Special Report on San Juan (May 1962)

May 1902

SAN JUAN

COMMONWEALTH OF PUERTO RICO

GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO SAN JUAN. PUERTO RICO

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Dona Felisa Rincon de Gautier,

Mayoress of San Juan.

SAN JUAN—Capital of Puerto Rico City Hail, San Juan.

San Juan, Capital of Puerto Rico, founded in 1521, is the oldest city within the United States. From its beginnings as an outpost of the Spanish Empire,

San Juan has grown to become a city of approximately 450,000, and although it still retains much of its charming old world character, it is now a modern and

progressive metropolis and a thriving center of commerce and industry.

Including the five adjacent municipalities of Bayamon, Catano, Guaynabo, Carolina and Trujillo Alto, the Metropolitan Area has a population of almost 650,000. The harbor enclosed by the City is excellent and the airport serving

the City is one of the finest and busiest in the Western Hemisphere.

San Juan is "The gateway to the Caribbean," and is about 1.600 miles southeast of New York City {VA hours flying time) and 1,000 miles south east of Miami. It is Puerto Rico's largest city and is the center of the economic, educational, cultural and governmental activities on the island.

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PUERTO RICO bi,Uilfl

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Puerto Rico is a self governing Commonwealth of the United States having a population of 2,317,000, associated with the Federal Union by compact and mutual consent. The Commonwealth Constitution is in complete harmony with the Federal Constitution providing for a republican form of government with executive, legislative and judicial branches. In its structure and power the gov ernment of the Commonwealth resembles those of the States. Puerto Rico,

however, does not have voting representation in Congress and is not included in the U.S. federal taxing area.

History

Ashford Park Condominium,

one of the large new condominium buildings in San Juan.

Puerto Rico came under United States sovereignty by the Treaty of Paris on December 10, 1898. The Congress of the United States provided for a civil government for the island in 1900. The original act was superseded in 1917 by the Organic Act of Puerto Rico, which granted United States citizenship to Puerto Ricans as well as unrestricted suffrage for local purposes.

In accordance with the wishes of the People of Puerto Rico, the 81st Con

gress enacted Public Law 600, approved July 3, 1950. This law, which is "in the nature of a compact," became effective upon its acceptance by the elec torate of Puerto Rico. It provides that those sections of the Organic Act which define the political, economic and fiscal relationship between Puerto Rico and the United States shall remain in full force and shall be thereafter known as

the Puerto Rican Federal Relations Act. It also authorized the People of Puerto Rico to draft and approve their own constitution. The Constitution

was drafted by a freely elected constitutional convention, overwhelmingly approved in a special referendum, and approved by Congress and the Presi dent. It became effective upon proclamation of the Governor of Puerto Rico on July 25, 1952.

The Commonwealth Government

The Constitution recognizes and assures a separation of powers among the executive, legislative, and judicial branches. Both the Governor and the bicamPuhlic housing projects in Rio Piedras section of San Juan.

Luxury home in the Condado section of San Juan.

Condominium apartment buildings in the Condado section

of San Juan.

eral legislature are subject to regular election every four years. The Legislature operates under standard parliamentary and legislative rules. The judicial system is similar to and linked with the U.S. courts, with ultimate appeal available

to the Supreme Court of the United States. The currency and postal systems are the same as in the States.

Insofar as local governmental functions are concerned, there are 3 basic differences between municipal government in Puerto Rico and in the States: 1. There are no overlapping local units of government. The Commonwealth government and the seventy-six municipalities are the only units of gov

%

ernment which exist and arc the only public bodies in Puerto Rico which

may levy ad valorem taxes. Consequently, there is no overlapping in taxation, expenditures or authority.

2. The Commonwealth Government to a large extent supervises municipal fiscal affairs and collects most of the taxes levied by the municipalities.

Revenues and expenditures are under strict control and municipal debt must be approved by the Commonwealth.

3. The Commonwealth Government assumes responsibility for a number

of important functions usually performed by local governments in the continental U. S. Among these are police and fire protection, education,

major street and highway construction, and public health programs.

Three instrumentalities. Water Resources Authority, Aqueduct and Sewer

Authority and Ports Authority have responsibility for construction, financing and administration of electric power, water and sewer, and harbor and airport service and facilities on the island. The bonded indebtedness of these public

corporations is and will continue to be entirely supported by revenues derived from their operations.

