Submitted By: Peter Lee
presenter
Presentation By: Tammi Haslam
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Department: Budget
STAFF RECOMMENDATION (Motion Ready):
title
Adopt the Fiscal Year 2022-2023 tentative millage rates: Basic City - 6.6177; District A - 1.7185; District B - 1.6332; District C - 1.4699
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
Tentative Millage Rates
As required by the State of Florida Department of Revenue, the City must provide its tentative millage rates, rolled-back rates, and the date, time and place of its budget public hearings to the Marion County Property Appraiser no later than August 4, 2022. To do so, we request that City Council agree on tentative millage rates at the August 2, 2022 meeting. Once the tentative millage rates are set, the tax rates can be held constant or reduced. They cannot be increased.
The tentative millage rate is used to calculate taxes based upon the assessed value of real property. One mill of tax is equal to $1.00 for each $1,000 of property value. The level of increase is calculated using the rolled-back rate as the base. The rolled-back rate is the millage rate that will provide the same property tax levy as was levied during the previous fiscal year, except for levies on new construction, additions to structures, deletions, and property added due to geographic boundary changes.
FINDINGS AND CONCLUSIONS:
When setting the tentative millage rates, Council should consider:
1. The rolled-back rate is the amount of millage necessary to raise the same amount of Ad Valorem tax revenue as the previous year excluding taxes from new construction and may be adopted by a majority vote of City Council.
2. The adjusted rolled-back rate which includes the change in per capita Florida personal income (1.0613 for FY22) may be adopted by a majority vote of the City Council.
3. The maximum millage rate allowed with a 2/3 vote of City Council is computed at a rate of 110% of the adjusted rolled-back rate.
4. A millage rate greater than the 2/3 vote maximum requires the unanimous vote of City Council or a referendum.
Basic City Millage Rate
Based on the July 1 Certification of Taxable Values received from the Marion County Property Appraiser, the current year gross taxable value for operating purposes is $6,314,014,819 and reflects a 12.96% increase when compared to the prior year’s gross taxable value of $5,589,801,390.
For comparison purposes, the following schedule provides the current, rolled-back and maximum millage rates that can be imposed with a majority vote or 2/3 vote of City Council and the amount of revenue that would be generated for each, based on a 95% collection rate.
|
FY23 Rates |
% Incr/Decr over RBR |
Comments |
Vote |
FY23 Proposed Revenue @ 95% |
FY22 Actual Revenue @ 95% |
Incr/Decr over FY22 Revenue @ 95% |
|
6.6177 |
9.55% |
Current Rate FY22 |
Majority |
$39,695,043 |
$35,142,047 |
$ 4,552,996 |
|
6.8457 |
13.33% |
Majority Vote Max |
Majority |
$41,062,659 |
$35,142,047 |
$ 5,920,611 |
|
6.0407 |
0.00% |
Rolled-back Rate |
Majority |
$36,234,016 |
$35,142,047 |
$ 1,091,969 |
|
7.5303 |
24.66% |
2/3rd Vote Max |
2/3rd Vote |
$45,169,105 |
$35,142,047 |
$10,027,057 |
The schedule below uses the millage rates above to provide an estimate of the amount of city property taxes that a property owner would pay for each rate, assuming the assessed value is $150,000 less a $50,000 deduction for homestead exemption.
|
Taxable Value* |
FY23 Rates |
City Tax |
FY22 Rates |
City Tax |
Incr/Decr over FY22 Tax |
|
$100,000 |
6.6177 |
$662 |
6.6177 |
$662 |
$0 |
|
$100,000 |
6.8457 |
$685 |
6.6177 |
$662 |
$23 |
|
$100,000 |
6.0407 |
$604 |
6.6177 |
$662 |
($58) |
|
$100,000 |
7.5303 |
$753 |
6.6177 |
$662 |
$91 |
|
*Based on reported Median Home Value in Marion County |
Downtown Development Districts
The Fiscal Year 2022-2023 taxable values, current millage rates, rolled-back rates, maximum millage rates allowed with a majority vote, maximum millage rates allowed with 2/3 vote, and the revenue generated for each rate for the three Downtown Districts are shown below for
comparison purposes. Districts A, B and C reflect increases of 11.89%, 9.1% and 1.56% respectively over FY2022 taxable values.
|
District |
FY23 Tax Value |
Current Millage |
Revenue at 95% |
Rolled-Back Rate |
Revenue at 95% |
Max Rate Majority Vote |
Revenue at 95% |
Max Rate 2/3 Vote |
Revenue at 95% |
|
District A |
36,156,636 |
1.7185 |
$59,028 |
1.5711 |
$53,965 |
1.7184 |
$59,025 |
1.8902 |
$64,926 |
|
District B |
26,653,566 |
1.6332 |
$41,354 |
1.5044 |
$38,093 |
1.6329 |
$41,346 |
1.7962 |
$45,481 |
|
District C |
11,709,186 |
1.4699 |
$16,351 |
1.4639 |
$16,284 |
1.6727 |
$18,607 |
1.8400 |
$20,468 |
Public Hearings
The City’s public hearings must be held in September. Per Truth in Millage (TRIM) requirements, the first hearing cannot be held sooner than September 3 and no later than September 18. The dates proposed for the Fiscal Year 2022-2023 public hearings are September 6 and September 20.
The School Board has first priority scheduling hearing dates, and the Board of County Commissioners has second. No other taxing authority in the county can use the hearing dates selected by the School Board or Board of County Commissioners.
FISCAL IMPACT:
Per Chapter 200, Florida Statutes the City Council must adopt a tentative millage.
PROCUREMENT REVIEW:
N/A
LEGAL REVIEW:
N/A
ALTERNATIVE:
None