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Home My WebLink AboutResolution 97-56 - Adopting 1997-98 Tax Rate ($.04930 per $1 Council/Agency Meeting Held: 642:z Deferred/Continued to: 2"'Approved ❑ Conditionally Approved ❑ Denied jOe City Clerk' Signature uzw Council Meeting Date: August 4, 1997 Department ID Number: AS 97-033 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, City Administrator - PREPARED BY: ROBERT J. FRANZ, Deputy City Administra SUBJECT: Adoption of 1997/98 Tax Rate - - �2a. 9 -56 Fstatement of Issue,Funding Source,Recommended Action,Alternative Action,Analysis,Environmental Status,Attachmen Statement of Issue: The City Charter states that "There shall be levied...., if no other provision for payment thereof is made,... a tax sufficient to meet all obligations of the City for the retirement system in which the City participates, due and unpaid or to become due during the ensuing fiscal year." The 1997/98 proposed budget includes estimated revenue of$6,522,380 from a continuation of this tax to fund 70.1% of the retirement costs of the City. The balance of the retirement costs are proposed to be paid from other city revenues. Funding Source: Not Applicable Recommended Action: Adopt Resolution'497 56setting the tax rate for voter approved indebtedness. Alternative Actionlsl: Alternative Action: .1. Do not levy a tax to fund retirement costs. 2. Levy an amount less than the recommended levy. If this is done the City will permanently lose the difference in revenue lost by the reduction. To be consistent with Charter requirements, alternative 1 or 2 can be selected only if the City makes "... other provisions for payment ..." of the retirement obligations. The proposed budget for 1997/98 makes no provision for payments of these obligations other than the use of the $6,522,380 estimated revenue from a continuation of this levy. Therefore, if either of the above alternatives is selected, action needs to be taken to determine how to make provision to pay the City's retirement costs in 1997/98 and in future years. Attachment 3 California Cities Having a Property Tax Levy for Retirement Indebtedness Albany Monrovia Oakland Montebello Richmond Monterey Park Coalinga Redondo Beach Fresno San Fernando Eureka San Gabriel Alhambra South Pasadena Bell Whittier Beverly Hills Fairfax Burbank San Anselmo Compton Huntington Beach Culver City Riverside El Monte Sacramento El Segundo Rialto Glendora La Mesa Huntington Park Stockton Inglewood Santa Barbara Long Beach Watsonville Los Angeles Cloverdale Lynwood Santa Rosa Manhattan Beach Oxnard Maywood Source: State Controller's Office publication: Ad Valorem Property Tax Rates Levied in Excess of the 1%Tax Rate Limitation- Fiscal years 1985/86- 1987/88 (No longer published) taxret.doc 07/16/97 ATTACHMENT #4 Attachment 4 Property Tax Levies in addition to the 1% Basic Levy (1993/94) Orange County Cities Background: Proposition 13 limits property tax levies to 1%of Assessed Value,with some exceptions.The 1%Basic Levy is shared by all pre-Proposition 13 taxing agencies,primarily cities,counties,and school districts. The City of Huntington Beach receives 14.8%of the basic levy. In addition,cities can levy taxes above the 1%levy,or levy assessments on property,by following procedures outlined in State law.Following is a chart listing taxes and assessments levied by Orange County cities in 1993/94. (Does not include taxes or assessments levied by and paid to the county,school,or special districts.) Taxes Assessments Cities listed from high to low in terms of o amount of levies and assessments above 1% m to basic levy per $100 Assessed Valuation. c 2 w o m c «� d = m ° a m N cc °> to c m y 9 E c v c m `m E u, `m City A 67 ° Annual Revenue Per $100 A.V. Per Capita Placentia $4;543,155 0.238 $108.61 j.......4.......4.......4.......4 j........j........j........:........1........j........;........4........0........1........ Laguna Beach 7,380,198 0.233 $300.01 j........j.......y........j........j ......j.. ..;.. ..i........i.. ..i........:........;........j... ..j....... Tustin ....... ....... € _ € 6,523,255 0.221 $119.17 . ................, ....... San Clemente . . € € 5,295,360 0.142 $125.59 Yorba Linda ,.......,.......,......., :................. ... . . ........... .........;........:.. .......... 4,615,800 0.134 $88.14 i.......5.......4.......i.......i i........i........i........i........i........i........i........i........i........i........ Stanton i 1,054,828 0.121 $33.65 i.......4.......4.......r.......a :........1........1........1................i........1........a........i........1........ Mission Viejo 6,393,568 0.108 $84.68 j.......4.......4.......4.......4 i........1........1.......•/.......•i........t........i........4........i........i........ Irvine € € € € 14,225,349 0.102 $138.90 j.......4.......4.......4.......4 j........;........1........1........1........i........i........4........i........j........ Laguna-Niguel € € 41785,681 0.093 $70.65 ....... ....... ....... ....... ........:........:........................................;........T................ Brea _ 1,404,606 0.087 $41.87 j....................... :.......; j....... . ............... San Juan Capistrano j 1,689,853 0.078 $62.35 ................................ ............................................. Laguna Hills € € € i i j i i i 1,667,353 0.074 $72.69 a.......r.......a.......s.......: :........1........i........i........i........i........i........i........s........i........ Cypress 1,728,351 0.074 $39.09 i.......r.......r.......4.......i 1........1........1........1........t........i........i........4........i........1........ Garden Grove s @ € 3,211,003 0.069 $21.69 t.......4.......4................ j........i........1........i........1........i........t........4........i........i........ La Palma € 454,580 0.064 $29.55 j.......r.......4.......4........j :........:........:........:........1........1........1.......................... ;... Huntington Beach 6,371,953 0.056 $33.25 j.......y.......y.......�.......� j........j........i........i........i........i.......i... ..? � : Orange . 2,807,192 0.045 $24.90 j.......;.......: .......: ... .i _ Lake Forest € 1,351,698 0.039 $23.31 ....... ....... ................:.......:........: ........_ _ Costa Mesa @ @ € € € € 1,834,256 0.029 $18.61 a.......s.......a.......a.......: :........1........1........1........1........1........1........i........s........1........ Anaheim 3,392,988 0.025 $12.80 Westiminster € € 551,810 0.020 $6.90 j.......4.......4.......4.......4 i........i........1........i........1........1........i........4........i........1........ Los Alamitos € 109,184 0.015 $8.96 j.......4.......4.......4.......4 j........i........j........:........j........j........j........4........i........j........ Seal Beach 139,937 0.008 $5.58 j........j........j.......y........j j........j........j........j........j........:........j........:,........i.........;........ Dana Point € _ _ € 272,214 0.008 $8.53 ................. ;....... Santa Ana ': € `: 395,625 0.005 $1.30 .. .................. .. - ....�.. :... .. Newport Beach i € € € € i 262,936 0.002 $3.71 Villa Park 7,176 0.001 $1.13 i.......i.......4.......4.......4 i........i........i........i........i........i........i........4........i........1........ Buena Park 12,457 0.000 $0.18 j.......4.......0.......4.......4 j........1........1........1........1........1........1........4........i........1........ Fullerton € 9,537 0.000 $0.08 j.......4.......4.......4.......4 j........i........:........i........;........;........j........4........�........j........ La Habra @ 3,482 0.000 $0.07 i.......