HomeMy WebLinkAbout05.07.2024 Amended Finance Committee PacketCity Council Finance Committee Agenda May 7, 2024
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SARATOGA CITY COUNCIL
FINANCE COMMITTEE
May 7, 2024
4:00 P.M. REGULAR MEETING
AMENDED AGENDA
• 05/08/2024 ITEM 2.0 UPDATED/REVISED 2024-25 BUDGET OVERVIEW MEMO
• 05/08/2024 ITEM 2.0 PRESENTATION SLIDES ADDED
Public Participation Information
In accordance with Saratoga City Council’s Remote Public Participation Policy, members of the
public may participate in this meeting in person at the location listed below or via remote
attendance using the Zoom information below. In the event remote participation technology is
unexpectedly unavailable, the meeting will proceed in person without remote participation.
Members of the public can view and participate in the meeting by:
1. Attending the meeting in person in the Linda Callon Conference Room located at 13777
Fruitvale Avenue, Saratoga CA 95070; OR
2. Accessing the meeting through Zoom
* Webinar URL https://us02web.zoom.us/j/87463967175
* Webinar ID: 874 6396 7175
* Calling 1.669.900.6833 or 1.408.638.0968
Written Communication
Comments can be submitted in writing at www.saratoga.ca.us/fc. Written communications will
be provided to the members of the City Council and included in the Agenda Packet and/or in
supplemental meeting materials.
Public Comment
Members of the public may comment on any item for up to three (3) minutes. The amount of
time for public comment may be reduced by the Mayor.
Meeting Recording Information
In accordance with the Saratoga City Council’s Meeting Recording Policy, the City Council
Finance Committee Meetings are recorded and made available following the meeting on the
City website.
City Council Finance Committee Agenda May 7, 2024
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CALL TO ORDER
ROLL CALL
Public Comment
AGENDA ITEMS
1. Finance Committee Minutes
Recommended Action:
Review and approve the minutes for the April 9, 2024, Finance Committee Regular
Meeting.
Finance Committee Minutes
2. 2024-25 Budget Overview
Recommended Action:
Receive a 2024-25 budget overview and provide input to City staff for their presentation to
City Council on May 15th.
Memo - 2024-25 Budget Overview (Revised 05-08-2024)
Presentation Slides (Added 05-08-2024)
3. 2024-25 Enabling Budget Resolutions
Recommended Action:
Receive draft staff reports and provide requests for clarification – No actions required.
A. Appropriations Limit (GANN)
B. General Obligation Bond Tax Levy
C. Arrowhead Community Facility District Tax Levy
Memo - Enabling Resolutions
Attachment A - DRAFT SR - Gann Limit 2024-25
GANN Resolution
California Department of Finance Price Factor and Population April 2024
Attachment B - DRAFT SR - FY25 GO Bond Tax Levy
GO Bond Resolution
GO Bond Debt Service Schedule
Attachment C - DRAFT SR FY 2024-25 Arrowhead Property Tax Levy
Arrowhead Tax Levy Resolution
ADJOURNMENT
CERTIFICATE OF POSTING OF THE AGENDA, DISTRIBUTION OF THE AGENDA PACKET,
COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT
City Council Finance Committee Agenda May 7, 2024
Page 3 of 3
I, Gina Scott, Administrative Analyst for the City of Saratoga, declare that the foregoing agenda
for the meeting of the City Council Finance Committee was posted and available for public
review on May 2, 2024, at the City of Saratoga, 13777 Fruitvale Ave., Saratoga, CA 95070, and on
the City’s website at www.saratoga.ca.us.
Signed this 2nd day of May 2024 at Saratoga, California.
Gina Scott, Administrative Analyst
In accordance with the Ralph M. Brown Act, copies of the staff reports and other materials
provided to the Committee by City staff in connection with this agenda, copies of materials
distributed to the Committee concurrently with the posting of the agenda, and materials
distributed to the Committee by staff after the posting of the agenda are available on the City
website at www.saratoga.ca.us and are available for review in the office of the City Clerk at
13777 Fruitvale Avenue, Saratoga, California.
In compliance with the Americans with Disabilities Act and the Governor’s Executive Order, if
you need assistance to participate in this meeting, please contact the City Clerk at
bavrit@saratoga.ca.us or call 408.868.1216 as soon as possible before the meeting. The City will
use its best efforts to provide reasonable accommodations to provide as much accessibility as
possible while also maintaining public safety. [28 CFR 35.102-35.104 ADA title II]
City Council Regular Finance Committee Minutes – April 9, 2024
Page 1
MINUTES
SARATOGA CITY COUNCIL FINANCE COMMITTEE
REGULAR MEETING
APRIL 9, 2024
CALL TO ORDER
The meeting was called to order at 4:00 p.m.
ROLL CALL
Present:Mayor Yan Zhao, Councilmember Belal Aftab
Also Present:James Lindsay, City Manager
Ryan Hinchman, Administrative Services Director
Leslie Arroyo, Assistant City Manager
Ann Xu, Finance Manager
Gina Scott, Administrative Analyst
REPORT ON POSTING OF THE AGENDA
The Administrative Analyst reported the agenda for this meeting was properly posted on April 4,
2024.
AGENDA ITEMS
1. Finance Committee Minutes
Recommended Action:
Approve the minutes for the February 13, 2024, Finance Committee Regular Meeting.
AFTAB/ZHAO MOVED TO APPROVE THE MINUTES FOR THE FEBRUARY 13, 2024,
FINANCE COMMITTEE REGULAR MEETING. MOTION PASSEDBY VERBAL ROLL CALL.
