DALLAS — Gilbert, Ariz., will begin an extensive, multi-year effort to widen streets throughout the Phoenix suburb with next week's competitive sale of $188 million of general obligation bonds.
The sale will include all $85 million of a GO package approved by voters in 2006, and $104 million from a $175 million authorization approved by voters in 2007. Some $10 million of the proceeds from the 2006 bonds will be used to acquire land for a special events center, but the remainder of the money from Tuesday's sale will be devoted to widening several two-lane streets to four-lane thoroughfares.
"The proceeds from this bond sale should take care of more than half of our widening projects," said Gilbert town manager George Pettit. "The work will focus on providing two north-south corridors and two east-west corridors."
He said the street-widening projects are necessary because many areas were developed on Maricopa County land outside the city limits, and therefore are not covered by municipal planning jurisdiction.
Gilbert's development regulations call for the developers of a property to build four- to six-lane arterial roads on one-mile grids, but the county does not have a similar requirement. As a result, Pettit said, some roads go from wide to narrow and then widen again, repeating the process several times as they cross the city.
There are no north-south roads in Gilbert that are at least three lanes through the city, he said.
"We call those narrow areas 'county scallops,' " Pettit said. "We're building the missing pieces so traffic can flow smoothly."
Greenberg Traurig LLP is the city's bond counsel. Peacock, Hislop, Staley & Given Inc. is financial adviser.
Ratings for the city's GO debt were raised with the issue. Moody's Investors Service raised Gilbert's rating to Aa2 from Aa3, and Standard & Poor's rating rose to AA from AA-minus.
The city will have $257 million of outstanding GOs after the sale, with no outstanding variable-rate debt. Gilbert retires 65% of its tax-supported principal within 10 years.
Pettit said the bonds will not require an increase in the city's property tax rate of $1.15 per $100 of assessed valuation. The remaining $71 million of GOs authorized at the November 2007 election won't be issued until enough of the current debt matures to avoid a property tax increase, he said.
Wider roads that can handle increased traffic are needed because the town has experienced incredible growth since 1970, when it had fewer than 2,000 residents. Gilbert's population has increased to 210,000 today from 110,000 people in 2000, a growth rate of more than 86% in less than a decade.
"Our single-family residential permits dropped from 350 a month last year to about 200 to 250 a month earlier this year," Pettit said. "But that seems to be recovering."
Any slack in residential growth is being overtaken by commercial construction, according to the town manager.
"Our valuation is going up because of the non-residential development that is going on," he said. "We have a large regional mall that is about to come onto the tax rolls, and there have been four hotel projects announced for the city. That's pretty healthy growth under the current conditions."
Secondary assessed valuation has increased an average of 45% a year over the past two years, totaling $2.37 billion in fiscal 2008.
The city had considered issuing the debt as street and highway user revenue bonds, supported by Gilbert's share of Arizona gasoline and other highway taxes. However, Pettit said, there was concern about the highway bonds.
"Gasoline tax revenues could be dropping if people cut back on their driving and don't go on vacations," he said. "We wanted to reserve our capacity for highway user revenue bonds for our maintenance and use our GO capacity for this capital improvement program."
Gilbert plans to issue $75 million of excise-tax and special assessment-backed debt in 2009, along with $85 million of enterprise or system development fee-backed debt.