San Marcos Mercury | Local News from San Marcos and Hays County, Texas

December 10th, 2008
Commissioners prefer quick start to road work

By BILL PETERSON
Editor at Large

Hays County commissioners took their first real stabs at building roads with new money Tuesday, making no decisions but stating a very clear preference for starting all the projects as soon as possible, if not simultaneously.

The commissioners also revisited an older bond initiative, deciding to issue $9.985 million from the $30 million parks bond passed in May 2007. The county’s bond advisor, Dan Wegmiller of Specialized Public Finance, said the county still has another $10 million left to issue from that bond package after the new year.

Wegmiller said he hopes for an interest rate of around five percent on new issue, up from the 3.8-percent rate it received when it issued the first $10 million of parks bonds earlier this year. The financial markets obviously have changed a lot since this spring, Wegmiller said, adding that the last issue was done by an aggressive bank placement, which no longer is so accessible.

“When we talk about five percent now, we’re comparing it with the lower rates we’ve been getting,” Wegmiller said. “When we talked about five percent 15 years ago, we were comparing it with six, seven or eight percent that we were getting. It’s really all about getting projects done.”

That thought emerged from the minds of county commissioners as they turned to nearly two dozen road projects for which they are now responsible. Voters easily passed a $207 million road bond on Nov. 4 to fund 23 discrete projects addressing 13 key roads in Hays County.

The majority of funds, about $150 million, will go towards four “pass through” projects on highways operated by the state, including FM 1626, U.S. 290, Interstate-35 and a new loop on the southeastern side of San Marcos (FM 110). The state has agreed to reimburse Hays County for up to $133.2 million over 20 years if the county fronts the costs for the roadwork.

About $60 million is earmarked for “priority projects,” which are the projects not included in the pass through agreement. The priority projects emerged as the commissioners and their citizens advisory committee took input from stakeholders throughout the county, such as school districts and municipalities. Many of the projects involve RR 12 on the west side of Hays County.

While the cost of borrowing has increased, consultants say the cost of actually doing the work has decreased in a slumping market. As put by Mike Weaver of Prime Strategies, the county’s program manager for the pass-through roads, “The benefit of a down economy right now is that there are a lot of anxious engineers ready to get to work.”

Likewise, a lot of anxious motorists are ready to see road improvements on the ground. Thus, commissioners noted the importance of working quickly.

“We are behind the curve on getting up to date on our highways the way it is,” said Precinct 3 Commissioner Will Conley (R-San Marcos). “This is a situation where we may be able to get a bigger bang for the buck.”

Said Precinct 4 Commissioner Karen Ford (D-Dripping Springs), “It’s important to move on our pass-through projects so we can get the maximum pay back.”

Advocates for the pass-through package have long argued that the advantage consists in being able to build the roads now, rather than wait until the Texas Department of Transportation (TxDOT) can get around to it. Therefore, commissioners say, it makes sense to start building all the roads as soon as possible, or they would lose some of the pass-through benefit.

“If we do these sequentially, it could take years, or decades,” said Precinct 2 Commissioner Jeff Barton (D-Kyle).

Weaver emphasized the importance of managing the pass-through projects through a disciplined tracking system that includes detailed cash flows drilling down to specific items. The county may purchase specialized software called Fast Track to help with the task. Barton said the county could receive 15 sets and a day of training for $9,000. Weaver said Prime Strategies will provide the county with bi-weekly progress reports and monthly construction reports.

“What is important is that there are policies and procedures in place that are consistent throughout the program,” Weaver said.

Weaver will go back to the commissioners for a more concrete discussion concerning the pass-through roads next Tuesday at 1 p.m. Meanwhile, the commissioners are putting out a Request for Proposal (RFP) in search of engineers to manage the priority roads.

Barton said the process for seeking such a program manager should offer the county a variety of ideas for addressing them. Therefore, he recommended that the RFP invite firms to be creative, rather than telling the firms specifically how the county wants to deal with the priority projects.

Wegmiller said he hasn’t worked out specifically how he will recommend that the county issue $207 million in road bonds. Most likely, he said, is that the county will make three issues of about $70 million each over time, with the first to come in the spring.

Download: Hays County road bond package

Email Email | Print Print

--

2 thoughts on “Commissioners prefer quick start to road work

  1. I’m just a Ph.D. Economist.

    Let’s see if I have this straight.

    Key US Treasury interest rates are at historical lows.

    Major banks and other lending companies have so far received $350,000,000,000 of taxpayer money to keep them afloat.

    The three major credit rating companies were shown to be complicit with falsely rating high risk securities because of conflict of interests.

    Hays County bond credit rating was raised just a few months ago.

    and,

    “Wegmiller said he hopes for an interest rate of around five percent on new issue, up from the 3.8-percent rate it received when it issued the first $10 million of parks bonds earlier this year. The financial markets obviously have changed a lot since this spring, Wegmiller said, adding that the last issue was done by an aggressive bank placement, which no longer is so accessible.”

    2009 is surely the time for our elected officials to run up the county debt for taxpayers at higher bond interest rates (when other key interest rates are historically low), and lavish the bond funds on their special interest campaign supporters.

    Who are the special interest supporters? Go to the Hays County web site and look at the election financial reports of your favorite Hays County special interest officials, Barton and Conley.

  2. You have a Ph.D in Economics? Really?

    I thought that was a Ph.D in Agricultural Economics. Like in agribusiness.

    Weren’t you the author of a dissertation entitled “A Simulation of Long-Run Adjustment Patterns in Capital Formation in the Grain Handling and Storage Industry, 1968-1975” from the University of Maryland? And exactly what year did you receive that degree in?

    Is that another one of your Rovian tactics? Hedge a bit on what exactly your degree was in to make you sound more knowledgeable about a certain subject area?

    But hey, if that makes you an expert in Wall Street financing – go for it. But maybe if you listened to the news a little closer, you might understand. I would recommend the Wall Street Journal and the NY Times over Fox News. Your posts would be more credible.

Leave a Reply

Your email address will not be published. Required fields are marked *

:)