City bonds pay for the costs associated with capital improvement projects—such as public safety, transportation and city amenities—the city’s Chief Financial Officer Dawn Lang said. City officials do not yet know how much the bond might be or what it will fund.
“It’s common practice in Arizona, and I think it is an obviously necessary financing tool for capital improvement projects in any municipality,” Lang said. “It’s time for Chandler to take a look at this again. Bonds are an important financing tool because we are financing large expenses, and if we depended on cash reserves we would use up cash very, very quickly. This allows us to fund land acquisition, capital construction, equipment and other items.”
Lang said City Council asked her and her team to find a way to meet the community needs and to keep tax rates at the existing rate.
“When we are looking at funding our capital program, council is very committed to maintaining a low property tax rate,” Lang said. “What is difficult sometimes with citizens and businesses is we can leave a rate unchanged, and there will be other portions that will go up, and its difficult sometimes; they will call the city and ask why the rate is higher, but we had nothing to do with it. The city accounts for a small portion of the property tax bill, but it’s very important for us because the majority of what we do receive pays principal and interest on our bond and helps us maintain capital and add new infrastructure.”
A presentation from the bond election committee is expected to be made to council in February, and council has several months to discuss the improvements requested by the committee.
“There is great enthusiasm and participation from the Chandler residents serving on this committee,” said Boyd Dunn, chair of the citizen bond exploratory committee. “They are excited to be part of Chandler’s history and understand the important impact their recommendation could have on our community.”
City Manager Marsha Reed will oversee as the council directs city staff later in the process.
“We’re working with the citizen bond exploratory committee to evaluate community needs and provide the City Council with a bond package recommendation that will not raise the city’s current property tax rate,” Reed said. According to data from the city, minimal bond authorization remains for public safety and the airport, and no bond authorization remains for IT, water or wastewater. Lang said bond authorization cannot shift between categories. A bond can affect a resident’s property tax bill, Lang said. For every $1 of a typical Chandler property tax bill, 9.8 cents goes to the city, 22.7 cents goes to Maricopa County and special districts, and 67.5 cents goes to public school districts and the community college district, according to documents from the city.
“Bonds are a common financing tool for many communities,” Lang said. “Issuing debt is a very healthy and great way of managing a city’s capital as long as you have good debt management. This isn’t uncommon for any community.”
Lang said the bond had been in the works long before the COVID-19 pandemic gripped the nation.
“We put this all together with the help of a citizens assessment and the update of master plans; that’s how we get a good sense of direction,” Lang said. “For our capital improvement plan, every year 52% is funded with bonds. That’s way before COVID[-19] existed.”