AYES: AFTAB/ZHAO NOES: NONE. ABSTAIN: NONE.
2. Financial Policies
Recommended Action:
Review and provide updates to the City Council adopted financial policies.
Ryan Hinchman, Administrative Services Director, gave a summary of the Financial Policies
which were provided at the February Finance Committee meeting. Responses to questions
generated from the February 9th Financial Policy review were presented, and updates to the
policies were discussed. Clarification on excess Educational Revenue Augmentation Fund
(ERAF) was also discussed.
AFTAB/ZHAO MOVED TO APPROVE TO RECOMMEND THE FINANCIAL POLICIES AS
AMENDED AND PRESENT THEM TO THE CITY COUNCIL AT THE MAY 1, 2024,
COUNCIL MEETING. MOTION PASSED BY VERBAL ROLL CALL. AYES: AFTAB/ZHAO
NOES: NONE. ABSTAIN: NONE.
When discussing the CalTRUST item below it was the consensus of the committee to go back
to the Financial Policies Agenda Item (2) and amend the motion.
AFTAB/ZHAO MOVED TO UPDATE THE FINANCIAL POLICIES FROM THE CITY’S
INVESTMENT POLICY TO INCLUDE THE ABILITY TO ALLOCATE UP TO 30% INSTEAD
3
City Council Regular Finance Committee Minutes – April 9, 2024
Page 2
OF 20% FOR THE TOTAL INVESTMENT POOL.MOTION PASSED BY VERBAL ROLL
CALL. AYES: AFTAB/ZHAO NOES: NONE. ABSTAIN: NONE.
3. Treasurer’s Report Overview
Recommended Action:
Receive report overview of the monthly Treasurer’s Report.
Ryan Hinchman, Administrative Services Director, gave a high-level overview of the
Treasurer’s Report which is presented to the Council monthly. He explained each section of
the report which includes financial information as it relates to the City’s funds.
No action required.
4. Transfer to CalTRUST
Recommended Action:
Receive report on transfer to CalTRUST Joint Powers Authority (JPA) Investment Pool.
Ryan Hinchman, Administrative Services Director, gave an update on the recent transfer of
funds made to CalTRUST. Current returns were identified, and staff discussed historical
return patterns and liquidity options. Confirmation of the process for investment timing and
JPA vendor choice was discussed and reviewed.
No action required.
5. Fiscal Year 2025 Preliminary Budget
Recommended Action:
Receive fiscal year 2025 Preliminary Budget Report.
Ryan Hinchman, Administrative Services Director, provided a brief financial summary of the
2025 preliminary budget as well as a timeline for the budget adoption. Pension Contributions
were discussed and staff was asked to present a Pension Contribution slide and provide a
discussion on the topic during the Council budget presentation in June.
No action required.
ADJOURNMENT
THE MEETING WAS ADJOURNED AT 5:04 PM.
Minutes respectfully submitted:
Gina Scott, Administrative Analyst
City of Saratoga
4
Memorandum
DATE: May 7, 202
TO: Finance Committee
FROM: Ryan Hinchman, Administrative Services Director
Gina Scott, Administrative Analyst
SUBJECT: 2024-25 Budget Overview
The following table summarizes the 2024-25 general fund preliminary budget. The budget is balanced
with revenues slightly higher than expenses. The two variance columns on the right of the table are
provided to demonstrate changes in 2024-25 compared to the last year.
General Fund 2024-25 preliminary budget (in $1,000’s):
Actua
l
Budge
t
Forecas
t
Budge
t
Varianc
e
Varianc
e
2023 2024 2024 2025
to LY
Budget
to LY
Forecas
t
411 -Property Taxes 18,238 18,636 18,756 19,255 619 499
413 -Other Taxes 2,653 2,677 2,540 2,575 (102)35
416 -Franchises & Surcharges 2,693 1,919 2,827 2,646 728 (181)
420 -Intergovernmental 580 303 647 533 230 (114)
440 -Charges for services 3,748 3,165 3,674 4,097 932 423
450 -Fines & penalties 62 47 38 47 (1)9
460 -Use of money & property 1,240 1,527 1,675 1,430 (97)(246)
Total Revenue
29,21
4 28,274 30,157 30,583 2,309 426
500 -Salaries & Benefits 8,951 10,063 9,513 10,333 269 820
529 -UAL Payoff 1,631 1,256 1,256 1,350 94 94
610 -Operating Expenses 1,670 1,926 1,991 1,957 32 (34)
640 -Contract Services 1,704 1,907 1,947 2,766 859 819
648 -Public Safety Contract 7,621 8,162 8,031 8,694 532 662
650 -Professional Services 776 871 869 1,079 208 209
770 -Fixed Assets 13 0 0 72 72 72
790 -Internal Services 3,206 4,034 4,034 4,316 282 282
Total Expenditures
25,57
2 28,219 27,642 30,566 2,348 2,925
Operating Balance 3,641 55 2,515 16 (39)(2,499)
Transfers to Capital 3,889 3,508 3,508 3,216 (292)(292)
5
Memorandum
Net Revenue /
(Expenditures)*(248)(3,453)(993)(3,199)253 (2,207)
*A Net Expenditure requires use of General Fund Reserves to balance the budget.
Detailed explanations of the budget assumptions,and line-item categories are below:
REVENUES:
411 -Property Taxes:
Property taxes are allocated by the county and include taxes imposed on real property (land and
permanently attached improvements such as buildings) and tangible personal property located within the
City, excess Educational Revenue Augmentation Fund (ERAF) funds, and property tax in-lieu-of vehicle
license fees.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
411 -Property Taxes 18,238 18,636 18,756 19,255 619 499
The 2024-25 budget assumes about a 3% increase in property taxes. The estimate includes $900K of excess
Educational Revenue Augmentation Fund (ERAF) funds that may be taken away by the state.
