By Elsa Maxey
Part of a recent quote on the political front, “somebody invested in roads and bridges,” applies to an undertaking that has been approved by the Fort Bend County Commissioners Court. On July 24, it voted unanimously to issue bonds and enter into an agreement for the payback of those bonds. The Fort Bend Grand Parkway Toll Road Authority will be developing a segment of the Grand Parkway, Segment D, and to do it, it will issue $179,825,000 in bonds to finance the project.
The action for the road project by elected officials is indirectly from taxpayers entrusting them with making fiscally sound decisions with the use of their money paid directly or indirectly as an investment to their community’s infrastructure. The average interest value of the loan, which is actually the bonds, is stated at 3.86 percent, attributed to the county’s good credit rating.
Essentially the financed construction is for the tolled overpasses on the Fort Bend Grand Parkway, and the reconstruction of portions of the existing roadway. This road portion extends from U.S. 59 to the intersection at FM 1093 known as the Westpark Tollway. The project is expected to be completed by January 2014.
Payments for the principal and interest to pay back the bonds will go into a special fund called the Fort Bend Grand Parkway Toll Road Authority Bond Fund.
According to the county, the debt service rate for the bonds will be debtted at a zero dollar amount for the first three years, and net revenues by the end of the third year are projected to be available at that time and thereafter for funding the debt service of the bonds. Each year the Fort Bend County Commissioners will then take action to set the debt service tax rate for repayment of the bonds, which the county expects to be at a zero tax rate. For other toll road projects, the county reports it took the same action in 2003 and 2004, and it was done without having to levy a tax.
A $60 million to $100 million difference, which includes reserve funds, is reported to be the savings with the use revenue sales dollars for payback over the life of the bonds. “And even though we don’t anticipate any shortfall in the revenues generated by operating the toll road, if in fact 10 to 12, 15 years from now, if revenue are short, whether we did this or not,” said Judge Bob Hebert, “in all likelihood, we’d levy a tax to keep the bond owners from foreclosing on the toll road and operating it as a private toll road,” which he considers to be detrimental to the county. “That’s the collateral,” said Judge Hebert.
He also said that it makes sense to take advantage of the 60 million savings noting that the projections “show that we will probably never have to levy a tax on taxpayers.”
More on the recent quote that may turn out to be famous… “Somebody helped to create this unbelievable American system that we have that allowed you to thrive.” In Fort Bend County, it may have been those elected to office working in joint public/private partnerships.