sr-081010-7cCity Council Meeting: August 10, 2010
Agenda Item: ~'-'G
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Ordinance Setting the FY2010/11 Tax Rate for the 2002 Library General
Obligation Bonds
Recommended Action
Staff recommends that the City Council adopt the attached ordinance setting the
FY2010/11 tax rates for the 2002 Library general obligation bonds.
Executive Summary
The City Council is required to annually set by ordinance property tax rates to generate
funds to pay the debt service on voter-approved general obligation bonds. The City
currently has one outstanding general obligation bond issue. The bonds were issued in
2002 for construction, improvement, and remodeling of the Main Library and branch
libraries. Staff requests that Council adopt the attached ordinance setting the
FY2010/11 rate at $.007990 per $100 of assessed valuation.
Discussion
On April 10, 1990, the City issued $4.5 million in General Obligation Bonds to acquire
property adjacent to the Main Library to meet immediate parking needs and for future
library expansion. On June 25, 1998, the City refunded a portion of the 1990 bonds at a
lower interest rate, resulting in a lower tax rate assessed to local property owners. On
August 27, 2002, the City issued $25 million in additional voter approved General
Obligation bonds for construction, improvement, and remodeling of the Main Library and
branch libraries. Since the final debt service payment for the 1998 refunded bonds was
made on July 1, 2010, no tax rate is required.
1
Staff has calculated the total FY2010/11 property tax rates for the 2002 bonds to be
$.007990 per $100 of assessed valuation. The FY 2010/11 assessed values used to
calculate the rates are estimates based on preliminary values from the County
Assessor's office. Final assessed values were not available at the time of this report.
Any differences between preliminary and final values should beminor and will be
accounted for in next year's rate calculations.
Previous Council Actions
From FY 1990191 through FY2001/02 the tax rate was set on the annual debt payment
for the 1990 Library Bonds (refinanced in 1998). FY 2002103 was the first year that tax
rates also included the 2002 Library Bonds. Attachment 1 provides further detail on the
calculations.
Financial Impacts and Budget Actions
The tax revenue generated from the Library bonds tax rates should be sufficient to
cover FY2010/11 debt service requirements of approximately $1.9 million. Both the
revenues and the expenses are already included in the FY2010/11 budget, so no
budget action is required by this report.
Prepared by: David Carr, Principal Investment Analyst
Approved:
Forwarded to Council:
/ -~ -
Carol Swindell Rod Gould
Director of Finance City Manager
Attachments:
1 -Calculation of Tax Rates
2 -Ordinance
2
ATTACHMENT1
CALCULATION OF TAX RATES
Calculation of the FY 2010-11 property tax rates are as follows:
FY 2002 Bands
$1,804,011 Net Requirements for FY 2010-11
(84,165) Projected Unsecured Property Tax
----------- revenues for FY 2010/11 *
$1,719,846 Projected net debt service requirements to be
financed by a levy on secured property for FY 2010/11
$1,719,846
$21,524,057,737 ** / $100
* Unsecured revenues are calculated applying the prior year secured tax rate to current year
assessed valuation of unsecured property.
`* Per Proposition 87, the assessed value used to calculate the tax rate is different depending on whether
the bonds were approved by voters before or after January 1, 1989, so that redevelopment agencies
do not receive revenues resulting from these tax override rates to pay debt service on General Obligation
bonds approved by the voters.
For bonds, such as the 2002 bonds approved by voters after January 1, 1989, total assessed value
in the City is used to calculate the tax rate.
Assessed values are estimates consistent with budget assumptions and have been adjusted to reflect
projected delinquent parcels.
Reference Ordinance No.
2320 (CCS).