Capital Project Funding Bond Election Discussion Presentation

Capital Project Funding
Bond Election Discussion
Mayor and Council Work Session
Thursday, June 27, 2024

Agenda
2025-2034 Capital Improvement Plan (CIP)
Deep Dive on Bond & General Funded Projects
Inflation Impacts to Funding Plan
Secondary Property Tax as CIP Funding Source
Supplementing CIP with Alternate CIP Funding Source
Other Valley Cities
Bond Election History and Timelines
Options and Council Direction

Strategic Framework  
Capital Needs in All Areas
Focus Areas 
•Economic Vitality
•Sustainability and Technology
•Connectivity
•Neighborhoods
•Quality of Life
•Community Safety

2025-2034 Capital Improvement Plan (CIP)
$2,488,884,031
Total 10-year CIP is funded as follows
7% 
Grants
68.4% 
Bond 
Funded
22% 
Current 
Revenues/
Fund Balance
1.9% 
System 
Development 
Fees

68.4% of 10-Year CIP is Bond Funded
Total 10-year 
CIP is 
$2,488,884,031

GO Bond Authorization
Bond Authorization usage higher than anticipated and will be exhausted by FY 2025-26 for Police, 2026-27 for Streets 
and Parks, and FY 2028-29 for Fire.  Additional Bond Authorization needed to continue capital program in these areas.
Type of Voter 
Approved Debt
Available 
Authorization 
After 2021 & 
2023 Bond 
Sales
Fall 2025
 Bond Sale
Remaining 
Authorization
Fall 2027
Bond Sale
Remaining 
Authorization
Parks/Recreation/
Museum/Arts
52,130,000
$    
(40,930,000)
$     
11,200,000
$    
(54,825,000)
$      
(43,625,000)
$       
Streets
98,681,000
      
(72,725,000)
       
25,956,000
$    
(75,625,000)
        
(49,669,000)
$       
Public Safety- Police
55,340,000
      
(55,340,000)
       
-
$                   
(17,000,000)
        
(17,000,000)
$       
Public Safety- Fire
15,181,000
      
-
                      
15,181,000
$    
(3,300,000)
          
11,881,000
$        
Airport
494,000
            
-
                      
494,000
$          
-
                       
494,000
$             
Public Buildings
(Facilities)
31,050,000
      
(7,100,000)
         
23,950,000
$    
(9,000,000)
          
14,950,000
$        
Stormwater
624,000
            
-
                      
624,000
$          
(300,000)
              
324,000
$             
Library
3,680,000
         
-
                      
3,680,000
$       
-
                       
3,680,000
$          
Subtotal
257,180,000
$ 
(176,095,000)
$  
81,085,000
$    
(160,050,000)
$   
(78,965,000)
$      
Landfill
4,935,000
         
-
                      
4,935,000
$       
-
                       
4,935,000
$          
Public Buildings
9,960,000
         
(6,000,000)
         
3,960,000
$       
-
                       
3,960,000
$          
Water/Wastewater
-
                     
-
                      
-
$                   
-
                       
-
$                      
Total
272,075,000
$ 
(182,095,000)
$  
89,980,000
$    
(160,050,000)
$   
(70,070,000)
$      
GO Bonds 
cannot be 
issued without 
residents 
authorizing 
this first

Deep Dive on GO Bond & General Fund
10-Year CIP Projects
Refer to Handouts
GO Bond Funded Projects ($626M)
•
Summarized by bond category (blue lines)
•
Projects not highlighted will use existing 
bond authorization 
•
Projects highlighted need additional bond 
authorization to complete ($395M)
•
Supports new and existing infrastructure
General Funded Projects 
•
Summarized by department/division
•
Supports areas without bond authorization (i.e. 
Technology, Fiber, Airport)
•
Higher revenue used to fund bond eligible 
projects to extend current bond authorization 
o Applied ARPA to some freeing up General Fd
o Higher General Fund revenue (over $60M) is 
result of inflation, Intel and other 
developments, and shift to 2.5% flat tax in 
State Shared
o Typical one-time revenue is $21M to $30M

