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November 3, 2020 — California General Election
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Local

City of Piedmont
Measure UU - 2/3 Approval Required

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Shall the measure to prevent permanent closure of Piedmont's Community Pool by constructing new pool facilities, restrooms and related areas, to conserve energy and water, provide greater community access and safety, and authorize Piedmont to issue $19,500,000 in bonds at legal rates, generating $1,257,950 annually at an average rate of 2.6 cents per $100 of assessed valuation while bonds are outstanding, with all money staying local and independent citizens' oversight, be adopted?

What is this proposal?

Measure Details — Official information about this measure

YES vote means

A “YES” vote would be in favor of authorizing the City to issue general obligation bonds in an amount not to exceed $19,500,000 for the purpose of constructing improvements to the Piedmont Community Pool.

NO vote means

A “NO” vote would be against the issuance of such bonds.

Impartial analysis / Proposal

City Attorney, City of Piedmont

If adopted by the voters, Measure UU would authorize the City of Piedmont to issue up to $19,500,000 in general obligation bonds to finance the costs of municipal improvement projects of the City to prevent the permanent closure of and replace the Piedmont Community Pool and adjacent areas. Measure UU was placed on the ballot by the Piedmont City Council. General obligation bonds are a form of municipal indebtedness used to finance public improvements and are authorized by the California Constitution and California Government Code. The measure authorizes the bond proceeds to be spent for the construction of improvements to the Piedmont Community Pool and adjacent areas, including pools, showers, restrooms, locker rooms and multi-use rooms, and all associated expenditures necessary to complete such work and issue the bonds.

Measure UU limits the principal amount of the bonds to no more than $19,500,000 and provides that interest rates on the bonds would be capped at a maximum of 12%, but the prevailing market rates could be less. The bonds would be secured by ad valorem taxes levied on taxable real property in the City. The City estimates that the levy of taxes to repay the bonds would be at an average rate of 2.6 cents per $100 of the assessed valuation. The tax would only be assessed if the bonds are issued and the actual tax rate shall be subject to variation during the duration of the repayment period. Proceeds of the bonds may only be used for the design and construction of improvements for the Piedmont Community Pool and adjacent areas. Measure UU includes accountability requirements including that bond proceeds shall be deposited in a separate account created and held by the City solely for financing the authorized improvements. In addition, the measure also requires the Finance Director to file a report with the City Council at least annually showing the amount of bond proceeds collected and expended, and the status of improvements. Measure UU would also require the City Council to establish and appoint members to an oversight committee, which would have responsibility for reviewing and reporting on the expenditure of the proceeds of the bonds.

In order to pass, Measure UU must receive two-thirds (66.67%) of the ballots cast.

A “YES” vote would be in favor of authorizing the City to issue general obligation bonds in an amount not to exceed $19,500,000 for the purpose of constructing improvements to the Piedmont Community Pool.

A “NO” vote would be against the issuance of such bonds.

/s/ Michelle Marchetta Kenyon,
City Attorney for the City of Piedmont

Tax rate

City Administrator, City of Piedmont

An election will be held in the City of Piedmont (the “City”) on November 3, 2020, to authorize the sale of up to $19,500,000 in bonds of the City to finance the municipal improvements listed in the bond measure. If such bonds are authorized, the City expects to sell the bonds in one or more series. Principal and interest on the bonds will bepayable solely from the proceeds of ad valorem tax levies made upon the taxable property in the City. The following information is provided in compliance with applicable provisions of the California Elections Code. Such information is based upon the best estimates and projections presently available from official sources, and other demonstrable factors.

Based upon the foregoing and projections of the City’s assessed valuation:

1. The best estimate of the average annual tax rate that would be required to be levied to fund the bond issue over the entire duration of the bond debt service, based on assessed valuations available at the time of filing of this statement is $0.0262 per $100 (or $26.20 per $100,000) of assessed valuationof all property to be taxed. The best estimate of the final fiscal year in which the tax is anticipated to be collected is 2051.

2. The best estimate of the highest tax rate that would be required to be levied to fund the bond issue, based on assessed valuations available at the time of filing this statement is $0.0262 per $100 (or $26.20 per $100,000) of assessed valuation of all property to be taxed. The best estimate of the first fiscal year in which the highest tax rate will apply is 2025.

