Subject: San José 911, Fire, Police, Paramedic, and Neighborhood Security Act

RECOMMENDATION

That the City Council adopt a resolution to place the following measure to the voters at the general election to be held on March 5, 2002, authorizing the issuance of general obligation bonds as follows:

“San José 911, Fire, Police, Paramedic, and Neighborhood Security Act” bonds in the maximum principal amount of $159 million.

BACKGROUND

I am proud to propose the “San Jose 911, Fire, Police, Paramedic, and Neighborhood Security Act” to bring forward to San Jose voters at the March 2002, general election. The purpose of this bond measure is to protect the lives, homes, and neighborhoods of our residents. We want to make sure our San Jose police officers, paramedics, and fire fighters have the right tools to save lives.

The San Jose 911, Fire, Police, Paramedic, and Neighborhood Security Act includes these elements. It will:

§ Create a state-of-the-art 911 communications center;

§ Improve and upgrades 24 neighborhood fire stations;

§ Build new neighborhood fire stations;

§ Build a new police substation in South San Jose;

§ Expand four community police stations;

§ Build new and improved police and fire training facilities; and

§ Create a citizens committee to oversee expenditures

As a result of these public safety improvements, this plan will:

§ Reduce police, fire, and medical response times to emergencies so we can get police officers, firefighters and paramedics to homes and businesses faster to protect and save more lives;

§ Expand our community policing efforts to ensure that our police officers work hand-in-hand with residents to prevent crime in our neighborhoods; and

§ Improve the training facilities of our police officers, fire fighters, and paramedics to ensure that they are the best trained to respond to any emergency.

These projects are in response to the needs of our community and reflect the City’s planning that has been underway over the last two years, including the Council’s approval of the fire services strategic plan in October this year. As the events of September 11 have underscored, well-equipped, well-trained, and well-positioned fire fighters, paramedics, and police officers are a critically important investment for the safety of any community. We need these new and improved public safety facilities now, and I recommend that we take the steps required at this time to ensure that our City can do its best to protect the people of our community.

For purposes of sizing the bond issues, the estimated costs of the facilities to be funded by the proposed bond measure are outlined in Attachment A. The total estimated cost of the facilities is $157.5 million. The remaining $1.5 million is for the cost of issuing three series of bonds, as described below.

The Finance Department recently analyzed the impact on homeowners’ property taxes from a public safety general obligation bond authorization of $159 million. Staff made the following assumptions:

1. Following two-thirds voter approval, the bonds would be issued in three series, with sales anticipated to take place in June of 2002, 2004, and 2005. Each series would be approximately 25%, 50%, and 25% respectively of the total bond authorization.

2. Each series of bonds would have level principal payments amortizized over thirty years. Based on current market conditions, the average borrowing cost is estimated at 4.79%. The tax rate statement that will be included in the sample ballot will also include a scenario, which will assume a conservative borrowing cost rate of 7.0%.

3. The total assessed value of the City increases by 2% per annum from the FY 2001-02 level of $81.3 billion.

Based on the current market rate assumptions noted above, the analysis found that the projected average annual tax payments associated with the public safety general obligation bonds of $159 million for an assessed property valued at $200,000 would be $19.02. Using the conservative borrowing cost estimate of 7.0% as noted above, the average annual tax payments are projected to be $23.30. The average assessed value of single-family homes in San Jose is less than $200,000.

The recommended ballot language for this measure is:

San José 911, Fire, Police, Paramedic, and Neighborhood Security Act

To improve San José’s fire, police, and paramedic response times by: adding and improving fire stations and police stations, training facilities, and creating state of the art 911 communications facilities, shall the City issue $159,000,000 in bonds, at the best rates possible, with the moneys deposited in a special account to be used only for these purposes and with annual expenditure reporting to a citizens watchdog committee?

I am confident that San Jose voters are willing to make this investment to make their neighborhoods even safer. With this bond measure, we will keep San Jose the safest big city in America with better-trained and better-equipped police officers and firefighters who will be prepared to keep San Jose families safe in their homes, at school, and at work.

Mayor Ron Gonzales

Attachment A

The 911, Fire, Police, Paramedic, Neighborhood Security Act would enable the City to provide residents:	Estimated Costs In millions
New and improved Fire Stations to improve fire and paramedic response times in the following areas	$41.8
Berryessa
Silver Creek/Yerba Buena
Santa Teresa/Edenvale
Communications Hill
North Coyote Valley
North East SJ
Alviso/North Rincon
Cambrian
Willow Glen/Cambrian
Santa Clara Street near SJMC
Upgrade 24 existing fire stations to essential facilities
Gender Privacy Improvements at existing fire stations
Upgraded 911 Communications facilities	$7.2
New Police Facilities to improve response times, improve community police centers and save money on existing leased space, shorter drive time to beats, consolidate narco, etc.	$82.0
North Community Policing Center
South Community Policing Center
East Community Policing Center
West Community Policing Center
New South Police Substation
Better Training Facilities for our fire, police and emergency medical response personnel	$28.0
Renovation of Central Training Facility
Public Safety Driving Facility
Grand total*	$159.0

* Bond issuance costs have been factored in the individual project categories.