General Obligation Bond Committee Meeting 3-10-09 - City of Surprise

General Obligation Bond Committee Meeting
Villanueva Gym
15660 N. Hollyhock St, Surprise, AZ 85374
March 10, 2009
MINUTES OF THE MEETING – Draft Revised 3/18/09
Members present:
Patricia Alesh Nancy Collins
Don Duncan Cliff Elkins
Tim Herdrich Ken Johanson
Harvey Noteboom Lou Provenzano
Bill Pupo Ken Smythe
Scott Vejrostek Rachel Villanueva
Members absent:
Norm Davis Dan Morris
Council Members present:
Richard Alton Roy Villanueva
Skip Hall
Staff present:
Diane Arthur Robert Nilles
Jared Askelson Randy Oliver
Ken Lynch Doug Sandstrom
Kim Davies
I. ROLL CALL/CONVENE
Chairman Elkins called the meeting to order at 6:35 p.m. at the Villanueva Gym,
Surprise, Arizona on Tuesday, March 10, 2009.
II. APPROVAL OF MINUTES
Chairman Elkins called for approval of the February 25, 2009 minutes. Motion
and second to approve. Motion carried.
III. PRESENTATION BY CITY STAFF - OVERVIEW
Mr. Elkins expressed his deep appreciation for the citizen response and input.
He also thanked the bond committee members for their commitment and
dedication to the bond committee. Mr. Elkins acknowledged the presence of

Council members Alton, Hall, and Villanueva. Mr. Elkins provided a brief
background of the committee’s meetings to date. He stated there is no
predisposition by the committee to any of the projects. The bond committee is
here tonight to hear resident input. The public input will be a considerable
portion of what the committee weighs as they consider recommendations. Such
as projects citizens think the committee should or should not be considering.
The bond committee received the five-year Capital Improvement Program (CIP)
as an informational item from staff as to what the committee might wish to
consider funding via the general obligation bond route. The CIP is available as a
handout at all of the public meetings and includes elements of the Parks/Trails
Master Plan, the Integrated Water Master Plan, the Transportation Plan, the Fire
Master Plan and the General Plan.
Mr. Elkins indicated it is critical that residents understand that the committee is
under no obligation to recommend any portion of the CIP for bond funding and
that other means besides bond funding are available to fund the CIP. Bond
committees usually hear of possibilities that far exceed what bond capacity may
be available and this committee must work through all these options in finding its
way to its recommendations. The purpose of the four public input sessions is to
hear from the residents as to what they think. Mr. Elkins stated the committee is
fully mindful of the current economic climate as well as the future needs of the
city.
Ken Lynch, Communications Director, provided a brief overview of the format for
the evening indicating there would be a three minute limit on public comments
and asked that citizens approach the microphone and state their name for the
record. Mr. Lynch introduced Jared Askelson, Budget Manager, who discussed
tonight’s agenda and provided a brief overview of the citizen bond committee’s
mission. The committee is tasked with three basic goals: it will make an
advisory recommendation to the Mayor and Council on projects, priorities and a
bonding issue; it provides a line of communication with the residents of the city
regarding the CIP and a bond issue; and it ensures public input is heard and
considered.
In addition to tonight’s public meeting, one additional public meeting is planned
for:
March 24 at the Willow Canyon High School Cafeteria, 6:30 p.m.
Mr. Askelson provided a financial overview of the city, explaining the difference
between ongoing and one-time revenues and provided an explanation of the
different sources of one-time revenue (single family residential permits,
commercial, office and multi-family permits and capital improvement plan
revenue). Mr. Askelson pointed out that the one-time revenue projected for
FY 2010 to FY 2014 is one-third the amount available during FY 2004 through
FY 2008.

