What is a General Obligation Bond?
- General Obligation Bonds are a way for municipalities to borrow money and repay it with interest to investors. Bonds are backed by a community promise to pay, with the payment coming from a portion of residential and commercial property taxes (secondary property tax).
- The bond debt is limited to a percentage of the cash value of residential and commercial property in the community. This value is determined by the County Assessor.
- The Maricopa County Assessor has valued Surprise’s residential, municipal and commercial property at $1,353,294,535. State law stipulates that 20% ($270,658,907) can be utilized as bond funding for water, sewer, lighting, parks, public safety, streets, transportation, open space and recreation. 6% ($81,197,672) may be utilized for all other purposes. The city’s overall bonding capacity is $351,856,579, or 26% of the assessed value.
- The city council-appointed Citizens General Obligation Bond Committee recommended to the Surprise City Council that voters decide a General Obligation Bond package of $184,900,000, less than 53% of the city’s total bonding capacity.
- The city of Surprise currently has no General Obligation bond debt.
- All bond issuances require approval by the Surprise City Council in a public meeting.
- The City Council approved this recommendation and set an election date of November 3, 2009