GO Bond Projects 
Project’s Impacted from 2021 Election
Parks 
Existing Neighborhood & Community Parks
AJ Chandler Park Renovation
Mesquite Groves Phase II and III
Existing Community and Neighborhood Park Improvements
Folley Pool/Park Renovation
Lantana Ranch park site
Streets/Transportation  
Street Repaving*
Traffic Signal Additions and Repairs
Kyrene Rd (Chandler Blvd. to Santan 202) (portion)
Price Rd Queen Creek Intersection
McQueen Rd (Warner to Pecos)
Washington Street Improvements
Ocotillo Rd shared use path
Public Safety Fire
Fire Station 4 Rebuild (portion)
Public Safety Police
Forensic Services Facility
Police Main Station and Criminal Investigation 
Bureau (CIB)/Communications Renovations 
Fire Station #4

GO Bond Authorization Project Drivers
Parks 
Streets/Transportation  
Increases as high as +30% to +50% in Capital Project costs 
4 Diamond 
Fields
$22.3M + 
Ryan Rd 
5.9M 
Pickleball
$6.6M 
(12 to 18 courts) 
& 3 Tennis 
Cts/Lights 
$2M
Cooper/
Insight Loop
$13.5M
Price/Queen 
Creek 
Intersection
$19.3M (Beg. 
FY 2025-26)
Alma School 
(Germann to QC) 
$10.1M
Cost Changes 
since 2021 
Arterial +19.2%
Intersect. +19.1%
Collectors +21.4%
Public Safety Police
Public Safety Fire
Forensic 
Facility
$64.8M
(incl $9.1 GF)
Station 2 
Rebuild
$10.7M 
(+$1.4M GF)
Station 4 
Rebuild
+$16.8M (beg. 
FY 2028-29)
Regional Park Development Auth $18,074,000, now $61.5M
Multi-Gen 
Expansion
$14.8M 
(gym 
delayed)
Forensic Facility Auth $38,325,000
Fire Stations Auth $15,670,000
Streets Auth $10.9M, now $42.9M
Mesquite 
Groves Ph 1
$10M
 (SDF  
shortfall)

Inflation’s New Normal
In last 20 years, 
only one year 
would have 
seen project 
costs coming 
down 0.4%.
Data source: U.S. Bureau of Labor Statistics:  All Items in U.S. city average, all urban consumers, not seasonally adjusted.

Construction Price Index New Normal
Construction 
Costs continue 
to go up, just 
not as fast
Data source: The Mortenson Construction Cost Index is calculated quarterly by pricing a representative non-residential 
construction project in geographies throughout the country.

CIP Inflation Impact Example
Forensic Facility
$ 30.3M
$ 31.3M
$ 37.8M
$ 32.4M
$ 32.4M
$ 39.1M
$ 33.6M
$ 33.6M
$ 40.4M
$ 34.7M
$ 34.7M
$ 41.8M
$ 35.9M
Should future 
partnerships 
happen, 
authorization 
would last longer 
for other projects
•Anticipate cost of build to continue to increase
•Project at $55.340M using current bond authorization and $9.1M of 
General Fund included in FY 2024-25 and FY 2025-26
•Study anticipates new build since growth of Police Department has 
exceeded current Police Admin building
•Options retrofitting existing or building new are both large capital costs
•Partnership options may be available, but size of facility would be larger 
with larger savings being on ongoing operations

CIP Inflation Impact Example
Mesquite Groves
 Current
 Year 1  Shift
 Year 2  Shift
 Year 3  Shift
 Year 4  Shift
 Year 5  Shift
 Mesquite Groves Park Site Phase I
 Mesquite Groves Park Site Phase II
 Mesquite Groves Park Site Phase III
$ 35.2M
$ 30.3M
$ 30.3M
$ 36.5M
$ 31.3M
$ 31.3M
$ 37.8M
$ 32.4M
$ 32.4M
$ 39.1M
$ 33.6M
$ 33.6M
$ 40.4M
$ 34.7M
$ 34.7M
$ 41.8M
$ 35.9M
$ 35.9M
$ 95.8M
$ 99.1M
$ 102.6M
$ 106.2M
$ 109.9M
$ 113.7M
Costs 
anticipated to 
increase each 
year under this 
new normal 
($12M/phase 
est. pre-COVID)

