Round Rock Strong: Funding infrastructure in a pandemic 

Keeping up with infrastructure demands in one of the fastest-growing cities in the state and nation has long been a priority for Round Rock leaders. It takes foresight and funding, and the fiscal 2021 budget provides $192.1 million when it comes to meeting infrastructure needs. 

Our Community Investment Program (CIP) makes up nearly half of the $420.2 million budget the City Council will vote on at its Thursday, Sept. 10 meeting.

The budget proposal reduces overall spending by $25 million from the original fiscal 2020 budget, due to declining revenues caused by the coronavirus pandemic. But we’re ensuring our capital needs are met by prudent planning, use of long-term debt and regional partnerships to get the big jobs done during a temporary economic slowdown. 

The biggest chunk of infrastructure spending will go toward transportation needs, at $91.7 million. We’ll be in Year 3 of our five-year Driving Progress program, which will invest $240 million to improve traffic flows in Round Rock. Much of the funding for that program comes from certificates of obligation, which are long-term notes backed by property taxes. As noted in a previous budget blog post, a silver lining in the COVID-19 cloud was the City’s ability to borrow money at a significantly lower interest rate this year compared to last year.  

Among the transportation projects on tap for fiscal 2021 are: 

Utility infrastructure makes up more than $77 million in CIP spending planned for fiscal 2021. Expansion of the regional wastewater treatment plant highlights the investments, at $44.7 million. That project is a partnership of the cities of Round Rock, Austin, Cedar Park and Leander, which allows us to achieve savings through economies of scale on one of our most basic services. Other utility projects include measures to deal with zebra mussels at Lake Georgetown as well as improvements to the Lake Creek wastewater line. Stormwater improvements are slated for $5.2 million. 

And then there are “quality of life” projects targeted for investments in FY 21 (though, let’s face, it’s hard to imagine any decent quality of life without good roads and utility infrastructure) like parks and the library. 

The budget earmarks $8.6 million for three trail extensions – Heritage Trail East, Heritage Trail West and the Lake Creek Trail. All three are being paid for with proceeds from the 2013 bond election.  

Last but certainly not least is the new library. While we won’t break ground on the structure in FY 21, there are expenses for engineering and site preparation. Estimated completion of the new library is scheduled for November 2023. 

That’s certainly not all the capital projects in the budget for next fiscal year, but the City’s goal to make these kinds of investments as our population continues to grow – even in the midst of a pandemic – remains on track. 

Shop the Rock: Civic duty or just the right thing to do? Yes! 

Note: This is the fifth in a series of posts about the City of Round Rock’s proposed fiscal 2021 budget and tax rate. 

shop the rock logoWant better roads? How about better parks? All you have to do is Shop the Rock! 

Seriously, head over to the outlets and buy those shoes, or venture downtown for lunch. It doesn’t matter if you are shopping, dining or getting your pet groomed; your dollars are helping to build our community. What makes this possible? Sales tax.  

For every $100 in purchases by visitors, residents and businesses, the City collects $2 in sales tax revenues. The General Fund, which pays for public safety, parks, library and other basic City services, gets $1, while 50 cents goes to property tax reduction and the remaining 50 cents goes to the Type B Fund to pay for roads and economic development.  

In the proposed fiscal 2021 budget, sales tax revenue makes up $48.3 million of the General Fund budget – that’s 40 percent. Property tax revenue, by comparison, makes up 37 percent.  

Clearly, sales tax revenue is vitally important to Round Rock’s budget. The 50 cents out of every $100 spent in Round Rock that goes into the Type B Fund helps address Round Rock’s biggest challenge: traffic. Since approved by voters in 1997, that half-cent has generated $600 million worth of transportation improvements. It also helps fund the City’s economic development partnership with the Round Rock Chamber, which brings high-quality, high-paying jobs to the community 

And about that 50 cents earmarked for property tax reduction. It reduces the property tax rate for FY 2021 by 14.4 cents. That saves the median homeowner $31 per month, or 25 percent, on their monthly tax bill. 

Paying for new roads and keeping our property tax rate among the lowest in the state — what other reasons do you need to Shop the Rock? 

So next time you see a shirt you love, buy it! Your city – and your tax bill – will thank you. 

Building new roads, maintaining old ones impacts tax rate proposal 

Note: This is the fourth in a series of posts about the City of Round Rock’s proposed fiscal 2021 budget and tax rate. 

Update: The City Council approved on first reading the Fiscal Year 2021 budget and tax rate on Aug. 27.

Building additional capacity for Round Rock’s future transportation needs while also making sure to take care of existing streets requires considerable resources, i.e., money. The proposed fiscal year 2021 budget includes $91.7 million in capital spending for transportation. 

The spending aligns with one of the City Council’s top strategic goalsCity Infrastructure: Today and for Tomorrow. It also addresses what our citizens have told us in every biennial survey we’ve done since 1998: Traffic is the biggest problem facing Round Rock.  

Of course, some of the price tag for tackling a problem of this magnitude falls on residential and commercial property taxpayers.  

