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What is the Phoenix bond program?
Bonds allow the city to pay for major capital investments,
such as new fire stations, libraries, streets, sewers, and
parks. Bonds are sold to investors and the dollars are used
for the capital projects. The bonds are backed by property
tax revenues. As the city collects property taxes each year,
the bonds are paid off and the bond investors get their
investment returned.
Bond financing cannot be used for operation and maintenance
expenditures such as salaries for police officers, firefighters,
librarians and other city employees. Such operating expenses
are paid for by sales tax and state-shared revenues.
Issuing the capital bonds must be approved by a vote of
Phoenix residents at a citywide election.
How often is a bond election held?
Bond elections in Phoenix typically occur every four to
six years. This helps to provide ample planning for approved
projects, but allows for frequent enough balloting for new
programs to meet the rapidly expanding and changing needs
of a fast growing city. Prior to 2006, the last bond election
was held in 2001.
How large can the bond program be?
First, the Phoenix Finance Department analyzes the city's
current and projected property valuations, aligns that with
constitutional limits on public debt, and considers the
importance of maintaining the city's excellent bond ratings.
In addition, the city needs to determine the impact that
new facilities will have on the operating budget.
For instance, many firefighters and librarians will have
to be hired to staff new fire stations and libraries, while
new streets and storm sewers have much less impact on the
city's operating budget.
The Fiscal Capacity and Operations and Maintenance subcommittees
then made recommendations on how much new debt the city
can incur, and how much of that debt can be directed to
projects that will require increased operating fund expenditures.
Will these bonds raise my taxes?
Because bonds approved in previous elections are being
paid off, the Bond Executive Committee was able to recommend
a new bond program that will not raise the property tax
rate.
The program subcommittees considered the capital improvement
requests prepared by the various city departments, and to
hear other citizen requests. They prioritized and ranked
projects and made recommendations to the Bond Executive
Committee, which considered all the subcommittee recommendations
before presenting final recommendations to the City Council.
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