Bonds & Obligations

When we identify the need to construct a capital project, issuing debt to finance a project may be the best method for the following reasons:

• avoids the depletion of our reserves
• allows the cost of the project to be spread over future years so that residents pay for the infrastructure that they are using
• allows projects to be built sooner so that residents receive the benefit when needed

Issuing debt in the form of bonds and obligations is the most common method to finance long-term capital improvements such as streets, buildings, utility systems, etc. The financed assets should have at least the same useful life as the term of the bond (e.g., a water line with an expected useful life of 30 years should not be financed over more than a 30-year period).

After we receive voter authorization and are ready to proceed with a capital project, we issue (sell) bonds or obligations. Each year we also retire (pay off) a portion of debt issues in prior years.

Issuing bonds and obligations allows us to meet infrastructure needs while paying for the assets as they are used. Because municipal debt interest payments are typically exempt from federal income tax, the debt requires a lower interest rate than other forms of borrowing.

Types of Debt Financing

General Obligation (G.O.) Bonds are used to finance public safety, streets, parks and library projects. They are repaid primarily through secondary property tax and development impact fee revenue. G.O. bonds are backed by the full faith and credit of the City.

Utility Systems Revenue Obligations are used to finance natural gas, water, wastewater, electric, and solid waste projects. Utility revenue obligations are repaid from revenues received from the customers of each utility.

Bond Type Ratings

Bonds & Obligations by Project Category - $421.6 M

• Library - $12.8M
• Parks - $23.7M
• Public Safety - $82.6M
• Transportation - $39.2M
• Electric-$11.0M
• Gas - $40.6M
• Water - $142.8M
• Wastewater - $68.7M

Debt Service Outstanding

As of July 1, 2023 the City’s total outstanding bond debt was $1.6 billion. For more information, visit the City of MesaData Portalon Bonds and Debt Service.

The outstanding debt balance is paid back over time through annual principal and semi-annual interest payments (debt service). When debt is issued, it obligates us to make regular payments for periods of up to 30 years. Our goal is to have consistent debt service payments, creating a stable financial environment for providing sustainable services to residents.

Purchasing Mesa Bonds/Obligations

We work with financial institutions to market and sell new Mesa bonds/obligations to investors at the lowest possible cost. To purchase these bonds/obligations, contact a securities broker.     

For more information, visit the our Data Portal on Bonds and Debt Service.