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Home My WebLink AboutSS3 - Revenue Status & Projections�S5 3 -a // 2 /,go 2007 -08 Revenue Status & Projections for 2008 -09 General Considerations: • Housing Market turmoil • Tightening of Credit Policies • Deterioration of the "Wealth Effect' and consumer confidence • Threat of economic recession • State budget crisis Threats: • Property Tax Delinquencies • Foreclosures • Reassessments • Slower Consumer Spending • Lower Hotel Occupancy • Legislative Actions US Real GDP Growth 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 2004 2005 2006 2007 Estimted 2008 Projected [GDP Growth 3.6% 3.1% 2.9% 2.1% I.W. 1 General Fund Major Revenue Sources Actual Growth 30.00% - - - -1 t Secured Property Tax 25.00% Sales Tax 20.00% O UTOT - Commercial 15.00% a 10.00% 5.00 � O 0.00% °p N -5.00% -5.00 % - -- - -- o - -" � o � N ° -10,00% N � - 15.00% - 20.00% - General Fund Major Revenue Sources 3 Yr Avg Growth (Smoothing) 20.00% Secured Property Tax --N— Sas Tax UTOle T - Commemial 1500% 500% 0.00% ape O N m � O °p N -5.00% - -- - -- o - -" 2 Secured Property Taxes • Assessed Value growth trend declining off record highs • 20 Yr. average Assessed Valuation growth approximately 8% • Gap between market and assessed valuation is still significant 2007 -08 collection trend slightly higher than revised estimates • No data on delinquencies, foreclosures or reassessments • 2008 -09 budgeted growth increase conservative at 4% 30M% Plcx�I�Y.7� 20.00% 15.00% 1-4 / x Assessed Value Growth Assessed Value Growth — Typical Budgeted Growth — Regression Trendline I 10.00% -- -- - 500% 0.00% - T -.. -- -. F. 7 - - -r- r -- - — M V N O W W d) W O O N O (7 O V Q) O 41 r` D) oo D) O D) O O O N O C') O 'd' O O (D O r O Co O W 00 m co 0 N M V u� c0 I� W W co O 0) 0) N O M V 0) 0) N 0 (0 0) r O Co 0) 0) 0) O O O N O A O d' O LA O CO O h O °D rn OD rn °0 rn 00 rn co 0) 00 m °o rn 0) rn 0) 0) rn 0) 0) 0) 0 0 0 0 0 0 0 0 0 0 0 - 5.00% - — - -- - 4 - WEBSTER J. GUILLORY OFFICE OF THE ASSESSOR COUNTY ASSESSOR Telephone: (714) 834 -2727 www Ocaov.corn /assessor Property Value Decline - Will It Lower My Property Taxes? Orange County's real estate markets have slowed, and some property values are down in some areas. Does a decline in a property's market value require a reduction in property taxes? The answer is that it depends on the Market Value and the Taxable Value. Market Value - Is how much the property would sell for (the unconditional sales price) Taxable Value - Is established by the Assessor, (the Prop. 13 value), and this value may be increased by a CPI factor of up to 2% per year as specified by California laws A temporary reduction in property taxes can only be granted if the Market Value falls below the Prop. 13 value (Taxable Value). Some property purchased in 2005, 2006 and 2007 would be the most likely to qualify. Property is valued for property tax purposes each year as of January 1. The Assessor reviews property each year looking for areas and individual property subject to economic adjustment (Prop. 8) considerations. Taxpayers send market information also, to assist the Assessor in this review. Each property is unique, and the Assessor is required to consider all aspects of the property and market conditions