From the last blog we now know more about Enterprise Fund debt than we ever really wanted to know. It is important to remember that it has a bdu-4-pocket-khaki-tan-jacket-100-ripstop-cotton[1]dedicated source of funding – customer utility bills. Its debt is not paid with sales tax revenue. Since it is separate fund it does not impact the city’s General Fund. It is safe to say that it is not the primary cause of Glendale’s financial problems. Let’s dig into the next pocket and see what we find.

In Pocket #2 is the Highway User Revenue Fund (HURF) bond debt of $4,695,875 – 6% of Glendale’s total debt and Transportation bond debt of $7,331,080 — 8% of Glendale’s total debt. This is an easy one too.

When Glendale builds new roads or maintains and repairs them it uses HURF bonds. They are used to finance the improvement, construction, reconstruction, acquisition of right-of-way or maintenance of streets and highways of the city including traffic control devices as well as bridges and noise walls. Two examples of its use can be seen in the Arrowhead area along the Loop 101. The sound walls adjacent to the Loop 101 and the pedestrian bridge that spans it were paid for with HURF.

Where does the money come from to pay HURF bond debt? Every city in Arizona receives State Shared Revenue and one of the pieces of State Shared Revenue is HURF. For instance, when you fill up your gas tank, part of what you pay is a tax on a gallon of gasoline. It goes to the state. The state, in turn, gives back a small portion of that tax to cities based upon a specific formula. Glendale, as does every other city in the state, receives this money back as state shared revenue.

Transportation bond money comes strictly from Glendale’s voter approved dedicated portion of the city’s sales tax. After voter approval of this dedicated sales tax the city created a long term transportation plan for the money’s use and it is monitored by a citizen oversight commission. It is specifically dedicated and can only be used for transportation related projects from street repair to installing new traffic lights. The revenue is used to build transportation projects including design, construction and right-of-way acquisitions, roadway widening, intersection improvements, transit stops, bicycle connections, park and ride lots and airport projects. The bike lanes and bus stops throughout Glendale were paid for from the transportation sales tax.

We know where the money comes from for this pocket and when we take it out we know the narrow uses for this money. HURF money comes from state shared revenue and Transportation bond money comes from sales tax that can only be used for that purpose. Both of these funds can only be used for street and transportation projects.

In the next blog we’ll explore Pocket #3. Unfortunately things will become murkier as we move from the realm of specifically dedicated uses for bond revenue to the more discretionary uses found in Pockets #3 and #4.

© Joyce Clark, 2014


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