Incurrence and Payment of Municipal Debt

Puerto Rico is divided into seventy-six contiguous municipalities, each of which consists of urban and rural areas. Municipalities may incur bonded debt

only after receiving approval of the Governor of the Commonwealth. This is obtained only after recommendation of the Department of Justice, the Planning Board and the Department of the Treasury, and the bonds must be sold

Pine Grove Condominium,

recently completed, an attractive addition to the growing array of condominium buildings in Puerto Rico.

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through the Government Development Bank as fiscal agent. The Governor is empowered to veto any municipal bond ordinance where legally available debt margin is not sufficient or where adequate revenues are not or cannot be com mitted to debt service. There is no limitation on the amount of taxes that may

be levied on property for the payment of public debt.

Act No. 142 (Municipal Law) approved July 21, 1960 provides in Section 61 that interest on the public debt and amortization thereof constitutes a first budgetary charge on any and all available municipal revenues. Property is assessed by the Secretary of the Treasury throughout Puerto Rico, and he col lects directly all municipal and other taxes upon real and personal property.

From these collections, the amount allocated for the payment of principal and interest on outstanding obligations is retained for each municipality and depos ited in redemption funds. Sums sufficient to meet payments on municipal debt as it becomes due are withdrawn and paid by the Secretary of the Treasury of the Commonwealth from the appropriate municipal bond redemption fund.

The most recent reappraisal of assessed valuations was made in 1958, and An arithmetic lesson in an elementary school in Caparra Heights, San Juan.

present assessments are estimated to average between 85% and 90% of 1957 market values, and less than two-thirds of current values.

Expansion and Diversification of the Economy of Puerto Rico

The giant strides made in the expansion and diversification of the economy of Puerto Rico since 1940 are well known, and Puerto Rico is considered a

prime example of the gains which can be made under a system of democratic capitalism. The island has been called a showcase of economic and social development and over 13,000 persons from 126 countries came to Puerto Rico in the 1950's to study its development.

Net income of the Puerto Rican economy has increased from a level of $225 million in 1940 to $1,465 million in 1961. The output of the economy, Commerce and Education Building,

University of Puerto Rico.

Girls Dormitory, one of several imposing new buildings on the campus of the University of Puerto Rico.

measured in terms of gross product adjusted for price changes has shown an average increase of about 5.7% compounded annually, and per capita income has increased from $120 to $621. The Commonwealth's program of indus

trialization has aided the economy to shift from a heavy dependence on agri culture in general and sugar in particular to a high degree of diversification in both industry and agriculture. While net agricultural income expanded from $70 million in 1940 to $200 million in 1961, manufacturing income increased from $27 million to $320 million, substantially surpassing agriculture as a source of income; and while sugar cane constituted 62% of merchandise

exports in 1940, it constituted less than 20% in 1961.

Manufacturing income, which provided $209 million or 22% of Puerto Rico net income last year, is generally derived from the production of new and diverse types of articles manufactured principally for shipment to the U. S. These new products are manufactured in over 700 modern plants representing a total original investment estimated at over $500 million.

Underlying Puerto Rico's growing and changing economy there has been a steady expansion in investment. Gross fixed investment during the five con secutive fiscal years 1957 to 1961 ran at the high rate of 21 % of gross product.

Inflowing long term U. S. capital rose from $30 million in postwar 1947 to an estimated $219 million in 1961 when it equalled 60%. of the $367 million fixed investment registered in that year.

1

NOTICE OF SALE and PROPOSAL FORM

$5,970,000

MUNICIPALITY OF SAN JUAN,PUERTO RICO MXWICIPAL STADIUM BONDS

DATE OF SALE

MAY 2, 1962

COMMONWEALTH OF PUERTO RICO

GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO SAN JUAN, PUERTO RICO 48 WALU STREET NEW YORK 8, N. Y.