413 -Other Taxes:
Other taxes include sales tax, transient occupancy, supplemental, construction, and business license
taxes. The State receives 8.0 cents and the City receives 1.0 cent of the 9.0 cents paid on every dollar of
taxable sales in the City.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
413 -Other Taxes 2,653 2,677 2,540 2,575 (102)35
The 2024-25 estimate for Other Taxes is provided by our sales tax consultant MuniServices, and reflects
slowing sales tax growth after recovering from pandemic lows in 2020-21.
416 -Franchises & Surcharges:
Fees and charges are levied by the City on a variety of utilities. The largest revenue source in this category
is from solid waste for the city's various state-mandated environmental programs.
Actual Budget
Forecas
t
Budge
t Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
416 -Franchises & Surcharges 2,693 1,919 2,827 2,646 728 (181)
6
Memorandum
The increase in 2024-25 reflects budgeting a full year of solid waste revenue. Previously,this revenue
was believed to be at risk based on the Zolly vs. Oakland case,and reduced in last year’s budget as a
result.The Zolly case called franchise fees into question, but a new study has justified their validity, and
they are expected to continue in the future.
7
Memorandum
420 –Intergovernmental:
Revenue received from other governmental agencies and municipalities,such as grants from the State or
Federal government are included in this category.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
420 -Intergovernmental 580 303 647 533 230 (114)
2024-25 budget assumes only regular recurring revenue from other government agencies and includes.
440 -Charges for services:
Charges include revenue generated from development activity and encroachment permit fees for utility
company construction work.The largest revenues are from building permits and plan checks.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
440 -Charges for services 3,748 3,165 3,674 4,097 932 423
The 2024-25 budget increased both revenue and expense by $650K for consultant plan checks. Previously,
these plan checks were shown as a net revenue, and the consultant was paid a percentage of plan fee
revenue to review plans. In order to better track data, we are now showing both the revenue and expense
in total for plan checks, but there is no financial impact from the change.The additional increases in
charges reflect increased building activity and the recent fee study implementation.
450 -Fines & penalties:
These fees are primarily related to Sheriff services activities such as vehicle code fines and parking
citations.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
450 -Fines & penalties 62 47 38 47 (1)9
Fines and penalty revenue is estimated to be flat to last year’s budget based on historical trends.
460 -Use of money & property:
Use of money and property shows investment returns and income generated from City owned properties.
Actual Budget
Forecas
t
Budge
t Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
460 -Use of money & property 1,240 1,527 1,675 1,430 (97)(246)
Th 2024-25 budget assumes about $100K decrease in investment income compared to the last year’s
budget. The Fed increased interest rates eleven times between March 2022 and January 2024 to reduce
8
Memorandum
inflation. At this time,it is unclear if the rates will be reduced in 2024-25. Given the uncertainty, the budget
is conservative and allows for potential interest rate reductions that are outside of the City’s control.
EXPENSES:
500 -Salaries & Benefits:
Salaries and benefits include wages for both permanent and temporary staff, and employer paid benefits.
Labor costs are prepared using known data on current employees, current MOU provisions, and medical,
dental, vision, long-term disability, and life insurance premiums.
Actual Budget
Forecas
t
Budge
t Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
500 -Salaries & Benefits 8,951 10,063 9,513 10,333 269 820
The 2024-25 budget anticipates about a 3% increase from the last year budget. Since staff turnover is
typically low, the budget doesn't include a vacancy factor. Instead, it incorporates a payroll expense buffer
within salary allocations to cover unforeseen costs like turnover, PTO payouts, and excess overtime. This
buffer also supports compliance with policy requirements for the Compensated Absences Reserve.The
2024-25 budget also includes a $46K request for increasing an existing administrative analyst position in
Public Works from 0.75 full-time equivalent (FTE) to 1.0.
529 -UAL Payoff:
The unfunded accrued liability (UAL)represents a debt the City owes under their contract with CalPERS to
provide pension benefits to employees.The amount owed fluctuates as it adjusts for CalPERS investment
returns and actuarial assumptions.
Actual Budget
Forecas
t
Budge
t Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
529 -UAL Payoff 1,631 1,256 1,256 1,350 94 94
The 2024-25 budget includes $850K of minimum required payment, and $500K of additional contributions
to help proactively reduce the pension liability.
610 -Operating Expenses:
General operating expenses include costs for ongoing operations such as dues, utilities, supplies,
materials, and fees.
Actual Budget
Forecas
t
Budge
t Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
610 -Operating Expenses 1,670 1,926 1,991 1,957 32 (34)
The 2024-25 budget assumes a modest increase of $32K compared to last year’s budget driven by
increases in dues and utilities.
9
Memorandum
640 -Contract Services:
Contract services are provided to the City from the private sector or public agencies, and do not include
public safety contracts. The primary services in this category include tree services, landscaping, planning,
and maintenance.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
640 -Contract Services 1,704 1,907 1,947 2,766 859 819
The 2024-25 budget increased both revenue and expense by $650K for consultant plan checks. Previously
these plan checks were shown as a net revenue, and the consultant was paid a percentage of plan fee
revenue to review plans. In order to better track data, we are now showing both the revenue and expense
in total for plan checks, but there is no financial impact from the change. In addition,a budget request of
$180K is included for a comprehensive tree inventory of the City.
