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04/10/2006 - Agenda Parks & Recreation Advisory Board AGENDA Monday April 10, 2006 7:00 p.m. Tigard Water District Building 8777 SW Burnham Street The purpose of the Parks and Recreation Advisory Board is to advocate for park and recreation opportunities for a growing Tigard. 1. Roll Call 2. Comments from the audience 3. Approval of Minutes — March 13, 2006 4. Certificates of Recognition to: Carl Switzer and Shelley Richards 5. Review of PRAB Mission (2 min) 6. Search for new teen PRAB member (1 min)Recreation Program Update 7. Q and A's with Finance Dep't on Bond Measures and Local Tax Levies A. Local Tax Levy for creation of a Recreation Division B . G.O. Bond Measure for Land Acquisition and Park Development FY 2006-2007 8. Recreation Program Update 9. FY 2006-2007 Budget Recommendation 10. A. Continue Park and Greenway Land Acquisition Process, (purchase first-refusal options / explore School District property exchange (Fowler School) / purchase land for a downtown public gathering place / consider recommending a general obligation bond measure election to be conducted in November, 2008 to purchase and develop parks and greenways). B. In the short-term, establish and initiate a small Recreation Program for the City of Tigard in FY 2006-2007. C. In the long-term, consider recommending a local tax levy election be conducted in November, 2008 to provide funds to begin a comprehensive Recreation Program in Tigard. 11. EXEC SESSION: Land Acquisition 12. Adjourn Executive Session: The Parks and Recreation Advisory Board may go into Executive Session under the provisions of ORS 192.660(1)(d),(e), (f)&(h)to discuss labor relations,real property transactions,current and pending litigation issues and to consider records that are exempt by law from public inspection. All discussions within this session are confidential;therefore nothing from this meeting may be disclosed by those present. Representatives of the news media are allowed to attend this session,but must not disclose any information discussed during this session. Daniel Plaza-April 10 mtg Page 1 From: Daniel Plaza To: board Date: 4/6/2006 10:20:22 AM Subject: April 10 mtg UPDATE ON COMPILATION OF DRAFT RECREATION PROGRAM Jennifer has gone on vacation and will return on April 16.Although Jennifer has made good strides in putting together a draft program, the draft is not yet complete, nor is ready for distribution. When she returns she will complete the draft and it will be placed in a binder(a la the land acquisition binders)and distributed to the PRAB in a timely manner before the May 8 meeting where its presentation, by Jennifer, will be on the agenda. Thanks Dan Plaza Parks and Facilities Manager City of Tigard 503 718 2590 daniel@tigard-or.gov March 21, 2006 CITY OF TIGARD OREGON Tigard Budget Committee City of Tigard 13125 SW Hall Blvd. Tigard, Oregon 972123 Dear Budget Committee Members: The Tigard Parks and Recreation Advisory Board (PRAB) has been receiving periodic updates regarding the process for funding the construction of the Jim Griffith Memorial Skate Park.Tigard staff has apprized the PRAB that of the$426,300 construction cost, Parks SDC funding will cover$335,502 of this amount. The Skate Park Task Force has approximately$40,000 in its treasury, and$50,798 is budgeted in the General Fund. Tigard is quite unique in being one of the only metropolitan cities without a skate park for its youth. It is also well known that exhausting fundraising efforts have been put forth by the Skate Park Task Force for more than four years. The Task Force has done an excellent job in masterminding the development of this project and has worked hard to bring it to reality for our community and its youth. Additionally, there have been many local citizens, organizations, and businessman who have stepped forward by offering personal, and in-kind services or cash donations in an attempt to see this project to completion. This facility will fill a large recreational deficit for our present and future youth. Considering this, the Tigard Park and RecreationAdvisory Board would like to strongly encourage the Tigard Budget Committee to include the funding necessary to construct the Skate Park in the City's 2006-07 budget. Sincerely, Michael Freudenthal, Chair Park and Recreation Advisory Committee 13125 SW Hall Blvd., Tigard, OR 97223 (503) 639-4171 TDD (503)684-2772 Pj � D,� oA pendix B A Recent History of Oregon's Property Tax System To understand the current structure of Oregon's property tax system, it is helpful to view the system in a historical context. Although governments in Oregon have been taxing property since before statehood, the structure of the tax changed very little until the 1990s, when two statewide ballot measures dramatically altered the system. Measure 5, which introduced tax rate limits, was passed in 1990 and became effective starting in the 1991- 92 tax year. When fully-implemented in 1995-96, Measure 5 cut tax rates an average of 51 percent from their 1990-91 levels. Measure 50, which cut taxes, introduced assessed value growth limits, and replaced most tax levies with permanent tax rates, was passed in 1997 and transformed the system from one primarily based on levies to one primarily based on rates. Measure 50, when implemented in 1997-98, cut effective tax rates an average of 11 percent from their 1996-97 levels. This appendix consists of four sections that are designed to provide a history of Oregon's property tax system within the context of the changes it has undergone in the 1990s. The first section, Overview, consists of a broad look at how the two ballot measures have affected the property tax system. The second section, Prop- erty Tax Administration, reviews how property assessment, tax calculation, and tax collection have been transformed. The next section, Urban Renewal, describes the changes urban renewal agencies have under- gone. The appendix concludes with a discussion of tax relief programs that have existed during the past