NOTICE OF SALE

$5,970,000

MUNICIPALITY OF SAN JUAN,PUERTO RICO AIUIÂŤCn>AL STADIUM BONDS

Sealed bids will be received by the Government Development Bank for Puerto Rico, at its New York Office, 45 Wall Street, New York 5, N. Y., until 11:00 o'clock A.M. Eastern Daylight Saving Time, May 2, 1962

at which time and place all bids will be publicly opened and read for the following series of bonds which bids must be for all of the bonds of both series:

$440,000 Municipal Stadium Bonds, Series A, dated July 1, 1961, numbered from 1 to 440, inclusive, and

maturing annually, July 1, as follows: Year of

Principal

Year of

Principal

Maturity

Amount

Maturity

Amount

1963 1964

$140,000 140,000

1965

$160,000

$5,530,000 Municipal Stadium Bonds, Series B, dated July 1, 1961, numbered from 1 to 5,530, inclusive, and maturing annually, July 1, as follows: Year of

Principal

Year of

Principal

Maturity

Amount

Maturity

Amount

1966 1967

$180,000 200,000

1977 1978

$275,000 275,000

1968 1969 1970 1971

200,000 200,000 200,000 250,000

1972 1973 1974 1975

250,000 250,000 250,000 250,000

1979 1980 1981 1982 1983 1984

275,000 300,000 300,000 300,000 325,000 325,000

1985 1986

325,000 325,000

1976

275,000

Denomination 11,000; coupon bonds registrable as to principal alone and as to both principal and interest

and, if registered as to both principal and interest, reconvertible into coupon bonds; unless registered as to prin cipal alone or as to both principal and interest, principal and semi-annual interest (January and July 1) payable in New York City or, at the option of the holder, at the office of the Government Development Bank for Puerto Rico, San Juan, Puerto Rico; general obligations, for the payment of which, both principal and interest, the full faith, credit and unlimited taxing power of the Municipality of San Juan, Puerto Rico, are pledged; principal of

bonds registered as to principal alone or as to both principal and interest payable at the office of the New York paying agent as bond registrar; interest on bonds registered as to both principal and interest payable by check or draft mailed to the registered owner.

The bonds which mature after July 1, 1982 will be subject to redemption prior to their respective maturi ties, at the option of the Municipality of San Juan, Puerto Rico,from any moneys that may be made available for that purpose, either in whole on any date not earlier than July 1, 1982, or in part, in the inverse order of their numbers, on any interest payment date not earlier than July 1, 1982, at the principal amount of the bonds to be redeemed, together with the interest accrued thereon to the date fixed for redemption, plus a premium of Va of 1% of the principal amount of each bond to be redeemed for each twelve (12) months' period or fraction thereof between the date fixed for redemption and the stated maturity date of such bond.

Under the provisions of the Acts of Congress now in force the bonds and the income therefrom are, in the opinion of Bond Counsel named below, exempt from Federal and State taxation.

A separate proposal for the bonds of each series described above is required, but no bid for less than all of the bonds of both series described above or for less than par and accrued interest for each series will be entertined. Bidders are requested to name the interest rate or rates, in multiples of Va or 1/10 of 1% and each bidder must specify in his bid the amount and the maturities of the bonds of each rate; provided, however, that no rate

shall be named in excess of 5% for any maturity or maturities. No bid may name more than four different interest rates for all of the bonds offered, any of which may be repeated, and all bonds maturing on the same date must bear interest at the same rate. The interest on any bond payable on any interest payment date shall be represented by a single coupon. The bonds will be awarded to the bidder offering to purchase the bonds of both series at the lowest interest cost to the Mumcipality of San Juan, Puerto Rico,such cost to be determined by deducting the total

amount of any premiums bid from the aggregate amount of interest upon the bonds of both series computed from January 1,1962 to their respective maturities.

Bach bid must be submitted on a form to be furnished by the undersigned, must be enclosed in a sealed enve lope marked Bid for the $5,970,000 Municipal Stadium Bonds of the Municipality of San Juan, Puerto Rico", and must be accompamed by a certified or bank manager's, cashier's or treasurer's check drawn upon an incor porated bank or trust company for $119,400 payable unconditionally to the order of the Municipality of San Juan,Puerto Rico,on which no interest will be allowed. Award or rejection of bids will be made within 24 hours from the time stated for the receipt of bids and the checks of unsuccessful bidders will be returned immediately.

The check of the successful bidder will be held uncashed as security for the performance of his bid, but in the event the successful bidder shall fail to comply with the terms of his bid, the check may then be cashed and the proceeds thereof retained as and for full liquidated damages. Whenever such terms shall have been complied with,or if it shall be found impossible to issue and deliver the bonds, the check will be returned.

Delivery of the bonds in definitive form will be made on or about May 31, 1962 in New York City, against payment therefor by a certified or bank manager's, cashier's or treasurer's check drawn on a New York City bank

or trtist company.'ITie approving opinion of Mitchell, Pershing, Shetterly & Mitchell, New York, N. Y., will be furnished without cost to the purchasers of the bonds. A copy of such opinion, certified by the City Manager of the Municipality of San Juan,Puerto Rico, by her facsimile signature will be printed on the reverse of each bond.

