Santa Clara council authorizes ad valorem tax levy to support Measure I bond program

The Santa Clara City Council on Tuesday adopted a resolution directing Santa Clara County to place an ad valorem tax levy on the 2025–26 property tax roll to support the city’s voter‑approved Measure I general‑obligation bond program. The council recorded a unanimous vote to authorize a maximum levy of $28.70 per $100,000 of assessed value, while staff described an expected average levy of about $19 per $100,000 over the life of the bonds.

City Finance Director Ken Lee told the council the levy is a technical, required step that allows the city to collect property‑tax revenue for future debt service on the bonds. “This is the first of the city council’s official actions that are required to issue the general obligation bonds,” Lee said during his presentation, describing an initial tranche sized at up to $150 million and noting the full bond program will ultimately fund projects described in the Measure I expenditure plan.

Lee and the city’s financial adviser, Jaime Trejo of PFM, explained the timing benefits of placing the levy on the 2025–26 roll now. Lee said the city would save an estimated roughly $3.7 million in interest costs by levying this year rather than waiting a year, because the city will be able to collect property‑tax revenues in the fall of 2025 and make a debt service payment in August 2026. Trejo said the financing structure is designed so that as assessed values grow the tax rate will decline, producing the approximately $19 average figure that was presented to voters during the campaign.

Using the plan approved by voters in November 2024, staff described Measure I as a $400 million public facilities and infrastructure bond program including streets and transportation, public safety facilities, parks and recreation, libraries and senior centers, storm drainage and historical building rehabilitation, and the cost of issuance. Lee said a household with a typical assessed value would expect roughly a $200 levy in the first year based on the assumptions used in the tax‑rate statement; he noted the county’s final assessed valuations in September will determine exact amounts.

Council members asked clarifying questions about how the $28.70 maximum related to the $19 average that was cited during the campaign. Lee and Trejo reiterated that the $28.70 figure is the maximum initial levy in the first year’s tax roll and that the issuance strategy and expected assessed‑value growth drive the lower average over the life of the program. The council voted 7–0 to adopt the resolution.

What’s next: staff will update the city’s debt management policy in September and return to the council in December with a bond issuance resolution and more detailed sizing for the first issuance. The county will publish final assessed values in September; those values will determine the exact levy the county places on the tax roll.