City of Flagstaff FY2013 Budget

1. City of FlagstaffFY2013 Budget Overview of Property Taxes

2. City Lowering Your Tax Payment The majority of taxpayers in the City will experience an overall reduction in property taxes they pay to the City of Flagstaff!

3. Timing of Assessment • 18 to 24 month process set by State Law, administered by Coconino County The February 2012 Evaluation you just received in the mail will not show up on your tax bill until November 2013.

4. Property tax types • The City of Flagstaff collects two different property tax types. • Primary property taxes can be used for any general purpose use in the City • Secondary property taxes can only be used to pay for general obligation debt for capital projects that have received voter approval

5. Primary Property Tax • Primary property taxes pay for General Fund Services - $5.2 M or 9.6% of revenue • Police • Fire • Parks • Recreation • Library

6. General Fund Revenues

7. Secondary Property Tax • Pays for voter approved capital projects – FY2013 $6.4 M in budgeted revenue • 2004 • Four fire stations • Aquaplex • Multigenerational center • Regional and Neighborhood Open space/FUTS • Lake Mary Regional Park

8. Secondary Property Tax (cont.) • 2010 Bond Election • Public safety radio system • Street/utility improvements

9. Property Tax Definitions • Full Cash Value (FCV) – 100% of the assessed valuation as determined by the Coconino County Assessor’s office. This value is used when calculating the SECONDARY property tax levy • Limited Property Value (LPV) – Calculated annually based on a statutory formula. The LPV can NEVER exceed the FCV and is usually less. This value is used when calculating the PRIMARY property tax levy.

10. Definitions (continued) • The property tax LEVY is the total dollar amount or revenue the City will receive. The LEVY (revenue) for primary property taxes is statutorily limited to a 2% increase every year, plus new construction. • The RATE is determined by taking the LEVY (revenue) and dividing it by the assessed valuation.

11. Residential tax bill calculation • Assessed valuation • A residence is assessed at 10% of it’s value • The RATE is applied to every $100 of the assessed value • Equals the amount of property tax you will pay to the City • $100,000 • $10,000 • $10,000/100 *$1.5639 • = $156.39 for every $100,000 in assessed valuation

12. Commercial tax bill calculation • Assessed valuation • A business is assessed at 20%* of it’s value • The RATE is applied to every $100 of the assessed value • Equals the amount of property tax you will pay to the City • $1,000,000 • $200,000 • $200,000/100 *$1.5639 • = $3,127.80 for every $1,000,000 in assessed valuation Most businesses are assessed at 20%

13. Property tax rate history

14. Overview • Property tax valuation - property values have been falling since 2008 • Due to the timing of assessment vs. the timing of your property tax payment as illustrated in slide 3, the property tax assessment decreases started showing up in property tax bills starting in 2010. • The City has increased the PRIMARY property tax rate to allow for slight (2%) increases in revenue.

15. Overview (continued) • The City has held the SECONDARY property tax rate FLAT so revenue has been decreasing as assessed valuation decreased • For the last two years, assessed valuation has decreased by a greater percentage than the slight percentage growth in primary property tax revenue by the City ALLOWING FOR AN OVERALL REDUCTION IN THE AVERAGE AMOUNT A FLAGSTAFF PROPERTY TAX OWNER PAYS

16. Impact to homeowner Proposed (FY2013) 2% primary revenue 3.0% LPV $277,905 3.8% FCV $280,219 Primary ($0.7273) $202 Sec’ary ($0.8366) $234 Total $436 Current (FY2012): LPV: $286,500 FCV: $291,288 Primary ($0.6917) $198 Sec’ary ($0.8366) $244 Total $442

17. Questions/Comments? Barbara Goodrich Management Services Director bgoodrich@flagstaffaz.gov 928-213-2205