HomeMy WebLinkAbout2014-06-09 14-211 ORDERCOUNCIL ACTION
Item No. 14-211
Date: June 9, 2014
Item/Subject: Order, Reducing the Downtown Development District Tax Increment Financing
Captured Assessed Value Percent for FY 2015
Responsible Department: City Council
Commentary: this order will reduce the captured assessed value in the Downtown
Development District from 100% to 65% for the fiscal year beginning July 1, 2014. 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. Since that time, the City has continued to realize modest growth in
assessed value, but it has not been 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 fourth 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 2015 DDD captured assessed value percentage from
100% to 65%.
Manager's Comments:
Associated Information: Order
Budget Approval:
Legal Approval:
Intro ced for
Passage
First Reading
Referral
Department Head
Caa M " O-,
City Manager
Page _ of _
Finance Director
icitor
Assigned to Councilor Gallant
CITY OF BANGOR
14-211
NNE 912014
(TITLE.) Order, Reducing the Downtown Development District Tax Increment Financing
District Captured Assessed Value Percentage for FY 2015
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 increase in assessed value in FY2015, and
WHEREAS, the anticipated modest increases in commercial assessed value since FY 2011 does
not offset the FY 2011 reduction in commercial 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 2015, the Downtown Development District
captured assessed value percentage is hereby reduced from 100% to 65%.
IN CITY COUNCIL .
JUNE 9, 2014
MOTION MADE AND SECONDED FOR PASSAGE
PASSED
CITY' CLERK