Since 1986, SUHSD has formed 18 Community Facilities Districts. Annually, the board is presented with a Resolution to be considered and enacted as Legislative Body of the Districts accomplishing two purposes.
The first is to establish the “Maximum Initial Year Special Tax Rates” (“MIYSTR”) applicable to properties for which the first or initial year of taxation is fiscal year 2016-2017, and as to existing developed properties which were taxed in previous fiscal years.
Pursuant to the provisions of the various Rate and Methods of Apportionments (“RMAs”) of the respective Districts, the MIYSTR as to property being subject to Special Taxes for the first fiscal year, are subject to an increase over the MIYSTR for the prior fiscal year. This is generally equal to the greater of (i) the annual change in the Building Cost Index as published in the Engineering News Record (BCI) or (ii) two percent (2%). The annual percentage increase in the BCI for 2015-2016 was 2.40 percent so, for the properties in the various CFDs for which fiscal year 2016-2017 represents the initial year of taxation, there will be an increase by 2.40 percent. The MIYSTR of such properties are reflected in Exhibit “A” of proposed Resolution No. 4439.
After the initial year of taxation, each parcel of taxable property within the Districts is subject to an annual increase of two percent as set forth in the applicable RMA. As the MIYSTR is established each initial year or Special Tax Year in accordance with changes in the BCI, there are many applicable tax rates for each CFD, which are determined by the size, type and year of development of each taxable property. As a result, only the Special Tax rates applicable to properties for which fiscal year 2016-2017 represents the initial year of taxation, are included in Exhibit “A” to Resolution No. 4439.
The second purpose of Resolution No. 4439 is to establish the Special Tax Rates levied in fiscal year 2016-2017 for each District. In prior fiscal years, the Board has levied the Special Taxes at the Maximum Annual Special Tax Rate authorized as described above. However, commencing in fiscal year 2013-2014, the Special Tax Rate of the Districts was reduced to approximately two percent less than the authorized Maximum Special Tax Rate. The levy of the Special Taxes includes payment of (i) principal and interest due on outstanding debt of the District, (ii) direct funding of additional authorized ”School Facilities”, and (iii) administration expenses of the Districts.
Described School Facilities of the Districts eligible to be constructed or acquired with Special Taxes within the Districts also were authorized to be funded from proceeds of general obligation bonds pursuant to the 2000 General Obligation Bond Election. The actual Special Tax Rate to be applied to each taxable parcel within the majority of the Districts may be reduced by a credit derived from the preliminary or actual ad valorem taxes applicable for the outstanding 2000 General Obligation Bonds. The SUHSD estimates for fiscal year 2016-2017, that such credit will not exceed $0.032 per $100 of assessed value. This estimate is a maximum and such credit may be less. In fiscal year 2015-2016, this credit was equal to $0.02756 per $100 of assessed value.
After review of the current outstanding debt service requirements of the applicable Districts, Capital Facilities Funding Plan allocations to the Districts, the projected need for additional School Facilities based on projected development in the Districts, and, as applicable, Rehabilitation/Modernization needs of the Districts, staff and the District’s Special Tax Consultant recommend that the Special Taxes be levied for fiscal year 2016-2017, prior to consideration of any credit, at the percentages of the applicable Maximum Special Tax as noted on Exhibit “B”.
For questions regarding this board item, please contact Karen Michel at 619/691-5550 or karen.michel@sweetwaterschools.org.