10.30.2017 SPD PacketPage 1 of 1
]
Prosper is a place where everyone matters.
1. Call to Order/Roll Call.
2. Introductions of Members.
3. Review purpose of committee.
4. Review current tax rates and its purpose for the Town.
5. Review effective and rollback tax rate calculations with sales tax adjustment.
6. Discuss possible legislation and the impact on rollback tax calculations.
7. Review Special Purpose Districts in the State of Texas.
8. Review Committee calendar.
9. Adjournment.
CERTIFICATION
I, the undersigned authority, do hereby certify that this Notice of Meeting was posted at Prosper Town Hall,
located at 121 W. Broadway Street, Prosper, Texas 75078, a place convenient and readily accessible to
the general public at all times, and said Notice was posted on October 27, by 5:00 p.m., and remained so
posted at least 72 hours before said meeting was convened.
_______________________________ _________________________
Carol Myers, Deputy Town Secretary Date Noticed Removed
Pursuant to Section 551.071 of the Texas Government Code, the Town Council reserves the right to consult
in closed session with its attorney and to receive legal advice regarding any item listed on this agenda.
NOTICE OF ASSISTANCE AT PUBLIC MEETINGS: The Town Hall Annex is wheelchair accessible. For
special services or assistance, please contact the Town Secretary’s Office at (972) 569-1011 at least 48
hours prior to the meeting time.
AGENDA
Special Purpose District Committee
Prosper Fire Station #2
1140 S Teel Parkway
Prosper, TX 75078
Monday, October 30, 2017
6:00 p.m.
Special Purpose District
Committee
October 30, 2017
Purpose of Committee
The Town Council has created and appointed seven members selected to serve on newly-created committee to review options available for a portion of the Town’s local sales tax.The committee will study options available with the creation of a Special Purpose District that could designate a portion of the Town’s local sales tax revenue.
Upon completion of the meetings, the committee will make a recommendation to the Town Council.Since a change in the Town’s sales tax designation would require voter approval, the Town Council will decide whether to call an election to be held in May 2018 to formally create the Special Purpose District.
Mayor Pro-Tem Curry Vogelsang will serve as the Committee Chairman.Curry may be reached at curry_vogelsang@prospertx.gov
The Town’s Finance Director, Kelly Neal, will be the staff liaison for this committee.Kelly may be reached at kelly_neal@prospertx.gov or 972-569-1019.
Thank you for your willingness to serve your community.
October 30, 2017 2
Sales Tax
October 30, 2017
Town of Prosper, Texas
2017 -2018 Current Tax Rates
Property tax
The Town of Prosper property tax rate is $0.52 per $100 taxable value. Of this amount, $0.1525 is applied to Debt Service, and $0.3675 is applied to Maintenance and Operations.
Sales tax
The total combined sales tax rate in Prosper is 8.25% and is comprised of the following segments:
6.25%State sales tax rate
1.00%Prosper city sales tax rate
0.50%Prosper property tax relief
0.50%Prosper Economic Development Corporation
8.25%Combined sales tax rate
Hotel occupancy tax
The Town of Prosper hotel occupancy tax rate is 7% of the price paid for a room. Receipts from the tax may only be used to promote tourism and the convention and hotel industry. Currently Prosper has no hotels.
Source: Town of Prosper Finance Department, October 2017
October 30, 2017 4
October 30, 2017 5
Property Taxes
October 30, 2017
2017 Valuations Overview
Certified Total Taxable (after freeze loss) Increased 22.30%
○Collin County Value $2,719,182,499
○Denton County Value $ 394,824,724
○Total Value $3,114,007,223
Existing Taxable Values Increased 8.45%
○+ 06.11% in Collin County
○+ 33.85% in Denton County
New Construction Totaled $ 352,783,446
○Collin County $244,771,201
○Denton County $108,012,245
October 30, 2017 7
2017 Valuations Overview Cont’d
2016-2017 2017-2018 Difference Tax Dollars
Assessed Value $3,236,092,432 $3,978,881,859 $ 742,789,427 $ 20,690,186
Freeze Taxable $ 196,365,692 $ 234,171,487 $ 37,805,795 $ 1,217,692
Homestead Exemptions $ 139,092,623 $ 227,972,194 *$ 88,879,571 $1,185,455
Other Exemptions $ 354,490,396 $ 402,730,955 $ 48,240,559 $ 2,094,201
Net Taxable $2,546,143,721 $3,114,007,223 $ 567,863,502 $ 16,192,838
* FY 2017-2018 Homestead Exemption increased from 7.5% to 10%
October 30, 2017 8
Average Single-Family Home Value
Source: Collin CAD and Denton CAD Certified Totals 2008-2017
$342,977 $344,458 $333,084 $324,387
$321,662 $351,317
$378,651
$423,062 $460,766
$495,762
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
October 30, 2017 9
Ad Valorem Taxes
Source: Collin CAD and Denton CAD Certified Totals 2017
2017
Freeze Adjusted Taxable Value $3,114,007,223
Times Total Tax Rate per $100 $0.52
$16,192,838
Times Anticipated Collection Rate 100.0%
Plus Actual Tax from Freeze $1,071,060
Total Tax Levy $17,263,898
One Penny on the Tax Rate Yields $311,401
October 30, 2017 10
Property Tax Rate History
Fiscal Year
General
Fund I & S Fund Total
2012-13 0.316914 0.203086 0.520000
2013-14 0.326191 0.193809 0.520000
2014-15 0.356301 0.163699 0.520000
2015-16 0.361074 0.158926 0.520000
2016-17 0.367500 0.152500 0.520000
2017-18 0.367500 0.152500 0.520000
As Proposed
0.0 0.1 0.2 0.3 0.4 0.5 0.6
General Fund I & S Fund
October 30, 2017 11
Property Tax Rate Comparison
(2017 Tax Rates)
Source: Collin and Denton Central Appraisal Districts.
