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Home > Government > Strategic Initiatives > 2019 Bond Election > General Information

General Information

On Aug. 13, 2019, the Denton City Council adopted an ordinance calling for a bond election to be held on Nov. 5, 2019. The proposed 2019 bond program includes $221,519,000 of public securities in four propositions.
 
A bond is an issuance of public debt that must be approved by voters in a bond election. A city calls for a bond election in order to receive authority to use bonds for large, one-time projects. A city issues debt for capital improvement projects for several reasons. For instance, issuing debt provides upfront funding of infrastructure or other large projects. Bond financing also spreads the cost for the project over its useful life, which allows large, one-time projects to be paid for over time rather than up front. A bond program is a plan for the issuance of bonds that, when adopted by voters, includes project and financing plans.

Bond Propositions AND Descriptions

The proposed 2019 bond program consists of four propositions, which will be voted on separately. A proposition is a spending category that encompasses a group of similar infrastructure or amenity projects. The propositions within the proposed 2019 bond program were identified through the analysis of current use of facilities, overall road conditions, citizen surveys and feedback, and the impact that potential growth may have on mobility and public welfare.

Each proposition includes information on the spending category and a maximum dollar amount that may be used for projects in that category. During the Nov. 5 election, voters will vote on each individual proposition separately, and not on individual projects.

  • Proposition A
    Ballot Language:

    Voters will cast a ballot FOR or AGAINST:
    THE ISSUANCE OF $154,000,000 OF PUBLIC SECURITIES FOR STREET IMPROVEMENTS, AND LEVYING THE TAX IN PAYMENT THEREOF

    Ordinance Proposition Language:

    Shall the City Council of the City of Denton be authorized to issue public securities of said City, in one or more series or issues, in the aggregate principal amount of $154,000,000, with the public securities of each such series or issue, respectively, to mature serially within not to exceed thirty years from their date, and to be sold at such prices and bear interest at such rates, not to exceed the maximum rates permitted by law at the respective times of issuance, as shall be determined within the discretion of the City Council, for the purpose of the acquisition of property and making improvements for public purposes in said City, to-wit: constructing, reconstructing, restructuring and extending streets, roadways, bridges, overpasses, pedestrianways, sidewalks, landscaping, streetscapes, collectors, storm drains, signalization , signage, other traffic and signal controls, traffic control and transportation facilities, street lighting and median improvements (including the reconstruction, restructuring and extension of Bonnie Brae Street, Hickory Creek Road and Ryan Road); the acquisition of land and interests in land for the foregoing; and improvements related to the foregoing; and shall said City Council be authorized to levy and cause to be assessed and collected annual ad valorem taxes in an amount sufficient to pay the annual interest on said public securities and provide a sinking fund to pay said public securities at maturity?
     
  • Proposition B
    Ballot Language:

    Voters will cast a ballot FOR or AGAINST:
    THE ISSUANCE OF $ 61,900,000 OF PUBLIC SECURITIES FOR PUBLIC SAFETY FACILITIES FOR POLICE DEPARTMENT, AND LEVYING THE TAX IN PAYMENT THEREOF

    Ordinance Proposition Language:

    Shall the City Council of the City of Denton be authorized to issue public securities of said City, in one or more series or issues, in the aggregate principal amount of $61,900,000, with the public securities of each such series or issue, respectively, to mature serially within not to exceed thirty years from their date, and to be sold at such prices and bear interest at such rates, not to exceed the maximum rates permitted by law at the respective times of issuance, as shall be determined within the discretion of the City Council, for the purpose of the acquisition of property and making improvements for public purposes in said City, to-wit: constructing, reconstructing, renovating, improving, expanding, equipping and furnishing public safety facilities for the police department including related utility infrastructure, drainage, landscaping, and site and access improvements; the acquisition of land and interests in land for the foregoing; and improvements related to the foregoing; and shall said City Council be authorized to levy and cause to be assessed and collected annual ad valorem taxes in an amount sufficient to pay the annual interest on said public securities and provide a sinking fund to pay said public securities at maturity?
  • Proposition C
    Ballot Language:

    Voters will cast a ballot FOR or AGAINST:
    THE ISSUANCE OF $ 5,000,000 OF PUBLIC SECURITIES FOR ACQUISITION OF LAND FOR PARKS, AND LEVYING THE TAX IN PAYMENT THEREOF

    Ordinance Proposition Language:

