HomeMy WebLinkAbout101-FY 2009-10 Property Tax Levy Report.pdf
SARATOGA CITY COUNCIL
MEETING DATE: July 1, 2009 AGENDA ITEM:
DEPARTMENT: Finance & Administrative Services CITY MANAGER: Dave Anderson
PREPARED BY: Mary Furey DIRECTOR: Mary Furey
SUBJECT: Property Tax Levy for Debt Service Payments on the Library General Obligation Bonds
RECOMMENDED ACTION
The City Council adopt the attached resolution which sets the FY 2009/10 property tax levy rate for the
Library General Obligation Bonds at $.0094 per $100 of Assessed Valuation to provide for the Library
Bond’s debt service requirements over the fiscal year.
REPORT SUMMARY
Background
In March 2000, the citizens of Saratoga approved the issuance of City of Saratoga General Obligation
Bonds to pay for improvements to the City’s library building. The General Obligation Bonds were issued
in May of 2001, and the debt service payments began in February 2002.
With this bond approval, property owners are to be assessed an additional property tax levy over thirty
years to fund the debt service resulting from the bond issuance. The levy is assessed on property tax bills as
a percentage of property tax valuation, as are school and Water District bonds.
The County of Santa Clara requires that local jurisdictions approve and submit an annual tax levy to the
County each year to determine the annual assessment rate to charge property owners in order to fund the
debt service payments (principal and interest). The tax levy rate adjusts each year due to ongoing increases
in property values.
As Santa Clara County’s Auditor-Controller’s Office does not provide a secured assessed valuation report
for the upcoming fiscal year until days before the tax levy rate is due to the County on August 1st, (not
leaving enough time for the Council to approve the levy), a property tax assessed value estimate from the
Assessor’s most recent Secured Property Roll Growth Comparison report is used to prepare the tax rate
calculation.
Discussion
In prior years, the City’s tax levy rate was structured to yield an amount approximately equal to the fiscal
year’s debt service, however with rising property tax growth, receipts surpassed debt service payments
each year, and the Debt Fund reserves now greatly exceed debt service payment requirements. To reduce
fund balance, the property tax levy calculation shown on the next page is structured to provide less than
debt service payments which will in turn lower property tax owner’s levy rates.
Fiscal Year 2009/10 Calculation
The Library bond’s principal and interest requirements for FY 2009/10 total $1,013,556 as shown:
Debt Service – Principal $ 330,000
Debt Service – Interest 683,556
Total Debt Service $ 1,013,556
The assessor’s roll as of June 1, 2009 lists the City of Saratoga’s assessed valuation under the Current
Assessor’s Working File (CAWF) in progress for July 1, 2009 at: $10,163,045,520. The property tax
levy is then subsequently determined by dividing the annual recovery amount per $100 of estimated
assessed valuation:
Property Tax Levy Calculation:
Debt Service recovery amount $ 950,000
Divided per $100 of estimated valuation $ 101,630,455
Property Tax Levy Rate: .0094
(rounded to 4 decimals per Assessor)
Therefore, it is projected that a property tax levy rate of .0094 per $100 of assessed valuation will fund
$950,000 of the $1,013,556 of debt service payments in FY 2009/10, thereby lowering the debt service
fund balance from the estimated $977,938 year end fund balance to $912,382 (exceeding August’s
$676,728 bond payment).
For historical reference, the following schedule displays the City’s adopted annual property tax levy rates
since first assessed in FY 2002/03:
Fiscal Year Tax Levy Rate
2002/03 0.01650
2003/04 0.01210
2004/05 0.01484
2005/06 0.01170
2006/07 0.00955
2007/08 0.01130
2008/09 0.01040
FISCAL IMPACT
The tax levy funds the annual debt service requirements of the voter approved General Obligation Bond,
and tax revenues are included in the City’s operating budget, within the Library Bond Debt Service Fund.
A reserve balance is maintained in the Library Bond Fund to provide sufficient funding for the debt service
prior to the property tax levy remittance to the City. With the adoption of this property tax levy, the debt
service payment is funded with the supplemental tax assessment, and would not impact city operations.
ALTERNATIVE ACTION
The Council could choose to approve an alternative property tax levy rate, or to not approve a tax levy
rate. If the property tax levy is not approved, supplemental funds would not be collected by the Santa
Clara County Tax Assessor for the debt service related to the Library General Obligation Bond, and the
debt service payments would be funded from City reserves.
FOLLOW UP ACTION
Direct the City Clerk to send a certified copy of the resolution setting the property tax levy for the Library
General Obligation Bond no later than August 1st to:
Mu-Hua Cheng
County of Santa Clara
Controller-Treasurer Department
70 West Hedding Street, East Wing, 2nd Floor
San Jose, CA 95110-1705
ADVERTISING, NOTICING AND PUBLIC CONTACT
N/A
ATTACHMENTS
A: Library Bond Debt Service Schedule
B. Resolution authorizing the Tax Rate Levy for the General Obligation Bonds and report the levy rate to
the Santa Clara County Tax Collector.
