Texas-Size Bond Votes On Nov. 6

The Bond Buyer - - Front Page - BY RICHARD WIL­LIAMSON

DAL­LAS – Vot­ers across Texas will con­sider about $8.7 bil­lion of lo­cal bond pro­pos­als on Nov. 6, with the Hous­ton area’s Fort Bend In­de­pen­dent School District top­ping the list at $992.6 mil­lion.

The 51 pro­pos­als on next week’s lo­cal bal­lots are about $1.1 bil­lion more than the $6.6 bil­lion re­quested in Texas’s May 5 elec­tion and about $2.3 bil­lion less than the record $11 bil­lion on the Novem­ber 2017 bal­lot.

School bond pro­pos­als again dom­i­nate the bal­lots, with 35 dis­tricts seek­ing $4.94 bil­lion. Of the 10 largest bond pro­pos­als in the state, eight are from school dis­tricts, in­clud­ing the chart-top­per from Fort Bend ISD, a $695 mil­lion pro­posal in sub­ur­ban Dal­las’ Frisco ISD, $508.4 mil­lion from Round Rock ISD in sub­ur­ban Austin and $480.5 mil­lion from Alvin ISD out­side Hous­ton.

The city of Austin is ask­ing vot­ers for $925 mil­lion of bonds, in­clud­ing $250 mil­lion for af­ford­able hous­ing.

“This is a his­toric level of fund­ing for hous­ing, and it is time to have that con­ver­sa­tion with the com­mu­nity,” city coun­cil mem­ber Ann Kitchen said when she voted to place the is­sue on the bal­lot in Au­gust. “This is such a crit­i­cal need.”

Austin and 10 other ci­ties are ask­ing vot­ers for $1.53 bil­lion. The city of Ar­ling­ton be­tween Dal­las and Fort Worth is ask­ing vot­ers for $189.5 mil­lion for tra­di­tional city projects.

Four coun­ties have pro­pos­als worth $1.6 bil­lion, led by Tar­rant County’s $800 mil­lion pro­posal for im­prove­ments to John Peter Smith Hospi­tal. The bond re­quest for the county’s hospi­tal is the first since 1985 and would go to­ward $1.2 bil­lion in up­grades, in­clud­ing a new be­hav­ioral and men­tal health hospi­tal, four re­gional med­i­cal cen­ters, an out­pa­tient surgery cen­ter, in­creased bed space and ex­panded can­cer treat­ment.

Collin County north of Dal­las is seek­ing a record $750

mil­lion road bond is­sue to cope with traf­fic in one the na­tion’s fastest grow­ing coun­ties. The county is propos­ing to con­vert ex­ist­ing road­ways into a high-speed, lim­ited ac­cess cor­ri­dor that would even­tu­ally con­nect with a 250-mile outer loop around the en­tire Dal­las-Fort Worth Metro­plex.

One com­mu­nity col­lege district, the Col­lege of the Main­land in Galve­ston County is seek­ing $162.5 mil­lion.

Most of the vol­ume comes from three metro ar­eas.

The Dal­las-Fort Worth Metro­plex ac­counts for $3.1 bil­lion, fol­lowed by metro Austin at $2.1 bil­lion and the Hous­ton area at $1.7 bil­lion.

Fort Bend ISD in the af­flu­ent western sub­urbs of Hous­ton had con­sid­ered ask­ing vot­ers for $1.5 bil­lion in one bal­lot but de­cided chances of pas­sage would be im­proved if the pro­posal were bro­ken into two. The school board ex­pects to ask vot­ers for an­other large au­tho­riza­tion in three years.

With un­der­ly­ing rat­ings of AA-plus from S&P Global Rat­ings and Fitch Rat­ings, Fort Bend ISD serves an es­ti­mated pop­u­la­tion of 426,939, with me­dian house­hold ef­fec­tive buy­ing in­come rated “very strong” by S&P at 154% of the na­tional level.

The district has faced chal­lenges with state fund­ing cuts while its en­roll­ment and eco­nom­i­cally dis­ad­van­taged pop­u­la­tion con­tin­ues to grow, of­fi­cials said.

