By Claremont City Manager Jeff Parker
Q: How much will the GO bond cost residents?
A: The cost of the GO bond is approximated at an average of $24.73 per $100,000 assessed value per year over the 30-year life of the bond. This will begin at $32.93 per $100,000 assessed value per year and will decline over the 30 years to $18.48 per $100,000 assessed value per year, assuming a two-percent assessed value growth throughout the city.
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Q: What is the impact on those properties assessed at greater than $400,000?
A: The financial impact to each taxable property in Claremont is based on assessed value of the property, just as annual property taxes are. Therefore, the higher the assessed value, the higher the payment for the GO bond. Below are 3 examples of the annual payments based on 3 different property values and the average payment amount.
|
Cost per $100,000 |
Property A/V |
Annual Cost |
|
$24.73 |
$400,000 |
$99 |
|
$24.73 |
$600,000 |
$148 |
|
$24.73 |
$1,000,000 |
$247 |
Q: How many appraisals have been done and what is the appraised value of Johnson’s Pasture?
A: There have been two appraisals done. The first was completed in December 2005 and values the property at $12 million. After the assessment district election, a second appraisal (September 2006) was done which valued the property at $10.265 million.
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Q: What is the difference between the two appraisals?
A: The most significant difference between the two appraisals is that the December 2005 appraisal is based on 50 to 70 units and the September 2006 appraisal is based on the 41 development credits the property is currently allocated.
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Q: Why would the city pay more than the appraised value?
A: The city has a purchase agreement with the property owners for $12 million. This agreement is based on the December 2005 appraisal. At this time, the property owners have not been willing to reduce the price.
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Q: What does the city have to do to get the $1 million grant from the State Wildlife Conservation Board (WCB)?
A: The city is still eligible for a $1 million grant from the WCB if the negotiated purchase price is reduced to $11.5 million or less.
The reason for this is that, in order to receive this grant, the December 2005 appraisal had to be approved by the State Department of General Services. They approved the appraisal at a value of $11.5 million based on a $500,000 reduction in value due to access issues.
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Q: The ballot measure says $12.5 million dollars. Where does this number come from?
A: The figure is based on a $12 million purchase price. To date, $750,000 has been secured in grants from the Claremont Wildlands Conservancy and Los Angeles County Supervisor Mike Antonovich, that bring the net purchase price to be bonded down to $11.25 million. Then there are $1.25 million in bond issuance costs, credit enhancement costs, and capitalized interest. This brings the total amount, which must be bonded, to $12.5 million.
|
Negotiated Purchase Price |
|
$12,000,000 |
|
Grant Funding |
- |
$750,000 |
|
Net Purchase Price |
= |
$11,250,000 |
|
Bond Costs |
+ |
$1,250,000 |
|
Amount Necessary to Bond |
= |
$12,500,000 |
Q: What if the city gets a grant after they sell the bonds? Can the principle be prepaid?
A: There are two options:
Typically, these types of bonds are structured so they cannot be prepaid in the first 10 years; but after year 10, they can be prepaid at no penalty.
Alternatively, a portion or all of the bonds could be structured with more flexible prepayment terms that would allow for prepayment. However, bonds with more flexible prepayment terms will carry higher interest rates.
