File #: 20-0652    Name: FY 2021 Tax Rate Discussion and Proposal
Type: Agenda Item Status: Approved
In control: City Council Regular Meeting
On agenda: 8/4/2020 Final action: 8/4/2020
Title: Consider/Discuss/Act on Fiscal Year 2020-21 Proposed Tax Rate, Take Record Vote and Set Public Hearing and Adoption Date

Title

Consider/Discuss/Act on Fiscal Year 2020-21 Proposed Tax Rate, Take Record Vote and Set Public Hearing and Adoption Date

 

Summary

 

COUNCIL GOAL:                     Financially Sound Government

(4A: Provide Funding and Organizational Framework to Ensure Continual Economic Improvements)

 

MEETING DATE:                     August 4, 2020

 

DEPARTMENT:                      Financial Services

 

CONTACT:                                            Mark Holloway, Chief Financial Officer

                                                               

 

RECOMMENDED CITY COUNCIL ACTION:

  • Discuss FY2020-21 proposed tax rate.
  • Provide a motion to propose the tax rate, schedule a public hearing, and announce the adoption date by stating the following:
  •  
  • “I move that the City of McKinney propose to adopt a Fiscal Year 2021 Total Tax Rate of $0.51560, which is higher than the Fiscal Year 2021 no-new-revenue tax rate of $0.508645, and call for a public hearing; the public hearing to be held on September 15, 2020 at 6:00 p.m. Further, a record vote on the tax rate adoption will be held on September 15, 2020 at 6:00 p.m. All meetings will be held in the McKinney City Hall Council Chambers at 222 North Tennessee Street, McKinney, TX 75069.”
  •  
  • Take record vote on proposed tax rate.
  •  
  • ITEM SUMMARY:
  • The proposed tax rate ceiling is $0.51560 based on 100% market ratio on each $100 of all taxable property within the City.
  • The rate for Maintenance and Operations (M&O) is $0.361666 per $100 valuation. 
  • The rate for Interest and Sinking Funds (I&S) is $0.153934 per $100 valuation.
  • The tax rate ratio is 69% for M&O and 31% for I&S. 
  • The proposed tax rate of $0.51560 is the same as the current tax rate; this rate exceeds the no-new-revenue tax rate of $0.508645.
  • The no-new-revenue tax rate is the relationship between taxes for the preceding year and for the current year; it will raise the same amount of property tax revenue from the same properties in both the preceding tax year and the current tax year.
  • The voter-approval tax rate is the highest tax rate that an entity may adopt without holding an election to seek voter approval of the rate.
  •  
  • BACKGROUND INFORMATION:
  • State law requires that an entity must vote to place a proposal to adopt the tax rate on the agenda of a future meeting as an action item. This must be a record vote.
  • The no-new-revenue tax rate is $0.508645 per $100 valuation and the voter-approval tax rate is $0.517652 per $100 valuation.
  • Once the record vote has passed, State law requires an entity must schedule and hold a public hearing before adopting a tax rate.
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  • FINANCIAL SUMMARY:                      
  • Estimated tax revenues will be determined by the adopted tax rate.