Extracted text (via pymupdf)
3376 characters
2026 Financing Plan
April 2, 2026
Mark Hute, Treasurer
1
Financing Plan & Benefits
2
What is the financing plan?
• Plan to secure funding for capital projects through bonds/obligations
What are some benefits to financing?
1. Tax-exempt (Lower interest rates)
2. Accelerates project delivery
3. Spreads costs over useful life of projects
4. Assists in smooth rate adjustments
Financing Process
3
1. Capital Improvement Program (CIP)
• Projects prioritized
• Funding source identified (cash and/or financing)
2. Seek voter approval (General obligation bonds)
3. Access financial markets
We are here
CIP
Process
Voter
Approval
Financial
Markets
Managing Long-Term Obligations
4
• Tax-exempt
• Structured for stable payments
• Up to 25-year final maturity
• 10-year refinance “call”
“Bonds” and “Obligations” = Loans
5
1. General Obligation (GO) Bonds
• Voter-approved for specific purpose (parks, etc.)
• Backed by “full faith and credit” of City
• Paid for with secondary property tax
2. Utility Systems Revenue Obligations
• Contractual obligation
• Backed by utility revenue pledge
• Paid for with utility revenue
Proposed 2026 Utility Refundings
6
“To ensure that bond refundings produce anticipated savings, refunding bonds should have a
net present value savings exceeding 3% of the debt service amount of the bonds being
refunded…” (City of Mesa Financial Policies, section 5.6, 2017)
Utility Systems Revenue Bonds/Obligations (Tax-exempt)
• Refinance: $225 million (Bonds issued 2013 – 2016)
• Estimated Savings: $13.6 million (NPV of 4.2% of prior debt service)
Proposed 2026 GO Bonds Issuances
7
GO Bonds (Tax-exempt)
Target Proceeds: $61 million
Parks, Public Safety, Transportation
• Bond elections: 2020, 2022, & 2024
Public
Safety
$19 M
31%
Transportation
$29 M
48%
Parks
$13 M
21%
8
• Fire Station 205 Rebuild
• Fire Station 224
• idea Museum Renovations
• Police Headquarters
• Signal Butte Park Phase 2
• Transportation Projects
GO Bonds
Project Examples
Total GO Bonds Financing Payments
(Outstanding + 2026 Proposed)
9
$0
$10
$20
$30
$40
$50
$60
25/26
26/27
27/28
28/29
29/30
30/31
31/32
32/33
33/34
34/35
35/36
36/37
37/38
38/39
39/40
40/41
41/42
42/43
43/44
44/45
45/46
Millions
Fiscal Year
Principal
Interest
Proposed 2026 Utility Obligations Issuances
10
Utility Systems Revenue Obligations (Tax-exempt)
Target Proceeds: $341 million
• $179 million for non-capacity fee projects
– Water, Wastewater, and Natural Gas
• $162 million for capacity fee projects
– Water and Wastewater
Natural Gas
$31 M
9%
Water
$115 M
34%
Water -
Cap Fee
$150 M
44%
Wastewater
$33 M
10%
Wastewater
- Cap Fee
$12 M
3%
11
• Smart Metering (Advanced
Metering Infrastructure)
• Central Mesa Reuse Pipeline
• Natural Gas System Improvements
• Signal Butte Water Treatment Plant
Expansion
Utility Obligations
Project Examples
Total Utility Financing Payments
(Outstanding + 2026 Proposed)
12
$0
$20
$40
$60
$80
$100
$120
$140
$160
25/26
26/27
27/28
28/29
29/30
30/31
31/32
32/33
33/34
34/35
35/36
36/37
37/38
38/39
39/40
40/41
41/42
42/43
43/44
44/45
45/46
46/47
47/48
48/49
49/50
Millions
Fiscal Year
Principal
Interest
Timeline for 2026 Financings
(Subject to market conditions)
13
April 6
Council considers authorization
April 27 – May 29
Bonds/obligations sold
May 21 – June 25
Proceeds received
Remaining
Analyst
Questions
14
14