CC 2014-07-08_08.d. Resolution Fire Station Tax Levy RateMEMORANDUM
TO: CITY COUNCIL
FROM: DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES~·
SUBJECT: CONSIDERATION OF A RESOLUTION AUTHORIZING THE FIRE
STATION EXPANSION GENERAL OBLIGATION BOND PROPERTY
TAX LEVY RATE
DATE: JULY 8, 2014
RECOMMENDATION:
It is recommended the City Council adopt the attached Resolution authorizing the FY
2014-15 fire station expansion property tax levy approved by voters on November 5, 2002.
City staff and the San Luis Obispo County Auditor Controller's Office have calculated a
.00606% levy per $100 of assessed value.
FINANCIAL IMPACT:
Staff recommends that the City reduce the tax levy rate to .00606%, which is .00211 %
less than the prior year. The tax levy is expected to result in revenues of approximately
$153,600. This will provide sufficient revenues for paying FY 2014-15 principal and
interest of approximately $141,000; paying agent fees and banking administrative cost
of $1,800; and San Luis Obispo County handling charges of $500. The remaining
$10,300 will go into reserves to help offset any future increases in the tax rate.
BACKGROUND:
On November 5, 2002, voters approved Measure 0-02, authorizing the expansion of the
Arroyo Grande Fire Station and the issuance of $1,900,000 in general obligation bonds.
The Measure, which was approved by more than two-thirds of the Arroyo Grande voters
voting in the election, authorized bonded indebtedness and placing a tax on real
property within the Arroyo Grande City limits. The election results were subsequently
certified and the bonds issued in accordance with all applicable laws and regulations.
Interest and principal payments, paying agent fees and banking administrative costs on
the general obligation bonds are due during FY 2014-15. The San Luis Obispo County
Auditor-Controller requires that all tax levies be submitted by August 31, 2014 for
collection and remittance in December 2014 and April 2015.
Item 8.d. - Page 1
CITY COUNCIL
CONSIDERATION OF GENERAL OBLIGATION BOND PROPERTY TAX LEVY
JULY 8, 2014
PAGE2
ANALYSIS OF ISSUES:
Staff from the San Luis Obispo County Auditor-Controller's Office and the City concur
on the amount required for principal, interest, and fees; the calculation used in
determining the tax levy rate; and the tax levy rate amount of .00606%. As indicated last
year, the stabilization of property values has resulted in staff's recommendation to lower
the tax levy rate this year. The rate is likely slightly higher than necessary, but would
involve risks to further reduce at this time given the future uncertainty of property
values. The rate is reviewed each year, therefore, if assessed valuations continue
rebounding, the rate can be adjusted to accommodate the circumstances at that time.
Excess reserves will likely result in the ability to pay off the bonds early.
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
1. Approve staff's recommendation by adopting the attached Resolution;
2. Given available reserves, the City Council could direct staff to pursue a decrease in
the rate;
3. Modify staff's recommendation and adopt the Resolution; or
4. Provide direction to staff.
ADVANTAGES:
By approving the tax levy rate, the County will be able to place the tax levy on the FY
2014-15 property tax rolls. In addition, the recommended rate will ensure sufficient
funds are available to pay debt service on the bonds and avoid the need for substantial
future increases.
DISADVANTAGES:
Approval of the recommendation maintains a tax rate that may be slightly higher than
necessary to generate the funds needed for debt service at this time.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, July 3, 2014. The Agenda
and report were posted on the City's website on Thursday, July 3, 2014. No public
comments were received.
Item 8.d. - Page 2
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE AUTHORIZING THE FIRE STATION
EXPANSION PROPERTY TAX LEVY FOR FISCAL YEAR
2014-15
WHEREAS, City of Arroyo Grande ("City") is a duly authorized municipal corporation
and existing under the laws of the State of California; and
WHEREAS, in the City of Arroyo Grande, a special election (the "Election") was duly
and regularly held on the 5th day of November 2002, in that territory included within the
boundaries of the City at which Election there was submitted to the qualified voters of
the City the following question:
MEASURE 0-02: Shall the City of Arroyo Grande expand the Fire Station
including the addition of sleeping facilities, a federally required area for safe
clean up of blood-borne pathogens, a federally required room to store turnout
clothing, a system to divert vehicle exhaust from the apparatus rooms, an
expanded training room, fire sprinklers, seismic retrofit of the facility to meet
current standards, and expansion of the apparatus bay, by issuing $1,900,000 in
general obligation bonds; and
WHEREAS, more than two-thirds of the votes cast at the Election were in favor of and
assented to the incurring of such indebtedness, and the City Council of the City was
authorized and empowered to provide for the form of bonds of the City, and for the
issuance thereof for the purpose and objects provided for in the election, payable,
principal and interest, from taxes levied exclusively upon the taxable property within the
City, as permitted by law; and
WHEREAS, on December 3, 2002, the City Council of the City adopted Resolution No.
3636 which certified the results of the November 5, 2002, Election conducted by the
Registrar of Voters, which results showed that more than two-thirds of the votes cast
were in favor of the proposition to incur bonded indebtedness and levy the tax; and
WHEREAS, the City issued its General Obligation Bonds, Series A of 2003 (Fire
Station Project) in the amount of $1,900,000 pursuant to Resolution No. 3648, adopted
by the City Council of the City, which bonds were issued for the purpose of the fire
station expansion and retrofitting project (the "Bonds"); and
WHEREAS, the City Council is further authorized to determine by resolution on or
before August 31 of each year, the specific tax to be levied on each parcel of land in the
City; and
WHEREAS, it is now necessary and appropriate that the City Council of the City levy
and collect the taxes for Fiscal Year 2014-15 for the purpose specified in the Election,
by the adoption of a resolution;
Item 8.d. - Page 3
RESOLUTION NO.
PAGE2
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo
Grande as follows:
1. In accordance with Government Code Section 43632, there is hereby levied
upon the parcels of land within the City the taxes for Fiscal Year 2014-15 (the
Taxes"), at the tax rates set forth in Exhibit A attached hereto and incorporated
herein. The City Manager or his designee (the "City Manager") is designated
and directed to file this Resolution with the San Luis Obispo County Auditor-
Controller by August 31, 2014.
2. The Taxes shall be collected in the same manner as ordinary ad valorem taxes
are collected and shall be subject to the same penalties and the same
procedure, sale and lien priority in cases of delinquency as provided for ad
valorem taxes, as such procedure may be modified by law or the City Council of
the City from time to time. After collection by the County, the amount of the
assessments, after deducting compensation due the County for collection, shall
be paid to the City.
3. The City Manager is hereby authorized to transmit a certified copy of this
Resolution to the San Luis Obispo County Assessor and/or the San Luis Obispo
Treasurer-Tax Collector, together with other supporting documentation as may
be required to place the Taxes on the secured property tax roll for Fiscal Year
2014-15 and for the collection of the Taxes in the manner of ad valorem property
taxes, and to perform all other acts which are required by law or deemed
necessary by the City Manager in order to accomplish the purpose of this
Resolution, or Bond covenants.
On motion of Council Member , seconded by Council Member
and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this day of 2014.
Item 8.d. - Page 4
RESOLUTION NO.
PAGE3
TONYFERRARA,MAYOR
ATIEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, CITY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, CITY ATIORNEY
Item 8.d. - Page 5
EXHIBIT A
SCHEDULE OF TAX RATE
Tax rate per $100 of assessed value = .00606%
Item 8.d. - Page 6