RICHMOND -- West Contra Costa homeowners and businesses may be hit with hundreds of dollars more in property taxes this year to repay school bonds because of a decline in assessed property valuation within the district and the need to service new debt.
Contra Costa Assessor Gus Kramer reduced Richmond property valuations by an average of 14.61 percent for 2013-14, dragging down a 4.1 percent average increase in valuations in other cities and unincorporated areas in the West Contra Costa school district. The drop in Richmond was driven largely by a lower assessment granted Chevron's refinery as a result of the August fire.
Property values within the district fell 5.9 percent overall, contributing to the need for the county to raise tax rates on the district's bonds to an estimated $285 per $100,000 of assessed valuation, compared with $215.70 per $100,000 in 2012-13, bond program adviser Dave Olson of KNN Public Finance in Oakland told trustees last week.
The $70 per $100,000 increase would require an owner of a property assessed at $300,000 to pay $210 more for school construction bonds in 2013-14, while an owner of an $800,000 home would pay an extra $560.
The largest component of the rate increase will be a charge of $48 per $100,000 of assessed valuation for about $120 million in new bonds to be issued this year under Measure E, which was passed by voters in November.
The district also will issue new bonds under 2010's Measure D, raising the measure's tax rate from $31.40 per $100,000 in 2012-13 to its targeted maximum of $48 per $100,000 this year.
The rate increase would be even higher if the district weren't tapping into a so-called tax rate stabilization fund this fiscal year to keep rates within voter-approved limits.
West Contra Costa will spend about $3.8 million out of $11.6 million in the reserve fund that was created by keeping rates higher than what was required to service the bonds and placing the extra cash in a dedicated account.
Olson referred to the strategy as "an insurance policy" against future revenue shortfalls.
"If we didn't have the reserve, tax rates would have to rise over the targeted maximums this year," said Martin Coyne, the district's executive director of business services for the bond programs.
West Contra Costa's total assessed value is 17.8 percent lower than in 2008-09, the first year of the nationwide real estate downturn, Olson said.
"(This was) effectively a 32.5 percent hit given the bond programs have been based on an assumed 4 percent annual growth," according to a KNN information packet Olson presented to trustees.
Assessed values within the district rose 1.1 percent in 2011-12 and 6.6 percent in 2012-13 before falling this year.
Charles Cowens, a member of the district's citizens' bond oversight committee, said the district's cumulative tax bill is high compared with other districts in the state.
West Contra Costa has the third-largest school construction bond program in the state behind Los Angeles and San Diego.
"Those districts are exponentially larger than we are, so we are spending more money per student," Cowens said.