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File #: 210662    Version: 0
Type: Ordinance Status: In Committee
File created: 9/1/2021 In control: FINANCE & PERSONNEL COMMITTEE
On agenda: Final action:
Effective date:    
Title: An ordinance relating to the minimum and maximum balances in the tax stabilization fund.
Sponsors: THE CHAIR
Attachments: 1. Fund Balance Policy Presentation, 2. Hearing Notice List
Date Ver.Action ByActionResultTallyAction DetailsMeeting DetailsVideo
9/15/20210 FINANCE & PERSONNEL COMMITTEE HELD TO CALL OF THE CHAIR

Minutes note: Appearing: Aycha Sawa, Comptroller Joshua Benson, Deputy Comptroller Matthew Schnackenberg, PFM Richard Li, Comptroller's Office
Pass5:0 Action details Meeting details Video Video
9/1/20210 COMMON COUNCIL ASSIGNED TO   Action details Meeting details Not available

Number

210662

Version

ORIGINAL

Reference

 

Sponsor

THE CHAIR

Title

An ordinance relating to the minimum and maximum balances in the tax stabilization fund.

Section

304-29-5                                                               am

304-29-6                                                               cr

Analysis

This ordinance increases the maximum ceiling balance of the tax stabilization fund from 5%of the current year, total common council controlled budget to 15% of the most recently audited year’s general fund expenditures as reported by the office of the comptroller. It further creates a minimum floor for the tax stabilization fund of 10% of the most recently audited year’s general fund expenditures.

Body

Whereas, The Tax Stabilization Fund is intended to assist in stabilizing the property tax rate and is sourced by various surplus funds from prior years; and

 

Whereas, Standard and Poor downgraded the City’s bond rating from AA- in 2019 to A in 2020; and

 

Whereas, The Tax Stabilization Fund balance is one of the primary indicators rating agencies evaluate to determine municipal bond ratings; and

 

Whereas, The Comprehensive Annual Financial Report from the Office of the Comptroller indicates that total general fund expenditures in 2019 was $756,027,000; and

 

Whereas, Establishing a minimum required balance for the Tax Stabilization Fund would prohibit any transfers out of the Tax Stabilization Fund and into the general fund should the Tax Stabilization Fund balance fall below its minimum floor; and

 

Whereas, Establishing a minimum required balance would preclude the need for the Common Council or Mayor to directly transfer property tax revenue into the Tax Stabilization Fund should it fall below its minimum floor, a practice that undermines the Tax Stabilization Fund’s purpose in creating a less volatile property tax burden; now, therefore

 

The Mayor and Common Council of the City of Milwaukee do ordain as follows:

 

Part 1. Section 304-29-5 of the code is amended to read:

 

304-29. Tax Stabilization Fund.

 

5. MAXIMUM CEILING ON FUND. Any uncommitted balance in the fund as of June 1 of the current year that is in excess of [[5]] >>15<< % of the [[current year, total common council controlled budget]] >>most recently audited year’s total general fund expenditures as reported by the office of the comptroller<< shall be applied to tax reduction for the following year notwithstanding any other provisions of this section.

 

Part 2. Section 304-29-6 of the code is created to read:

 

6. MINIMUM FLOOR ON FUND. No withdrawal from the fund shall be budgeted for the following year if after such withdrawal the uncommitted balance in the fund, as of June 1 of the current year, would be below 10% of the most recently audited year’s total general fund expenditures as reported by the office of the comptroller.

 

LRB

APPROVED AS TO FORM

 

____________________________

Legislative Reference Bureau

Date:  ______________________

Attorney

IT IS OUR OPINION THAT THE ORDINANCE

IS LEGAL AND ENFORCEABLE

 

____________________________

Office of the City Attorney

Date:  ______________________

 

Requestor

 

Drafter

Alex Highley

LRB176636-1

4/7/2021