Attachment C - Fiscal Capacity Committee Minutes and Materials.pdf

City of Phoenix 
Fiscal Capacity Committee 
Summary Minutes 
Monday, Jan. 24, 2022 
Virtual Meeting – Via WebEx 
Committee Members Present 
Committee Members Absent 
Dave Krietor, Chair 
Ron Butler  
Deb Fisher 
 
Hope Levin 
MaryAnn Guerra 
1. CALL TO ORDER
Chairman Krietor called the Fiscal Capacity Committee to order at 11:05 a.m. with
committee members Ron Butler, Deb Fisher, Hope Levin and MaryAnn Guerra
present.
2. INTRODUCTORY REMARKS
Chairman Krietor welcomed committee members and staff and invited them to begin
with introductions. He explained the committee’s charge and history, and he
expressed appreciation to members for returning to reconvene the committee for a
potential 2023 bond issue.
Chairman Krietor discussed the planned schedule of meetings for the group to arrive
at a recommendation. He mentioned the fourth meeting on Feb. 15 had been
scheduled but may not be needed. He further explained the schedule would provide
staff time to review the recommendation with City Council and move to the next
stage of the potential bond issue.
3. REVIEW AND APPROVAL OF THE JANUARY 17, 2020 MEETING MINUTES
Committee member Ron Butler made a motion to approve the minutes of the Jan.
17, 2020 meeting. Committee member Deb Fisher seconded the motion, which
passed unanimously, 5-0.
4. STAFF UPDATE REGARDING POTENTIAL GENERAL OBLIGATION BOND
PROGRAM
Chairman Krietor introduced the item and City Manager Jeffrey Barton, Budget and
Research Director Amber Williamson, and Chief Financial Officer Kathleen Gitkin to
provide a staff update on the potential general obligation (GO) bond program.
Mr. Barton thanked the committee for their participation and discussed the impacts 
of the COVID-19 pandemic on the potential bond program, which previously focused 
exclusively on public safety. He highlighted the replacement of Police Headquarters 
as an example of a project previously considered for the bond program, explaining 
ATTACHMENT C

the city had since acquired 100 West Washington, formerly the Wells Fargo building, 
to house Police and other city operations. He stated this acquisition would provide 
greater flexibility within the proposed bond program.  
 
Mr. Barton emphasized the importance of setting up a process to have a bond 
program every five to seven years, focused on maintenance and no new ongoing 
costs, with virtually no increase to secondary property tax. He explained that, if 
successful, the plan would lay the groundwork for four bond programs over the next 
20 years and set the city up for success moving ahead. 
 
Chairman Krietor recalled bond issuances in 1987, 2000, and 2006, with no other 
bond issuances since that time.   
 
Ms. Williamson provided an overview of the city’s current financial health, particularly 
considering the COVID-19 pandemic. She stated the impact of the pandemic on 
revenues was initially unclear, but that the city has done well financially. She shared 
that staff was preparing a general fund status and five-year forecast to present to the 
City Council which would demonstrate potential scenarios about the city’s fund 
balance over the next few years.  
 
Ms. Williamson stressed the importance of focusing on projects that would not result 
in net new increases in operating expenses, as existing city infrastructure and assets 
could be expanded, replaced, or renovated. She stated she would provide more 
detailed information during forthcoming meetings, including challenges the general 
fund would face.   
 
Ms. Gitkin gave an overview of financial modeling and key metrics that would be 
presented at forthcoming meetings. She explained the city had contained 
expenditures remarkably well through the pandemic and acknowledged that the city 
measured higher revenues than in the past, beyond receiving significant resources 
from the federal government. 
 
Ms. Gitkin emphasized the importance of thoughtful and methodical planning, as 
well as relying on experts from Piper Jaffray to obtain exact market numbers for 
financial modeling. She stated she would hire a financial advisor if the bond program 
moved forward, to validate the information that would be presented. 
 
Chairman Krietor discussed the tentative schedule for the potential bond program 
process, explaining that the next meeting would be devoted to reviewing models and 
figures. He stated the current meeting’s agenda would focus on a tutorial of how the 
property tax works in Phoenix and the technical mechanisms for it.

5. COMMITTEE TITLE 
Chairman Krietor introduced the item and explained that it would be necessary to 
change the name of the committee since it would no longer focused exclusively on 
public safety projects. He asked Deputy Budget and Research Director Chris Fazio 
to confirm the new proposed name for the committee.  
 
Mr. Fazio stated the proposed name was Fiscal Capacity Committee. 
 
Committee member Hope Levin made a motion to approve the committee name 
change. Committee member Ron Butler seconded the motion, which passed 
unanimously, 5-0.  
 
6. PROPERTY TAX OVERVIEW 
Chairman Krietor introduced Deputy Budget and Research Director Christopher 
Fazio to provide an overview of property tax, specifically in Phoenix. 
 
Mr. Fazio explained general obligation bonds were backed by secondary property 
tax and reiterated the goal of the proposed bond program to proceed without raising 
tax rates above current levels.  
 
Mr. Fazio defined property tax, net assessed value, secondary net assessed value, 
limited property value and full cash market value. He explained implications of 
Proposition 117, distinguished the property tax levy from the property tax rate, and 
provided the formula used to calculate municipal property tax levies. He identified 
changes to Phoenix’s full cash value compared to two years earlier. 
 
Chairman Krietor mentioned the calculation of net assessed value was particularly 
relevant now because of significant appreciation seen in the market.  
 
Mr. Fazio identified changes to Phoenix’s full cash value, primary tax levy, and 
secondary rate and levy, compared to two years earlier. He stated the primary rate 
remained $1.3055. 
 
Chairman Krietor asked what years the new tax levies represented in terms of actual 
assessed valuation. 
 
Mr. Fazio stated the primary levy of $193 million was indexed approximately 12 
months earlier and there would be some predictability moving forward because the 
market was doing well. 
 
Mr. Fazio discussed the functions of the primary property tax as a general fund 
source and secondary property tax as supporting debt service for general obligation

bonds. He briefly discussed the city’s current secondary property tax reserve, which 
would be discussed in detail during the Jan. 31 meeting. 
 
Chairman Krietor clarified that the committee’s recommendations could not rely 
heavily on the existing reserve, which has preserved the city’s financial position in 
rough times, as the state would be limiting the amount that could fund the reserve.  
 
Mr. Fazio stated there would be less need for the reserve from a modeling 
standpoint. He explained forecasting could be hindered by legislative action absent 
major catastrophic situations that impact property values, due to the change with 
Proposition 117.  
 
Mr. Fazio gave an overview of a sample property tax bill and emphasized that the 
city represented only one piece of the total bill. He presented the results of a study 
benchmarking Phoenix’s tax rates against other cities in the region, which showed 
the $2.12 combined primary and secondary rate exceeded only by Tempe. He 
explained the secondary tax rate alone was one of the lowest and the city share of 
median single-family residential was below average.  
 
Chairman Krietor clarified the recommendation would focus on maintaining the 
existing tax rate, but people may have to pay more taxes because assessed 
valuations are increasing.  
 
Mr. Fazio confirmed. 
 
Committee member Maryann Guerra asked if a scenario would be presented that 
assumed a market crash and decrease in property values. 
 
