Dallas council gives approval to street plan

DALLAS — The city of Dallas is proceeding with a plan to pay for its backlog of street maintenance through revenue bonds and an interfund loan.

The Dallas City Council approved the plan Monday. It was recommended by the council-appointed streets advisory committee, which began meeting in February.

Matt Goolsby, the chairman of the committee, said the method of using revenue bonds and loans is preferable to the routes the city took in the past of attempting to charge a fee or pass a general obligation bond to fix streets.

“This town does not have an appetite for fees,” Goolsby said. “The city has been turned down through votes and referendums, any financial backing of street repair. The streets are in pretty sad shape.”

City Attorney Lane Shetterly said revenue bonds differ from general obligation bonds in that they do not require voter approval.

“They identify a revenue source from which they can be paid. Under state law and under our charter, general obligation bonds require voter approval before they can go out,” he said. “Those are paid through property taxes. Revenue bonds do not require voter approval.”

That revenue source is federal and state gas tax money, which has increased since the State Legislature passed a transportation funding bill that gave more money to local governments to pay for street maintenance.

This year, the city will receive $1,163,055 in revenue to the street fund through state and federal sources. Expenses amount to $783,000, leaving $380,055 for a payment on a revenue bond.

Based on estimates, that carryover continues to grow through 2019-20, when City Manager Greg Ellis proposes the city sell its first revenue bond for $3 million to begin projects.

Ellis said the city has about $13 million in backlogged maintenance on its streets. He broke down the cost by putting streets into categories based on how much repair they require:

Full reconstruction — $3.3 million.

Partial reconstruction — $4.5 million.

Fair/marginal — $3.2 million.

Good/very good/excellent — $2.2 million.

He said the committee’s recommendation is to tackle the problem in stages, starting with the 2019 revenue bond.

The next step is an interfund loan of $2 million from the sewer systems development charge fund in 2022.

He said the sewer SDC fund has built up a reserve of about $5 million.

“By the time 2022 gets here, it will be quite a bit more,” Ellis said. “We will also look at what we have to do for the sewer capacity.”

He noted currently the sewer system is adequate to meet the city’s needs.

In July 2025, Ellis said the city could issue a second revenue bond for $5.5 million to pay off the remaining principal of the 2019 bond and interfund loan. After the payoffs, about $2 million would be left over for more projects.

Ellis said another $3 million in bonds is likely needed in 2028-29. Remaining repairs and maintenance could be paid for with reserves built in the street fund. By 2026-27, the carryover amounts about $1.7 million.

“The bond carryover dollars could be used to address the maintenance needs of the streets in the good/very good/excellent category with no additional need for loans or bonding,” Ellis wrote in a memo to the council.

He said the plan could allow the city to keep up with continued maintenance without asking for a utility fee.

Councilor Kelly Gabliks said she’s willing to approve the plan but has concerns about the it being based on estimates of revenue from the state and federal government and estimated expenses within the street fund. She said those estimates could be too conservative and might not anticipate future changes in the economy.

Ellis said the plan allows for flexibility for when the city issues revenue bonds and the payment for the first bond, about $200,000, is low enough that the fund would have enough revenue to support it even if estimates were too rosy.

While the first bond wouldn’t be issued until 2019, Ellis said the timeline on the project should begin in July with engineering for the first round of repairs and preparing for the revenue bond sale.

He asked the council or approve moving forward with the project, which it did on a unanimous vote.

Goolsby said he and the committee believed the plan is the best path toward improving the city’s streets.

“If you think about it in terms of what the appetite is in the city, where we are, what we need, (revenue bonds) seems liked the most rational and logical way to go,” Goolsby said.

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