Webber backpedals on $60M bond vote
Mayor: Proposal offered during council meeting was idea; consensus needed to pursue improvements
Mayor Alan Webber on Thursday hit the brakes on a possible $60 million general obligation bond election this fall, saying he had only offered the idea as a “place-holding resolution” to the City Council the night before.
Webber said there were no hard-and-fast answers yet on whether the election would be held, what the funds would be put toward, the dollar amount or what voter approval could mean for the property tax rate in the city.
The mayor this week introduced two pieces of bond-related legislation — the possible bond election in November and another $13 million in gross receipts tax improvement revenue bonds that would not require voter approval.
But Webber on Thursday said a bond election was far from a sure thing.
“We got over our own skis a little bit if it appeared there was already a commitment or a package already put together,” he said. “None of that is the case. This is essentially me as the mayor saying we need to be able to be in a position to think about doing this.”
The intent of the bond introductions, Webber said, was to simply open the conversation and ensure the city could, if some consensus is reached between city councilors and the public, pursue that avenue to address its capital investment needs and get bond questions on the ballot in November.
Nothing is set in stone. There isn’t even a stone, Webber said.
“It’s not, ‘We’re committed to doing this; we know exactly what’s in package; we know exactly what the tax implications are; we know when the first bonds would be issued.’ That’s not where we are,” he said. “We’re at the other end of process. Even being able to consider a bond issue for the November election, we have to get the paperwork started now.”
The city has about $250 million in deferred maintenance costs hanging over it. The mayor said the conversation about the general obligation bonds would be part of his and city finance staff ’s effort to “get the city into a regular, recurring pattern so we can take care of our significant backlog of investments and improvements.”
“This is not an effort to raise people’s taxes,” Webber added. “This is an effort to begin a conversation about getting onto a more predictable cycle of funding so that we catch up to our capital needs.”
“In theory, philosophically, I see bonds as doing more long-term things rather than maintenance-type projects,” said Councilor Signe Lindell. “But we’re pretty overwhelmed with maintenance. The bottom line for us, of course, is if people want this done, they can vote for it.”
“Typically no one wants more taxes,” she added. “However, people do want better streets, and there’s lots of projects they want to see done. But you’ve got to either spend less somewhere else or you’ve got to raise more money. It’s a pretty simple formula.”
Hearings on the bond proposals are scheduled for the city Public Works and Finance committees, as well as before the City Council. Consensus would be essential for moving forward, Webber said.
“This isn’t something the mayor gets to unilaterally decide,” Webber said. “Even to have the opportunity to discuss the idea, and to acquaint and educate both the council and public about why this is or isn’t a good idea, what it would cost, what would be in the package, that conversation is predicated on putting those resolutions on the docket.”
General obligation bonds are repaid with property tax revenues. That means the tax rate might rise to cover debt from the bond issue.
“As soon as the words ‘tax increase’ are uttered, it raises all kinds of warning signals, and I understand that,” Webber said. “But it’s flat-out premature to assume anything. This is enabling us to have the conversation that we need to have given our capital needs.”
The city of Santa Fe’s property tax rate is low relative to other cities in the state.
Last year, the city’s imposed property tax rate of 3.183 mills was below the state average of 4.551 mills and even further below the 7.65 mill maximum allowed by New Mexico statute, according to state figures.
The most comparable cities in the state by population, Rio Rancho and Roswell, were both at the 7.65 maximum rate last year, according to the state.
Albuquerque and Las Cruces have comparatively higher property tax rates, as well, at 7.064 mills and 5.120 mills respectively.
A mill is one-thousandth of a dollar, and the mill rate determines how much property tax is levied.
There is more than $4 billion in net taxable property value in the city of Santa Fe, according to state figures for 2017, almost double that of either Rio Rancho or Las Cruces.
Santa Fe takes in the largest chunk of its revenue from gross receipts taxes.
Property tax revenue delivers something in the neighborhood of $10 million to $11 million in revenue to the city each year, according to recent budget totals. That is about one-tenth the revenue from gross receipts taxes.