HomeMy WebLinkAbout2013-06-10 13-203 ORDERCOUNCIL ACTION
Item No. 13-203
Date: June 10, 2013
Item/Subject: Order, Reducing the Downtown Development District Tax Increment Financing
Captured Assessed Value Percent for FY 2014
Responsible Department: City Council
Commentary: this order will reduce the captured assessed value in the Downtown
Development District from 100% to 75% for the fiscal year beginning July 1, 2013. In FY 2011,
the City's residential property values remained steady, but the economy had a significant
negative impact on the City's commercial property values. This resulted in a reduction of
approximately 25% in commercial property value for FY 2011, with little increase in new
property value to offset it. In FY 2014, the City anticipates modest growth in assessed value,
the growth is not sufficient to offset the loss in commercial values from the prior year. Based on
the potential impact on residential property tax payers, the City Manager's recommended budget
included a provision to continue the lower the percentage of captured assessed value within the
Downtown Development District (DDD) Tax Increment Financing District, for the third year in a
row. This recommendation was based on the fact that a significant portion of the DDD
increment is generated from commercial property values.
The attached Order would reduce the FY 2014 DDD captured assessed value percentage from
100% to 75%.
Manager's Comments:
Associated Information: Order
Budget Approval:
Legal Approval:
Introduced for
Passage
First Reading
Referral
Department Head
Page _ of _
ICity Manager
FKaTce Director
Solicitor
Assigned to Councilor Nealley
CI`T'Y OF BANGOR
13-203
JUNE 10, 2013
(TITLE.) Order, Reducing the Downtown Development District Tax Increment Financing
District Captured Assessed Value Percentage for FY 2014
By the City Council of the City of Bangor.
WHEREAS, in FY 2011, the City realized an overall reduction in assessed value; and
WHEREAS, the decrease was comprised of an estimated 25% reduction in commercial real
estate value, a 1%-5% reduction in multi -family home values, as well as the annual
depreciation of personal property, which approximates 8% per year; and
WHEREAS, the City anticipates realizing a slight decrease in assessed value in FY2014, and
WHEREAS, the anticipated modest increase in FY2014 commercial assessed value does not
offset the FY 2011 reduction in commercial value and FY 2014 slight decrease in residential
assessed value; and
WHEREAS, the majority of the captured assessed value within the Downtown Development
District Tax Increment Financing District is comprised of commercial value; and
WHEREAS, a continuation of the Council's action in FY 2011 to decrease the percentage of
Downtown Development District captured assessed value will continue to mitigate the tax shift:
from commercial properties to residential properties;
NOW THEREFORE BE IT ORDERED, THAT for FY 2014, the Downtown Development District
captured assessed value percentage is hereby reduced from 100% to 75%.
IN CITY COUNCIL
June 10, 2013
Motion made and seconded for Passage
Passed
GITY CLE
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