Denton is planning a series of bond sales to pay for street repairs and new road projects, including a $20 million streets-only bond package that would go to voters in November.
The City Council is expected to meet Monday to discuss projects proposed for the bond package and could vote to appoint a bond advisory committee within a month. No tax rate increase is expected, although officials say the tax rate would fall if they didn't sell the bonds. ALSO ONLINE
Denton bond program report
Separately, city staff members are making plans to sell $9 million in certificates of obligation - bonds that don't require voter approval - in 2013-14 to pay the city's share of the Bonnie Brae Street and Mayhill Road widening projects. They also expect to ask voters to approve a $40 million to $50 million bond package in 2015-16 that would include another $20 million for street reconstruction projects spread out over five years.
The plans represent the city's latest attempt to get a handle on a road network that declined for years because of underfunding.
The council voted in September to increase street maintenance spending to $3.5 million in this year's budget, up from $2.8 million last year. The council also approved the creation of a separate street fund with two dedicated income streams: bond debt savings and increases in franchise fee revenue. The fund was designed to nearly double street maintenance spending to $5.8 million a year in five years.
However, Denton's street quality rating will continue to decline until the city spends at least $10 million a year on maintenance, according to a consultant's report released last year.
The city plans to ask voters to approve a $20 million bond package Nov. 6 that would provide $4 million a year to reconstruct existing streets over five years. That, too, would help the city's street rating.
"The [bond] funding is intended to complement what we have in street maintenance," finance director Bryan Langley said during the council's annual planning session Tuesday. "It does not replace what we have [in the budget]."
Under a timeline proposed Tuesday, the council would appoint a 14- to 21-member bond advisory committee by March 5. The committee would meet between April and August to help decide which road projects would be part of the program.
The city plans to sell the new bonds over time as old debt is retired. That should allow projects to be funded without a related tax rate increase, based on current assumptions of appraised values and debt retirement, Langley said.
Denton is also planning bond sales unrelated to street projects.
In April, the city plans to issue $58.6 million in bonds, mostly certificates of obligation for utility projects. The sale is expected to include $4 million to finish projects approved in the city's last bond election in 2005.
The city could also sell certificates of obligation this year to help pay for a proposed convention center project, although the dollar amount isn't known yet, Langley said. The city is in talks with the University of North Texas and Springfield, Mo.-based O'Reilly Hospitality Management LLC about building a full-service hotel and convention center at Interstate 35E and North Texas Boulevard, but officials say no agreement has been reached.
Council member Chris Watts questioned why the council would "unilaterally" fund the convention center with certificates of obligation, instead of taking it voters in a bond election.
City Manager George Campbell said that unlike a voter-approved bond program, the convention center project wouldn't draw on property tax dollars.
"This conference center is intended to be paid for out of revenue generated on that site or the developer making up the difference in any debt-service requirements," Campbell said. "We're not there yet with the development [agreement], but it's a significant difference from a standard GO [general obligation] bond."
In an interview, Watts said he simply wanted to air the issue. He was still struggling with which course was more appropriate.
"If it's good for the city, the voters would probably see that," Watts said. "The risk would always be that this would be voted down."
LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com .
