Alliance Policy & Management Group Tax Year 2014 Update September 19, 2014

2 COCONINO COUNTY TAXES  Assessed Values – February 10 th  Each taxing entity receives a levy limit worksheet from the PTOC (Property Tax and Oversight Commission) to assist in developing tax levies and tax rates  Tax Notices to be mailed by September 15th

3 COCONINO COUNTY TAXES – Preliminary Assessed Value Projection  Primary Assessed Values are Projected to Increase by 1.55% in FY16 (Tax Year 2015)  Secondary Assessed Values are Projected to Increase 4.71% in FY16 (Tax Year 2015)

4 COCONINO COUNTY TAXES – Current and Future Changes  Transwestern Pipeline  Transwestern appealed the valuation for tax years 2010 through 2014  Estimated total refund - $1,715,094  Educational Jurisdictions: $1,369,787  County, FUSD, Maine Consolidated, and Williams Unified and all other taxing jurisdictions, ( other than Maine Consolidated*), will be refunding Transwestern all at one time in October 2014  * (Maine has a loan with County Treasurer)

5 COCONINO COUNTY TAXES – Current and Future Changes  Prop 117  Proposition passed in the 2012 General Election and will take effect in FY2016 (Tax Year 2015)  Cannot increase more than 5% above the previous year  County Assessor is required to notify property owners as to the property’s full cash and limited property value  Limited Property Value will be used to calculate all taxes and cannot exceed the Full Cash Value.

Agency Information CCC FUSD City of Flagstaff Coconino County Summit Fire District Highlands Fire District

Coconino Community College

8 Coconino Community College: Primary Property Taxes  General Fund Levy for College Programs (Instruction, Academic Support, Student Services, Institutional Support, and Facilities)  Levy is capped at 2% growth + new construction Coconino Community College has the lowest primary property tax rate of all Community Colleges in the State of Arizona

9 Coconino Community College: Secondary Property Taxes  $25 Million Debt Service for 20-year bonds used for the construction of Lone Tree and Williams buildings and expansion of Page Campus  Debt Services complete in FY 19

10  For all properties in the City of Flagstaff, the average change for Community College property taxes is a levy increase of $6.55 or 6%. Coconino Community College: Property Tax Summary

11  Impact on a $100,000 home located in the City of Flagstaff valued in FY 2014 with comparisons.  Summary: If there was no change to the value of the property the tax increase would be $1.77. However, on average a home valued at $100,000 in FY14 is valued at $102,600 in FY15 due to an increase in average district values. This results in an average tax increase of $3.34. Coconino Community College: Property Tax Summary *Average Taxpayer Impact on owner occupied residential (class 3) properties only

Flagstaff Unified School District #1 Comparison of Overall Budgets FY 2011, FY 2012, FY 2013, FY 2014 & FY 2015 Budget Area FY 2011 Amt.FY 2012 Amt. FY 2013 Amt. FY 2014 Amt. FY 2015 (Est.) I. Total M&O Budget$67,000,000$63,600,000$61,200,000$61,210,000$61,880,000 II. Vocational JTED Fund (596-Tchr cost only)400,000500,000700,000 III. Prop 301 Funds1,200,0001,300,0001,500,0001,800,0002,700,000 IV. Instructional Improvement Fund350,000300,000450,000150,000400,000 V. Major Federal Grants7,000,0006,100,0004,700,0004,600,000 VI. Capital Outlay Budgets A. DAA* & Bond $ for Clsrm Tech.4,100,0001,950,0001,400,000**1,700,000 B. Capital Outlay Override (611)2,700,0001,300,000650,000520,000900,000 C. Soft Capital (625)800,000200,000260,00000 VII. Adjacent Ways320,000660,000100,000250,000550,000 Sub Total for General & Capital Outlay$83,870,000$75,910,000$70,960,000$70,930,000$73,430,000 VIII. Debt Service5,400,0005,700,0005,100,0005,700,0006,400,000 Grand Totals $89,270,000 $81,610,000 $76,060,000 $76,630,000 $79,830,000 *DAA is District Additional Assistance, which encompasses what was formerly Unrestricted Capital Outlay and Soft Capital. **Includes funds out of Bond Revenues for Classroom Technology.

14 Flagstaff Unified School District #1 History of State Equalization Aid to FUSD Note: The % figure = State Equalization Aid ÷ Revenue Control Limit (RCL)

15

16 Flagstaff Unified School District #1 Assessed Valuations Last 10 Fiscal Years Fiscal YearPrimary Assessed Valuations% of Change Secondary Assessed Valuations % of Change 2015$1,039,582, %$1,041,305, % 2014$1,035,897, %$1,034,382, % 2013$1,200,840, %$1,200,403, % 2012$1,234,921, %$1,251,920, % 2011$1,324,013, %$1,403,781, % 2010$1,264,349, %$1,478,020, % 2009$1,149,388, %$1,414,083, % 2008$1,023,399, %$1,181,358, % 2007$920,184, %$989,865, % 2006$845,202,755 $881,539,456

Flagstaff Unified School District #1 Tax Rate Projections - Primary & Secondary - for August 2014 Levy (FY 2015) Tax Rate Categories FY 2014 Tax Rates FY 2015 Tax RatesDifferences Primary Tax Rates: Maintenance & Operation$3.9803$3.7886($0.1917) District Additional Assistance$0.0000$ Adjacent Ways$0.0096$0.0259$ Total Primary Tax Rate$3.9899$3.8502($0.1397) Secondary Tax Rates: Overrides$0.7061$0.7138$ Debt Service$0.4979$0.6227$ Total Secondary Tax Rate$1.2040$1.3365$ Totals for FUSD Primary & Secondary Tax Rates$5.1939$5.1867($0.0072) * The Department of Revenue will be adjusting Homeowner (Primary AZ Residence) rebate percentages to offset homeowner tax shifts resulting from lowering the assessment ratios for commercial properties. In FY 2014 the percentage of rebate was set at %. It is estimated to be set at 44% for taxes. The homeowners rebate is actually called Additional State Aid and requires the State to pay a portion of each homeowners primary property taxes up to a maximum of $600. The rebate applies only to taxpayers primary AZ home.

