Aztec discusses general obligation bond process while seeking North Main funding
AZTEC — Aztec city leaders put the brakes on plans for development of North Main Avenue due to a budget shortfall this spring, and are now discussing using general obligation bonds as one way to get that work done.
The Aztec City Commission learned about general obligation bonds during a work session Tuesday prior to its regular meeting.
City Finance Director Kathy Lamb said Aztec is not currently proposing the use of those bonds. She said the work session was solely for educational purposes.
The commission is seeking alternative funding mechanisms to help pay for the North Main development, which includes a pedestrian-friendly plaza and a market area to help connect downtown with the Aztec Ruins National Monument
General obligation bonds would raise property tax in Aztec
General obligation bonds are debt a city takes on that it pays back using revenues from property tax. If the city did choose to pursue that course, voters would have to approve the bonds.
If approved, property owners inside Aztec city limits would see their taxes increase. The taxes would then also increase if the population decreased significantly, if a major property tax payer left the city or if the assessed values of property in Aztec decreased.
Property owners in Aztec also pay tax to support the school district, state, county and San Juan College.
“Aztec’s just a small portion of our total property tax rate and so our local rate would increase pretty significantly but in relationship to the total rate it’s not as significant,” Lamb said.
Aztec currently has the third highest residential property tax rate in the county. The mill rate in Aztec is 28.851, which is less than Bloomfield and a special tax area between Aztec and Bloomfield. The special tax area has the highest property tax in the county at 30.024 mills. Bloomfield’s mill rate is 29.791 mills.
The largest portion of the Aztec residential property tax — 12.234 mills — goes to the Aztec Municipal School District. In contrast, 4.475 mills go to the city of Aztec, according to county documents.
Sipe expresses concerns about economic uncertainty
Commissioner Sherri Sipe expressed concerns about general obligation bonds because of the economic fluctuations related to the oil and gas industries.
She highlighted the Central Consolidated School District’s concern as one of its major property tax payers, the San Juan Generating Station, prepares to close in 2022. Property owners within CCSD limits will likely see their tax rates increase because CCSD must pay bond debt.
The closure of the generating station could also impact property tax rates in Aztec, according to Four Corners Economic Development. The generating station and its associated mine are one of the major property tax payers supporting San Juan College. Like CCSD, the college also has outstanding bond debt that will have to be paid by property tax payers. This could mean an increase in property tax county-wide.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at firstname.lastname@example.org.