Council approves issuance of $30 million in CO bonds

The Round Rock City Council authorized on Thursday the issuance of $30 million in bonds as the next step in implementing the City’s five-year roadway improvement program.

Including the $30 million approved by Council, a total of $140 million in property tax-backed Certificates of Obligation (COs) are expected to be issued in phases over the next five years to fund transportation projects, which could include:

• Kenney Fort Boulevard extension from Forest Creek Drive to SH 45
• Gattis School Road widening from A.W. Grimes Boulevard to Double Creek Drive
• Gattis School Road widening from Via Sonoma to Red Bud Lane, including improvements to the intersection at Red Bud Lane
• University Boulevard/Chandler Road improvements from A.W. Grimes Boulevard to SH 130
• Engineering for the extension of Wyoming Springs Drive from Creek Bend Boulevard to FM 3406

Other projects targeted for future improvements include Deepwood Drive, Logan Street, McNeil Road, North Mays Street, Oakmont Drive, Old Settlers Boulevard, Red Bud Lane, RM 620, the SH 45 Frontage Road and additional portions of Kenney Fort Boulevard and Gattis School Road.

Issuing the COs in phases helps mitigate the impact to the City’s property tax rate, which at this time is projected to increase by 1.5 cents in 2020 as a result of the issuance. As the City grows, there will be more property owners – both commercial and residential – contributing toward the debt repayment.

The City also passed approximately $12.49 million in 2010 General Obligation (GO) refunding bonds. Due to current market conditions, the City was able to refinance this debt at a more favorable rate. The current interest rate is 4% and the goal is to reduce it to below 2.5%. The net present value savings over the life of the debt is projected to be over $800,000, or an average of $100,000 per year, and will be reflected as a reduction of the debt service requirement. The term of the debt did not have to be extended to achieve these savings.

Chief Financial Officer Susan Morgan also reported the City received a AAA rating — the highest possible rating — on the bonds. The rating agency included praises for the City’s strong economy, management and financial policies.

Other funding for the City’s five-year, $240 million roadway improvements program is expected to come from Roadway Impact Fees from developers; state and federal funds such as CAMPO grants, which have already contributed $29 million to the Kenney Fort Boulevard, Gattis School Road and University Boulevard projects; the half-cent, Type B sales tax revenues; and partnerships with private developers.

All the potential projects are part of the Transportation Master Plan, which identifies $1.2 billion in needed improvements to accommodate Round Rock’s ultimate build out, adopted in October 2017.

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Source: City of Round Rock