DALLAS - Montgomery County, Tex., commissioners are laying the groundwork for a $335 million road bond issue with public hearings next month and a possible ballot proposal in November.
Officials in the rapidly growing suburban county north of Houston are considering five 30-year bond packages of $67 million apiece to be issued at two-year intervals starting in 2012.
Under a "worst-case" scenario, growth of the tax base would rise only 1%, requiring a 7.75-cent property tax increase per $100 beginning in 2019, according to financial adviser RBC Capital Markets. If the tax base grew at a 3% rate, the effective tax rate would rise only five cents.
The county's historical growth has been greater than 8% the past 15 years and is slightly higher than 6% this year, says county tax assessor-collector J.R. Moore.
The county's current debt of $486 million would grow by nearly 70% if all the bonds were issued. Commissioners have not committed to the bond proposal or the date of an election yet. The hearings are designed to provide guidance on the likelihood of passage, the demand for transportation improvements, and the public's willingness to take on debt.
Waiting until next year to hold the election could make projects more expensive if construction costs reverse their current downward trend, said commissioner Ed Rinehart.
The county carried general obligation bond ratings of AA from Standard & Poor's for its last issue in 2008. Moody's Investors Service rated $35 million of tax-backed road bonds Aa3 last August. Fitch Ratings does not rate the underlying credit but downgraded county road bonds insured by Financial Security Assurance Inc. to AA-plus from AAA on May 12.
Montgomery County borders Harris County, which includes Houston, to the south. According to U.S. Census estimates, the county, which had a 23.4% population increase from 2000-2005, is among the nation's fastest-growing counties. Its population currently stands at 412,638.
Assessed valuation since fiscal 2000 has almost doubled to $26.7 billion for fiscal 2008. The 10 leading taxpayers account for less than 3.4% of the tax base.
According to Moore, 42% of county residents rated traffic congestion as their primary concern. Texas Department of Transportation area engineer Karen Baker said her agency is committed to expanding Interstate 45, the major highway to Houston, all the way to the northern border of Montgomery County.
County Judge Alan B. Sadler said the fact that transportation is the top issue in the county makes the August hearings an important avenue to educate voters about the need for funding.