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
0.900
Cents per $100October 30, 2017 12
Where the Property Taxes Go
Collin County
Prosper, TX
Rate per
$100 Valuation
Town of Prosper $0.520000
Prosper ISD $ 1.670000
Collin County $ 0.192246
Collin College $ 0.079810
TOTALS $ 2.462056
Denton County
Prosper, TX
Rate per
$100 Valuation
Town of Prosper $0.520000
Denton ISD $1.540000
Denton County $ 0.237812
TOTALS $ 2.297812
Town of
Prosper
21%
Prosper ISD
67%
Collin County
9%
Collin College
3%
Town of
Prosper
23%
Denton ISD
68%
Denton County
9%
Source: 2017 rates from Collin CAD and Denton CAD websites
October 30, 2017 13
Average Home Owner
2017 Average Homestead Market Value = $ 495,762
Average Prosper Resident Total Tax Bill –Collin County
Note: Average Taxes are computed using 2017 tax rates for all agencies.
Includes exemptions with each entity for simplicity.
Taxing Jurisdiction
Tax Rate
per $100
Homestead
Exemption Tax Levy
Prosper ISD $1.670000 $25,000 $7,862
Town of Prosper $0.520000 $49,576 $2,320
Collin County $0.192246 $24,788 $905
Collin College $0.079810 -$396
Totals $2.462056 $99,364 $11,483
October 30, 2017 14
Sales Tax Adjustment Rate Effect
to Rollback Rates
0.052762674 0.049631969 0.042344
0.050862
0.054063
0.033197
0.508702591
0.501461794
0.524487
0.42922
0.463067
0.511076
0
0.01
0.02
0.03
0.04
0.05
0.06
0
0.1
0.2
0.3
0.4
0.5
0.6
2017 2016 2015 2014 2013 2012
Historical Tax Rates
Sales Tax Adjustment Rate Rollback Rate Before Sales Tax Relief Rollback Rate After Sales Tax Relief Adopted Tax Rate
October 30, 2017 15
SB 1 –Bettencourt Tax
Education, Health and Safety, Local Government, Special District
Local Laws, and Water Codes
Tax Code, defines “small taxing unit” for purposes of property tax assessment provisions, as a junior college or a taxing unit, other than a school district, for which the M&O tax rate proposed for the current tax year is two cents or less per $100 of taxable value or would impose taxes of $25 million or less when applied to the current total value for the taxing unit.
Amends §26.04, Tax Code, keeps intact the rollback rate for “small taxing units”. For a taxing unit other than a small taxing unit: Rollback Tax Rate = (Effective Maintenance and Operations x 1.06) + Current Debt Rate. If a disaster is declared, rate can go back to 1.08 until the earlier of: the first tax year in which the total taxable value of property taxable by the taxing unit exceeds the total taxable value of property taxable by the taxing unit on January 1 of the tax year in which the disaster occurred: or the 3rd year after the disaster occurred.
Amends §26.041, Tax Code, makes conforming changes. Amends title of §26.07, Tax Code, to read “Election to Reduce Tax Rate of Small Taxing Unit”. Amends title of §26.08, Tax Code, to read “Election to Approve Tax Rate of Taxing Unit Other Than Small Taxing Unit” provides for an automatic election if tax rate exceeds rollback tax rate of 6%.
October 30, 2017 16
October 30, 2017 17
GASB Statement 77 Abatements
Existence of an identifiable agreement
between a government and a specific
individual or entity
Promise by government to forgo tax revenues to
which they are otherwise entitled
Promise by individual/entity to take a specific
action after the agreement has been entered
into that contributes to economic development
or otherwise benefits the governments or the
citizens of those governments.
October 30, 2017 18
GASB Statement 77 Disclosures
Brief description of the abatement
Gross amount that tax revenues were
reduced by the abatement
Sales Tax Abatements:
○Highland Homes
○Sanders Custom Builders
○Denton County Fresh Water Supply District
○Lowe’s
○Home Depot
○Kroger
October 30, 2017 19
Committee Calendar
Week 1 –October 30
Introduction of members
Purpose/Intent of Committee
Current makeup of our sales tax and how it
is used (Town and EDC)
Impact the sales tax property tax relief has
on effective and roll back tax rates
Proposed legislation impact on rollback
calculation
Summary of State of Texas that have SPD
October 30, 2017 20
Committee Calendar
Week 2 –November 6
Local Sales Tax Options
Consultant report on sales tax analysis for
the Town
Fire and Police departments provide
financial operations and impact of growth in
the Town for maintaining level of service
October 30, 2017 21
Committee Calendar
Week 3 –November 13
Local Sales Tax Options
Parks and Library departments provide
financial operations and impact of growth in
the Town for maintaining level of service
Streets department provide financial
operations and impact of growth in the Town
for maintaining level of service
Other various special purpose district
options available with sales tax
October 30, 2017 22
Committee Calendar
Week 4 –November 27
Committee makes recommendation on sales
tax options for the Town
Information to be provided to Council in
December
October 30, 2017 23
Committee Calendar
Week 5 –December 12
Committee presents to Council their
findings/recommendation
Week 6 –January 9
Council reviews recommendation from
Committee
Week 7 –January 23
Deadline for Council to call for an election
October 30, 2017 24
Committee Calendar
Ongoing
Committee presents to local organizations
and/or civic forums to inform the citizens of
the upcoming election
Use of social media and other forms of
communication
Straw poll survey
Election to be held May 5, 2018
October 30, 2017 25
Thank You!
Questions?
October 30, 2017