In November, the city of Glendale will ask voters to approve four bonds for more than $180 million.
If approved, the bonds could raise property taxes—though the exact amount is to be determined.
Assistant City Manager Vicki Rios and the Budget and Finance Director Lisette Camacho gave a Sept. 17 presentation during a virtual meeting of the Community Development Advisory Committee on four bond questions that will be on the ballot.
If all four of the bond questions are approved, $187.9 million in new bond financing will become available for various infrastructure improvements as part of the city’s 10-year capital improvement plan.
Rios prefaced her presentation by stating their goal of educating the public and, in this case, the Community Development Advisory Committee on what is going to be on the ballot this November and what it means.
“Part of what we’ve been doing is kind of a public outreach campaign, and we decided early on we were going to go to where there were some people instead of expecting people to come to us,” Rios said.
The projects associated with the proposed bonds focus on four areas: park improvement, street reconstruction, the expansion of the Glendale landfill and storm drain improvements. Camacho gave a presentation on some of the specifics of these projects.
There is $87.2 million in bond financing proposed to be added for various improvements to parks around Glendale. These would include projects such as updated playgrounds, updated restrooms and a splash pad at O’Neil park, among others.
Another $81.5 million is proposed to be added for street construction and reconstruction. This reconstruction would entail taking certain sections of high traffic streets in Glendale down to the “dirt level,” giving them a new lifespan of approximately 30 years. According to one of the video Camacho showed as part of her presentation, one of the goals of the project is to reconstruct three miles of road every year for 10 years.
Landfill expansion and flood control projects would take up another $9.9 million and $9.3 million, respectively, of the proposed additions.
There is currently $65 million in bond financing approved for the projects in these four areas, but that amount doesn’t cover the total $255.4 million cost of all the proposed projects in Camacho’s presentation.
That’s where the proposed bonds come in. Rios gave a presentation that explained the financial details of the proposed bonds.
In general, the process begins when the city sells a bond to a private investor in return for cash to be used on projects. The city then pays the investors back with interest over a period of 20 to 25 years.
According to Rios, the proposed bonds are general obligation bonds, meaning that they are “paid for with revenue generated by secondary property taxes.” Currently, this secondary property tax levy is flat. This means, according to her, that though an individual homeowner’s tax may change depending on the value of the property, the total amount of revenue that is collected by the city stays the same overall, only growing with new construction.
This applies to all of the proposed bond questions except those to be used for the expansion of the Glendale landfill, which would be paid for by landfill customers, according to the city of Glendale’s website.
Considering that the rest of the bonds would be paid for through property taxes, Rios addressed the possible impact on property taxes if all four questions are approved. She said this depends on the interest rate that the city pays investors.
This rate is determined by the bond market, though, so the exact rate that the city will pay investors is unknown. However, Rios did point out that “bond market rates are at historic lows, and in some cases, they’re as low as 1%.”
Rios went through some projections with different interest rates.
Under the assumption of a 5% interest rate (a conservative number, according to Rios), the annual tax impact on a residence valued at $250,000 would be $172.44 if all four questions pass.
However, she also walked through a model that would allow the city to add these proposed bonds without increasing taxes on residents.
“Assuming you have a 3.5% interest rate on the bonds, and the older debt is paid off, and you have this slight growth in the tax levy as new properties are being added, the city could issue these new voter authorized bonds within the same tax levy as the old bonds,” Rios said.
As stated earlier, though, the eventual interest rate that these bonds would be sold at is still unknown, and wouldn’t be known unless the bonds are approved and then sold to investors.
There are several public meetings scheduled to continue informing the public of the bonds and of the details associated with them.
The next meeting is scheduled at 6 p.m., Friday, Sept. 25, at Heroes Regional Park Library, 6075 N. 83rd Avenue.