DALLAS — The Brenham City Council decided earlier this week not to call for a May bond election that would have been around $20 million.
City manager Terry Roberts said council members felt it prudent to wait and make sure the most-pressing needs were laid out in any potential bond package and any consequent tax impact was vetted.
Texas issuers had to decide by this coming Monday whether to hold an election in May or not.
“Because we’re not calling for a bond election every year or even every few years, the council just though it best to make sure we had our priorities right,” he said.
The fire department would like to see a substation built in the southwest part of town and the public works department has a list of street expansions and upgrades, some of which that have been bounced around for more than 40 years.
Public works director Doug Baker said there’s at least $15.3 million of needed upgrades to thoroughfares across the central Texas town.
“Eventually as Brenham grows, every one of them will get done,” Baker said. “The city does spend a lot of money on a lot of things just not transportation or mobility projects. Road construction always follows development and development is pretty slow right now. [The council doesn’t] like to see a pavement sitting out there with nothing around it. And they’ve been real sensitive to the fact taxpayers are hurting right now and chose to not even ask them to vote no.”
Roberts agreed and felt the council had the taxpayers in mind when it chose not to put a referendum on the ballot.
“The principal project that needs to be addressed in the near future is a transportation-enhancement program,” Roberts said. “We gave [the council] a very detailed plan with four different projects we felt need to be addressed. And, quite frankly, I think we may have given them more information than they could digest in just one meeting.”
Brenham sold nearly $6 million of combination tax and revenue certificates of obligation in December through a private placement. Proceeds were used for a new water tower on the west side of the town, which is roughly half way between Austin and Houston.
The city has about $45.2 million of general obligation debt outstanding and no authorized but unissued bonds. The city issued $9 million of bonds in 2006 for public-safety projects but wasn’t able to build the new fire substation, as construction costs escalated.
Specialized Public Finance Inc. is the city’s financial adviser and Vinson & Elkins LLP is bond counsel.
In December, Standard & Poor’s upgraded Brenham’s underlying credit rating to AA-minus from A-plus, citing a strong financial position and good management practices.
Analysts said the higher rating reflects Brenham’s “position as the principal commercial center of Washington County and its diverse mix of general fund revenue sources.” Offsetting factors include an elevated carrying charge and moderate debt burden.
The population of the city, which is home to the headquarters of Blue Bell Creameries and Del Sol Food Co., is up 13% since the start of the decade to about 15,250.
Fitch Ratings rates the city’s GO debt at A and revised its outlook to positive from stable in August, due to significant improvement in general fund performance and “a demonstrated shift towards strong financial management practices, including the preparation of multi-year projections. “
The unreserved general-fund balance of $2.25 million at the end of fiscal 2007 represents 23% of expenditures and is up from 5% for fiscal 2004, according to Fitch.