City Council
	Agenda Request
Agenda Of:	August 26, 2008	Agenda Request No:		iv a
Initiated By:	Donna Svatek Treasury Manager	Responsible Department:		Treasury
Presented By:	Donna Svatek Treasury Manager	Department Head:		Linda Symank Director of Fiscal Services
		Additional Department. Head (s):		N/A
Subject / Proceeding:	Property Tax rate – Tax Year 2008
Exhibits:	Notice of Public Hearing on Tax Increase
Clearances			Approval
Legal:	N/A		Executive Director:	N/A
Purchasing:	N/A		Asst. City Manager:	Karen Daly
Budget:	Jennifer Brown Assistant Fiscal Services director		City Manager:	Allen Bogard
Budget
Expenditure Required: $			N/A
Current Budget: $			N/A
Additional Funding: $			N/A
Recommended Action
Receive and hear all persons wishing to speak regarding the 2008 proposed tax rate.
Executive Summary
The FY09 budget was filed on July 22, 2008 with a proposed tax rate of $0.30000. The City received the 2008 certified tax roll on August 11, 2008. Since the proposed tax rate exceeds the calculated effective tax rate of $0.26939, and will generate more property tax revenue than in 2007, the City must follow the steps mandated by the truth in taxation law in order to adopt the same tax rate as 2007. On August 14, 2008, City Council took the first step in the truth-in-taxation process by approving the placement of an item on a future meeting agenda for consideration to set the 2008 tax rate at $0.30000. The next step is for the City to hold two public hearings on the proposed tax rate. These public hearings must be held at least three days apart; the vote on the tax rate can be held no sooner than three days after the second public hearing. At least seven days prior to each hearing, the City must publish a ¼ page notice of the public hearing in the general reading section of the official newspaper. The titles and language in the notices are mandated by law and cannot be altered by the City. Prior to the adoption of the tax rate, the City must publish a “Notice of Tax Increase” that states the date and time of the vote, and identifies the public hearings that were held by the City on the tax rate proposal. This notice was previously titled “Notice of Vote on Tax Rate”, which more aptly describes the content in the notice, but the title of the notice was changed in the 2007 legislative session in an attempt to increase the public’s attention to the notice. Notices will be published on August 20 and 27, 2008. The notice will also be posted on the City’s web page and municipal channel, as required. A second public hearing will be held on September 2, 2008, with final adoption of the tax rate scheduled for September 16, 2008. The “Notice of Tax Increase” will be published on September 10, 2008. A copy of the “Notice of Public Hearing” is attached as an exhibit. A resident with the average residential value of $262,019 and a 7% homestead exemption will see a 2008 tax bill of $731.03, an increase of $43.40 or 6.3% compared to the average 2007 tax bill of $687.64, which is based on the average value of $241,276 and a 5% homestead exemption. In June, City Council approved an increase to the homestead exemption from 5% to 7% for tax year 2008 helping to reduce the impact of the increase in the average value. The average residential value increased 8.6% from 2007 to 2008, driven largely by the addition of new homes in the City that have an average value of about $397,000- significantly higher than the average residential value for 2007. Most residents will not see this increase in their value or tax bill; the individual tax impact is based on the assessed value assigned to each property by the Fort Bend County Appraisal District. The City’s portion of the overall tax bill remains low, but varies depending on where the home is located. Levee Improvement Districts and Municipal Utility District tax rates vary in different areas of the City; on average the City’s portion makes up less than 15% of the total tax bill. The City of Sugar Land continues to maintain one of the lowest tax rates in the state, ranking second only to Tyler for cities between 61,000 and 121,000 in population, as identified in the 2007 Tax and Debt survey conducted by the Texas Municipal League.
Exhibits