Below are answers to frequently asked questions regarding Measure UU, which, if approved, would authorize the issuance of general obligation bonds to replace the Piedmont Community Pool.
1. The City proposes to issue $19.5 Million in bonds. What is the actual expected borrowing interest rate assuming the bond passes this year?
Municipal bonds can be issued in stages as the funds are needed, and the applicable interest rate is determined at the time the bonds are issued. As a frame of reference, the interest rate as of September 16, 2020 is 2.8%.
2. What is the City’s current total outstanding general obligation debt?
The City currently has no outstanding general obligation debt.
3. What is the term of the bond repayment?
Measure UU provides that the term of the bond repayment is 30 years with a fixed interest rate.
4. How long will the tax be imposed on properties, and will the amount of the tax ever decrease?
Measure UU, if adopted, would impose a tax on properties for 30 years. In the event our property tax roll increases at 3.5% per year (10 year average is ~4.5%), the tax rate per $1,000 of assessed value will drop from $0.26 (if all bonds are issued) to approximately $0.10 in thirty years. The total tax assessed would still be the same, but redistributed based on the individual property assessment.
5. How can a property owner ascertain the assessed value of property?
Each year, the Alameda County Assessor’s Office notifies all property owners of the property’s annual assessed value. This number can also be found on a property owner’s property tax bill. Residents can ascertain the assessed value of their home on the Alameda County Assessor’s web site.
6. How does Measure UU impact the City’s General Fund?
Measure UU does not have an impact on the City’s General Fund.
7. What is the proposed concept for replacing the existing pool?
In the event Measure UU is adopted, the exact design of the pool facility will be finalized through a public process. The current proposed concept to replace the existing pool is the establishment of two pools: (1) a warmer, shallower recreation pool with areas for safe water play, swim lessons, therapeutic swim, and physical rehabilitation, and (2) a wider and deeper pool for recreation, physical education, water aerobics, water polo, swim team, and lap swimming. Each pool would be larger than the current “medium” and “big” pools.
8. What are the estimated costs of the project compared to bond revenues and what steps will the City take to limit project costs to available bond revenues?
The measure would authorize the City to issue bonds with a principal value that does not exceed $19.5 million. In the event the City receives an AA+ bond rating, it is conceivable the bonds would be sold at a premium and Measure UU would provide revenues in excess of the face value of the bonds. The City determined that the $19.5 million figure was appropriate based on rough “hard cost” estimates as follows: $8 million for the two pools to replace the current “medium” and “big” pools, $3.5 million for site preparation, and $6 million for a building to house the pool equipment, restrooms, offices, and community space. If necessary, the concept can be value-engineered during final design development to meet the budget parameters.
9. Can the City repair the existing pool?
The City has determined that repairing the existing pool is not a feasible option. The City has been continuously repairing the existing pool since it took over operations in 2011. The repairs required to keep the facility safe and operational have become increasingly expensive every year, and the facility is now at the point where pool decks need to be removed in order to address structural issues. A renovation of the existing facility would require not only major structural repair and equipment replacement, but would also trigger significant site work required to meet current health, safety, and accessibility regulations.
10. What oversight is in place to ensure that the bond funds are used properly?
Measure UU provides that a bond oversight committee be appointed to make sure the bonds are issued and spent in accordance with the terms of Measure UU. As with any project, staff and the City Council will also work to ensure proper use of public funds. The project will also be subject to the City’s project risk management policy.
Editors Note: Opinions expressed are those of the City of Piedmont and Measure UU supporters.
