Santa Clara City Council approves ad valorem tax levy for $400M Measure I bonds

The Santa Clara City Council took a significant step towards enhancing local infrastructure by approving a resolution to levy an ad valorem tax as part of the implementation of Measure I, a $400 million public facilities bond approved by voters in November 2024. The measure, which received a strong backing of 69.41%, aims to modernize and upgrade various city facilities, including streets, parks, libraries, and emergency services.

During the joint meeting held on June 24, 2025, city officials emphasized the importance of this tax levy, which is necessary to fund the debt service associated with the unsold general obligation bonds. The proposed tax rate is set at $28.70 per $100,000 of assessed property value for the fiscal year 2025-2026, although the average tax rate over the life of the bonds is projected to be around $19 per $100,000. This structure is designed to ensure that the city can efficiently manage its debt while minimizing costs for residents.

City Manager Deanna Grogan and Finance Director Ken Lee provided detailed insights into the financial implications of the tax levy. They explained that by initiating the tax levy now, the city could save approximately $3.75 million in interest costs over the life of the bonds, which would allow more funds to be allocated to the intended projects. The council will revisit this tax levy annually to ensure transparency and accountability in how the funds are utilized.

The meeting also highlighted the timeline for the bond issuance, with a resolution expected to return to the council in December 2025, aiming to enter the bond market early in the following year. This proactive approach is intended to expedite the funding process for critical infrastructure projects that have long been identified as necessary for the community.

In addition to the primary discussion on the tax levy, council members raised questions regarding the implications of the tax structure and the timing of future bond tranches. Officials reassured the public that the average tax rate would remain below the promised threshold, maintaining transparency about the financial commitments made to voters.

As the city moves forward with these plans, residents can expect ongoing updates and opportunities for public engagement regarding the projects funded by Measure I, reinforcing the city’s commitment to improving community facilities and services.