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Home My Public Portal About07. Resolution Establishing the 2022-23 General Obligation Bond Tax Rate for Johnson's Pasture1►0 1997 - File #: 4314 Claremont City Council Agenda Report TO: CLAREMONT CITY COUNCIL FROM: ADAM PIRRIE, CITY MANAGER DATE: J U LY 26, 2022 41 I R• IF(:T- Item No: 7. Reviewed by: City Manager: AP ADOPTION OF A RESOLUTION ESTABLISHING THE 2022-23 GENERAL OBLIGATION BOND TAX RATE FOR THE LEVY OF AN AD VALOREM TAX TO BE COLLECTED TO MAKE DEBT SERVICE PAYMENTS ON OUTSTANDING GENERAL OBLIGATION BONDS ISSUED TO FINANCE THE ACQUISITION OF JOHNSON'S PASTURE SUMMARY On August 21, 2007, the City issued $9,655,000 in General Obligation Bonds, Series 2007, to finance the acquisition of Johnson's Pasture. The City refinanced these outstanding bonds in 2016 with the issuance of General Obligation Refunding Bonds, Series 2016, to obtain more favorable interest rates for the purpose of reducing annual debt service costs. The City is obligated to levy an annual ad valorem tax upon all taxable properties within the City for payment of the bond principal and interest. Each year, the rate of the ad valorem tax levy must be calculated based on changes in the assessed value of taxable properties within the City of Claremont. RECOMMENDATION Staff recommends that the City Council adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, REQUESTING AND AUTHORIZING THE COUNTY OF LOS ANGELES TO LEVY A TAX ON ALL REAL PROPERTY IN THE CITY OF CLAREMONT AS A VOTER APPROVED LEVY WITH RESPECT TO THE CITY'S GENERAL OBLIGATION BOND APPROVED BY THE VOTERS AT THE NOVEMBER 7, 2006 STATEWIDE GENERAL ELECTION TO FUND THE ACQUISITION OF JOHNSON'S PASTURE. CLAREMONT Page 1 of 3 Printed on 7/20/2022 ALTERNATIVE TO RECOMMENDATION In addition to the staff recommendation, there is the following alternative: • Request additional information. FINANCIAL REVIEW The proposed tax rate will ensure that sufficient funds are received from the property tax levy to cover the debt service payment. The debt service requirement for 2022-23 for the 2016 General Obligation Refunding Bonds is $506,550. In order to collect sufficient funds to ensure that this requirement is met, an ad valorem tax levied by the County of Los Angeles of $0.008079 per $100 of assessed value (0.008079%) must be assessed on each taxable parcel within the City. The tax rate is calculated each year based on changes in the assessed value of property in Claremont. The tax rate for the prior year was $0.008474 per $100 of assessed value (0.008474%). It is important to note that debt service payments on the 2016 General Obligation Refunding Bonds will be fully funded through this tax levy. No General Fund or other City funds will be required to fund the debt service payments. The cost to prepare and complete this report is estimated at $500. This cost is in staff time to prepare the report and is included in the operating budget of the Administrative Services Department. ONAI YRIR The City's annual debt service requirement on the 2016 General Obligation Bonds for 2022-23 is $504,300. By adopting the proposed resolution (Attachment A), the City authorizes the County of Los Angeles to levy the tax at a rate of $0.008079 per $100 of assessed valuation (0.008079%) on property tax bills issued for 2022-23. A detailed breakdown of this calculation is included as Attachment B. The tax rate is calculated by taking the annual required debt service payment and dividing it by the net assessed valuation, less a delinquency factor. RELATIONSHIP TO CITY PLANNING DOCUMENTS Staff has evaluated the agenda item in relationship to the City's strategic and visioning documents and finds this report in compliance with the General Plan and the 2022-24 Budget. CEQA REVIEW This item is not subject to environmental review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and Section 15060(c)(3) (the activity is not a "project" as defined in Section 15378). Under CEQA Guidelines Section 15378(b)(5), continued administrative activities and organizational activities that will not result in a direct or indirect physical change in the environment are not CEQA projects. Moreover, under CEQA Guidelines Section 15378(b)(4), government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment are not CEQA projects. CLAREMONT Page 2 of 3 Printed on 7/20/2022 The adoption of a resolution establishing the General Obligation Bond tax rate is an organizational activity of the government, which involves fiscal activities but does not commit to any specific project, as such, this item is not a CEQA project. Even if it was determined to be a CEQA project, pursuant to CEQA Guidelines Section 15061(b)(3), CEQA does not apply to this item because there is no potential for causing a significant effect on the environment. The adoption of a resolution establishing the General Obligation Bond tax rate will not have a significant effect on the environment because the action will not result in or lead to a physical change in Claremont. Therefore, no additional environmental review is needed