Mesa Council approves general-obligation and utility bond issuances after public questions on past projects and rates

Mesa City Council on Monday unanimously approved two bond-related resolutions authorizing the sale of general obligation bonds and utility system revenue obligations after staff answered residents’ questions about how proceeds will be used and whether the utility bonds require future rate increases.

A voter who identified himself as David Winstanley of Eastmark asked whether the proposed general-obligation bond resolution is tied to ballot Question 2 ($90 million for public safety) and Question 3 ($170 million for parks, recreation and culture) and whether some proceeds would be used to cover prior debt balances. Mark Brady, a city staff presenter, said the council presentation shows the proceeds will reimburse projects dating back to 2018 and that some previously authorized projects now under construction will be paid or reimbursed from the sale. Brady said, “these proceeds that are being sold are covering projects that go clear back to 2018.”

Winstanley asked whether proceeds for the public-safety bonds were being used to cover prior debt; Brady said the presentation and council report break out the years and projects and that residents can view the slides online. Brady cited examples including ongoing public-safety facilities such as the Northeast Public Safety Facility and a Southeast Mesa project that are already under construction and will be completed soon.

On the utility bonds, Winstanley asked whether passage would require a later rate increase and whether approving $37,000,000 in utility bonds automatically increases taxes on citizens via a 30% surcharge on utility bills. Brady said the city’s long-range rate projections already anticipate much of the capital investment and debt service the utility system will carry and that the council has seen charts projecting payments and needs over 10 to 30 years. He also advised the resident to follow up with Chief Financial Officer Michael Kennington for detailed revenue and transfer calculations.

Councilmember action: Councilmember Spilsbury moved to approve items 5B and 5C together; the motion was seconded by Councilmember Duff and passed unanimously. The council previously removed items 5B and 5C from the consent agenda for separate consideration and public comment.

Staff said the presentation from a recent study session and the council report include line-item and year-by-year detail on projects funded from prior authorizations and on how the city times bond sales to match project needs. Brady noted timing issues such as construction inflation and COVID-related pauses that affected when bonds are issued and projects proceed. He said the city typically issues debt as projects are ready so proceeds reimburse costs rather than accumulating unused cash.

The council approved both resolutions after the public Q&A and staff explanations. The presentation and study-session materials referenced by staff are available on the city’s website, Brady said, and residents were encouraged to consult CFO Michael Kennington for technical questions about debt transfers and future rate impacts.