Friday, July 17, 2009

County Bonds - Not going to happen. What a dilemma!

Earlier this week, the Montgomery County commissioners drew up a bond proposal to consider for the coming budget process. $300+ million is needed to finance a fairly long slate of needed county road major projects. Here in The Woodlands, it would involve the replacement or resurfacing of Grogan’s Mill, West Panther Creek, Woodlands Parkway, and possibly others. Although we need some work on all of these, and with the extent of traffic volume on Woodlands Parkway, the price is just too high to issue such a bond right now. The county judge says, “it isn’t going to happen.”

We do have some advantage of doing this now. Construction bids are coming in about 30% down from last year. However, now is simply not a good time to do it. It is a risky proposal, given the state of our economy and the related voter apprehension. We cannot afford a failed bond issue at the polls. Increasing taxes by 7-9 cents (or 17%) would be exceptional, especially in this soft economy, which has not yet recovered from a near disaster. “There is at least one respected financial analyst predicting that the economy will almost totally fail, that the disaster has not been averted, and that that we are still headed for a depression.” noted County Judge Alan Sadler.1. He went on to say “This bond will not happen”, meaning that the county will not go forward with such a bond. The judge is concerned that there is just too much risk of the bond failing. We need to find alternatives and find some means to fix our roads. “For example, the asphalt-constructed Walden Rd is having significant problems and needs to be replaced with a concrete construction. Yet when we first built this road according to state specifications, the state funded 80% of it. Now, we have to pay for the entire replacement road without that subsidy. This is a big dilemma for all of us.”

We are between a rock and a hard place. What happened in Austin in this legislature has hurt our county. How is it that we had federal bailout money injected into expansion projects and we are now sitting in this position to maintain our existing roads?

Today, there is no pass-through money available from the State of Texas for our bonds. TxDOT has absolutely nothing for us this time. That means we will have to finance all of it ourselves without any subsidies. We get no help. When we originally constructed Walden Road, we got 80% of it financed by the state. If existing residents have to pay for the county’s growth, something is wrong. Just imagine. A resident moves here and is asked to fund road maintenance at a high tax rate. The payments should be spread out over 20 or more years of tax base. Interest rates are low. High routine maintenance costs also drive taxes up, so we have to invest in quality projects. We need durable quiet roads. Contractors and their equipment burden some of the roads, causing wear and tear that residents eventually must pay. Roads decline because of subsurface material and they simply fail because we use them so heavily. Who rightfully pays? The county would construct a class “B” concrete road to replace the asphalt Walden Rd, which lies on top of clay. That would have one layer of iron rods, not two as in Class “A”, but strong enough to hold together on top of a clay roadbed.

What to do? Go to the hard place or go to the rock; either way it seems to me that we are in the middle and squashed.

Maybe we could get the commissioners out together on each proposed road with a budget cap of $160mm and come up with a “now” proposal with a limited budget? That would probably be well worth the effort. I think that might fly. Face it, the current proposal will not fly and the commissioner's court sees that. Maybe there are even alternatives to repairing some roads. Then after all the economic issues subside in three years, try again. Keep the property tax below $.049! Isn’t it a good idea to have very stringent criteria for inclusion of projects and a budget cap for the bonds. It isn’t so much that we have some repair to do, but it is the extent of it. We have people here on fixed incomes. We have people here worried about keeping their jobs. It is definitely a time to be conservative! Maybe not everyone is equal. Some people can afford it and some cannot. Homes continue to increase in value. Each taxpayer is paying more to the county even without an increase in the tax rate. Tough choices are coming in the county budget meetings.

Yep, truly a dilemma! We all are in this together. Hopefully, there will be some middle-of-the-road compromise. And yes, pun intended!

1 Judge Alan B Sadler’s profile

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