Legislation authored by state Rep. Dianne White Delisi and state Sen. Troy Fraser of Bell County allows cities to issue bonds to provide funds for construction, improvement and related expenses associated with work on state roads in a city. It allows cities to pledge, levy and collect taxes or a combination of revenue and taxes to back the bonds.
The legislation was approved during the just completed session and awaits Gov. Rick Perry’s signature.
Although the bill gives cities the option of repaying bonds through taxes and revenue bonds, it also leaves open the option of pass-through financing: TxDOT reimburses the city for a project based on road usage. That, according to Temple officials, would be the logical choice for work on the loop.
Temple Mayor Bill Jones III, who testified in the House and Senate for the bill, said the city would likely fund the project with pass-through financing.
“The work can be backed by taxes, but we don’t intend to do that at this point,” he said.
Jones said the legislation was brought forth specifically with the build out of Southwest Loop 363 in mind.
“This will really help facilitate the project for us on the northwest loop,” he said. “This is a very big project as we get ready for (expansion of) I-35, and it will also help with traffic flow in industrial Park and the west side of Temple.”
According to Delisi’s office, pledging ad valorem taxes in addition to the pass-through payments provides a lower cost of borrowing and more favorable financial terms for the city.
Cities can issue certificates of obligation payable from ad valorem taxes for state highway projects, but obligations solely from ad valorem property taxes affects a city’s debt rating and financial statements.
“(The bill) helps us because we can put full faith and credit of Temple behind the bonds, which will simplify paperwork and reduce cost,” Jones said.
He said it is difficult to specify the potential savings because of variables that include funding commitments by TxDOT, cost of work done on the railroad tracks and other negotiable issues.
TxDOT officials said the first phase of the loop project, which would be funded by the state agency, is intended to be used as a bypass to I-35 once work to widen the interstate to three lanes commences through Temple between the two loop intersections. The project should result in four lanes - two in each direction, running the length of the West Loop 363 between its north and south intersections with I-35. The estimated $41 million project also calls for two overpasses - one at the intersection of the loop and the BNSF railroad main line and another one at the intersection with State Highway 36. The project has a tentative late 2008 start date and estimated three-year completion time.
A proposed, full-blown version of the loop could be built over the next 20 years and would include full frontage roads, full main lanes and additional overpasses beyond those planned for the first phase, John Obr, area engineer with TxDOT, said during a December public hearing on the project.
The estimated $31 million for that portion of the project is not available, according to TxDOT, and that’s why city officials said they pushed for the transportation bill.
Temple City Manager David Blackburn said the bill allows cities to do what counties have already been doing.
“Counties had tools made available in the last session but cities were not included at that time,” he said. “We just went back and asked the Legislature to include cities.”
James Cooley, chief of staff for Delisi’s office, said the pass-through funding plan can be used by any city.
The bill specifies that bonds would provide funds for the design, development, financing, construction, maintenance, operation, extension, expansion or improvement of a non-toll project or facility on the state highway system located in the municipality or as a continuation of the project in an adjacent jurisdiction.
rstinson@temple-telegram.com