    Shall the City Council of the City of Denton be authorized to issue public securities of said City, in one or more series or issues, in the aggregate principal amount of $5,000,000, with the public securities of each such series or issue, respectively, to mature serially within not to exceed thirty years from their date, and to be sold at such prices and bear interest at such rates, not to exceed the maximum rates permitted by law at the respective times of issuance, as shall be determined within the discretion of the City Council, for the purpose of the acquisition of property and making improvements for public purposes in said City, to -wit: the acquisition of land and interests in land for parks; and shall said City Council be authorized to levy and cause to be assessed and collected annual ad valorem taxes in an amount sufficient to pay the annual interest on said public securities and provide a sinking fund to pay said public securities at maturity?
  • Proposition D
    Ballot Language:

    Voters will cast a ballot FOR or AGAINST:
    THE ISSUANCE OF $619,000 OF PUBLIC SECURITIES FOR PUBLIC ART, AND LEVYING THE TAX IN PAYMENT THEREOF

    Ordinance Proposition Language:

    Shall the City Council of the City of Denton be authorized to issue public securities of said City, in one or more series or issues, in the aggregate principal amount of $619,000, with the public securities of each such series or issue, respectively, to mature serially within not to exceed thirty years from their date, and to be sold at such prices and bear interest at such rates, not to exceed the maximum rates permitted by law at the respective times of issuance, as shall be determined within the discretion of the City Council, for the purpose of the acquisition of property and making improvements for public purposes in said City, to -wit: acquiring, constructing and installing public art within the City; and shall said City Council be authorized to levy and cause to be assessed and collected annual ad valorem taxes in an amount sufficient to pay the annual interest on said public securities and provide a sinking fund to pay said public securities at maturity?

Bond PROGRAM INFORMATION AND BACKGROUND

The proposed 2019 bond program is the culmination of a months-long bond program development process involving the City Council and members of the public. After receiving information and presentations from staff throughout April, the City Council adopted a resolution establishing a Special Citizens’ Bond Advisory Committee (SCBAC) whose role was to consider potential projects for inclusion in a proposed bond program - including public safety facilities, major roadway projects, local street improvements, streetlights, sidewalks, and parks and open space. The 19-member committee of Denton residents held eight meetings from May 30 through June 27, during which the public was invited to submit feedback to the committee. The City Council received the committee’s bond program recommendation at its Aug. 1 meeting. 

FINANCIAL INFORMATION

As part of the development of the proposed 2019 Bond Program, the City Council and Special Citizens’ Bond Advisory Committee evaluated the potential financial impact of the program. In addition to the financial assumptions provided, the City will seek to stagger projects over a six-year period to provide additional financial stability as the projects are implemented. Debt from the proposed bond program is intended to be amortized over a 20-year period. 

  • Tax Rate
    While the conditions may change, a debt service tax rate increase may be needed to fund the bond program. Based on property tax value assumptions, if the 2019 bond program is approved, the city’s debt service tax rate would increase by 3.5 cents over the FY 2018-19 rate. This equates to an additional $35 increase for a property valued at $100,000. Charts illustrating the recent assessed value and tax rate history are shown below:
     
    Property Value Growth

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    Tax Rate History
    Tax-Rate-History.png
     
  • Financial Assumptions
    In assessing the potential impacts of a bond program, the City of Denton projected future financial conditions that might impact bond issuances and payment. These projections assume conditions that are less favorable than current conditions.
     
    Financial Assumptions:
    • Six-year issuance schedule
    • Assessed values will grow at a rate of 5%
    • Bond program debt will be amortized over 20-year period
    • Remaining debt from 2014 bond program will be issued in FY 2019-20

BOND PROGRAM TRANSPARENCY

Transparency is one of the four core values of the City of Denton organization. The City intends to ensure that Denton residents are informed as to the progress of all projects and bond issuances.   

  • Reporting
    In 2019, the City of Denton began reporting its bond completion progress to the public through its communications channels, including the City’s two printed newsletter editions of the 2019 Construction Guide and the bond program webpage on the City website.
     
    Going forward, the City plans to implement a bond program dashboard on the City's website to provide bond program reporting that is up to date and informative. The dashboard will allow viewers to view progress at the project level, including completion status, and include an interactive map of all planned and active bond projects.
  • Process Improvements
    The City of Denton has taken steps over the previous two years to improve project management capability and capacity. The Project Management Office was established to monitor and report on projects, key performance indicators, and financial information. The Capital Projects department has also adopted the Project Management Body of Knowledge (PMBOK) approach to project management to align processes within the department. The City has also increased the number of project managers from one to eight (including four contract positions), increased the number of project inspectors from eight to 15, and added two program managers to coordinate projects across the city.
  • Bond Oversight Committee
    If the proposed 2019 bond program is approved by voters, the Denton City Council intends to establish a Bond Oversight Committee.

    The Committee would monitor the City’s plans relating to the issuance of bonds and the implementation of projects approved in bond election, including the annual appropriation of bond funds, and any changes in the amount of bond funds issues or cash commitments made, assess current City facilities and needs, prioritize proposals, and make recommendations to the City Council.