This measure would authorize the City to issue up to $850,000,000 in general obligation bonds to fund City infrastructure projects and affordable housing. California law authorizes cities to issue general obligation bonds to finance acquisition and/or improvement of real property, subject to certain limitations.
The bonds would be repaid with revenue from an ad valorem property tax. "Ad valorem" means according to the value of the property. To pay the principal and interest on the bonds, the City would impose a tax on property based on the value of real property and improvements.
The Tax Rate Statement included in the ballot materials reflects the City's current estimate of the additional ad valorem property tax rate required to be levied on all taxable property in the City in order to repay the bonds. The Tax Rate Statement is an estimate based on currently available data and projections; the actual tax levied could be more or less than the City's estimate.
The City's Debt Management Policy establishes a goal to maintain the ad valorem property tax rate levied by the City to service its voter-approved indebtedness at or below the estimated fiscal year 2022-2023 tax rate so long as bonds are outstanding. The City aims to achieve this goal by issuing new bonds as older bonds are retired and/or as the tax base grows.
The measure requires that the bond proceeds be deposited in a special trust account and expended at the direction of the City Council as set forth in the measure. The measure requires an annual independent audit to ensure proper disbursement of the bond proceeds in accordance with the objectives of the measure. The measure would assign an existing City commission to provide citizen oversight of the measure by reviewing relevant financial and operational reports related to the expenditure of the bond proceeds and providing reports to the City Council.
The bond proceeds would finance affordable housing projects in an estimated amount of $350 million, transportation projects in an estimated amount of $290 million, and Citywide facility preservation and improvement projects in an estimated amount of $210 million. See the Ballot Summary for details of allowable uses of the bond proceeds. The dollar amounts are estimates and are not ·a guarantee that any specific amount will be spent on a particular project or that any particular project will be completed. The projects will be completed as needed according to City Council priorities provided in the measure. Beginning five years after enactment of the measure, ifthere are funds in any given category that have not been obligated or expended, the City Council may transfer up to ten percent of funds in that category to any other category or categories in the measure. This measure was placed on the ballot by the City Council.
Source: City Attorney's Impartial Analysis of Measure U