Mr. Fazio stated this presentation focused on the baseline scenario, based on what 
will most likely occur. He added Ms. Gitkin would discuss scenarios to look at 
contingencies and explained a downturn or housing bubble over the long term would 
tend to be smoothed out.  
 
Chairman Krietor agreed that this is a question the committee would need to 
understand to make their recommendation and acknowledged that a smaller bond 
issue would attempt to mitigate the impacts of a downturn. 
 
Mr. Fazio gave an overview of the baseline assumptions for the assessed valuation 
forecast and discussed what had been presented two years earlier and adjustments 
since then. He presented the staff net assessed valuation model reflecting long-term 
growth and indicated stress scenarios would be discussed at the Jan. 31 meeting.

Chairman Krietor clarified the modeled growth did not only reflect what had been 
built and was appreciating, but also assumed new construction over time.  
 
Mr. Fazio confirmed the model accounted for new construction, appreciation, and 
new inventory each year. He mentioned one of the stress scenarios considered a 
bubble in new construction activity.  
 
Chairman Krietor asked if massive commercial projects such as the Taiwan 
Semiconductor Manufacturing Company development, with tax abatements, would 
be factored into the calculations. 
 
Mr. Fazio stated the project would not be captured in fiscal year 2022, but it had 
been factored into long-term new construction figures.  
 
Mr. Fazio explained the statutorily required informational pamphlet accompanying a 
general obligation bond election must ensure five-year appreciation would not 
exceed the 10-year average.  
 
Committee member Hope Levin asked if the pamphlet could be updated to reflect 
changes in growth, since the vision of the program would be smaller, more frequent 
bond sales. 
 
Mr. Fazio stated each bond election would include its own assessment and 
assumptions. 
 
Ms. Gitkin confirmed the four proposed bond programs would each have unique 
pamphlets to reflect new financial impacts.  
 
Committee member Levin recalled a recent Madison School District bond override 
and referred to the sample tax bill, which showed the city as only one part of the total 
bill. She asked if there was historic knowledge of how appealing a municipal bond 
program would be to voters when they have other bond proposals presented to 
them.   
 
Mr. Fazio stated there was no current data on other jurisdictions’ bond elections 
presented to voters concurrently with a municipal bond election.   
 
Chairman Krietor mentioned there had not been a failed bond issue in the time he 
has lived in Phoenix, aside from a transit sales tax bond issue.  
 
Committee member Ron Butler expressed support for the effort and appreciation for 
the property tax tutorial to get back up to speed. He stated he would be interested to 
see how inflation may impact the timing of the bond issuance.

Ms. Gitkin stated the presentation for the following week would show modeling and 
assumptions based on 5% interest rate loans to account for unpredictability. She 
explained there had been historically low rates and inflation is taking time to catch up 
to the market, particularly with municipal bonds.  
 
Committee member Guerra asked for clarification on the Madison School District 
and its effect on the Phoenix bond election.  
 
Mr. Fazio clarified that on a property-by-property basis, there could be various 
school districts involved, each with their own bond elections or overrides. He 
confirmed those would be in addition to a Phoenix GO bond election.   
 
Chairman Krietor thanked Mr. Fazio for his presentation and stressed the 
importance of the committee’s knowledge of commercial and residential growth, and 
forthcoming models and forecasting from staff, to arrive at a final recommendation.  
 
7. FUTURE AGENDA ITEMS 
Chairman Krietor discussed the items currently planned for the next meeting: 
• Summary of Outstanding GO Bond Debt Service 
• Constraints and Considerations for a New GO Bond Program 
• New GO Bond Program Scenario Assumptions 
• New GO Bond Program Scenarios 
Chairman Krietor asked if there were other items the committee would like to 
include. Committee members had no additions. 
 
8. ADJOURNMENT 
Chairman Krietor adjourned the meeting at 12:10 p.m.

Public Safety Bond
Fiscal Capacity Committee
January 24, 2022
Agenda
1. Introductory Remarks
2. Approval of Minutes
3. Staff Update
4. Committee Title
5. Property Tax Overview

Planned Meetings
Meeting Schedule (11 am):
Monday, January 24
Monday, January 31
Monday, February 7
Tuesday, February 15
Tentative Schedule
JAN/FEB 2022 – Fiscal Capacity Committee
MAR 2022 – Fiscal Capacity Report to Council
APR 2022 – Community Budget Hearings
MAY 2022 – Council Appoint Bond Committee
AUG 2022 – Start Bond Committee Work
DEC 2022 – Bond Committee Recommendations
NOV 2023 – Election

Property Tax
Property Tax
Ad Valorem tax on real & personal property
Property valued by County Assessor & DOR
Primary & secondary rates established
Assessed and collected by County Treasurer
Distributed to taxing jurisdictions

Formula
Property Tax Levy =
Net Assessed Value/100
x
Tax Rate
City assumes 1% of its levy is uncollected
Secondary NAV
Historically calculated off of market value
November 2012: Proposition 117
Now calculated off of limited property value
Change first reflected in FY 2016

NAV = LPV x Ratio
Limited Property Value =
lesser of Full Cash (Market) Value or
Prior Year Limited Property Value + 5%
Phoenix’s current FCV > LPV by 38% 47%
NAV = LPV x Ratio
Established by State Statute
Residential: 10%
Commercial: 18% => 16%
Agricultural/Vacant: 16%
City assumes no change to these ratios
Legislation reducing commercial to 16%

Levy = NAV x Rate
Established by taxing jurisdictions
Governed by legal limits
City of Phoenix Tax
Primary Rate: $1.3055
Primary Levy: $173 million $193 million
Secondary Rate: $0.8241 $0.8141
Secondary Levy: $109 million $120 million

Primary Property Tax
General Fund source
Ceilings:
Constitutional 2% Levy Limit
City Charter $1.00 plus Library Levy
Current Rate: $1.3055
Current Constitutional Limit: $1.3447 $1.3061
Secondary Property Tax
Debt service for general obligation bonds
Ceilings (2017 HB 2011):
Annual debt service costs
Reserve <= 10% by end of FY 2023

Sample Tax Bill
+8%
+5%
Sample Tax Bill

Sample Tax Bill
Sample Tax Bill
City Portion (this taxpayer):
($154 + $96)/($1,187) = 21%
City Portion (average for all taxpayers):
16%

FY 2022 Tax Rates
Primary
Secondary
Combined
Tempe
0.8852
1.4816
2.3668
Phoenix
1.3055
0.8141
2.1196
Glendale
0.3848
1.3409
1.7257
Mesa
-
1.1319
1.1319
Chandler
0.2426
0.8700
1.1126
Scottsdale
0.5039
0.5042
1.0081
Gilbert
-
0.9895
0.9895
FY 2022 Tax Rates
Primary
Secondary
Combined
Tempe
0.8852
1.4816
2.3668
Glendale
0.3848
1.3409
1.7257
Mesa
-
1.1319
1.1319
Gilbert
-
0.9895
0.9895
Chandler
0.2426
0.8700
1.1126
Phoenix
1.3055
0.8141
2.1196
Scottsdale
0.5039
0.5042
1.0081