Mr. Askelson stated there are two ways for a municipality to borrow: (1) use the
existing operating funds for payment; and (2) create a new funding stream for
payment. He indicated that general obligation bonds do require voter approval
and that the debt payments are funded by secondary property taxes. The debt
capacity of general obligation bonds is limited by state law. Mr. Askelson
explained what the additional property tax would amount to on a property with an
assessed value of $200,000 at a six percent interest rate over a 30 year term.
Mr. Askelson indicated the city was recently notified that its secondary assessed
valuation for 2009 will decrease, decreasing the city’s bond capacity by
$30 million.
Mr. Askelson indicated that general obligation bonds are backed by a community
pledge to use property tax revenues to repay bond holders and reiterated that a
public vote is necessary to set an amount that can be borrowed. He stated
investors consider municipal bonds to be safe and reliable because of the
community’s pledge and because it is tied to property tax revenue. Municipal
bonds usually get the strongest credit rating and the city can borrow money at a
lower interest rate.
Mr. Askelson indicated the city does not borrow the money all at once. The
timing of the borrowing is impacted by the timing of the projects, market
conditions which affect the construction market (varies the price of a project) and
the bond market (causes the cost of borrowing to fluctuate) and operational costs
(ongoing revenue is needed to support operational costs). The desired tax rate
can change the timing of borrowing as well.
Mr. Lynch stated that tonight the committee is looking for citizen input on the
concept of a bond issue. The projects were generally divided into five
categories: Transportation, Economic Development, Recreation, Public Safety,
and Infrastructure. He stated the CIP projects were provided as a means of
orienting the committee to show where the city is at in its planning. The
committee is not obligated to recommend any portion of the various proposals for
funding. Mr. Lynch stated bond committees usually hear plans or ideas totaling
more than capacity and the committee must work through various options in
formulating a recommendation. He stated Master Plans and Capital
Improvement Plans do not require bond funding but that bonds are an often-used
option but are not the only choice. Not all projects in Master Plans are ultimately
built.
Mr. Lynch reminded everyone the Committee is not under any obligation to
recommend any portion of what it has seen so far. They have to work through
the various options heard and formulate a recommendation. The CIP
components were presented as a way to orient the committee and those present
to types of projects for potential funding – not all projects in master plans are
ultimately built.

Mr. Lynch provided an overview of the five project categories: (1) Transportation
($159,761,800) includes arterial road improvements (north/south connectivity,
right-hand turn lanes, scalloped streets) and drainage, lighting and landscaping
improvements around the city; (2) Economic Development ($34,500,000)
includes potential purchase of land as possible incentives for new businesses
and infrastructure; (3) Parks and Recreation ($96,958,100) includes community
parks, libraries, Surprise Farms Park improvements, trails/open space and
recreation centers; (4) Public Safety ($34,592,000) includes radio equipment for
Fire and Police, future fire stations, police substation, and training facilities; and
(5) Infrastructure ($104,507,500) includes water reclamation facilities, a surface
water treatment plant, public works yards, recharge wells and water/sewer and
reclaimed lines.
Mr. Lynch requested comments on any category area of interest and that the
public think projects rather than people (bond money is not utilized to hire
personnel). He indicated comment cards are available for written comments and
will become part of the official record. Mr. Lynch reminded everyone of the city’s
web site for community input on the bond issue (www.surpriseaz.com/bondsite).
The web site affords an opportunity to select individual categories, see other
people’s comments and react to those comments. There is also a video about
bonds for informational purposes on the web site. The web site is not meant to
be anything but an opportunity to provide input on where the city should be
going.
Randy Oliver, City Manager, indicated that the city was upgraded on some
existing bonds from AA- to AA last week. Mr. Oliver stated this shows the
strength and commitment of the city’s management team and Council on
decisions that have to be made even in critical economic times. Mr. Oliver
indicated he expects the GO bonds to be rated as an AA category; they could be
rated higher, but it is more likely to be an AA rating. Mr. Oliver related how the
city has made changes to adjust to the current economic conditions including
right-sizing departments that have been most affected by the decrease in
residential and commercial permits. He expressed concern that when the market
does start to turn around, that there may be an inflationary environment. This
may cause the cost of the bonds to rise.
Mr. Oliver stated that there are two projects in the Federal Stimulus Plan that
should have an effect on Surprise residents. They are the widening of Grand
Avenue from 83 rd Avenue to the Loop 303 (estimated $56 million) and the
widening of I10 from Dysart Road west. The biggest challenge will be to have the
Grand Avenue project under contract not later than June 30, 2009. This funding
does not include an overpass at Bell Road. The City would need to determine
improvements and infrastructure requirements such as landscaping and irrigation
before construction. Mr. Oliver stated he receives a lot of questions regarding
scalloped streets. Developers are required to pay for two lane roads. The city

