HomeMy WebLinkAbout101-FY 2007-08 Annual Property Tax Levy.pdfSARATOGA CITY COUNCIL
MEETING DATE: July 18, 2007 AGENDA ITEM:
DEPARTMENT: Finance & Administrative Services CITY MANAGER: Dave Anderson
PREPARED BY: Mary Furey DEPT HEAD: Mary Furey
SUBJECT: Annual Property Tax Levy for Debt Service Payments on the Library General Obligation
Bonds
RECOMMENDED ACTION
That the City Council adopt the attached resolution which sets the FY 2007/08 property tax levy rate for the
Library General Obligation Bonds at $.01130 per $100 of Assessed Valuation to provide for the Library Bond’s
debt service requirements over the next 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 the next thirty
years to fund the debt service resulting from the bond issuance. The annual tax levy is calculated each year to
determine the assessment rate to charge property owners to fund the debt service payments, as the tax levy rate
adjusts each year due to ongoing increases in property values.
The County of Santa Clara requires that the local jurisdictions approve a tax levy rate to meet the debt service
payments and notify the County no later than August 1st of each year, prior to the County preparing and mailing
the property tax bills.
Discussion
Debt service requirements for FY 2007/08 total $1,015,906 which is the amount the tax rate must yield. At the
time this agenda item was prepared, the County of Santa Clara had not yet provided the City of Saratoga’s
secured assessed valuation for the upcoming fiscal year, therefore an estimate is used in the tax rate calculation.
The property tax levy is a percentage of the estimated property tax valuation which funds the debt service. The
FY 2007/08 estimated assessed property valuation was calculated by increasing the FY 2006/07 assessed
valuation by 4%:
FY 2006/07 assessed property valuation: $ 8,660,695,237
FY 2007/08 estimated valuation with 4% increase: $ 9,007,123,046
The property tax levy is then subsequently determined by dividing the annual debt service per $100 of estimated
assessed valuation:
Debt Service – Principal $ 295,000
Debt Service – Interest 720,906
Total FY 2007/08 Debt Service $1,015,906
Property Tax Levy Calculation:
FY 2007/08 Debt Service $ 1,015,906
Divided per $100 estimated valuation $ 90,071,230
Property Tax Levy Rate: .01128 Æ rounded to 4 decimal points = .01130
Therefore, it is estimated that a property tax levy rate of .01130 per $100 of assessed valuation will fully fund the
$1,015,906 of debt service payments in FY 2007/08. The Library Bond Fund’s fund balance reserves will
provide for the estimated $5,200 of annual administrative costs.
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
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 1, 2007 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: Resolution authorizing the Tax Rate Levy for the General Obligation Bonds and report the levy rate to the
Santa Clara County Tax Collector.
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 2008 AT $.01130 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 the debt service and related expenditures due in FY 2007/08.
NOW, THEREFORE, BE IT RESOLVED that the 2007/08 Property Tax Levy for debt service on the
Library General Obligation Bonds be established at $.01130 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 18th day of July 2007 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Aileen Kao, Mayor
City of Saratoga
ATTEST:
____________________________
Cathleen Boyer, City Clerk
City of Saratoga