Santa Fe Opportunity Bonds FAQs
Frequently Asked Questions (FAQs) on Santa Fe Opportunity Bonds
Why is the city of Santa Fe (the City) putting general obligation bonds (Santa Fe Opportunity Bonds) on the March 6 ballot for voter approval?
The Santa Fe Opportunity Bonds are designed to enhance Santa Fe’s economy by improving our infrastructure in key areas (public safety, parks and trails, and the environment). This is a way for Santa Fe to be self-sufficient and to address issues that help provide enhanced quality of life for all Santa Feans. In many areas, funding is no longer available from the state and federal governments, and the need to maintain and improve infrastructure remains a priority.
Why issue bonds now? As infrastructure ages--for example, when parks and trails deteriorate from heavy use; or city buildings operate with inefficient, costly power--it will be more expensive to repair or build these facilities at a later date. Also, the economy will rebound more quickly with the immediate infusion of funding that will create jobs and lead to the purchase of materials and services.
How will the final decision be made on whether the bonds will be issued? The bonds will be decided by the voters at the March 6, 2012 election. Three questions will be on the ballot – one on each area of investment:
1. Public Safety bonds for $5 million for police and fire facilities.
$1.5 million would complete the main Police facility on Camino Entrada. This will relieve the cramped space for Police Department staff; especially as annexation adds to their responsibilities.
$3.5 million would build and equip a new fire station. Fire Station #11 will be outfitted with a new fire truck, an advanced life-support ambulance, and a water tanker; all of which are needed to provide fire suppression, emergency medical services and adequate water supply to an area of the city without proper coverage or fire hydrants. This will enable the City Fire Department to keep up with the increasing volume of calls, and cover areas being annexed into the city.
2. Parks and Trails bonds for $14 million for parks and trails infrastructure.
$6 million would go to trail improvements including an underpass of St. Francis Drive at West Alameda. This will enhance the budding bicycle businesses, tourism and community in Santa Fe which is supported by Bicycle Technologies International (top parts wholesaler), and the International Mountain Biking Association Conference, which is coming to Santa Fe in October, 2012.
$5 million would complete Phase 1 of the SWAN (Southwest Activity Node) Park in Tierra Contenta including a playground, family picnic area, multi-purpose sports field, lawn area, basketball court, landscaping, access road and parking. This is a much-needed facility for the 40% of Santa Fe’s children who attend school in the southwest part of town—the most populous and fastest growing area in Santa Fe which has very few neighborhood parks and open spaces, and no large regional parks. For over 18 years, the community has expressed the desire and need for a substantial community recreation area in this part of town, including through the extensive community planning process for Tierra Contenta in 1993. Nearby businesses will benefit by having an outdoor amenity for workers, customers and others. SWAN will become an economic development force by bringing people to the area for league play, regional teams and other outdoor activities.
$3 million would be allocated to additional parks improvements not completed through the 2008 Parks Bond. This will enhance outdoor space and quality of life throughout Santa Fe which is the main reason that businesses and others want to be in or relocate to Santa Fe.
3. Sustainable Environment bonds for $3.8 million for projects to promote cost-effective solar energy; strengthen and improve our watershed and rehabilitate substandard arroyo drainage.
$1.8 million would be used to build a photovoltaic (PV) system at the Genoveva Chavez Community Center. The PV system will generate 600,000 kilowatt hours (kWhs) per year or roughly 25% of the facility’s total electric use. The system will be installed in the parking lot south of the building (not on the roof). The PV system will result in reduced electric costs for the city and as a result it will pay for itself over roughly 15 years. Building this type of system will also provide opportunities to build capacity at a local businesses and train a green workforce .
$2 million will be used to improve our watershed and storm-water management and slow down runoff so that more water can recharge the aquifer. This will be achieved through correcting substandard arroyo drainage. More than 50 projects have been identified throughout the city. These improvements will also decrease the risk of serious damage to property from flooding while addressing both upstream and downstream deterioration.
If all three questions are approved the City will issue $22.8 million in bonds. If only one or two questions are approved then the City will bond for a lesser amount.
How will the SF Opportunity Bonds affect the local economy?
The bonds will improve our infrastructure and community amenities. In Santa Fe, many businesses say the reason they are here is because this is the city of choice for them and their employees. The bonds will help maintain our high quality of life which is crucial to our business climate and economic well-being.
The direct effect of the bonds is that a minimum of 157 direct construction jobs will be created by the projects (if all questions are approved). Other economic activity would also be generated, especially in spending on materials, tools and other supplies. The economic impact will be enhanced by new efforts to ensure the money is spent locally to generate local jobs by refining procurement policies and education about the importance of buying local and supporting community businesses.
How will the bonds be paid for?
The bonds will be funded through a property tax increase. If all bonds are approved the property tax increase on a home valued at $300,000 (taxable valuable of $100,000) will be ROUGHLY (taxes always vary household to household) $54 per year, $4.50 per month.
How much will property tax increase?
Property taxes will increase about 2.63% of the current residential property tax amount (thus, if the current tax paid is $1000/year the increase would be $26, for a total new bill of $1026). The increase for non-residential will be 1.78% of the current tax amount. The new tax rate will remain in place for the life of the bonds which is estimated to be 30 years.
What are General Obligation bonds and can the city of Santa Fe afford them?
General Obligation bonds are ways of borrowing funds to support immediate major improvements in a community. The City can afford them. If all three questions are approved, the city of Santa Fe would have used slightly more than one-third of its General Obligation bonding capacity.
What is the City’s total bonding capacity and how it is determined?
The city of Santa Fe has a total general obligation bonding capacity of about $144 million. This total is determined by New Mexico Statute and is calculated by taking one-third of the total property value in Santa Fe times .04, so four percent of the total taxable value of property in Santa Fe.
What is the City’s bond rating and will this affect it?
The city of Santa Fe’s overall bond rating is triple-A (AAA)—the best it can be. One part of this bond rating is derived from a combination of the ratings on all individual bonds the City holds, also included is the City’s overall financial management picture. With good financial management on this and other bonds and in other areas, the City is expected to maintain its triple-A bond rating.
Will any other expenses increase if these bond questions are approved?
Operating costs for the city of Santa Fe will increase as a result of some of the projects which would be funded through these bonds. For example, buildings, equipment, trails and parks must be maintained. As it has in the past, the city of Santa Fe will fund these and other recurring expenses through appropriately managing operating revenue to meet demand.