State of California

Prop. 51 Initiative Statute - 2/3 Approval Required

This measure was placed on the ballot by the City Council.

This measure would authorize the issuance of $100 million of general obligation bonds. Bond proceeds would be used to repair, renovate, replace, or reconstruct existing City infrastructure and facilities, such as streets and sidewalks, storm drains and green infrastructure projects, senior centers, parks and recreation centers and other important public buildings and facilities. One percent (1%) of the bond proceeds would be available for functional art integrated into infrastructure and/or facilities that are paid for by bond proceeds, as and to the extent determined by the City Council.

This measure requires subcommittees of the Public Works Commission and the Parks and Waterfront Commission to engage in a robust public process to receive public input, and to jointly report to the City Council on an annual basis regarding projects funded by the bond and bond expenditures. It also requires the City Manager, as part of the annual budget process to provide the City Council with a comprehensive report of how bond proceeds have been expended in an equitable manner throughout the City, listing all specific projects on which they have been expended.

This measure limits the maximum rate of interest to be paid on the bonds to six percent (6%).

The year after the first series of bonds are issued, the tax rate required to meet the estimated debt service would be $6.35 per $100,000 of assessed valuation. The tax rate will increase as additional series of bonds are issued and is anticipated to require $31.26 per $100,000 of assessed value at the highest point. The average tax rate is projected to be $21.27.

The average annual cost over the 40-year period the bonds are outstanding would be approximately $21.27, $90.39, and $127.61, respectively, for homes with assessed valuations of $100,000, $425,000 and $600,000.

The estimated annual tax for a home with an assessed valuation of $425,000 would be $27.01 the first year after bonds.

An election will be held in the City of Berkeley (the “City”) on November 8, 2016, on the question of issuing bonds in the principal amount of $100,000,000 to finance improvements to the City’s Infrastructure and other Public Facilities as described in the bond measure. If the bonds are approved, the City expects to sell the bonds in several series beginning in 2017. Principal and interest on the bonds will be paid from taxes levied on taxable property in the City. The following tax rate information is given to comply with Sections 9400-9404 of the Elections Code of the State of California.

Based on estimated assessed valuations available at the time of filing of this statement:

     1. The best estimate of the tax rate that would be required to be levied to fund the bond issue during the first fiscal year after the sale of the first series of bonds, based on estimated assessed valuations available at the time of filing of this statement, is $0.00635 per $100 ($6.35 per $100,000) of assessed valuation in fiscal year 2016/17.

     2. The best estimate of the tax rate that would be required to be levied to fund the bond issue during the first fiscal year after the last sale of the bonds, based on estimated assessed valuations available at the time of filing of this statement, is $0.02238 per $100 ($22.38 per $100,000) of assessed valuation in fiscal year 2026/27.

     3. The best estimate of the highest tax rate that would be required to be levied to fund the bond issue, based on estimated assessed valuations available at the time of filing this statement, is $0.03126 per $100 ($31.26 per $100,000) of assessed valuation in fiscal year 2046/47.

     4. The best estimate of the average annual tax rate which would be required to be levied to fund the bond issue over the entire life of the bond debt service, based on estimated assessed valuations available at the time of filing of this statement, is $0.02127 per $100 ($21.27 per $100,000) of assessed valuation. The final fiscal year in which a tax is anticipated to be collected is 2055/56.

Voters should note that such estimated tax rates are specific to the repayment of bonds issued under this authorization and are and will be in addition to tax rates levied in connection with other bond authorizations approved or to be approved by the City or any other overlapping public agency. The City is targeting to maintain the combined tax rate at the 10-year average currently in effect for the outstanding City general obligation bonds ($0.04916 per $100 or $49.16 per $100,000 of assessed value) through the final issuance of the bonds (2026/27).

Voters should note that the estimated tax rates are based on the assessed value of taxable property on Alameda County’s official tax rolls, not on the property’s market value. In addition, taxpayers eligible for a property tax exemption, such as the homeowner’s exemption, will be taxed at a lower effective tax rate than described above. Certain taxpayers may also be eligible to postpone payment of taxes. Property owners should consult their own property tax bills and the County Assessor to determine their property’s assessed value and any applicable tax exemptions.