when making a value determination. The chart below compares the Prop. 13 Taxable Value of a home purchased in January 2000 to the Orange County's Median Home Price (Market Value) from January 2000 to January 2007. As you can see, the Taxable Value is normally below the Market Value. Taxable Value is printed on the value notices sent by the Assessor in July, and on property tax bills sent by the Tax Collector in September. You can search for Taxable Value by parcel number or property address on the Tax Collector's website, at http / /tax ocaov com /tcweb /search pane asp. Remember, property taxes may be temporarily reduced if the Market Value drops below the Taxable Value. For more information, you can call the Assessor Department at (714) 834 -2727. Release: December 2007 O. C. Median Home Price vs. Prop. 13 Taxable Value � —O. C. Median Horne Price $600.000 SEOU.000 — + — Prop. 13 Taxable Value $582,750 $550,000 5534,000 Market Value $450,000 $450,000 $369,000 i $350,060 Taxable Value $3oe,000 $287.945 $276.000 a 251,000 $250,000 - - - - -- — — - Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Nov. 2000 2001 2002 2003 2004 2005 2006 2007 2007 SOURCE. OC Median Home Price- DONewscom Taxable Value is printed on the value notices sent by the Assessor in July, and on property tax bills sent by the Tax Collector in September. You can search for Taxable Value by parcel number or property address on the Tax Collector's website, at http / /tax ocaov com /tcweb /search pane asp. Remember, property taxes may be temporarily reduced if the Market Value drops below the Taxable Value. For more information, you can call the Assessor Department at (714) 834 -2727. Release: December 2007 Assessed Value by Land Base Decade and Significant Periods 2005-07 $11,817,658,2' 34% 2000 -04 $10,063,612,197 29% 1970's $2,121,883,059 6% 1980's $4,004,583,104 11% 1990'$ $7,170,185,363 20% Assessed Property Parcels by Land Base Decade and Significant Periods 2005 -07 19,310 32% 1970's 6,969 12% 1980's 5,522 9% 2000 -04 19,029 32% 6 1990's 9,017 15% 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 December January February March April May June Final June December January February March April May June Final June Secured Property Tax Collection Trend December January February March 9nns AM,mI 9nnA A�„ >i 9nn7 -+ -2005 Actual 2006 Actual 2007Actual -x -2008 Actual 2008 Collection Trend 12008 As Budgeted -2009 As Budaeted April May June Final June 9nnA Trand 9nnR Ac Rurlaeted 2009 As Budgeted 19,668,047 19,437,816 20,899,553 28,036,536 23,308,762 -1.98% 24,241,113 22,507,701 25,822,417 27,638,819 29,669,307 29,360,138 30.534,543 22,735,530 25,822,417 27,638,819 29,768,520 29,458,317 30,636,649 25,117,434 28,249,097 30,636,477 32,816,228 32,474,266 33,773,237 35,441,868 39,741,373 47,943,899 47,947,610 47,447,972 49,345,890 39,715,034 44,918,035 48,408,589 51,973,358 51,431,769 53,489,040 39,715,024 45,153,176 48,408,589 52,064,131 51,521,596 53,582,460 40,222,852 45,371,305 48,905,823 52,547,572 52,000,000 54,080,000 Collection Trend 9nnR 9nnA 9nn7 Wr Trend Median Soread 48.90% 42.84% 42.73% 44.82% 42.8% -1.98% 55.96% 56.91% 56.51% 56.46% 56.5% 0.05% 56.52% 56.91% 56.51% 56.65% 56.5% -0.13% 62.45% 62.26% 62.64% 62.45% 62.4% 0.00% 88.11% 87.59% 98.03% 91.25% 