648 -Public Safety Contract Services:
Public safety includes Sheriff and animal control contract services.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
648 -Public Safety Contracts 7,621 8,162 8,031 8,694 532 662
The 2024-25 budget includes an increase of about 7% based on the agreement with the Sheriff.
650 -Professional Services:
Professional services include specialized services provided by outside contractors to the City often for
legal, planning, or engineering services.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
650 -Professional Services 776 871 869 1,079 208 209
The 2024-25 budget includes an estimated $150K increase for consultant costs related to the housing
element implementation.
770 -Fixed Assets:
Fixed assets include purchases of equipment, vehicles,and machinery to support the City’s infrastructure.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
770 -Fixed Assets 13 0 0 72 72 72
Only one new fixed asset is planned for the 2024-25 General Fund budget. This is a new $72K lawnmower
to improve Parks operations.New fixed assets are typically funded through a department's operating
budget.
11
Memorandum
790 -Internal Services:
The City utilizes Internal Service Funds to provide centralized cost centers for shared expenses and
services in order to efficiently track costs and manage resources. Costs are allocated back to operational
programs based on usage to better reflect the cost of services.
Actual Budget Forecast Budget Variance Variance
2023 2024 2024 2025
to LY
Bud
to LY
Fcst
790 -Internal Services 3,206 4,034 4,034 4,316 282 282
The increased costs compared to last year’s budget are primarily due to continued increases in insurance
costs. Insurance premiums continue to climb as coverage becomes more expensive, particularly due to
insurance providers exiting the market.
ATTACHMENTS
None
12
Preliminary General Fund Budget
FY2024-25
13
2024-25 Budget Summary
Balanced
Budget
Expenditures include
new budget requests
and contract updates
Excess ERAF and
interest income strong
in 2024-25, but may
decline in future years
14
Balanced Budget in ($1,000’s)
Actual
2023
Budget
2024
Forecast
2024
Budget
2025
Total Revenue 29,214 28,274 30,157 30,583
Total Expenditures 25,572 28,219 27,642 30,566
Net Operations 3,641 55 2,515 16
Does not include general fund contributions to capital
15
2024-25 Key Expenditures
1. $500K additional payment to the UAL
2. $180K tree inventory project -Aid in risk management as well
more efficient maintenance of City Trees (contract service)
3. $150K housing element implementation (professional service)
4. $72K Lawnmower purchase -Increase work efficiency and be
more ergonomic to use
5. $46K Public Works Administrative Analyst position change from
0.75 to 1 FTE (salaries & benefits)
16
Expenditure Summary in ($1,000’s)
2023-24
Forecast
2024-25
Budget
Variance
$
Variance
%
500 - Salaries & Benefits 9,513 10,333 820 9%
529 - UAL Payoff 1,256 1,350 94 7%
610 - Operating Expenses 1,991 1,957 (34)-2%
640 - Contract Services 1,947 2,766 819 42%
648 - Public Safety Services 8,031 8,694 662 8%
650 - Professional Services 869 1,079 209 24%
770 - Fixed Assets 0 72 72
790 - Internal Services 4,034 4,316 282 7%
Total Expenditures 27,642 30,566 2,925 11%
17
2024-25 Key Revenues
•Solid Waste Revenue – $1.4M included in 2024-25 budget,
previously at risk from Zolly vs. Oakland case
•Investment Income – $1.1M revenue is cyclical and changes
with the economy
•Excess ERAF – $900K included in budget and is volatile and
subject to potential claw back.
18
Excess ERAF
•Excess ERAF is volatile and changes over time
•Available only when county ERAF revenue exceeds school and community college general fund needs
•Future excess ERAF is uncertain
Budget
In ($1,000’s)
675
601
1,197
904 905 900
2020 2021 2022 2023 2024 2025
19
Revenue Summary in ($1,000’s)
2023-24
Forecast
2024-25
Budget
Variance
$
Variance
%
411 - Property Taxes 18,756 19,255 499 3%
413 - Other Taxes 2,540 2,575 35 1%
416 - Franchises & Surcharges 2,827 2,646 (181)-6%
420 - Intergovernmental 647 533 (114)-18%
440 - Charges for services 3,674 4,097 423 12%
450 - Fines & penalties 38 47 9 22%
460 - Use of money & property 1,675 1,430 (246)-15%
Total Revenue 30,157 30,583 426 1%
20
Next Steps
Feedback on presentation
1. May 15
th - proposed budget to Council
2. June 5
th - budget public hearing
3. June 19
th - budget adoption
21
Memorandum
DATE: May 7, 2024
TO: Finance Committee
FROM: Ryan Hinchman, Administrative Services Director
SUBJECT: Fiscal Year 2025 Enabling Resolutions
Attached are three draft staff reports required by State law or the Santa Clara County Assessor
for financial operations in the upcoming fiscal year. These items are presented to the Finance
Committee for informational purposes before the resolutions appear on the City Council agenda
of June 19, as consent items for consideration and approval.
No Finance Committee action is required.
Attachments
Attachment A –2024-25 Appropriations Limit, draft staff report
Attachment B –2024-25 General Obligation Bond Tax Levy, draft staff report
Attachment C –2024-25 Arrowhead Community Facility District Tax Levy, draft staff report
22
SARATOGA CITY COUNCIL
MEETING DATE:June 19,2024
DEPARTMENT:Administrative Services
PREPARED BY:Ryan Hinchman, Administrative Services Director
Gina Scott, Administrative Analyst
SUBJECT:Resolution Establishing the Appropriations Limit for Fiscal Year 2024-25
RECOMMENDED ACTION:
Adopt a Resolution establishing the City’s appropriations limit for Fiscal Year 2024-25.
