Welcome to the City of Albuquerque

Frequently Asked Questions

Q. What are General Obligation Bonds?

A. General Obligation Bonds (G.O. Bonds) are bonds backed by the full faith and credit of the City of Albuquerque. They may be redeemed by any regular source of City funding, but as a policy matter are generally redeemed by property taxes paid to the City.

Q. Will my property tax rate go up to pay for the General Obligation Bonds?

A. NO! The City property tax rate will not increase. New bonds are issued as older bonds are retired, thus keeping the City’s property tax rate essentially constant. In fact, due to low interest rates, the cost to the taxpayers for the issuance of bonds has been at historically low levels, enabling the City to pay down bond indebtedness in an average of 6 to 7 years rather than the planned 13 years.

The City receives about 30% of the property taxes paid by the typical Albuquerque homeowner. The remaining 70% is allocated to other governmental and educational entities which include the County Commission, CNM, AMAFCA, APS, and UNM.

Q. But my property taxes are going up. How come?

A. Governmental entities other than the City of Albuquerque have increased the tax rate over the years and/or the assessed taxable value of the property has increased. As noted above, it is the policy of the City of Albuquerque to keep the City’s property tax rate essentially at a constant level by paying off old bonds before issuing new ones.

Q. Will my property taxes go down if I do not vote for the General Obligation Bonds? A. There will be a minimal decrease in property taxes if the bonds are not approved by the voters - about $3.06 per month for a home valued at $150,000; about $2.00 per month for a home valued at $100,000.

Q. Briefly, what does bond funding provide for the citizens of Albuquerque?

A. General obligation bonds fund a host of capital improvements that directly affect the basic needs and quality of life of every Albuquerque resident. Public safety equipment, including police and fire facilities and vehicles; street and storm drainage improvements; public transportation improvements; parks, recreation and open space facilities; cultural institutions, including the zoo, aquarium, botanic garden and museums; senior centers and meal sites; and community centers; all these capital facilities and more are funded by general obligation bonds. Projects may cost millions of dollars and be funded over several bond cycles, or may cost a few thousand dollars and be funded within one bond program.

 

Q. And, by the way, how are these projects decided on?

A. Good question. It is actually pretty complicated and time consuming. The Capital Implementation Program administers a two-year-long process that begins with a resolution adopted by the City Council establishing criteria against which all projects are required to be evaluated. Each City department submits an application for projects and these applications go through a rigorous review process that includes staff review, rating and ranking; Senior City management review and recommendation to the Mayor; the Mayor’s recommendation to the Environmental Planning Commission; and the City Council’s review and amendment.

There is public participation at various points in this process. First, when the City Council adopted the criteria resolution, they established the Council-Neighborhood Set-Aside program, which provided that $1 million would be set-aside in each Council District for projects recommended to the Councilors by the public in their districts. The Environmental Planning Commission (EPC) is required to hold a public hearing and the City Council is also required to hold at least one public hearing. During this cycle, EPC held its public hearing in November 2012 and the City Council held two public hearings during February and March 2013.

 

Q. Are the funds derived from the bonds that are sold ever used to leverage federal, state, private or other local funds?

A. YES - often! G.O. bonds are often used as participating funds to obtain additional funding from all the sources you mentioned, especially for very expensive public works projects.

Q. Are G.O. bond revenues used right away? Normally how long does it take to complete a project?

A. Projects usually take about two years to complete, once enough money has been identified. Some large, multi-million dollar projects may take years to assemble the funding and complete construction. For example, large arterial street projects like Unser Blvd; or a brand new community center like the North Domingo Baca Multi-Generational Center are typically funded over several bond cycles. The goal is to have a bond cycle’s projects completed, or nearing completion, by the time the following bond cycle is ready for bond issuance. However, it is difficult to achieve this goal for all projects.

Q. You have used streets purpose projects as an example several times, but I remember that I voted for a quarter-cent gross receipts tax to pay for street projects. Am I paying for streets twice?

A. NO! The primary use for the ¼¢ funds is to maintain and repair streets. The City has grown so fast, particularly in the last 20 to 25 years, that the funding available from the

G.O. bonds was not sufficient to meet all the maintenance requirements and the demand for new facilities. So the voters approved the ¼¢ tax to allow the Department of Municipal Development to implement a major rehabilitation effort focused primarily on those parts of the City that have the greatest need for repair. General Obligation bond money supplements the street rehabilitation effort and also funds: sidewalk repair and expansion; median improvements; traffic signal upgrades; neighborhood traffic improvements; railroad crossing improvements; bike lanes; and some major road projects.

Forty-four percent of ¼ cent funds are dedicated by law to street rehabilitation and maintenance. The remaining fifty-six percent are dedicated to: public transportation (36%); development of deficient road links (15%); and development of on- and off-street trails (5%). As with G.O. bonds funding, the City Council reviews and approves all proposed ¼ cent projects.

Q. We vote on G.O. Bonds every two years. Why is this necessary?

A. The two-year cycle is not a requirement, but the City has found that the biennial time frame is a good one, because it provides for a steady funding approach to the capital program. Some communities use a five-year time frame. The City believes that the biennial approach allows adequate time for planning, staff review, decision-making by elected officials, public participation, bond election, and sale of the bonds. It is also true that this schedule permits a relatively consistent and predictable stream of projects available for bid to the private sector.

Q. Do the voters generally approve the bonds and does the City have any trouble selling them?

A. Yes, the voters do and no, the City does not.

The voters of the City of Albuquerque have been consistently supportive of the general obligation bond questions. In 2011, 66% of the voters approved all the general obligation bond ballot questions.

General obligation bonds of the City of Albuquerque have traditionally maintained an excellent bond rating and continue to do so. High bond ratings mean low interest rates when the City borrows funds, and low interest rates ensure that the City’s bonds are well received by issuers and purchasers.

 

The City maintains these high ratings for several reasons. First, the City redeems its

G.O. bonds in a relatively short time frame — an average of 6 to 7 years, but never more than 13 years. In fact in recent years, the City has begun redeeming some bonds within 5 years, sometimes in as little as 1 year.

In addition, the City is perceived by all three credit rating agencies to have strong financial management; a favorable debt profile; an orderly capital planning process and, as a result, a manageable capital plan; and finally, a diverse economy.

 

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