6 6
3 DATE: June 3, 2024
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Waqas Hassan, Assistant Finance Director
DEPARTMENT: Finance
SUBJECT: ESTABLISHING THE PROPERTY TAX RATE FOR GENERAL OBLIGATION BONDS FOR FISCAL YEAR 2024-2025
RECOMMENDATION
It is recommended that the City Council approve the attached resolution establishing the property tax rate for General Obligation bonds for Fiscal Year 2024-2025.
EXECUTIVE SUMMARY
In August 2020, the City issued General Obligation Bonds, Series 2020 (Levee Protection Planning and Improvements Project) "Bonds" in the aggregate principal amount of $85 million. In July 2023, due to the subsequent increase in the total cost of the Project, the City issued a second tranche for $5 million Bonds of the total approved amount of $90 million.
The City Council is required annually to levy a property tax sufficient to pay the principal and interest on the Bonds. City staff has determined that a combined tax rate of $0.0288 per $100 on assessed value (equates to $28.8 per $100,000 assessed value) upon taxable properties in the City is necessary to pay for the Bond debt service (principal and interest) of $4,148,812 that is due and payable on February 1, 2025 and August 1, 2025.
BACKGROUND/ANALYSIS
In June 2018, Foster City voters approved a ballot measure authorizing the issuance of
6 6
3 General Obligation bonds for the Levee Protection Planning and Improvements Project for up to $90 million. In August 2020, the City Council authorized the issuance of the first tranche of the General Obligation bonds in the aggregate principal amount of $85 million. In July 2023, due to the subsequent increase in the total cost of the Project, the City issued a second tranche for $5 million Bonds of the total approved amount of $90 million. Given that there is a combined Bond debt service (principal and interest) of $4,148,812 that is due and payable on February 1, 2025 and August 1, 2025, City staff has determined that a combined property tax rate of $0.0288 per $100 on assessed value (equates to $28.8 per $100,000 assessed value) is appropriate in Fiscal Year 2024-2025. This combined rate corresponds to separate tax rate of $0.0273 per $100 on assessed value (equates to $27.3 per $100,000 assessed value) for 2020 General Obligation Bonds and $0.0015 per $100 on assessed value (equates to $1.5 per $100,000 assessed value) for 2023 General Obligation Bonds. The County requires a City Council resolution providing the County with the authority to add this levy to their tax roll.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
The recommended General Obligation Bonds tax levy provides funds needed in the City's Debt Service Fund for principal and interest payments for the bond year ending August 1, 2025. There is no impact to the General Fund.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1 - Resolution