The Round Rock City Council approved the second round of funding for the City’s five-year transportation improvement program when it approved $30 million in certificates of obligation (COs) at its regular meeting Thursday, April 23.
The program, which the City is calling Driving Progress, has a target of investing a minimum of $240 million over five years to improve roadway capacity and connectivity. In April 2019, the City issued $30 million in COs to begin work on major roadway improvements such as widening Gattis School Road and University Boulevard.
The second round of property-tax backed COs is expected to increase the City property tax rate by 1.0 cent in 2021. This is the second of five anticipated bond issues expected to total $140 million to fund the 5-year program.
Due to market circumstances resulting from COVID-19, the City is doing a private placement as opposed to traditional open market bond offering. Private placement debt is sold directly to a single investor and does not require a bond rating. The City secured a 1.81 percent interest rate for this round of COs. Last year’s COs had a 3.2 percent interest rate.
Here are some of the projects expected to break ground in 2020:
- University Boulevard widening from the IH-35 frontage road to Sunrise Boulevard
- University Boulevard widening from A.W. Grimes Boulevard to SH 130
- Logan Street extension from Greenlawn Boulevard to A.W. Grimes Boulevard
- Kenney Fort Boulevard extension from Old Settlers Boulevard to Joe DiMaggio Boulevard (known as Segment 4)
Other projects in the Driving Progress program include:
- Kenney Fort Boulevard extension from Forest Creek Drive to SH 45 frontage road (known as Segments 2, 3)
- Gattis School Road widening from Via Sonoma Trail to Red Bud Lane
- Gattis School Road widening from .25 miles west of A.W. Grimes to .2 miles east of Double Creek Drive (known as Segment 3)
- Wyoming Springs extension from Brightwater Boulevard/Creekbend Boulevard to FM 3406/Old Settler’s Boulevard
- Red Bud Lane North widening from Wal-Mart at U.S. 79 to County Road 117
- Red Bud Lane South widening from Evergreen Drive to Gattis School Road
- Old Settlers Blvd. extension from Red Bud Lane to County Road 110
- County Road 112 from A.W. Grimes Boulevard to CR 110
The Driving Progress program is designed to complete a significant portion of the City’s $1.2 billion Transportation Master Plan. Other funding sources include Roadway Impact Fees, approved by City Council in March 2019, which will be paid by developers to cover some of the costs of expanding our transportation network necessitated by their projects; our half-cent, Type B sales tax revenues; state and federal funds like those received through the Capital Area Metropolitan Planning Organization (CAMPO); and partnerships with private developers. Funding for Round Rock projects is also expected via the general obligation bonds approved by Williamson County voters in November.
Bond refunding expected to save $464,000
The City Council also approved a property tax-backed issuance of approximately $7 million to refund the series 2011 General Obligation bonds.
The refunding is expected to save taxpayers approximately $65,000 a year in interest costs.
Limited tax note to fund vehicle purchases
The City Council also authorized a Limited Tax Note of approximately $4.5 million for the purpose of purchasing City vehicles and paying the costs of issuing the note.
Each year, the City acquires a portion of its heavy equipment and vehicles through a tax-exempt leasing program. This year, due to circumstances in the market resulting from the COVID-19 pandemic, the City will be using a limited tax note for the funding of this equipment. The City expects to save $27,000 with this financing method. The change also allows the City to keep more cash on hand during uncertain economic times.
A limited tax note is a note issued under Chapter 1431 of the Texas Government Code payable from ad valorem taxes, within the limits set by state law, which can have a maturity of up to seven years if issued for the construction of public works or the purchase of materials, supplies, equipment, machinery, buildings, lands, or rights-of-way for the City’s authorized needs and purposes.
Like the transportation COs, the City is doing private placements as opposed to traditional open market bond offerings on the refunding bonds and limited tax note.