There will also be furnished the usual closing papers. Copies of the bid form and financial information concerning the Municipality of San Juan, Puerto Rico, are available at the Government Development Bank for Puerto Rico, San Juan, Puerto Rico, or at the New York office of said Bank, at 45 Wall Street, New York 5, N. Y., and will be furnished upon request.

The right to reject any or all bids or to waive any minor irregularity in the submission of any bid is reserved.

GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO By: David Rodriguez, Acting President.

PROPOSAL FOR BONDS ,1962 Government Development Bank for Puerto Rico 45 Wall Street

New York 5,New York Gentlemen:

Subjea to the provisions and in accordance with the terms of the annexed Notice of Sale, which are hereby made a part of this bid, we offer to pay Dollars ($

), plus accrued interest

from January 1,1962 to the date of delivery, for $440,000 Municipal Stadium Bonds, Series A, and Dollars ($

), plus accrued interest

from January 1,1962 to the date of delivery,for s$5,530,000 Municipal Stadium Bonds, Series B,described in said Notice of Sale and bearing interest at the following rates: $440,000 MUNICIPAL STADIUM BONDS, SERIES A Year of

Principal

Interest

Year of

Principal

Interest

Maturity

Amount

Rate

Maturity

Amount

Rate

1963 1964

$140,000 140,000

■%

1965

$160,000

$5,530,000 MUNICIPAL STADIUM BONDS, SERIES B Year of

Maturity

Principal Amount

1966 1967 1968 1969 197 0 197 1 1972 197 3 1974

$180,000 200,000 200,000 200,000 200,000 250,000 250,000 250,000 250,000

1975 197 6

250,000 275,000

Interest Rate

-% -%

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Year of

Principal

Interest

Maturity

Amoimt

Rate

197 7

$275,000

-Jo

1978

275,000

-Jo

197 9

275,000

-Jo

1980

300,000

-Jo

198 1 198 2 198 3 1984 198 5

300,000 300,000 325,000 325,000 325,000

-Jo

198 6

325,000

■Jo

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We will accept delivery of and make payment for the bonds at in New York City, in accordance with said Notice of Sale.

We enclose herewith certified or bank manager's or cashier's or treasurer's check payable unconditionally to the order of the Municipality of San Juan, Puerto Rico, for $119,400, which check is to be returned to us if this bid is not accepted, but otherwise is to be applied in accordance with said Notice of Sale.

The closing papers referred to in said Notice of Sale are to include a certificate dated as of the day of the

delivery of the bonds, stating that there is no litigation pending or, to the knowledge of the signers of such certifi cate, threatened affeaing the validity of the bonds.

(No addition or alteration, except as provided above, is to be made to this bid. It will be appreciated if a

list of syndicate members is attached and if the net interest cost of the bid is stated on a separate sheet.)

SAN JUAN As the principal city of the Commonwealth, San Juan has shared fully in the expansion of the Puerto Rican economy. San Juan has over 25% and the metropolitan area has over 35% of all the manufacturing establishments on the island. Of the more than 700 new plants established in Puerto Rico with the help of the Economic Development Administration, 201 are in San Juan proper and 356 are in the metropolitan area.

The Commonwealth governmental headquarters are in San Juan as are the

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main offices of all the autonomous public corporations. The city is the center for all the Federal Government offices and large installations of the U. S. armed forces are maintained in and around San Juan.

San Juan is an important educational center. In addition to being the site of the principal campus of the University of Puerto Rico with 18,000 students, the Metropolitan Vocational School is situated here. This educational facility can accommodate 15,000 students and offers instruction in 55 various trades. It is

one of the largest institutions of its kind in the world and has become a training center for the entire Caribbean area.

El Portal, one of several attractive new commercial hotels in San Juan.

The thriving Puerto Rican tourist industry is centered in San Juan and the investment in tourist facilities continues to expand significantly. There are

now 5 major hotels being constructed in the San Juan area representing an investment of about $31 millions. Expenditures made on the island last year

by about 345,000 tourists are estimated to total about $54 million. Tourist expenditures have shown sizeable gains in every year since 1950.

