About General Obligation Bonds
General Obligation (GO) Bonds are an important source of funding for basic capital improvements (bricks and mortar) that our growing community requires to thrive.
General Obligation Bonds are typically best suited for projects that benefit the general public but generate little or no revenue to pay debt service.
The City typically uses GO Bonds for initiatives including:
- Parks and recreation facilities and improvements
- Public facilities such as fire stations, police stations, libraries, senior centers
- Infrastructure improvements such as roads, sidewalks, trails, and drainage facilities
- Other projects with strong local support
In a special mail-ballot election held between July 24 and August 21, 2018, Las Cruces voters approved four GO Bond questions totaling $35.6 million:
- Shall the City issue general obligation bonds, payable from property taxes, in an amount up to $16,900,000 to construct improvements to parks, including sports fields and other related facilities? Approved 57%
- Shall the City issue general obligation bonds, payable from property taxes, in an amount up to $9,800,000 to construct a new animal shelter facility and related improvements? Approved 67%
- Shall the City issue general obligation bonds, payable from property taxes, in an amount up to $6,200,000 to construct replacement fire station facilities for Fire Station 3 (at 390 N. Valley Drive), including acquisition of necessary land? Approved 70%
- Shall the City issue general obligation bonds, payable from property taxes, in an amount up to $2,700,000 to construct and improve recreational walking, jogging, and biking trails, including acquisition of necessary land? Approved 58%
Frequently Asked Questions (FAQ)
- What is a GO Bond?
A GO Bond is a form of debt financing secured by property tax revenue - General obligation bonds can be issued for general purpose projects. The law requires like or similar projects to be presented in a separate question for voter approval.
- How much bonding capacity does the City of Las Cruces have?
State statute limits the amount of general obligation bonds issued by municipalities to 4% of total assessed valuation. The City of Las Cruces' current GO Bonding capacity is about $92 million.
- Does Las Cruces have any GO Debt?
No, Las Cruces currently has no GO Bond debt.
- How is the GO Bond debt retired?
A GO Bond is typically paid back in 10 to 15 years with an interest rate based on the City's credit worthiness. A municipality can borrow at a better than private market rate.
- Will there be future GO Bond Elections?
Many communities issue and repay GO Bonds on a regular cycle - e.g. every 2 to 6 years. The City will evaluate the success of the upcoming election to determine the strategy for future elections.
- What is the tax impact on a typical home owner?
The following table shows the yearly impact to a typical homeowner should voters approve a $35.6 million GO Bond that funds all of the proposed projects.
Bond Size: Yearly Cost to a Typical Homeowner
|Bond Size: Yearly Cost to a Typical Homeowner|
|Full Value||Assessed Value*||2.1 mills|
*Tax at 1/3 market valuation Median Home Value
- What is the schedule for the GO Bond process?
The GO Bond Schedule:
- February 15 to May 14, 2018 - Public Meetings and project vetting
- February 15, 2018 - Lynn Middle School
- February 22, 2018 - Branigan Cultural Center
- February 27, 2018 - Doña Ana Community College
- March 27, 2018 - Sage Café
- April 3, 2018 - Thomas Branigan Memorial Library
- April 14, 2018 - Frank O’Brien Papen Community Center
- May 14, 2018 - Frank O’Brien Papen Community Center (City Council Work Session)
- May 4 - Final Ballot Information determined
- June 4 - City Council consideration and approval of ballot questions
- July 24 through August 21 - Mail-ballot election for GO Bond
Special election ballots, mailed or hand-delivered, had to be received at the County Clerk's Office by 7:00 PM on August 21.
- Does the City have other sources of capital funding?
Yes. Las Cruces has a Capital Improvement Program (CIP) that is now primarily funded by revenue bonds. These are bonds issued against a regular source of revenue such as the City's share of the New Mexico Gross Receipts Tax (GRT). You can find information about the City's CIP program here, at the Office of Management and Budget site.
- If approved, when would the tax increases go into effect?
Depending on which GO Bond requests are approved, the City will prepare for one or several bond sales spaced out to minimize interest cost and match project needs. Tax rates would be adjusted after the sale of the bond(s), and property owners would see that increase on their next property tax bill (issued annually).
- Where can I submit a question?
Send in your thoughts to firstname.lastname@example.org.