Road Bond Questions and Answers
Bond Question“Shall the City of Rio Rancho issue up to $9,000,000 of general obligation bonds, to be repaid from property taxes, for the purpose of designing, constructing, repairing, preserving, rehabilitating, enhancing and otherwise improving roads?”
What are the Funding and Tax Implications?
If approved by voters, limits the amount of bonds to $9 million over a two-year period for the purpose of designing, constructing, repairing, preserving, rehabilitating, enhancing and otherwise improving roads.
If approved by voters, the property tax municipal debt service rate would increase from 1.848 mils to 2.067 mils. On a $100,000 market value house, this translates to an estimated increase in property tax of $7.30 per year.
What Roads Would be Addressed/How Would the $9 Million be Spent?
- The reconstruction of High Resort Boulevard (from Broadmoor Boulevard to N.M. 528) at a current estimated cost of $6.5 million
- Mill and inlay work on Sara Road (from Southern Boulevard to N.M. 528) at a current estimated cost of $2.3 million
- Delma M. Petrullo Art in Public Places Ordinance which requires that one percent (1%) of the proceeds of each general obligation bond issuance shall be dedicated for works of permanent public art that enhance the environment of the City
- Bond issuance costs
- Any remaining funds would be used for additional road-related work as directed by the Governing Body
What is Reconstruction and Mill and Inlay Work?City engineers rate the condition of all roads in the City with an assessment of what work, if any, is needed. Based on this information, public input (e.g., see below under miscellaneous), the City's adopted Infrastructure Capital Improvement Plan, Governing Body input, and the amount of available funds, a list of proposed projects to receive funding is developed.
Reconstruction is recommended for High Resort Boulevard. Reconstruction involves removing all existing asphalt to native raw dirt and building the section correctly based on roadway classification.
Mill and inlay is recommended for Sara Road. Mill and inlay is when approximately one to two inches of the existing asphalt is removed and replaced. This type of work adds, by approximately five to 10 years, longevity to the life of a road.
What are the City’s Road Needs?
Rio Rancho’s street system requires increased investment/funding in all aspects – preventative maintenance, rehabilitation, reconstruction, and system expansion. This road need exceeds the recurring resources currently available to municipal government. For example, the City’s 2016-2021 Infrastructure Capital Improvement Plan has a total of $113,066,968 identified in road work (includes preventative maintenance, reconstruction/rehabilitation projects, and system expansion) of which $76,459,873 has no identified funding source.
A general obligation bond cycle provides a recurring and predictable source of funds for infrastructure, is considered the most secure form of municipal debt, is the most cost efficient form of borrowing, and has favorable terms with no additional security or reserve funds required.
If the March 1, 2016 general obligation bond question for roads is approved by voters, a two-year general obligation bond cycle is re-established in the City. Every two years going forward, with voter approval, the City could take on new bond indebtedness to address more road needs, or other public service needs in the City, without an additional tax increase (i.e., increasing the municipal debt service property rate). For example, over a 10-year period via general obligation bonding, $45 million in funding could be generated for City needs.
A statistically valid survey of Rio Rancho residents was conducted in fall 2015. Residents were asked to specify their level of support for the statement: “The roads in Rio Rancho need to be improved.” Ninety-one percent (91%) of respondents either strongly (55%) or somewhat (36%) agreed with this statement. The survey also gauged the level of property tax increases to use for road improvements. Respondents were most supportive of a $10 per year increase (76% either strongly (45%) or somewhat (31%) supported).