�.......�.......y.......� i........i........i........i........i........t........i........�........T........:........ Fountain Valley 0 0.000 $0.00 :.......................:.......: :........:........:........:........:........:........:........:........:........:........ g Avera a 0.068 $47.93 Huntington Beach compared to Average -17% -31% Note : Revenue is for Secured Tax levy only, which represents 90% of the total Property tax levy, on the average. TAXLEVY.XLS �O• 7/16/97 ATTACHMENT #5 Attachment 5 PropertyTaxes and Assessments - Additions to Basic Levy ----------------------------- ------------------------------- ---------------------------- Placentia Laguna Beach Tusti n San Clemente Yorba Linda Stanton y%.sz........ s: Irvine . .. .. ... ..I �; Brea San Juan Capistrano } YP C ress S:•: w.� %r. •. #: Garden Grove La Palma : ...... Huntington -��-'�'•'-}' ��`{ Huntington Beach Beach Orange {f{�• :. Costa Mesa Anaheim Westminster Los Alamitos Seal Beach Santa Ana Newport Beach Villa Park Fountain Valley La Habra Fullerton Buena Park 0% 5% 10% 15% 20% 25% 1993/94 Additional Levy as a % of Total Property Tax Bills All Orange County Cities except those incorporated since Proposition 13 (1978) RCA ROUTING SHEET INITIATING DEPARTMENT: Administrative Services SUBJECT: Adoption of 1997/98 Tax Rate COUNCIL MEETING DATE: August 4, 1997 ... RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. (Appoved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS .. REVIEWED RETURNED FOR A` DED ..... Administrative Staff ( ) ( ) Assistant City Administrator (Initial) ( ) ( cv ) City Administrator (Initial) ( ) ) City Clerk ( ) . EXPLANATION FOR RETURN OF ITEM. Only)(Below Space For City Clerk's Use REQUEST FOR COUNCIL ACTION MEETING DATE: August 4, 1997 DEPARTMENT ID NUMBER: AS 97-033 Analysis: The City receives a pro-rata portion of the one-percent basic levy of all real property (15.6% of the basic levy). In addition, the California Constitution allows cities to levy additional taxes for voter-approved indebtedness. The City has, since voter approval in 1966, levied an additional tax which pays for a portion of the Charter-approved employee retirement costs. Under State Law, the levy is limited to the lower of the amount needed or the amount levied in 1984/85. In our case, the lower amount is the 1984/85 levy of .04930 per $100 of assessed valuation. The levy currently covers an estimated 70.1% of the City's retirement costs for 1997/98. During the past six fiscal years, the City's share of the basic levy property tax has been reduced by the State of California from 19.5% to 14.5%. General Fund property tax revenue from the basic levy has, therefore, been reduced by $5.5 million per year. Environmental Status: NIA Attachmentilsl: NumberCity Clerk's Page 1. Resolution 9r�-56 2. Annual Property Tax Levy 3. Listing of California Cities Having a Property Tax Levy for Retirement Indebtedness 4. Property Tax Levies In Addition to the 1% Basic Levy (1993/94) - Orange County Cities 5. Property Taxes and Assessments -Additions to Basic Levy 0026664.01 -2- 07/28/97 8:30 AM ATTACHMENT # 1 RESOLUTION NO. 97-56 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH FIXING THE FISCAL YEAR 1997/1998 TAX RATE WHEREAS, the City of Huntington Beach will be receiving a pro-rata portion of the one dollar ($1.00) Basic Property Tax Rate levied by the County Board of Supervisors as a means of providing revenue for the operation and support of various city departments, offices and activities; and In 1966, the electorate of the City of Huntington Beach approved a City Charter amendment authorizing the collection of a property tax in excess of 1% of the full cash value of property in order to meet the obligations of the City to pay for employee retirement through the State Employees Retirement