Item 6P
Item 6P
M E M O R A N D U M
August 25, 2015
To:Shana Yelverton, City Manager
From:Sharen Jackson, Chief Financial Officer
Subject:Consider proposal to adopt a taxincrease
Action
Requested:Consider proposal to adopt a tax increase and holdpublic
hearing on the tax rate.
Background
Information:The proposed tax rate of $.462 will exceed the effective tax
rate ($.430012) and increase tax revenues. Even though the
tax rate is held at $.462for the thirteenth year,the tax rate
exceeds the effective tax rate ($.430012). Because the tax
rate exceeds the effective taxrate, state law requires thattwo
public hearings be held by the governing body before adopting
the proposed tax rate. This is the secondof two public
hearings on the proposed tax increase. The firstpublic
th
hearing was held on August 18.
At each hearing, the governing body must announce the date,
time and place of the meeting at which they will vote on the tax
rate.
“City Council will vote on the tax rate on September 15, 2015
at 5:30 P.M. or immediately following the work session in the
City Council Chambers at Town Hall, 1400 Main Street
Southlake Texas”
It is important to note the city has chosen to use the
homestead exemption as the form of tax relief to residents.
In August 2015, City Council approved Ordinance No. 1121to
increasethe homestead exemption to 12% which is the
equivalent to a $0.055 tax rate reduction which is a larger
savings to the residents than the effective rate of 0.430012
($0.031988 tax reduction). Theimpact of the homestead
exemption reduces the City’sFY 2016 budgeted revenueby
approximately$3.0 million.
Financial
Considerations:The effective tax rate would result in a property tax revenue
reduction of $1,850,609.
Strategic Link:F1Adhere to financial management principles and budget
Citizen Input/
st
Board Review:Second Public hearing is scheduled for September 1
Honorable Mayor and City Council
Page 2of2
Legal Review:None required
Alternatives:None
Supporting
Documents:None
Staff
Recommendation:Hold public hearing to comply with state law.