Santa Clara council votes to place Measure I debt levy on 2025–26 tax roll

The Santa Clara City Council on Tuesday voted unanimously to adopt a resolution directing the county to place an ad valorem property tax levy on the 2025–26 tax roll to fund debt service on Measure I, the $400 million general obligation bond approved by voters in November 2024.

Council action came after a presentation from Finance Director Ken Lee and city staff explaining the timing and sizing of an initial issuance and the tax-rate mechanics. Lee said the council must place the levy now to allow the county to bill for collections that begin in November 2025 and February 2026 so the city can make its first debt payment in August 2026.

Measure I, approved by 69.41% of voters in November 2024, funds a range of capital projects including streets and transportation, public safety facilities, parks and community facilities, storm drainage and historic buildings. City staff said the council plans an initial bond tranche sized up to $150 million; the total $400 million program is expected to be issued across multiple tranches as projects are ready.

Lee and financial adviser Jaime Trejo of PFM said the levy before council tonight sets a maximum tax rate of $28.70 per $100,000 of assessed value for fiscal year 2025–26. The city and its financial adviser told the council that this is a front-loaded structure intended to lower overall interest costs and that the voter-disclosed average tax rate over the life of the bonds remains about $19 per $100,000 of assessed value. Staff estimated that accelerating the levy this year could save roughly $3.75 million in interest costs compared with waiting a year.

Staff offered examples to illustrate potential impacts: a typical homeowner’s 2025–26 payment for Measure I was estimated by staff at roughly $200, while the 20 largest commercial property owners were shown in outreach materials as facing much larger, sample bills (staff cited an illustrative $254,000 for a large commercial parcel under the current assessed valuation). Lee emphasized that the county’s final assessed values, released in September, will determine the precise levy rate for each parcel.

Council members asked about when residents would see a definitive bill, how the levy interacts with subsequent tranches, and how the city will track the advertised $19 average. Lee and Trejo said the definitive debt service schedule will be set at bond pricing and the council will receive annual technical resolutions to place the levy on the tax roll. The city manager and finance staff committed to reporting back to council and the public each year with updated levy estimates and comparisons to the advertised average.

The council approved the resolution on a unanimous vote. Staff said the next fiscal steps include filing the levy request with Santa Clara County in July 2025, bringing a debt-management policy update in September, and returning with a bond-issuance resolution in December.