System. This provision was readopted by the electorate in 1978; and In Carman v. Alvord(1982) 31 Cal.3d 318, the California Supreme Court held that a tax to fund a city's obligations to the State Employees Retirement System is exempt from Proposition 13 (Article XIIIA of the California Constitution) as voter-approved indebtedness; and Since 1983-84, the City has fixed the rate of property taxation at Zero and .04930/100ths Dollars ($.04930) per $100 of assessed value in the City to pay for employees retirement cost; and Said tax does not constitute an extension of an existing tax requiring voter approval under Proposition 218 (Articles XIIIC-D of the California Constitution) because Section 3(a)(1) of Proposition 218 exempts from the voter approval requirement any tax already valid under Proposition XIIIA, as interpreted in Carman v. Alvord; and The tax rate herein is levied pursuant to Section 93 of the Revenue and Taxation Code for the purpose of paying voter approved indebtedness of the City of Huntington Beach; 1 SF/s:PCD:ResoIuti on:Tawate RLS 97-381 6/20/97-#4 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach that the rate of taxation for said city for fiscal year 1997/1998 be fixed at zero and .04930/100ths dollars ($.04930) per$100 of assessed property value in said city. The said rate shall be applied as employee retirement costs. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 4th day of August , 1997. 04410-01 Mayor ATTEST: APPROVED AS TO FORM: City Clerk y Attorne ak,&-2,o-F-7 REV APPROVED: MININ OROVED: City Administrator Deputy City dmmistrator/ 0 Administrative Services 2 SF/s`.PCD:Resoluti on:Tax rate RLS 97-381 - 6/20/97-#4 ,i Res. No. 97-56 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an regular meeting thereof held on the 4th day of August, 1997 by the following vote: AYES: Julien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo NOES: None ABSENT: None /Ozl"c • City Clerk and ex-offici Clerk of the City Council of the City of Huntington Beach, California G/resol uti/resbkpg/97-39 ATTACHMENT #2 Attachment 2 Background: A separate property tax levy for retirement indebtedness was authorized by the voters in 1966. The tax levy covered a portion of the City's retirement costs. 70% of the costs were covered in Fiscal Year 1977/78. 42%to 73% of the costs have been covered by the levy in the years since 1977/78. Huntington Beach Property Tax Levy - Retirement Indebtedness 1977/78 - 1997/98 Tax Levy Property Tax Retirement Revenue as Fiscal Year Per$100 A.V. Revenue Costs*** % of Cost 1977/78 0.16610 $1,418,858 $2,026,098 70.0% 1978/79 0.13650 1,135,385 2,509,196 45.2% 1979/80 0.14330 1,338,341 3,193,121 41.9% 1980/81 0.14330 1,607,826 3,584,726 44.9% 1981/82* 0.03729 1,978,715 4,028,308 49.1% 1982/83 0.04930 2,792,077 4,329,797 64.5% 1983/84 0.04930 2,994,942 4,543,000 65.9% 1984/85 0.04930 3,299,596 6,870,908 48.0% 1985/86 0.04930 3,440,683 6,911,625 49.8% 1986/87 0.04930 3,773,584 7,097,000 53.2% 1987/88 0.04930 3,929,922 7,134,000 55.1% 1988/89 0.04930 4,592,276 6,817,910 67.4% 1989/90 0.04930 41867,552 7,375,289 66.0% 1990/91 0.04930 5,230,891 8,162,283 64.1% 1991/92** 0.04930 6,116,356 8,949,277 68.3% 1992/93 0.04930 63118,857 9,833,755 62.2% 1993/94 0.04930 6,478,879 9,745,290 66.5% 1994/95 0.04930 6,489,367 8,909,787 72.8% 1995/96 0.04930 6,211,715 8,827,634 70.4% 1996/97 (est.) 0.04930 6,041,000 8,782,408 68.8% 1997/98 Recomd. 0.04930 6,522,380 9,300,000 70.1% * Rates were reduced in 1981/82 due to the County changing Assessed Value to equal 100% of market value. Prior to 1981/82 Assessed Value was set at 25% of market value. ** Revenue prior to 1991/92 excludes delinquent payments, interest, and miscellaneous revenue categories. *** Includes City PERS pickup costs for years after 1977/78. TAXLEVY.XLS 7/16/97 ATTACHMENT #3