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ITEM 24
City Council Memorandum Management Services Memo No.
22-068
Date:
June 20, 2022
To:
Mayor and Council
Thru:
Joshua H. Wright, City Manager
Dawn Lang, Deputy City Manager - CFO
From:
Matthew Dunbar, Budget and Policy Assistant Director
Subject:
Ordinance No. 5018 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, 2023
Proposed Motion:
Move City Council pass and adopt Ordinance No. 5018, 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, 2023.
Background:
State law requires the tax levy necessary for funding the adopted budget be established by ordinance and 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 15, 2022). 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 effective immediately. 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 2022 tax values from the Maricopa County Assessor on February 10, 2022, as required by State law. The City’s Total Assessed Value is $3,702,957,065, which is a 6.9% increase from the 2021 Total Assessed Valuation, and includes valuation changes to 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 $0.01 reduction in the combined property tax rate from $1.1126 to $1.1026 per $100 of Assessed Valuation.
As part of the tax levy process, the County Assessor 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 2022 is $0.6168 per $100 of assessed value. The Fiscal Year (FY) 2022-23 Adopted Budget sets the rate at $0.2326 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 to levy the increased property taxes. The rate calculated for FY 2022-23 is $0.2391 per $100 of assessed valuation. Since the City of Chandler rate for the FY 2022-23 Budget of $0.2326 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. 5018 follows the prescribed form recommended for adoption, and establishes a tax levy of an estimated $41,078,804, as set forth in the FY 2022-23 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 $1.1026 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 # 5018 Property Tax Levy
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