In Conversation: Issuers on Texas' Explosive Population Growth, Emerging Trends and Opportunities Ahead

Our panel of issuers will share their insights into Texas' economic/population growth and how we pay for it


Transcription:

Karl R. Biggers (00:09):

Thank you. Good morning everyone. Good to see everyone here. We're not going to talk anything about the market, which I think everybody will be relieved over, but instead we're going to have a conversation as we try to do on this session about some things that are going on here in the state of Texas and ultimately end up talking about things that issuers have coming down the road with regard to various financings on the horizon. This is a room full of bankers and lawyers, so we know what your interests are and how to address them, but we're going to make you wait until the end in order to hear that. So with that, I wanted to take a couple of minutes and just kind of tee this up with regard to how this state has changed over the last 50 years. And one of the things that we're going to start with are a couple of pictures and maybe there's someone in this room who can remember this, but that was the original tollway in North Texas between Dallas and Fort Worth. It's now I 30. Anybody remember that? Or isn't anybody willing to admit to remembering that? Okay. One other thing, this one's a bit more recent

Video Presentation 1 (01:52):

Here, midway between Dallas and Fort Worth. I'm standing in the middle of the world's largest air center. From here you can only see the shape. You cannot begin to absorb the immensity or the significance of what will become one of the most immense, one of the most significant works of man in the entire world. As you can see, we're well along with the construction of the Dallas Fort Worth airport, and by now you can begin to appreciate the vast scale of this project. It covers an area of more than 17,000 acres that's larger than all of Manhattan Island. Our airport is located in the center of the Mushrooming Dallas Fort Worth area that's Dallas off to the east, about 17 miles from where I'm standing. And over there about the same distance is Fort Worth where the west begins getting a feeling of magnitude. Now you are looking at a 2,500 square mile chunk of growth potential and our Dallas Fort Worth airport sits square in the middle of it.

Karl R. Biggers (02:57):

That was 51 years ago. I'm pretty sure that there are some people in this room that can remember that. Unfortunately, Chris Poinsatte, who's the CFO at DFW Airport is not going to be able to make it today, but he did provide that as some context from which we can start our discussion about how the explosive growth in this region, not only in the North Texas DFW region, but also in the Harris County and Houston areas as well, which are the two largest metropolitan areas in the state, the expansive growth and how it is led to the need for expanded infrastructure and how that infrastructure in some respects has led to the expansive growth where we see these trends going, where they are now, where we see them going. And so with that, I'm going to let Horatio Porter, who is the CFO for North Texas Tollway Authority kind of begin with and talk us through how this infrastructure, the demands for infrastructure have been fed and how infrastructure itself has fed our development.

 Horatio Porter (04:11):

And thank you Karl. Again, Horatio Porter, the CFO, happy to be here with you today. We were talking during our prep session about the best time to plant a tree is 50 years ago and to DFW airports credit and to TTAs credit, we did in fact plant those trees some 50 years ago and we're now enjoying the shades from those trees. A lot of the growth and development that's taken place, particularly in DFW are in large part because those significant investment made by DFW Airport and of course by NTTA, that very original slide that we had up there was 1958, the original tow road connecting Dallas to Fort Worth. Prior to that, it would take you almost an hour to get to Dallas and Fort Worth when that road was constructed. Cut that time in half. The slogan that they had back then was 30 minutes, 30 miles, getting to Dallas to Fort Worth since that time period, I know many of who were in the Dallas for, they already know that that corridor has gone through some major disappear and we'll get to the maintenance later. But you're also well aware that along that corridor is a facility called AT&T stadium, small place where this small football team plays every once in a while and hadn't been doing very well, laid the call,

Karl R. Biggers (05:25):

That hadn't been doing well at all.

