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ITEM 18
City Council Memorandum Management Services Memo No.
MS 21-059
Date:
June 24, 2021
To:
Mayor and Council
Thru:
Joshua H. Wright, Acting City Manager
Dawn Lang, Management Services Director
From:
Matthew Dunbar, Budget and Policy Assistant Director
Subject:
Ordinance No. 4970, Levying Upon the Assessed Valuation of the Property Within the City of Chandler, Arizona, Subject to Taxation a Certain Sum Upon Each One Hundred Dollars ($100) of Assessed Valuation Sufficient to Raise the Amount Estimated to be Required in the Annual Budget, Less the Amount to be Received From Other Sources of Revenue; Providing Funds for Various Bond Redemption, for the Purpose of Paying Interest Upon Bonded Indebtedness and Providing Funds for General Municipal Expenses, All for the Fiscal Year Ending the 30th day of June 2022
Proposed Motion:
Move City Council to pass and adopt Ordinance No. 4970, levying upon the assessed valuation of the property within the City of Chandler, Arizona, subject to taxation a certain sum upon each one hundred dollars ($100) of assessed valuation sufficient to raise the amount estimated to be required in the annual budget, less the amount to be received from other sources of revenue; providing funds for various bond redemptions, for the purpose of paying interest upon bonded indebtedness and providing funds for general municipal expenses, all for the Fiscal Year ending the 30th day of June 2022.
Background:
State law requires that the tax levy necessary for funding the adopted budget be established by ordinance and be adopted fourteen (14) days following the public hearing and the final adoption of the budget and not later than the third Monday in August (August 16, 2021). As this tax levy ordinance is an administrative method of setting apart funds necessary for use and maintenance, it does not require an extraordinary (3/4) vote to make it immediately effective. This determination is based on a Supreme Court decision and is fully explained in the Municipal Budget and Financial Manual provided by the League of Arizona Cities and Towns.
Discussion:
The City received notification of Chandler’s 2021 tax values from the Maricopa County Assessor on February 8, 2021, as required by State law. The City’s Total Assessed Value is $3,463,794,661, which is a 6.8% increase from the 2020 Total Assessed Valuation, and includes valuation changes to the existing property as well as the value of new growth. Based on a legislative change implemented July 1, 2015, property owners are now assessed on the Limited Assessed Value versus Full Cash Value, and residential property values cannot increase more than 5% in a given year. City Council has approved a 0.0075 cent reduction in the combined property tax rate from $1.1201 to $1.1126 per $100 of Assessed Valuation.
As part of the tax levy process, the County Assessor also establishes the maximum allowable primary tax rate, which allows a 2% increase in the maximum tax levy each year. Chandler’s maximum primary tax rate for Tax Year 2021 is $0.6136 per $100 of assessed value. The Fiscal Year (FY) 2021-22 Adopted Budget sets the rate at $0.2426 per $100 of Assessed Valuation, which is significantly less than the maximum. In addition, the State Property Tax Oversight Commission establishes a maximum primary rate that would require a Truth in Taxation notice, which requires special notice to citizens and a roll call vote of City Council to levy the increased property taxes. The rate calculated for FY 2021-22 is $0.2426 per $100 of assessed valuation. Since the City of Chandler rate for the FY 2021-22 Budget of $0.2426 per $100 of Assessed Valuation does not exceed the maximum primary rate that would require a Truth in Taxation notice, the City is not subject to the Truth in Taxation provisions this year.
Ordinance No. 4970 follows the prescribed form recommended for adoption and establishes a tax levy of an estimated $38,538,200, as set forth in the FY 2021-22 Budget. In this ordinance, the Chandler City Council directs the County of Maricopa to levy the amount allowed by law. The total tax rate will be $1.1126 per $100 of assessed valuation. The property value estimates received from the County Assessor's office are available for public inspection on the City’s website at
www.chandleraz.gov/budget
or by calling the Budget Division at
(480) 782-2254
.
Attachments
Ordinance No. 4970
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