The City embarked on a five-year, $240-million road building program called Driving Progress in 2018. The program is funded in part by bonds backed by property taxes, and will improve traffic flows on major corridors like Gattis School Road and University Boulevard. 

In April 2019, the City issued $30 million in certificates of obligation (COs) to kick off funding for the program. This past April, the City Council approved the second round of $30 million in COs. Because lending markets were hard hit by the COVID-19 pandemic, the City was able to borrow the second $30 million for a significantly lower interest cost than the first $30 million. 

That means less impact on the proposed property tax rate, but an impact nonetheless. Of the proposed 1.3 cent tax increase, 0.3 cents goes to paying back the second round of COs. 

The balance of the potential increase – the City Council will make its first vote on the tax rate at its Thursday, Aug. 27 meeting – is earmarked to pay for neighborhood street maintenance. You can read about the street maintenance/tax impact issue in our prior budget blog post. 

Lest you think the entire burden for paying for new roads is being borne by property taxes, remember the City Council approved Roadway Impact Fees in March 2019, which are paid by developers to cover some of the costs of expanding our transportation network necessitated by their projects. 

About the proposed tax rate 

The proposed property tax rate is 43.9 cents, the same as the current tax rate. It’s an increase of 3.2 percent above the “no new revenue” tax rate of 42.5 cents, which takes into account the 2.8 percent growth in existing property values from last year. 

At the proposed rate, the owner of a median valued home would pay $94 per month in City property taxes, or $3 more than last year. The median home value in Round Rock for FY 2021 is $256,347. 

For those of you wondering why the City’s growth won’t pay for the needed transportation projects, here’s your answer: New property valued at $294 million was added to the property tax roll since last year. This amount of new property will generate $1.3 million in additional property tax revenues. 

Sales tax revenue continues to be a critical source for funding City services – as well as $86 million worth of transportation infrastructure in the proposed budget but we’ll talk in more detail about that in next week’s budget blog. Spoiler alert: It’s a big deal. (Can’t wait? Read more about it here.) 

While no one likes paying more in property taxes, it helps to have some perspective. Round Rock’s property tax rate is among the lowest in the Texas, as the chart below shows, and few cities receive the kind of recognition we do for affordability and livability.

Building additional roadway capacity and taking care of what’s already built isn’t easy – or cheap – but Round Rock has found a way to do it that minimizes the impact on the tax rate. 

Budget maintains focus on strategic priorities to keep community on track for long-term progress 

Note: This is the third in a series of posts about the City of Round Rock’s proposed fiscal 2021 budget and tax rate. 

Maintaining a strategic focus yearin and yearout, in good times and bad, is one reason Round Rock is featured on so many “Best Place lists. The proposed budget continues that practice, prioritizing spending on projects that drive long-term progress on keeping Round Rock a great place to live and run a business. 

Even though the proposed fiscal year 2021 budget is $25 million less than the budget approved this time last year, it still funds key programs of the City Council’s strategic priorities. 

Financially Sound City Providing High Value Services 

The Council’s top priority is supported in our General Fund budget, with funding for maintenance and upgrades for facilities, parks and technology. Because of reduced revenues, the “buckets” for these programs are being funded at reduced levels.  

The budget also includes step increases and market adjustments for public safety staff, and cost of living increases and market adjustments, if needed, for general government staff.  


City Infrastructure: Today and for Tomorrow 

Keeping up with water, wastewater, stormwater and transportation improvements is critical to maintaining quality of life in a fast-growing community like Round Rock. 

The 2021 spending plan includes $91.7 million for road and street projects, and $77.2 million for water and wastewater improvements, including a major expansion of a regional wastewater treatment plant. 

The transportation projects slated for funding include: 

The City Council is also considering an additional $1.5 million for neighborhood street maintenance.


Sports Capital of Texas for Tourism and Residents 

Our Go Round Rock tourism program had to hit the pause button due to the significant impact of COVID-19 on the hospitality industry, but there are bright spots and the future still holds much promise. 

The Round Rock Sports Center continues to be self-supporting through the hotel-motel venue tax. The Round Rock Multipurpose Complex has reopened, under health guidelines from the Governor and CDC, and is beginning to recover revenues lost in the current fiscal year. And City-owned Forest Creek Golf Club is on track to cover expenses again this year, following extensive renovation and a shutdown in 2018. 

The best news for the tourism program came in July, when Kalahari Resorts announced it was on track to open on Nov. 12 its hotel, indoor water park and convention center. 


Great Community to Live 

Two of the final projects from the 2013 bond election are included in this priority: a new library and major sections of the Brushy Creek Regional Trail system.  

There is $8.6 million earmarked for the Heritage Trail and Lake Creek Trail projects, which will connect neighborhoods west of I-35 to downtown. The budget also includes $1 million for the Behren’s Ranch Nature Park. 

While the new library is scheduled to break ground in FY21, it won’t be completed until November 2023.  

The budget plan includes $1.8 million for improvements to the South Mays Street commercial corridor, which will be funded with Type B sales tax revenues. 


