About Bonds
About Bonds
General Obligation (GO) bonds are used by municipalities to fund public infrastructure projects. Similar to a home mortgage, selling bonds allows municipalities to build public infrastructure projects now, and then pay off over time. When issuing GO Bonds, the Town agrees to pay the bondholders back over time through secondary property taxes. The 2024 Sahuarita Bond Program will appear on the November 5, 2024 General Election ballot as Proposition 403.
Features of GO Bonds:
Authorizes municipalities to fund public improvement projects needed today and share the cost with future residents.
Allows for improvement projects to be completed sooner rather than a “pay-as-you-go” process.
Repayment of GO bonds is from annual secondary property tax revenues for a prescribed period of time, usually 20-30 years.
Bonding may create a hedge against inflation of project costs since projects are brought online sooner than they otherwise would be.
Bonding Capacity
Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt for combined water, sewer, light, parks and open space, transportation and public safety purposes may not exceed 20% of a city’s net full cash assessed value (NFCAV), nor may outstanding general obligation bonded debt for all other purposes exceed 6% of a city’s net full cash assessed value (NFCAV).
Capacity will grow as net full cash assessed value (NFCAV) increases and/or as bonds are paid off and retired.
Tax Impact
The estimated average tax rate for the proposed bond authorization is $0.8850 per $100 of assessed valuation.*
*Assessed value is multiplied by the assessment ratio, which is 10% for residential properties, 16.5% for commercial properties, and 15% for others in Arizona.
Residential
Pima County calculates that the average assessed valuation for homes in the Town of Sahuarita is $232,067. Using this average figure, the monthly cost for a homeowner in the Town would be $17.12 for the $66 million in bonds.
Your home will likely vary from this average. Use the formula below to calculate your estimated average monthly cost.
Your Estimated Average Monthly Cost = [(Your Residential Property Assessed Value) x 0.10 x 0.008850] / 12
Example: Kevin is a homeowner in Sahuarita. His residential property assessed value is $260,000. The assessment ratio is 10% for residential properties in Arizona. The estimated average tax rate for the proposed bond is $0.8850/$100 (0.008850) of assessed valuation. For Kevin to calculate his estimated average monthly cost, he would multiply $260,000 by 0.10 by 0.008850 and divide that number by 12 months.
[($260,000) x 0.10 x 0.008850] / 12 = $19.18. Kevin’s estimated average monthly cost is $19.18.
Commercial
Pima County also calculates that the average assessed valuation for commercial property in the Town is $1,102,751. Using this average figure, the monthly cost for an owner of a commercial property in the Town would be $134.19 for the $66 million in bonds.
Your business valuation will likely vary from this average. Use the formula below to calculate your estimated average monthly cost.
Your Estimated Average Monthly Cost = [(Your Commercial Property Assessed Value) x 0.165 x 0.008850] / 12
Estimated Cost to Taxpayer
The following tables illustrate the estimated annual and monthly cost to taxpayers, including principal and interest, based on varying types of property, property values and assessed values. To determine your estimated tax increase, refer to your property tax statement which identifies the specific assessed value of your property.
Estimated Average Annual Bond Tax Rate Per $100 of Assessed Valuation $0.8850
(E1) The tax impact over the term of the bonds on an owner-occupied residence valued by the County Assessor at $250,000 is estimated to be $252.92 per year for 25 years or $6,323.00 total cost.
Estimated Average Annual Bond Tax Rate Per $100 of Assessed Valuation $0.8850
(E2) The tax impact over the term of the bonds on a commercial property valued by the County Assessor at $1,000,000 is estimated to be $1,524.60 per year for 25 years or $38,115.00 total cost.
Estimated Average Annual Bond Tax Rate Per $100 of Assessed Valuation $0.8850
(E3) The tax impact over the term of the bonds on a agricultural and vacant property valued by the County Assessor at $100,000 is estimated to be $151.75 per year for 25 years or $3,793.75 total cost.
(A) Assessor's value for tax purposes is the value of your property as it appears on your tax bill and does not necessarily represent the market value. Beginning with fiscal year 2015-2016, this value cannot increase by more than 5% from the prior year if the property has not changed. For commercial property, only locally assessed property is subject to this limit.
(B) Cost based on the estimated average tax rate over the life of the bond issues and a number of other financing assumptions which are subject to change.
(C) Estimated average assessed value of owner-occupied residential properties, commercial properties or agricultural and vacant properties, as applicable, within the Town as provided by the Arizona Department of Revenue.
(D) Assessment ratio will phase down to 16.5% in tax year 2024 and will be further reduced to 15.0% for tax year 2027 and thereafter.
(E) Assumes the net assessed valuation of the property changes at the lesser of five percent or half the rate of the Issuer’s total net assessed value shown on the projected debt service schedule.
Source: Assessor of the County.