Financial Administration

On May 2, 1962, San Juan will sell a municipal stadium bond issue in the total amount of $5,970,000, maturing July 1, 1963 through 1986, for the

purpose of building a municipal stadium. Construction will be completed in the fall of 1962. Part of the proceeds will be used to retire $2,500,000 of munici pal stadium bond anticipation notes which had been issued in the preceding fiscal years, and to replace an interim receipt of $440,000 held by the Govern ment Development Bank.

After allowing for the sale of these bonds, gross debt of San Juan will be $32,555,000, and net debt, after deducting bond redemption funds, will be

Hotel Pierre, opened this year,

adjacent to and owned by the famed restaurant, Swiss Chalet.

El Convento. an unusual new hotel

occupying a restored historic edifice in old San Juan.

-

$28,978,959. This includes $2,000,000 in bond anticipation notes, issued in connection with future borrowing plans later described.

Growth in assessed valuation, which amounted to $904,582,710 on January

1, 1962, has kept pace with net indebtedness, as shown on the following pages.

The present ratio of net debt of $25,948,959 to assessed valuation is 2.9%, and after the sale of this issue will be $28,978,959, or 3.2%. Per capita net debt of $65.37 is moderate.

The only overlapping tax supported indebtedness is that of the Common wealth, of which the San Juan share is 45.6%. Net overlapping debt, including this issue will be $110,553,393, or 12.2% of assessed valuation.

Bond maturities over the next five years average about 5.7% each year of net debt outstanding.

Many of the functions usually associated with municipal administration in the States are handled by the Commonwealth of Puerto Rico itself. Conse

quently, the actual expenditures of the Capital of Puerto Rico are relatively modest. San Juan is empowered to levy an annual tax of 2 per cent of its taxable property for operating expenses. Under the Municipal Borrowing Law, unlimited ad valorem taxes may be levied for payment of all bonds issued.

The actual tax rate of $2.13 per $100, of which $1.03 is levied for general

SrHND UNION

Commonwealth purposes, and $.28 for San Juan bond purposes, is exception

ally low in comparison with cities of similar size.

All property tax collections and all debt service funds are administered directly by the Secretary of the Treasury of Puerto Rico, who retains in his

custody from these collections the amounts appropriated for the payment of principal and interest on outstanding obligations. The City relies for its rev enues mainly on the property tax. It also derives revenues from municipal licenses and fees, and a percentage of the cigarette tax and automobile license

fees levied by the Commonwealth Government are returned to the City. The Grand Union Supermarket at the Santa Rosa shopping center.

Puerto Rico Water Resources Authority pays to the City, in lieu of taxes, 6 per cent of its gross revenues collected in the municipality. For the present fiscal year this payment is estimated to be approximately $1.1 million.

Tax Penalties and Reductions

In June, 1958, the Legislature enacted Public Law No. 67 which provided for an increase thereafter from 6% to 9% per annum in the interest rate

Typical supermarket scene in Puerto Rico.

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charged on delinquent taxes. Whereas no penalties were previously charged on delinquent taxes, other than interest, the Act provides that thereafter a penalty of 5% of the amount of the tax will be added after becoming 30 days delinquent, increasing to 10% after becoming 60 days delinquent.

Furthermore, as additional incentive for the prompt payment of property taxes, the Legislature approved in 1959 Act No. 80, of June 25, 1959 granting a 10% discount if the taxes for the entire fiscal year are paid within 30 days; a 5% discount if paid during 60 days; and a 3% discount if half the taxes are paid within 30 days and the other half within 30 days after January 1 of the fiscal year. These discounts are granted only if all delinquent taxes including penalties are paid in full at the time the discount is claimed upon payment of current taxes. During fiscal year 1960-61 discounts for prompt payment in the amount of $860,948 were granted for current taxes and $121,141 for previous year's taxes.

Scale model of new baseball stadium being built at Hiram Bilhorn Park.

Encouragement of home ownership and of the building of low and medium cost homes for middle income families has been one of the prime objectives

of the Government in Puerto Rico in carrying out its basic policies. One form of stimulation of home ownership used has been the reduction of property taxes in recent years on low and middle income homes where the owner is the occupant of the residence.

Recognizing, however, the importance of the property tax in the fiscal require ments of the municipalities, the Commonwealth makes annual appropriations from the General Fund of the Treasury to the municipalities as compensation in the amount of the revenues lost from the reduction or non-collection of such property taxes.

