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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 9