Attachment

EXHIBIT #1 COUN CIL W ORKSH OP OF 12/07/2 009 COUNCIL W ORKSHOP OF 12/07/2009 CITY OF DOVER – JANUARY 2010 EXHIBIT #1 This lid slide presentation is a i revision of a i similar presentation made at a Council Workshop held on December 7, 2009

Home Rule and Overlapping Geographical boundaries Both provide services to residents Both have power to fix property tax rates

Kent County Real Property Taxes 9 2009‐2010 (source: Delaware Property Tax Rates 2009‐2010 Prepared by: Industry d Research & Analysis Center, Delaware Economic Development Office)

 Kent County tax rate is the same for property tax payers in incorporated and unincorporated areas  Non‐municipal property tax payers pay only Kent County property taxes  Municipal property tax payers pay both City and County property taxes

 Total Kent County Property Assessments ‐ $3.193 Billion (1)  Total Property Tax Collected by Kent County ‐ $9.481 Million  Kent County’s Assessment of Dover Properties for Tax Levy ‐ $832 Million  Kent County’s Taxes Collected on all Dover Properties ‐ $2.579 Million  Residential ‐ $1,274,497  Commercial /Condo ‐ $1,304,265  Dover City’s Share of All Property Taxes Collected by Kent County – 27.20% 1. Kent County Assessment Office – Assessment as of July 1, 2009

Kent County uses property tax and other revenue to pay for similar or the same services provided by Dover and other incorporated municipalities

Municipal property tax payers pay for services once through their local property tax and a second time through Kent County Government but receive limited or no benefit from h the second payment. In other words they are p y aying for a service twice and only receiving it once. Credit is not given for local service functions performed by incorporated municipalities. Municipal property tax payers in Kent County are subsidizing non‐municipal property tax payers.

A Local Service Function Budget divides and segregates in a separate budget all expenditures for the performance of local service functions which are not performed by the County within the limits of any municipality. i

New Castle County Home Rule in 1967 Budgeting provisions in 55 Del. Laws, c.85 require an Annual Budget divided into : General Operating Budget and Local Service Function Budget* Adjustments to New dj Castle County Tax Rates *9 Del.Code, Chapter 11, Sections 1102 and 1131

 Section 1 – General p Operating Budget  Property tax rate for all County property owners to pay for the costs of the Operating Budget (at 24.32 cents per $100 of assessed value)  Section 2 – Local Service Function Budget  Property tax rate for those portions of New Castle County outside of incorporated municipalities to pay the costs of the Local Service Function Budget (at 45.82 cents per $100 of assessed value)  Property tax rate for properties within incorporated municipalities (a differential rate based on local service function provides credit for services a municipality has performed and i t f ntends to continue to ti perform through June f 30, 2010)

 Tax Relief for Municipal Property Owners in New Castle County.  The property tax ill millage rate in support of the L S .S.F.B. is reduced for municipal property tax payers by a factor that accounts for the expenditures of municipal governments for the performance of local service f functions.  I di ndividual tax payer equity is hi achieved on i di ndividual’s property tax payment to New Castle County pegged at least proportionately to the benefits the tax payer receives from the County.

Middletown claimed credit for Local Service Functions that included:  Police Operations  Long Range Comprehensive Planning Code Enforcement Zoning & Subdivision Regulations & Enforcement Building Inspections & Plan Review Recreation Programs & Operation of Local Parks

eduction of the rate for the L S R d .S.F.B. from 45.82 cents to less than one (1) cent (.93 cents per $100 of assessed valuation)  Comparing Middletown County property taxes to unincorporated areas, Middletown property tax payers pay 25 cents versus 70 cents per $100 of assessed value

L.S.F.B. provisions were NOT included in The Kent County Home Rule legislation All Kent County property tax payers pay the same rate Credit is not given for local service functions performed by incorporated municipalities

City‐County Meetings Council Resolutions State Legislation Analysis and Reports Taxpayer Suit

Dover is a full‐service community, like Newark and Wilmington – a similar tax rate adjustment could be suggested. Newark and Wilmington FY 09‐10 L.S.F.B. expenditures Have resulted in a 65% tax rate differential. N.C. tax rate for unincorporated area ‐ $0.7018 per $100 of assessed value. N.C. tax rate for Wilmington/Newark ‐ $0.2436 per $100 of assessed value. ADJUSTMENT REPRESENTS A 65% DIFFERENCE OR $0.4536 PER $100 OF ASSESSED VALUE. With that level of adjustment, Dover property tax payers would pay 11 cents per $100 of assessed value to Kent County instead of 31 cents per $100 of assessed value.

 Focus on d advocating dj adjustment to property tax rate (L.S.F.B.)  Annual Lump sum compensation/reimbursement  Service Consolidation  Special Tax Districts  Assess proposed l solutions on a service‐ by‐service basis  L.S.F.B. l plus service consolidation l