 Horatio Porter (05:27):

But in addition, that that facility hosts a number of concerts and major events, provide a lot of economic activity there. Adjacent to that facility is also the globe life field where the Rangers play and hosts a lot of other events. So that necessary infrastructure that was put in place many, many years ago providing great, great economic benefits for the DFW area. I think the next lot we have called shows the Dallas nor to way back in the early seventies, same time period. You may recognize that's the Galleria in the early seventies, a lot of growth, a lot of development, and the decision was made then the question was raised then do we extend the Dallas North Tollway or Toll Road further north or do we stop here? And they had to foresight then to say, let's continue to extend this road to promote and be a catalyst for economic growth and development. The next slide call I think shows what that looks like today.

(06:27):

Almost exact same vantage point to early seventies to now, 2024, 2025 in many of you who live in the Dallas Worth area can attest to the traffic perhaps that exists there, but also the economic activity. Those lights wouldn't exist, but for that tow road that was put in place further, every time the organization has extended the Dallas North Tow way, we've created another city. So at this point in the picture, you see Dallas proper primarily at 635 in Dallas North Tollway. When we've extended that road, we built Addison. Addison came to be extended a little bit further. Plano came to be. Then Frisco further extension to Prosper. Now Salina, and these aren't small mom and pop towns, these are major cities within our state that are now as a result of, in part because of the roads we built because those great reliable transportation infrastructure. I'll pause for a second because I know Amy has similar stories to talk about Harris County, but significant investment that the organization made again 50 years ago to create what we enjoy now economic activity in the corridor.

Karl R. Biggers (07:37):

And Amy, before you speak, I would add, just from my perspective, I've been in Dallas since 1981. Okay? When I first came to Dallas as a freshman in college, if you can envision the Galleria envision across the street from the gallery on the north side on the cross from Alpha Road, a family friend of ours owned two acres on which sat her nice ranch style house. Could you imagine a ranch style house sitting at that corner today? She was bought out at that time and what you see there is what resulted from what used to be her two acres of homestead. And she had a fabulous garden there by the way as well. But again, we're just trying to set the tone for you as to how this development has taken place and the impact that it has had all along the various corridors that the tollway encompasses, Amy.

 Amy Perez (08:46):

So good morning and thanks for having me here today. So just to kind of build off of what Horatio has been talking about, so we are seeing expansive growth in Harris County as well. Just in preparing for this today, I was looking up some numbers. So 1990, the population was around 2.8 million. In Harris County today we sit over 5 million and they expect by 2050 that we're going to be over 6 million. So I mean it has grown significantly in that amount of time. And so of course we have our challenges with that, right? And so one of the things that we're working on right now is our hospital district Harris Health System, and I may use those two interchangeably because it's always been hospital district for as long as I've been there, and then they went and changed the name on me, and so I kind of get thrown off with that.

(09:39):

Well anyway, this was the original hospital that was built in 1928 and was there until 1938 and then it was replaced in 1938, I believe. Yes. And then this is the way it sat until 1989, still called Jefferson Davis. Well then shortly after that they tore it down and then they built the new or what is currently existing the LBJ hospital there in Harris County, and it opened in 1989. And this is how it sits currently. As we are in the process of issuing bonds to expand this hospital because of the growth, we are at capacity and over capacity to the point that it almost had to shut down just because of the capacity during covid and the challenges that came with that. So we are in the process of doing a huge capital expenditures that related to the hospital expanding it. I think if I remember correctly, and please don't quote me on this, I'm just the lady they come to for the money.

(10:48):

I don't know all the details. I want to say that the bed, they had a capacity of somewhere between 215 and 250 and they are expanding it to where it will reach almost 500 beds and whenever they're completely done with all of the construction, so as many of you probably already know, in 2024, I believe they went to the voters for two and a half billion dollars worth of voted authority to do this project. The project also consists of renovations to Ben Top to make sure it stays at a level one trauma center as well as opening three new clinics across the county in underserved areas that do not have the medical care that is needed for that area. So that's just a glimpse into what we're talking about when we're talking about how much growth has happened in Harris County. I can get into a little bit around the toll roads that we have. So the toll road itself has brought an immense amount of growth to us already. So we ran some statistics a while back. I think this was back from 2020. At that time, our population was somewhere around 4.7 million and a little over 1.5 million lived within two miles of our toll roads. And so that's just how much growth has happened because of the toll roads made them easier to be able to get around to commute to work, that sort of thing. So I mean, it's massive how much business was brought in because of the toll roads.

