Austin voters will decide on a $1 billion rail and road bond Nov. 4 that would raise homeowners' taxes by hundreds of dollars.
To pay off the $1 billion bond, the city would need to increase the debt service property tax rate by 6.25 cents, said Deputy Chief Financial Officer Greg Canally. The average annual cost to a homeowner with a $200,000 home would be $217.
The debt service tax rate, currently at 11.23 cents, is part of the city's overall tax rate of 48.09 cents per $100 of property valuation. It pays for the city's debt, such as paying off bonds, Canally said.
The city still has $315 million worth of bonds to issue from bond programs approved in 2006, 2012 and 2013, but those will not affect the tax rate, Canally said.
"To be able to issue any [new authorized] bonds it would require a tax rate increase above our current rate," he said. "That's what we mean by our bond rate capacity."
The official bond language asks voters to approve $600 million in 20-year public improvement bonds for the urban rail system. If voters approve the Nov. 4 bond, the city could only start construction on rail if it secures $400 million in funding for road projects and corridor studies and if it receives a matching grant of $600 million from the Federal Transit Administration for the rail project.
Project Lead Kyle Keahey said the city would spend some of the bond money before submitting the project to the FTA in 2017 for consideration of funding.
"As we go forward with this process, we would be drawing down on some of those bond funds to be able to fund the environmental and planning process," he said.
The city still needs to fund the preliminary engineering phase and going through the National Environmental Protection Act process, Keahey said.
To fund the road projects, Canally said the city would sell $400 million worth of nonvoter-approved state highway bonds and repay the bonds through the debt service tax rate. The first increase to the debt service tax rate would occur in late 2015 with increases of about 1 cent occurring every year for six years. Multiyear projects require selling the bonds over several years, he said.
"With big capital projects, it takes a long time to build them, whether it's a building or urban rail system," Canally said.
