Mayor Warren has posted his comments on the city’s website Fiction vs Fact. – Below are some details that were not in his comments.
Here is the City Council and City Staff’s Work Session Meeting where they had discussions about a 25-million-dollar Bond Referendum. The question is why the Jersey Village Government is looking at having a Special Election in November. Why is the Jersey Village Government not waiting until the Regularly Held May 2024 Election Time? It costs the Jersey Village Community a large amount of money to call a Special Election. What is the big hurry? The Jersey Village Government made sure not to allow the Jersey Village Citizens/Taxpayers to be able to vote during an election to make the decision on if they wanted the Jersey Village Government to spend 8.7 million dollars and more Taxpayer dollars on a new Golf Course Clubhouse and Events Center. But now they are going to ask Jersey Village Taxpayers to in-debt themselves 25 million dollars. The Jersey Village Government intentionally did not allow the Citizens of Jersey Village, Texas to be able to make the decision on the Jersey Village Government’s desired Golf Course Clubhouse and Events Center. The Jersey Village Government did not want to be told no by the Citizens of Jersey Village by them saying no we do not want your New 8.7-million-dollar Golf Course Clubhouse and Events Center.
The Jersey Village Governments proposed Bond Referendum should not have any of that money being spent south of US290 in the Jersey Village Governments Extra Territorial Jurisdictional Land Area. The Jersey Village Governments Tax Incremental Reinvestment Zone 2 (TIRZ 2) created by the Jersey Village Government in the Year 2017 was supposed to bring in the money to be able to do projects in that area without having the Jersey Village Citizens/Taxpayers paying for any of that development. If you look at the Capitol Improvements List of proposed projects, you will see that out of the 35 million dollars of projects, 25 million are projects to build infrastructure on the south side of US290.
The City Manager is submitting Grant Applications to hopefully be able to get money from the Federal Government or State Government to cover the cost of rehabbing the Philippine Waste Treatment Plant. If the funding gets approved that leaves the Jersey Village Government with all the Bond Money that would have been used on the Philippine Waste Treatment Plant to be spent on something else that the Jersey Village Taxpayers will not have a say on what the money will be spent on.
This is from the city’s website:
Capital Improvement Plan
If we switch health insurance vendors both of these items may not be possible. As we look to the future there are a lot of projects that we will have to do in the coming years. These include street projects, replacing water lines, lining sewer pipes, and storm sewer pipes. We also have a large cost share coming up for the wastewater treatment plant that we are part owners of with the White Oak Bayou Joint Powers Board. As all of this infrastructure is getting close to 50 years old we do not have the luxury of waiting.
We also have to consider how we will fund the replacement of the city pool. That will need replacing in the next 3-5 years as well.
Budget Memo – May Council and Staff Budget Meeting May 17, 2023 Page 7
In looking at the future of what is needed the City Council needs to consider all of the options that the city has to fund these projects.
Street Improvements
Historically the city council has done projects with cash on hand. This has worked well in the past, but this does not look to be viable for the future. The main driver behind this is the cost increases of the past few years. Back in 2019 when we first started looking at a 10 year Capital Improvement Plan with the streets the engineers estimates for a street reconstruction project (with a new street, new water, new sewer (where applicable), new storm sewer, new street lights, etc.) was $520 per linear foot. Bids for Seattle Street came in at approximately $1,612 per linear foot. Estimates for our next project, which staff recommends to be Congo Street, are at approximately $1,841 per linear foot. It is not sustainable for us to fund projects with a PAYGO method with these types of cost increases.
The City Council should consider bonds as a potential option for these major upcoming projects. If the city were to issue a $25,000,000 bond in June 2024 financed over 30 years our city Financial Advisor estimates that our debt service requirement in 2025 would go from $1,525,500 which will already be required with existing debt, to $2,182,479, approximately $657,000 more. This would be a debt service tax rate increase of approximately $0.05127. Currently our debt service tax rate is $0.118730, and that increase would bring it to approximately $0.17. In 2027 when our existing debt service is retired it would drop to $0.05910 if no additional debt were added.
Under this proposal the $25,000,000 would be for street reconstruction (including storm sewer, street lights, and sidewalks) which makes up approximately $13,250,000. This is what would be impacted by the debt service rate.
The remaining $11,750,000 would be for the water lines, sewer lines associated with the street projects and improvements at the wastewater treatment plant. This portion of the bond could be paid for via utility fund revenues, and would require an annual payment of approximately $725,000.
A breakdown of what the debt service tax rate, estimated average annual amounts of money in debt service and utility revenue, and total interest paid if the bond were financed over different terms is as follows:
Bonds
Estimated Annual Debt Service Requirements for $25,000,000 Bond financed over indicated term:
Term Int Rate Ann PMT Ann INT Tot INT Paid
30 YRS 5.1270% $1,507,194 $708,381 $20,215,833
25 YRS 4.8770% $1,617,155 $760,063 $15,428,867
20 YRS 4.6270% $1,827,259 $858,812 $11,545,188
Budget Memo – May Council and Staff Budget Meeting May 17, 2023
Debt Service Tax Rate Required Debt Service Amount Required Utility Fund Amount Required Page 8
A $25,000,000 bond is currently estimated by staff to be enough to do the next five years, potentially six years, of street CIP projects including the associated water/sewer lines, and the city share of the White Oak Bayou Water Treatment Plant project.
Street Assessments
One option the City Council should consider are street assessments. A street assessment is a fee the city can levy on an adjacent landowner of a project to share in the cost of the street improvement. This is something that is authorized by state statute in Chapter 311 and 313 of the Transportation Code. It is also authorized in our City Charter. Texas Municipal League has a good informational document that explains this more. That is include in the back of this document for easy reference.
A street assessment would allow the City Council to levy a certain percentage of the project, consisting of curb, gutter, and sidewalk on the abutting landowners that are benefitting the most from the project. The exact amount can be set by the City Council using a formula which typically includes the full cost of the project and how much frontage the land owner has on the project. The payment terms would be set by the City Council as to how many years the land owner would have to pay it off.
Street assessments would not, and legally cannot, pay for the entire street project. But it could cover a percentage of the project that the Council deems reasonable. If assessments were to be utilized the assessments would be used against the overall debt service tax rate and that amount would be reduced.
Grants
City staff will continue to apply for grants to fund city projects as the become available. However, the funding for street projects like this is limited in nature and the qualifications are strenuous. In many cases the city is not eligible to apply for them. There are a few grants the City will apply for, including some that will be presented to Council for authorization during the May 17, 2023 meeting. However, grants should be not be relied on as a funding source.
Municipal Swimming Pool
The municipal swimming pool will need to be replaced within the next 3-5 years. If we were to replace our existing one with close to what we have today that cost would be approximately $6,000,000. However, it is anticipated the community would want something that is better that what exists currently and would therefore cost more money. Given inflationary pressures over the next few years and the “upgrade” that would be desired we are estimating that cost to be $10,000,000.
That project will likely require a bond as well, as it is unlikely the city will be able to pay cash on hand for that project. Staff will certainly try for grants, and a fundraising campaign could also be done, but those two items will almost certainly not be enough to cover the full cost of the pool.