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Date: To: From: Subject: AGENDA BILL Agenda Item No. 5(G) April 3, 2012 El Cerrito City Council Mary Dodge, Administrative Services Director Ordinance Establishing the Measure A Swim Center Parcel Tax Rate for FY 2012-13 ACTION REQUESTED Introduce by title, waive any further reading and approve an Ordinance establishing the Measure A (Swim Center) Parcel Tax rate for FY 2012-13. Staff recommends that the City adopt an Ordinance establishing the Measure A Parcel Tax Rate at the current level of $38.61 per single-family residential unit, $29.73 per multi-family residential unit, and $270.66 per acre of non-residential property for FY 2012-13. BACKGROUND On June 17, 2002, the City Council approved the issuance of Lease Revenue Bonds associated with the construction of the Swim Center facility. Section 4.56.040 of the El Cerrito Municipal Code provides that the City Council may reduce the amount of the annual special tax for any classification of property if the City Council determines that it is in the public interest to do so. Each year since the bond issuance, the Council has reviewed the revenue capabilities of the Measure A Parcel Tax rate, and has adjusted the tax below the voter-approved maximum rate of $58.46 per single-family residence (along with other rates for various other property uses). On July 15, 2002, the rate was set at $45.00 per single-family residence. On July 21, 2003, the rate was raised to $53.07; and the excess revenue generated during FY 2003-04 was used to fund the cost of the Swim Center parking lot improvements and water play features for the pool. The pool was completed in early 2004. On July 19, 2004, the parcel tax rate was lowered to $38.61 per single-family residence, which represents a minimum level to be levied that meets the requirements of the bond issuance. The parcel tax rate has remained the same since 2004 and is anticipated to provide tax revenue of$438,000 for FY 2012-13. ANALYSIS In FY 2012-13, the City will make Measure A (Swim Center) lease payments in the amount of $365,800. Section 3.05(b) of the lease agreement between the El Cerrito Public Finance Authority (PF A) and the City of El Cerrito specifies that the tax rate be set at a rate such that a minimum 110% of the annual debt service be raised, which would require an additional $36,580. Other expenditures of the Measure include Contra ---PAGE BREAK--- Agenda Item No. 5(G) Costa County retaining approximatelY. $12,000 from Measure A proceeds for its revenue collection efforts. Additionally, the City incurs approximately $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, etc. The total estimated revenue in the FY 2012-13 Proposed Budget will be $438,400, which includes interest earnings projected at $400. If the rate is kept at the $38.61 per single-family residence rate the Parcel Tax will generate enough revenue to meet these minimum requirements. The surplus amount in the Measure A Fund is projected in the FY 2011-12 Adopted Operating Budget to be $257,349 at year end as a result of the extra 1 Oo/o required to be collected each year, offset by capital projects. The City Council will consider use of these funds for ongoing capital needs of the swim center in the FY 2012-13 Proposed Operating Budget. The City's Engineer for the Parcel Tax rates, NBS Local Government Solutions, must complete their analysis and submit their report to the Contra Costa County Auditor- Controller's Office by August 10, 2012 so that the County may include the City's Parcel Tax in the County Property Tax bill. Scott Hanin, City Manager Attachments: 1. Ordinance Page 2 ---PAGE BREAK--- ORDINANCE NO. 2012-XX Agenda Item No. S(G) Attachment 1 AN ORDINANCE OF THE CITY OF EL CERRITO SETTING A REDUCED TAX RATE ONLY FOR FISCAL YEAR 2012-13 FOR THE SPECIAL TAX IMPOSED PURSUANT TO CHAPTER 4.56 OF THEEL 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 WHEREAS, by prior resolution, the City Council authorized staff to enter into a lease financing transaction to fund the renovation and reconstruction of the Swim Center (the "Lease Financing Transaction"); and WHEREAS, the City has completed each of the Authorized Improvements, but must continue to fund the Authorized Improvements through the Lease Financing Transaction; and WHEREAS, the City Council has determined that the City will be able to meet its Fiscal Year 2012-13 obligations in connection with the Lease Financing Transaction by levying the Special Tax at a rate lower than the maximum rate; and WHEREAS, Section 4.56.040 of the El Cerrito Municipal Code provides that the City Council may reduce the amount of the annual Special Tax for any classification of property if the City Council determines that it is in the public interest to do so; and WHEREAS, the City Council has determined that it is in the public interest to impose the Special Tax at a rate for Fiscal Year 2012-13, which is lower than the maximum rate. 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 2011 12, 2012-13, the Special Tax imposed pursuant to Chapter 4.56 ofthe 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. ---PAGE BREAK--- Agenda Item No. 5(G) Attachment 1 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. THE FOREGOING ORDINANCE was introduced and first read at a regular meeting of the El Cerrito City Council on April 3, 2012, and adopted by the following vote on of '2012: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: APPROVED: William C. Jones III, Mayor ATTEST: Cheryl Morse, City Clerk