DALLAS - With some trepidation, Denton County, north of Dallas and Fort Worth, will test the strength of its triple-A credit rating in a competitive sale of $104 million of general obligation bonds next week.
Bids to managing director John Martin at financial adviser Southwest Securities are due by 11 a.m. Central Daylight Time Monday by mail or on Ipreo's Parity system. Denton County commissioners will award bonds to the winner at a meeting Tuesday morning, or reject all bids.
The bonds carry top ratings from Standard & Poor's but are awaiting an opinion from Moody's Investors Service. Moody's current rating for the county is Aa1. Fitch Ratings does not rate the county's general obligation debt.
In a meeting last month at which commissioners unanimously agreed to offer the bonds, some commissioners said they were concerned about the still erratic bond market amid the continuing recession. Precinct 1 commissioner Hugh Coleman proposed a quick sale of the county's older buildings so the money could be used to pay off the bond debt.
But County Judge Mary Horn told commissioners that, all things considered, it was a good time for a highly rated issuer to borrow. Nevertheless, she said the original plan to issue $117 million was reduced to $104 million.
Next week's issue is carved from $495 million of general obligation bonds approved by voters last November. The bond program, known as TRIP - for Transportation Road Improvement Program - began with a voter authorization of $187 million in 2004.
"To date, we have leveraged that funding into $2 billion in much-needed transportation projects," Horn said. "That is a 975% return."
After next week's issue, Denton will have $471 million of authorized but unissued debt.
The 2008 bond package was split into two major components. One proposition provided $310 million worth of road projects, and the other would set aside $185 million for buildings and technology.
The technology package includes fiber optic cables for the county computer network and a new juvenile case-management system.
Officials also plan to complete the second and third phases of the county administrative complex, expand the jail, build a government center in Lewisville, and expand juvenile detention. Money from the 2004 voter-approved bond is paying for the first phase of the administrative complex.
Positioned atop Dallas and Tarrant counties, Denton County has grown rapidly as a suburban center with good highway connections to Dallas-Fort Worth International Airport.
Since the 2000 census, the county's population has grown more than 38% to an estimated 599,350. However, that growth has slowed since the recession began, according to the North Central Texas Council of Governments.
The region added an estimated 92,480 people over the last year, bringing the population up to 6.6 million, according to a recent report from the group.
"However, last year's growth represents a departure when compared to that of previous years," the report said. "For the first time in 13 years, the region's estimated annual population growth was less than 100,000. This slowing of growth is a reflection of the national mortgage crisis and ensuing economic recession that dramatically affected new home construction and employment growth."
Assessed property value, which increased by 12.9% from 2007 to 2008, has also slowed. County officials expect to learn the current assessed values on May 15.
Foreclosure filings for May in the Dallas-Fort Worth area soared 25% to a record high, according to the Addison, Tex.-based Foreclosure Listing Service.
Dallas-area home prices were down 4.5% from a year ago in the latest measure by Standard & Poor's/Case-Shiller. Dallas' decline compares with an overall 18.6 percent nationwide drop in prices in February from a year earlier. Dallas had the smallest price decrease among the 20 cities surveyed.
Another hit to the tax rolls comes from the transition of the Denton Presbyterian Hospital to a nonprofit this year. Valued at $97.7 million by the Denton Central Appraisal District, the hospital paid about $2.9 million in property taxes for 2008, including about $300,000 to the county, officials said.
On the upside, the University of North Texas' spring 2009 enrollment hit a record 33,366, increasing by 3.6%. UNT students last fall also approved higher fees to help finance a new football stadium and athletic complex. A new stadium can only be built with funds raised by private donors and student fees because Texas law does not allow state funds to be used for construction of athletic facilities. Texas law also says student fees can fund no more than 50% of the cost.
The new stadium will replace 56-year-old Fouts Field, where much of the infrastructure is outdated. Originally opened to accommodate 20,000 fans, Fouts Field is no longer a viable home for the North Texas football program and other events.
Meanwhile, the nascent Denton County Transportation Authority last month broke ground on its first station for the commuter rail line that is scheduled to link up with the Dallas Area Rapid Transit Authority next year. The project includes 21 miles of rail, five stations, a bicycle-pedestrian trail and a maintenance facility. Completion of the DCTA line will coincide with DART's completion of its Green Line connecting downtown Dallas to the northern suburb of Carrollton, where the two systems will link.
The rail line will give students in Dallas an easy way to commute to the UNT campus and will ultimately connect the main campus with the new UNT Dallas campus south of downtown.