preliminary fy 2011-12 city of glendale, az annual budget book

2012-2021 CAPITAL IMPROVEMENT PLAN
Financing the CIP
The impact of the steep valuation decline on the city’s secondary property tax revenue stream
directly affects the city’s capacity to support debt service on existing GO bonds, as well as the
city’s ability to support additional debt service for new capital projects. The impact and the city’s
plan to address the impact are discussed in the next section.
Capital Plan Implications for Secondary Property Tax Rate
Table 2-3 (below) summarizes annual debt service requirements for existing bonds outstanding.
No new G.O. bond issuances are shown per the previous discussion for Table 2-2. You will see
that the secondary assessed valuation figures reflect the declines discussed previously in this
capital section.
The estimated secondary property tax rate assumes no change from the $1.3699 that will be
adopted for FY 2012. This is in contrast to prior capital plans that assumed a portion of the
primary property tax rate would move to the secondary rate each fiscal year, with the total rate
remaining unchanged. This change in assumption was required because the economic downturn
is having an adverse impact on primary property tax revenue that is used in the operating budget.
Given the city’s financial policy regarding property tax rate stabilization, no changes are
assumed to either the secondary or primary property tax rates.
Table 2-3 also reflects the Build America Bond (BAB) subsidy related to the G. O. bonds sold in
2010 and the DIF Citywide Recreation Facilities Fund (Fund 1480) debt service contributions
related to the Foothills Recreation and Aquatic Center which was funded with proceeds from
2004 G. O. bond sale. The BAB subsidy and DIF debt service contributions directly reduce the
debt service to be covered by secondary property tax revenue and will help address the shortfall
between the annual debt service requirements and secondary property tax revenue. The current
G.O. debt is documented in Schedule 7 of this budget book.
Fiscal
Year
Secondary
Assessed
Valuation
Table 2-3
General Obligation Property Tax Bonds
(All Dollars in Thousands with Exception of Tax Rate)
Estimated
Secondary
Property
Tax Rev. 1
Existing
Debt
Service 2
Less Build
America
Bond (BAB)
Subsidy
Less
Fund 1480
DIF
Contribution
Proposed
Debt
Service
Total
Debt
Service
FY 2012 $1,313,558 $17,994_ $25,337_ ($669)_ ($209)_ $0_ $24,459
FY 2013 $1,124,799 $15,409_ $23,971_ ($659)_ ($209)_ $0_ $23,104
FY 2014 $1,043,983 $14,302_ $22,735_ ($647)_ ($209)_ $0_ $21,878
FY 2015 $1,043,983 $14,302_ $25,773_ ($633)_ ($210)_ $0_ $24,930
FY 2016 $1,096,182 $15,017_ $23,644_ ($618)_ ($211)_ $0_ $22,815
1 Assumes the secondary property tax rate of $1.3699 remains unchanged through FY 2016
2 Existing debt service includes a transfer of $1.4M in FY 2012 for HURF debt service
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