Gilbert, Ariz., will not be able to issue any general obligation bonds or other authorized debt this year after the City Council voted last week to keep the secondary property-tax rate unchanged in fiscal 2013 for the 11th year in a row.
City officials said a 40% drop in property values since fiscal 2009 has reduced the Phoenix suburb’s capacity to issue new debt.
Total assessed value of $1.67 billion is down 10% from fiscal 2012’s $1.86 billion. Valuations peaked in fiscal 2009 at $2.77 billion.
Budget administrator Dawn Irvine told the council that revenues from the secondary property tax are sufficient to meet debt service on the city’s $526 million of outstanding debt issued by the city and Gilbert Municipal Property Corp. Debt service in fiscal 2013 will be $51 million, down from $75 million in fiscal 2012.
Irvine said the property assessments are expected to decline further in fiscal 2014, but are projected to rebound in fiscal 2015.
Voters approved $80.6 million of GO bonds for parkland acquisition and improvements, but $74.3 million remain unissued. Gilbert has not issued $156.8 million of the $188 million of GOs approved in July 2008 for road projects.
Gilbert’s GO debt is rated Aa1 by Moody’s Investors Service and AA by Standard & Poor’s and Fitch Ratings.