(12:35):

Anything else I was supposed to say?

Karl R. Biggers (12:36):

Very good, thanks Amy.

(12:40):

As a result of all of the growth, one of the things that potential companies are looking at as they relocate to DFW or to Harris County is what are the educational opportunities? Can we have access to a well-educated workforce? Will our children have access to quality education in K through 12 in community college in universities? Carmen has a unique perspective being the CFO of an urban school district, which interestingly enough right now as is the case with many of the urban school districts have seen declining population. So I'm going to let her speak about that and the whole encompassing idea of how K through 12 contributes to the growth and also how K through 12 and from the public school standpoint is being impacted currently.

Carmen Arrieta-Candelaria (13:46):

Yes, thank you Karl. Again, Carmen Arrieta-Candelaria, I'm the Chief Financial Officer for Fort Worth ISD. Happy to be here. I'm really happy we got out of the market. We closed on a big deal on Tuesday, so I am going to speak a little bit about the market because I'm really happy we were able to close our deal,

Karl R. Biggers (14:02):

Just a little bit. All right,

Carmen Arrieta-Candelaria (14:05):

But let me start by first if you'll bring up that slide and just talk a little bit about Fort Worth, the city of Fort Worth, and what's happening there within our borders. One more, one more. No more. There we go. So here you can see in the red bars really the population of the city of Fort Worth. We've overtaken Austin now as the fourth largest city in the state of Texas in last year and are still the 12th largest city in the nation. We're also the fastest growing city in the United States. And so we've had a lot of population growth in our area, and certainly that has led to a lot of expansion and educational opportunities, not only in K 12, but also for the universities, colleges that are in the area. We've seen a lot of expansion and growth, and so we're really pleased about that and pleased to serve over 70,000 students currently within our 140 schools in Fort Worth, ISD.

(15:17):

But one of the things that we're looking at is there's another trend line that you see that in yellow is that Fort Worth, like many urbans have continued to lose enrollment despite the growth within the city. So we really have to understand what that growth is coming from and what is occurring within our borders to be able to address and understand how much students we're actually serving. So it's almost like you have to be a professional demographer in addition to your CFO hat, but to understand what are the demographic changes that are coming within your community? Are there more retirees moving in or there more young families moving in to be able to understand what that population growth is so that you can plan for future and future expansion? Certainly working with counterparts at the county to be able to understand what the birth rates are.

(16:17):

And we started noticing that in the birth rates that are coming in, they're not as high as they used to be, so that means that there's less children coming into the schools. And so what does that mean for future expansion? And we can't ignore the charter school expansion and the allowability of charter schools to continue to expand in our area. We've had a huge charter school expansion in Fort Worth, and that has led to some of the 16,000 student drop in the last six years, as you can see by the slide private schools in the area. Also, we look to see what are the private schools, what are they offering, what programmatic offerings do they have and how did they impact the number of students that were actually coming into our schools? The housing authority, again, working with a community partner to see what changes they're making within our borders that will actually in fact impact our population for our district and certainly the development in the area, what is happening, the growth, the expansion of roads, any expansion in DFW and any other expansion of roads or cities or developments, getting information out from all of these different public sources that will provide you with an eye on what's happening within your respective communities.

(17:54):

So before it was pretty easy to say, oh, you know what? I've got a hundred students in first grade and guess what? I'm going to have a hundred in second grade. That doesn't happen anymore. That was, I don't remember when that was 20, 30 years ago. But you can't do that anymore. You really have to understand what is happening in your community so that you can address the growth that's coming because it is coming. As you can see in the slide, we're growing in different areas. We're just not growing in our respective school district, but that's also an opportunity for us to look within and then do more community outreach, certainly to try to draw students back. We certainly have the capacity to do that, but like I said, just being aware of that growth. Again, Fort Worth 7.7% growth since 2020, making it now the fourth largest city in the state of Texas. So it is very impactful.

 Horatio Porter (19:00):

Yeah, I think without offer to that, Carmen, again, 1974, 1975 population in the D-F-W-M-S-A was 2.2 million people. Today that's 8.5 million people. So significant growth, but what you're saying is it's not growing the school district. And we kind of joked earlier with the expansion that NTTA has done, particularly in Dallas. Every time we've extended the road, we create a new city. Well, that's not helpful for DISD, Dallas Independent School District, but people are moving further and further out. So that's a challenge. But I think there's some opportunities, Carmen, to address even new cities and new school district with their investments.

Carmen Arrieta-Candelaria (19:39):

Absolutely. And in Dallas, they saw a 16,000 student drop in that six year gap as well. And so they have to look at what's happening within their borders as well. But you have other school districts like Katie, ISD, Lamar, ISD, and Fort Bend, Plano, Frisco, those school districts are growing. So it really is trying to understand where that population shift is going. And literally, I think we just need a crystal ball to be honest, to figure out where people are moving and there's a lot of dynamics and we just have to have a little bit more insight as to what's happening so that we can address infrastructure needs.

Karl R. Biggers (20:22):

Exactly. Thank you, Carmen and Horatio. And as this growth continues, do you all see it continuing at the rate that it has been continuing has been going, or do you see it tapering off in some respects given what you have seen with your demographic data that you're collected and analyzed as you're making your decisions?

 Horatio Porter (20:48):

I think the answer is yes Karl Texas has long been a very popular state for a number of reasons. Despite some of our challenges, and I'm speaking on behalf of NTTA, not any other associations, chair of the MSRB. So yeah, I think Texas will continue to grow and we've often said that people continue to move here, but they're not bringing any concrete, they're not bringing any water. So it's incumbent upon us as leaders to make sure that those resources, that infrastructure is in fact in place. It may not be at the same level we've seen the past 20 years, but I think Texas still remains a relatively attractive state.

Carmen Arrieta-Candelaria (21:29):

And I was going to say that we have seen a slight pause in the decline in enrollment, certainly the last year was if that's an indicator of that decline, we have seen better performance in our enrollment in the last year. So I think that to RA's point, I do agree that there is some of that impact of the population growth is impacting Fort Worth ISD. I hope that it continues to do that. And certainly the growth that we see in Fort Worth as far as the construction and the expansion and the continued development that is continued. If you look at the numbers, whether it's at the city, the permits that are being let out and all of that, you're still continuing to see in sales, tax growth is still strong. Some of those indicators that we look to is still strong. And so I would say that it's going to continue to grow. It may not be in the urban core, which is what we see, but it probably is in the outskirts of the cities.

 Amy Perez (22:42):

And I would echo that. So that's where we're seeing the majority of our growth is on the unincorporated areas outside of the city of Harris County is where we've seen the most explosive growth, which is the roads that we maintain at the county. And so that's where we're having a lot of challenges is trying to maintain those roads and keep them to the point that they're safe, safer for people to drive on. And so that's a big, big challenge for us right now with that growth.