Act No. 15 of 1960 provided for property tax reductions on owner-occupied homes for fiscal 1960-61 that ranged downwards percentage-wise from $45 on properties valued at $6,000 to a fiat $85 on properties valued at $20,000

or more. Act No. 23 of 1961 subsequently provided for a larger percentage tax reduction on such owner-occupied homes, but the reduction applied only to the first $15,000 of assessed valuation. On owner-occupied residences with assessed valuations up to and including $6,000, the tax was reduced by 75% of the amount of the total levy subject to collection, and the percentage declining gradually to 50% on the first $15,000 of assessed valuation.

A bill sponsored by the Administration is currently before the Legislature which would grant complete property tax forgiveness on the first $15,000 of assessed valuation on all residences occupied by their owners, starting in the

1962-1963 fiscal year. Such properties will remain on the tax rolls, and to receive the benefit of the tax forgiveness, the taxpayer must file a certificate with the Secretary of Treasury to the effect that he is the owner and occupant of the residence so affected.

The bill further provides for an appropriation from the general fund of the Treasury to be made each year to the municipalities in the amount of the total of the taxes forgiven on assessed valuations of owner-occupied homes up to $15,000. The municipalities thereby would receive the full amount levied, the only difference being that the Commonwealth Treasury instead of the property tax payer becomes the source of payments in the case of owner-occupied resi dences up to this amount.

And, finally, the bill provides that such tax forgiveness will be suspended if in any year available income, including any amounts appropriated from the Commonwealth Treasury, is not sufficient to pay principal and interest on bonded debt.

Public Health Center recently

opened and operated as a division of the San Juan Municipal Hospital.

Fernando Juncos A venue, one of the

busy thoroughfares of San Juan.

It should be emphasized that neither of the preceding acts, nor the proposed act, reduces the assessed valuation of any residential property or exempts sue property from taxation if necessary for debt service. The propose i oes

not modify or lessen the pledge of the full faith, credit and taxing power o t e Commonwealth or the municipalities. The obligation remains unc ange to

levy a special tax on all taxable property, including owner-occupied homes, if necessary in an amount sufficient, with any other availab e un s, or t e payment of debt service on their outstanding bonds.

Present Bond Issue

In October 1961 San Juan adopted a bond ordinance authorizing the issuance Supreme Court Building, San Juan.

of $5,970,000 in bonds to finance the construction of a Municipal Stadium and at the same time repealing an ordinance adopted in 1958 authori^zing $3 million for the same purpose. Final plans which included additional facilities raised the construction cost to $5,970,000 from the original estimate of $3 million.

. ,

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While these bonds will be general obligations of San Juan it is expected that revenues from the Stadium will be sufficient to cover part of the debt service.

Bond anticipation notes against this issue have been sold in the amount of $2,940,000. In March 1962, $440,000 of these notes were retired with the proceeds of the sale of an interim receipt of $440,000 representing Scries A of these bonds.

Additional Bond Authorizations

In July, 1958, San Juan authorized the issuance of $24,100,000 public im provement bonds to cover a five-year capital improvement program. Three series of $5,000,000 each were sold in 1959, 1960 and 1961; the remainder will be sold in lots of about the same size, at approximately one year intervals.

In 1959, an issue of $10,000,000 bonds was authorized for construction of single and multiple-unit low cost housing. Again, these will be general obli gation bonds, but San Juan will be liable only for the deficiency by which rental revenues fail to cover operating costs and debt service. Bond anticipation notes in the amount of $2,000,000 have been sold in advance of this issue; a bond issue in the amount of one half of the authorization is expected to be sold in 1963.

Puerto Rico's imposing copitol building made of while Georgia marble, houses the Senate and House.

The debt paying record of San Juan is clear of default or delinquency. There has never been any forced or "managed" refunding of maturing bonds to avoid default. A similar debt record exists for the central government and all munici

palities and instrumentalities of Puerto Rico.

Under the provisions of the Acts of Congress and the Constitution and Laws of Puerto Rico now in force, the bonds and income therefrom are, in

the opinion of Bond Counsel, exempt from Federal, State and Commonwealth of Puerto Rico taxation.

The bonds are legal investments for Savings Banks and Trust Funds in the State of New York. They are also eligible for deposit by banks in Puerto Rico to secure public funds, and by insurance companies to qualify them as required by law to do business in Puerto Rico.