BACKGROUND:
California voters approved Proposition 4 in 1979 to establish Article XIIIB of the California State
Constitution, commonly referred to as the Gann Limit or Appropriations Limit (Limit).Two additional
voter-approved initiatives, Proposition 98 in 1988 and Proposition 111 in 1990, modified the 1979 voter-
approved propositions. This report fulfills the annual requirements of the Limit as provided in State law.
The Limit establishes the maximum tax collections by every agency in California. The Limit adjusts
annually, with 1981 as the baseline year, using inflation and population factors provided by the State of
California's Department of Finance (Attachment B).If an agency collects more taxes than authorized, State
law mandates the return of taxes above the Limit. For example, if a taxing agency with a Limit of $98
million collects $100 million in taxes, the taxing agency is required to return the $2 million collected in
excess unless the excess collection is authorized by voters in the agency.In the example and absent a voter
approved appropriations limit override, State law requires that the agency refunds the $2 million in taxes
collected above the Limit.
With the change in population and per capita income published by the California Department of Finance as
of April 30,2024, the City’s adjusted appropriations limit for 2024-25 is $58.7 million (Exhibit A in
Attachment A), and the proposed budget includes proceeds from taxes subject to the Limit of $21.8 million.
The City's appropriations are well below the Limit,and will continue to be under the Limit for the
foreseeable future, given the City's revenue profile which is predominately property taxes.
ATTACHMENT:
Attachment A –Resolution
Attachment B -California Department of Finance Price Factor and Population, April 30, 2024
23
Resolution No. 24-XXXX
Page 1
RESOLUTION NO. 24-_____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
ESTABLISHING THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2024-25
WHEREAS, the City of Saratoga established its base year Appropriations Limit as
$5,961,747 in Fiscal Year 1979; and
WHEREAS, the cumulative impact of changes to population and to the California per
capita personal income since the base established a fiscal year 2023-24 Appropriations Limit of
$56,590,005; and
WHEREAS, the California Department of Finance’s April 30, 2024 memorandum
specifies a 3.62 percent increase in per capita personal income for the twelve-month period ended
December 31, 2023 and
WHEREAS, the California Department of Finance’s April 30, 2024 memorandum
specifies a -0.08 percent decrease in the City of Saratoga’s population and a 0.02 percent increase
in the County of Santa Clara’s population for the twelve-month period ended December 31, 2023;
and
WHEREAS, State law provides an adjustment to the prior year Appropriation Limit by
combining the change in per capita personal income, and either the city or county’s change in
population, at the discretion of the city or county’s governing board;
NOW, THEREFORE BE IT RESOLVED,the City of Saratoga’s 2024-25 Appropriations Limit
is $58,650,291 as calculated in conformity with Article XIIIB of the Constitution of the State of
California and detailed in Exhibit A.
The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga
City Council held on the 19 day of June 2024 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Yan Zhao, Mayor
ATTEST:
Britt Avrit, MMC, City Clerk
24
Resolution No. 24-XXXX
Page 2
Exhibit A
Fiscal year Prior Year
Limit County City Fiscal Year
Limit
2015-16 36,243,974 1.0113 1.0000 1.0382 1.0499 38,053,696
2016-17 38,053,696 1.0126 1.0053 1.0537 1.0670 40,602,404
2017-18 40,602,404 1.0081 1.0023 1.0369 1.0453 42,441,648
2018-19 42,441,648 1.0099 1.0052 1.0367 1.0470 44,434,849
2019-20 44,434,849 1.0033 1.0003 1.0385 1.0419 46,297,871
2020-21 46,297,871 1.0037 1.0009 1.0373 1.0411 48,202,473
2021-22 48,202,473 0.9944 0.9901 1.0573 1.0514 50,679,074
2022-23 50,679,074 0.9931 0.9966 1.0755 1.0718 54,320,026
2023-24 54,320,026 0.9975 0.9938 1.0444 1.0418 56,590,005
2024-25 56,590,005 1.0002 0.9992 1.0362 1.0364 58,650,291
Data Source: Annual percentage change in population and per capita income provided by California Department of
Finance per California Revenue and Taxation Code section 2227.
*Greater of County or City population change used for "Appropriation Factor" calculation.
Population
Change
California
Per Capita
Income
Change
City of Saratoga
Appropriations Limit Calculation
Fiscal Year
Appropriation
Limit
Adjustment
Factor*
25
26
27
28
SARATOGA CITY COUNCIL
MEETING DATE:June 19, 2024
DEPARTMENT:Administrative Services
PREPARED BY:Ryan Hinchman, Administrative Services Director
SUBJECT:Resolution Establishing the Fiscal Year 2024-25 Tax Levy Rate for the
Library Series 2011 General Obligation Bonds Debt Service
RECOMMENDED ACTION:
Adopt resolution establishing the Fiscal Year (FY)2024-25 Tax Levy Rate for the Library Series
2011 General Obligation Bonds Debt Service at $0.0040 per $100 of Secured Assessed Value.
BACKGROUND:
The recommended action maintains the current property tax levy rate approved by Saratoga voters
and collected by the County of Santa Clara. All funds collected under the voter-approved General
Obligation (G.O.) Bonds are exclusively used for debt service payments and administrative costs,
with the final payments due in FY2031-32.
