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Item 6ACITY OF SOUTHLAKE MEMORANDUM September 10, 2024 To: Alison Ortowski, City Manager From: Sharen Jackson, Chief Financial Officer Subject: Ordinance No. 1286, 2nd Reading, Tax Levy Ordinance Action Requested: The purpose of this item is to seek Council approval on the tax levy at a tax rate of $0.305. Background Information: The FY 2025 budget submitted to the City Council proposes a tax rate of $.305 per $100 of a property's taxable value. State law requires the city to adopt the tax rate in two components. Part of the tax rate, $0.055 (18%) per $100, pays for the retirement of debt due during the 2025 budget year. The remainder of the tax rate, $0.25 (82%) per $100, is used to support the General Fund operations of the City. On July 25th, the Tarrant and Denton Appraisal Districts certified the appraised values of all properties in Southlake to City management. The total taxable value in the City is $11,275,155,717 (net of TIF value), which is the value of properties as of January 1, 2024. Upon adoption of a tax rate upon the second reading, the City's tax collector, Tarrant County, will be notified of the adopted rate. Tarrant County will then apply the tax rate to the taxable values of properties in Southlake and generate tax statements after October 1, 2024. This year's proposed tax rate ($0.305) falls below the no new revenue rate ($0.305956) and will reduce property tax revenues from the same properties in FY 2024 and FY 2025. The proposed budget also includes tax relief through a 20% homestead exemption and a $0.014 rate reduction. Item 6A Financial Considerations: FY 2025 proposed tax rate reduction of $0.014 with a total tax rate of $0.305. The tax rate allocation of $0.25 for general fund operations and $0.055 for debt service. As previously mentioned, this will provide a distribution of 82% of the rate for operations and 18% for debt service. Strategic Link: F1 Safeguarding the public trust through a commitment to thoughtful planning and responsible, conservative financial management. Citizen Input/ Board Review: Public hearing is scheduled for September 3rd and September 17th. Legal Review: None required Alternatives: If the ordinance is not approved and adopted, the existing tax rate and related allocation between maintenance, operations, and debt service would remain in force until otherwise provided. Supporting Documents: Ordinance No. 1286 Staff Recommendation: Approval of Ordinance No. 1286, on 2nd reading, levying ad valorem taxes at the rate of $.305 for the Fiscal Year beginning October 1, 2024, and ending September 30, 2025. ORDINANCE NO. 1286 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, FIXING AND LEVYING MUNICIPAL AD VALOREM TAXES FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2024 AND ENDING SEPTEMBER 30, 2025, AND FOR EACH YEAR THEREAFTER UNTIL OTHERWISE PROVIDED, AT THE RATE OF $0.305 PER ONE HUNDRED DOLLARS ($100.00) ASSESSED VALUE ON ALL TAXABLE PROPERTY WITHIN THE CORPORATE LIMITS OF THE CITY OF SOUTHLAKE, TEXAS, AS OF JANUARY 1, 2024, TO PROVIDE REVENUES FOR THE PAYMENT OF CURRENT EXPENSES AND TO PROVIDE AN INTEREST AND SINKING FUND ON ALL OUTSTANDING DEBTS OF THE CITY; DIRECTING THE ASSESSMENT THEREOF; PROVIDING FOR DUE AND DELINQUENT DATES TOGETHER WITH PENALTIES AND INTEREST THEREON; PROVIDING FOR PLACE OF PAYMENT; PROVIDING FOR APPROVAL OF THE TAX ROLLS PRESENTED TO THE CITY COUNCIL; PROVIDING FOR THE REPEAL OF INCONSISTENT ORDINANCES; PROVIDING FOR A SEVERABILITY CLAUSE; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Southlake, Texas (hereinafter referred to as the "City") hereby finds that the tax for the fiscal year beginning October 1, 2024, and ending September 30, 2025, hereinafter levied for current expenses of the City and the general improvements of the City and its property must be levied to provide the revenue requirements of the budget for the ensuing year; and WHEREAS, the City Council has approved, by a separate ordinance adopted on the 17t" day of September 2024, the budget for the fiscal year beginning October 1, 2024, and ending September 30, 2025; and WHEREAS, all statutory and constitutional requirements concerning the levying and assessing of ad valorem taxes have been complied with. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS: Section 1. That all of the above premises are found to be true and correct and are incorporated into the body of this Ordinance as if copied in their entirety. Section 2. That there is hereby levied and ordered to be assessed and collected for the fiscal year beginning October 1, 2024, and ending September 30, 2025, and for each fiscal year thereafter until it be otherwise provided by and ordained on all taxable property, real, personal and mixed, situated within the corporate limits of the City of Southlake, Texas, and not exempt from taxation by the Constitution of the State and valid State laws, an ad valorem tax rate of $0.305 for the general operations of the City on each One Hundred Dollars ($100.00) assessed value of taxable property, and shall be apportioned and distributed as follows: a. For the purpose to defray the current expenses of the municipal government of the City, a tax of $0.25 on each One Hundred Dollars ($100.00) assessed value of all taxable property. THIS TAX RATE WILL RAISE LESS TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S TAX RATE. THE TAX RATE WILL EFFECTIVELY BE CHANGED BY 0.23% PERCENT AND WILL REDUCE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $14.00. b. For the purpose to create a sinking fund to pay the interest and principal on all outstanding debt of the City, not otherwise provided for, a tax of $0.055 on each one Hundred Dollars ($100.00) assessed value of all taxable property, within the City which shall be applied to the payment of such interest and maturities of all outstanding debt. Section 3. That all ad valorem taxes shall become due and payable on December 31, 2024, and all ad valorem taxes for the year shall become delinquent after January 31, 2025. There shall be no discount for payment of taxes prior to January 31, 2025. A delinquent tax shall incur all penalty and interest authorized by State law Sections 33.01 and 33.11 of the Property Tax Code, to -wit: a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent plus one percent (1 %) for each additional month or portion of a month the tax remains unpaid prior to July 1 st of the year in which it becomes delinquent. Provided, however, a tax delinquent by July 1st incurs a total penalty of twelve percent (12%) of the amount of the delinquent tax without regard to the number of months the tax has been delinquent. A delinquent tax shall also accrue interest at a rate of one percent (1 %) for each month or portion of a month the tax remains unpaid. Taxes that remain delinquent on July 1, 2025, incur an additional penalty of twenty percent (20%) of the amount of taxes, penalty, and interest due; such additional penalty is to defray costs of collection due to contract with the City's attorney pursuant to Section 6.30 of the Property Tax Code. Section 4. Taxes are payable at the office of Tarrant County Tax Collector. The City shall have available all rights and remedies provided by law for the enforcement of the collection of taxes levied under this ordinance. Section 5. That the tax rolls, as presented to the City Council, together with any supplement thereto, be, and the same are hereby approved. Section 6. That any and all ordinances, resolutions, rules, regulations, policies, or provisions inconsistent or in conflict with the provisions of this Ordinance are hereby expressly repealed and rescinded to the extent of the inconsistency or conflict. Section 7. If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance, or application thereto any person or circumstances is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this Ordinance; and the City Council hereby declares it would have passed such remaining portions of this Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. Section 8. That the necessity of and levying municipal ad valorem taxes of the City for the next fiscal year as required by the laws of the State of Texas, requires that this Ordinance shall take effect immediately from and after its passage, and it is accordingly so ordained. PASSED AND APPROVED on first reading this day of 2024. Shawn McCaskill, Mayor ATTEST: Amy Shelley City Secretary PASSED AND APPROVED on second reading this day of 2024. Shawn McCaskill, Mayor ATTEST: Amy Shelley City Secretary APPROVED AS TO FORM: City Attorney Date: Adopted: Effective: