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A general obligation bond is a form of borrowing that provides government entities with funds to finance large capital improvements. This debt can be compared to a home mortgage that is repaid over time. The bonds are repaid with property taxes and therefore require voter approval. The city’s good credit ratings (AA- from Standards & Poor’s and Aa2 from Moody’s) allow the city to pay lower interest rates on bonds.
In recent citizen surveys residents have identified street improvements as a top priority for our community. With that in mind, last fall the City Council appointed a 2020 Capital Program Advisory Committee to review street infrastructure needs and options for funding the improvements. The committee, which included 35 residents from across North Richland Hills, met from October to February and made a recommendation to the City Council to hold a May bond election. The City Council called for the election at its February 10 meeting, but because of the coronavirus pandemic the May election was postponed to November.
With concerns over the pandemic, in March Gov. Abbott suspended sections of the Election Code to allow May 2020 elections to be moved to November 2020. State law does not provide an option for the election to be postponed beyond November 2020.
Whenever possible, the city pays cash for capital improvements. However, more costly improvement projects are financed. This allows the city to complete the improvements sooner and keep the property tax rate as low as possible. If the city did not finance more costly projects, the improvements would be deferred for several years during which time costs are likely to go up. If the city chose to fund the proposed projects with cash by increasing the property tax rate, based on current property values we estimate the rate would need to increase by approximately 11.6 cents to pay cash for the projects over the next 6 years.
The city projects that property owners will not see a tax rate increase to pay for the bonds. As existing debt is paid down, the city is able to take on new debt and stay within its budget and current tax rate. Similar to your own budget, when you pay a loan off, the monthly payment can be shifted to another priority.
Property taxes are not used to fund the golf course or water park. Both the golf course and water park operate like businesses. Each pays for their operational expenses and debt service through the revenue they generate by admissions and the sale of food and merchandise. This year, for the first time in its 25 year history, NRH2O’s season was cut short due to the pandemic and the park received a loan from the city’s reserves to cover some expenses. The water park will repay the loan back to the reserve fund over the next few years. Since 1992, the development and maintenance of the city’s parks and trail system has been funded primarily through the voter approved ½-cent sales tax for park development and more than $14 million in grants. Around half (50.8%) of the city’s property tax goes to public safety, 21.6% to streets and traffic control, 14% to city facilities, 4.3% to library services, 3.7% to parks and recreation, 3.6% to Neighborhood Services and 2.1% to other city services.
In 2012, voters approved the issuance of $48 million in bonds and a 4-cent increase to the property tax rate to fund construction of the new city hall, which opened in 2016. As property values have increased and new properties have been added to the tax rolls, the city has been able to pay down the debt while decreasing the property tax rate by 3.43 cents.
In February 2003, the voters authorized $37,210,000 for street and other improvements. The bonds were issued with no increase to the property tax rate. All of the 2003 bond-funded projects were completed as planned except for the widening of Boulevard 26, which was a joint project with TxDOT. Unfortunately, due to statewide funding shortfalls and other priorities, TxDOT has been unable to proceed with the project. The city’s $3 million for the project remains unspent. In addition, there was $860,000 in savings from other 2003 bond projects.
The city is planning to use the $3,860,000 in remaining 2003 bonds to reconstruct Glenview Drive East (Boulevard 26 to Flory). In addition to having a poor pavement condition rating, Glenview Drive was identified as the street most in need of improvement in recent citizen surveys. Reconstruction of Glenview Drive West (Honey Lane to the city limit) is one of 27 street projects proposed for the 2020 bond election.
In September 2019, the North Richland Hills City Council established a 2020 Capital Program Advisory Committee to review street and other infrastructure needs and make recommendations for necessary improvements. The committee included 35 residents from across North Richland Hills. The committee met from October to February to review and prioritize projects. They considered more than 100 streets that are in poor condition, the estimated cost for reconstruction and how much the city can afford without a tax rate increase. Committee members felt that a majority of proposed bond funding should be dedicated to improving heavily traveled streets such as Glenview, Iron Horse and Bedford-Euless, and the remaining to residential streets that carry less traffic. To stretch the funding further and improve more residential streets, the committee recommended that residential streets which are currently asphalt be reconstructed with asphalt, rather than more expensive and time-consuming concrete construction.
