Gilbert council leans toward maintaining current secondary property tax rate to preserve reserve

Finance Director Kelly presented three secondary property‑tax levy options the town could adopt for next year’s debt service: a “debt service only” levy (about $0.964 rate) that keeps the rate lower but reduces future bond capacity; a middle option that maintains the current 0.98 rate and targets roughly 7% reserves; and a maximum option (just over $1.00) that would max out reserves and increase capacity to pay down debt faster.

Kelly noted town policy requires a minimum 5% reserve and state law caps a levy at no more than 10% reserves; she said the town’s debt service for next year is about $34.3 million and the assessed valuation now allows staff to calculate the specific levy and rate options. She also explained the trade‑off: a lower rate reduces short‑term property tax bills but increases interest expense on future bond issuances, while a higher rate reduces long‑term interest costs but raises tax bills and adds variable rate uncertainty.

Council response: Multiple members signaled support for the middle option to keep the rate stable. Councilmember Young said staying with the current rate “keeps the stability” and Councilmember Koprowski, Councilmember Kenny and others signaled green for the mid option; a few members said they would be red on the highest option and would not favor further reductions because of long‑term cost. Kelly said she would place the middle option in the preliminary budget documents for the upcoming study session and budget hearings.

Why it matters: The council’s preliminary preference matters for the FY26 budget development and for the town’s capacity to issue future transportation bonds authorized by voters. Choosing the middle path preserves debt‑service capacity while keeping reserve policy intact.