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Cost of city government numbers

  Here are some interesting numbers and figures on the cost of city governments.

Per-capita general obligation bond debt per city resident. Please note that the tax and spend tyrants in Tempe spend almost FIVE times what Mesa spends, and almost THREE times what Phoenix spends. They don't call it the "People's Republic of Tempe" for nothing. And of course Tempe Mayor Hugh Hallman pretend to be a Republican when the way he votes he could easily be thought of as a communist or socialist.

  • Mesa: $630 per resident.
  • Gilbert: $937.
  • Glendale: $968.
  • Phoenix: $1,129.
  • Chandler: $1,905.
  • Scottsdale: $2,660.
  • Tempe: $2,942.

What residents pay in sales taxes, property taxes and utility fees per homeowner.

  • Gilbert: $1,527
  • Chandler: $1,574.
  • Mesa: $1,607.
  • Scottsdale: $1,664.
  • Tempe: $1,821.
  • Phoenix: $1,927.
  • Glendale: $2,051.

The full chart is available at www.mesaaz.gov/budget/

This is the article that had the information


Source

Mesa still pays debt obligation from general fund

by Gary Nelson - May. 12, 2011 09:49 AM

The Arizona Republic

The tone was all but celebratory on July 26, 1945, when Mesa's hometown newspaper reported on that week's City Council meeting:

"Here's good news for property owners in Mesa," the Journal-Tribune crowed. "The city of Mesa is letting you operate your property this year free of charge as far as it is concerned."

The plan going forward was to run the city without a property tax, relying on utility revenue more than any other source to pay the bills. So lucrative were those utilities that Mesa during that last wartime year was actually able to add staff and develop five new parks.

Fast-forward 66 years, to another City Council meeting.

During a study session last week, the council took a detailed look at how the 1945 model is working. Without saying so directly, Mayor Scott Smith strongly suggested the time is coming for a trade-in.

"Overall we're pretty comfortable that the practices and policies of financial management have served us pretty well," Smith said. "But there are some very significant items that this council needs to revisit, not this year but certainly in years to come."

The primary focus of discussion was Mesa's general obligation bond debt. Mesa issues those kinds of bonds to pay for non-utility capital projects such as police and fire facilities and street construction.

The problem isn't that Mesa has too much of that debt. Compared with six other large Valley cities, Mesa's per-resident general obligation debt is by far the lowest.

The problem is how Mesa pays it back.

When the city fathers decided in 1945 to eschew the property tax, every Mesa council between then and 2008 took that as a command from on high not to impose any kind of property tax. Not even a secondary property tax, which by law - and even by the language presented to voters in bond elections - can be levied for the sole purpose of paying off that debt.

So, how would Mesa pay those bills? By using general-fund revenues such as sales taxes, money from the state and, as in 1945, utility income.

In any other city that money could be used for police officers, firefighters, libraries, park maintenance and other services. But not in Mesa.

That began to change in 2008, when the City Council under former Mayor Keno Hawker finally told voters that bonds approved that year would be paid from a secondary property tax.

The council also said it would levy a secondary tax to repay some pre-2008 bond debt, freeing general-fund money to staff and operate new fire stations.

Even so, Mesa is spending $25 million to $26 million a year from its general fund to repay pre-2008 bonds.

In the boom times when sales-tax dollars grew on trees and state-shared money was rolling in, Mesa could handle that.

But the boom times ended in 2007. Mesa's general fund has shrunk about 25 percent and is now about $110 million a year less than before the financial crisis hit.

That makes debt service a greater strain on Mesa's finances than ever before.

Last week was hardly the first time the council has visited the issue in recent years. The discussion, however, had the sound and feel of a tutorial aimed at preparing Mesa residents for changes to come.

Although he was well aware of the answer before he posed the question, Mayor Smith asked, "Is there any other city that we know of that pays their GO (general obligation) debt obligation out of general fund?"

City Manager Chris Brady: "We're still looking nationally to see if we can find that."

Smith: "Nationally? I think there's a city in Chile that does that."

Executive administrator Chuck Odom: "When we did this study in 2008 we could not find another city that operated the same way."

Smith: "Basically, we are a trailblazer."

Brady: "It's a trail nobody else is following."

Smith: "That's important to know. So there's about $25 million to $26 million a year in what others would use to fund their police and fire and those things that we're redirecting into debt service. . . . We're doing something that is unique."

Nobody advocated any particular action during last week's meeting. But a couple of possibilities were put on the table.

One: If the council ever decides to sell bonds that voters authorized before 2008 but have not yet been issued, there's the option of imposing a secondary tax to pay for them - even though prior councils told the voters that tax would not be imposed. There is about $32 million worth of such authorized, but as-yet-unused, bond capacity.

Two: The council, without voter approval, could impose a secondary tax on all or some of the already-issued pre-2008 bond debt, freeing general-fund money for other uses. That, too, would fly in the face of promises made to voters.

The second option is something of a third rail in Mesa politics: Any office-holder touching it could get electrocuted at the polls.

But after the 2012 elections, assuming four incumbents are re-elected, the majority of the council will be lame ducks. And tough decisions can be far easier to make when fear of voter reprisal is taken out of the equation.

-----------------------------------

Mesa keeps lid on bond debt

As City Council members talked about Mesa's bond debt last week, they were careful to note the difference between a city and debt-laden Uncle Sam.

"This is not the federal government," council member Alex Finter said, trying to deflect some of the recent anger that has been directed at governments across the board because of financial issues.

"The federal government borrows money for its operating expenses," Vice Mayor Scott Somers added. "We don't come anywhere close to that."

Not only does the city borrow only for capital projects, it also makes sure the debt is repaid before the asset that money purchased is retired. If a piece of fire equipment lasts 10 years, say, it's paid off before the 10 years are up. Payments on buildings can be stretched out far longer.

Executive manager Chuck Odom also said Mesa's per-capita general obligation bond debt is far lower than in other Valley cities.

Mesa: $630 per resident.

Gilbert: $937.

Glendale: $968.

Phoenix: $1,129.

Chandler: $1,905.

Scottsdale: $2,660.

Tempe: $2,942.

Mesa on low end of costs for residents

Every year, Mesa tallies how much its residents pay for city services compared with those in other Valley cities.

The rankings can change depending on where cities are in their budget-making process, but Mesa has taken pride in being among the cheapest of Valley cities over the years.

Last week Mesa released a new chart that considers what residents pay in sales taxes, property taxes and utility fees.

If the council approves utility-fee hikes as proposed this spring, the rankings will look like this, assuming other cities' fees remain as they are now:

Gilbert: $1,527 per homeowner.

Chandler: $1,574.

Mesa: $1,607.

Scottsdale: $1,664.

Tempe: $1,821.

Phoenix: $1,927.

Glendale: $2,051.

The full chart is available at www.mesaaz.gov/budget/

 

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