FORT WORTH -- City Council members are set this week to consider when to hold Fort Worth's next bond election, as they grapple with a broader debate over how to pay for the fast-growing city's vast infrastructure needs.
Staff members could recommend holding an election as early as November, city budget director Horatio Porter said, but are more likely to recommend May 2014. The later date would allow the city to spend remaining money from voter-approved programs dating from 2004 and would let the Fort Worth schools run a bond proposition in November.Fort Worth's bond package will be at least $242 million and will probably grow, based on such factors as property values and interest rates. Part of the city's property tax revenue will pay off the debt, so higher property values would increase borrowing capacity.But the money will still meet only a small portion of the city's estimated $2.3 billion in capital needs over the next several years -- including $1.5 billion for infrastructure -- and council members are expected to hash over other ideas to expand the pot.The city staff will recommend this week that the council increase impact fees on new development, which are used to build feeder roads. Council members appear open to the proposal. At least one business coalition supports raising the fees by a lesser amount.Among other ideas: Council members this year are expected to review whether to establish a user fee on water bills that would go to roads and streets, recommended by a city task force in 2010. Councilman Jungus Jordan wants to review the ordinance that requires a percentage of capital expenditures to go to public art, saying he believes less is OK.Councilman Sal Espino, whose district includes far north Fort Worth, which has lagged in infrastructure, has been pushing the council to consider dedicated revenue streams for transportation, such as higher impact fees and the user fee, and he wants to see if there's a way to redirect more of the city's sales tax to transportation.Mayor Betsy Price said she hasn't made up her mind on the revenue ideas and needs more information. Council members are holding a public workshop Wednesday to discuss the bond election."If I had to guess, I would say you're probably looking at sometime in 2014," Price said. Council members interviewed said May 2014 is the likeliest date.With the city having sped the spending of leftover capital last year, council members have said they're reluctant to hold another bond election in the meantime."I'm adamantly opposed to going back to the taxpayers and saying 'I need more debt from you' before we've got everything spent," said Councilman Dennis Shingleton, who says November is too early.Uncommitted money -- almost all for roads, streets and other transportation projects -- dropped to $126.6 million in mid-December, down from $185 million in the summer. It should fall to zero by May 2014, said Doug Wiersig, transportation and public works director.Wiersig, who took his job in April 2011, streamlined processes and brought in the Jacobs Engineering Group to manage $77 million in projects.Looking to the bond election, Wiersig plans to start early engineering work on some major projects to ensure that construction begins quickly."It's like buying a new car," Wiersig said. "Once people say let's do this, let's make it happen."Council members have praised Wiersig for closing delays but aren't convinced that all leftover money can be committed by May 2014.Jordan, the council's point man on transportation, said the department has completed $35 million to $40 million in projects annually.That has risen to an annual rate of $75 million to $80 million in the last two quarters, but "I'm still the doubting Thomas that we'll execute all that by May 2014," he said.Roads and streets are expected to represent $196 million of the $242 million bond package.A wish list of capital projects in the city's recently completed 2013 comprehensive plan, built from neighborhood feedback, includes roads and streets, bridges, sidewalks, bike projects, swimming pools, community centers, playgrounds, library branches and remodelings, and fire stations and remodelings, plus new municipal facilities in far north Fort Worth.The city is financing the bonds by shifting part of its property tax rate to debt service from operations.The council moved 1 cent of the 85.5-cent tax rate to debt service in 2012 and is moving 1.5 cents this year, and 1 cent in each of the next two years. The moves will increase debt service to 22.1 percent of the city's tax rate from 18 percent.After the council schedules a bond election, community meetings and public hearings will begin.The staff and council view what's in the comprehensive plan -- available on the city's website, www.fortworthtexas.gov -- as a short list, although more could be added.Price encourages community feedback. "The more engaged we can get citizens, the better we're going to be," she said.The conversation about other funding sources has already been simmering. In interviews, council members appear more open to raising impact fees in the near future than to establishing a user fee. The