does have a repayment ordinance that states if a developer develops within ten
years, the city receives reimbursement for street improvements. Mr. Oliver
indicated the city wants development to pay for itself, either through repayment
ordinances, requiring that infrastructure be provided by the developer, or through
development impact fees. Mr. Oliver stated that because Maricopa County is not
in agreement about the proposed aerial tramway in the White Tanks, that project
is off the list. He is considering a venue at or near the tennis center to seat 2500-
5000 patrons. Mr. Coronado of the Community and Recreation Services
Department is researching the feasibility of such a venue. It could include a
retractable screening device.
Mr. Oliver spoke of the Loop 303 which will be funded with state money. The City
has a commitment from the state to proceed North to South on construction
which will commence December 2010 and be completed by December 2011.
This does not include the bridges at Bell Road.
IV. PUBLIC COMMENTS
Johnny Montoya:
Mr. Montoya asked: in regards to the Property Valuation Assessment, would a
$400K home be assessed higher than a $200K home? He also asked if this
General Bond request is consistent with the 2001/2002 General Plan?
Mr. Askelson responded that a $400K home would indeed be twice the amount
of a $200K home. Mr. Elkins responded that the General Plan is being followed.
Billy:
Mr. Billy stated he thinks there is pork in this program. He stated that Public
Safety should be the #1 priority and there should be more money dedicated to
the Fire Dept. and the Police Dept. He reiterated that we need more protection.
Martha Bails:
Ms. Bails suggested the Project Categories list be added to the City of Surprise
website. She said she would like residents who can’t attend these meetings have
the opportunity to see the projects listed. She also stated that when a new City
service is added/built, an additional maintenance cost is added to the City’s
annual budget which cannot be funded by funds from the bond. Ms. Bails also
asked what our current primary and secondary property tax is. Ms. Bails also
stated her real concern is the $25 million allocated to economic development.
She asked what the land is intended for and where is it? She as a resident would
not vote for something that does not explain what the money is intended for.
Parks and Recreation could be removed because if you add a park, you will need
to use general fund money to support the park. Transportation – she is
concerned about the current issues the City faces. She stated the City could
better help residents understand the true impact. Ms. Bails also stated the
residents could be paying for this bond for 30-40 years.

Ralph Richardson:
Mr. Richardson asked if the Fire Dept. labor/management committee was able to
report to council their needs. He stated he does not believe the City needs a $27
million park. He stated we need more fire stations.
Mr. Sandstrom stated that the Fire Dept. did not present to this committee. He
also stated that fire stations are built in conjunction with growth.
Rebecca Villarreal:
Ms. Villarreal stated she is a school teacher and would like to see the Hollyhock
Library expanded/updated. She stated she would like to see more resources for
the children. She would like the same resources as the NW Regional Library.
Paul Martin:
Mr. Martin asked why some of the items do not have $ amounts listed. He stated
that Fire and Police are important. He too agrees there is too much openendedness
in regards to the land for economic development. He disagrees with
the City’s tram project at the White Tanks. He believes it will be a negative
impact. He asked who would pay to staff the project and he would not vote for
the bond if this project is included.
Mr. Oliver stated the tram project is not being included. The county is not
supportive of the effort. He also stated if the City of Surprise wants to create a
name in the valley, it is his opinion that we need to create uniqueness or
something different from other cities.
Pat Cesaro:
Ms. Cesaro stated she is against the bond, that this is not the time to ask
residents for more money. She too believes there are pork projects. She agrees
we need more fire and police. She stated we are in a bad economy and this is
not the time to add $400 more per year in taxes.
Ralph Richardson:
Mr. Richardson would like the $9.5 million for the tram project reallocated to
public safety.
Mr. Askelson stated the projects listed are in the 10 year plan. The projects
without $ amounts are outside of the 5 year plan.
Mr. Lynch stated he wanted to remind everyone the committee is just listening
now and has not made any recommendations to the City Council. The City
Council will place on the ballot or not. Ultimately the voters will make the final
decision.
Mr. Oliver stated the city is working with several companies who want to relocate
here and employee residents who then do not have to commute outside of the
City. Nothing is solidified yet.

