Proposition D Fire, Police and Emergency Services Bond Measure Overview On March 2, 2004, La Mesa voters approved Proposition D, the Fire, Police and Emergency Services Bond Measure, with a 76.7 percent affirmative vote. The approval of Proposition D authorizes the City to sell $25.0 million of general obligation bonds for needed improvements to fire and police stations. Utilization of funds allocated via Proposition D will enable La Mesa to make the following enhancements to Public Safety facilities: Fast Project Facts Fire Station 11 Construction Cost: $7.4 million Square Footage: 20,500 Personnel: 30 Construction Start: 1/31/05 Grand Opening: 7/31/06 Move In: 8/18/06 Architect: Jeff Katz Architecture Contractor: Erickson Hall Construction Fire Station 13 (Retrofit) Cost Allocation: $0.8 million, Prop D bond proceeds; $0.4 million, City funds Square Footage: 3,000, with addition Personnel: 9 Timeline: Estimated completion, 3 rd quarter 2007 Architect: Jeff Katz Architecture Police Station* Allocation: $17.1 million Square Footage: 36,000 Personnel: 100 full-time employees and 60-80 volunteers Timeline: Estimated start of construction, 1 st quarter 2008 Architect: Leach Mounce Architects *Location: The new Police Station will be constructed on the corner of the La Mesa Civic Center that now contains the County branch library and the former Helix Water District building.
FREQUENTLY ASKED QUESTIONS CITY OF LA MESA Fire, Police, and Emergency Services Measure (Proposition D of March 2, 2004) What is the Fire, Police, and Emergency Services Measure? On March 2, 2004, City voters approved Proposition D, the Fire, Police, and Emergency Services Measure, with a 76.7% affirmative vote. The approval of Proposition D authorizes the City to sell $25.0 million of general obligation bonds for needed improvements to fire and police stations. What City facilities will be improved with the proceeds of the bonds? La Mesa s main Fire Station, Police Station, and Fire Station 13 were built during the 1950s and 1960s before recent advances in emergency services and crime-fighting technology. The facilities are old, outdated, and in need of repair or replacement. None of the stations are earthquake safe. Bond proceeds will be used to finance a new main Fire Station and a new Police Station, both in the La Mesa Civic Center, as well as the cost of renovation of Fire Station 13 on Grossmont Boulevard. What is the source of repayment for the bonds? The Proposition D bonds are general obligation bonds, and would be repaid solely from property taxes levied by the County of San Diego on all taxable property located in the City. A tax rate per $100 of assessed valuation would be determined each year by the City based on the relationship between the amount of bond payment due in the coming year and the total assessed valuation of taxable property in the City in that same year. The assessed valuation of property would be determined by the County Assessor and would be subject to limitations imposed by Proposition 13, and may be different than the market value of property, which is the price a willing buyer would pay to purchase a property. The amount of tax paid by an individual property owner in the City would be determined by multiplying that year s tax rate by the assessed valuation of the owner s property in that same year. When will the taxes begin for the repayment of the bonds? Fiscal year 2004-05 is the first year that taxes will be levied to repay the Proposition D bonds. The tax for the City s bonds will be included with other property taxes levied by the County of San Diego. The County Tax Collector will mail property tax bills to property owners in October 2004. The tax levied in 2004-05 will be the source of the initial debt service payments for the $19.0 million of Proposition D bonds sold by the City in August 2004.
What property in the City will be subject to taxes to repay the bonds? A tax to repay the bonds would be levied on all taxable property in the City otherwise subject to secured and unsecured property taxes currently levied by the County of San Diego. Property that would be fully exempt from general County property taxes would also be fully exempt from taxes to repay the bonds of the City, generally including the following: Property owned by public agencies (such as state and federal government, city and county governments, public school districts, public transit agencies, fire districts, and water and sewer districts) Cemeteries Property used for religious worship Property used for non-profit religious, hospital, scientific, and charitable purposes Certain partial property tax exemptions that apply to general County property taxes would also apply to taxes levied for the repayment of the bonds of the City. Partial property tax exemptions are available for property that serves as the principal place of residence for: Homeowners (exemption of $7,000 assessed valuation) War veterans (exemption of $4,000 assessed valuation) Disabled war veterans (the amount of partial exemption is determined by the type of disability) Certain owners of residential property in the City who are 62 years or older are eligible for a postponement of general County property taxes. Such tax postponement would also apply to property taxes levied for the repayment of the bonds of the City. Owners of property in the City should seek independent counsel from their own tax advisors with respect to eligibility for any property tax exemption or postponement. Will non-residential property be sharing the cost of repaying the bonds? The repayment of the Proposition D bonds would be shared by all taxable property located in the City. The bond repayment would be shared among land uses based on the percentage of the assessed valuation in the City represented by each land use. In 2003-04, the respective shares of total assessed valuation by land use in the City are as displayed in Table I on the following page. The percentages are likely to change over time due to property development and changes in the assessed valuation of the respective categories of land use in the City.