Karl R. Biggers (23:12):

And Amy, you kind of took my next question, but as Horatio indicated, people are moving here, but they're not bringing any concrete. So we have to be able to provide the infrastructure, be it general infrastructure as would be in Amy's purview or roads, tollways as would be in Horatio's, but with the more of that kind of thing that you build, the more maintenance is going to be required. So you run into yet another issue of, okay, we've built this fabulous tollway that reaches all the way to Oklahoma. How do we keep it in good working condition? Because they do deteriorate over time, and particularly in Texas when we have such extreme weather changes, it gets harder than West Hill all over the state and it stays that way for months on end. You have flooding in Harris County, we have extremely cold weather on the other end in north Texas where it gets down into the teens and single digits and stays that way for several days. And all of those things are impactful on the quality of the infrastructure. Horatio, Amy, what kind of challenge does that pose? What are the things that you all are doing to first of all enhance the quality of the product that you're putting down to start with? And number two, how do you maintain that and how big of a drain is that on your budget?

 Horatio Porter (25:02):

That's a good question, Karl. One of our goals is to provide safe and reliable tow roads for our customers. And one of the things that makes 'em safe and reliable is that they're well maintained. And while this group here and others, we weren't there when the original tow roads were built or the original airports were built, but we are currently the stewards of those assets. It is important for us to make sure we accurately maintain those assets. And for us, for every dollar we collect in tolls, we got to spend 10 15 cents just to maintain it. And that's not the insignificant amount of money. We've got 1100 lane miles across the region that we build and maintain. So it's a significant investment for us to make sure that current drivers and future drivers continue to enjoy a safe and reliable transportation experience.

 Amy Perez (25:51):

Yeah, so you mentioned flooding. So obviously everybody knows Houston has flooding issues and from a flood controls perspective, a lot of those flooding issues are caused from the growth that's happened in Harris County and the new infrastructure that's been put down and all the concrete and all those kinds of things. And so it's really put a strain on our flood control budget. And we actually went to the voters this last year and almost, well, we increased our m and o rate just to be able to continue to maintain what we're trying to put in place currently with the bond that voted authority we already have. It was great. We got the voted authority, we're able to do the capital projects, but now we got to maintain 'em and we didn't have that. So that's been a big thing that we've been working on this year from the flood control perspective. Now, from the roads, like I said, I mentioned earlier, a lot of the roads are out in the unincorporated areas, so we're managing that. And actually it's a very interesting, they do the individual precincts, they do a cost analysis on whether it makes more sense for them to maintain the existing road and continue to asphalt it every few years or however many years you need to do that, or to just completely replace it with a concrete road that apparently has a better life quality, what's the word I'm looking for?

(27:26):

And then it also, it actually has a better, it looks better, it lasts longer. It is apparently safer from what I'm told, than doing the asphalt roads. Probably weather's better in the weather and that sort of thing. So they do a very in-depth cost analysis to determine based on the funding that they have, what can they do to make sure that the roads are still safe at this point. And so they have had to actually really go to just a maintenance kind of thing. And they're not able to replace any roses at this point because of the funding shortage, because the growth has happened so quickly that we're just not able to keep up in any other way. So really the only way that we're able to do anything new is through some sort of bond financing to keep things current. But again, even that has been mostly maintenance to now.

Carmen Arrieta-Candelaria (28:23):

And I want to add just how much the school district depends on good roads. I mean whether they're county toll or city managed, state managed, we spend over $20 million every year transporting kids to school. So we rely on good roads, we have to, and we certainly rely on our partners to be able to provide those roads. We have over 190 routes that we manage to get our kids to school. And one of the biggest complaints that we hear is get kids on time to school and sometimes it happens, there's a construction or something, there's a delay of that magnitude. And so it's so important and it really demonstrates the relationships that we have to one another that we certainly at the school district, we rely on those roads to be safe and be able to get our kids to school on time.

 Horatio Porter (29:26):

Amy mentioned earlier the funding source that's so critical, and I had call, pull this slide back up for a reason again, this project was the original toll road in Dallas Fort Worth and it was completed in 1958. And the then mayor of Arlington made the statement that once the road is paid off, we're going to take the toes off.

(29:44):

The road performed so well, the bonds were paid off in 10 years, so 1968, 1969, they took the toes off, everybody celebrated great rah rah, great political win, but there was no funding source to deal with maintenance. So for 30 years, I 30 was in disrepair because there's no funding source. There are great needs across this amazing state to do nothing but maintenance. And there was not a funding source to address the roads. This particular road, 2015, 2016, the decision made to make some necessary repairs to the road and change some of the interchanges, but that's some 40 years after the road was built. So you got to have a funding source to address these issues. And whether it's taxes which no one loves and taxes, they probably told they hate less, hate more. You got to have a funding source and if these things are truly important to this great state, you got to have a funding source to address these. Again, it'd be a disservice for us to let these great assets that have been built, whether it's schools, roads, hospitals, libraries, fire stations, be a great disservice to let those assets fall in disrepair because we don't properly maintain them.

Karl R. Biggers (30:55):

And Horatio, I would ask kind of another follow-up question to that, and that is the collection of tolls. I can remember and many of you as well, when you went through the toll booth and slung your 50 cents into the basket and then you kept going, so sometimes it wasn't 50 cents, it was just all the cat, the change that you had in your glove compartment, but you went through anyway, but now technology has taken over and how has that impacted your abilities to be more cash flush, whether it's maintenance or debt service or whatever? Because I can recall attending finance committee meetings at NTTA and hearing about the losses that you all were sustaining because of people who were going through the toll boost and not throwing their 50 cents in.

 Horatio Porter (31:53):

So technology has been a great win for many of us. I think we can agree to that. Want to correct one point you made, Carl, we're not cash flush. You're not. No, we're not cash flush at all. But we NTTA made the decision back in 2007 to convert to an all electronic towing system removing these what you see in the picture tow booth. And when we did that, we effectively extended credit without doing background checks.

(32:19):

So anyone who drove through a tow booth, we had to trust that they would in fact pay us. And many did. Many still do pay, but there is a second amount of population that don't feel that they should pay tolls. So collection has been an issue and we are probably as much of an IT company as we're a construction company, we invest significantly in our IT infrastructure to make sure we capture the information process, the transaction, actually send you accurate bills. And we do a really good job of that. And when we don't get it right, we try to correct it quickly. So again, we invest heavily in technology to improve our collection so we can get to a call of stands cash flush. We're not cash flush. Now call, come on. So I mentioned earlier that 15 cents out of every dollar goes to maintenance, 60 cents out of every dollar goes to debt service to pay for the roads that we built much sooner than the state could have otherwise built if we borrowed with many of your help, borrowed a lot of money to build these roads, we're sending at $8 billion, $9 billion of outstanding debt.

(33:18):

If Chris were here, he'd tell you he wants to surpass that number. And I said, Chris, you can have that title. I'm happy to yield that to you, but yet we have $9 billion of debt outstanding. So 60 cents out of every dollar we collect goes to pay back those bonds. So it's significant and it's important that we do collect every penny we can from your glove compartment call.

Karl R. Biggers (33:41):

It's empty.

(33:44):

We've kind of talked about all the demands that this brings, that all the population growth brings, be it infrastructure, K through 12, whatever. What are the diamonds in all of these of opportunity in all of this growth?

 Amy Perez (34:02):

Start with you.

Carmen Arrieta-Candelaria (34:05):

Yeah, I can start. So when we were doing our prep, giving a little bit of thought, and I do think that for the opportunities, certainly for the large urbans that right now I feel that they're in the state of retrenchment, right? They're evaluating their facilities and determining, certainly we have 140 schools for 70,000 students and that is more, we have a lot of under utilization of our facilities. And I would imagine that that's the same case for a lot of the large urbans. So I think the opportunity there is to do an assessment, which we're in the process of doing as well to look at all the facilities and upgrade opportunities for upgrade in looking at less campuses, but better campuses. You always want to send your child or your student to a better place than if you're going to have to close the school.

