6/24/2025 Item 2.B
City Council Meeting
Item #2.B - RTC 25-722
Resolution Authorizing an Ad
Valorem Tax Levy Based on
Debt Service Estimate to be
CI Provided to Santa Clara County
1852 Respecting Unsold General
THE MISSION CIT Obligation Bonds for FY2025/26
(Continued from June 10, 2025)
June 24, 2025
Agenda
• Measure I Background
• First tranche of General Obligation Bonds issuance
• Ad Valorem Tax Rate and Levy timeline
• Recommendation
City of
Santa Clara
2 POST MEETING MATERIAL
1 6/24/2025 Item 2.B
Measure I Background
• General Obligation Bonds administration team
- City staff from
• City Manager's Office
• City Attorney's Office
• Finance
- External professional services providers confirmed by Resolution No. 24-9341* • Bond Counsel: Jones Hall (Scott Ferguson)
• Financial Advisor: PFM (Jaime Trejo)
Passed on July 9, 2024, A Resolution of the City of Santa Clara, California, determining that the public interest and necessity deman he acquisition, construction and improvement of municipal improvement projects constituting public infrastructure of the City, and the financing through the issuance of General Obligation Bonds City of
Santa Clara
The Center at Wits Ponitie
3 Measure I Background - cont'd
• Key Actions & Timeline
Action Estimated
Timeline
1. Bond Compliance Citizens' Oversight Committee (COC) Confirmation & May 27, 2025 COC Bylaws Approval
2. Approve Ad Valorem Tax Levy for Debt Service June 10, 2025
3. Approve Updated Debt Management Policy September 2025
4. Approve Bond Issuance and Related Documents December 2025 (1) Annual until final maturity
(2) Each Bond Issuance
City of
Santa Clara
4 2
6/24/2025 Item 2.B
Measure I
• Ballot Measure passed in November 2024 approving the sale of up to $400 Million of General Obligation Bonds to finance specific types of city infrastructure (passage rate of 69.41%)*
Projects to be funded and constructed outlined in an attached intended "Expenditure Plan"
- Streets and Transportation ($41,170,000)
- Fire Stations and Emergency Response ($142,235,450)
- Police Facilities ($43,987,500)
- Parks, Library, Senior Center and Aquatic Facilities ($115,258,750) - Storm Drain Improvements ($46,000,000)
- Historic Buildings and Beautification ($9,200,000)
Bond Issuance Costs ($2,000,000)
*Source: Santa Clara County voter results, November 5. 2024. Measure / City of
Santa Clara
5 5
Tax Rate Statement
• The tax rate statement included in the full text of the ballot measure Tax Rate Statement Information
Estimated maximum tax rate during the term of repayment: $28.70 per $100,000 of AV* tax year 2025-26 Estimated average tax rate during the term of repayment: $19.00 per $100,000 of AV* Total cost of repayment: $736,890,700
*Assessed Value
Source: Santa Clara County November 5, 2024 General Election; hitps://stenrov.scegov.org/voterquide/137/SC002ENG-508.pdf City of
Santa Clara
6 3
6/24/2025 Item 2.B
General Obligation Bonds, Series 2026
• Resolution No. 24-9341
- Stated the City's intention to issue bonds for public interest and necessity demand for infrastructure
- Declared the City's intention to use GO Bonds proceeds for reimbursement of capital projects expenditures, paid prior to bond issuance, no later than 18 months after expenditure payment date or placed in service date
• Additional reimbursement timing
- Reimbursement from GO Bonds proceeds must occur no later than 3 years after the original expenditure date
• Or 5 years with an engineer's certificate
• First tranche of General Obligation Bonds (GO Bonds) issuance size of $150 Million
City of
Santa Clara
He Can
7 General Obligation Bonds, Series 2026 - cont'd
• Total estimated GO Bonds, Series 2026 Issuance = $150 Million While City staff has developed the proposed phasing approach, it is subject to Council review and approval. Given the number, scale, and urgency of the infrastructure projects identified, a substantial initial tranche-estimated at $150 million—is necessary to initiate key improvements and maintain project momentum. This approach ensures that the City can begin addressing critical needs without delay while preserving flexibility for future Council direction. • Bond Compliance COC to review 1st tranche capital projects in early August 2025 • City Council to approve 1st tranche capital projects in late August 2025 City of
Santa Clara
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6/24/2025 Item 2.B
Pro Forma Debt Service
Estimated Bond Statistics:
Net Proceeds for Projects* $149,125,000 "Net of cost of issuances and underwriter's discount * Does not account for original issue premium, which can de deposited into the debt service funa True Interest Cost 4.58%
