McLennan County leaders will decide this week how to fund two major road projects in the upcoming budget year.
They must determine first what the tax rate will be and whether they initially will pay down existing debt.
Commissioners Ben Perry and Kelly Snell each requested funding to improve heavily traveled roads in their respective precincts.
The largest project, rebuilding a four-mile stretch of Speegleville Road from State Highway 6 to the Middle Bosque River, would cost between $15 and $17 million.
The other project, widening Surrey Ridge Lane from I-35 to Moonlight Drive in Precinct 1, would cost $4.3 million.
Commissioners this week could determine what direction to take with the project and how that affects plans for the debt and tax rates for fiscal year 2016.
Snell said most of McLennan County’s growth is in his and Perry’s precincts and these two particular roads are feeling that pressure.
Speegleville Road handles 4,300 vehicles per day from State Highway 6 to U.S. Highway 84, and is the main artery for large concentrations of housing growth in the Midway Independent School District.
Surrey Ridge Lane is adjacent to Interstate 35 and serves an area with new housing additions to the east of the interstate. Neither of the roads has shoulders.
Surrey Ridge Lane was originally designed to be a cut-through road and was not meant to handle the amount of traffic that now accumulates there as drivers exit I-35, Snell said.
The city of Lorena also is pursuing a Tax Increment Reinvestment Zone to help finance infrastructure needs in that area through the incremental increase of appraised value over time because of development. Thus, an increase in property tax revenues over time.
Snell said the TIRZ, located east of I-35 at Old Waco-Temple Road and Cooksey Lane, will increase development in the area, only increasing traffic along Surrey Ridge Lane.
“The longer you wait the more trouble you are going to have getting the road widened,” Snell said. “Now’s definitely the time . . . We just need to get all the numbers together and make sure we can afford it.”
Perry said the Speegleville Road project has been a long time coming. Development continues along the stretch of road and Midway ISD owns land nearby that could possibly hold another school one day, in addition to nearby River Valley Intermediate School.
“You have to get ahead of the curve on this,” he said. “If not, you end up paying a good bit more down the road on something that should have been done years ago.”
Mark McLiney, with SAMCO Capital Markets, told commissioners last week that just a few years ago, the county wasn’t in great shape financially but that has changed. With that in mind, he said, the county could sell old bonds and issue new ones to fund the two road projects.
“In the last five years you’ve never been this strong financially,” he said. “You’d get bidders throughout the country trying to buy these bonds, not just locally.”
County Judge Scott Felton said the county could continue to “kick the can down the road” when it comes to dealing with debt or it could address the situation now. Felton said the county could pay down some debt for fiscal year 2016 or consider reducing the tax rate.
Commissioners recently adopted the proposed tax rate for fiscal year 2016 at 53.5293 cents, the same figure as fiscal year 2015. At 53.5293 cents per $100 property valuation, a McLennan County homeowner with a house valued at $100,000 would pay $535 per year in county taxes.
The effective tax rate for fiscal year 2016 is 51.5108 cents per $100 property valuation. The effective tax rate is the rate, based on current valuation, that would bring in the same amount of money to the county next year as the tax rate in the current fiscal year.
The rollback tax rate is 56.8092 cents per $100 property valuation, which is the highest rate the county could adopt without triggering an election for the voters to approve or deny the rate.
The county will host public hearings on the proposed tax rate at 6 p.m. Aug. 18 and 9 a.m. Aug. 21 in the McLennan County Courthouse commissioners court room, 500 Washington Ave.
The county’s current debt service tax rate is 2.6 cents. McLiney said if the county were to issue new bonds, using a 4.5 percent interest rate, it would take the debt service tax rate to 3.48 cents.
“This is assuming no new growth in taxable value, which is very unlikely,” McLiney said, noting that he used a high interest rate as well to be conservative. “If you borrowed today, you’d probably be in the 3.5 percent rate.”
“A $22 million financing (package) could be done for about 1 penny on the tax rate if that’s what you want to do going forward,” McLiney said.
The county could have a general obligation bond election in November or issue a certificate of obligation. A certificate of obligation is not a way to get around voters, but to allow county officials a chance to move forward with a non-political project without delaying it until election, he said.
Snell said the only way to fund the two projects will be to issue one bond to cover them both. Snell said his goal is to find a way to pay down old debt, and issue new debt, all without raising taxes.
Perry said the court has some big decisions to make this week between paying down the county’s debt, lowering the tax rate and/or issuing new bonds for these road projects.
With interest rates currently low, Perry said, the county could pay off the $2.7 million 2006 certificate of obligation, as well as all of its about $2 million in short-term debt, freeing up the county’s debt services to float a bond for these two projects, without impacting the annual debt service payment.
“It’s incredible to realize just three years ago we were in serious financial trouble,” he said.
But, he said, while the county is financially stable enough to pay down debt in fiscal year 2016, he doesn’t think it’s in a good enough place to lower the tax rate on top off that.
Keeping the proposed tax rate would bring in an additional $2.6 million for the county in fiscal year 2016.
In April the county hired Walker Partners LLC to study the road projects. Clark Gauer, Walker Partners LLC project manager, said the goal for both projects is improved safety, incorporating future population projections, the safe handling of traffic during reconstruction and the best value. Both projects are in the study and report phase, he said. Final cost estimates and preliminary schematics will be ready in about a month.
Jed Walker, president of Walker Partners, said if the court decided to move forward, the design and land acquisition portion of the project would take at least 12 months. Construction on Surrey Ridge Lane would take about a year, and construction on Speegleville Road between 18 to 24 months.
Gauer said a study from 2010 showed portions of Speegleville Road handle more than 4,300 vehicles per day. Any construction plan would have to incorporate the most efficient and effective way to reroute traffic during that time period, he said.
The portion of Speegleville Road under review stretches a little more than four miles, from State Highway 6 to the Middle Bosque River. The existing road has 100-foot-wide right-of-ways. The new road would have 120-foot right-of-ways, with two 12-foot lanes and two 10-foot shoulders.
The renovations would require the acquisition of 22 parcels of land, Gauer said.
Hog Creek Bridge
The 200-foot-long Hog Creek Bridge, built in the early 1960s as two independent bridges close to one another, is a major obstacle in the Speegleville Road project. Gauer said they developed four plans for the bridge.
The option being recommended is to leave the northbound lane bridge as is, with 12-foot driving lanes and a 10-foot outside shoulder. The plan includes building a new 24-foot-wide bridge span on the southbound side. The new structure would be wide enough to handle both directions of traffic should the other bridge need to be replaced in the future, Gauer said.
Gauer said there are no fewer than six utility companies with infrastructure along Speegleville Road.
Proposed renovations for Surrey Ridge Road will stretch from I-35 to F.M. 3148, also known as Moonlight Drive.
The road is about 60 feet wide and the proposal would increase it to 80 or 90 feet wide. The project would include the acquisition of right of way from six property owners on the south side of the road. There also are five utility companies with infrastructure along that stretch of road.