Board of Directors Budget Workshop


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Meeting Date: 08/16/2018  

SUBJECT MATTER:
Receive, consider and act upon the proposed 2018 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 2018 property tax rate for the 2019 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 $0.2273, no public hearings will be necessary.  If the rate is above the effective tax rate, the Board will need to take action to establish dates and times for two public hearings on the proposed tax rate.  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 $3,443,367 of principal and interest payments due in 2019 on the Township’s unlimited tax bonds.  The 2018 debt service rate certified by the Montgomery County Tax Assessor’s office is $0.0170 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 reflects the debt service and maintenance and operations components of the 2018 property tax rate assuming the rate will be maintained at the current level of $0.2300.  Staff can calculate other tax rate scenarios as requested by the Board.


 
 
  Maintain tax rate at current rate of
$0.2300
Debt Service Rate $0.0170
Maintenance and Operations $0.2130
    Total Proposed 2018 Rate $0.2300
 
 
RECOMMENDATION:
Approve a proposed 2018 property tax rate of $0.2300 [or another amount determined by the Board] per $100 of taxable value, consisting of a debt service rate of $0.0170 and a maintenance and operations rate of $0.2130. 

    

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