FY 2022 Tax Bills
Median SFR
(City Share Only)
Tempe
$397
Scottsdale
$344
Phoenix
$251
Chandler
$226
Gilbert
$216
Glendale
$204
Mesa
$170
Average: $258
Assessed Valuation 
Forecast

Staff Assumptions
Assessment ratios held constant
Assessment ratios held constant after FY 2026
3.5% 2.0% appreciation through FY 2026
3.0% appreciation thereafter
Annual new construction growth of 2.0%
12/2019 FY 2022 Projected NAV: $14.84B
Actual FY 2022 NAV: $14.80B (-0.3%)
Staff NAV Model
 -
 5,000,000,000
 10,000,000,000
 15,000,000,000
 20,000,000,000
 25,000,000,000
 30,000,000,000
NAV
NAV per historical calculation

Informational Pamphlet
Growth years 1-5 <= prior 10-year average
0% ~5% growth assumption
Growth years 6+ <= 20% of prior 10-year avg.
0% ~1% growth assumption
Informational pamphlet must reflect long 
range assumptions that staff considers 
unlikely
Required by statute
Pamphlet NAV Max
 -
 5,000,000,000
 10,000,000,000
 15,000,000,000
 20,000,000,000
 25,000,000,000
 30,000,000,000
NAV
NAV per historical calculation

Next Meeting Agenda
1. Summary of Outstanding GO Bond Debt
Service
2. Constraints and Considerations for a New GO
Bond Program
3. New GO Bond Program Scenario Assumptions
4. New GO Bond Program Scenarios
Questions

City of Phoenix 
Fiscal Capacity Committee 
Summary Minutes 
Monday, Jan. 31, 2022 
Virtual Meeting – Via WebEx 
Committee Members Present 
 
 
Committee Members Absent 
Dave Krietor, Chair 
Ron Butler  
Deb Fisher*  
 
MaryAnn Guerra 
Hope Levin 
 
*Joined at 11:11 a.m. 
 
1. CALL TO ORDER 
Chairman Krietor called the Fiscal Capacity Committee to order at 11:04 a.m. with 
committee members Ron Butler, Hope Levin and MaryAnn Guerra present.  
2. REVIEW AND APPROVAL OF THE JANUARY 24, 2022 MEETING MINUTES 
Committee member Hope Levin made a motion to approve the minutes of the Jan. 
24, 2022 meeting. Committee member Ronald Butler seconded the motion, which 
passed unanimously, 4-0. Committee member Deb Fisher joined the meeting after 
the motion passed at 11:11 a.m. 
3. FISCAL CAPACITY ANALYSIS 
Chairman Krietor introduced Chief Financial Officer Kathleen Gitkin to present on the 
fiscal capacity analysis. He explained the basis of the analysis would assume one 
$500 million bond issue every five years, for a total of $2 billion over a 20-year 
period.  
 
Ms. Gitkin began by sharing the history of the city’s general obligation (GO) bond 
programs beginning in 1957, with 12 voter-approved programs totaling $4.6 billion 
since then. She indicated the last GO bond program was in 2006 and the last new 
money bonds issued associated with the authorization were in 2012. 
 
Chairman Krietor reiterated that voters approved the last bond program in 2006, but 
the last issue that went to market was in 2012. He asked if staff structured the sales 
of individual bonds based on the demand generated by the approved projects, after 
voters approved the bond issue. 
 
Ms. Gitkin confirmed that after voter authorization is received, staff considers project 
planning timeframes, procurement needs, and cash flows before there are capital

expenditures and bond issuances. She added staff would not want to issue bonds 
too soon and have unused cash.  
 
Ms. Gitkin discussed the legal and statutory requirements and restrictions for GO 
bonds. She explained the city could only issue bonds for major infrastructure and 
capital expenditures with a long useful life, to ensure the debt could be repaid before 
the end of its useful life. She added that bond sales could be adjusted to coincide 
with the life of the asset.  
 
Ms. Gitkin explained cost of issuance could also be paid, including bond counsel 
fees, financial advisor fees, underwriter fees, and staff cost specifically related to 
sale of the bonds.  
 
Ms. Gitkin cautioned against using tax-exempt bond proceeds for private activity or 
loans, using a Family Advocacy Center and a neighborhood clean-up loan program 
as examples of activities that would not be permissible by the IRS as tax-exempt. 
She explained a city-owned Family Advocacy Center operated by various non-profits 
to offer services to the public, while serving the community and the city’s goals, 
would be considered private activity and no longer a public use. She added that 
there would be a small allocation for private activity and stated that if a program was 
a priority for the city, taxable bonds could be issued, which had been done in the 
past but could be more costly.  
 
Ms. Gitkin stated action could only be taken based on what was written in the 
proposition that would go before voters. She explained the proposition should be 
written in a manner that strikes a balance between being clear for voters to 
understand and flexible for how bond proceeds could be used. She cautioned 
against omitting necessary language, using land acquisition for a municipal building 
as an example where the language should clearly state that land would be 
purchased, and a building constructed. 
 
Chairman Krietor wanted to know how taxable or tax-exempt would be determined in 
a situation where the city hypothetically planned to purchase the old Channel 12 
headquarters and renovate it for use by the Southwest Center for HIV. 
 
Ms. Gitkin stated the process the Budget and Research Department was 
undertaking, asking departments to submit recommended projects early, provides 
ample opportunity to get tax opinions early and discuss with departments. 
 
Ms. Gitkin discussed the existing GO bonds, currently outstanding in the principal 
amount of $919 million. She pointed out the period from 2022 through 2027 had 
substantial debt service. Total GO bond debt service is fully paid off in 2034. She

stressed the importance of being mindful of the maximum annual debt service 
(MADS), the peak debt service, currently at $155 million in 2026.   
 
Ms. Gitkin discussed two aspects that would impact the look of the debt stack, the 
GO bond reserve and GO bond refunding opportunities.  
 
Ms. Gitkin reiterated the impact of House Bill (HB) 2011 on the GO bond reserve, 
which would require the city to deplete the reserve to less than or equal to 10% of 
annual debt service by the end of fiscal year 2023. She discussed the history of the 
reserve and explained a significant amount had been used to pay down debt service 
from 2011 through 2016. She explained that by the end of 2022, $73 million would 
remain in the reserve, which would be approximately $60 million higher than what 
would be required by HB 2011. She detailed staff’s proposal to use approximately 
$54 million of the GO Bond Reserve balance to pay off $58 million in debt service, 
which includes interest, to drive down the MADS from $155 million to $146 million. 
 
Ms. Gitkin stated there were approximately $280 million outstanding in 2012 GO 
bonds, 30% of all city bonds, which could potentially be refunded for savings on July 
1, 2022, and result in savings of approximately $15 million over the life of the GO 
bonds. She detailed staff’s proposal to take advantage of refunding to target savings 
early and increase capacity for a new GO bond program in 2023. 
 
Chairman Krietor clarified there would be $54 million in the reserve and the 
refunding would provide $15 million in savings, to give capacity to do additional 
bonds, which would be almost $70 million. 
 
Ms. Gitkin confirmed taking these actions would create additional capacity for 
another bond program and could also help avoid a property tax rate increase in 
2026, the peak year, even if a bond program is not done.  
 