(35:03):

So I think it's an evaluation, it's an opportunity for evaluation of your facilities to determine whether or not you can make upgrades. And certainly we would look to that. There's opportunities to repurpose to working with our partners like the city or the county or nonprofits to be able to utilize the facilities that we will close. I think there's opportunities there and there may be some investment opportunities there that can be looked at. Certainly for the fast growing school districts, there's going to be more bond programs that are going to go out. But I think just reflecting on that, I really am concerned about the continued restrictions that are being placed on issuing new debt or debt that appear to be on the horizon every year. And I think I've spoken about this before is that every legislative year it seems that there's continued look at trying to limit the amount of ways that we can issue debt.

(36:17):

And as I think Orio said it best that we have to have deferred maintenance and public debt is the least expensive way to fund these capital improvements. And so we have to be able to lower the cost of borrowing for all of us, the ones that are paying for the debt through our property taxes. And so I think that we continue to have these concerns or these bills that come forward, whether it's no INS revenues can be used for deferred maintenance, which is what you asked just spoke about, requiring three-fifths vote to approve a bond referendum, moving all the bond referendums to November requiring separate propositions, the inability to defeat debt unless you go to or refund, unless you go to the voters. And I think that's really where all of us can advocate that we really need infrastructure dollars to be able to and access to those dollars because we make management decisions and recommendations regularly that are supported by bond dollars or certificate of obligation dollars in the case of cities and counties. And so I think that there are a lot of opportunities and certainly being good stewards of the public's money as well as good managers and trying to respect the amount of debt that we issue. But at the same time, we do have critical needs that we need to address and we want safe roads, we want safe schools, we want safe places for us to get together as communities. And so I think that the best way to do that is to fund those things through the lowest cost of borrowing, which is municipal debt.

(38:32):

And so I think just reflecting on that, I think there's a lot of opportunities out there for different folks and different entities that are going out there. But that's kind of my viewpoint as we were talking about prepping this afternoon for this afternoon.

Karl R. Biggers (38:53):

Amy.

 Amy Perez (38:54):

Yeah, I would ditto everything that Carmen just said. I mean we have taken on a huge project to kind of assess all of our buildings that the county owns who's currently occupying them. We've purchased several buildings in the downtown area that kind of makes up our county complex as we like to call it. But the county is so large that we have facilities all over the county and some of them that are just not in good standing. I mean some of them are just flat out unsafe at this point, but because of the growth in the areas, their value has gone up. And so if we're not using them to their full capacity, we should be selling them off using those funds to kind of address some of the other needs that we have in the county. So I think that's a huge opportunity for us that we've tried to start to capitalize on and work through.

(39:53):

It has been a huge undertaking. We just own a lot of property throughout the county. We have a lot of parks that people will donate, like land space for parks, which is great. We love that until it comes time for us to try to maintain them. And so we're looking for opportunities there. What is the best way that we can maintain 'em, keep staff employed there, that sort of thing. And so we're looking for opportunities for those kinds of things as well. And again, I mean everything that we do that's capital expense is done through debt financing. We have no other revenue source for that. I mean, our tax rate m and o stuff goes just to maintenance and operations. It is not go to capital projects. So I mean the limitations that are being on are contemplated to be put on the ways that we finance those things are really, really challenging for us and causing lots of concerns because we are going to have problems in the future with all of the growth if we are not able to do those things.

Karl R. Biggers (41:04):

Horatio.

