2018 Property Tax Levy $28,699, Estimated Property Tax Levy $30,200,000 FINANCIAL IMPACT:

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1 Agenda Bill City Council Regular Meeting November 06, 2018 SUBJECT: 2019 Property Tax Levy Ordinance DATE SUBMITTED: October 29, 2018 DEPARTMENT: Finance NEEDED FROM COUNCIL: Action Direction Informational RECOMMENDATION: EXHIBITS: Approve the Ordinance setting the 2019 property tax levy. 1. Exhibit Property Tax Levy Ordinance 2. Exhibit 2 - Property Tax History Tables BUDGET: Total dollar amount $30,200,000 Approved in budget Fund(s) General Fund Budget reallocation required No budgetary impact WORK PLAN FOCUS AREAS: Transportation Community Safety Communication & Engagement Community Livability High Performing Government Culture & Recreation Environmental Health & Protection Financial Sustainability NEEDED FROM COUNCIL: Shall the Council approve the 2019 property tax levy foregoing the allowable 1% increase and banking the amount for possible future use? KEY FACTS AND INFORMATION SUMMARY: This ordinance sets the 2019 property tax levy amount at a maximum of $30,200,000. The final rate will be adjusted based on the final assessed valuation of property within Sammamish. The King County Assessor's Office anticipates providing this information near the end of November. The ordinance also preserves the City's ability to bank an additional $291,721 for future levies. The City's total banked capacity for the years 2010 through 2019 is $2,152,793, which is the difference in the 2019 levy amount and the amount allowed under state law.

2 The action requested at this time is consistent with Council's prior directions to forego the allowable 1% increase and bank that for future use. The 2019 property tax levy is estimated to be $30.2 million. Under current law the increase from the prior highest allowable regular levy is limited to the lesser of 101% or 100% plus inflation where inflation is measured by the percentage change in the Implicit Price Deflator (IPD). The IPD change for establishing the 2019 property tax levy limit is %. The property tax levy foregoes the 1% increase allowable under state law for the tenth year. Increases based on the categories in the following table are estimated to add $1,500,357 to the 2018 levy amount. The final levy amount is due from King County at the end of November Property Tax Levy $28,699,643 Plus: New Construction Levy 836,855 Plus: Relevy for prior year refunds 25,497 Plus: Estimated State Utility New Construction 100,000 Plus: Allowance for change in KC Estimate 538, Estimated Property Tax Levy $30,200,000 The assessed valuation of taxable property in 2018 increased $2.19 billion of which $485 million is for new construction. The total 2018 assessed valuation is $18.8 billion. The changes in assessed valuation and the decision to forego the 1% increase results in the estimated 2019 levy rate calculation of $1.61 per $1,000 of assessed valuation. The 2018 levy rate is $1.72 per $1,000 of assessed value $ Change Assessed Valuation (in Billion $) $16.64 $18.84 $2.20 Property Tax Levy Rate $1.72 $1.61 ($0.11) A public hearing on this proposed tax levy for 2019 is scheduled on November 6th, This public hearing has been properly noticed as required by State law. FINANCIAL IMPACT: $30,200,000 in General Fund revenue for 2019

3 CITY OF SAMMAMISH WASHINGTON ORDINANCE No. O2018- AN ORDINANCE OF THE CITY OF SAMMAMISH, WASHINGTON, RELATING TO THE LEVYING OF REGULAR PROPERTY TAXES AND ESTABLISHING THE AMOUNT TO BE LEVIED IN 2019 ON THE ASSESSED VALUATION OF THE PROPERTY WITHIN THE CITY. WHEREAS, the population of the City of Sammamish is estimated to be 63,470, and the City s actual levy amount from the 2018 tax year was $28,699,643; and WHEREAS, the Sammamish City Council has properly given notice of, and conducted, a public hearing on November 6, 2018 to consider the budget for the biennial budget period, pursuant to RCW ; and WHEREAS, the Sammamish City Council, after hearing and after duly considering all relevant evidence and testimony presented and having considered its budget for the 2019 calendar year, has determined that it is in the best interests of the City of Sammamish to forego the allowable 1% increase in the regular property tax levy to be collected in the 2019 tax year; and WHEREAS, the Sammamish City Council desires to bank for the future the difference between 100 percent of the 2019 allowable regular property tax levy and the levy limit factor of 101 percent of the 2019 allowable regular property tax levy; and WHEREAS, banking for the future the otherwise permissible 1% increase in the property tax levy for 2019 will add $291,721 to the city s previously banked capacity of $1,861,072 for a total banked capacity of $2,152,793; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAMMAMISH, WASHINGTON DO ORDAIN AS FOLLOWS: Section 1. The regular property tax levy is hereby authorized to be collected in the 2019 tax year in the estimated amount of $30,200,000 representing a $0, 0% increase from the 2018 regular property tax levy. This levy amount includes the re-levy of prior year refunds of $25,497 plus the estimated increase resulting from the addition of new construction and improvements to property, the estimated increase in the value of state assessed property, and the estimated increase resulting from annexations. The expected rate is $1.61 per $1,000 of assessed value. P:\Finance\Budget\ Budget Development\1 Council packet materials\ordinance 2019 Property Tax Levy Rate - Banking 1%.doc 1

4 Section 2. Effective Date. This ordinance shall be in full force and effect five (5) days from and after its passage, approval, and publication as provided by law. ADOPTED BY THE CITY COUNCIL AT A REGULAR MEETING THEREOF ON THE DAY OF NOVEMBER CITY OF SAMMAMISH Attest: Mayor Christie Malchow Melonie Anderson, City Clerk Approved as to form: Michael R. Kenyon, City Attorney Public Hearing: November 6, 2018 Ordinance Reading: November 6, 2018 Passed by the City Council: November 6, 2018 Date of Publication: Effective Date: P:\Finance\Budget\ Budget Development\1 Council packet materials\ordinance 2019 Property Tax Levy Rate - Banking 1%.doc 2

5 Exhibit 2 Property Tax: Levy Rate and Revenue History (November 6, 2018) $3.00 $2.50 $2.42 Levy Rate History ($ per 1,000 of Assessed Valuation) $2.47 $2.56 $2.59 $2.41 $35 $30 Revenue History ($ in Millions) $26.9 $27.8 $28.7 $30.2 $2.00 $2.05 $1.99 $1.93 $1.72 $1.61 $25 $20 $20.5 $21.5 $21.7 $21.8 $22.3 $22.9 $1.50 $15 $1.00 $10 $0.50 $5 $ $ Notes: The 1% property tax levy increase allowed by State law has not been taken by the City for 2010 through The Klahanie area was annexed in 2016.

6 $ in Billions Exhibit 2 Assessed Valuation History (November 6, 2018) $24 $20 $18.8 $16 $13.7 $14.6 $16.6 $12 $11.2 $8 $8.4 $8.6 $8.4 $8.4 $9.3 $4 $ Note: Klahanie annexation in 2016 added assessed value of $1.88 billion.