August August February Fiscal Year Bond
Fiscal Interest Annual Interest Interest Annual Debt Principal
Year Rate Principal Payment Payment Interest Service Balance @ YE
Initial Bond Offering at May 9, 2001 - - 15,000,000
2001/02 5.000%- - 588,942 588,942 588,942 15,000,000
2002/03 5.000%60,000 392,628 391,128 783,756 843,756 14,940,000
2003/04 5.000%245,000 391,128 385,003 776,131 1,021,131 14,695,000
2004/05 5.000%255,000 385,003 378,628 763,631 1,018,631 14,440,000
2005/06 5.000%270,000 378,628 371,878 750,506 1,020,506 14,170,000
2006/07 5.000%280,000 371,878 364,878 736,756 1,016,756 13,890,000
2007/08 6.000%295,000 364,878 356,028 720,906 1,015,906 13,595,000
2008/09 6.000%310,000 356,028 346,728 702,756 1,012,756 13,285,000
2009/10 6.000%330,000 346,728 336,828 683,556 1,013,556 12,955,000
2010/11 6.000%350,000 336,828 326,328 663,156 1,013,156 12,605,000
2011/12 6.000%370,000 326,328 315,228 641,556 1,011,556 12,235,000
2012/13 5.000%395,000 315,228 305,353 620,581 1,015,581 11,840,000
2013/14 5.000%415,000 305,353 294,978 600,331 1,015,331 11,425,000
2014/15 5.000%435,000 294,978 284,103 579,081 1,014,081 10,990,000
2015/16 5.000%455,000 284,103 272,728 556,831 1,011,831 10,535,000
2016/17 5.000%440,000 272,728 261,728 534,456 974,456 10,095,000
2017/18 5.000%460,000 261,728 250,228 511,956 971,956 9,635,000
2018/19 5.000%485,000 250,228 238,103 488,331 973,331 9,150,000
2019/20 5.000%510,000 238,103 225,353 463,456 973,456 8,640,000
2020/21 5.125%535,000 225,353 211,644 436,997 971,997 8,105,000
2021/22 5.125%565,000 211,644 197,166 408,809 973,809 7,540,000
2022/23 5.125%590,000 197,166 182,047 379,213 969,213 6,950,000
2023/24 5.125%625,000 182,047 166,031 348,078 973,078 6,325,000
2024/25 5.250%655,000 166,031 148,838 314,869 969,869 5,670,000
2025/26 5.250%690,000 148,838 130,725 279,563 969,563 4,980,000
2026/27 5.250%730,000 130,725 111,563 242,288 972,288 4,250,000
2027/28 5.250%765,000 111,563 91,481 203,044 968,044 3,485,000
2028/29 5.250%805,000 91,481 70,350 161,831 966,831 2,680,000
2029/30 5.250%850,000 70,350 48,038 118,388 968,388 1,830,000
2030/31 5.250%890,000 48,038 24,675 72,713 962,713 940,000
2031/32 5.250%940,000 24,675 - 24,675 964,675 -
TOTALS 15,000,000 7,480,416 7,676,730 15,157,146 30,157,146
Total Bond Principal 15,000,000
Total Bond Interest 15,157,146
Total Cost of Bond 30,157,146
City of Saratoga
2001 Series General Obligation Bonds
Debt Schedule
Attachment A
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
ESTABLISHING THE PROPERTY TAX LEVY
FOR THE DEBT SERVICE OF THE LIBRARY GENERAL OBLIGATION BOND
FOR 2009/10 AT $.0094 PER $100 OF ASSESSED VALUATION
WHEREAS, in March 2000, the citizens of Saratoga approved an increase in their property tax
rate to pay for the debt service and other expenses of the general obligation bonds for construction of the
Library, and
WHEREAS, the general obligation bonds were sold on April 24, 2001, and
WHERAS, it is necessary for the City Council of the City of Saratoga to establish an annual
property tax levy to provide funds for debt service payments and related expenditures due in FY 2009/10.
NOW, THEREFORE, BE IT RESOLVED that the 2009/10 Property Tax Levy rate for debt
service on the Library General Obligation Bonds be established at $.0094 per $100 of assessed valuation.
The above and foregoing resolution was passed and adopted at an adjourned meeting of the Saratoga City
Council held on the 1st day of July 2009 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Chuck Page, Mayor
City of Saratoga
ATTEST:
____________________________
Ann Sullivan, City Clerk
City of Saratoga