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AGENDA BILL Agenda Item No. 5(B) Date: April 22, 2014 To: El Cerrito City Council From: Lori Trevino, Senior Financial Analyst Lisa Malek-Zadeh, Finance Director/City Treasurer Subject: Ordinance Establishing the Measure A Swim Center Parcel Tax Rates for FY 2014-15 ACTION REQUESTED Introduce by title, waive any further readingand approve an ordinance establishing the Measure A Swim Center Parcel Tax rates for FY 2014-15, equal to the approved FY 2013-14 rates of $38.61 per single-family residential unit, $29.73 per multifamily residential unit, and $270.66 per acre of non-residential property. BACKGROUND On March 7, 2000, the voters of El Cerrito approved a special tax for the purpose of renovating and reconstructing the El Cerrito Swim Center, rehabilitation of Canyon Trail Clubhouse, and completion of access and restroom renovations at Harding, Huber, and Poinsett Park Clubhouses. The special tax approved by the voters established a maximum rate authorized per single-family residential unit, multi-family residential unit, and acre of nonresidential property and expires in 2020. Each fiscal year, the City Council may amend Section 4.56 of the El Cerrito Municipal Code and set rates for the special tax at levels lower than the maximum rates, if the Council determines it is in the public interest to do so. If the City Council does not adopt an amending ordinance, the special tax shall be imposed at the maximum rates approved by the voters in 2000. On June 17, 2002, the City Council and El Cerrito Public Financing Authority (PFA) approved the issuance of Lease Revenue Bonds totaling $4.6 million and an associated lease agreement, for the reconstruction of the Swim Center facility. Each year since the bond issuance, the Council has reviewed the revenue capacity of the Measure A special tax rates, and has set the rates below the voter-approved maximum rates of $58.46 per single-family residential unit, $45 per multi-family residential unit, and $410 per acre of non-residential property. The pool reconstruction project was completed in early 2004. For FY 2004-05, the special tax rates were reduced and set at $38.61 per single-family residential unit, $29.73 per multi-family residential unit, and $270.66 per acre of non- residential property. These rates represented the minimum levies needed to meet the requirements of the bond issuance at that time. They have remained the same through FY 2013-14, generating about $438,000 annually. ---PAGE BREAK--- Agenda Item No. 5(8) On August 21, 2012, the City Council and PFA Board adopted resolutions authorizing refinancing of the Measure A Swim Center Lease Revenue Bonds. After the one-time costs of issuance, refinancing these bonds resulted in a savings to the City of $212,781 over the remaining term of the bonds. ANALYSIS Section 3.05(b) of the lease agreement between the PFA and the City specifies that the tax rate be set such that a minimum 110% of the annual debt service be raised. The debt service payments due in FY 2014-15 on the refinanced bonds total $363,324, so a minimum additional $36,333 must be raised. Costs associated with the Measure A Fund include Contra Costa County Auditor- Controller retaining approximately $12,000 from Measure A parcel taxes collected for its administration and revenue collection efforts. The City incurs about $5,000 in annual administrative costs, including the payment of trustee fees, the maintenance of financial records, the production of continuing disclosure documents related to the bonds, and the preparation of audited financial statements. Maintaining the current parcel tax rates will generate enough revenue to meet these minimum funding requirements. NBS Local Government Solutions, the Engineer for the parcel tax rates, must complete their analysis and submit their report to the Contra Costa County Auditor-Controller's Office by August 10, 2014 so that the County may include the City's Parcel Tax in the property tax bills. Scott Hanin, City Manager Attachments: 1. Ordinance 2014-XX Page 2 ---PAGE BREAK--- Agenda Item No. 5(B) Attachment 1 ORDINANCE NO. 2014-XX AN ORDINANCE OF THE CITY OF EL CERRITO SETTING REDUCED TAX RATES FOR FISCAL YEAR 2014-15 ONLY FOR THE SPECIAL TAX IMPOSED PURSUANT TO CHAPTER 4.56 OF THE EL CERRITO MUNICIPAL CODE WHEREAS, Chapter 4.56 of the El Cerrito Municipal Code provides for a special tax (the “Special Tax”) for the purpose of renovating and reconstructing the El Cerrito Swim Center (the “Swim Center”), rehabilitating the Canyon Trails Clubhouse, and performing access and restroom renovations to the Harding, Huber, and Poinsett Park Clubhouses (collectively, the “Authorized Improvements”); and WHEREAS, the Special Tax was approved by the voters at the March 7, 2000 election as Measure A and includes a maximum rate authorized per single-family residential unit, multi- family residential unit, and acre of non-residential property (the “Maximum Rates”); and WHEREAS, each fiscal year, the City Council may amend Section 4.56 of the El Cerrito Municipal Code to reflect the lower rates if it determines that it is in the public interest to do so, or else the Maximum Rates will be levied; and WHEREAS, the City Council has determined that the City will be able to meet its Fiscal Year 2014-15 obligations in connection with funding and financing the Authorized Improvements, by levying the Special Tax at rates lower than the Maximum Rates. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF EL CERRITO HEREBY ORDAINS AS FOLLOWS: SECTION 1. That Sections 4.56.020 of the El Cerrito Municipal Code is hereby amended to read as follows (additions in underline; deletions in strikethrough): B. For Fiscal Year 2013-14 2014-15, the Special Tax imposed pursuant to Chapter 4.56 of the El Cerrito Municipal Code shall be imposed in the amount of $38.61 per single family residential unit, $29.73 per multifamily residential unit, and $270.66 per acre of non-residential property. Thereafter, unless the Council adopts a further amending ordinance, the Special Tax shall be imposed at the Maximum Rate for each type of property. SECTION 2. It is the intent of the City Council that, if any tax imposed under this Ordinance is for any reason held to be unconstitutional or contrary to state law, the tax which would have been imposed had this ordinance not been adopted shall remain effective. SECTION 3. This ordinance shall take effect thirty days after passage and within fifteen days after passage, a summary of this ordinance shall be posted in accordance with Section 36933 of the Government Code of the State of California with the names of those City Council members voting for and against it. ---PAGE BREAK--- Agenda Item No. 5(B) Attachment 1 THE FOREGOING ORDINANCE was introduced and first read at a regular meeting of the El Cerrito City Council on April 22, 2014, and adopted by the following vote on May 6, 2014: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: APPROVED: Janet Abelson, Mayor ATTEST: Cheryl Morse, City Clerk