“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
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
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).