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Administrative Services Department
DATE: August 6, 2013
TO: Mayor and City Council
FROM: Hue C. Quach, Administrative Services Director
Shannon Huang, Financial Services Manager /City Treasurer
SUBJECT: RESOLUTION NO. 6986 DETERMINING THE AMOUNT OF REVENUE
TO BE RAISED FROM PROPERTY TAXES FOR FISCAL YEAR 2013 -14
TO PAY FOR THE DEBT SERVICE ON THE 2011 AND 2012 GENERAL
OBLIGATION BONDS
Recommendation: Adopt
SUMMARY
The City has two General Obligation Bonds supported by voter approved levies. The
Series 2011 issuance was to fund the building of a grade separation at the intersection
of Santa Anita Avenue and the proposed Gold Line station; the General Obligation
Bonds Series 2012 were refunding bonds, replacing the Series 2001 General Obligation
Bonds, which were used to finance the construction of the City's police station.
Annually, the City Council is required to adopt a resolution to establish the supplemental
taxes collected to make debt service payments for the outstanding General Obligations
Bonds.
DISCUSSION
The issuance of Series 2001 General Obligation Bonds was approved in a special
election held on November 2, 1999; the Series 2011 issuance was approved by the
voters in the April 11, 2006, election. More than two - thirds of the votes cast were in
favor of the agreed indebtedness with the principal and interest payable from taxes
levied upon taxable property within the City.
In 2012, the bond market provided an opportunity to refinance the Series 2001 General
Obligation Bonds. General Obligation Bonds Series 2012 were issued on November 6,
2012, providing savings to overall debt service payments.
Both of the 2011 and 2012 Bonds are payable entirely by ad valorem property taxes
levied on behalf of the City and collected by Los Angeles County.
FY 13 -14 Tax Levies on General Obligation Bonds
August 6, 2013
Page 2 of 2
Each year, a resolution must be adopted by the City Council to determine the amount of
revenue required to be raised from property taxes to pay for the debt service on the
General Obligation Bonds. This information is the basis for establishing tax rates, which
are forwarded to Los Angeles County and will be applied to properties within the City's
boundary. A separate schedule (Exhibit "A ") illustrating the calculation of the tax rate is
attached to provide detail of the debt service payments, the assessed valuations,
beginning balances, estimated expenditures, and the proposed tax rate for Fiscal Year
2013 -14. The levy rate for Series 2011 General Obligation Bonds is .005011% in
comparison to 0.006621% last year. No comparison is provided for the Series 2012
General Obligation Bonds as this is the first year of tax levy. The FY 2013 -14 debt
service payments for the Series 2011 General Obligation Bond totals $600,300, of
which, $318,500 represents Principal and $280,000 as Interest. The FY 2013 -14 debt
service payment for the Series 2012 General Obligation Bond totals $366,900, of which,
$179,300 represents Principal and $185,000 as Interest.
FISCAL IMPACT
The rates established for Fiscal Year 2013 -14 will generate tax revenue of $583,744
and $392,862, for the 2011 and 2012 General Obligation Bonds. These tax revenues
will add to each bond fund's existing fund balances for debt service payments occurring
in Fiscal Year 2013 -14.
RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 6986 determining the
amount of revenue to be raised from property taxes for Fiscal Year 2013 -14 to pay for
the debt service on the 2011 and 2012 General Obligation Bonds.
Approved.
Dominic Lazza
CIty Manager
Attachments: Exhibit "A"
Resolution No. 6986
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General
Balance
2013 -14
Estimated
Debt
$179,300
Obligation
Available
Assessed
Tax
Service
% Tax Rates
Bonds
(1)
valuations
Revenue
(2)
2013 -14 (3)
7 -01-13
Series 2011
$382,500
$11,648,840,143
$583,744
$600,300
0.005011%
Series 2012
$301,400
$11,648,840,143
$392,862
$366,900
0.003373%
(1) Excess fund balance is included to ensure that positive cash balance is
available for the debt service payments on August 1, 2014.
(2) Per debt service schedule below.
(3) For comparison, the levy rate from last year for Series 2011 General
Obligation Bonds was 0.006621%; the defeased General Obligation
Bonds of 2001 was 0.002970 % with its initial debt service year being
0.009657%.
DEBT SERVICE PAYMENT SCHEDULE:
2011 G.O. Bond
2012 G.O. Bond
Principal
$318,500
$179,300
Interest
$280,000
$185,000
Total
$600,300
$366,900
RESOLUTION NO. 6986
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, DETERMINING THE AMOUNT
OF REVENUE TO BE RAISED FROM PROPERTY TAXES
FOR FISCAL YEAR 2013 -14 TO PAY FOR THE DEBT
SERVICE ON THE 2011 AND 2012 GENERAL
OBLIGATION BONDS
WHEREAS, City of Arcadia voters approved the issuance of General Obligation
Bonds Series 2001 in the principal of $8 million for the construction of a police facility in
a special election held on November 2, 1999, and the 2001 Bonds were defeased by
the issuance of General Obligation Bonds Series 2012 on November 6, 2012. Property
taxes are to be raised for the principal and interest payments of the indebtedness
through tax levy; and
WHEREAS, City of Arcadia voters approved the issuance of General Obligation
Bonds Series 2011 in the principal of $8 million for the construction of a grade
separation, which will locate at the intersection of Santa Anita Avenue and the proposed
Foothill Extension of the Metropolitan Transit Authority Gold Line, in the general
municipal election held on April 11, 2006. Property taxes are to be raised for the
principal and interest payments of the indebtedness through tax levy.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS.
SECTION 1. The following is the amount of revenue necessary during Fiscal
Year 2013 -14 to pay for the authorized debt services on the above described Bonds:
Series 2011 General Obligation Bonds: $583,744
Series 2012 General Obligation Bonds: $392,862
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of 2013.
Mayor of the City of Arcadia
ATTEST:
City Clerk
APPROVED AS TO FORM:
Stephen P. Deitsch
City Attorney