Road Bond Proposal cut to $96M

The City Council has heard from the Road Bond Committee and has provided direction to the city staff to prepare a bond package for the voters in the May 9 election.  The salient features are:

     1. Cap the bond package at $96M
     2. Do not include the Austin Street bridges in the package
     3. The schedule for bond issue would show completion by 2026
     4. Develop a "Contract with Voters" that limits tax rate increases to 3 cents/$100 for any year and a cumulative rate of 9 cents/$100

The Council removed the Austin Street bridges from consideration because they believe their inclusion would hamper the city's ability to obtain funding from TXDOT and the FHA.  They have already received a commitment of $1M from CAMPO with the expectation that more funding will be forthcoming.  Any funding shortfall, $14.5M required for bridge replacement, would be accommodated using a Certificate of Obligation.

The State originally legislatively authorized the issuance of Certificates of Obligation in case of emergencies, without requiring voter approval.  The requirement of using this debt mechanism only in emergencies has long been ignored and cities routinely use this debt mechanism for any need wherein they wish to bypass the voters.  It should be noted that approximately 1/2 of the current debt tax rate(22 cents) for Georgetown is dedicated to paying Certificates of Obligation debt!

In addition to recommending a bond package for road construction, the Road Bond Committee has been charged with marketing the approved bond package to the voters of Georgetown.  The City Council or staff cannot advocate for the road bonds once the Council votes to put the measure on the ballot.  The committee intends to form a PAC (Political Action Committee) to solicit funds for the marketing activity.  The potential sources of the PAC funds are unknown at this time, but, one can be assured that those who contribute expect to see some financial benefit in the future.

At current bond rates and a typical 20 year duration bond, property taxes on the average $210,000 Georgetown home would ultimately increase by about $210 per year.  Remember that the current property tax bill levied by the City on the average home is about $911 annually.  Also, this estimate assumes that the entire bond costs would be paid by property owners whose property taxes are not frozen due to being over 65 years in age.

The City Council tends to focus on tax rate when considering issuing new debt or developing the annual budget.  They need to focus on the dollar amount extracted from the tax payer, not the tax rate, as that does not consider the increase in appraised value of property.  Let them know it is the dollars from your pocket that matters to you, the Georgetown taxpayer.

The City currently owes $136,015,888 in principal and interest backed by property taxes.  The debt tax rate is $0.22662 per $100 valuation of taxable property.  According to the Texas Bond Review Board, Georgetown owes $243,290,813 when all debt is considered, including revenue backed debt issued by the utility system.