Rebecca Villarreal:
Ms. Villarreal stated her concern is for the children, primarily in the OTS. She
would like to know what percentage of funds for Parks and Recreation will be
allocated to the OTS.
Mr. Sandstrom stated the only current project in the OTS is the Lizard Run
Recreational Complex.
Ms. Villarreal stated the children in the OTS tend to be forgotten and that is her
concern.
Johnny Montoya:
Mr. Montoya would like to see fiber optics in the OTS. He stated it is hard to
obtain internet access in some places.
Rachel Villanueva:
Ms. Villanueva stated that Mr. Oliver said that Grand Avenue is the ugliest road.
She understands it will be upgraded and would like to see the trench covered
and new landscaping. Ms. Villanueva suggested possibly applying for some grant
$ for this project. She too agrees safety is a priority. She stated we have
thousands of teens in our city and we need things to keep them busy in our City.
Mike Woodard:
Mr. Woodard stated his priority is transportation. He is in favor of the $ going to
transportation. He inquired as to where SPA 1 is located.
Mr. Askelson replied that Special Planning Area 1 is generally south of Grand
Ave. to the Beardsley Canal.
Jackie Ortiz:
Stated there are no parks on the south side of the OTS nor is there any
transportation to get to the other parks in the City. She would also like to see
speed humps on some of the more heavily traveled streets.
Martha Bails:
Ms. Bails stated for the committee members that the OTS has more park space
per capita than any other area in the City of Surprise.
Paul Martin:
Mr. Martin stated transportation is a big issue and that the appearance of Grand
Ave. does need to be upgraded. He also stated that the builder donated a dirt lot
to the homeowners in his neighborhood and they are developing it themselves
without any funds from the City.
Mr. Oliver stated he anticipates the Mayor and Council looking at design
improvements to Grand Ave. in about 4-6 weeks.
Rachel Villanueva:
Ms. Villanueva stated that the OTS has no HOA and that the 3 parks in the OTS
are 50 years old. She believes a little upgrading won’t hurt.

Arlene Larimer:
Ms. Larimer stated people are facing possible job loss at this time. She stated
that growing families are aware of the everyday increased costs. Sometime we
need to step away from the trend. If there is a revenue shortage, we need to be
realistic, take care of basic needs such as transportation. She asked is this
committee would be willing to recommend to council not to bring this bond
forward?
Mr. Elkins assured the audience that the committee is listening to every comment
from the residents. They will assess all information provided to them and will act
responsibly.
Dick Briette:
Mr. Briette asked if there would be liability to the City for low-water crossings.
Mr. Elkins responded that there are many low-water crossings in the state of AZ.
With engineer’s technical advice, there will not be an issue.
No further comments from the public in attendance.
Mr. Elkins thanked all for coming and giving their comments.
V. ADJOURNMENT
MOTION: Mr. Elkins called for a motion to adjourn. Motion and second.
All approved. Meeting was adjourned at 7:45 pm.
Submitted by:
_______________________________
Kim Davies,
Office of the Mayor & City Council
__________________________________
Cliff Elkins, Committee Chairman