Gilbert’s Woes May Nix GOs

Gilbert may not be able to issue $82 million of authorized but unissued general obligation debt due to plummeting property values in the Phoenix suburb.

Voters approved $57 million of bonds in 2001 and $174 million in 2007. The unissued bonds from the two authorizations would provide $11.8 million for upgrades to three city parks and $71 million for street projects.

Assistant town manager Marc Skocypec told the City Council last week that county-assessed property values in Gilbert dropped 3.4% in fiscal 2010, with valuations expected to fall significantly through fiscal 2012.

He said property values are expected to drop by 15% to 25% a year in fiscal 2011 and 2012.

Skocypec said the current property tax rate of $1.15 per $100 valuation would have to go to $1.30 per $100 in fiscal 2011 and $1.55 in fiscal 2012 to support the unissued bonds.

Gilbert’s GO debt is rated AA by Standard & Poor’s and Aa2 by Moody’s Investors Service. The city’s population is estimated at approximately 215,000, up dramatically  from fewer than 30,000 in 1990.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER