There are many paths to funding transportation needs

Editor’s note: This is the third in a series of posts on the fiscal 2019 budget and tax rate.


We direct significant resources at our transportation problems in Round Rock. From lots of sources — not just local taxpayers. There are many paths to paying for what’s needed to address the City’s No. 1 problem — traffic congestion.

The fiscal 2019 budget includes a little over $41 million for transportation. That covers everything from the crews needed to fill cracks in pavement to widening University Boulevard.

The transportation funding bucket includes some property tax revenue, certainly, but nearly half comes from the half-cent sales tax voters approved in 1997. Add in funding from state and federal sources, as well as the private sector, and you’ve got a potent mix of revenues to deal with the City’s most pressing problem. And we’re looking at a couple of new funding sources to add to the mix — more on that in a minute.

That half-cent sales tax goes a long, long way

Since Round Rock’s half-cent sales tax for transportation and economic development went into effect, we’ve collected $293 million. Those dollars have been leveraged into more than $533 million worth of projects as we’ve tapped county, state and federal funds, as well as private developers, to maximize the impact of this key funding source.

That half-cent is one reason the presence of Dell is so important to Round Rock, along with destination retailers like IKEA, Premium Outlets and Bass Pro Shops. Anytime Dell sells a good or service to a Texas-based customer, it generates local sales tax revenue to the City. And those hundreds of thousands of visitors from out of town who shop here are helping pay for transportation improvements here. Those are dollars we don’t collect from local taxpayers.

Collecting visitor sales tax revenue is also a driver behind our Sports Capital of Texas tourism program. We fund our operations at the Round Rock Sports Center, Round Rock Multipurpose Complex and City costs at the Dell Diamond with Hotel Occupancy Tax revenue. That’s the tax paid by folks staying in our hotels. When you see some of your favorite restaurants around town full of kids wearing the same jersey, you can smile knowing they’re contributing to the funding of City services, including major road projects in Round Rock.

Sales tax aside, the City has also been successful in securing $27.6 million in federal funds via CAMPO for three significant road projects: Kenny Fort Boulevard from Forest Creek to SH 45; University Boulevard from A.W. Grimes Boulevard to County Road 110; and Gattis School Road from Via Sonoma Trail to Red Bud Lane. That’s nearly a third of the $61.5 million total estimated cost.

TxDOT delivering $73 million worth of relief

Of course, the 600-pound gorilla in the room when talking Round Rock traffic is I-35. Our friends at the Texas Department of Transportation have multiple projects under way to tame that beast. There are five projects either under construction or completed in recent years, valued at a whopping $73.5 million.

  1. Ramp reversals between U.S. 79 and FM 3406 — Completed in December 2015, this $6.7 million project helped alleviate a bottleneck on the northbound mainlanes of the interstate.
  2. The Diverging Diamond intersection at RM 1431 — Completed in May 2016, this $6.7 million project moves significantly more cars through an increasingly busy intersection.
  3. Widening the FM 3406 bridge — Scheduled for completion this fall, the $12.4 million project will add two U-turn lanes and increase capacity.
  4. Braided ramps, U.S. 79 intersection — This $28.1 million project includes constructing braided ramps to remove merging conflicts on the I-35 northbound mainlanes between Hesters Crossing and RM 620. The northbound extended entrance/exit lane will allow drivers to match travel speeds prior to merging. The improvements to the northbound and southbound frontage road intersections at I-35 and U.S. 79 and a third left-turn lane for westbound U.S. 79 were components of this project. Final completion is anticipated in early 2019 — but the ramps are now open!
  5. Frontage roads between FM 3406, RM 1431 — TxDOT considers this two projects, one southbound and one northbound. The $9.2 million southbound project reverses two ramps on southbound I-35 and improves the southbound frontage road. The $10.4 million northbound project will reconstruct/widen the I-35 northbound frontage road from two to three lanes between RM 1431 and FM 3406, and relocate the exit ramp to RM 1431 and extend the existing auxiliary lane, or extended entrance/exit lane.

New funding sources being considered

The City is in the formal process of evaluating Roadway Impact Fees, which are one-time costs assessed to new developments in order to improve roadway capacity. The funds can be used to help accommodate growth and serve the overall transportation system as allowed by state law. According to the City’s 2017 Transportation Master Plan, more than $1.2 billion in new roadway capacity is needed to accommodate future growth in the City of Round Rock.

The City Council will hold a second public hearing on the fees at its Thursday, Sept. 13, meeting. A decision on whether to implement the fee is expected to occur in November.

That decision will influence how much the City Council will consider issuing in Certificates of Obligation (COs) later this year or early next year to fund planned road projects. The Council approved $28 million in COs in 2014 to help fund multiple projects: the Creek Bend Boulevard extension (completed in January 2017) as well as improvements Downtown to Mays and Main streets (completed in spring 2018), Phase 2 of Seton Parkway (completed in March 2016) and Phase 2 of La Frontera street maintenance work (completed in November 2015). 

As emphasized in our first Fiscal 2019 budget blog post, a key element of Round Rock’s “Blueprint for Success” is to diversify how we fund local government. We’re always looking for ways to fund needed projects without putting it all on the tab of single family homeowners. That may be most evident when it comes to transportation funding.