Whether it's the 9 cents per $100 assessed valuation proposed by acting City Manager Rich Dlugas or a 6 cents increase suggested by others hangs on a City Council tax vote in June, but no one voiced objections to a rate hike during an all-day budget meeting Friday. Whichever the council picks, homeowners will pay less next year than they did this year because the amount is based on home values that have steadily declined during the economic downturn, Dlugas said.
Without an increase, Chandler would not be able to pay bond debts or maintain parks and roadways, he said. Even with a higher rate, the city still has to put several park and road projects on hold for years or until home values increase. The only street improvements set for next year are four that are receiving considerable federal and state funding: 1-mile sections of Gilbert and Ocotillo roads and Chandler Boulevard intersections at Alma School and Price roads.
Revenues from secondary property taxes pay bond debt that finances streets, park improvements and maintenance. Sales-tax revenues, which in Chandler have been slowly increasing over the past year, fund the city's day-to-day operations, including salaries.
Chandler's municipal property-tax rates are lower than those in Phoenix, Glendale, Tempe and Peoria but higher than those in Gilbert, Scottsdale and Mesa. Tempe, Scottsdale and Mesa also are considering rate increases.
The 9 cents increase would bring in about $4.6 million more than the 6 cents increase. The difference would provide more to spend on park and street maintenance and could advance construction of two promised neighborhood parks, according to budget reports. Neither will pay for acquisition of land for future parks or promised construction at others.
At Friday's budget meeting some council members said they would consider a 6 cents increase if it is enough to pay the city's $404 million bond debt and no more.
When the 6-acre Mesquite Groves Aquatic Center opened in 2008, it was touted as the small first part of a 100-acre Mesquite Groves Park southwest of Val Vista Drive and Riggs Road next to Basha High School. The drawings showed lighted ballfields, a recreation center, amphitheater, skate and dog parks, horseshoe pits, artificial lakes, picnic ramadas and trails were supposed to go in soon.
Now, the project is on indefinite hold and the colorful play pools and water slides are surrounded by massive dirt lots. Also postponed indefinitely are the Shawnee Park satellite recreation center, senior center expansion, additional development of Tumbleweed Park and expansion of the Snedigar Sportsplex.
Property-tax declines aside, Chandler is in better shape than some other Valley cities, Management Services Director Dennis Strachota said, citing thirteen consecutive months of small increases to sales-tax revenue and a AAA bond rating from all three rating agencies. Previous staffing and vehicle reductions and energy efficiencies have saved $2.8 million, according to his report. That has the budget calling for no new cuts to staff or services and a possible 5 percent merit raise for employees.
But like other cities, Chandler must adjust to state budget decisions that will take away $1.6 million in highway revenue fees and is creating uncertainty about future collection of construction impact fees. To make up for that uncertainty and the prospect that economic recovery may be slower than expected. Dlugas has added a new reserve fund to the budget for infrastructure maintenance "should the city fall further behind in its upkeep of existing infrastructure as a result of further declines in property tax assessed values."
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How rate increases would affect Chandler tax bills
• Median home value in 2010-11: $178,300.
• Current combined city tax rate: $1.18 per $100 assessed valuation.
• This year's municipal property taxes on median-value home: $210.64.
• Median home value in 2011-12: $153,200.
• Next year's city taxes on median home with 6 cents secondary rate increase: $190.18.
• Next year's city taxes on median home with 9 cents secondary rate increase: $194.77.
Source: Chandler budget report.
Chandler budget
• Proposed total for 2011-12: $676.5 million.
• Increase over this year: $5.5 million.
• Set aside to pay debts: $58 million.
• Designated for operating expenses: $303.3 million.
Council budget meetings
• Where: City Council chambers, 88 E. Chicago St.
• Discussion of possible budget amendments: 7 p.m. May 23.
• Tentative budget adoption: 7 p.m. May 26.
• Public hearing on budget and property-tax levy: 7 p.m. June 9.
by Edythe Jensen The Arizona Republic May. 11, 2011 10:24 AM
Chandler City Council likely to approve property-tax hike
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