Authentic Downtown – Exciting Community Destination 

Significant infrastructure improvements for Northeast Downtown are planned, in part to support the new library mentioned above as well as continued redevelopment in the area. A total of $6.4 million is budgeted for water, wastewater, drainage, transportation and dry utility improvements. 

The budget also includes funds for continuing the Hometown Holiday lights and displays as well as marketing initiatives for Downtown Round Rock. 


Sustainable Neighborhoods – Old and New 

The most significant expenditure for neighborhoods is $1.5 million for street maintenance. The City Council has prioritized funding for maintaining our neighborhood streets to keep them good condition based on the fact that ongoing maintenance is less expensive over time than rebuilding them. Since 2015, the City has allocated $22.3 million for neighborhood street maintenance. 

The budget continues to fund our Neighborhood Services program, which provides services for active and engaged neighborhoods to revitalize themselves using community resources. 

The FY21 budget proposal keeps Round Rock on track to achieving its long-term vision, as well as providing the basic services needed to keep the community so livable for residents and businesses.  

 

 

City Council wrestles with street maintenance funding level for FY21 

Note: This is the second in a series of blog posts about the proposed fiscal 2021 budget and tax rate. 

To fund or not to fund street maintenance, that is the question. 

And it’s a $1.5 million question that has a $2 per month impact for property taxpayers next year, as well as implications for the quality of neighborhood streets in the future 

Since 2012, the City has spent more than $37.1 million to maintain neighborhood streets. The cost is significant, but not nearly as expensive as having to completely rebuild streets that have failed or are in severe disrepair. 

The City Council is wrestling over a decision to nudge up the proposed property tax rate to fund more of the neighborhood street maintenance program in the fiscal 2021 budget, or continue to defer funding along with other spending cuts in light of the COVID-19 pandemic. 

The City Council approved a $4.3 million cut to street maintenance this spring as part of overall budget cuts due to forecast reduced revenues from the economic slowdown caused by the coronavirus. 

“I would think deferred maintenance would cost more to catch up than if we did it now,” Councilmember Tammy Young said at Tuesday’s City Council work session. 

Transportation Services Director Gary Hudder agreed, adding,Not only would costs continue to escalate, but also as you kick the can down the road, obviously the problem starts getting bigger again.” 

The City Council voted Thursday, Aug. 13, to set a proposed maximum tax rate of 43.9 cents. At that rate, the City would have $3.0 million for street maintenance. That rate would cost the owner of a median value home an additional $3 per month. The City Council is also considering a 42.9 cents tax rate, which would cost the owner of a median value home an additional $1 per month but include only $1.5 million for neighborhood street maintenance. 

“Even at the 43.9 cent rate we’re still in the bottom quarter of tax rates among Texas cities,Mayor Craig Morgan said. “The additional funds generated by that rate would go to core City services, and I think that’s what people want.” 

The Thursday, Aug. 13, vote isn’t the final say on the tax rate; it just establishes the maximum rate the City Council can approve. The final tax rate vote will occur on Thursday, Aug. 27. The City Council could adopt a lower tax rate. 

At the current proposed tax rate of 43.9 cents, the proposed budget reduces spending by more than $24 million from the original 2020 budget. 

You can watch the City Council’s discussion on the proposed budget and tax rate at the Tuesday, Aug. 11, work session here.

The Time is Now for Round Rock’s long-term plans to deliver results in midst of global pandemic 

Note: This is the first in a series of posts about the proposed 2021 budget and tax rate. 

With so much still unknown about the impact of COVID-19 on the local economy, planning for the fiscal 2021 City budget has been less complicated than usual. There are no new programs included in the budget, and the current proposed spending plan is $26 million less than the original 2020 budget. 

The proposed $418.7 million budget maintains the service levels our citizens have come to expect, and continues to fund our five-year transportation improvement program that will improve traffic flows on key corridors like University Boulevard and Gattis School Road.  

Because of the City’s long-term strategic planning and conservative fiscal policies, Round Rock is well-positioned to endure a slumping economy while continuing to move forward on key infrastructure projects. We are preparing to recover from the pandemic from a position of fiscal strength. 

“Lately, it seems like the only constant is change,” City Manager Laurie Hadley stated in her introduction to the proposed budget. “There is a lot going on in the world, and I am always impressed by our organization’s ability to keep things moving forward no matter the challenges we face.” 

The roadway improvements continue apace because the City Council approved a second round of funding for the Driving Progress program this April. The City took advantage of below market interest rates to keep the 5-year, $240 million program moving forward. The $30 million borrowed will require a slight property tax increase.

The spending plan will continue to drive results on the City Council’s six strategic priorities: 

  • Financially Sound City Providing High Value Services 
  • City Infrastructure: Today and Tomorrow 
  • The Sports Capital of Texas for Tourism and Residents 
  • Great Community to Live 
  • Authentic Downtown – Exciting Community Destination 
  • Sustainable Neighborhoods – Old and New 

In future posts, we’ll dive deeper into how we’re staying on track with those strategic priorities, as well as a breakdown of the proposed tax rate, the importance of sales tax and shopping local to our budget, the funding plan for transportation improvements, and major community improvement projects.