What are GO Bonds?
General Obligation (GO) bonds are one way cities fund large, long-term infrastructure and community projects, with voters making the final decision through a bond election. A General Obligation Bond Program addresses projects that are difficult to fund within existing annual operating budgets or pay-as-you-go capital resources. They’re often used for projects that cost more than a city can pay for all at once, similar to how a home loan spreads out the cost over time. The most recent bond elections were held in 2021 for Economic Development and in 2001 for Public Safety, Storm Drainage, and Streets.
Why issue bonds to pay for City projects rather than pay cash?
Issuing bonds allows the city to fund large, long-term infrastructure and community projects more quickly than using existing annual operating budgets or pay-as-you-go capital resources. The property tax rate is composed of two parts: the Maintenance and Operations rate (M&O) and the Debt Service rate. The Debt Service rate provides the revenue necessary to make payments on tax-supported debt, such as bonds.
Bonds are similar to a home mortgage that is repaid over time, while M&O expenses are like the daily household expenditures that are paid immediately, such as groceries. Because many major city projects are designed to last for many years, the cost is often spread over time, so it can be shared by both current and future residents who use those projects.
How were the projects chosen:
The projects are proposed by City staff based on a variety of factors, including the conditions and needs of roads, technology, emergency response, population growth, and community input.
How will the bonds be repaid?
Bonds would be repaid through the debt service portion of the City’s property tax revenues. The total amount will be repaid with an estimated maximum 3.90 cents** (per $100 of assessed value) property tax increase. Each project will have an individual tax rate, as debt is issued for each project. The City currently plans to issue the debt over a 10-year period. The City Council will vote to increase or maintain the tax rate each year based on the revenue needed to cover bonds issued that year. While bonds may be financed over a 40-year period, they are generally issued based on a 20-year amortization schedule (meaning they are repaid over 20 years) and are only issued to fund approved bond projects.
What happens if the bonds are approved/not approved?
If approved, the City can issue bonds for the projects, and in the amounts, listed under approved propositions. Bonds would be issued over time as projects are being designed and built (not all at once). If not approved, the City would continue financing capital projects based on available funds.
Is this one vote or multiple votes?
The ballot will list three separate propositions. Voters can vote on each proposition individually.
Are all projects guaranteed to happen exactly as listed?
Although bonds can only be issued in the amounts and for the purposes listed in each bond proposition, project costs, timing, and sequencing can change based on engineering needs, bid pricing, and other factors. Any changes will be posted publicly.
Will this increase my property taxes?
A bond program can affect the debt portion of the property tax rate. The estimated tax impact depends on the number of bonds issued, timing, interest rates at the time of issuance, property values, and existing city debt schedules. The bond issuance will not directly affect the M&O (maintenance and operating) portion of the property rate, but could increase the debt portion of the property tax rate.
If approved, how will the public be kept updated on project status?
The city will keep the public informed of project updates via this webpage.