Committee member Hope Levin asked what the interest rate had been on the 
previous bonds, and how time passing from bond approval to issuance could impact 
the rate.  
 
Ms. Gitkin stated there would always inherently be savings in a bond sale because 
the city issues debt with a 10-year par call. She explained this meant the city could 
call or pay off the bonds without premium or penalty in 10 years, even if they would 
not be set to mature for another five to 10 years. She stated most likely in 2012, the 
city paid around 4 to 5% yield, which would be 1.8% right now for a 20-year bond. 
She emphasized the new refunding bonds would not go out beyond 2034 and the 
city would not extend the life of the bonds.

Finance Debt Manager Andrew Durket confirmed yields to 2034, the longest date of 
maturity, was 3.75%, so the 1.8% to 2% yield would provide plenty of savings. 
 
Committee member Maryann Guerra asked if paid down bond funds could be 
reused, or if it would only serve to improve capacity for future bonds.   
 
Ms. Gitkin stated legislation had been passed three to four years ago that prevented 
the city from reusing authorization and the city could be penalized.  
 
Ms. Gitkin provided an overview of the debt stack including the reserve payoff and 
refunding opportunity, which would decrease the MADS to $135 million and build 
approximately $20 million in capacity in the front end. She explained the scenarios 
moving forward would assume both actions were taken, and staff would be going to 
City Council for formal authorization to do the refunding that same week.   
 
Ms. Gitkin discussed bond ratings and explained the city would take them into 
consideration but not make decisions based on the rating agencies’ methodologies. 
She explained that we do not want any increase to MADS or any negative impact to 
fixed cost burden, and affordability of additional operating expenses would be 
important.  
 
Chairman Krietor asked if $155 million had been based on the rating agencies’ view 
and wanted to know if that amount was the pain threshold.   
 
Ms. Gitkin confirmed that was correct and the amount reflected the bond rating 
perspective.  
 
Ms. Gitkin discussed another major consideration was property tax affordability and 
reiterated the intent to ensure capacity for $500 million of projects every five years, 
with no increase to the current total property tax rate or the secondary property tax 
rate.  
 
Ms. Gitkin gave an overview of the final considerations related to legislative and 
administrative mandates, including reduction of the GO reserve fund, growth rate 
assumptions, the timing of infrastructure needs, and other legislative changes.  
 
Ms. Gitkin discussed fixed cost burden as an impact to credit ratings and the 
differences between the rating agencies’ methodologies. She explained Moody’s 
considered pension cost, other post-employment benefits, and debt service fixed 
costs, and added a disclaimer that this did not represent a generally accepted 
standard and Finance did not believe it was an adequate methodology to measure 
financial stability.

Ms. Gitkin stated the city was rated AA+, stable outlook, with S&P; AAA, stable 
outlook, with Fitch; and Aa1, negative outlook, with Moody’s. She explained the city 
had been on a negative outlook with Moody’s since 2016, in preparation to 
downgrade, primarily because of the fixed cost burden caused by pension costs. 
She explained the city has paid its liabilities and more on pension costs than what 
has been required, and stressed the importance of maintaining the debt below $155 
million because Moody’s is watching those pension costs and the city would not 
want to do anything related to debt to drive numbers up.  
 
Committee member Guerra asked if the Moody’s rating had always been AA1.  
 
Ms. Gitkin confirmed the city has long been rated Aa1 with Moody’s, and the 
recession put the city on a negative outlook due to economic impacts. She added 
S&P previously rated the city as AAA, but changed their rating methodology in 2013 
to assess the city’s economy score based on the state’s economy score.  
 
Chairman Krietor asked if exceeding $155 million threshold would result in a 
downgrade. 
 
Ms. Gitkin emphasized the significance of rising pension costs, specifically Public 
Safety Personnel Retirement System (PSPRS) costs, risking a downgrade. She 
explained that raising debt service costs above current levels could increase 
potential credit rating concerns which the city would not want to be the reason 
behind a downgrade.    
 
Chairman Krietor acknowledged the difficulty of working around the state’s 
requirements for PSPRS.   
 
City Manager Jeffrey Barton confirmed the bigger concern with Moody’s was the 
public safety pension costs and the limitations those presented on the city’s flexibility 
from a general fund perspective. He mentioned the rating methodology around fixed 
cost burden did not account for the city’s provision of other key public services.  
 
Ms. Gitkin explained the rating methodology was called “treading water” and 
assumed a rate of return of 3%, while both the public safety and civilian plans were 
over 7%.  
 
Chairman Krietor asked if the interest rate differential would be material if the city 
were to be downgraded.  
 
Ms. Gitkin confirmed it would not have a major cost difference, as the city already 
has a split credit rating and would likely be priced in the AA range, which is what the 
GO bonds currently price at.

Committee member Levin asked if residents would be swayed by bond ratings.  
 
Ms. Gitkin did not know how voters would react to the credit rating, but she 
anticipated they would react similarly to bondholders, indifferent.  
 
Mr. Barton agreed and added he believed there would be a larger political reaction 
to the credit ratings.  
 
Budget and Research Director Amber Williamson gave an overview of challenges 
that could put pressure on the general fund, specifically challenges with forecasting 
revenue and other operating budget needs. She highlighted the city’s strategic 
approach with CARES and ARPA funding and the city’s nationwide lead in job 
growth, net migration, and diversification of the economy over the last 20 years. She 
stated the general fund was in a good position and forecasted a surplus but did not 
anticipate it would continue this way as COVID-related federal aid works its way out 
of the system.  
 
Ms. Williamson emphasized the importance of being mindful of increasing net new 
operating costs because of other outstanding operating budget needs, including 
employee compensation increases, classification and compensation study impacts, 
PSPRS costs, information technology needs, health insurance cost increases, 
appropriate funding for trust fund reserves, and fleet replacements. She stated it 
would be important to have resources available to meet those needs as well as City 
Council and community demands for more programs and services, including 
affordable housing, homelessness, and climate initiatives.  
 
Ms. Gitkin reminded the committee of the three bond program options, and their 
associated property tax rate impact, that were discussed in 2020. She shared the 
final discussion with the committee centered on the impact of timing on bond sales 
and the committee recommended Option 1, a $450 million program, or Option 2, a 
$615 million program. She added the committee’s further recommendation that the 
city postpone a bond election to Nov. 2021. 
 
Ms. Gitkin discussed the city’s financial capacity for three new scenarios: 
 No new GO Bond Program 
 Four GO Bond Programs – No change to Total Rate 
 Four GO Bond Programs – No increase to Total or Secondary Rate 
 
Ms. Gitkin began by discussing the scenario in which there would be no new 
program, which showed no tax rate increases above the current fiscal year 2022 rate 
with the MADS at $135 million. She detailed the scenario modeling assumptions,

which included an annual coupon payment of 5% on all new bond sales which would 
build a significant cushion should any unforeseen fluctuations in the market arise.  
 
 
Ms. Gitkin discussed the timing of the proposed bond programs and sales, which 
laid out a plan to put $500 million bond programs before voters in 2023, 2028, 2033, 
and 2038, and split bond sales into two $250 million tranches between each 
election. 
 