3. The best estimate of the total debt service, including the principal and interest, that would be required to be repaid if all the bonds are issued and soldis $37,446,788.

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 voters of the City or any other overlapping public agency.

Voters should note that estimated tax rate is based on the ASSESSED VALUE of taxable property within the City as shown 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. Property owners should consult their own property tax bills to determine their property’s assessed value and any applicable tax exemptions.

Attention of all voters is directed to the fact that the foregoing information is based upon projections and estimates only, which amounts are not maximum amounts or durations and are not binding upon the City. The actual debt service amounts, tax rates and the years in which they will apply may vary from those presently estimated, due to variations from these estimates in the rating for the bonds, 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 dates of sale and the amount of bonds sold at any given time will be determined by the City based on need for 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 Alameda County assessor in the annual assessment and the equalization process.

Sara Lillevand

Piedmont City Administrator

Published Arguments — Arguments for and against the ballot measure

Arguments FOR

For more than 50 years, the Piedmont Pool has been an integral part of our community, serving children, adults of all ages, and our local schools. The pool has reached the end of its life and needs to be replaced or permanently closed. The deck is crumbling, the plumbing is failing, and the pool leaks approximately 3,000 gallons of water each day.

Measure UU will provide the funds necessary to construct a safe, sustainable, and affordable facility to serve Piedmont families, students, and seniors for the next 50 years.

Measure UU will allow the City to take advantage of historically low interest rates, currently less than 3%, and will cost the median homeowner less than 75 cents a day.

A Citizen Bond Oversight Committee will monitor the use of bond proceeds and provide regular reports to the community.

A YES Vote on Measure UU will ensure that Piedmont has a pool for lessons, recreation, exercise, school sports and PE programs.

The three existing pools will be replaced with two pools to meet resident needs: a warmer recreation pool with areas for safe water play, swim lessons, therapeutic swim, and physical rehabilitation; and a wider and deeper pool for recreation, physical education, water aerobics, water polo, swim team, and lap swimming.

Replaced pool facilities, restrooms, and related areas will conserve energy and water, comply with state and federal disability and safety standards, and provide restroom access for those using the tennis courts.

Swimming is an important life safety skill, especially for children. Without a pool, Piedmont will no longer have swim lessons, lifeguard training, or a local swim team.

If Measure UU does not pass, the Piedmont Community Pool is on track to be closed permanently.

Vote YES to a Community Pool for Piedmont, vote YES on Measure UU.

 

Robert S. McBain, Mayor, City of Piedmont

Betsy Smegal Andersen, Councilmember, City of Piedmont

Steven D. Roland, Chair, Piedmont Recreation Commission

Sarah Pearson, Past President, Piedmont Board of Education

Nancy McHugh, Retired Principal, Beach Elementary School

— City of Piedmont website

Arguments AGAINST

We are experiencing the worst pandemic of the past century, with no end in sight. The United States GDP shrank at a record 32.9% in the second quarter of 2020, the sharpest economic contraction in history. Estimates are that the economy will not recover completely until at least 2022.

In the first seven months of 2020, the volume of Piedmont home sales dropped by $33,494,500, reducing transfer tax revenue by over $435,000; annualized, the number would be almost $750,000. Since properties are selling much more slowly, houses are staying on the assessor’s roles at Prop 13 values rather than being reassessed. This means that Piedmont won’t see the usual increase in property taxes that has padded its coffers in years past. With almost 75% of its revenue coming from “Taxes and Fees”, should Piedmont be taking on $20 million of general obligation debt in the midst of fiscal uncertainty?

Moreover, while we do need new pool facilities, we have absolutely no idea when the health crisis will end, and people will actually feel they are able to safely use a public pool.

This is not the time to increase Piedmont’s debt by $20 million! To go out and borrow $20 million at a time of complete uncertainty ranks somewhere between foolhardiness and fiscal insanity.

We do not have to commit to this project now. It is not a case of “if we don’t do it now, we can never do it”. Interest rates will remain low for the foreseeable future. Why are we rushing into this project at this time?

Let’s wait a year and see if things return to normal. If they do, we will happily support a bond. But until we have clarity, we need to exercise fiscal responsibility and vote NO on this ill-timed measure.

