1. Alliance Policy & Management Group TAX YEAR 2015 UPDATE SEPTEMBER 18, 2015 1

2. COCONINO COUNTY TAXES Proposition 117 – Effective Tax Year 2015(FY2016) ◦Limit set on annual percentage increase in limited property value to no 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 values. ◦Limited Property Value (primary assessed value) will be used to calculate all taxes and cannot exceed the Full Cash Value (secondary assessed value). 2

3. 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

4. COCONINO COUNTY TAXES – Preliminary Assessed Value Projection Primary Assessed Values are Projected to Increase by 1.60% in FY17 (Tax Year 2016) Secondary Assessed Values are Projected to Increase 3.89% in FY17 (Tax Year 2016) Beginning in FY16 all tax levies will be calculated using the Primary Assessed Values (Limited Property Value) 4

5. Agency Information CCC FUSD City of Flagstaff Coconino County Summit Fire District Highlands Fire District 5

6. Coconino Community College 6

7. 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 7

8. 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 8

9. For all properties in the City of Flagstaff, the average change for Community College property taxes is a levy increase of $7.93 or 6.7%. Coconino Community College: Property Tax Summary 9

10. Impact on a $100,000 home located in the City of Flagstaff valued in FY 2015 with comparisons. Summary: If there was no change to the value of the property the tax increase would be $0.49. However, on average a home valued at $100,000 in FY15 is valued at $104,860 in FY16 due to an increase in average district values. This results in an average tax increase of $3.46. Coconino Community College: Property Tax Summary *Average Taxpayer Impact on owner occupied residential (class 3) properties only 10

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12. Flagstaff Unified School District #1 Comparison of Overall Budgets FY 2011, FY 2012, FY 2013, FY 2014, FY 2015 & FY 2016 Budget Area FY 2011 Amt. FY 2012 Amt. FY 2013 Amt. FY 2014 Amt. FY 2015 Amt. FY 2016 (Est.) I. Total M&O Budget$67,000,000$63,600,000$61,200,000$61,210,000$61,045,000$62,730,000 II. Vocational JTED Fund (596-Tchr cost only)400,000500,000700,000 III. Prop 301 Funds1,200,0001,300,0001,500,0001,900,0002,800,000 IV. Instructional Improvement Fund350,000300,000450,000150,000500,000 V. Major Federal Grants7,000,0006,100,0004,700,000 5,900,000 VI. Capital Outlay Budgets A. DAA* & Bond $ for Clsrm Tech.4,100,0001,950,0001,400,000**1,700,000**2,100,000 B. Capital Outlay Override (611)2,700,0001,300,000650,000520,000330,000 C. Soft Capital (625)800,000200,000260,000000 VII. Adjacent Ways320,000660,000100,000250,000230,000 Sub Total for General & Capital Outlay$83,870,000$75,910,000$70,960,000$71,130,000$73,605,000$75,290,000 VIII. Debt Service5,400,0005,700,0005,100,0005,700,0006,400,0004,800,000 Grand Totals $89,270,000 $81,610,000 $76,060,000 $76,830,000 $80,005,000 $80,090,000 *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. 12

13. Flagstaff Unified School District #1 History of State Equalization Aid to FUSD Note: The % figure = State Equalization Aid ÷ Revenue Control Limit (RCL) 13

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16. Flagstaff Unified School District #1 Assessed Valuations Last 10 Fiscal Years Fiscal YearPrimary Assessed Valuations% of Change *Debt Service/ Override Valuation for Tax Levy % of Change 2016$1,059,614,2742.63% * $1,052,447,785 1.08% 2015$1,032,443,414-0.33%$1,041,219,1980.66% 2014$1,035,897,607-13.70%$1,034,382,290-13.80% 2013$1,200,840,727-2.80%$1,200,403,857-4.10% 2012$1,234,921,625-6.70%$1,251,920,817-10.80% 2011$1,324,013,7124.70%$1,403,781,932-5.00% 2010$1,264,349,89310.00%$1,478,020,7014.50% 2009$1,149,388,30012.30%$1,414,083,72819.70% 2008$1,023,399,94311.20%$1,181,358,09419.30% 2007$920,184,2298.90%$989,865,17912.30% *The actual Secondary Valuation (full cash value) for 2015 Valuation is $1,091,553,274 or increased by 4.8% in 2015. The new formula for Debt Service and Override tax rates are now levied on the Primary Valuation minus the GPLET Valuation. 16

