FY24 Adopted Budget

years). However, Fiscal Year 2023 deviated from that trend and the taxable valuation actually decreased – again due largely to a reduction in the taxable percentage of residential properties (including multi-family). These rollback impacts, combined with stagnant valuations and inflation reducing buying power, led to another decrease in taxable valuations for Fiscal Year 2024. As shown by the chart below, Fiscal Year 2023 and 2024 marked the lowest two-year total in taxable valuations growth within the last ten years by a wide margin.

Total Property Tax Valuations & Percent Change

-2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00%

$0 $1,000,000,000 $2,000,000,000 $3,000,000,000 $4,000,000,000

FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Taxable Val $3,136, $3,182, $3,421, $3,542, $3,745, $3,923, $4,258, $4,396 $4,375 $4,360 Val % Change 3.32% 1.46% 7.50% 3.55% 5.72% 4.74% 8.54% 3.24% -0.46% -0.36%

Taxable Value

2 yr. Val % growth:

10.4% 111

4.8%

11%

11.7%

-0.8%

In light of these financial impacts, the Fiscal Year 2024 budget includes no change in the property tax levy rate. For the previous eleven years, tax rate reductions were made possible by prudent debt strategies, operational efficiencies, and valuation growth. In particular, reductions in the debt service portion of the tax levy has been achieved through debt restructuring and early bond retirement strategies, fueled by valuation growth. However, our debt service revenue is no longer keeping up with project costs in this hyperinflationary market. If the city’s tax base continues to lag in growth and inflation worsens, the City may need to consider more severe expenditure cuts or increases to the property tax rate to avoid service cuts or increased deferred maintenance.

Property Tax Rate vs. Valuations

$1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 Taxable Value (in millions)

15.2 15.4 15.6 15.8 16 16.2 16.4 16.6 16.8 17

$0 $500

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Tax Value (millions) $3,036 $3,137 $3,183 $3,421 $3,543 $3,745 $3,923 $4,258 $4,396 $4,376 $4,360 Val % Change 2.56% 3.32% 1.46% 7.50% 3.55% 5.72% 4.74% 8.54% 3.24% -0.46% -0.36% Ptax Rate 16.805 16.705 16.651 16.583 16.333 16.183 15.833 15.773 15.673 15.633 15.633 Rate % Change -2.69% -0.60% -0.32% -0.41% -1.51% -0.92% -2.16% -0.38% -1.01% -0.26% 0.00% 15

20