88.1% -3.13% 98.74% 99.00% 98.98% 98.91% 99.0% 0.08% 98.74% 99.52% 98.98% 99.08% 99.0% -0.10% 100.00% 100.00% 100.00% 100.00% 100.0% 0.00'/0 7 Sales Taxes Top Segment Producers: Luxury Auto Sales - Continued Record Sales - Lexus Dealership Relatively New ( Leasing Stream not fully realized) Restaurants - New High End Restaurants Boosting Sales Department Stores - Fashion Island Nordstrom on the horizon Sales Taxes by Business Segment 13% 21% 3% 3% 44% 4 °,0 4% 18% a 7% 7% 9% ■ Auto Sales - New -10 ■ Restaurants - 295 ❑ Department Stores - 25 ❑ Miscellaneous Retail - 632 ■ Leasing - 44 B Apparel Stores -152 ■ Service Stations -17 ❑ Misc. Vehicle Sales - 37 ■ Furniture / Appliance - 232 ■ Food Markets - 34 O Light Industry -168 O Other - 655 No 4th Qtr Results (Due End of March early April) Collection Trend ahead of 2007 -08 original estimates however, the 2007 -08 estimates have not been revised yet because there is not sufficient data available to support the revenue revision 2008 -09 includes a conservative growth estimate of 2% over the original 2007 -08 budget estimates 8 25,000.000 20,000.000 15,000,000 10,000,000 5,000,000 December January February March April May June Final June December January February March April May June Final June Sales Tax Collection Trend December January February March 9nns AH.,M 7nnA A'fual 9nn7A,e „a1 April May June Final June 7n06 Trwnd 7006 As Budgeted 2009 As Budceted 6,884,912 7,793,151 7,376.293 5,966.892 8,131,687 8,294,321 8,167,088 9,164,572 b y c 1 � rYi IN Mz i',. 9,873,939 9,877,788 -� 2005 Actual 10,973,553 - 2006 Actual ! 2007A=al t - 2008 Actual f' 2008 Trend Forecast - - 2O08 As Budgeted 14,164,454 --2009 As Budgeted 14,255,572 December January February March 9nns AH.,M 7nnA A'fual 9nn7A,e „a1 April May June Final June 7n06 Trwnd 7006 As Budgeted 2009 As Budceted 6,884,912 7,793,151 7,376.293 5,966.892 8,131,687 8,294,321 8,167,088 9,164,572 8,927,993 9,984,808 9,680,332 9,873,939 9,877,788 11,011,472 10,973,553 12,113,316 11,743,933 11,978,812 11,685,402 13,030,715 12,959,506 14,323.499 13,886,719 14,164,454 12,802,954 14,255,572 14, 225,523 15,695,188 15,216, 580 15,520,911 14,275,036 15,907,572 15,947,923 17,536,043 17,001,300 17.341,326 16,115,055 18,003,156 18,302,247 19.921.384 19,313, 903 19,700,181 18,977,829 21,465,557 21,662,440 23,596,683 22,877,127 23,334,670 Collection Trend 9nnA 9nnA 7nn7 Wr Trwnt Median Spread 36.3% 36.3% 29.2% 33.9% 36.3% 2.37% 43.0% 42.7% 36.9% 40.9% 42.7% 1.83% 52.0% 51.3% 47.0% 50.1% 51.3% 1.18% 61.6% 60.7% 56.8% 59.7% 60.7% 1.00% 67.5% 66.4% 63.1% 65.7% 66.4% 0.75% 89.3% 89.6% 71.7% 83.5% 89.3% 5.77% 113.1% 83.9% 83.3% 93.4% 83.9% -9.55% 100.0% 100.0% 100.0% 100.0% 100.0% 0.00% 9 Transient Occupancy Taxes • Feedback From Hoteliers is Positive • Fairmont & Marriot Expansion are complete — More rooms available • Pelican Hills Resort - 220 Rooms (Expected to Open Nov 2008 and become fully operation by Feb 2009) 0 100 Villas will be available @ $2,000 /Night 0 120 Rooms will be available $3501 Night Potential Settlement of Online TOT collections (Lead by County of LA). • 2007 -08 collection trend Suggests 17% increase over current budget estimate. • 2008 -09 revenue estimate held relatively flat compared to current collection trend. 