Arizona law requires that bonds that are payable from City property taxes be voter approved. These bonds are commonly called “general obligation bonds.” A general obligation bond is a contract between a bondholder, who, in effect, lends the City money and the City, which pledges to repay it. Repayment is by secondary property taxes levied on all taxable property in the City. Legally, the secondary property tax levy for repayment of the general obligation bonds is unlimited as to rate or amount.

If the bond questions are approved by the voters, the Bonds will be issued and sold periodically. Present and future residents’ property taxes will be used to repay the Bonds over a period of approximately 20 years from their date of issuance, in the same manner that homeowners pay off a home mortgage over time. The Bonds will be issued when funds are needed for a specific project or purpose, in the actual amount needed for such specific project or purpose, but the total amount of Bonds issued may not exceed the amount approved by voters. In this case, $581,500,000 if all the questions are approved by voters. Money received from the issuance and sale of the Bonds may only be used for the purposes specified in the bond questions. Some of the costs may be paid from other City sources.

The total amount of general obligation bonds the City may have outstanding at any one time is limited by the State Constitution. The limit is based on a percentage of the value of all taxable property, within the City. The remaining available, constitutional bond capacity of the City, for all permitted purposes is approximately $776,986,973.

The City collects two types of property taxes. Primary property taxes are generally used to support the maintenance and operation budgets for local governments, such as cities, counties, school districts, and community college districts. Secondary property taxes are generally used to pay for bond issues, budget overrides, and special districts. Each year’s property tax bill has a separate primary and secondary property tax rate for the City as well as most other local governments.

The City collects a secondary property tax to repay City general obligation bonds that were issued to fund police, fire, street, library, park, municipal infrastructure and facility, and storm drain capital projects.

The current City secondary property tax rate is $1.5544 per $100 of net assessed limited property value. That rate is currently repaying the principal and interest on the City’s $271,690,000 outstanding general obligation bonds that are repaid with secondary property tax revenues.

For the current tax year, the City levied a $1.5544 per $100 of net assessed limited property value secondary property tax to repay existing, outstanding bonds.

Per A.R.S. 35-454(A)(1)(g), the tax impact over the term of the new Bonds on an owner-occupied residence valued by the Maricopa County Assessor at $250,000 is estimated to be $258.12 per year for 30 years, or $7,743.60 total cost.

Using the same estimated average annual secondary property tax rate as in the table titled “Estimated Debt Retirement Schedule, Assumed Assessed Valuations and Estimated Tax Rates” the estimated tax impact on an owner-occupied residence valued by the Maricopa County Assessor at $250,000 for each Question is listed below:

Based on current and projected property values and the City’s current plans for issuance of the Bonds, the City’s secondary property tax rate is expected to be $0.8781 per $100 of net assessed limited property valuation for these Bonds. Please note that projected property values and the City’s current plans for issuance of future general obligation bonds are subject to change and that bonds to be authorized by each of the Bond questions would be payable from a property tax without limitation as to rate or amount.

Each ballot item is a separate question. Voters may vote either “yes” or “no” on each question.

The planned projects to be financed with the Bonds are intended to:

Question No. 1 – Enhance Community Safety through Public Safety and Roadway Improvements ($301,000,000)

• Reduce response times and improve service delivery by modernizing public safety infrastructure, including construction, improvement, repair, and renovation of police and fire stations.

• Enhance safety conditions of drivers and pedestrians through construction, improvement, and repair of highways, streets, right of ways, bike paths, bridges, alleys, sidewalks, crosswalks, lighting, and parking lots.

• Improve roadway mobility and reduce congestion for commuters.

• Expand and enhance transportation connectivity options for the disabled community and in areas where access to safe transportation is limited.

• Construct, reconstruct, or improve traffic control systems, devices, facilities, street lighting, street signage and underground utility lines.

• Mitigate the impact of floods and storms through infrastructure improvements, including sewers, detention basins, and flood control projects.

 

Question No. 2 – Improve Quality of Life in Tempe Neighborhoods ($248,500,000)

• Enhance existing parks across the City.

• Construct and renovate playgrounds and recreational facilities.

• Increase accessibility and improve Americans with Disabilities Act (ADA) compliance in publicly owned spaces and facilities.

• Construct, renovate, and improve municipal infrastructure and facilities.

• Acquire and improve technological infrastructure.

• Acquire and preserve historic properties.

 

Question No. 3 – Increase Supply of Affordable Housing ($32,000,000)

• Redevelop City owned housing to create additional affordable rental units.

• Repurpose existing available buildings into rental units.

• Acquire land and enhance properties for development of affordable housing.

If the City’s voters reject one or more questions, the Tempe City Council will not be authorized to issue general obligation bonds to pay for the projects described in any particular ballot question which does not pass, and the projects may remain unfunded and not built or scaled down to reflect available funding.

No. Arizona law requires that the proceeds of the Bonds be used only for projects described in the ballot questions. Those questions were based on a specific list of projects presented to the Mayor and Council on April 25, 2024. The expected bond project list for each question is included in FAQ #8.

Note: If the actual amount expended for a specific project is less than the estimate or a specific project is not completed, the excess bond authorization may be expended, if needed, on other projects within the same question.