Andy Wasserman, Retired CFO

Larry Miller, Certified Financial Planner

— City of Piedmont website

Replies to Arguments FOR

The issue is not whether Piedmont needs a new pool. It does. The issue is whether it is fiscally prudent in the midst of the worst pandemic of our lifetime to issue bonds that will cost the city more than $20 million, including interest.

The proponents of the measure have conveniently ignored referencing Piedmont’s financial condition. Piedmont has over $53 million in liabilities, including over $26 million in future pension liabilities and over $8 million in bonds and sewer loans. Measure UU would increase total liabilities by almost 40% and would restrict our ability to borrow addition money for emergency purposes.

An even more important number is the Unrestricted Net Position, which is Piedmont’s net worth excluding both capital assets and restricted funds. That number is a deficit of $8.6 million.

The proponents state that we must act now to take advantage of historically low interest rates. Not true. The Federal Reserve has issued warnings about the country’s economic recovery and stated its intention to keep rates close to zero for the foreseeable future.

We should NOT be incurring additional debt in the midst of huge financial uncertainty. The pool is closed now due to Covid, and it may remain closed for a while – but not permanently. When things return to normal, we can pass a bond measure to rebuild the facility. But until then, we need to exercise patience and fiscal prudence. Vote NO on Measure UU. 

Andy Wasserman, Retired CFO

Larry Miller, Certified Financial Planner

— City of Piedmont website

Replies to Arguments AGAINST

The Piedmont Pool is currently closed for health and safety reasons and on track for permanent closure due to age-related costs. This is not a surprise. Our 56-year-old pool has been deteriorating for years. Prior to closure, the City was spending roughly $1,000 a day to keep our failing pool safe and operational.

Even the opponents of Measure UU agree that Piedmont needs new pool facilities. Measure UU has nothing to do with the pandemic, the national GDP, transfer taxes, or the volume of home sales in Piedmont.

Measure UU is about whether or not Piedmont citizens believe a community pool is an important asset for our families and our schools.

If Measure UU passes, it will take approximately 3 years to design, engineer, and build a replacement facility. Best case scenario, the rebuilt pool will open in early 2024.

If we wait, construction costs will continue to escalate and replacing the pool will only get more expensive.

If we wait, Piedmont will end up with an empty padlocked pool in the center of town, not temporarily, but permanently.

Measure UU is affordable and pragmatic, less than 75 cents a day for the median Piedmont home. Instead of waiting and hoping for a better time, let’s use the time we have now, when the pool is already closed, to invest in the future of Piedmont.

Please join the entire Piedmont City Council and the entire Piedmont Board of Education and Vote YES to a Community Pool for Piedmont, Vote YES on Measure UU!

Robert S. McBain, Mayor, City of Piedmont

Betsy Smegal Andersen, Councilmember, City of Piedmont

Steven D. Roland, Chair, Piedmont Recreation Commission

Sarah Pearson, Past President, Piedmont Board of Education

Nancy McHugh, Retired Principal, Beach Elementary School

— City of Piedmont website

Read the proposed legislation

Proposed legislation

ORDINANCE NO. 754 N.S.

 

AN ORDINANCE ORDERING THE SUBMISSION OF A PROPOSITION INCURRING BONDED INDEBTEDNESS TO THE QUALIFIED VOTERS OF THE CITY OF PIEDMONT AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 3, 2020, FOR THE PURPOSE OF FINANCING THE COST OF THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN MUNICIPAL IMPROVEMENT PROJECTS

 

The City Council (the “City Council”) of the City of Piedmont (the “City”) hereby ordains as follows:

 

SECTION 1. PURPOSE AND INTENT

 

Under sections 3, 5, and 7 of article XI of the California Constitution and Section 1.03 of the City of Piedmont Charter, the City is authorized to make and enforce all laws and regulations concerning municipal affairs and certain other matters.  Pursuant to such authority as well as the authority provided by the California Government Code and California Elections Code, the City Council proposes to order the submission of a proposition authorizing the City to issue general obligation bonds (the “Bonds”) to the qualified voters of the City at the general municipal election to be held on November 3, 2020.