twenty years. Overview One useful way to understand the recent history of the property tax system is to divide the discussion into three distinct periods—Pre-Measure 5,Measure 5,and Measure 50. Pre-Measure 5 Oregon had a pure levy-based property tax system until 1991-92. Each taxing district calculated its own tax levy based on its budget needs. County assessors estimated the real market values of all property in the state. Generally speaking, the full market value of property was taxable; there was no separate definition of assessed value. The levy for each taxing district was then divided by the total real market value in the dis- trict to arrive at a district tax rate.The taxes imposed by each district equaled.its tax rate multiplied by its real market value. Consequently there was no difference between taxes imposed and tax levies under this system, so taxes imposed grew with levies. Most levies were constitutionally limited to an annual growth rate of 6 percent,and levies above that required voter-approval. Under this system, the tax rate for an individual property depended on the combination of taxing districts from which it received services. Taxes for each property were calculated by first summing the tax rates for the relevant taxing districts to arrive at a consolidated tax rate.That tax rate was multiplied by the assessed value of the property to determine the taxes imposed on that property. The annual growth in taxes on an individual property depended on the interaction of a number of factors, including the growth in levies and the amount of new construction within the district. For example, if there were no new construction,then any growth in levies meant a growth in taxes for individual properties whose value did not decline. On the other hand, new construction within the district meant that the levies were distributed across more properties (i.e. more value), causing the tax rate to fall. This growth could translate into lower taxes for some individual properties. „ r' i, w. F"*.e"N . .p ^e ' 121 Measure 5 Measure 5 introduced limits,starting in 1991-92,on the taxes paid by individual properties.The limits of$5 per $1,000 real market value for school taxes and $10 per $1,000 real market value for general government taxes applied only to operating taxes, not bonds.4 If either the school or general government taxes exceeded its limit, then each corresponding taxing district had its tax rate reduced proportionately until the tax limit was reached.This reduction in taxes to the limits has been termed"compression." Measure 5 resulted in a system that was a hybrid of levy-based and rate-based systems. For properties where the school and general government taxes were below the limits, the process resembled a levy-based system; taxes imposed depended on levies. For properties where the calculated taxes exceeded the limits, and hence the tax rates were fixed at the limits, the process more closely resembled a rate-based system; taxes imposed depended on assessed values. Measure 50 The 1997 legislature drafted Measure 50 in response to the passage of Measure 47 in November of 1996, which a citizens'initiative put on the ballot. It would have rolled back property taxes (not assessed values) to 90 percent of the 1995-96 level for each property in the state. However, it was repealed by the legisla- tively-referred Measure 50, which was drafted to correct a number of technical problems with Measure 47 while replicating the tax cuts of Measure 47. The objective of Measure 50 was to reduce property taxes in 1997-98 and control their future growth. It achieved these goals by cutting the 1997-98 district tax levies and making the following three changes: the switch to permanent rates, the reduction of assessed values, and the limitation placed on yearly assessed value growth. While Measure 5 simply limited the tax rates used in calculating taxes imposed, Measure 50 changed the conceptual definitions of both assessed values and tax rates.Assessed value is no longer equal to real market value. For 1997-98, the assessed value of every property was reduced to 90 percent of its 1995-96 assessed value.5 Because value growth has not been uniform throughout the state, this change had varying impacts. The greatest cuts in assessed value, and consequently in taxes, were realized by those properties that expe- rienced the greatest growth between 1995-96 and 1997-98. For property that did not exist in 1995-96, the assessed value was calculated as a percentage of its market value. For existing property, Measure 50 limited the annual growth in assessed values to 3 percent, so predicting future assessed values becomes much simpler than in the past. For new property (for example, newly con- structed homes), assessed value is calculated as the market value of the property times the ratio of assessed value to market value of similar existing properties. This approach to assigning values to a new property assures that it is taxed consistently with similar existing properties. Measure 50 also stipulates that as- sessed value may not exceed real market value.As a result, if the real market value of a property falls below its assessed value,the taxable value will beset to the real market value. Prior to Measure 50, levies were set by local governments and voters, and tax rates were the result of divid- ing levies by assessed value. Under Measure 50 most levies were replaced by permanent tax rates, making the permanent rates central to the property tax system. There are three types of property taxes that taxing districts may impose: taxes from the permanent rates, local option levies, and bond levies.s Only the perma- nent rates are fixed; they do not change from year to year. For the local option and bond levies, the tax 4 The limit for schools was$15 per$1,000 assessed value in 1991-92.It was reduced by$2.50 each year until it reached a rate of$5 per$1,000 assessed value in 1995-96. 5 Note that in 1995-96,assessed and real market value were equal. 