Tempe unveils $1.95 billion recommended five-year CIP; council signals consensus to raise tax-cap ceiling to speed bond projects

City staff presented the initial recommended five-year capital improvements program (CIP) to the Tempe City Council on March 20, showing a program of roughly $1.95 billion and outlining strategies to accelerate voter-approved bond projects. Councilmembers gave consensus to revise the city—s property-tax stabilization policy so the city can raise the levy cap to accelerate paving and affordable housing projects.

The CIP presentation brought forward projects across parks, public safety, transportation, transit, storm drains, and enterprise systems and reiterated the city—s intent to prioritize asset preservation and public health and safety. "This presentation is the first look at the recommended capital improvements program for the next 5 years," said Lisette Camacho, a presenter to the council. Julie Hyder, the interim municipal budget director, said the staff work aligns with council priorities and transparency goals.

Why it matters: The five-year program uses a mix of general obligation bonds, enterprise-funded bonds, special revenue, and cash where available. Voters authorized about $582 million in bond capacity in the November 2024 election; staff said they maximized general-obligation bond capacity to respond to inflationary pressure on project costs and to accelerate high-priority work such as paving and affordable housing.

Key points from the presentation - Total program: staff presented a five-year CIP of about $1,950,000,000. - Bond authorization: the November 2024 general-obligation bond authorization totals roughly $582,000,000 to fund public-safety, roadway, neighborhood, historic-preservation and affordable-housing projects. - Change from prior plan: staff said the five-year total rose by roughly 0.5 percent, which they estimated equates to about $9 million, partly because an added fifth year was included in the recommended plan. - Funding categories: staff said the largest funding components are enterprise bonds (water, wastewater, solid waste, ambulance), general obligation bonds (paid from the secondary property-tax levy and requiring voter authorization), and special revenue funds restricted for specific purposes such as transit and arts and culture. Staff also noted potential federal grants and developer contributions where applicable. - Project examples: staff highlighted PQI (pavement quality index) acceleration, a new police substation, rebuild of Fire Station 2, renovation of Fire Station 3, construction of Fire Station 8, water and sewer replacement projects, and asset restoration at Tempe Center for the Arts and the History Museum.

Policy change and next steps City staff proposed revising Tempe—s property-tax stabilization policy, adopted in June 2011, to remove a tie to the Consumer Price Index and to allow an annual levy increase up to 5 percent (the current policy references CPI up to a 3.3 percent maximum). Lisette Camacho presented the recommendation and asked whether the council had consensus to move forward. Councilmember Brad Adams said he supported the change, noting the bond election returns as strong voter support and that policy updates are appropriate over time: "If you're asking me to simply approve lifting up that cap a little bit to allow you to get all these projects done, I think that's very much what our residents would want, so I'm fully in support." Councilmember Keating also expressed full support. The mayor confirmed the council had consensus to revise the policy; staff said a resolution would be brought for formal approval at the April 10 regular council meeting.

Other discussion and staff direction Staff described additional program decisions and trade-offs: departments prioritized projects and, because of inflation and bond capacity limits, deferred or scaled back lower-priority projects. Hyder said departments were given financial targets based on the bond election and noted staff did not re-score projects this cycle because targets were pre-set. Staff also recommended suspending cash funding for capital projects in the general fund, transit fund, and arts and culture fund due to a loss in residential rental sales tax revenue; the presentation framed that as a staff recommendation rather than a council decision.

Acceleration and performance management Wydell Holmes, director of the Strategic Management and Innovation Office, reviewed "acceleration models" tied to the council—s prioritized performance measures, which include reducing homelessness, improving feelings of safety, increasing pavement quality, and boosting police-service satisfaction. Holmes described targets such as reducing encampment-response time from five days to two and increasing Tempe Works program completions. Holmes also described the Tempe Accelerates performance team and a quarterly cadence of reporting to maintain accountability.

Timeline and outreach for paving projects Staff said contracts for paving work would come to council the following week and that paving work is expected to begin in April. Staff and councilmembers discussed resident outreach: Chris Baxter, a staff member, said the city will place signs at projects and publish notices in digital channels (Tempe This Week/Tempe Today) and neighborhood communications. Councilmembers repeatedly requested clear advance communication to neighborhoods and schools; staff said work is underway on a Tempe Refresh communications hub to display project maps and progress.

Discussion vs. decisions - Discussion: full program details, prioritization criteria, and acceleration strategies were discussed at length. Staff described funding choices, survey results (592 community responses), and project examples. - Direction: the council gave consensus to revise the property-tax stabilization policy; staff will return with a resolution on April 10. - Formal action: no ordinance or formal vote was taken at the March 20 work study session; council consensus was recorded and a future resolution was promised.

What to watch next Staff said the city will bring a resolution on the property-tax stabilization policy to the April 10 regular meeting and contracts to authorize paving work are expected the week following the March 20 work study session. Staff also noted public dashboards and a Tempe Refresh hub will show project maps and status updates.