Outstanding Public Net Debt of San Juan Versus Legal Debt Limit Fiscal Years 1952-53 to 1961-62 millions

of dollars 100 95

LEGEND;

â– LEGAL DEBT LIMIT

lO'^f of

90

I'dliuilioii -

Real (iiul Personal Properly 85

^ PUBLIC NET DEBT 80 75 70 65 60

55 50 45

40 35 30 25 20 15 10 5

0 52-53

53-54

54-55

55-56

56-57

57-58

58-59

59-60

As of March 31, 1962.

I

See inside cover for financial tables on Assessed Valuations. Property Tax Collec

tions. Operating Receipts and Expenditures, and Trend of Bonded Indebtedness.

60-61

61-62

SAN JUAN—Capital of Puerto Rico Property Tax Collections FISCAL

ASSESSED

TAX RATE

TOTAL

YEAR

VALUATION

PER $1,000

LEVY

CURRENT YEAR

$129,319,280 $29.70 $2,994,310 $ 3,667,853 140,925,060 29.70 2,992,626 4,238,823 163,146,880 33.10 5,379,068 4,048,808 222,396,140 33.10 5,528,338 4,441,187 298,476,900 21.00 6,937,280 316,121** 334,521,000 21.00 6,871,070 644,802** 358,617,020 21.00 7,479,891 4,925,340 . . .

391,729,690 23.90 9,175,927 6,317,998 . . . .

418,830,660 25.10 10,292,682 .

6,941,097 451,645,450 25.10 11,094,552 6,923,244 . . . .

521,067,120 25.10 11,838,941 7,053,283 709,269,090 21.30 13,808,526 8,623,438 753,734,000 21.30 13,121,030*1 7,543,238 807,716,360 21.30 13,717,972*1 9,882,967 851,606,970 21.30 13,967,268*1 8,201,881$$ 904,582,710 21.30 15,500,000 1962-63# * Increases in Assessed Valuation resulted partly from annual growth in tax base and partly from a change in

1947-48 1948-49 1949-50 1950-51 1951-52* 1952-53* 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59* 1959-60 1960-61 1961-621

. . . . .

. . . . . . . . . . . .

basis of assessment.

^ As of March 31, 1962.

# Official estimate. ^ The gross figure of taxes levied was reduced by discounts for prompt payment as follows; 1959-60 1960-61 1961-62 .

GROSS LEVY

DISCOUNT

NET LEVY

$13,841,870

$720,840

$13,121,030

14,578,920

860,948 712,510

13,717,972 13,967,268

14,679,778

Gash Receipts FISCAL

CASH BALANCE

LOAN

PROPERTY TAX

OTHER

TOTAL

YEAR

BEGINNING OF YEAR

PROCEEDS

RECEIPTS

RECEIPTS

RECEIPTS

$3,350,000

$3,521,161 6,627,655 7,101,498 9,733,713 9,378,306

1956-57 1957-58 1958-59 1959-60 1960-61

.

$5,973,789 6,604,145 5,440,694 8,809,338 4,952,432

517

7,005,213 2,200,000 8,100,000

$ 8,456,212 7,048,176 8,028,451 8,318,244 10,488,302

$15,327,373 13,676,348 22,135,162 20,251,957 27,966,608

Expenditures FISCAL

CAPITAL

DEBT

OTHER

TOTAL

CASH BALANCE

YEAR

EXPENDITURES

SERVICE

EXPENDITURES

EXPENDITURES

AT YEAR END

$10,452,391 12,175,676 13,823,347 15,829,548 17,264,438

$14,697,017 14,839,799 18,766,518 24,108,863 25,737,608

$6,604,145 5,440,694 8,809,338

$2,787,174 1,138,478 3.544,183 6,469,930

1956-57 1957-58 1958-59 1959-60 1960-61

6.587,893

$1,457,452 1,525,645 1,398,988 1,809,385 1,885,277

4,952,432 7,181,432

GROSS BONDED DEBT

Trend of Bonded Indebtedness

PER CENT OF AS OF

GROSS BONDED

REDEMPTION FUNDS

NET DEBT AS

ASSESSED

.lULY 1

DEBT

AS OF JULY 1

OF JULY 1

VALUATION

1940

1945 1950 1955 1956 1957 1958 1959 1 960 1961

i962T

$ 6,852,532 4,952,400 3,443,000 9.253,000 10.766,000 12.915,000 1 1.884.000 16,170.000 17.1 18.000 24.750.000 29.525.000*

Not Available Not Available

Not Available Not Available

$1,170,448 2.466.172

$ 2,272,552

2.528,849 2,461,239 2.519.840 2.606.662 2.847.750 2.550.794 3.576.041

6,786,828 8.237.151 10,453,761 9,364.160 13.563,338 14.270.250

22.199.206 25.948.959

5.0 4.6 2.1 2.2 2.4 2.5 1.7 2.1 2.1 2.9 3.3

PER CAPITA

$28.80 20.80 9.30 25.08 29.18 35.00 28.57 35.99 38.10 55.08 65.37

As of March 31, 1962.