Comparison of FUSD TAXES* for FY 2014 and FY 2015 $100,000 House FY 2014 $100,000 House FY 2015 FUSD Tax Type Tax Rate Taxes Tax RateTaxes FUSD Primary Tax$3.99$ $3.85$ FUSD Secondary Tax$1.20$ $1.34$ Overall Rates and Taxes$5.19$ $5.19$ Primary Homeowner's Rebate-$1.44-$ $1.47-$ Total Net Rates and Taxes$3.75$ $3.72$ If House Increases in Value: If House Increases in Value by 1% in FY 2015, the property value would be $101,000 and the total taxes for FUSD would be $524, or an increase of $5.00. *School Districts are limited by State government to a regulated budget capacity/spending authority. Budget capacity is supported by cash from State aid and property taxes. Cash balances are important in setting each year's levy.

19 City of Flagstaff

20 City of Flagstaff: Primary Property Taxes  General Fund Levy for City Services ( including: Police, Fire, Parks, Recreation, City Court, Administration, Management Services…)  Levy is capped at 2% growth + new construction  Council decision is to keep levy flat  Increase due to new construction

21 City of Flagstaff: Secondary Property Taxes  Debt Service Obligations  Water, Sewer, Lighting, Open Spaces, Recreation, and Fire Facilities (20%)  Other General Obligation Debt (6%)

22 City of Flagstaff: Property Tax Summary  For owner occupied residential properties in the City of Flagstaff, the average change for City property taxes is a levy increase of $9.40. *Average Taxpayer Impact on owner occupied residential (class 3) properties only

23 City of Flagstaff: Property Tax Summary  For demonstration purposes only. Impact on a $100,000 home valued in FY2014 with comparisons to change in proposed rates and home value changes.

Coconino County

Property Tax Disbursement Based on FY15 Levy Data

Coconino County: Primary Property Taxes General Fund Levy for County Services (Sheriff, Parks and Recreation, Superior Court, County Attorney, Public Defender, Probation) Levy is capped at 2% growth + new construction Average Impact = $1.57 increase per $100,000 of FY14 value. Coconino County has the third lowest primary property tax rate of all Counties in the State of Arizona

Coconino County: Secondary Property Taxes Library District County-wide, funds library operations No rate or levy restrictions Average Impact = $0.02 increase per $100,000 of FY14 value.

Coconino County: Secondary Property Taxes Public Health Services District County-wide, funds public health services $0.25 rate limit Average Impact = $0.02 increase per $100,000 of FY14 value.

Coconino County: Secondary Property Taxes Flood Control District Excludes incorporated Flagstaff, Page, Fredonia $0.50 rate limit Average Impact = $0.73 decrease per $100,000 of FY14 value.

Coconino County: Property Tax Summary The average per parcel impact for properties not in the Flood Control District is an increase of $9.48. The average per parcel impact for properties located in the Flood Control District is an increase of $10.34.

Other Taxing Jurisdictions Property Tax Summary FDAT State required formula, dependent upon Fire District levies County-wide Maximum rate = $0.10 Expect slight drop in levy State Equalization State required rate 0.66% decrease for FY14 JTEDs (Joint Technology Education Districts) Statutory rate of $0.05 Expect drop in levy = drop in property value

Property Tax Projections For properties located in the following taxing areas: City of Flagstaff Highlands Fire District Summit Fire District

Tax Rates by Taxing Area The following slides show sample tax assessments based on the typical property by taxing area. The average value changes by taxing area. The chart below shows the tax rates that would apply in each Flagstaff area jurisdiction.

Tax Levy by Taxing Area Assessed values changed by area as well. The chart below shows the average change in total tax levy for a home that was valued at $100,000 in FY14 in various location. The net tax levy will change for each property based on change in value and change in area tax rates.

35 State Aid to Education (Homeowner’s Rebate)  Owner Occupied Residential Properties (Class 3) (Only one primary residence eligible for rebate)  Credit of up to $600 (tax reduction)  Formula to determine credit rate:  FY14 formula = Lesser of % of School District Primary Tax Rate or % QTR, up to $600 credit. This became a $1.44 reduction rate times the Assessed Valuation, or for a house appraised at $100,000 ($10,000 Assessed Valuation), the homeowner would receive a $ tax credit reduction for FUSD’s Primary Tax Levy.  Estimated Rebate – FY15 formula = Lesser of % of School District Primary Tax Rate or % QTR, up to $600 credit. This becomes a $1.47 reduction rate times the Assessed Valuation, or for a house appraised at $100,000 ($10,000 Assessed Valuation), the homeowner would receive a $ tax credit reduction for FUSD’s Primary Tax Levy.

Tax Year 2014 (FY2015) Property Tax Projection: Property Located in the City of Flagstaff

Tax Year 2014 (FY2015) Property Tax Projection: Residential Property Located in the Highlands Fire District

Tax Year 2014 (FY2015) Property Tax Projection: Owner Property Located in the Summit Fire District