By Moses Leos III.
Here is a math conundrum:
Thirty million dollars –that’s what the Buda City Council preliminarily set as its threshold for a proposed November bond.
Seventy million dollars – that’s the amount of projects in Buda’s Capital Improvement Plan (CIP).
The stage is now set for Buda’s bond committee to decide when, or if, Buda should call a bond election. Setting the priorities, given the $40 million difference between the threshold and the CIP, could be a challenge.
Finance Director Sidonna Faust said a threshold will help the Buda Bond Committee better prioritize which projects should go into the bond.
“Without a threshold, it doesn’t give [the bond committee] clear direction on how to start,” she said.
The Bond Committee is an 11-member cross-section of Buda residents picked by city staff and council. They will be tasked with it’s helping the city and its consulting firm, Gap Strategies, in prioritizing CIP projects for the bond.
Last Tuesday, Jennifer Douglas, the city’s bond counsel and financial advisor, presented the tax implications of a possible bond in a city workshop.
Douglas’ presentation ranged from $10 million to $40 million in bond debt. All but one scenario would directly affect the property tax rate. All scenarios would increase the city’s yearly average debt payment.
Council settled on the $30 million figure based on what the city would get in the bond.
“It got more bang for the buck,” Mayor Todd Ruge said.
Ruge also felt the impact on Buda residents for increasing taxes from $20 to $30 million “wasn’t that much.” The tax rate associated with a $20 million bond debt was projected at .33 cents per $100 evaluation.
However, Douglas’ findings came with a caveat – all were based on a one-time scheduled payment.
According to Faust, Buda could structure the debt to spread out how much it borrows. Such a move could limit the amount of interest Buda pays, along with the tax rate.
Jeff Barton, Managing Principal at Gap Strategies, said people could jump to conclusions on the possibility of a higher tax rate.
“It’s premature to worry too much about that yet,” Barton said. “We don’t know what [Buda is] going to do.”
The next task is gathering public feedback on the bond. A community wide hearing on April 22 will give citizens a chance to voice their opinions on funding the CIP.
Barton said Gap Strategies will work with the bond committee on prioritizing projects, while at the same time working with city staff and council.
However, City Manager Kenneth Williams conceded not everything in the CIP could be funded. He and city staff now await the public’s reaction.
“A city can’t do everything in its CIP,” Williams said. “We’ll just try to prioritize and go from there.”
Council now awaits the committee’s final decision – a choice that could end up higher than Buda’s targeted threshold.
“My hope is the bond committee comes back and says it’s substantially less,” Ruge said.