17. Flagstaff Unified School District #1 Tax Rate Projections - Primary & Debt Service/Override for August 2015 Levy (FY 2016) Tax Rate Categories FY 2015 Tax Rates FY 2016 Projected Tax Rates Projected Differences Primary Tax Rates: Maintenance & Operation$3.7886$4.0824$0.2938 District Additional Assistance$0.0357$0.1735$0.1378 Adjacent Ways$0.0259$0.0216-$0.0043 Total Primary Tax Rate$3.8502$4.2775$0.4273 Debt Service/Override Tax Rates: Debt Service$0.6227$0.4515-$0.1712 Overrides$0.7138$0.7265$0.0127 Total Debt Service/Override Tax Rate$1.3365$1.1780-$0.1585 Totals for FUSD Primary & Debt Service/Override Tax Rates$5.1867$5.4555$0.2688 * 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. The rebate is estimated to be set at about 45% for 2015-2016 taxes. The homeowners rebate is actually called Additional State Aid and requires the State to pay a portion of each homeowner's primary property taxes up to a maximum of $600. The rebate applies only to taxpayers' primary AZ home. 17

18. Comparison of FUSD TAXES* for FY 2014, FY 2015 and FY 2016 $100,000 House FY 2014 $100,000 House FY 2015 $100,000 House FY 2016 FUSD Tax Type Tax Rate Taxes Tax RateTaxes Tax RateTaxes FUSD Primary Tax$3.99$399.00 $3.85$385.00$4.28$428.00 FUSD Debt Service/Override Tax$1.20$120.00 $1.34$134.00$1.18$118.00 Overall Rates and Taxes$5.19$519.00 $5.19$519.00$5.46$546.00 Primary Homeowner's Rebate-$1.28-$128.00 -$1.51-$151.00-$1.74-$174.00 Total Net Rates and Taxes$3.91$391.00 $3.68$368.00$3.72$372.00 If House Increases in Value: If House Increases in Value by 1% in FY 2016, the property value would be $101,000 and the total taxes for FUSD would be $551, 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. 18

19. City of Flagstaff 19

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 FY16 levy increase due to new construction The City of Flagstaff is currently 8% below our allowable levy. 20

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%) 21

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 $10.56. Average Taxpayer Impact on owner occupied residential (class 3) properties only 22

23. City of Flagstaff: Property Tax Summary For demonstration purposes only. Impact on a $100,000 home valued in FY2015 with comparisons to change in proposed rates and home value changes. 23

24. Coconino County 24

25. Property Tax Disbursement Based on FY16 Levy Data 25

26. 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 = $1.82 increase per $100,000 of FY15 value. Coconino County has the third lowest primary property tax rate of all Counties in the State of Arizona 26

27. Coconino County: Secondary Property Taxes Library District County-wide, funds library operations No rate or levy restrictions Average Impact = $0.05 increase per $100,000 of FY15 value. 27

28. Coconino County: Secondary Property Taxes Public Health Services District County-wide, funds public health services $0.25 rate limit Average Impact = $0.05 increase per $100,000 of FY15 value. 28

29. Coconino County: Secondary Property Taxes Flood Control District Excludes incorporated Flagstaff, Page, Fredonia $0.50 rate limit Average Impact = $0.33 increase per $100,000 of FY15 value. 29

30. Coconino County: Property Tax Summary The average per parcel impact for properties not in the Flood Control District is an increase of $11.91. The average per parcel impact for properties located in the Flood Control District is an increase of $14.07. 30

31. 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 0.69% decrease for FY16 (Tax Year 2015) JTEDs (Joint Technology Education Districts) Statutory rate of $0.05 Expect drop in levy = drop in property value 31

32. Property Tax Projections For properties located in the following taxing areas: City of Flagstaff Highlands Fire District Summit Fire District 32

33. 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. 33

34. 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 FY15 in various location. The net tax levy will change for each property based on change in value and change in area tax rates. 34

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: ◦FY15 formula = Lesser of 44.000% of School District Primary Tax Rate or 44.000% QTR, up to $600 credit. This becomes a $1.51 reduction rate times the Assessed Valuation, or for a house appraised at $100,000 ($10,000 Assessed Valuation), the homeowner would receive a $151.00 tax credit reduction for the major part of FUSD’s Primary Tax Levy. ◦Estimated Rebate - FY16 formula = Lesser of 45.003% of School District Primary Tax Rate or 45.003% QTR, up to $600 credit. This becomes a $1.74 reduction rate times the Assessed Valuation, or for a house appraised at $100,000 ($10,000 Assessed Valuation), the homeowner would receive a $174.00 tax credit reduction for the major part of FUSD’s Primary Tax Levy. 35

36. Tax Year 2015 (FY2016) Property Tax Projection: Property Located in the City of Flagstaff 36

37. Tax Year 2014 (FY2015) Property Tax Projection: Residential Property Located in the Highlands Fire District 37

38. Tax Year 2014 (FY2015) Property Tax Projection: Owner Property Located in the Summit Fire District 38