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HomeMy WebLinkAboutItem 2a: Resolution 6734 Revenue to be Raised from Property Taxes for FY 2010-11 to Pay for General Obligation BondsSTAFF REPORT Administrative Services Department DATE: August 17, 2010 TO: Mayor and City Council FROM: Hue C. Quach, Administrative Services Director Shannon Huang, Financial Services Manager /City easurer SUBJECT: Resolution No. 6734 determining the amount of revenue to be raised from property taxes for fiscal year 2010 -2011 to pay for the debt services on the City's General Obligation Bonds Recommendation: Adopt SUMMARY In June of 2001, the City issued General Obligation Bonds for the construction of a Police facility and the debt service on the bonds is payable from a voter approved levy. It is required that the City Council adopt a resolution to establish a supplemental tax rate for the debt services every year. DISCUSSION A special election was held on November 2, 1999, to consider a proposition to incur bonded indebtedness in the principal amount of $8 million for the construction of a Police facility. 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. Each year a Resolution is adopted determining the amount of revenue required to be raised from property taxes to pay for the debt services 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 expanded detail of assessed valuations, beginning balances, estimated expenditures, and the proposed tax rate for fiscal year 2010 -2011. This annual levy will provide for interest payments in the amount of $172,633 and $168,914 due on August 1, 2010 and February 1, 2011 and a principal payment of $175,000 due on August 1, 2010. FISCAL IMPACT The rates established for fiscal year 2010 -2011 will generate tax revenue of $505,547 to pay for the debt service payments on the General Obligation Bonds. RECOMMENDATION Adopt Resolution No. 6734, 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 2010 -11 to pay for the debt services on the City's General Obligation Bonds. Approved: -)a-Y 4Q � ) Attachments Donald Penman, City Manager 2 Balance Available (1) 7 -01 -10 2010 -11 Assessed valuations Estimated Tax Revenue Debt Service (2) % Tax Rates 2010 -11 (3) 11,000 10,109,348,638 505,547 516,547 0.005000 CITY OF ARCADIA GENERAL OBLIGATION BONDS Exhibit "A" (1) An allowance is included to ensure that positive cash balance is available for the debt service payments on August 1, 2010. (2) Per debt service schedule. (3) For comparison, last year's rate was 0.005304 % and the initial rate for the first year was 0.009657 %. 3 RESOLUTION NO. 6734 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 2010 -2011 TO PAY FOR THE DEBT SERVICES ON THE CITY'S GENERAL OBLIGATION BONDS WHEREAS, City of Arcadia voters approved the issuance of a General Obligation Bonds in the principal of $8 million for the construction of a police facility in a special election held on November 2, 1999. Property taxes are to be raised to pay for the debt services 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. That the following is the amount of revenue necessary during fiscal year 2010 -2011 to pay for the authorized debt service on the Series A, 2001 General Obligation Bonds: $505,547. SECTION 2. The City Clerk shall certify to the adoption of this Resolution. [SIGNATURES ON NEXT PAGE] 4 ATTEST: City Clerk Passed, approved and adopted this 17th day of August, 2010. APPROVED AS TO FORM: Stephen P. Deitsch City Attorney Mayor of the City of Arcadia