Title
Adoption of Resolution Requesting and Authorizing the County of Alameda to Levy a Tax on All Real and Personal Property in the City of Alameda as a Voter Approved Levy for the General Obligation Bonds Issued Pursuant to a General Election Held November 7, 2000 for the Alameda Library. (Finance 421.1)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
On November 7, 2000, the voters of the City of Alameda (City) passed Measure “O,” authorizing the issuance of bonds in an amount not to exceed $10,600,000 (Bonds) to finance the acquisition, construction, and completion of a new Main Library facility and make improvements to two branch library facilities (Project) in the City. On September 17, 2013, the City issued $9,010,000 of 2013 General Obligation Bonds (the Refunding Bonds) to refund the outstanding 2003 bonds, creating savings via a reduced interest rate. The Resolution authorizes to levy a tax all real and personal property in the City and will provide for sufficient funds to pay principal and interest on the Bonds in Fiscal Year (FY) 2020-21.
BACKGROUND
On November 7, 2000, the voters of the City passed Measure “O,” authorizing the issuance of Bonds in an amount not to exceed $10,600,000 to finance the Project. The issuance of the bonds was predicated upon receiving a grant for library construction from the State of California. The City received the final grant award in December 2002 in the amount of $15,487,952. In March 2003, the City sold the full amount of the Bonds.
On September 17, 2013, the City issued $9,010,000 of 2013 Refunding Bonds to refund the outstanding 2003 bonds, creating savings via a reduced interest rate.
DISCUSSION
Measure “O” set the maximum tax rate at $15.98/$100,000 of assessed valuation over 30 years. The required tax rate for FY 2020-21 is $4.00/$100,000 of assessed valuation. This is substantially lower than the maximum rate and remains the same as the rate for the prior fiscal year. This rate and the accumulated cash balance in the Library Bond Fund will produce sufficient revenues to pay the required debt service during the fiscal year.
ALTERNATIVES
Due to this being an outcome of General Obligation Bonds Issued, there are no alternatives available.
FINANCIAL IMPACT
There is no impact to the General Fund. Debt service for the Refunding Bonds will be paid from this tax levy on all real and personal property in Alameda, which is accounted for in Fund 421.1 (2013 General Obligation Library Bond Fund). Staff estimates the tax rate will generate approximately $546,000 for collection in FY 2020-21. As of June 30, 2020, the outstanding bond balance is $6,825,000.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378 (b)(4) of the CEQA Guidelines, because it involves governmental fiscal activities (levy of a tax), which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Adopt a resolution requesting and authorizing the County of Alameda to levy a tax on all real and personal property in the City of Alameda as a voter-approved levy for the General Obligation Bonds issued to refund the original bonds issued pursuant to the authorization given at a general election held November 7, 2000 for the Alameda Library.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of adoption of a resolution requesting and authorizing the County of Alameda to levy a tax on all real and personal property.
Respectfully submitted,
Nancy Bronstein, Acting Finance Director