TO: Mayor and City Councilmembers
FROM: Paul Young, Finance Director
SUBJECT:
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Report on Property Tax Revenue Update
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RECOMMENDED COUNCIL ACTION:
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Receive the Report on Property Tax Revenue Update. No further action is required.
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SUMMARY:
Preliminary assessed values indicate that taxable property values increased approximately 3.55% for fiscal year 2026/27 compared with the prior year.
The preliminary report is based on values assessed for the county’s 2026-27 property tax bills and estimates for county admin fees. The final property tax includes actual county admin fees and supplemental tax bills throughout the year.
PREVIOUS COUNCIL ACTION:
Staff updates City Council bi-annually with preliminary and final property tax reports. The last property tax staff report to City Council was on April 21, 2026.
DISCUSSION:
Under the City’s consulting agreement, HdL Companies monitors and projects property tax revenue and vehicle license fee revenue and provides preliminary and final reports for both revenue sources.
HdL reported the following changes in net taxable value:
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Taxable property values are estimated to have increased 3.55% in 2026/27 compared with the prior year. Previous annual changes were 5.4% in 2025/26, 4.4% in 2024/25, and 6.6% in 2023/24. The most recent decrease was 4.5% in 2012/13.
The main reasons for the 2026/27 increase are Change from CPI, Transfers of Ownership and Unsecured value change.
Changes from CPI are the increase in taxable value per Proposition 13. Proposition 13 limits increases to 2% each year from the original sales price. The total change in CPI for 2026/27 was $20.2 million. The Assessed value for taxes is the lower of the Prop 13 value or the market value. If the market value for taxes is lower than the prop 13 value it results in a Prop. 8 Reduction. The total amount of property tax reductions under prop 8 is $2.9 million.
The main reason for the increase in Transfer of Ownership was...
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