Road Repair and Street Safety Initiative

Staff will continue its discussion with Council on the proposed sales tax initiative to fund repairs to road, utility and street safety, including $53M in capital repairs and $30M in pavement preservation.  Based on feedback from Council at the 6/10 Work Session, staff prepared two revised financing alternatives (0.33% and 0.30% sales tax rates) for consideration which address the following policy questions:

1. How does the City sales tax fund these repairs with bond and “pay as you go” financing?
2. Should the Road Repair and Street Safety Initiative be financed with a higher tax rate with lower interest payments or a lower tax rate with higher interest payments?

 
Draft ballot language will also be presented to Council for both financing alternatives.
 
Background Information:
 
Coconino County Coordination

• Coconino County is likely to propose a 0.30% or 3/10 of a cent sales tax for 20 year term.

 
2013 Community Survey

• A small increase in the sales tax for a longer period of time (20-25 years)
  • 62% support of City voters
• A larger increase in the sales tax for a shorter period of time (3-5 years)
  • 28% support of City voters

 
2014 Survey of Likely Voters:

• 1/4 cent City sales tax increase
  • 67% support of City voters
• 1/2 cent City sales tax increase
  • 60% support of City voters
• 1/4 cent City and 1/4 cent County sales tax increase
  • 65% support of City voters
• 1/2 cent City and 1/4 cent County sales tax increase
  • 56% support of City voters

 
Draft Ballot Language – 0.30%, 3/10 of a cent
Shall the City Council have the authority to (A) amend the Tax Code of the City to levy an additional Transaction Privilege Tax (Sales Tax) rate of 0.30% ($0.0030), such additional tax to be in effect for a period of 20 years commencing January 1, 2015, the proceeds of such additional tax to be used for the purpose of paying costs of improvements to pavement condition and maintenance of streets within the City and, in conjunction with such street improvements, making improvements, as appropriate, for  pedestrian safety and to maintain sidewalks, bicycle paths, curbs, gutters and drainage and paying all incidental costs in connection therewith and separately paying costs of issuance and debt service on obligations described in (B) and (B) authorize the issuance of obligations for the purpose of financing costs of such improvements, which obligations will pledge to their payment revenues from such additional Transaction Privilege Tax (Sales Tax), be in one or more series, in an aggregate amount not to exceed $28,000,000 of principal, run not more than 20 years from the date thereof, and have such other provisions as are approved by City Council?
 
Draft Ballot Language – 0.33%, 1/3 of a cent
Shall the City Council have the authority to (A) amend the Tax Code of the City to levy an additional Transaction Privilege Tax (Sales Tax) rate of 0.33% ($0.0033), such additional tax to be in effect for a period of 20 years commencing January 1, 2015, the proceeds of such additional tax to be used for the purpose of paying costs of improvements to pavement condition and maintenance of streets within the City and, in conjunction with such street improvements, making improvements, as appropriate, for  pedestrian safety and to maintain sidewalks, bicycle paths, curbs, gutters and drainage and paying all incidental costs in connection therewith and separately paying costs of issuance and debt service on obligations described in (B) and (B) authorize the issuance of obligations for the purpose of financing costs of such improvements, which obligations will pledge to their payment revenues from such additional Transaction Privilege Tax (Sales Tax), be in one or more series, in an aggregate amount not to exceed $20,000,000 of principal, run not more than 20 years from the date thereof, and have such other provisions as are approved by City Council?