FY2024-25 G.O.bond expenditures total $841,585 requiring a tax levy rate on taxable secured
property in Saratoga of $0.0040 per $100, or $40.00 per $1.0 million of assessed value.The total
also includes a $2,000 administrative fee.The County of Santa Clara requires City Council to
adopt a yearly resolution establishing the upcoming fiscal year’s tax levy rate.
In May 2001, the City issued the Library Series 2001 G.O.Bonds with debt service payments
beginning in February 2002. At the time of issuance, competitive interest rates ranged between 5
and 6 percent. With interest rates falling to historic lows in 2011, the City refunded (refinanced)
the 2001 Series General Obligation Bonds saving the City’s residents $2,677,041 in interest over
the remaining bond term.
ATTACHMENT:
Attachment A –Resolution
Attachment B –Series 2011 General Obligation Bonds Debt Service Schedule
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Resolution No. 24-XXXX
Page 1
RESOLUTION NO. 24-______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
ESTABLISHING THE FISCAL YEAR 2024-25 TAX LEVY RATE FOR THE LIBRARY
SERIES 2011 GENERAL OBLIGATION BONDS DEBT SERVICE
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 the re-
construction of the library; and
WHEREAS, the general obligation bonds were originally sold on April 24, 2001; and
WHEREAS, the original general obligation bonds were refunded on August 1, 2011; and
WHEREAS, it is necessary for the City Council of the City of Saratoga to establish an annual
property tax levy rate to provide funds for the debt service payments and related expenditures during the
fiscal year;
NOW, THEREFORE BE IT RESOLVED,by the City Council of the City of Saratoga that the
General Obligation 2011 Library Bonds property tax levy rate be established at $0.0040 per $100 of
assessed valuation for Fiscal Year 2024-25 as calculated in Exhibit A.
The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga
City Council held on the 19th day of June 2024 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Yan Zhao, Mayor
ATTEST:
Britt Avrit, MMC, City Clerk
31
Resolution No. 24-XXXX
Page 2
Exhibit A
A.Series 2011 General Obligation (GO) Bonds FY24 debt service requirements:
Principal 630,000$
Interest 209,585$
Paying Agent fees 1,000$
Other costs 1,000$
Total Requirements 841,585$
B.City of Saratoga Total Secured Assessed Value 21,074,741,623
C.Total Secured Assessed Value per $100 of valuation 210,747,416$
D.Library Series 2011 General Obligation Bonds
Per $100 of secured assessed value
City of Saratoga
Library Series 2011 General Obligation Bonds
Fiscal Year 2024-25 Property Tax Levy
0.0040$
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Attachment B
City of Saratoga
2011 Series General Obligation Bonds
Debt Schedule
Bond Refunding Date - August 1, 2011
August August February Fiscal Year Bond
Fiscal Interest Annual Interest Interest Annual Debt Principal
Year Rate Principal Payment Payment Interest Service Balance @ YE
- - $ 11,995,000
2011/12 2.000% - - 228,211 228,211 228,211 11,995,000
2012/13 2.000% 455,000 208,518 203,968 412,485 867,485 11,540,000
2013/14 2.000% 485,000 203,968 199,118 403,085 888,085 11,055,000
2014/15 2.000% 495,000 199,118 194,168 393,285 888,285 10,560,000
2015/16 2.000% 500,000 194,168 189,168 383,335 883,335 10,060,000
2016/17 3.000% 475,000 189,168 182,043 371,210 846,210 9,585,000
2017/18 3.000% 485,000 182,043 174,768 356,810 841,810 9,100,000
2018/19 4.000% 500,000 174,768 164,768 339,535 839,535 8,600,000
2019/20 4.000% 525,000 164,768 154,268 319,035 844,035 8,075,000
2020/21 4.000% 545,000 154,268 143,368 297,635 842,635 7,530,000
2021/22 3.000% 565,000 143,368 134,893 278,260 843,260 6,965,000
2022/23 4.000% 580,000 134,893 123,293 258,185 838,185 6,385,000
2023/24 4.000% 610,000 123,293 111,093 234,385 844,385 5,775,000
2024/25 4.000% 630,000 111,093 98,493 209,585 839,585 5,145,000
2025/26 3.500% 655,000 98,493 87,030 185,523 840,523 4,490,000
2026/27 3.500% 685,000 87,030 75,043 162,073 847,073 3,805,000
2027/28 3.700% 705,000 75,043 62,000 137,043 842,043 3,100,000
2028/29 4.000% 730,000 62,000 47,400 109,400 839,400 2,370,000
2029/30 4.000% 760,000 47,400 32,200 79,600 839,600 1,610,000
2030/31 4.000% 790,000 32,200 16,400 48,600 838,600 820,000
2031/32 4.000% 820,000 16,400 - 16,400 836,400 -
TOTALS 11,995,000 2,601,993 2,621,686 5,223,678 17,218,678
Total Bond Principal $ 11,995,000
Total Bond Interest 5,223,678
Total Cost of Bond $ 17,218,678
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SARATOGA CITY COUNCIL
MEETING DATE:June 19,2024
DEPARTMENT:Administrative Services Department
PREPARED BY:Ryan Hinchman, Administrative Services Director
Gina Scott, Administrative Analyst
SUBJECT:Resolution Establishing the Fiscal Year 2024-25 Property Tax Levy for Debt Service
Payments on the Arrowhead Community Facility District 2018 Bond
RECOMMENDED ACTION:
Adopt the attached resolution that sets the Fiscal Year (FY)2024-25 property tax levy rate for the
Arrowhead Community Facility District’s 2018 Bond's debt service payment at $6,500 per parcel for the
remaining eighteen (18)participating property owners.