Chairman Krietor recalled the city had done a $2 billion bond program over the last 
20 years, but there had been no strategic approach. He expressed appreciation for 
the planned bond program schedule as it demonstrated a more strategic approach.  
 
Ms. Gitkin presented the scenario of four new bond programs resulting in no 
increase to the total rate, which showed increases in the secondary rate with a 
MADS of $157 million. She stated this program would be achievable and the MADS 
would increase slightly above $155 million in 2027 but go back down. 
 
Ms. Gitkin continued by discussing the scenario of four new bond programs which 
would result in no increase to the secondary or total rate with a MADS of $157 
million. She explained this scenario would also be feasible, relying on the depletion 
of the reserve fund to $4.4 million in the first five years of peak debt service. She 
explained if that were to happen, there would be capacity after 2027 to start 
rebuilding the reserve balance to 10% of annual debt service.  
 
Chairman Krietor asked what risks would be involved in depleting the reserve 
further. 
 
Ms. Gitkin stated the main risk would be flexibility to address unforeseen changes in 
the market. She explained that if the interest rates skyrocket, net assessed valuation 
drops, or a legislative mandate occurs, the city could use the GO reserve fund to 
balance rather than increase property tax rates.  
 
Ms. Gitkin reaffirmed that the city could afford a $500 million bond program but 
presented alternative scenarios with a coupon rate of 6% or a $600 million program. 
She explained these scenarios would have no increases to the total rate but would 
increase the secondary rate and deplete the reserve fund to $5.9 million. She added 
that an additional $5.6 million in other resources would be needed to maintain the 
current secondary rate, which the city may not be able to afford.   
 
Chairman Krietor clarified the amount of the bond programs after the first could 
increase beyond $500 million.

Mr. Barton explained it would depend on other resources the city would come to 
bear in this same window. He stressed the importance of being strategic and 
practical in creating a framework that could deliver for the City Council and the 
community.  
Chairman Krietor invited his fellow committee members to weigh in on the proposed 
scenarios. 
 
Committee member Ron Butler stated the first bond program seemed capped at 
$500 million and graduated increases could occur in the long term. He expressed 
interest in how the $500 million would be used.   
 
Committee member Guerra wanted to understand the community’s critical needs to 
determine the level of risk that would be taken financially.  
 
Chairman Krietor asked what steps would need to be taken to get to a bond election 
in 2023. 
 
Ms. Williamson provided an overview of the timeline for the next two years, including 
formal action by City Council, the solicitation of community input on the bond 
program, developing and refining the total scope of projects, and working with the 
City Clerk to get the bond program on the ballot.  
 
Committee member Butler asked if it would be the committee’s recommendation on 
the total amount of the bond program, the timing of the program, and direction on tax 
rate impacts.  
 
Mr. Barton stated he would defer to Chairman Krietor but explained staff’s 
perspective would be to have no increase, or a minimal increase, given the political 
appetite for tax increases.  
 
Chairman Krietor recommended staff return to the committee with a report that 
outlines the two scenarios with a $500 million program and a clear strategic 
pathway. He stated during the next meeting, the committee could discuss those two 
scenarios to develop a recommendation for City Council and that the small increase 
above MADS for one year should be addressed.  
 
Committee member Levin asked if the recommendation would become a strategic 
plan for the City Council, and whether it provides them with flexibility in 2030 and for 
future programs.  
 
Mr. Barton explained it would be like a 5-year capital improvement program, where 
the City Council would adopt the 2023 bond program as well as a strategic plan for

the next 20 years, which would allow flexibility for future councils to make decisions 
depending on market conditions.  
 
Committee member Guerra asked if the committee should consider any negative 
impacts using the GO reserve fund as proposed in the scenarios might have on 
bond ratings. 
 
Ms. Gitkin stated the rating agencies are familiar with this and there would be no 
anticipated impact to ratings that should be considered. 
 
Chairman Krietor asked if a bond issuance could be delayed, given any catastrophic 
change in the market, since the bonds would be sold in two tranches.  
 
Ms. Gitkin confirmed that this is possible and was done historically with the recent 
water bond sale.  
 
Chairman Krietor expressed his hope that the committee would be recommending a 
structure that would avoid that situation.  
 
Ms. Gitkin gave an overview of the legislative scenario and explained that the 
legislation dictates the content of the pamphlet and how the numbers would appear. 
She discussed the assumptions associated with growth in net-assessed value (NAV) 
and how the assumed growth rate has increased since the committee first convened 
in 2020. She explained that Deputy Budget and Research Director Chris Fazio had 
looked at every potential scenario and this scenario seemed unlikely. She added 
that the primary property tax levy would be impacted. 
 
Ms. Gitkin went on to discuss the legislative requirement scenario and pointed out 
that 2048 is when it would start to compound. She explained the city would only 
have to show the first program in the pamphlet and it would not have a significant 
impact on the city’s ability to do a bond program. She noted that a rate increase of 
$0.13 may be a dramatic change to voters that would have to be noted in the 
pamphlet.  
 
Chairman Krietor clarified that that change would be in a future pamphlet. 
 
Ms. Gitkin confirmed it would be in a pamphlet far into the future. She reaffirmed that 
for the first five years there would be no impact.   
 
Ms. Gitkin presented the stress scenario and discussed the assumptions, including 
that the legislature continues incremental cuts to commercial assessment ratio to 
10%, then appreciation of 2.5%. She described additional assumptions, such as new 
construction slowing in the first year after the election, and that the primary rate is

held constant unless there is a reduction required by the constitutional levy limit. She 
explained that the scenario modeled an immediate impact in the first five years, but 
not as dramatic as the legislative requirement scenario.  
 
Ms. Gitkin explained the total rate would increase in this scenario in fiscal year 2027 
by approximately $.04 and, after depleting the bond reserve, the city would still need 
$3.2 million to fund with other sources. She stated there were things the city could 
do now to alleviate that, such as another refunding opportunity and use of the 
cushion built into the assumptions with 5% couponing. She stated that under an 
extreme stress scenario, a program would be manageable.  
 
Mr. Fazio reminded the committee that there was a window into the future with 
property taxes, as there was a lag between market conditions and what is seen.  
 
Chairman Krietor acknowledged special attention should be paid to this stress 
scenario. He recalled commercial and industrial assessment ratios had been 2.5 
times higher than residential. 
 
 Mr. Fazio stated commercial is currently at 18% and would be reduced to 16%. He 
added there is a bill currently floating to take off two more half-percents.  
 
Committee member Levin clarified if this impacts other cities in the county.  
 
Mr. Fazio confirmed this has a statewide impact. 
 
Chairman Krietor commended staff on their presentation, which built on the property 
tax overview from the previous meeting.  
 
Committee member Butler echoed Chairman Krietor’s comments and commended 
staff on the presentation. 
 
4. FUTURE AGENDA ITEMS 
Chairman Krietor asked staff to return to the committee at the Feb. 7 meeting with a 
draft report including the two scenarios discussed and a recommendation to 
strategically position the city for recurring bond issues every five years.  
 
Chairman Krietor asked if there were other items the committee would like to 
include. Committee members had no additions. 
 