10 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 t 2005 Actual 2006 Actual 2007Actual -N- -2008 Actual 2008 Collection Trend +2008 As Budgeted --2009 As Budoeted UTOT Collection Trend December January February March April May June Final June 2005 Actual 2006 Actual 2007Actual 2008 Trend 2008 As Budgeted 2009 As Budgeted December January February March April May June Final June December January February March April May June Final June 3,188,985 3,857,308 4,957,569 4,647,740 4,309,436 5,013,818 3,700,710 4,277,447 5,740,929 5,786,471 4,920,678 5,724,968 4,214,645 4,949,440 6,476,828 6,576,811 5,615,238 6,533,055 4,739,558 5,754,202 7,329,552 7,497,386 6,401,219 7,447,505 5,342,622 6,472,111 8,065,047 8,374,150 7,149,795 8,318,436 5,948,364 7,253,752 9,172,516 9,414,495 8,038,035 9,351,860 6,535,288 7,999,107 9,945,578 10,309,391 8,802,091 10,240,802 8,162,909 8,694,941 10,919,757 1 11,762,396 10,042,657 11,684,140 Collection Trend onna inns onrn W, Trcnrl Madian Snread 39.0% 44.4% 45.4% 42.9% 44.4% 1.45% 45.2% 49.2% 52.6% 49.0% 49.2% 0.20% 51.5% 56.9% 59.3% 55.9% 56.9% 1.01% 57.9% 66.2% 67.1% 63.7% 66.2% 2.44% 65.3% 74.4% 73.9% 71.2% 73.9% 2.66% 72.7% 83.4% 84.0% 80.0% 83.4% 3.39% 79.9% 92.0% 91.1% 87.6% 91.1% 3.43% 100.0%1 100.0%1 100.0%1 100.0% 100.0%1 0.00% 11 Legislative Actions Prop 1A Protects Local Government revenue streams against permanent shifts in local funding but does allow the State to borrow about $2 million from the City of Newport Beach but this amount would need to be repaid within 3 fiscal years. Highway Users Tax Delay State to Borrow $666,034 from City Gas Tax apportionments between April 08 — August 08 but to be repaid Sept 08 Son of ERAF, New Triple Flip Plan or Other State Initiative? No positive indication that any of this will happen at this point. Legislative Analysis: Good Source as it relates to local government finances: www.californiacitvfinance.com Reserve Levels Operating Reserve Funded at $7.9 million PIERS Reserve $5.0 million Contingency Reserve Fully Funded at $18.9 million Facilities Replacement Reserve Funded at $20.2 million 80,000.000 70,000,000 60.000.000 50.000.000 40.000.000 30.000,000 20.000.000 10.000.000 General Fund Total Fund Balance 2000 2001 2002 2003 2004 2005 2006 2007 2008 BW 2009 Bud 12 General Fund Revenues Top Revenue Sources 180,000,000 - -- 160,000,000 —4—Secured Property Tax 140,000,000 Sales Tax wt Prop Tax In Lieu UTOT - Commercial 120,000,000 Total General Fund 100,D00,000 80,000,000 60,000,000 40,000,000 20,000,000 i Secured Property Tax Sales Tax &Property Tax In Lieu UTOT - Commercial TOTAL GENERAL FUND Annual Growth Top 3 Sources as % of Total eons 2nne 2007 2008 Oriainal 2008 Revised 2009 Bud 45,371,305 48,905,823 51,480,000 52,000,000 54,080,000 24,317,656 27,185.585 S m N N N 31,592,735 140,222,852 8,182,909 8,694,941 pW � S 10,042.657 10,042,657 N 123,295,015 135, 546,799 0 O 1 146,964,943 1 148,408,349 O N eons 2nne 2007 2008 Oriainal 2008 Revised 2009 Bud 9.9%1 45,371,305 48,905,823 51,480,000 52,000,000 54,080,000 24,317,656 27,185.585 29,010,693 30,445,828 30,894,666 31,592,735 140,222,852 8,182,909 8,694,941 10,919,757 10,042.657 10,042,657 11,684,140 123,295,015 135, 546,799 146,921,651 1 146,964,943 1 148,408,349 152,773,324 9.9%1 8.4%1 0.0%1 1.0% 59% 60% 60% 63% 63-/% ,64% 13