City staff sought consensus on Wednesday from a council still divided over what the 2027 bond should look like and what it could cover.
City Manager Erik Walsh pushed the council to agree on the recommended total bond capacity of $442 million and another $175 million for a stormwater drainage revenue bond that would be supported by a storm water fee increase.
That number would allow the city to meet upcoming deadlines to put the issue on the ballot in May 2027 and avoid a potential debt service tax rate increase to cover the bond in future years.
The $442 million recommendation was based on the staff’s analysis and economic assumptions that they believe would not force the city to raise debt service taxes in 2029 or after, said Ben Gorzell, the city’s chief of administrative and financial services.
Any amount above that, “we would not be able to sit here and tell you that we would not have to raise the debt service based on our assumptions, based on everything that we’re looking at,” he said.
Still, at least four council members said they favored a $750 million general obligation bond, however, while the mayor and others opted for the more conservative proposal put forth by Walsh and Director of Capital Delivery Mike Shannon.
The $442 million bond package proposed by city staff this week includes $330 million for street improvement projects, $50 million for affordable housing and $92 million for parks and facilities. Among the projects are infrastructure projects related to Project Marvel that add up to $35 million.
Bond projects are prioritized based on existing city plans, public safety and economic viability, as well as those that leverage funds from other sources.
While solidarity on the bond wasn’t achieved, most did agree on one thing — the need to dedicate funding to the city’s stormwater drainage system and repairs, even if it means directing more tax dollars to those projects and widening the scope.
Several members also noted the need to fund affordable housing at a higher amount through the bond.
Walsh said he was seeking input on the bond at the briefing-only council meeting ahead of a formal council vote to approve the bond issuance expected on Oct. 29, which will kick off a months-long process before it goes to voters.
In addition, the city manager wanted clarity on priorities and how the funding will be spread out among council districts.
“One of the things that we will talk about today is the concept of proportionality, which means not every district gets the same, a lot of it is based on need,” Walsh said ahead of the meeting. “But like the past bond program, we try to make sure that we are covering the respective needs in the district.”
Bond dollars would be divided among council districts with differences within 7-13%, Walsh said.
The council is expected to vote on the final recommended list of projects in January and the following month will consider adding it to the May ballot.
The proposed bond capacity is about one-third the size of the last one passed in 2022, a consequence of the slowing economy and reduced revenue from softening property values.
In September, the council voted for its first tax increase in decades to fund day-to-day city operations.
But some council members still want to increase the bond capacity — even if it means raising taxes in 2029 as city staff suggested — and aren’t backing down, saying now’s not the time for their district to give up on funding long-standing needs.
District 3 Councilwoman Phyllis Viagran said she didn’t want to make the bond conversation about taxes at all. Raising taxes in a growing city in light of the current economy seems inevitable, she said.
“I want us to approach this bond program with a fair opportunity that meets the priorities and needs of all 10 districts,” Viagran said. “What we have before us today is a bond package that has not been this low since 2007. I still want us to consider a bond program in the range of $750 million.”
But Councilman Jalen McKee-Rodriguez (D2) said the proposed $442 million is the path of least resistance, though he disagreed with the suggested list of stormwater drainage projects because none were in his district or District 6, which includes the West Side.
“Everybody should get at least one drainage project,” McKee-Rodriguez said. “As long as everybody gets something, that’s good.”
District 4 Councilman Edward Mungia said he also wants those districts to get a stormwater drainage project completed now rather than waiting for costs to escalate, and wants to see the bond at $750 million.
“What would be the cost for not doing some of these years later on?” he said, and being forced to pay for those projects out of the city’s general fund.
Another council member who said she supported the higher bond capacity was Councilwoman Teri Castillo (D5), if only to increase the amount earmarked for affordable housing.
Another councilwoman said consensus was key to getting voters to approve the bond in May. “There are voters that will ask us, ‘Do you support this bond?’ And if you say no, … that decreases the chances of this bond failing,” Councilwoman Sukh Kaur (D1) said.
She estimated any potential tax increase to support a $750 million bond would amount to about $1 a month more for property owners. She also suggested increasing the bond capacity to $750 million and incorporating the drainage projects in the bond package, thus eliminating the increased stormwater fee.
Saying she preferred to be more conservative with the bond, Councilwoman Ivalis Meza Gonzalez (D8) asked that the bond package prioritize projects that are already in progress.
But she also suggested rounding up the total package from $617 million to $650 million to allow for more stormwater projects in other districts.
Representing District 7, Councilwoman Marina Alderete Gavito supported the lower bond amount even if that doesn’t create enough funding to cover all the needs, which in her district alone adds up to $635 million.
She called it “not ideal.” But, “I just feel in today’s economy, a tax rate increase, no matter how small it is, in today’s economy, is just not going to fly,” she said.
Also weighing in against a higher bond and potential tax increases to support it, Councilman Marc Whyte (D10) said that was “absolutely off the table.”
“We’ve got to stop putting our hands in people’s pockets and taking their money,” he said. “Every damn time we’re up here, we’re talking about taking more money out of people’s pockets and that’s got to stop. We need to live within our means.”
During the meeting, the council also discussed the makeup of bond committees which are expected to spend November and part of December sifting through the city’s requests and needs, and public input, and make recommendations for the bond.
The proposed committee chairpersons could be announced later this week or next.
