BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Safe, Clean Water and Natural Flood Protection Special Tax Summary Report and Resolution Providing for Levy of the Special Tax Rates and Authorizing a Procedure for Correcting Special Tax Amounts for Fiscal Year 2020-2021.
End
RECOMMENDATION:
Recommendation
A. Accept the fiscal year 2020-21 Safe, Clean Water and Natural Flood Protection Special Tax Summary Report; and
B. Adopt the Resolution Providing for Levy of the Special Tax Pursuant to the Safe, Clean Water and Natural Flood Protection Measure in the Combined Flood Control Zone of the Santa Clara Valley Water District and Authorizing a Procedure for Correcting Special Tax Amounts for Fiscal Year 2020-2021.
Body
SUMMARY:
Provisions of Resolution 12-62 (Providing for the continuation and levy of special tax to pay the cost of a Safe, Clean Water and Natural Flood Protection Program in the combined flood control zone of the Santa Clara Valley Water District subject, nevertheless, to specified limits and conditions) require the District’s Chief Executive Officer to prepare a written report (Attachment 1) recommending rates for the Safe, Clean Water and Natural Flood Protection Special Tax, which was approved by voters on November 6, 2012. Rate limits as specified in the Safe, Clean Water ballot measure are indexed to the fiscal year 2019-20 rates plus the change in the Bay Area Consumer Price Index (CPI) or 3 percent, whichever is greater.
Staff recommends that the special tax rates for fiscal year 2020-21 be set flat to fiscal year 2019-20, which would reflect a 0 percent increase. Although current financial projections show there will be a funding deficit at program-end primarily due to increased capital costs of the program, the staff recommendation is consistent with Board discussion and direction given at the April 28, 2020 Board meeting in response to the COVID19 Pandemic. The staff recommendation is intended to minimize impacts to the community during these unprecedented and uncertain times. For reference purposes, a report released by the Bureau of Labor Statistics indicates that the change in CPI from February 2019 to February 2020 is 2.91 percent.
The senior exemption provided for in the ballot measure will continue to allow low-income parcel owners over the age of 65 to be exempt from paying the special tax consistent with Resolution 12-62. Staff has continued the enhanced outreach program to better inform the senior population of the tax exemption program.
The contemplated activities and rates in the proposed FY 2020-21 budget are consistent with the activities and rates identified in the November 16, 2012 Valley Water report, “Safe, Clean Water and Natural Flood Protection,” that explained the voter approved program in detail. Planned future expenditures as currently forecasted reasonably indicate that the revenue raised next year will be spent according to the 2012 Valley Water Report.
FINANCIAL IMPACT:
Levy of the Safe, Clean Water and Natural Flood Protection Special Tax at the recommended level for fiscal year 2020-21 will generate an estimated total of $45.5 million in net revenue that will fund budgeted expenditures consistent with the Report. Valley Water’s proposed Budget for fiscal year 2020-21 reflects this projected revenue. If the Board does not approve special tax rates for FY 2020-21, Valley Water would not receive the funding necessary to accomplish voter approved outcomes.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Staff Report
Attachment 2: Resolution
Attachment 3: Summary of KPIs, 15-Year Program
UNCLASSIFIED MANAGER:
Manager
Melanie Richardson, 408-630-2035