staff's impact fee proposal also raises the discount for development done where adequate roads exist.The 2010 task force recommended raising impact fees, establishing a user fee and shifting more money from operations to debt service. The council has implemented only the last recommendation.Jordan said he was not immediately opposed to the staff's upcoming impact fee recommendation, but he said he needs more information."I'm OK with a reasonable impact fee, because that's the development community paying for the burden they place upon the community," he said.About a user fee, Jordan said he wants the unspent capital used up first."I want to see that before I sign up to additional revenue," he said.The city Plan Commission recommended on Dec. 1 that the council approve the staff proposal.Fort Worth now charges impact fees for new construction and development that are at least 30 percent of the maximum laid out in a 2008 city study. The 30 percent is $2,000 for a single-family home.The fees, also charged for commercial development, raise $9.2 million annually.The city updated the fee study last fall, and the consultant recommended higher fees.Raising feesThe staff plans to recommend that the council raise the impact fee to 30 percent of the maximum allowed by the new study, or $3,680 on a single-family home and $15.5 million annually.The staff will also recommend that the council in two years raise the impact fee to 50 percent of the maximum under the new study, or $5,112 on a single-family home and $20.9 million annually.The recommended fee increase would pay for 1.8 miles of arterial construction per year but would not increase the amount of roadway being built, said Randle Harwood, director of planning and development.That's due to higher construction costs and lower projected growth, which drive unit fees up, he said."We need to do about eight [miles per year] to keep up with the pace of growth," Harwood said.Raising the fee again in two years to the staff's recommended level would enable the city to build four miles, he said.Councilman Danny Scarth said he "doesn't have too much trouble" with raising the impact fee."I am always concerned we are going to end up pricing ourselves out of the market and have people build across the street in another city," he said. "At the same time, there is a cost to development."A group including the Associated General Contractors, the Greater Fort Worth Real Estate Council, the Greater Fort Worth Association of Realtors and the Greater Fort Worth Builders Association opposes the staff recommendation.It supports raising fees to 50 percent of what was recommended in the 2008 study, or $3,000 on a single-family home and $12.9 million annually.That support is contingent on the council continuing its program of shifting money from operations to debt service and on starting a user fee, said Lee Nicol, a Fort Worth developer and builder and a member of the city Development Advisory Council."The builders association understands for reasons lost in antiquity, the city of Fort Worth used other priorities than building new streets and maintaining streets" in the past, Nicol said. "Like it or not, it is what it is."But he said housing is "just in the early throes of recovery. Business is good, but the cost of construction is up."The staff proposal increases the impact fee discount to 50 percent from 15 percent for development done where feeders exist.But Nicol said new development typically isn't done where there are already enough roads.The discount "looks good, and we supported it," but "it doesn't apply to most people," he said.User fee debateThe user fee idea figures to be more controversial. Price and four other council members voted down an increase in water rates last fall, worrying about its impact on users."I don't believe support exists for a transportation user fee" among a majority of the council, Espino said.Price said only: "I do believe such a fee should be tied to specific projects. Citizens ought to be able to clearly see what they get for their investment."Scarth questioned the honesty of a user fee."If the amount of money that we need to adequately provide our infrastructure is so big we have to charge a new fee, we ought to be honest with our taxpayer and say we're going to raise your tax rate," he said.Jordan also said he wants to revisit the ordinance requiring 2 percent of the capital project budget to be spent on public art. Public art includes sculptures, memorials, architectural enhancements and murals."I would have to be convinced that 2 percent is the right number," Jordan said. "To me, 1 percent is OK. I don't even know if 1 percent is acceptable to the citizens."Espino wants to re-examine the distribution of the city's sales tax to see whether part can be redirected to roads and streets from the Crime Control and Prevention District.Fifty cents of every $8.25 collected in sales tax goes to the crime prevention district. The 50 cents raises $50 million annually."We're obviously going to keep it, but do you keep it at 50 cents?" Espino said.Scott Nishimura,817-390-7808Twitter: @JScottNishimuraHave more to add? News tip? Tell us