5. ADJOURNMENT 
Chairman Krietor adjourned the meeting at 12:47 p.m.

0
Bond Program
Fiscal Capacity 
Committee
January 31, 2022
1
Overview
Existing GO Bond Program
GO Bond Program Considerations & Constraints
GO Bond Program Capacity As Presented in 2020
2023 GO Bond Program Scenarios
2023 GO Bond Program Stress Scenario

2
Existing GO Bond Program
The City has a long history of issuing GO bonds
• Phoenix voters have approved 12 bond
programs since 1957, totaling $4.6 billion
• 2006 GO Bond Program was the last
• Last new money GO Bonds were issued in 2012
• GO bonds are issued for major capital
infrastructure throughout the City with very
finite legal restrictions
Existing GO Bond Program

4
Legal Uses of Bond Proceeds
•
Capital projects (major infrastructure)
─
No operating costs or working capital
─
Long useful life
•
Cost of issuance
─
Bond Counsel
─
Financial Advisor
─
Underwriter
•
NO private activity or loans, unless bonds are
issued taxable
•
Only what is written in the propositions
5
Existing GO Bond Debt Service
$0
$20
$40
$60
$80
$100
$120
$140
$160
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Millions
Annual GO Bond Debt Service (principal and interest) for
$919 Million Principal Amount of Currently Outstanding GO Bonds
Principal
Interest
• Debt service payments are made using 
Secondary Property Tax Revenues
• Maximum annual debt service (MADS) 
is $155 million

6
GO Bond Reserve
State Law
HB 2011 ‐ Existing general obligation reserve fund balance must be 
<= 10% of annual debt service by end of FY 2023
$0
$50
$100
$150
$200
$250
$300
$350
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
GO Bond Reserve Fund
Millions
The City plans to use approximately $54 
million of the GO Bond Reserve balance 
to pay‐off $58 million in debt service
7
Existing GO Bond Debt Service 
After Required Pay‐Off
$0
$20
$40
$60
$80
$100
$120
$140
$160
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Millions
Annual GO Bond Debt Service (principal and interest) for
$867 Million Principal Amount of Bonds Outstanding After Required Pay‐Off
GO Debt Service
Pay‐Off
Decreases MADS from $155 million to 
$146 million

8
GO Bond Refunding Opportunity
• The City has $280 million outstanding (30% of total) in 2012 GO Bonds
• The 2012 GO Bonds can be refunded for savings on 7‐1‐2022
• Total savings of approximately $15 million over the life of the GO Bonds
$0
$5
$10
$15
$20
$25
$30
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Millions
2012 GO Bonds Debt Service
2012 GO Bonds
Savings from Refunding
9
Existing GO Bond Debt Service
After Pay‐Off & Refunding
$0
$20
$40
$60
$80
$100
$120
$140
$160
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Millions
Annual GO Bond Debt Service (principal and interest) for $843 Million 
Principal Amount of Bonds Outstanding After Pay‐Off & Refunding
GO Bond Debt Service
Pay‐Off + Refunding
Decreases MADS from $155 million to 
$135 million

10
GO Bond Program Considerations & 
Constraints
11
Bond
Ratings
• No increase to peak debt service, approximately $155 million
• No negative impact to fixed cost burden
• Affordability of additional operating expenses
Property Tax 
Affordability
• Capacity for $500 million of projects every 5 years
• No increase to current total property tax rate of $2.1196
• No increase to secondary property tax rate of $0.8141
Legislative 
& Admin 
Mandates
• Reduction of the GO Reserve Fund requiring pay‐off of debt
• Growth rate assumption in election pamphlet
• Timing of infrastructure needs (special initiatives)
• Other legislative changes (ratio or debt limitation changes)
Bond Program
Capacity Considerations

12
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
2017‐18
2018‐19
2019‐20
2020‐21
2021‐22
Forecast
2022‐23
Forecast
2023‐24
Estimated
2024‐25
Estimated
2025‐26
Estimated
2026‐27
Estimated
Pension
Other Post Employment Benefits
Debt Service
New GO Bond Program
Phoenix City Charter requires full payment of annual pension costs
Fixed Cost Burden
Fixed Costs as a Percent of Operating Revenues
13
Other Operating Budget Needs
•
Employee Compensation Increases
•
Classification & Compensation Study Impacts
•
Public Safety Pension (PSPRS) Costs
•
Information Technology Needs
•
Health Insurance Cost Increases
•
Trust Fund Reserve Levels
•
Fleet Replacements
•
Council and community demands for more
programs and services

14
GO Bond Program Capacity 
As Presented in 2020
15
Summary of 2020 Presentation
•
The final discussion with the committee centered on the impact of timing on
the bond sales
•
The committee recommended Option 1 or Option 2
•
The committee also recommended that the City postpone a bond election for
a year, November 2021 rather than November 2020
Option 3
$1.1 Billion*
$200 million
FY 2023
5‐year interest only
$900 million
FY 2028
no interest only
Option 2
$615 Million*
$200 million
FY 2022
6‐year interest only
$415 million
FY 2024
4‐year interest only
Option 1
$450 Million*
$200 million
FY 2022
6‐year interest only
$250 million
FY 2024
4‐year interest only
*Assumed interest rates:
FY 2022 – 4%
FY 2024 – 5%

16
16
Total Property Tax Rates from 
2020 Presentation
$0.99
$1.19
$1.39
$1.59
$1.79
$1.99
$2.19
 FY 2020 Rate
 No New Debt
 Scenario #1
 Scenario #2
 Scenario #3
$2.1296
Current Rate
17
2023 GO Bond Program Capacity
• No new GO Bond Program
• Four GO Bond Programs ‐ No
change to Total Rate
• Four GO Bond Programs ‐ No
increase to Total or
Secondary Rate

18
No New GO Bond Program
2.1196
2.1196
2.1130
2.0447
2.0387
1.9826
1.4927 1.4323
1.4239
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
Total Property Tax Rate 
Max Annual Debt Service
$135 million
FY 2023
No Increases 
Above Current 
FY 2022 Rate
Total Rate
Secondary 
Rate
Fiscal 
Year
$2.1196
$0.8141
FY 2023
$2.1130
$0.8141
FY 2024
$2.0447
$0.7521
FY 2025
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV). 
There is no guarantee that NAV forecast will be achieved.
•
GO Reserve Fund Pay-off
by 7/1/23
•
Refunding by 7/1/22
19
Scenario Modeling Assumptions
• Four separate $500 million GO Bond Programs, every 5‐years
• Use of GO Bond Reserve Fund to pay‐off a portion of bonds
• Refunding of the GO Bonds, Series 2012A and 2012C
• Refunding assumes current market interest rates plus 50bps (.50%)
• First bond sale is interest only for three‐years; All others are interest
only for 2‐years
• 25‐year amortization for all bond sales
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV). 
There is no guarantee that NAV forecast will be achieved.

