SR 07-25-2017 7A
Ci ty Council
Report
City Council Meeting : July 25, 2017
Agenda Item: 7.A
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To: Mayor and City Council
From: Gigi Decavalles -Hughes, Director , Finance Department
Subject: Ordinance Setting the FY 2017 -18 Tax Rate for the 2012 Library General
Obligation Refunding Bonds
Recommended Action
Staff recommends that the City Council ad opt the attached ordinance setting the FY
2017 -18 tax rate for the 2012 Library G eneral O bligation B onds.
Executive Summary
T h e City pa y s deb t s e r v ice o n v o t e r -app ro v e d g ene ral o b l ig a ti o n b o n d s. C u r r e n tl y ,
S an t a Mo n ica ha s o n e s u ch o u ts t and ing g e ne ral ob l ig a ti o n bo n d iss u e : t h e 20 1 2
L ibrary Gene ral O b l ig a ti o n R e f und i n g Bo n d s. Ea ch y ea r, t h e City C oun cil s e ts a t a x
rate t h a t is ad d e d to p ro pe rty ta x rat e s t o g e n e rate f u n d s t o pa y b on d d e b t s e r v ic e . T a x
rat e s c h an g e a n n ua l l y ba s e d o n t h e sc h edul e d d e b t s e r v ice pa y me n t a s w e ll a s
c han g e s in o v e rall Cit y -w ide a ss e ss e d p r o pe r ty v a lu e s. S t a ff rec om me n d s t ha t C oun cil
ad o p t t h e a t ta c he d o rd i nan c e s e t ti n g th e FY 2 017 -18 rate a t $.003764 pe r $1 0 0 o f
a ss e ss e d v a lu a ti o n .
Background
In August 2002 , the City issued $25 million in voter -approved General Obligation bonds
for construction, improvement, and remodeling of the City’s libraries. In May 2012 , all
outstanding 2002 funds were refunded by issuance of 2012 Library General Obligation
Refunding Bonds in order to take advantage of lower interest rates. On an annual
basis, staff calculates the recommended property tax rates based on changes in City -
wide assessed valuation and the amount of the scheduled debt service payment for the
year.
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Discussion
St a ff c a lcu l a t e d t h e t o t a l FY 2 017 -18 p ro p e rty ta x rat e s f o r th e 2 0 1 2 r e f u n d ing bo n d s t o
b e $.003764 pe r $1 0 0 o f a ss e ss e d v a lu a ti on , a decrease o f $.000140 p e r $100 of
assessed valuation from the prior year. The FY 2017 -18 assessed values used to
calculate the rates a re based on preliminary assessed value information from the Los
Angeles County Assessor. Final assessed values were not available at the time of this
report. Any differences between preliminary and final values should be minor and will
be accounted for i n next year’s rate calculations.
Attachment A provides further detail on the calculations.
Financial Impacts and Budget Actions
T h e ta x re v enu e g ene r a t e d f r o m t h e L i b rary Bond s t a x rate s h ou ld b e s u f f ic ie n t t o c o v e r
FY 2017 -18 d e b t s e r v i ce pa y m e n ts o f $1 ,327,450 . As s o cia t e d re v enue s (ac c o u n t
nu m be r 01 2 74 .40 4 6 60 ) a n d e x pend i t u res (a c c oun t n u m b e r 0 1 2 7 4 .5 55 3 00 ) are i n clu d e d
in t h e FY 20 17 -19 A d o p t e d Biennial B u d g e t.
Prepared By: David Carr, Assistant City Treasurer
Approved
Forwarded to Council
Att achments:
A. Calculation of Tax Rates
B. Ordinance
ATTACHMENT A
CALCULATION OF TAX RATES
Calculation of the FY 2017/18 property tax rates are as follows:
FY 2012 Bonds
$1,304,007
($42,869)Less
$1,261,138
$1,261,138
$33,505,049,895** / 100 =Tax Rate of $.003764
*
**
Unsecured revenues are calculated applying the prior year secured tax rate to estimated 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 2017/18
Projected net debt service requirements to be financed by a levy
on secured property for FY 2017-18
Projected Unsecured Property Tax revenues for FY 2017/18*
REFERENCE:
Ordinance No. 2549
(CCS)