SR 08-09-2016 7A
Ci ty Council
Report
City Council Meeting : August 9, 2016
Agenda Item: 7.A
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To: Mayor and City Council
From: Gigi Decavalles -Hughes, Director , Finance Department, Revenue
Subject: Ordinance Setting the FY 2016 -17 Tax Rate for the 2012 Library General
Obligation Refunding Bonds
Recommended Action
Staff recommends that the City C ouncil a dopt the attached ordinance setting the FY
2016 -17 tax rate for the 2012 Library general obligation bonds.
Executive Summary
The City pays debt service on voter -approved general obligation bonds. Currently,
Santa Monica has one such outstanding g eneral obligation bond issue : the 2012
Library General Obligation Refunding Bonds. Each year, the City Council set s a tax
rate that is added to property tax rates to generate funds to pay bond debt service . Tax
rates change annually based on the schedul ed debt service payment as well as
changes in overall City -wide assessed property values. Staff recommends that Council
adopt the attached ordinance setting the FY 2016 -17 rate at $.003904 per $100 of
assessed valuation.
Discussion
Staff annually calcul ates the recommended property tax rates based on changes in
City -wide assessed valu ation and the amount of the scheduled debt service payment for
the year. Staff calculated the total FY 2016 -17 property tax rates for the 2012 refunding
bonds to be $.00390 4 per $100 of assessed valuation, a difference of $.00 0795 per
$100 of assessed valuation from the prior year . This change reflects the estimated FY
2016 -17 assessed valuation increase , revenues collected in the prior year in excess of
initial estimates , and a decrease in the scheduled debt service obligation from the prior
year.
Attachment A provides further detail on the calculations.
Financial Impacts and Budget Actions
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The tax revenue generated from the Library Bonds tax rate should be sufficient t o cover
FY 2016 -17 debt service payments of $1,382,650. Associated revenues (account
number 01274.404660) and expenditures (account number 01274.555300) are included
in the FY 2016 -17 Adopted Budget.
Prepared By: David Carr, Assistant City Treasurer
Appr oved
Forwarded to Council
Attachments:
A. Calculation of Tax Rates
B. Ordinance
ATTACHMENT A
CALCULATION OF TAX RATES
Calculation of the FY 2016/17 property tax rates are as follows:
FY 2012 Bonds
$1,275,886
($41,739)Less
$1,234,147
$1,234,147
$31,608,537,636 **/ $100 =Tax Rate of $.003904
*
**
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 2012 bonds approved by voters after January 1,1989,total assessed value in the
City is used to calculate the tax rate.
Assessed values are based on preliminary information from the Los Angeles County Assessor and have
been adjusted to reflect projected delinquent parcels.
Net Requirements for FY 2016/17
Projected net debt service requirements to be financed by a levy
on secured property for FY 2016-17
Projected Unsecured Property Tax revenues for FY 2016/17*
Reference:
Ordinance No. 2526
(CCS)