HomeMy WebLinkAbout2012-06-11 12-198 ORDER COUNCIL ACTION
Item No. 12-198
Date: June 11, 2012
Item/Subject: Order, Reducing the Downtown Development District Tax Increment Financing
Captured Assessed Value Percent for FY 2013
Responsible Department: City Council
Commentary:
If approved, this order will reduce the captured assessed value in the Downtown Development
District from 100% to 75% for the fiscal year beginning July 1, 201Z. 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 2013, 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 second 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 2013 DDD captured assessed value percentage from
100% to 75%. �
Department Head
Manager's Comments: �� � �9n �
City Manager
Associated Information: Order
Budget Approval:
Finance Director
Legal Approval:
City Solicitor
Introduced for
� Passage
First Reading Page_of_
Referral
12-198
JLTNE 11,2Q12
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(TlTLE.) Qrder, Reducir�g the DQwntown Development District Tax Increment Financing
Distriet Captured Assessed Value Percentage far FY 2013
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 FY2013, and
WHEREAS, the anticipated modest increase in FY2013 commercial assessed value does not
offset the FY 2011 reduction in commercial value and FY 2013 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 '!"HEREFQRE BE IT ORDERED, THAT far FY 2Q13, th� DowrttorEvn Devetopment Ristrict
captured assessed value percentage is hereby reduced from iQ0% to T5°lo.
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