Scottsdale residents should know by April whether or not they will be asked to approve hundreds of millions of dollars in bonds to fund capital needs across the city.
Scottsdale took one of the first public steps in that process when city staff presented a list of unfunded capital projects to the City Council’s Capital Improvement Plan Subcommittee in January.
The city has over $700 million worth of unfunded capital projects, ranging from undergrounding utility lines throughout the city to big dollar parking improvements at WestWorld, according to a recent presentation to the panel.
At a Jan. 17 meeting, Vice Mayor Guy Phillips, who chairs the subcommittee, indicated that he preferred a bond package not to exceed $450 million.
The list presented by staff included 148 projects totaling $723.4 million that could potentially be included in a bond election come November.
The unfunded projects cover a wide range of categories, with the bulk falling under community services, transportation and planning and development.
The single most expensive item on the list is $47 million for parking projects at WestWorld.
City Engineer Dave Lipinski said they are needed because much of the space currently used for parking for major events like Barrett-Jackson and the Waste Management Phoenix Open is being displaced as state land in the Crossroads East area is sold off for development.
“This is to create more formalized parking and create additional space to replace loss of parking in that area,” Lipinski said.
The city could also spend $27.3 million to replace aging infrastructure and improve event space at Civic Center Plaza.
The city is also considering several improvements to recreational facilities, including building new swimming pools and buildings at Cactus Aquatic Center, $31.2 million; improving paths in Indian Bend Wash from Thomas Road to Shea Boulevard, $15 million; repairing lakes and irrigation at Vista del Camino Park in the Indian Bend Wash, $23.5 million; and renovations at McCormick Stillman Railroad Park, $4.1 million.
The wash projects primarily deal with maintenance and repair issues that will likely be addressed in the Indian Bend Wash Masterplan the city is currently working on.
It will be up to the subcommittee to recommend the size and scope of the bond program to the entire council, which is responsible for calling a bond election.
Phillips said he wanted to bring the matter before the entire council as quickly as possible.
Councilwoman Suzanne Klapp said the subcommittee would like to see a decision by April. “That would give us time to communicate with voters before a November (election),” Klapp said. “The problem last time was we took it up too late.”
Klapp was referencing the council’s decision not to call a bond election in 2018 after considering a motion on a $350-million bond at its meeting last May 1.
Instead, the council voted 4-3 to put a 0.1 percent sales tax increase before voters to raise the funds necessary to take advantage of Maricopa Association of Government’s Arterial Life Cycle Program matching funds for transportation projects.
Voters approved that tax increase last November.
One reason the council decided against calling a bond last year was the looming likelihood it would fail. Klapp said communication will be key if the council hopes to garner voter support for a bond.
Bond elections have been the subject of razor thin margins in recent years, with voters turning them down more often than not.
In a 2015 special election with six separate bond propositions on the ballot totaling nearly $96 million, only two bonds passed – $12.5 million for street paving and $16.35 million for the fire department.
The other four questions each failed by less than two percentage points.
In a 2013 special election, voters rejected four separate bond proposals totaling just over $212 million, including $43.7 million that would have gone towards public safety.
The current list of unfunded projects includes $76.6 million in projects for the police or fire departments, such as $1.9 million to replace the track at the police and fire training facility and $4.2 million to modernize the facility.
The city also has plans to renovate and expand the Civic Center jail and downtown police facility at a cost of $13.1 million. The list also includes two new fire stations at a cost of $13.6 million and an $18.3-million Fire Department training facility.
The bonds may be presented to voters differently this time around.
Instead of separating bonds by categories like parks or public safety, Phillips said he would like to see the bond structured “to one question for critical infrastructure and multiple questions for amenities.”
Councilwoman Kathy Littlefield agreed with that route.
“I like the idea of ‘what is really critical?’ and put that in first and then maybe have (questions) on what are nice amenities that our citizens could enjoy if they want to pay for them on a separate question… so they can have a choice,” she said.
If the city decides to move forward with a $450-million bond, estimates showed resident homeowners over time would not pay more in property tax than they currently pay, City Treasurer Jeff Nichols said, citing a chart prepared by staff based on a $300,000 home.
The chart showed that the city’s current property tax levy on existing debt for a $300,000 home is just under $180 annually and would remain in the $160-$180 range over the next 10 years to service new debt from a $450-million bond.
A $450-million bond would give the city enough money to cover approximately 60 percent of the unfunded projects compiled by city staff.
Both committee members and staff indicated they would like to remove transportation projects from consideration for this bond, though the city still has some transportation projects without an identified funding source.
Scottsdale spokesperson Erin Walsh said the councilmembers felt the city had already made an investment in transportation via the new tax and would like to allocate potential bond funds elsewhere.
“It would be staff’s recommendation that we let this program play out, and we possibly entertain not including transportation in a bond 2019 program to see how far the (0.1 percent tax) can take us,” Lipinski said. Phillips, Klapp and Littlefield all agreed.
Transportation projects accounted for $188.7 million of the projects presented by staff.
If the subcommittee chooses not to include transportation projects, that would leave 109 projects at a cost of $534.7 million to consider.
The subcommittee plans to make its recommendation at its next meeting on Thursday, Jan. 31.