By Moses Leos III.
The message from Buda was clear: It’s time to get down to business.
During the Nov. 19 meeting, city council directed staff to prepare for a possible November 2014 General Obligation (GO) bond election – a first for the city.
They want voters to decide how Buda should spend $73 million dollars in Capital Improvement Projects (CIP). These projects span from FY 14-18.
Staff also gave council several options on funding, which included Certificate of Obligations (COs), Limited Bond Notes, and other avenues. Going with a GO Bond was the safest and most appropriate route, according to Jennifer Douglas, bond manager for the city.
With a GO Bond, which is voter approved, municipality gain bonds from bondholders that are secured by the “full faith and credit,” of the city, which has the power to raise taxes to pay back the bonds. They also have a lower interest rate than a CO.
But the striking quality of a GO was allowing voters to approve it; for Mayor Todd Ruge, voter approval was paramount.
“I’ve always believed in the will of the citizens,” Ruge said. “With a GO (Bond), the voters get to choose. I’ve always operated that way.”
However, Buda must complete three portions of their CIP.
First, according to assistant city manager Brian Laborde, Buda must attain CIP estimates relating to the Downtown Master Plan. Consulting firm Halff and Associates will present those figures to the city by March.
Second, they must address drainage issues in two parts. They will assess problem areas following the Oct. 31 floods, which caused an estimated total of $1.17 million dollars in damage. The second part extends to current drainage studies in several neighborhoods.
Lockwood, Andrews and Newnam, (LAN) heads the study. Buda set aside $50,000 this fiscal year to complete it.
Perhaps the largest issue will be roads, which make up nearly $22 million dollars in CIP projects.
Overall, Laborde said during the meeting there was a plethora of projects to choose from. However, city staff felt it was “high time” to expedite those plans.
Ruge maintained the $73 million would not be voted on all at once. Instead, the city aims to break it into chunks. In addition, the city will look into paying for smaller, less pricey projects with a CO.
However, the city wants to ensure it has the revenue in place before issuing that debt. Sidonna Faust, finance director, said the city must ensure the tax rate supports revenue sources prior to debt issuance.
The goal is avoid what happened in Kyle, which has a principle and interest (P&I) debt of $99.33 million. As of Sept. 30., Buda’s P&I is $33.1 million.
Perwez Moheet, Finance Director in Kyle, said the high figure was a result of the city having to issue debt to meet city growth needs. At the time, Kyle did not have a tax base large enough to meet demand.
Buda is also entertaining the option of grabbing $27 million dollars in funding from the Capital Area Metropolitan Organization (CAMPO), which will go to road improvements.
“If that’s a possibility, we will definitely pursue it,” Ruge said.
The caveat is finding out which projects are priorities.
Buda aims to bring in a consultant to help. They also will have an 11-person “steering committee” to aid in prioritizing projects.
Buda’s steering committee, comprised of registered voters, selected by council and staff, will dig through the data and present bond-worthy projects to council.
The city expects to select the committee by January. The process will take about seven months. State law dictates the deadline to call a November bond election, which this year is Aug. 18.
The goal is to begin implementing larger plans, such as several transportation measures. A GO bond would allow that without having to “pay as they go,” with a CO.
Staying the course could see many projects fade away.
“If we pay as we go, we are never going to catch up,” Ruge said. “We need to do it in a big burst.”
Buda’s big issue will be property tax increases.
Council knows that is not a popular move. However, Mayor Pro-Tem Bobby Lane said it could, “take three, four [or] five cents on the tax rate to get [projects] done.”
Yet questions arose about whether Buda could finally implement plans. The downturn in the economy was one reason for the struggle.
“We’re good at planning [projects], but not good at executing them,” George Haehn said during the council meeting.
Ruge believed the city could pull through.
“[Haehn] made a great point: we have great plans, but not in position to pull the trigger,” Ruge said. “In my mind, we’re ready to pull trigger to get these things done.”