Speakers - Lisette Camacho, staff member (presenter) - Julie Hyder, Interim Municipal Budget Director (presenter) - Wydell Holmes, Director, Strategic Management and Innovation Office (presenter) - Councilmember Brad Adams (councilmember) - Councilmember Keating (councilmember) - Chris Baxter, staff member (online) - Mayor (title used in meeting; name not provided in transcript)

Authorities - {"type":"other","name":"City charter requirement to present the city manager's recommended five-year CIP at least 90 days before the fiscal year","referenced_by":["Lisette Camacho"]} - {"type":"policy","name":"Property tax stabilization policy (adopted June 2011)","referenced_by":["Julie Hyder","Lisette Camacho"]} - {"type":"other","name":"November 2024 voter authorization for bonds (~$582,000,000)","referenced_by":["Julie Hyder"]} - {"type":"other","name":"Secondary property-tax levy used to pay general obligation bonds","referenced_by":["Julie Hyder"]}

Actions - {"kind":"other","motion":"Council gave consensus to revise the property-tax stabilization policy to remove CPI reference and allow levy increases up to 5%","mover":null,"second":null,"vote_record":[],"tally":{},"legal_threshold":{"met":false,"notes":"Consensus recorded at work study session; formal resolution to be presented April 10"},"outcome":"consensus_note","notes":"No formal vote taken at this meeting; staff to return with resolution"}

Discussion_decision {"discussion_points":["Staff presented a $1.95 billion five-year CIP and described funding sources and department prioritization amid inflation","Staff proposed suspension of cash funding for general fund/transit/arts & culture due to residential rental sales tax loss","Acceleration strategies tied to performance measures: homelessness response, police satisfaction, PQI target, Tempe Works completions","Staff proposed revising the property-tax stabilization policy to permit up to 5% levy increase"],"directions":["Council gave consensus to staff to draft a resolution revising the property-tax stabilization policy for consideration April 10"],"decisions":[]}

Clarifying_details [{"category":"5-year CIP total","detail":"Five-year CIP total presented","value":"1950000000","units":"USD","approximate":false,"source_speaker":"Julie Hyder"},{"category":"November bond authorization","detail":"Voter authorization amount from November 2024 bond election","value":"582000000","units":"USD","approximate":false,"source_speaker":"Julie Hyder"},{"category":"CIP change","detail":"Staff said the total 5-year CIP increased about 0.5% compared with prior plan","value":"0.5","units":"percent","approximate":true,"source_speaker":"Lisette Camacho"},{"category":"community survey responses","detail":"Number of survey responses used to inform priorities","value":592,"units":"responses","approximate":false,"source_speaker":"Julie Hyder"},{"category":"PQI target","detail":"Pavement Quality Index target from bond acceleration","value":82,"units":"PQI points","approximate":false,"source_speaker":"Wydell Holmes"},{"category":"policy current cap","detail":"Current policy allows increase tied to CPI up to a maximum of 3.3%","value":"3.3","units":"percent","approximate":false,"source_speaker":"Julie Hyder"},{"category":"policy proposed cap","detail":"Staff recommended removing CPI reference and allowing up to 5% annual increase","value":"5","units":"percent","approximate":false,"source_speaker":"Julie Hyder"},{"category":"suspension of cash funding","detail":"Staff recommended suspending cash funding of capital projects for general fund, transit, and arts and culture due to residential rental sales tax revenue loss","source_speaker":"Julie Hyder"}]

proper_names [{"name":"Tempe","type":"location"},{"name":"Tempe Center for the Arts","type":"facility"},{"name":"History Museum","type":"facility"},{"name":"Fire Station 2","type":"facility"},{"name":"Fire Station 3","type":"facility"},{"name":"Fire Station 8","type":"facility"},{"name":"Tempe Works","type":"program"},{"name":"Tempe Accelerates","type":"program"},{"name":"Hometown for All","type":"program"},{"name":"Tempe Refresh","type":"program"},{"name":"Tempe This Week","type":"other"},{"name":"Tempe Today","type":"other"}]

community_relevance {"geographies":["City of Tempe"],"funding_sources":["General obligation bonds","Enterprise bonds","Special revenue funds","Federal grants","Developer contributions"],"impact_groups":["Tempe residents","neighborhoods receiving paving","affordable-housing applicants","utility customers"]}

meeting_context {"engagement_level":{"speakers_count":9,"duration_minutes":47,"items_count":1},"implementation_risk":"medium","history":[{"date":"2024-11","note":"Voter authorization of approximately $582M in general obligation bonds"}]}

searchable_tags ["CIP","capital projects","bonds","property tax","paving","PQI","affordable housing","Tempe Accelerates"]

provenance {"transcript_segments":[{"block_id":"b136","local_start":0,"local_end":108,"evidence_excerpt":"The only item on this evening's agenda is item 3A, initial recommended 5 year capital improvements program and acceleration strategies,","reason_code":"topicintro"},{"block_id":"b2106","local_start":0,"local_end":38,"evidence_excerpt":"Mayor, members of the council, that concludes our presentation.","reason_code":"topicfinish"}] }