6 Currently,there are also gap bonds and a pension levy.Gap bonds represent debt obligations that have been funded with the operating taxes of districts.The pension levy represents an ongoing obligation the City of Portland has to its fire and police forces.Both of these will eventually become part of the permanent rate for their respective districts. 122 measures are typically voted on in terms of dollars, and the rates are calculated as the total levy divided by the assessed value in the district. Taxes from the permanent rates, typically referred to as operating taxes, are used to fund the general oper- ating budgets of the taxing districts and account for the single largest component of property taxes. Strictly speaking, the permanent rates are rate limits,so districts may use any rate up to their permanent rate. Local option taxes represent the only way for taxing districts to raise operating revenue beyond the amount from their permanent rate. Because voters at the local level must approve these levies, they represent one aspect of local control over the level of property taxes.Currently,all districts except schools are authorized to levy local option taxes. Measure 50 required that local option levies be approved by a majority of voters in a general election or an election with at least a 50 percent voter turnout. Bond levies have remained largely unchanged during this transformation and are used to pay principal and interest for bonded debt. Under the provisions of Measure 50, new bond levies, like local option taxes, are subject to a 50 percent voter turnout if the election is not a general election. Some taxing districts receive revenue from the taxation of timber.This revenue, known as an"offset,"is used to reduce the amount of revenue districts need to raise from their permanent rates, reducing the permanent rate actually used. Only general government districts, not schools, reduce their permanent tax rates when they receive offset payments. Schools do, however, receive timber tax payments that represent revenue in additional to what they raise with propery taxes. School District Replacement Revenue Under the provisions of Measure 5, the state was required, until 1995-96, to replace the revenue lost by school districts caused by the "compression" of school taxes under the property tax rate limits. But because the state was not required to continue the level of Basic School Support that it provided to school districts prior to Measure 5, as a practical matter the state's school replacement obligation had little or no effect on the amount of state support the legislature provided to schools. Measure 50 also contained a constitutional requirement that the legislature replace the revenue lost by school districts caused by the Measure 5 rate limits. But because Measure 50 cut taxes dramatically, the revenue losses to school districts due to Measure 5 compression are very small compared to the Basic School Support that the legislature actually provides;so this provision has no effect. Property Tax Administration The changes to the property tax system brought about by Measures 5 and 50 required significant changes in the activities of county governments and the state of Oregon in administering the tax. This section describes how property tax administration was changed by Measures 5 and 50. Property Assessment The process of identifying and assigning a value to taxable property is termed assessment. Assessment of property is administered by the county assessor, except for public utility property, which is assessed by the Oregon Department of Revenue. Utility property is placed on a separate assessment roll maintained by the department,then transferred to the county roll prior to preparation of tax bills. The Department of Revenue also appraises certain large industrial plants, but those properties appear only on the county assessment roll. Property subject to taxation includes all privately owned real property (e.g., land, buildings, and improve- ments) and business personal property (e.g., machinery, office furniture, and equipment). There is no prop- erty tax on household furnishings (exempted in 1913), personal belongings, or automobiles (exempted in 1920). There are a number of other exemptions to the property tax that are described in detail in the Tax Expenditure Report, a companion document to the Governor's Budget. 123 April 10, 2006 Mr. Rob Saxton Superintendent Tigard-Tualatin School District 23J Larry Hibbard Administration Center 6960 SW Sandburg Street Tigard, Oregon 97223 Dear Mr. Saxton: Subject: Uses for District-Owned Fowler Middle School Property The City of Tigard is very interested in preserving and protecting the Fowler Middle School property, tax lots 1S134DC03000, 1S134DD00900,and 1S134DD01000,located along Tigard Street between Tiedeman and Gallo Avenues. In 2005, the Tigard City Council directed the City's Park and Recreation Advisory Board to identify and acquire parks and open space. Subsequently, the Board conducted a comprehensive inventory of potential park and open space property in and around the City. Given the considerable recreational opportunities the Fowler Middle School property could provide, the Fowler parcels were identified as one of the most important park and open space acquisition sites. Both the City and the Board believe this community resource should remain in public ownership. The City requests an opportunity to discuss this option with School District staff and a proposal be developed for consideration by the Board,prior to any decision to market this property to private interests is made. I am aware of the School Board's meeting on April 20, 2006,where possible uses for district-owned property,including the Fowler Middle School parcels,will be discussed. Although City representatives will be present at the meeting,please include this letter in the public record, as it reflects the City's current position on this property. The City of Tigard welcomes the opportunity to work with the School District on this matter. Sincerely, Craig Prosser City Manager