at this time. PUBLIC NOTICE PROCESS The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a paper copy, please contact the City Clerk's Office. Submitted by: Adam Pirrie City Manager Attachments: A - Resolution Establishing the 2022-23 General Obligation Bond Tax Rate B - 2022-23 General Obligation Bond Tax Rate Calculation CLAREMONT Page 3 of 3 Printed on 7/20/2022 ATTACHMENT A RESOLUTION NO.2022- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, REQUESTING AND AUTHORIZING THE COUNTY OF LOS ANGELES TO LEVY A TAX ON ALL REAL PROPERTY IN THE CITY OF CLAREMONT AS A VOTER APPROVED LEVY WITH RESPECT TO THE CITY'S GENERAL OBLIGATION BOND APPROVED BY THE VOTERS AT THE NOVEMBER 7, 2006 STATEWIDE GENERAL ELECTION TO FUND THE ACQUISITION OF JOHNSON'S PASTURE WHEREAS, the City of Claremont (the "City) is authorized to issue general obligation bonds to finance municipal improvements pursuant to certain provisions of the California Government Code, including Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 and including Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 (collectively, the "Bond Law") WHEREAS, more than two-thirds of the electors voting at a general statewide election held in the City on November 7, 2006, voted for a proposition authorizing the issuance by the City of general obligation bonds in the aggregate principal amount of up to $12,500,000 to fund the acquisition of hillside land known at Johnson's Pasture; WHEREAS, the City issued general obligation bonds pursuant to such authority (the "Series 2007 Bonds"), in an aggregate principal amount of $9,655,000, designated as the "City of Claremont General Obligation Bonds, Series 2007 (Johnson's Pasture Acquisition)"; WHEREAS, the City subsequently issued general obligation refunding bonds pursuant to such authority (the "Series 2016" Bonds), in an aggregate principal amount of $7,200,000, designated as the "City of Claremont General Obligation Refunding Bonds, Series 2016, to refinance the Series 2007 Bonds; WHEREAS, it is necessary for the City to request that the County of Los Angeles (the "County") levy and collect ad valorem property tax sufficient to make debt service payments on the Series 2016 Bonds; NOW THEREFORE, THE CLAREMONT CITY COUNCIL DOES HEREBY RESOLVE: SECTION 1. The above recitals are true and correct and are incorporated herein. SECTION 2. The County is hereby requested and authorized to assume on behalf of the City the collection, payment and enforcement of a $0.008079 levy on each $100 of assessed valuation (0.008079%) in the City, which amount shall be in addition to present ad valorem property tax collections for the City. SECTION 3. This resolution shall take effect upon its adoption by this Council. Resolution No. 2022- Page 2 SECTION 4. The Mayor shall sign this Resolution and the City Clerk shall attest and certify to the passage and adoption thereof. PASSED, APPROVED, AND ADOPTED this 26th day of July, 2022. Mayor, City of Claremont ATTEST: City Clerk, City of Claremont APPROVED AS TO FORM: City Attorn ,City of Claremont CITY OF CLAREMONT ATTACHMENT B Calculation of General Obligation Tax Rate for Series 2016 Bonds Fiscal Year 2022-23 ACCOUNT NUMBER AGENCY NAME 128.01 TD #1 128.02 Village RP 128.03 Vil RP 82 Anx 128.04 Vil RP 83 Anx 128.06 Vil RP '01 Anx TOTAL SECURED ASSESSED VALUE 4,930,800,069 283,499,668 10,371,516 33,038,737 511,409,928 5,769,119,918 LESS: (SECURED HOMEOWNER EXEMPTION) (36,383,200) (336,000) - - (700,000) (37,419,200) NET SECURED ASSESSED VALUE 4,894,416,869 283,163,668 10,371,516 33,038,737 510,709,928 5,731,700,718 % OF TOTAL NET SECURED ASSESSED VALUE 85.39% 4.94% 0.18% 0.58% 8.910 100.000 DEBT SERVICE REQUIREMENTS (A) Principal 230,559 13,339 489 1,556 24,058 270,000 (B) Interest 199,860 11,563 424 1,349 20,854 234,050 (C) Paying Agent Fees (Wells Fargo Bank) 2,135 124 5 14 223 2,500 (D) Other Costs - - - - - - (A+B+C+D) TOTAL (A) 432,553 25,025 917 2,920 45,135 506,550 OTHER FUNDING SOURCES (E) Cash Balance on Hand (Prior June 30) 45,021 2,605 95 304 4,698 52,723 TOTAL (B) 45,021 2,605 95 304 4,698 52,723 NET DEBT SERVICE REQUIREMENTS FROM SECURED AV (G) "TOTAL (A)" minus "TOTAL (B)" 387,532 22,420 821 2,616 40,437 453,827 (H) ADJUSTED SECURED ASSESSED VALUE 4,796,528,532 277,500,395 10,164,086 32,377,962 500,495,729 5,617,066,704 2% - Delinquency Factor Assumed CURRENT SECURED RATE FOR G.O. BONDS (G/H) "Net Debt Service Requirement" Divided by "Adjusted Secured AV" 0.008079% 0.008079% 0.008079% 0.008079% 0.008079% 0.008079% (1) The rate will appear as a rate per $100 in value, taken to 6 places. 0.008079 0.008079 0.008079 0.008079 0.008079 0.008079 CHECK ON CALCULATION (H) Adjusted Secured Assessed Value 4,796,528,532 277,500,395 10,164,086 32,377,962 500,495,729 5,617,066,704 (1) G.O. Tax Rate 0.008079 0.008079 0.008079 0.008079 0.008079 0.008079 (H*1/100) Total Collections $387,532 $22,420 $821 $2,616 $40,437 $453,827 (G) Total Net Debt Service Requirements $387,532 $22,420 $821 $2,616 $40,437 1 $453,827 Excess Collections ("Total Collections" minus "Total Net D/S Regs.") I $0 1 $0 $0 I $0 I $0 I$0