“Our av­er­age age of fa­cil­i­ties is 25 years,” Su­per­in­ten­dent Charles Dupre told the school board in Au­gust. “Based on what I’ve seen, we have un­der-in­vested in our fa­cil­i­ties.”

In Cor­pus Christi on the Coastal Bend of Texas, both the city and the school district are ask­ing vot­ers to ap­prove bonds. The Cor­pus Christi ISD is seek­ing $210.8 mil­lion, while the city pro­poses $96 mil­lion. This is the school district’s fifth bond pro­posal in the last 10 years.

As school dis­tricts seek bond money, many are also ask­ing vot­ers to in­crease tax rates to pay for op­er­a­tions.

Texas school dis­tricts have two tax rates, one for main­te­nance and op­er­a­tions and a sec­ond for debt ser­vice. State law re­quires that any school district need­ing to raise the main­te­nance and op­er­a­tions por­tion of its tax rate above $1.04 per $100 of as­sessed value seek voter ap­proval.

In the face of de­clin­ing state sup­port, school dis­tricts are fac­ing deficits un­less they in­crease the main­te­nance and op­er­a­tions tax rate.

Some dis­tricts are ask­ing vot­ers for so-called “swap-and-drop” tax rate changes. Un­der “swap and drop,” the tax rate for debt ser­vice is low­ered while the rate for main­te­nance and op­er­a­tions is in­creased, ef­fec­tively keep­ing over­all taxes level.

Over the five-year re­port­ing pe­riod, 44% of Texas’ new-money lo­cal debt is­suance was used to fi­nance ed­u­ca­tional fa­cil­i­ties and equip­ment in­clud­ing school buses, ac­cord­ing to the Texas Bond Re­view Board.

Gen­eral-pur­pose debt, which in­cludes pub­lic im­prove­ments, ranked sec­ond at 22%.

School dis­tricts, ci­ties and wa­ter dis­tricts ac­count for more than 86% of new-money and re­fund­ing trans­ac­tions. Over the past five fis­cal years, new-money debt is­suance to­taled $75.19 bil­lion and re­fund­ing debt to­taled $83.71 bil­lion.

Dur­ing that time the top three is­suers of new-money vol­ume were school dis­tricts, ci­ties and wa­ter dis­tricts that to­gether com­prised 87% of the new-money vol­ume and 82% of the re­fund­ing trans­ac­tion vol­ume.

Texas, which holds lo­cal elec­tions in May and Novem­ber, is re­port­ing un­usu­ally high turnout in early vot­ing for a mid-term Con­gres­sional elec­tion.

The state’s five largest coun­ties are see­ing nearly twice the num­bers of early vot­ers the Novem­ber 2014 elec­tion pro­duced, ac­cord­ing to the Texas Tri­bune.

In Har­ris County, the state’s most pop­u­lous, 13.2% of reg­is­tered vot­ers had voted by Thurs­day, com­pared to 6.4% over the same time pe­riod in 2014. In Dal­las County, the to­tals were 16.9% of reg­is­tered vot­ers, com­pared to 5.9% four years ago.

Fear­ing that vot­ers in a high-turnout elec­tion would not give their record $2.5 bil­lion flood bond pro­posal suf­fi­cient at­ten­tion, Har­ris County Com­mis­sion­ers de­cided to call a spe­cial elec­tion last Au­gust on the an­niver­sary of Hur­ri­cane Har­vey’s land­fall.

In a light turnout, the bonds passed. Aside from the Har­ris County spe­cial elec­tion, Fort Bend ISD’s bond pro­posal is the largest since Novem­ber, when vot­ers in the Austin ISD au­tho­rized more than $1 bil­lion of debt for new and up­graded schools. ◽

“This is a his­toric level of fund­ing for hous­ing,” Austin city coun­cil mem­ber Ann Kitchen said of the $250 mil­lion af­ford­able hous­ing com­po­nent of the city’s bond re◽uest.

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