Board of Directors Budget Workshop


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Meeting Date: 08/13/2019  

SUBJECT MATTER:
Receive, consider and act upon the proposed 2019 debt service tax rate and maintenance and operations tax rate;
FISCAL IMPACT:
Not applicable
BACKGROUND:
At the conclusion of the budget workshops, the Board will vote on a proposed 2019 property tax rate for the 2020 budget.  The action on the proposed rate is not the formal adoption of the tax rate, but it does determine if required published notices and two public hearings on the proposed tax rate are necessary. 
 
If the proposed rate is at or below the effective tax of $0.2240, no public hearings will be necessary.  If the proposed rate is above the effective tax rate, the Board will need to take action at the budget workshop meeting to confirm dates and times for two public hearings on the proposed tax rate.  The budget calendar adopted by the Board in May 2019 established Wednesday, August 28, 2019 at 5:00 pm as the date and time for the First Public Hearing and Wednesday, September 4, 2019 at 6:00 pm as the date and time for the Second Public Hearing.  Additionally, a Notice of Public Hearing on Tax Increase is required to be published in a general circulation newspaper at least seven days prior to the first public hearing as well as on the Township’s website. 
 
The proposed property tax rate consists of two components.  The first is a debt service rate, and the second is a maintenance and operations rate.
 
The debt service rate generates revenues to fund $3,448,204 of principal and interest payments due in 2020 on the Township’s unlimited tax bonds.  The 2019 debt service rate certified by the Montgomery County Tax Assessor’s office is $0.0167 per $100 of taxable value.  Please note that once the proposed debt service rate is voted on by the Board of Directors, it cannot be revised.
 
The maintenance and operations component of the property tax rate generates revenues to fund expenditures other than those related to debt service.  Once the Board approves the proposed maintenance and operations rate, it can be lowered but not increased without triggering requirements for additional published notices and public hearings.

The following chart reflets the debt service and maintenance and operations components of the 2019 property tax rate assuming the rate will be maintained at the current level of $0.2273.  Staff can calculate other tax rate scenarios as requested by the Board.


 
  Maintain tax rate at current rate of $0.22.73
Debt Service Rate $0.0167
Maintenance and Operations $0.2106
Total Proposed 2019 Rate  $0.2273
 
This agenda item is included on the agendas for the August 13, August 14, August 15 and August 16 budget workshop meetings to provide the Board flexibility during the budget process to act upon the proposed 2019 tax rate.
RECOMMENDATION:
Approve a proposed 2019 property tax rate of $0.2273 [or another amount determined by the Board] per $100 of taxable value, consisting of a debt service rate of $0.0167 and a maintenance and operations rate of $0.2106.

    

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