REPORT TO COUNCIL
SUBJECT
Title
Resolution Authorizing an Ad Valorem Tax Levy to Finance the City's 2026 General Obligation Bonds Debt Service for Fiscal Year 2026/27 In the Amount of $22.70 per $100,000 (0.0227%) of Assessed Value in FY 2026/27
Report
BACKGROUND
Measure I, which passed with more than two-thirds approval of City of Santa Clara (the "City") voters at the November 5, 2024 General Election, authorizes the issuance of general obligation bonds by the City in the total principal amount of $400 million (the "Bonds") for the purpose of providing funds for the municipal capital improvements listed in the bond expenditure plan (Attachment 2) approved by City Council. The first series of Bonds, in the principal amount of $97.125 million, was issued in February 2026 (RTC 26-87). The initial debt service payment on the first series of bonds is due August 1, 2026 and will be paid with property taxes authorized by Resolution 25-9455 (RTC 25-722) and collected by Santa Clara County (the "County") in Fiscal Year 2025/26.
Staff is requesting City Council approval of the required property tax levy to be placed on the Fiscal Year 2026/27 County property tax roll to provide for debt service payments of principal and interest coming due on the Bonds in FY 2026/27 and first half of FY 2027/2028. Under the California Constitution and applicable provisions of the California Government Code, the City is required to annually levy an ad valorem property tax in an amount sufficient to pay principal and interest on voter-approved general obligation bonds as those payments become due. Once the Bonds have been issued, the City has an ongoing legal obligation to annually levy a property tax in an amount sufficient to pay debt service on the outstanding Bonds, requiring City Council approval each year of a tax levy resolution with the applicable tax rate until the final maturity of all issued Bonds.
DISCUSSION
City staff, working with the City's municipal advisor, PFM Fi...
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