Bellaire enters final stretch of $54 million bond program

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Nearly two and a half years after more than two-thirds of voters approved them, projects associated with the $54 million Bonds for Better Bellaire referendum are nearing the final phases of completion.

“The idea was that it would take three or four years to complete all of the work from the 2016 bond program, and some of the schedules have shifted, but we’re still generally on that three-year schedule,” Bellaire City Manager Paul Hofmann said.

The bond program allocated $24 million toward improvements to the city’s streets and drainage, $5.6 million toward a new police and municipal court building and city hall and civic center, and $24.38 million to replace aging water and wastewater lines and add new water meters. The city is able to push back plans for a 2019 bond because some items came in below estimates, and some projects were cut.

“I think a lot of gratitude is owed to really hard-working city staff,” Hofmann said. “That’s one of the ways we maintain affordability. We’re not at all frivolous.”

Hofmann said another bond election may be held in 2020 and could address further improvements to the city’s streets and drainage, a new public works facility and a new public library.

Addressing needs

Prompted by the Memorial Day and Tax Day floods, the city paid for a drainage study and used its results to design Proposition 1, an overhaul of the street’s drainage to help mitigate future flooding by providing underground detention and larger pipes.

“The 2015 event, which flooded over 200 homes in Bellaire, was certainly enough to get our attention,” Hofmann said.

According to Hofmann, construction on the first phase of Proposition 1, which includes adding underground detention and repaving the roads on Imperial, Linden, Mayfair and Willow streets, is almost complete. The second phase, which includes work on Spruce, Fifth, Bolivar and Maple streets, began construction in late April. The proposition’s third phase is 60% designed, with construction to begin in December.

“The collateral benefit of having streets and drainage in place where, historically, they’ve flooded, is automatically you’re going to attract potential homebuyers,” Bellaire’s Chief Financial Officer Terrence Beaman said. “But honestly, our objective as of today is responding to Hurricane Harvey when we lost 2,000 properties, and to address concerns.”

With the new police and municipal court building and the majority of city hall construction complete, the only project left from Proposition 2 is the construction of Bellaire’s new civic center, which is planned to be complete in July and transform Bellaire’s Town Square into a campus for its government buildings.

“It’ll create this open look from Condit Elementary through the gazebo, through the pavilion and back to the town center,” Hofmann said. “It’ll open up the whole campus.”

Responding to residents

Not everyone was on board with the investments in city buildings. Jane McNeel, a longtime resident of Bellaire and head of the Bellaire Civic Club, said she was not in favor of the bonds in 2016 because of their cost and the lack of focus on drainage solutions.

“I didn’t think we needed a new city hall, but that’s what democracy is,” McNeel said. “There are so many options and so many places our money could go.”

Some residents have been divided on the implementation of specific projects, such as the Spruce and Fifth street and drainage improvements and constructing new sidewalks.

The Spruce and Fifth project faced  delays as the city received “a significant amount of business input about that street,” Hofmann said.

The $4 million originally allocated to fund the construction of sidewalks was reallocated to design more drainage solutions as a result of Bellaire residents expressing their disapproval, he said.

Bellaire Realtor and resident Mike Livingston said he voted in favor of the 2016 bond election, and the work associated with the bond programs will only affect Bellaire residents and the residential real estate market positively.

“The infrastructure improvements are what we can discuss with people to make them feel better. As time goes on, things will get better,” Livingston said. “The bond issue was what we needed, and the city of Bellaire is doing everything it can as an independent city.”

Paying off the debt

Because of the reallocation of funds from sidewalk construction and earlier phases of the bond program coming in under initial costs, a bond election planned for 2019 is tentatively being pushed back to 2020.

Funding significant infrastructure improvements through multimillion dollar bond programs is not new for Bellaire, as the 2000 Millennium Renewal program was valued at about $45 million, and the 2005 Rebuild Bellaire program was valued at about $50 million.

The $54 million in investments approved in 2016 will be paid back over the next 25 years through a combination of property tax increases and utility bill payments, Beaman said. For fiscal year 2018-19, the average home valued at $778,442 contributed an additional $70 in annual property taxes compared to the previous year as a result of the bond, according to city estimates.

Despite the city beginning FY 2018-19 with a projected $129 million debt load, repayments are on schedule, the city is able to maintain its 60-day reserve and it is able to keep its AAA bond rating. The city’s overall debt will begin to shrink in FY 2019-20, according to its projections.

“Current city finances are doing fine,” Beaman said. “We’re right in line with other cities that are developing, and when you develop, you have to issue debt.”

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