Land Use Category TABLE I % of City s Assessed Valuation in 2003-04 Single Family Residential 50.9% Condominium/Townhouse 10.4% Other Residential 17.2% Commercial 18.1% Industrial 1.2% Other uses 0.3% Vacant property 1.9% Total 100.0% What tax rate will be needed to repay the bonds? The City has estimated the tax rates that are likely to result from the sale of bonds authorized by Proposition D, as described in the Tax Rate Statement that appeared in the Voter Pamphlet published by the County Registrar of Voters for the election on March 2, 2004. In the Tax Rate Statement, the City estimated that the annual tax in 2004-05 would be $29.70 for $100,000 of assessed valuation and that the highest tax over the life of the bonds would be $30.18 for $100,000 of assessed valuation, subject to certain assumptions as described in the Tax Rate Statement. The actual tax levied by the City in 2004-05 for the repayment of the bonds will be $28.13 per $100,000 of assessed valuation, less than the amount estimated for voters in the Tax Rate Statement for 2004-05. How is the tax calculated for individual properties in the City? Each year the City will determine the tax rate needed to repay the bonds in the coming fiscal year. This annual tax rate is expressed as an amount per $100 of assessed valuation. To determine the amount of the tax for an individual property, a taxpayer needs to know the tax rate applicable in that year, the property s current assessed valuation as determined by the County Assessor, and any property tax exemptions or reductions for which the property is eligible. For residential property owners who qualify for the homeowner s exemption, the property s assessed valuation would be reduced by $7,000 (the amount of the homeowner s exemption), then divided by 100 (because the tax rate is expressed per $100 of assessed valuation), and then multiplied by the appropriate tax rate. In 2004-05, the tax rate for the bonds is $0.02813 per $100 of assessed valuation. How long will taxes be levied to repay the bonds? The City intends to sell its $25.0 million bond authorization for Proposition D in two series. The first series of bonds were sold in August 2004 in the amount of $19.0 million. The second and final series of bonds in the amount of $6.0 million is expected to be sold in the summer of 2006 to complete the fire and police station projects. Each bond issue would be repaid over a 35-year period. Because the payment schedules for the two bond issues would overlap, with each issue having its own 35-year repayment schedule, the aggregate payments for the two bond issues would extend for 37 years. The first series of bonds sold in August 2004 has its first payment due
in 2005 and its last payment due in 2039. The second and final series of bonds sold in the summer of 2006 would have its first payment due in 2007 and its last payment due in 2041. Are the bond payments fixed or are they subject to change? The annual payments on the $19.0 million of bonds sold by the City in August 2004 are fixed for the life of the bonds. The payments would change only if the City refinanced the bonds at some date in the future if interest rates then were substantially lower than the interest rates at which the bonds were sold in August 2004. When the second and final series of bonds of the Proposition D authorization are sold in the summer of 2006, the annual payments on those bonds will be fixed for the life of the financing. Are there limits to the items that can be funded from the proceeds of the bonds? The uses of bond proceeds would be limited to the items specified in the ballot measure for Proposition D approved by voters on March 2, 2004, as follows: To improve public safety, shall the City of La Mesa: upgrade 911 emergency response systems; add space for paramedic/firefighter equipment to improve response times to neighborhood fires/medical emergencies; repair/acquire land for replacement of old, outdated fire, police stations with earthquake-safe buildings/improvements, including Emergency Operations Center to coordinate disaster response; by issuing $25,000,000 of bonds at legal rates, with Citizens Oversight, annual audits, no money for administrators salaries? Generally, the California Constitution limits the use of any proceeds of city general obligation bonds to the acquisition or improvement of real property. Bond proceeds could not be used for furnishings and equipment, or for administrator salaries. What would be done with any bond proceeds that remain unspent at the completion of the fire and police station projects? Any unspent bond proceeds that exist after the Proposition D projects are complete would be transferred to the Debt Service Fund and used to pay interest and principal due on the bonds. This would have the effect of reducing the property tax that otherwise would need to be levied to make bond payments. Can a portion of the property tax be used to maintain the fire and police facilities that will be built with bond proceeds? The property tax levied for the Proposition D bonds can only be used for the semi-annual debt service payments on the bonds. The property tax revenue would not be available for any other purpose, including maintenance or operational expenses associated with the fire and police facilities built with bond proceeds. The tax cannot be levied unless there are bond payments to be made from the tax, and the tax must expire when the bond payments are concluded.