| ITEM #: 7. DATE: 06/23/2025 AI #:2419 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | PRIMARY AND SECONDARY PROPERTY TAX LEVIES FOR FY2026 |
| STAFF PRESENTER(S): | Ryan Bittle, Finance Manager |
SUMMARY
Adopt the primary and secondary property tax levies for FY2026.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
ADOPT ORDINANCE NO. 2025-1634 LEVYING UPON THE ASSESSED VALUATION OF THE PROPERTY WITHIN THE CITY OF GOODYEAR, SUBJECT TO PRIMARY AND SECONDARY TAXATION A CERTAIN SUM UPON EACH ONE HUNDRED DOLLARS ($100.00) OF VALUATION SUFFICIENT TO RAISE THE AMOUNTS ESTIMATED TO BE REQUIRED IN THE ANNUAL BUDGET FOR THE PURPOSE OF PAYING FOR VARIOUS EXPENSES; TO RAISE THE AMOUNT ESTIMATED TO BE RECEIVED FROM OTHER SOURCES OF REVENUES; PROVIDING FUNDS FOR VARIOUS BOND REDEMPTIONS, FOR THE PURPOSE OF PAYING PRINCIPAL AND INTEREST UPON BONDED INDEBTEDNESS; ALL FOR FISCAL YEAR ENDING THE 30TH DAY OF JUNE, 2026. (Ryan Bittle, Finance Manager)
FISCAL IMPACT
The primary and secondary property tax levies are a part of an overall finance strategy that provides funding for the city's budget. The adopted FY2026 Budget totals $1,240,703,500 dollars, of which $30,725,400 is funded by these property tax levies.
Adopting these property tax levies is the final step in the process of establishing the FY2026 budget.
If approved, $16,503,200 will be generated from the primary property tax levy to support the General Fund's ongoing operations and $14,222,200 will be generated from the secondary property tax levy to pay debt service on voter-approved General Obligation (G.O.) Bond debt.
Adopting these property tax levies is the final step in the process of establishing the FY2026 budget.
If approved, $16,503,200 will be generated from the primary property tax levy to support the General Fund's ongoing operations and $14,222,200 will be generated from the secondary property tax levy to pay debt service on voter-approved General Obligation (G.O.) Bond debt.
BACKGROUND AND PREVIOUS ACTIONS
Annual Budget Process: The FY2026 budget process officially kicked off back in calendar year 2024 with extensive collaboration and dozens of meetings between departments, the City Manager's office, and the budget team discussing available resources and needs for the upcoming fiscal year.
- As part of these touchpoints, our updated strategic plan, which was adopted by Council in November was at the forefront of these conversations, acting as a roadmap during development of the budget, helping us prioritize funding, and ensuring timely delivery of associated strategic plan action items. In February, a five-year general fund forecast was presented as part of our Council retreat, creating the foundation off of which our FY2026 budget was built.
- In April the City Manager presented a sustainable recommended budget which focused on growth, continuing existing programs and services to a larger residential base, fair compensation for employees, opening new capital facilities, and continuing the capital improvement program.
- Any subsequent changes from the City Manager's recommended budget work session were summarized as part of our Tentative budget presented to and adopted by Council on May 19, 2025. The approved tentative budget was published in the Arizona Republic West Valley Edition on May 23, and May 30 2025, consistent with requirements of state law. Further, state required budget forms are posted on the website, where they must remain for five years, and are also available at the library and City Clerk's Office.
Property Tax Levy Process: In accordance with Arizona Revised Statute (A.R.S.) § 42-17107, when the municipal primary property tax levy, excluding any increases due to the value of new construction, is greater than the amount levied in the previous year, actions must be taken to inform residents. These notices and actions are referred to as Truth-in-Taxation and appeared in the Arizona Republic West Valley Edition (a local newspaper of general circulation) on May 23rd and May 30th, 2025, as well as in a news release on May 21st, 2025.
- Further, state required budget forms are posted on the website, where they must remain for five years, and are also available at the library and City Clerk's Office. A public hearing was held on June 9th, 2025, prior to final adoption of the FY2026 budget and for the Truth-In-Taxation requirements associated with the Primary Property Tax levy. On June 9th, the City Council also adopted the Truth-In-Taxation increase of $303,271 that is included in the primary property tax levy presented for approval.
- As part of these touchpoints, our updated strategic plan, which was adopted by Council in November was at the forefront of these conversations, acting as a roadmap during development of the budget, helping us prioritize funding, and ensuring timely delivery of associated strategic plan action items. In February, a five-year general fund forecast was presented as part of our Council retreat, creating the foundation off of which our FY2026 budget was built.
- In April the City Manager presented a sustainable recommended budget which focused on growth, continuing existing programs and services to a larger residential base, fair compensation for employees, opening new capital facilities, and continuing the capital improvement program.
- Any subsequent changes from the City Manager's recommended budget work session were summarized as part of our Tentative budget presented to and adopted by Council on May 19, 2025. The approved tentative budget was published in the Arizona Republic West Valley Edition on May 23, and May 30 2025, consistent with requirements of state law. Further, state required budget forms are posted on the website, where they must remain for five years, and are also available at the library and City Clerk's Office.
Property Tax Levy Process: In accordance with Arizona Revised Statute (A.R.S.) § 42-17107, when the municipal primary property tax levy, excluding any increases due to the value of new construction, is greater than the amount levied in the previous year, actions must be taken to inform residents. These notices and actions are referred to as Truth-in-Taxation and appeared in the Arizona Republic West Valley Edition (a local newspaper of general circulation) on May 23rd and May 30th, 2025, as well as in a news release on May 21st, 2025.
- Further, state required budget forms are posted on the website, where they must remain for five years, and are also available at the library and City Clerk's Office. A public hearing was held on June 9th, 2025, prior to final adoption of the FY2026 budget and for the Truth-In-Taxation requirements associated with the Primary Property Tax levy. On June 9th, the City Council also adopted the Truth-In-Taxation increase of $303,271 that is included in the primary property tax levy presented for approval.
STAFF ANALYSIS
The primary property tax levy for FY2026 of $16,503,200 is expected to create a primary property tax rate of $0.9319 per $100 of assessed valuation. As a part of the general fund revenue, the primary property tax levy supports general fund activities, including police and fire protection, operations and maintenance, and many other general governmental functions. This levy amount is consistent with the City Council's adopted financial policy to maximize the primary property tax. The secondary property tax levy of $14,222,200 is expected to create a secondary property tax rate of $0.8031 per $100 of assessed valuation and will be used to fund the principal, interest, and redemption charges on voter-approved general obligation bonds. The FY2026 overall combined property tax rate of $1.7350 would equate to a city property tax payment of $173.50 for a home with an assessed value of $100,000. The Ordinance is provided as Attachment A.