Bond debt high in Scottsdale schools, city govt.

East Valley Tribune
Tuesday, February 26, 2008
Amanda Keim

Scottsdale's schools and city government have collected more bond debt than the majority of their counterparts around the state, according to a recently released report.

Arizona's state and local agencies collectively reported $32.1 billion worth of bond debt in fiscal 2007, an 11 percent increase from fiscal 2006, according to figures compiled by the state Department of Revenue's Debt Oversight Commission and released by the Arizona Tax Research Association.

"Oftentimes voters are concerned that property tax rates are going up, but oftentimes they are unaware that some of that ... is the bonds that they approved," said Justin Olson, research analyst for the tax research association.

Schools across the state accounted for $4.4 billion worth of that debt.

The Scottsdale Unified School District topped the school list with $388.7 million in outstanding bonds, even though it's the eighth-largest school district in the state.

The district also increased its bond debt from $298.8 million last year, Olson said. That was mostly because the district sold bonds that voters had approved in the past and refinanced bonds to pay them off sooner.

"There's the advantage that they're paying off debt, but there is a significant increase to the taxpayers," Olson said.

Scottsdale's story will change in a few years as the school district's debt gets paid off early, said David Peterson, the district's assistant superintendent of operations.

"For years and years and years, Scottsdale had (a) minimal amount of bonding, and our facilities deteriorated," Peterson said. "I don't know of any other school district in the state that built four comprehensive high schools at once. And that's what we did."

Cities contributed $13.3 billion to the state's total figure in 2007.

Scottsdale ranked fourth on the city list with $927.3 million in debt; $916 million of that was in voter-approved bonds, Olson said.

That was also a slight decrease from the $927.4 million in debt the city had in 2006, Olson said.

Scottsdale spokesman Pat Dodds said residents needed look at what is behind the debt, not just the statistics, for the full story.

For instance, Scottsdale is targeting about a third of the city's land for preservation, which will keep population and infrastructure costs down in the future, Dodds said.

"It's part of our debt now, but in the long run it will benefit the city in many different ways," he said.

Dodds and Peterson also pointed out that both agencies have received high bond ratings, indicating that they've managed the debt well.