Funding the 10-year CIP
Secondary Property Tax Supports GO Bonds 
(AAA bond rated = low-cost debt)
Property Tax Rate supporting 
current 10-year CIP in Orange
Property Tax Rate supporting 
current bond auth only in Blue
Benefits of utilizing Secondary 
Property Tax:
•
Tax Rate approved by voters 
and collected annually
•
Deductible on personal taxes
•
Considered a more stable 
revenue source
•
Equitable – pay over time
•
Levy funds debt service of 
entire 10-year plan without 
rate increase based on current 
projects

Funding the 10-year CIP
Supplementing Secondary Property Tax when
 Existing Bond Authorization is Fully Utilized
Current TPT Rate in Orange
Tax Rate supplementing 
secondary tax when existing 
bond authorization is fully 
utilized in Blue
Considerations:
•
Changes impact businesses
•
Rate change every three years 
would be needed or increase 
from 1.5 to 1.85 to meet debt 
service need 
•
Would constrain use of  ETROs 
for Utility projects and 
ongoing operations
•
Tax increase must remain for 
life of bonds

Who is in 
“The Same 
Boat” with 
Chandler?
Chandler
Glendale
2025
Buckeye 
2024
Mesa
2024
Gilbert
2025-26?
Phoenix
2023
Tempe
2024
Scottsdale
TPT- Nov
Surprise
2023

Bond Election History
The City of Chandler has had 
great success with residents 
voting to approve bond 
authorization to support the 
capital plan. Since 2000 the 
City has held 4 bond 
elections.  All with significant 
education/outreach.
The table shows the bond 
authorization amounts 
approved in each category 
since 2000.

Previous 2021 Bond Election Results
73.14% Yes
65.69% Yes
69.33% Yes
73.22% Yes
68.24% Yes
Council 
direction was to 
not increase 
secondary 
property tax 
rate

Previous 49 Member 
Bond Exploratory Election Committee
Purpose of Committee
Newly formed 
committee 
focus can be 
reimagined

Bond Exploratory Sample Committee 
Timeline
Committee selected 
July-Aug 2024
Kick-off begins
Aug. – Sep. 2024
Committee meetings 
take place
Sep.–Nov. 2024
Final Review with Finance 
Sub-committee in 
December 2024
Dec. 2024
Recommendation 
approved by Committee
Jan. 2025
Draft report prepared 
Jan. - Feb. 2025
Committee chair reports 
to Mayor and Council on 
recommendation and 
presents executive 
report 
Feb. - Mar. 2025
Call for Bond Election by 
May 8, 2025, for 
November 4, 2025, 
election
May 8, 2025

Bond Election Sample Process
Date
Description
Aug-Dec 2024
Bond Steering Committee process
Feb-Apr 2025
City Council discussion of recommendation
May 8, 2025
City Council calls for an election/approves ballot language by Resolution
June 7, 2025
Ballot language submitted to Maricopa County by deadline
July 7- Aug 6, 2025
Accepts Pro/Con Arguments
September 23, 2025
Sample ballot and informational pamphlet mailed to voters before election
October 6, 2025
Last day for voters to register for election
October 8, 2025
First day to mail out ballot
November 4, 2025
Election Day
November 24, 2025
Deadline for City Council to canvas the election

Options and Council 
Direction
•Begin formulation of Bond Exploratory Committee to 
evaluate project merits, financing options, and timelines
•Evaluate other sources of CIP financing to maintain as 
much of 10-year plan as possible (e.g. TPT, impact fees)
•Significantly pare back 10-year CIP to avoid bond 
authorization shortfalls post-2026 with no additional 
revenue stream

Questions