Includes $4,500,000 in bond anticipation notes of which $2,500,000 will be retired out of the proceeds of this bond issue. Interim receipt in the amount of $440,000 will also be retired.

TOTAL

LECTIONS tt CURRENT COLLECTIONS

UNCOLLECTED OF PREVIOUS

RESPECTIVE LEVIES

PER CENT OF

PER CENT OF

ON 6-30-61

CURRENT LEVY

CURRENT LEVY

TOTAL

YEARS

$ 631,301 503,335 1,151,291 899,261 473,799 5,164,531

5,745,105 2,357,789 2,562,155 2,589,838 3,696,309 4,680,289 4,541,780 3,270,630t 2,129,679t

COLLECTIONS

$ 3,625,611 3,495,961 5,200,099 5,340,448 789,920 5,809,333 10,670,445 8,675,787 9,503,252 9,513,082 10,749,592

$ 128,413 162,745 169,604 237,311 507,030 468,592 467,125 502,062 704,814 956,579 1,159,489

13,303,727

1,776,112 2,812,122 3,835,005

12,085,018 13,153,597 10,331,560

81.6 70.6 75.3 80.3 4.6^^* 9.4** 65.8 68.9 67.4 62.4 59.6 62.5 57.5 72.0

98.8 82.5 96.7 96.6 11.4 84.5 142.7 94.5 92.3 85.7 90.8 96.3 92.1 95.9

tt Includes compensation in the amount of $1,876,326 received from the general fund of Commonwealth Treas ury in lieu of taxes not collected under Act No. 23 of 1961.

tt Property tax collections through 1959-60 were about 60% for San Juan and 40% for Commonwealth purposes; in 1960-61, the division was about equal between the two purposes.

Tax collections in 1951-52 and 1952-53 were abnormal because the reassessment program resulted in delays in

issuance of tax bills and granting of non-penalty periods pending hearings on protests against new valuations, t Taxes settled with these collections amounted to $3,391,771 in 1960-61 and $2,195,472 in 1961-62 since discount of $121,141 and $65,793 respectively were granted for prompt payment in these years.

Overlapping Debt- Mr/rr/i i/. /962 Assessed Valuation, Jan. /, 1962

Net Direct Debt, $1,982,001,740

Commonwealth

San Juan

Per cent of total A. V.

Commonwealth

$178,891,302

904,582,710

San Juan share 45.6% San Juan direct debt

$ 81,574,434 25,948,959

45.69{:

Net Overlapping Debt

$107,523,393

Ratio of net overlapping debt to Assessed Valuation Per capita net overlapping debt

11.9%

$238

Bond Requirements, Next Five Years 1963

1964

1965

1966

$1,387,000

$ 1,467,000

$1,508,000

420,506

793,620

742,497

$1,508,000 689,235

$1,495,000 636,598

$1,807,506

$2,260,620

$2,250,497

$2,197,235

$2,131,598

$

$

3; 160,000 —

$

1962

Oustanding

Principal Interest Total

New Issues (principal) Series A

—

Series B

—

140,000 —

Breakdown of Property Tax Municipal

General Funds*

140.000 —

Rate (Per hundred dollars) SAN JUAN

Rl'o PII DRAS

$ .82

$ .82

.28

.24

1 .10

1.06

1.03

1.03

$2.13

$2.09

Loans

Total Municipal Commonwealth Total

— 180,000

* The tax rate levy of San Juan for general purposes is $1.02, but $.20 is granted as a reduction and is not collected as authorized by Act No. 16. approved May 31, 1960. and the rate for Commonwealth piirpo.ses was raised from $.83 to $1.03. Act No.

2.3. of June 6. 1961 directs the Secretary of the Treasury of Puerto Rico to compen sate the municipality in an amount equivalent to the reductions granted in various amounts on assessed valuations of owner-occupied homes.

sment

ASTRA

aSPERA