 

SECTION 2.  FINDINGS

 

The City Council hereby makes the following findings with respect to the proposed measure for the Bonds:

 

A.   The City owns and operates the Piedmont Community Pool, which, due to its age and condition, is in need of significant repair and/or replacement.

 

B.    On July 20, 2020, the City Council adopted, by a two-thirds vote of all its members, a resolution entitled “A Resolution of the City Council of the City of Piedmont Determining that the Public Interest and Necessity Demand the Acquisition, Construction and Improvement of Certain Municipal Improvement Projects, and Their Financing Through the Issuance of General Obligation Bonds,” pursuant to which the City Council has found and determined that the public interest and necessity demand the issuance of general obligation bonds to finance the cost of municipal improvement projects.

 

C.    In order to provide for the issuance by the City of general obligation bonds to provide financing for the municipal improvement projects, it is necessary for the City Council to adopt an ordinance ordering the submission of the proposition of incurring bonded indebtedness for such purpose to the qualified voters of the City at a municipal election.

 

D.   The City Council desires to submit said ballot measure to the qualified voters of the City at the regular election to be held in the City on November 3, 2020, and to consolidate the bond election with other elections held within the City on that date.

 

SECTION 3.  CALL FOR ELECTION

 

The City Council hereby orders that there be submitted to the qualified voters of the City a proposition on incurring bonded indebtedness for the purposes set forth in this Ordinance, at the regular election to be held on November 3, 2020.

 

SECTION 4.  BALLOT PROPOSITION

 

The City Council hereby submits to the qualified voters of the City, at the regular election to be held on November 3, 2020, a proposition on issuing the Bonds.  The statement of the measure shall be in substantially the form set forth in the resolution of the City placing the measure on the ballot.

 

SECTION 5.  OBJECT AND PURPOSE OF BONDS 

 

The object and purpose of the Bonds is to finance the costs of municipal improvement projects of the City to prevent the permanent closure of, and replace, the Piedmont Community Pool and to make improvements to adjacent areas (the “Improvements”), which Improvements are anticipated to consist generally of the acquisition, construction and/or improvement of community pools, related community facilities (for example, showers, restrooms, locker rooms and multi-use rooms), and adjacent spaces.

 

The authorized Improvements also include all work, facilities and expenditures necessary and incidental to the project described above.  Examples of such work, facilities, and expenditures include, but are not limited to: costs of design, engineering, architect and other professional services, inspections, site preparation, utilities (including improvements to plumbing, sewer and electrical systems to preserve energy and water), landscaping, construction management and other planning and permitting, legal, accounting and similar costs; a customary construction contingency; demolition and disposal of existing structures; rental or construction of storage facilities and other space on an interim basis for materials and other equipment and furnishings displaced during construction; interim facilities for municipal functions, including modular facilities; addressing unforeseen conditions revealed by construction or renovation, and other necessary improvements required to comply with existing building codes; environmental improvements to preserve energy and water; access requirements of the Americans with Disabilities Act; costs of the election; bond issuance costs; and project administration during the duration of such projects, as permitted by law. 

 

The final costs, locations, designs, layouts and other details of the Improvements will be determined as plans are finalized, construction bids are awarded, and projects are completed. Therefore, the City Council cannot guarantee that the Bonds will provide sufficient funds to allow completion of all needed Improvements.

 

SECTION 6.  ESTIMATED COST OF IMPROVEMENTS

 

The estimated cost of the Improvements is $23,000,000.  The estimated cost includes legal or other fees, the costs of printing the Bonds, and other costs and expenses incidental to or connected with the authorization, issuance and sale of the Bonds.

 

SECTION 7.  PRINCIPAL AMOUNT OF BONDS

 

The amount of the principal of the Bonds shall not exceed $19,500,000.

 

SECTION 8.  MAXIMUM INTEREST RATE

 

The maximum rate of interest to be paid on the Bonds shall be the statutory maximum of 12% per annum.  Said interest shall be payable semiannually, except that interest for the first year after the date of the Bonds may be made payable at the end of said year.