To prioritize the improvements, the committee considered numerous factors such as existing pavement conditions, traffic volumes, maintenance records, input from citizen surveys, whether or not the roadway is a primary public safety response route and estimated costs. While there are additional streets in need of reconstruction, the committee limited its recommendation to what the city can afford without increasing the property tax rate. The committee’s recommendation was presented to the City Council on January 27 and the City Council called for a May bond election at its February 10 meeting. Because of the coronavirus pandemic, the May election was postponed to November.
The city spends $1,250,000 per year on preventive street maintenance. This includes pavement sealing, patching and overlaying techniques that preserve and extend the life of streets. When a street has exceeded its pavement life expectancy and can no longer be effectively maintained by these maintenance techniques it is recommended for reconstruction. Additionally, when a street’s subgrade deteriorates significantly due to shifting or swelling of the base layers, or other environmental factors, the street is recommended for reconstruction.
The city will utilize the competitive bidding process to hire contractors for all engineering and paving work, which will provide private sector jobs for our local economy. To qualify for city projects, contractors must comply with state and federal employment laws.
No. Under state and local purchasing and ethics laws, city officials and their family members are not allowed to bid or perform any work on city projects.
The 2020 Capital Improvement Advisory Committee and City Council have indicated the desire for a rapid implementation of voter-approved bond-funded projects. It is anticipated that engineering and design work would begin immediately after the election. Construction would begin in late 2021 on the residential street projects and in mid 2022 on the major streets.
The committee ranked major streets and residential streets in order of priority. To the greatest extent possible, construction will take place in that order. In some cases, projects in close geographic proximity to each other may be bid and constructed together for cost savings. View the ranking here.
The biggest factor considered in ranking streets was pavement condition, followed by traffic volume. In 2019, the city contracted with Fugro, a geo-data collection firm, to independently and objectively assess the condition of every street in the city. Fugro used an Automatic Road Analyzer Vehicle with high tech sensors and imaging to collect pavement and subgrade conditions for each NRH street. Using this data, Fugro assigned each street a condition rating from 100 (best) to 0 (worst). This is the first time the city has utilized an independent, in-depth and objective assessment of street conditions. In previous years, city staff visually inspected streets and assigned condition ratings.
Project limits were determined by pavement condition rating. On Lariat Trail for example, two segments are rated in poor condition and proposed for reconstruction, while another segment (Riviera to Circleview) is in good condition and does not need improving.
High-traffic streets like Glenview, Iron Horse and Bedford-Euless Road will be reconstructed as new concrete streets. Residential streets will be reconstructed as new asphalt streets. Curb and gutter will also be repaired where needed.
On high traffic streets, plans are for sidewalks to be added to any sections where there are none. In order to stretch dollars further and improve more streets, plans for residential streets are to focus only on repaving the roadway.
Project durations will vary depending on the scope and complexity of the reconstruction. If the bond is successful, the city will keep the public informed via the city’s website, newsletter and social media as each project progresses from design through construction.
Steps will be taken to ensure that the city has legal recourse through the construction contracts to prevent a contractor from failing to complete the work in a timely manner.
The NRH Public Works Department maintains more than 543 lane miles of city streets. Through the department’s ongoing Preventive Street Maintenance Program, pavement sealing, patching and overlaying work is performed on numerous streets each year to preserve and extend the life of the streets. 163 streets are included in the Preventive Street Maintenance Program this year. You can find a map and more information on the Preventive Street Maintenance Program page.
The city plans to continue annual funding for the Preventive Street Maintenance Program whether or not the 2020 bond proposal passes.
If the 2020 bond proposal is approved and costs come in lower than anticipated, any remaining funding could be used to reconstruct additional streets.
As the city continues to pay down its debt, it is anticipated that another bond election for streets could be held in 5 to 7 years.
Committee members appointed by the City Council included:
Scott Turnage, ChairSuzy Compton, Vice ChairGeorge AcostaCarol AndersonJeanne ArnoldBryan BeckLauren BirkesKit BuschmanJennifer ChildsGreg CliftonJohn CopeRobert CopelandBobby (Robert) CoulsonCole CoulsonTracey DriverPatrick FaramLeslie GarvisGayle HaleGreg HoffaKathy HudsonScott MazeRussell MitchellMindy MonroeDavid NewhouseSarah OlveyJim SchoolerHenry SealAmy SteeleTracye TippsMarc TrevinoJeremy VaughanLen WadeJustin WelbornJason WinansBonnie Woody
Questions related to the 2020 Bond Election may be directed to the North Richland Hills City Manager’s Office at 817-427-6003 or by email.