Explain how the property tax is calculated and increases work.
Information was prepared prior to the May 2006 levy election on how property taxes are calculated and how increases work.

What is the split of property taxes between commercial and residential owners (dollars & percent)? Estimate cost of services per household/resident/employee.
Unfortunately, the County Assessor’s Office does not supply information on total citywide property taxes paid by property type so it is not possible to provide the split of property taxes between commercial and residential owners. 

However, the City has tracked several specific residential and commercial properties since 1994.  On average, the tax bills for commercial property have declined significantly while residential bills have remained relatively stable.  These changes suggest that the citywide property tax burden is shifting from commercial to residential properties.  This chart shows the data for 2006, as compared with 1994 when the city began tracking this information. 

Additionally, based on King County’s 2006 average assessed value of $383,400 for a Redmond home, at the 2006 levy rate of $1.23 per $1,000 of assessed valuation, the annual property tax households paid to the City in 2006  is estimated at $471.58.  For comparison purposes with the prior year, based on King County’s 2005 average assessed value of $353,100 for a Redmond home, at the 2005 levy rate of $1.58 per $1,000 of assessed valuation, the annual property tax households paid to the City in 2005 is estimated at $557.90. 

The average assessed valuation for commercial properties is not available because of the great variance in the size of businesses.

Explain why growth doesn’t provide enough revenue to expand service delivery.
The City does not have a tax structure in place that recovers sufficient revenue to fully provide for ongoing current service costs.  This gap is also due to the City’s fiscal policies that divert a significant percentage (relative to other cities) of ongoing General Fund revenues to capital projects and by the State’s sales tax exemption actions (i.e. high-tech sales tax exemption).

The City has done a significant amount of work on this and related questions in recent years.  The first study was the 1997 cost of growth study (see table below).  In 2004, the Anbender report recommended further Council work was needed on policies regarding growth paying for growth.  Even more recently, a report to the Council on March 1, 2006 focused on the impact of new Microsoft development on City revenues.

Cost of Growth Model Baseline Forecast and Case Studies	full document (7 megs)
Table of Contents		TOC
I. Introduction		section I *
II. Growth Prospects		section II *
III. Baseline Forecast Results		section III *
IV. Neighborhood Case Study  Results		section IV *
V. Town Center Case Study Results		section V *
VI. Applications and Uses of the Cost of Growth Model		section VI *
*  Sections are approximately 1-2 megs in size

Explain the sources of greater service demand.
There are several sources of greater service demand that impact all City services including:

• Residential population increases
• Significant growth and expansion of Microsoft and other businesses
• Unfunded mandates due to Federal and State legislation
• Changing population demographics (aging, more diverse community)
• Risk and liability issues

Other more service-specific drivers were presented to and discussed with Council in April - June 2005 as part of the City's long term financial strategy discussions.

Council Departmental Presentations April to June 2005		Size in megs
Mayor		less than 1
Finance & Legal		less than 1
Finance		6
Fire		6.5
Human Resources		3
Parks and Recreation		11
Planning part 1 & Planning part 2		3.5 & 2
Police		5
Public Works		8

Explain the proportions and limits of capital, operating & utility dollars on one page.
Please see the linked excerpt from the FY 05-06 budget, which summarizes the biennial budget by fund type for all city funds, as well as each fund’s respective share of the total City budget and the increases from FY 03-04.
(To view the current full budget information.)

(In order to view or print the pdf documents you must have the latest Adobe Acrobat Reader installed on your computer. Obtain free Acrobat Reader.)