Period Ending Principal Interest Debt Service Period Ending Principal Interest Debt Service 8/1/2026 $12,775,000 $3,750,000 $16,525,000 8/1/2041 4,120,000 4,443,750 8,563,750 8/1/2027 13,045,000 6,861,250 19,906,250 8/1/2042 4,325,000 4,237,750 8,562,750 8/1/2028 1,000,000 6,209,000 7,209,000 8/1/2043 4,540,000 4,021,500 8,561,500 8/1/2029 1,000,000 6,159,000 7,159,000 8/1/2044 4,765,000 3,794,500 8,559,500 8/1/2030 1,810,000 6,109,000 7,919,000 8/1/2045 5,005,000 8,561,250 8/1/2031 2,215,000 6,018,500 8,233,500 8/1/2046 5,260,000 8,566,000 2,655,000 8,562,750 8/1/2047 5,520,000 3,043,000 8,563,000 8/1/2032 5,907,750
8/1/2033 2,790,000 5,775,000 8,565,000 8/1/2048 5,795,000 2247,250 8.562,000 8/1/2034 2,930,000 5,635,500 8,565,500 8/1/2049 6,085,000 8.562,250 3,075,000 5,489,000 8,564,000 8/1/2050 6.390,000 2,173,000 8,563,000 8/1/2035
3,225,000 5,335,250 8,560,250 8/1/2051 6,710,000 1,853,500 8,563,500 8/1/2036
5,174,000 8,564,000 8/1/2052 7,045,000 1,518,000 8,563,000 8/1/2037 3,390,000
8,564,500 8/1/2053 7,395,000 1,165,750 8,560,750
8/1/2038 3,560,000 5,004,500
8,561,500 8/1/2054 7,765,000 796,000 8,561,000
8/1/2039 3,735,000 4,826,500
8/1/2055 8,155,000 407,750 8,562,750
8/1/2040 3,920,000 4,639,750 8,559,750
Total S88.875,000 S39.561,000 $128:436,000
Total $61,125,000 $B2,894,000 $144,019,000
Grand Total $150,000,000 $122,455,000 $272,455,000
City of
Santa Clara
Tax Levy in Anticipation of Bond Sale
• If the City does not levy an Ad Valorem tax in advance of its proposed GO Bonds sale in early 2026, the City would need to rely on capitalized interest to make the first debt service payment
• No Capitalized Interest (Cap I)
• Potentially provides approximately
Advantage $3.75M more for projects
• Faster principal amortization reduces
interest costs*
Advantage
• Earlier than necessary taxpayer
payment if bond issuance is delayed
•Assumes poncipal is amortized over a 30-year term
City of
Santa Clara 10
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6/24/2025 Item 2.B
Tax Levy Annual Timeline
FY2025-26 Tax Rate
FY2026-27 Tax Rate
July 2025 - City files
property tax request with FY2027-28 Tax Rate
County of Santa Clara • July 2026 - City files
November 2025 & February property tax request with
County of Santa Clara • July 2027 - City files
2026 - Property tax
property tax request with
payment due dates November 2026 & February County of Santa Clara August 2026 & February 2027 - Property tax
payment due dates > November 2027 &
2027 - debt service
February 2028 - Property
payment dates • August 2027 & February tax payment due dates 2028 - debt service
payment dates > August 2028 & February
2029 - debt service
payment dates
City of
Santa Clara
11 Tha Center A What Fossil
11 Tax Levy Rate and Amount
• At this time, a tax rate of $28.70 per $100,000 of assessed value will generate an estimated $16.8 Million, based on projected FY 2025/26 assessed value • A more accurate tax levy projection, based on the tax rate, will be known when the County releases the assessed valuations for FY 2025/26 in September 2025 Consistent with Measure I, the tax rate will be set at $28.70 per $100,000 of assessed value in the first year to generate adequate revenue to pay down principal
City of
Santa Clara
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6 6/24/2025 Item 2.B
Tax Bill Increase to Each Property Owner
• The tax bill for the largest 20 commercial property owners would increase by $254,000, on average, in FY 2025/26, based on current AV* • The tax bill for a typical homeowner would increase by approximately $202 in FY 2025/26, based on current AV*
Ballot Summary
Estimated maximum tax rate during the term of repayment: $28.70 per $100,000 of AV* tax year 2025-26 Estimated average tax rate during the term of repayment: $19.00 per $100,000 of AV* FY 2023/24 median AV of single-family home $674,000
Tax per year, based on average / maximum $128 / $193
*Assessed Value
Source: Santa Clara County November 5, 2024 General Election; https://stgenrov.sccgov.org/voterguide/137/SC002ENG-508.pdf City of
Santa Clara
13 13
Recommendation
Agenda Item # 2.B
Adopt the Resolution Authorizing an Ad Valorem Tax Levy Based on a Debt Service Estimate to be Provided to Santa Clara County Respecting Unsold General Obligation Bonds for Fiscal Year 2025/26
- Rate shall be $28.70 per $100,000 of assessed value
City of
Santa Clara
14 14
7 6/24/2025 Item 2.B
City Council Meeting
Item #2.B - RTC 25-722
Resolution Authorizing an Ad
Valorem Tax Levy Based on
CIT Debt Service Estimate to be
Provided to Santa Clara County
1852 Respecting Unsold General
THE MISSION CITY Obligation Bonds for FY2025/26
(Continued from June 10, 2025)
June 24, 2025
15