 Horatio Porter (41:07):

Without offright echo, what my colleagues have said. I reflect on what the comptroller said this morning about his past 10 years, 12 years serving in that spot and looking back even longer. And I think the point he was trying to make was that one of the points he was trying to make is that we're resilient. This country is resilient. The state of Texas is resilient. And I think because of that resiliency, the DI is to perhaps strengthen our economic foundation, make sure our base is solid, there's some real needs. We have basic blocking tackling we got to address, but make sure that our foundation is solid to address those issues. We can't do everything for everybody, it's just not possible. But focus on what those critical things are for your organization and make sure you're good at those things and only those things. And I know their desires to expand, do more, but focus on what you're really good at and do those things and make sure your foundation can support that. We have a Rain Day fund at NTTA that we created several years ago. We had to draw down that Rain Day fund during the pandemic as many others did to manage through the crisis. We've since restored the rainy day fund. We maintain decent credit ratings for our bond holders. Just want to make sure there's a solid house that we have at NTJ because we know that growth is coming. There's more growth to be had and we want to make sure we're in the position to address those needs.

Karl R. Biggers (42:26):

And with that, the final question, which all you all came here to hear the answer to. What do you all have coming down the pike? What are your capital requirements coming forth?

Carmen Arrieta-Candelaria (42:37):

Yeah, we passed a $1.2 billion bond program, 2021, and we still have some debt to issue about $461 million yet to issue. We put a small pause to, because we're going through this facilities plan and trying to evaluate that, but I would imagine in the next two years we'll issue that out. But as part of this facilities plan, we are looking at our elementary schools and making some decisions. So I would imagine then in the next two years we will have some type of referendum that we put out. Don't quote me, but I do think that as a result of that process, and it's been a great process to be able to understand all our needs and our growth, it's been really worthwhile. So I would imagine that it would be a sizable program in the next two, three years. Two, three years. If the last two are any indication and our needs are any indication, I think you'll see a big bond program coming forward. So,

Karl R. Biggers (43:44):

Amy,

 Amy Perez (43:45):

So we have several things going on at the moment. We have what I talked about earlier with the Harris Health system. So we're issuing $850 million of that two and a half billion dollars voted authority this year. In fact, we plan on pricing in May. So that's the first thing we have going on this year. And then we are also doing a road pipe flood control tax deal, all of it together. Again, plan on pricing in June. So that is going to be mostly all refundings, maybe a little bit of new money through CP takeout around 500 million. And then we'll be doing some toll road refunding for savings, a little over 108 million I believe, and then some CP takeout for that as well. So I think the total deal is looking a little bit over 200 million or something like that. So those are kind of the things that we have already in the pipeline ready to go. We've already picked syndicates, so sorry, please don't inundate you with stuff. Other than that, I mean we have lots of other capital needs that we expect are be coming down the road sooner than later. Don't know if it'll come this calendar year or it'll be next year, but they're still at the, we're being discussed internally phase to determine what exactly they're wanting to do as far as the projects go. So until they make some decisions there, we won't really have any insight on what's coming up next. But we do think there will be more to come.

Karl R. Biggers (45:19):

Horatio,

 Horatio Porter (45:21):

We have a number of widening projects over the next five years, taking our road from one lane to two lane, two lane to three lane to address the continued population growth that we're seeing across the region. It's pretty significant addition that we can continue to extend existing facilities further north. In some cases, CHI Trail is a critical project in a Tarrant County area. Going to widen that road as well. And with the help of meeting this room, we refinanced billions of dollars over the past several years, generating millions in interest savings. So we're in a better position than we were 10 years ago. But our goal is to make sure we're flexible. So when the region says we need a new project, we stand ready to finance a new project. There are some things that on the horizon that we're evaluating that are going through environmental, but we stand ready to serve the region to deliver transportation projects, which will rely on meaning in this room to help get that done.

Karl R. Biggers (46:20):

Very good. We have three and a half minutes for questions. Do we have any questions out there from anyone? No questions go in once. Going in twice.

 Horatio Porter (46:39):

Well only I'll leave with Paul is the best time to plant a tree is 50 years ago. The next best time is today.

Karl R. Biggers (46:46):

Today.

 Amy Perez (46:46):

There you go. Thank you.

Carmen Arrieta-Candelaria (46:48):

Well said.

Karl R. Biggers (46:49):

Thank you all.