IndeGO Bond FAQs: Financing

Passage of the G.O. bond will result in a modest increase in property taxes. 

For instance, for the median home value in Independence ($150,800), property taxes would be anticipated to increase $19.57 per month if all G.O. bond capacity was approved and issued at once; however, G.O. bonds will be issued over several years, and therefore property owners will not see the full increase in the first year. The amount is based on passage of all three questions.

Issuing bonds allows the City to fund large-scale projects immediately without requiring large tax increases or budget reallocations. This spreads the cost of the projects over several years, making them more affordable and enabling the City to address urgent needs.

G.O. bonds are backed by property taxes, whereas other bonds, like revenue bonds, are repaid from specific revenue sources, such as utility or sales taxes.

G.O. bonds generally offer lower interest rates because they are secured by property taxes, which are viewed to be more stable by investors.

Cities borrow funds to pay for infrastructure with a long useful life, rather than using current cash, for a variety of reasons. 

In the case of public assets like a bridge, paying for it over time provides “intergenerational equity.” In other words, the current generation does not pay the entire bill for a bridge with a 50-year useful life; rather, users pay their share over time. 

The use of borrowing also allows cities to use other resources to pay for vital services including public safety. 

Finally, in the case of G.O. bonds, property owners are asked to pay for the improvements with property taxes as property values throughout the City will benefit from the additional public investment.

The G.O. bonds are issued by the City of Independence, with support from financial experts like underwriters, bond counsel, and trustees; these professionals assist with structuring the bond, ensuring legal compliance, and marketing the bonds to potential investors.

The City of Independence has a Street Improvement Sales Tax (0.5%), but our current infrastructure needs outstrip the funds collected. 

The IndeGO Bond will allow the City to double the annual maintenance it can perform for the next 5-7 years. The G.O. bond will also provide funding that doesn't currently exist for bridge and repairs and sidewalks for schools.