BACKGROUND:
The Arrowhead Community Facilities District encompasses 39 homes located along the hillside between
Rolling Hills Road and Blue Hills Lane, off of Prospect Road. Since 1951, this neighborhood operated its
own private water company, known as Arrowhead Cooperative Company Inc. Over the years the number
of Arrowhead Cooperative residences and water service meters increased, to the extent that the water system
infrastructure was no longer sufficient for water and fire protection needs. Because the potential fire danger
situation was very alarming to the residents, the Arrowhead Board attempted to improve their water
infrastructure system. Tying into San Jose Water Company lines system was their preferred option, but the
private water cooperative was required to upgrade their water system with a new pump house, water line
connections,and water supply lines before they would be allowed to link into San Jose Water’s system. As
not all residents had funds immediately available for this construction expense, the Arrowhead Cooperative
Board asked the City to assist them with the issuance of a bond to finance the improvements.
To issue the bond as a collective group, the 39 homeowners were required to establish their Water
Cooperative as a Community Facility District. This allowed for a special tax to be assessed for debt service.
The homeowners voted to move forward with this action, and at the December 21, 2016 City Council
Meeting, the City Council adopted a resolution to form Community Facilities District 2016-1 (Arrowhead)
and called for a special election within the district to consider allowing the City to incur bond indebtedness
on the Arrowhead CFD’s behalf, and to levy a Special Tax Lien to pay principal and interest on bonds
issued to finance water infrastructure improvements.
On May 2, 2017,a total of 50 registered landowner votes were cast, with 100% of the votes in support of
this measure. On June 21, 2017, City Council adopted an ordinance authorizing the levying of Special
Taxes on properties in the Arrowhead CFD for bonded debt service.
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After several delays, the Community Facility District’s bond was finally issued on December 12, 2018.
Fifteen of the 39 property owners prepaid their share of the water infrastructure improvements, leaving only
24 property owners who participated in the bond issuance.
The total bond amount of $2,498,848 was issued at an interest rate of 6.05% on December 12, 2018, with
a 30-year maturity date on September 1, 2048. Attachment A, Exhibit A, includes the current Debt Service
payment schedule (after bond debt adjustments discussed below).
Bond participants may choose to pay the parcel assessment as an added charge on their property tax
payments over the 30-year term, or they may buy out their share of the bond liability. If a participant buys
out of the debt, the debt payment schedule will be adjusted, and the remaining bond participants continue
to pay their debt service amount each year. A buy-out does not change the remaining participant’s share of
the debt obligation, however, the annual debt monitoring service costs do increase as the number of
participants who pay the shared annual service costs is reduced.
In early FY2019-20, one bond participant chose to pay off their share of the bond, resulting in the advanced
maturity of a portion of the bonds on September 1, 2019 debt service payment date. A second participant
paid off their share of the bond in late FY2019-20, so this payment went to reduce the outstanding debt on
the September 1, 2020 payment date. Three more property owners submitted payoff payments and those
funds were used to reduce debt for the September 1, 2021 payment date, and in November of 2022, one
more property owner paid off their portion of the bond leaving18 active property owners. Payoffs must be
received no later than July 15th for the September 1st payoff schedule, to allow the bond administrator time
to prepare the upcoming year’s bond roll for submittal to the Santa Clara County Assessor’s Office. To
date, no other participants have submitted a request for an early payoff.
Arrowhead Project Fund Closeout
Almost $2.5 Million of Arrowhead Bond Issuance funds were added to the $1.5 Million from fifteen
Arrowhead property owners who chose to pay their share of the infrastructure improvement cost in cash.
This brought the total funding package to almost $4 Million.
Of the $4 Million, approximately $340,000 was for Bond Issuance Costs, $90,000 was held as a reserve to
ensure funding in case of payment default, and the remaining amount of $3,569,000 was put into the
construction account. The water infrastructure construction project was completed under-estimate,
bringing a refund from San Jose Water of $340,886. In addition, a total of $356,800 in excess funds
remained in the Project Improvement and Cost of Issuance funds. After final payments, cash participants
were refunded their share of excess funds, leaving almost $411,700 to buy down bond debt on September
1, 2020.
Under the terms of the bond issuance agreement, Prepaid Participants received their share of excess funds
back in cash. Bond Issuance Participants’ share of the excess could only be utilized to pay down bond debt.
The closeout of the improvement fund and the subsequent reduction of debt via surplus funds occurred in
2020.
REPORT DISCUSSION:
Bond Payments
There are two debt service payments each year: principal and interest in September, and interest only in
March. As the September payment is made prior to receiving the current year’s tax levy revenues, the prior
year-end Arrowhead Bond Fund Balance Reserve should provide enough funding to pay the September
debt service payment and the debt service monitoring service costs. The assessed property tax levy amount
received from the following January and June tax receipts is to provide funding for the March interest-only
payment, and then again leave a sufficient balance to pay the following September’s debt service payment.
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The following schedule shows the Arrowhead Bond’s estimated annual debt service and administrative fees
for next fiscal year:
FY2024-25 Debt Service
Debt Service - Principal $ 26,287
Debt Service - Interest 82,452
Administrative Fees 7,848
Total Annual Debt Service $ 116,587
Tax Levy Process
In order to assess a tax levy on the property owners, the County of Santa Clara requires local jurisdictions
to adopt a resolution each year to establish the annual tax levy. Attachment A is the annual resolution
establishing the 2024-25 tax levy of $6,500 per parcel.
