Bond Issue: Fact Or Fiction


When Payson voters go to the polls on March 12, one of the issues they'll decide is whether the town should sell $3.8 million in bonds to pay for specific street improvement projects.

The majority of the money raised from the bonds, which would be repaid over a 15-year period, would be used to pave and improve designated high-traffic streets that lead to or are near schools, according to Gordon Metcalf, chairman of a Citizens Bond Committee. The committee was formed by the town council to provide voters with the information necessary to make an informed decision.

Improvements will include a sidewalk on at least one side of the street.

Streets included in descending order of cost if the referendum passes are:

Manzanita Drive from Highway 260 to Timber Drive ($1,000,000).

Upgrading various neighborhood streets not accepted by the town for maintenance where property owners are willing to accept 50 percent of the cost ($1,000,000).

McLane Road from Forest Drive to Airport Road ($975,000).

South Mud Springs Road from Highway 260 to Frontier Drive ($785,000).

The remaining $40,000 would be spent on costs related to issuing the bonds.

The designated street projects were selected by an Ad Hoc Citizens Advisory Committee appointed by the town council in accordance with the town's strategic plan. According to that document, Payson voters should be given an opportunity to accelerate the town's street capital improvement program.

Over the past few years, the town has only spent an average of about $500,000 a year on street improvements.

Opponents of the measure have questioned portions of the referendum's wording on the ballot, including:

A statement that part of the money raised would be used "to liquidate any indebtedness already incurred for such purposes."

A statement that interest on the bonds is "not to exceed 8 percent."

"The wording about indebtedness has to be there," Metcalf said. "It's required by law, but since there is no indebtedness, it is a nonissue."

The interest rate stipulation is precautionary.

"The actual interest rate will not be known until the bonds are sold. But (chief fiscal officer) Glenn Smith thinks it will be around 5 percent," Metcalf said. "Bonds are very low at this time."

Another argument of opponents is the money will somehow end up being spent elsewhere or in the town's general fund. Metcalf says that, too, is bogus.

"Bond funding cannot be used for any purpose but street improvements on those streets listed as the top three priorities," he said.

"The town council has never used bond funds for purposes other than what they were intended."

Metcalf argues that the timing for a streets bond issue may never be better.

"We can do it right now at a lower cost than we've seen in years," he said. "If we wait, we will face higher costs for materials and labor, and higher interest rates.

"(Federal Reserve Board Chairman Alan) Greenspan has already rattled some sabers about raising interest rates."

Metcalf claims the town is also in a good position to take on additional debt compared to many Arizona communities.

In Smith's survey of towns of similar size, Payson's per capita debt appears relatively low. However, while Fountain Hills and Goodyear are carrying considerably more debt than Payson, Cottonwood, Douglas, Prescott Valley and Marana currently have no debt service.

"Payson's existing bond debt service of $215,361 is the Green Valley Lake bond," Metcalf said.

If the measure is approved, taxpayers will see a slight increase in their property taxes over the 15-year period. Taxes on an average home with an assessor's full cash value of $108,000 would increase $21.60 per year.

"That's the price of a tank of gas or two-thirds of a carton of cigarettes," said Metcalf.

"It's a small price to pay. Everybody has been complaining about the condition of our streets, but nobody has been doing anything. This is our chance to do something. This is the only way it's going to get done."

Commenting has been disabled for this item.