20
Scenario Modeling Assumptions 
(continued)
• Annual coupon payment of 5.0% on all new bond sales
City Sells $100,000 Bonds at a price of 120 
and 5% Coupon with a ten‐year maturity
City Gets $120,000 from Bondholder
Bondholder Receives 5% per year for 10 
years + $100,000 at maturity ($150,000)
The difference of $30,000 is the City’s 
actual cost or yield, 3%
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed 
Values (NAV). There is no guarantee that NAV forecast will be achieved.
21
Timing of Bond Programs & Sales
1
1
2
$500 Million
Bond Program 
to Voters 
November 2023
$250 Million
Bond Sale
FY 2024
$250 Million
Bond Sale
FY 2026
1
2
$500 Million
Bond Program 
to Voters 
November 2028
3
3
4
2
3
4
4
$500 Million
Bond Program 
to Voters 
November 2033
$500 Million
Bond Program 
to Voters 
November 2038
$250 Million
Bond Sale
FY 2029
$250 Million
Bond Sale
FY 2031
$250 Million
Bond Sale
FY 2034
$250 Million
Bond Sale
FY 2036
$250 Million
Bond Sale
FY 2039
$250 Million
Bond Sale
FY 2041

22
Four GO Bond Programs – No Increase 
to Total Rate
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV). 
There is no guarantee that NAV forecast will be achieved.
Increases in 
Secondary Rate
Total Rate
Secondary 
Rate
Fiscal Year
$2.1196
$0.8141
FY 2023
$2.1130
$0.8141
FY 2024
$2.1130
$0.8204
FY 2025
$2.1130
$0.8264
FY 2026
$2.1130
$0.8351
FY 2027
Max Annual Debt Service
$157 million
FY 2027
2.1196 
2.1196 2.1130 
2.1130 
2.1130 
2.1130 
2.0411 1.9970 1.9553 
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
Total Property Tax Rate
23
Four GO Bond Programs – No Increase 
to Total or Secondary Rate
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV). 
There is no guarantee that NAV forecast will be achieved.
Max Annual Debt Service
$157 million
FY 2027
No Increases in 
Total or Secondary 
Rates
Total Rate
Secondary 
Rate
Fiscal Year
$2.1196
$0.8141
FY 2023
$2.1130
$0.8141
FY 2024
$2.1067
$0.8141
FY 2025
$2.1007
$0.8141
FY 2026
$2.0920
$0.8141
FY 2027
2.1196 
2.1196 
2.1130 
2.1067 2.1007 2.0920 
2.0411 1.9970 1.9553 
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
Total Property Tax Rate
GO Bond Reserve 
Fund balance is 
depleted to $4.4 Million

24
Total 
Prope
rty 
Tax 
Rates
$1.17
$1.37
$1.57
$1.77
$1.97
$2.17
Total Property Tax Rates
 FY 2022 Rate
 No New Debt
Increase to Secondary
No Increase to Secondary
$2.1196
Current Rate
Total Property Tax Rates
Rate reflects 
primary only 
after 2034
25
Four GO Bond Programs – 6% Coupon 
or $600 Million Program Amount
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed Values (NAV). 
There is no guarantee that NAV forecast will be achieved.
Max Annual Debt Service
$162 million
FY 2027
No Increases in 
Total Rate
Total Rate
Secondary 
Rate
Fiscal Year
$2.1196
$0.8141
FY 2023
$2.1196
$0.8207
FY 2024
$2.1196
$0.8270
FY 2025
$2.1196
$0.8330
FY 2026
$2.1196
$0.8417
FY 2027
2.1196 
2.1196 
2.1196 
2.1196 2.1196 2.1196 
2.0411 1.9971 1.9551 
FY 2022
FY 2023
FY 2024
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
FY 2030
Total Property Tax Rate
•
GO Bond Reserve Fund is 
depleted to $5.9 Million
•
Maintaining secondary rate 
of $0.8141 would require 
approximately $5.6 million 
in other sources

26
Legislative Scenario Modeling 
Assumptions
• Growth in NAV in the first five‐years cannot exceed the
actual 10‐year average growth rate in NAV, assumed 5%
• Growth in NAV in year six and on cannot exceed 20% of
the 10‐year average growth rate in NAV, assumed 1%
• This assumption is not within the realm of any economic
situation either realized or envisioned
• The primary levy amount is impacted
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed 
Values (NAV). There is no guarantee that NAV forecast will be achieved.
27
NAV Growth –
Legislative Requirement
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
NAV Growth
No Increase to Secondary
Legislative Requirement
Estimated NAV
(in millions)
Fiscal 
Year
Forecast
Legislative 
Requirement
2024
$16,063
$16,063
2025
16,723
16,723
2026
17,403
17,403
2027
18,278
18,273
2028
19,186
19,180
2029
20,128
20,122
2030
21,106
20,323
2031
22,120
20,527
2032
23,173
20,732
2048
46,392
24,310

28
Total 
Propert
y Tax 
Rates
$2.1197 
$1.55
$1.60
$1.65
$1.70
$1.75
$1.80
$1.85
$1.90
$1.95
$2.00
$2.05
$2.10
$2.15
$2.20
$2.25
Total Property Tax Rates
 FY 2022 Rate
No Increase to Secondary
Legislative Requirement
$2.1196
Current Rate
Total Property Tax Rates in Pamphlet –
Legislative Requirement
Secondary Property Tax Rate
Fiscal 
Year
No 
Increase 
Secondary
Legislative 
Requirement
Difference
2024
$0.8141
$0.8139
‐0.0002
2025
0.8141
0.8269
0.0128
2026
0.8141
0.8239
0.0098
2027
0.8141
0.8417
0.0276
2028
0.7714
0.7716
0.0002
2029
0.7352
0.7354
0.0002
2030
0.7010
0.7280
0.0270
2031
0.6688
0.7207
0.0519
2032
0.6317
0.7061
0.0744
2048
0.1511
0.2883
0.1372
29
Stress Scenario Modeling Assumptions
• Legislature continues incremental cuts to commercial
assessment ratio, until it reaches 10% (to match
residential)
• After that, appreciation is 2.5%
• First year after the election, new construction slows two
years in a row, down to levels similar to construction
during the financial crisis
• Primary rate is held constant, unless a reduction is
required by the constitutional levy limit
Note: Tax rates are subject to change (plus or minus) based on actual Net Assessed 
Values (NAV). There is no guarantee that NAV forecast will be achieved.

30
NAV Growth –
Stress Scenario
Estimated NAV
(in millions)
Fiscal 
Year
Forecast
Stress 
Scenario
2024
$16,063
$16,063
2025
16,723
16,633
2026
17,403
17,153
2027
18,278
17,683
2028
19,186
18,223
2029
20,128
18,775
2030
21,106
19,337
2031
22,120
19,910
2032
23,173
20,496
2048
46,392
33,449
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
NAV Growth
No Increase to Secondary
Legislative Requirement
Stress Scenario
31
Total 
Propert
y Tax 
Rates
2.1625 
$1.55
$1.60
$1.65
$1.70
$1.75
$1.80
$1.85
$1.90
$1.95
$2.00
$2.05
$2.10
$2.15
$2.20
$2.25
Total Property Tax Rates
 FY 2022 Rate
No Increase to Secondary
Stress Scenario
$2.1196
Current Rate
Total Property Tax Rates 
Stress Assumptions
•
The increase to total rate in fiscal year 
2027 of $0.0429 equates to approximately 
$7.6 million 
•
Using the $4.4 million remaining in the GO 
Reserve Fund would leave $3.2 million to 
fund with other sources

32
Questions and Additional Discussion

City of Phoenix 
Fiscal Capacity Committee 
Summary Minutes 
Monday, Feb. 7, 2022 
Virtual Meeting – Via WebEx 
Committee Members Present 
 
 
Committee Members Absent 
Dave Krietor, Chair  
 
 
 
MaryAnn Guerra 
Ron Butler  
Deb Fisher 
 
 
Hope Levin 
 
1. CALL TO ORDER 
Chair Krietor called the Fiscal Capacity Committee to order at 11:01 a.m. with 
committee members Ron Butler, Deb Fisher, and Hope Levin present.  
2. REVIEW AND APPROVAL OF THE JANUARY 31, 2022 MEETING MINUTES 
Committee member Ron Butler made a motion to approve the minutes of the Jan. 
31, 2022 meeting. Committee member Hope Levin seconded the motion, which 
passed unanimously, 4-0.  
3. FINANCIAL CAPACITY RECOMMENDATIONS 
Chair Krietor recommended the committee discuss comments, suggestions, or 
changes they had on the drafted recommendation.  
 
Chair Krietor stated the report was reflective of what the committee learned and 
what had been discussed in previous meetings. He listed three suggestions based 
on his review of the drafted recommendation:  
1. List the names of the committee members, dates the committee met, and 
attaching staff reports that were reviewed during the reconvened meetings  
2. Update the language in the last paragraph of the Program Sizing and Bond 
Sale Timing section to state the committee is “strategically positioning” the 
city to allow for subsequent bond elections 
3. Update the tone of the second paragraph in the Tax Rate Informational 
Requirement section to avoid an appearance of negatively characterizing 
statutory requirements 
 
Chair Krietor stated the report looked consistent with the analysis and modeling that 
had been discussed, and he opened the floor to the rest of the committee for 
suggestions or changes.   
 
Committee member Hope Levin referred to the last paragraph in the report and 
requested clarification that the report needed to state the tax rates are meeting the 
statutory requirements so that could be disclosed to the voters. She stated that the

last sentence in the report appeared to be missing information and asked where the 
different scenarios would be included.  
 
Chair Krietor asked for suggestions from staff on how the Tax Rate Informational 
Requirements section could be revised, based on Committee member Levin’s 
feedback. 
 
Mr. Fazio stated the committee could consider moving the Program Sizing and Bond 
Sale Timing section to the end of the report, which would have the report end with 
the overall recommendations.  
 
Committee member Levin expressed her support for the change, explaining it 
provided her with clear direction that the committee was supporting the $500 million 
bond program and intended not to increase rates.  
 
Chair Krietor expressed support for moving the section up in the report and 
requested the language be tempered so that the City Council would not have the 
impression that the committee was demeaning the State’s legislative actions.  
 
Committee member Levin said she was fine with the final sentence in the Tax Rate 
Information Requirements section, as it was factual and expressed the impact to the 
voters. She suggested updating the sentence before it to state, “The committee 
believes the statutory requirements have been analyzed and are used in our 
recommendation.”   
 
Chair Krietor stated he was fine with that change. He stated he wanted to remove 
“misleading” but would be amenable to leaving in “pessimistic”.   
 
Committee member Levin asked if “pessimistic” was understated and requested 
clarification that higher growth rates could not be used.  
 
Chair Krietor explained his understanding of the sentence was that the state statute 
was forcing the use of a more pessimistic model, where the tax rate could be 
impacted.   
 
Mr. Fazio explained the biggest difference was that the modeled tax rates would be 
higher than they otherwise would be, and that the statutorily required model shows 
rates higher than what staff believes they would be.  
 
Chief Financial Officer Kathleen Gitkin stated what was being conveyed was that the 
modeling for the first five years almost exactly mimics the state requirement, which 
was more restrictive than staff’s modeling which had built in a generous cushion. 
She explained the thought process was that the committee evaluated the first five

years, and the growth assumption was similar and could be endorsed but going out 
further would be risky because the difference would be drastic.  
 
Chair Krietor asked if the section could state that the statute would be reflected in 
the modeling, and the modeling for the first five years would be consistent with state 
requirements, since the committee would only be officially recommending the first 
bond program.  
 
Mr. Fazio clarified how the state statute might impact the information that would 
appear in the pamphlet, explaining that the rates would reflect higher than what staff 
would otherwise show them to be, and modeling would reflect more than five years 
of debt service in the pamphlet.   
 
Chair Krietor summarized the feedback received from the committee, including the 
recommendation to move the Tax Rate Information Requirements earlier in the 
report, and updating language to communicate to the City Council how the state 
statute might have an impact.  
 
Committee member Butler agreed with Chair Krietor’s comments and asked if the 
Ballot Timing section could be written similarly to the Program Timing and Sizing 
section, which stated the committee would be recommending to City Council to 
develop a 2023 bond program.  
 
Chair Krietor confirmed that was correct. He asked Committee member Butler if he 
was recommending changes to the language which stated, “the Fiscal Capacity 
Committee unanimously recommended the City Council develop a $500 million bond 
program for a November 2023 election”.  
 
Committee member Butler confirmed that his recommendation would be to make the 
language similar to what was written in the first paragraph of the Program Sizing and 
Bond Sale Timing section, where it describes the program as one portion of a larger 
long-term strategy.  
 
Chair Krietor asked if there were any issues with updating the language. 
 
Mr. Fazio confirmed the change could be made. 
 
Chair Krietor reconfirmed the changes requested in the recommendation would be to 
adjust the wording, move the Tax Rate Information Requirements earlier in the 
report, and conclude with the recommendation. He asked if one of his fellow 
committee members would offer a motion to approve the report.

Committee member Levin made a motion to approve the report as finalized and that 
the recommendation supports the committee’s desire to see the city of Phoenix offer 
a $500 million bond program that would be brought before the voters on the ballot in 
November of 2023. Committee member Deb Fisher seconded the motion. 
 
Chair Krietor asked staff if the motion was sufficient.  
 
Budget and Research Director Amber Williamson confirmed the motion was 
sufficient and explained that staff would make edits to the document and send the 
finalized report to the committee within 48 hours. 
 
Chair Krietor agreed that it would be important to review the revised language and 
provide an opportunity for all committee members to see the final recommendation.  
 
The motion passed unanimously, 4-0. 
 
4. FUTURE AGENDA ITEMS 
Chair Krietor thanked the committee for returning for this effort. He detailed the next 
steps would be to receive a final draft of the recommendation from staff with 
language that was consistent with the discussion and motion. He requested 
clarification on when the item would go to the City Council for approval.  
 
Budget and Research Director Amber Williamson explained she was awaiting 
confirmation from the Mayor’s Office on timing of City Council briefings and 
agendas. She stated she would let the Chair know once direction has been received. 
 
Chair Krietor reiterated his appreciation for the work of staff and the committee 
members. He canceled the Feb. 15 meeting and requested a motion to adjourn the 
meeting.  
 
Committee member Ron Butler made a motion to adjourn. Committee member Deb 
Fisher seconded the motion, which was approved unanimously, 4-0. 
 
5. ADJOURNMENT 
Chair Krietor adjourned the meeting at 11:25 a.m.