 

SECTION 9.  ISSUANCE AND SALE OF BONDS 

 

The City proposes to issue and sell the Bonds pursuant to Article 1, commencing with Section 43600, of Chapter 4 of Division 4 of Title 4 of the California Government Code, or Article 4.5, commencing with Section 53506, of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, in one or more series, in the maximum amount and for the objects and purposes set forth above if two-thirds of all qualified voters voting on the proposition set forth above vote in favor thereof.  The Bonds will be general obligations of the City payable from and secured by ad valorem taxes levied and collected in the manner prescribed by laws of the State of California.  The revenue generated from the ad valorem tax levied and collected will be used for the payment of debt service on the Bonds.  All of the Bonds shall be equally and ratably secured, without priority, by the taxing power of the City.

 

SECTION 10.  MANNER OF CONDUCTING ELECTION

 

The election held on November 3, 2020 shall be held and conducted, election officers appointed, voting precincts designated, ballots printed, polls opened and closed, ballots counted, and returned, returns canvassed, results declared, and all other proceedings incidental to and connected with the election shall be regulated and done in accordance with the provisions of law regulating the election with which it is consolidated. 

 

SECTION 11.  PROCEDURE FOR VOTING ON PROPOSITION

 

Ballots for the election shall be provided in the form and in the number provided by law.  Voters shall be provided an opportunity to vote for or against the proposition on the ballot, in accordance with procedures to be adopted by the authorized officers of the County of Alameda (the “County”) charged with conducting the election.

 

SECTION 12.  ACCOUNTABILITY REQUIREMENTS

 

In accordance with Sections 53410 and 53411 of the California Government Code, the City Council hereby adopts the following accountability requirements relating to the Bonds:

 

(a)        A separate account shall be created and held by the City, into which the proceeds of the Bonds are deposited and applied solely for the purpose of financing the Improvements.

 

(b)       The Finance Director of the City shall file a report with the City Council at least annually showing the amount of Bond proceeds collected and expended, and the status of the Improvements.

 

SECTION 13.  IDENTIFICATION OF TAX

 

The tax imposed by this measure is an ad valorem tax levied upon taxable real property in the City, and will be used to pay the principal and interest on the Bonds.

 

SECTION 14.  ESTABLISHMENT OF OVERSIGHT COMMITTEE

 

In the event the ballot proposition is passed by two-thirds of all qualified voters voting on the proposition, the City Council shall establish and appoint members to an oversight committee, which shall have responsibility for reviewing and reporting on the expenditure of the proceeds of the Bonds. 

 

SECTION 15.  OFFICIAL ACTIONS

 

The Mayor, the City Administrator, the Finance Director, the City Clerk, and any of their designees, are hereby authorized to execute any documents and to perform all acts necessary to place the bond measure on the ballot.

 

SECTION 16. INTERPRETATION

 

The provisions of this Ordinance, being necessary for the health, welfare, and safety of the City and its residents, is to be liberally interpreted to carry out its purposes. No error, irregularity or informality, and no neglect or omission of any officer, in any proceeding taken related to the submission of the proposition incurring bonded indebtedness to the qualified voters of the City shall void or invalidate any such proceeding, any Bonds issued by the City or any levy of ad valorem taxes to pay principal of and interest on the Bonds.

 

SECTION 17. SEVERABILITY.

 

If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect any other provisions or applications, and to this end the provisions this Ordinance are declared to be severable.

 

SECTION 18.  PUBLICATION OF ORDINANCE 

 

This Ordinance shall be published once a day for at least seven days in a newspaper published at least six days a week in the City, or once a week for two weeks in a newspaper published less than six days a week in the City.  The first of said publications shall, in either event, be within 15 days after the adoption of this Ordinance.

 

SECTION 19.  EFFECTIVE DATE

 

In accordance with Section 2.12(C) of the City of Piedmont Charter and Section 36937(a) of the California Government Code, this Ordinance shall become effective immediately, as an ordinance relating to an election, upon its adoption by two-thirds vote of all the members of this City Council.

 

 

 

I certify that the foregoing ordinance was passed and adopted by Resolution 62-2020 at the regular meeting of the City Council of the City of Piedmont on August 3, 2020, by the following vote:

 

            Ayes:               Andersen, Cavenaugh, King, McBain, Rood

            Noes:               None

 

Attest: ________________________________

            John O. Tulloch, City Clerk

 

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