The actual tax rates and the years in which they will apply may vary from those presently estimated, due to variations from these estimates in the timing of bond sales, the amount of bonds sold and market interest rates at the time of each sale, and actual assessed valuations over the term of repayment of the bonds. The estimates are based upon the City’s projections and are not binding upon the City. The dates of sale and the amount of bonds sold at any given time will be determined by the City based on the need for construction funds and other factors. The actual interest rates at which the bonds will be sold will depend on the bond market at the time of each sale. Actual future assessed valuation will depend upon the amount and value of taxable property within the City as determined by the County Assessor in the annual assessment and the equalization process.

Dated: July 26, 2016

RESOLUTION NO. – N.S.

AUTHORIZING THE CITY OF BERKELEY TO INCUR BONDED DEBT AND ISSUE A GENERAL OBLIGATION BOND FOR IMPROVEMENTS TO EXISTING CITY INFRASTRUCTURE AND FACILITIES

WHEREAS, this resolution is adopted pursuant to and in conformance with Chapter 7.64 of the Berkeley Municipal Code; and

WHEREAS, the City's existing infrastructure is critical to protecting the public safety and welfare and enabling the residents of Berkeley to have a high quality of life:

• Streets and sidewalks provide for transportation and accessibility for both the general public and public safety personnel.
• Storm drains and green infrastructure projects protect the public from flooding and improve the quality of runoff into San Francisco Bay.
• Senior Centers provide important services for the City's seniors, including educational courses, activities, social support, emergency shelters in disasters, and meals.
• Parks and recreation centers and facilities provide recreational, educational and social opportunities and support for children and families, and recreation centers can also function as emergency shelters in disasters.
• The City's public buildings and other facilities are both important cultural resources in themselves and provide public services to the residents of Berkeley.

WHEREAS, the City’s existing infrastructure and facilities, including the types of infrastructure and facilities listed above, are in need of significant repair, renovation, replacement, or reconstruction (the “Improvements”) so that the public can continue to benefit from them; and

WHEREAS, existing funds and funding sources are inadequate to pay for the Improvements that are necessary in the short term; and

WHEREAS, the City’s existing and future infrastructure is critical to protecting the public safety and welfare; and

WHEREAS, documented existing infrastructure and facility needs substantially exceed $100,000,000; and

WHEREAS, the City Council has therefore determined that the public interest requires additional funding for the Improvements.

NOW THEREFORE, BE IT RESOLVED by the People of the City of Berkeley that the public interest requires the issuance of a general obligation bond in the amount of $100,000,000 to fund the Improvements.

BE IT FURTHER RESOLVED the People of the City of Berkeley that:

     A. Proceeds of bonded indebtedness shall be used to fund the Improvements. In addition, 1% of the bond proceeds shall be available for functional art integrated into Improvements that are paid for by bond proceeds, as and to the extent determined by the City Council.
     B. Each year as part of the budget process the City Manager shall provide to the City Council a comprehensive report of funds received pursuant from any bonded indebtedness authorized by this resolution and how they have been expended in an equitable manner throughout the City, listing all specific projects on which they have been expended.
     C. Subcommittees of the Public Works Commission and the Parks and Waterfront Commission shall engage in a robust public process to obtain input, and will jointly report to the City Council on an annual basis regarding projects funded by the bond and bond expenditures.

BE IT FURTHER RESOLVED the People of the City of Berkeley that:

     A. The estimated cost of the Improvements to be funded by any bonds issued pursuant to this measure is $100,000,000, although the total cost of all identified infrastructure and facility needs is substantially in excess of $100,000,000.
     B. The amount of the principal of the general obligation indebtedness (the "Bonds") to be incurred shall not exceed $100,000,000.
     C. The estimated cost may include legal and other fees and the cost of printing the Bonds and other costs and expenses incidental to or connected with the issuance and sale of the Bonds.
     D. The proceeds of the Bonds authorized to be issued by this resolution shall be used to finance construction of the Improvements and functional art integrated into the Improvements, to pay any fees and costs in connection with the issuance of the Bonds, including but not limited to, legal fees and bond printing costs.
     E. The maximum rate of interest to be paid on the Bonds shall not exceed six percent (6%).