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Oo��4ryiiy of °��y STAFF REPORT
Administrative Services Department
DATE: August 4, 2015
TO: Honorable Mayor and City Council
FROM: Hue C. Quach, Administrative Services Director
Shannon Huang, Financial Services Manager /City Treasurer
SUBJECT: RESOLUTION NO. 7086 DETERMINING THE AMOUNT OF REVENUE
TO BE RAISED FROM PROPERTY TAXES FOR FISCAL YEAR 2015 -16
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 are 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. Rates are proposed to decline slightly this Fiscal Year. It is recommended that
the City Council adopt Resolution No. 7086 determining the amount of revenue to be
raised from property taxes for Fiscal Year 2015 -16 to pay for the debt service on the
2011 and 2012 General Obligation Bonds, attached to this staff report.
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 solely for the
Resolution regarding Fiscal Year 15 -16 Tax Levies on General Obligation Bonds
August 4, 2015
Page 2 of 3
refunding on November 6, 2012, providing savings of approximately $1 million for
ratepayers over the life of the bonds.
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.
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 2015 -16.
The levy rate for Series 2011 General Obligation Bonds is 0.003920% in comparison to
0.005062% last year and the tax rate for the Series 2012 General Obligation Bonds is
0.002761 % versus 0.003159% for the prior year. The reduction in the tax rates is due
to the 8.82% increase on the City's property assessed value and the higher beginning
fund balances as a resulted of the more than expected tax collection in fiscal year 2014-
15. A home valued at $750,000 would pay $29.40 in taxes for the 2011 Series Bonds
and $20.71 for the 2012 Series Bonds as part of their annual property tax payments.
The FY 2015 -16 debt service payments for the Series 2011 General Obligation Bond
totals $596,220, of which, $295,000 represents Principal and $301,220 as Interest. For
the Series 2012 General Obligation Bond, the total amount due in FY 2015 -16 is
$420,125, including $260,000 for Principal and $160,125 for Interest.
FISCAL IMPACT
No General Funds costs are incurred through this action. The rates established for
Fiscal Year 2015 -16 are estimated to generate tax revenue of $537,880 and $378,887
for the 2011 and 2012 General Obligation Bonds, respectively, and will be paid directly
by property owners as part of their annual property tax bills. These tax revenues will
add to each bond fund's existing fund balances for debt service payments occurring in
Fiscal Year 2015 -16.
Resolution regarding Fiscal Year 15 -16 Tax Levies on General Obligation Bonds
August 4, 2015
Page 3 of 3
RECOMMENDATION
It is recommended that the City Council adopt Resolution No.7086 determining the
amount of revenue to be raised from property taxes for Fiscal Year 2015 -16 to pay for
the debt service on the 2011 and 2012 General Obligation Bonds.
Approved.
Dominic Lazzare
City Manager
Attachment — Exhibit "A" — Calculation of Tax Rate
Resolution No. 7086
Exhibit "A"
General
Balance
2015 -16
Estimated
Debt
$260,000
Obligation
Available
Assessed
Tax
Service
% Tax Rates
Bonds
(1)
valuations
Revenue
(2)
2015 -16 (3)
7 -01-15
Series 2011
$511,000
$13,721,169,975
$537,880
$596,220
0.003920%
Series 2012
$380,000
$13,721,169,975
$378,887
$420,125
0.002761%
(1) Excess fund balance is included to ensure that positive cash balance is available
for the debt service payments on August 1, 2016.
(2) Per debt service schedule below.
(3) For comparison, the levy rate from last year was 0.005062% and 0.003159% for
Series 2011 and 2012 General Obligation Bonds, and their first year levy rates
were 0.006621% and 0.009657% in 2011 and 2001, respectively.
DEBT SERVICE PAYMENT SCHEDULE:
2011 G.O. Bond
2012 G.O. Bond
Principal
$295,000
$260,000
Interest
$301,220
$160,125
Total
$596,220
$420,125
RESOLUTION NO. 7086
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 2015 -16 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 2015 -16 to pay for the authorized debt services on the above described Bonds:
Series 2011 General Obligation Bonds: $537,880
Series 2012 General Obligation Bonds: $378,887
1
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of , 2015.
ATTEST:
City Clerk
APPROVED AS TO FORM:
0.
Stephen P. Deitsch
City Attorney
Mayor of the City of Arcadia