SR 08-23-2011 7CCity Council Meeting: August 23, 2011
Agenda Item: T- G
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Ordinance Setting the FY 2011-12 Tax Rate for the 2002 Library General
Obligation Bonds
Recommended Action
Staff. recommends that the City Council adopt the attached ordinance setting the FY
2011-12 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 FY 2011-
12 rate at $.006973 per $100 of assessed valuation.
Discussion
On August 27, 2002, the City issued $25 million in additional voter-approved Geheral
Obligation bonds for construction, improvement, and remodeling of the Main Library and
branch libraries. Staff has calculated the total FY 2011-12 property tax rates for-the
2002 bonds to be $.006973 per $100 of assessed valuation. The FY 2011-12 assessed
values used to calculate the rates are based on the actual assessed value for FY 2011-
12 as determined by the Los Angeles County Assessor. The rate is lower than the prior
year rate of $.007990 per $100 of assessed valuation reflecting residual funds from
FY2010-11 collections being applied to the current year rate, a decrease in debt service
requirements, and an increase in overall assessed valuation.
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Previous Council Actions
From FY 1990-91 through FY2001-02 the tax rate was set on the annual debt payment
for the 1990 Library Bonds (refinanced in 1998). FY 2002-03 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, which included the impact
of applying the residual FY2010-11 collections should be sufficient to cover FY 2011-12
debt service requirements of approximately $1.8 million. Both the revenues and the
expenses are already included in the FY 2011-12 budget, so no budget action is
required by this report.
Prepared by: David Carr, Treasury Administrator
Approved:
Carol Swindell
Director of Finance
Forwarded to Council
-_
Rod Gould
City Manager
Attachments:
A. Calculation of Tax Rates
B. Ordinance
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ATTACHMENT A
CALCULATION OF TAX RATES
Calculation of the FY 2011-12 property tax rates are as follows:
FY 2002 Bonds
$1,675,830 Net Requirements for FY 2011-12
(69,963) Projected Unsecured Property Tax
----------- revenues for FY 2011-12'
$1,605,867 Projected net debt service requirements to be
financed by a levy on secured property for FY 2011-12
$1,605.867
$23,029,172,204 / $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 have been adjusted to reflect projected delinquent parcels.
Reference Ordinance No.
2366 (CCS)