DATE: JANUARY 9, 2024
DEPARTMENT: FINANCE DEPARTMENT
FROM: SELINA ANDREWS, ASSISTANT FINANCE DIRECTOR
TITLE: RECEIVE UPDATE ON PROPERTY TAX YEAR 2023-24
RECOMMENDED MOTION:
It is recommended that the Finance Committee receive the 2023-24 Property Tax Year update.
EXECUTIVE SUMMARY:
Property tax which includes Vehicle License Fee (VLF) is the second largest revenue source for the City and is comprised of approximately 22% of total City General Fund projected revenues for FY 2023-24. Property and VLF tax estimates are based on property tax data provided by the City’s consultant, Hinderliter, de Llamas & Associates (HdL). HdL provides staff with assessed values over time, roll summary, value changes, secured and unsecured comparisons, annual updates, top taxpayers, and transfer of ownership data.
In 2023, Salinas total assessed property values were $14.5 billion, an increase of 4.8% from the prior year. Residential assessed valuations grew $489 million or 5.0% from the prior year and accounted for 74% of all value growth. The number of detached single family home sales for 2023 is projected to be less than the prior year, consistent with sales trends in most areas of the State. The median sales price within Salinas from January through September was $675,000, an increase of $10,000 or 1.5% from the prior year. Unsecured values make up 6.4% of all assessed values in the City and increased by $84.5 million or 10.1% over the prior year. Growth was led by the new assessment of $8.5 million for Greengate Fresh LLP and $6.1 million for Luis A. Scattini & Sons. The assessed value gains on all single-family residential from 2023 sales through September is $78 million and will be added to the 2024-25 tax roll.
BACKGROUND
Property tax is levied by Monterey County Assessor’s Office at 1% of a property’s assessed value, of which the City receives approximately $0.1466 cents per dollar paid on property located within the municipal limits of Salinas. In compliance with Proposition 13, the assessed value of real property is based on the 1975/76 assessment roll value, adjusted by a 2% inflation factor thereafter. However, when property changes hands or new construction occurs, property is then reassessed at its current market value. Monterey County provides property tax collection updates and projections throughout the year. Property tax distributions are largely received in the third and fourth quarters. As staff receives relevant property tax information and receipts, it will be shared with the Committee. The below chart illustrates the City’s share of property tax. Per HdL, ERAF share of Salinas General Fund will likely be adjusted by the Auditor-Controller and will be lower than shown.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.
STRATEGIC PLAN INITIATIVE:
This memorandum aligns with City Council’s Strategic Goal of striving for Economic Development - Sustain, encourage, and develop a diverse and thriving economy that benefits all Salinas residents and businesses and that contributes to the community’s economic health.
DEPARTMENTAL COORDINATION:
This memorandum has been coordinated with the City Manager’s Office.
FISCAL AND SUSTAINABILITY IMPACT:
There is no cost associated with this action.
ATTACHMENTS:
Salinas Property Tax Review sheet
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