This levy will charge a total of $117,000 from the 18 participants. Santa Clara County will assess an
administration fee and then forward the remainder of the levy to the City for the bond’s debt service
expenditures. This total levied amount will be sufficient for 2024-25 debt service payments.
A certified copy of the adopted resolution setting the property tax levy for the Arrowhead CFD Bond will
be sent to the Santa Clara County Assessor’s Office no later than August 1
st.
ATTACHMENT:
A - Resolution
36
RESOLUTION NO. 24-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
ESTABLISHING THE FISCAL YEAR 2024-25PROPERTY TAX LEVY
FOR THE ARROWHEAD COMMUNITY FACILITY DISTRICT BOND DEBT SERVICE
WHEREAS,the City Council conducted proceedings to form the City of Saratoga Community
Facilities District No. 2016-1 (the “Arrowhead District”), to authorize the levy of special taxes upon the
land within the Arrowhead District, and to issue bonds secured by the special taxes to finance water
infrastructure improvements; and
WHEREAS,an election was held within the District on May 2, 2017, and the qualified electors
approved the incurrence of the bonded debt, the establishment of the appropriations limit for the District,
and the levy of the special tax by unanimous vote; and
WHEREAS, On November 21, 2018, the City Council adopted a resolution authorizing issuance
of Special Tax Bonds for Arrowhead Community Facility District through a private placement sale; and
WHEREAS,a Private Placement Bond Sale was conducted on December 12, 2018, on behalf of
twenty-four participating property owners within the Arrowhead Community Facilities District; and
WHEREAS, six of the property parcel owners have paid off their share of the bond liability,
leaving eighteen properties participating in the bond liability, and;
WHEREAS, it is necessary for the City Council of the City of Saratoga to establish an annual
Property Tax Levy on the participating property owners to provide sufficient funds for the debt service
payments and administrative expenditures during the fiscal year;
NOW, THEREFORE,be it resolved by the City Council of the City of Saratoga hereby establishes the
2024-25 Property Tax Levy for debt service on the Arrowhead Community Facility District Bonds at
$6,500 per parcel.
The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga City
Council held on the 19th day of June 2024 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Yan Zhao, Mayor
ATTEST:
DATE:
Britt Avrit, MMC, City Clerk
37
Resolution No. 24-XXXX
Page 2
Exhibit A
August August February Fiscal Year Bond
Fiscal Interest Annual Interest Interest Annual Debt Principal
Year Rate Principal Payment Payment Interest Service Balance @ YE
Bond Issue Date: December 1, 2018 - -
2018/19 6.050%- - 33,176 33,176 33,176 - 2,498,848
2019/20 6.050%89,531 75,590 69,845 145,435 234,966 100,388 2,308,929
2020/21 6.050%31,090 69,845 53,332 123,177 154,267 514,797 1,763,042
2021/22 6.050%25,520 53,332 45,393 98,725 124,245 236,934 1,500,588
2022/23 6.050%23,374 45,393 44,686 90,079 113,453 1,477,214
2023/24 6.050%24,787 44,686 41,624 86,309 111,096 76,443 1,375,984
2024/25 6.050%26,287 41,624 40,828 82,452 108,739 - 1,349,697
2025/26 6.050%26,383 40,828 40,030 80,859 107,242 - 1,323,314
2026/27 6.050%27,979 40,030 39,184 79,214 107,193 - 1,295,335
2027/28 6.050%29,672 39,184 38,286 77,470 107,142 - 1,265,663
2028/29 6.050%31,468 38,286 37,334 75,621 107,089 - 1,234,195
2029/30 6.050%33,371 37,334 36,325 73,659 107,030 - 1,200,824
2030/31 6.050%35,390 36,325 35,254 71,579 106,969 - 1,165,434
2031/32 6.050%37,531 35,254 34,119 69,373 106,904 - 1,127,903
2032/33 6.050%39,802 34,119 32,915 67,034 106,836 - 1,088,101
2033/34 6.050%42,210 32,915 31,638 64,553 106,763 - 1,045,891
2034/35 6.050%44,763 31,638 30,284 61,922 106,685 - 1,001,128
2035/36 6.050%47,472 30,284 28,848 59,132 106,604 - 953,656
2036/37 6.050%50,344 28,848 27,325 56,173 106,517 - 903,312
2037/38 6.050%53,389 27,325 25,710 53,035 106,424 - 849,923
2038/39 6.050%56,620 25,710 23,997 49,708 106,328 - 793,303
2039/40 6.050%60,045 23,997 22,181 46,178 106,223 - 733,258
2040/41 6.050%63,678 22,181 20,255 42,436 106,114 - 669,580
2041/42 6.050%67,531 20,255 18,212 38,467 105,998 - 602,049
2042/43 6.050%71,616 18,212 16,046 34,258 105,874 - 530,433
2043/44 6.050%75,948 16,046 13,748 29,794 105,742 - 454,485
2044/45 6.050%80,543 13,748 11,312 25,060 105,603 - 373,942
2045/46 6.050%85,416 11,312 8,728 20,040 105,456 - 288,526
2046/47 6.050%90,584 8,728 5,988 14,716 105,300 - 197,942
2047/48 6.050%96,064 5,988 3,082 9,070 105,134 - 101,878
2048/49 6.050%101,878 3,082 - 3,082 104,960 - -
TOTALS 1,570,286 952,100 909,685 1,861,785 3,432,071 928,562
Total Bond Principal 2,498,848$
Total Bond Interest 1,861,785
Total Cost of Bond 4,360,633$
2,498,848$
City of Saratoga
2018 Arrowhead Community Facility District Bond
Debt Schedule
Less
Approx
Bond Debt
38