Harris Health System
Harris Health System is in the middle of a $70 million expansion project at Ben Taub Hospital that will increase the number of operating rooms from 11 to 18. Last July, Harris County issued 20-year bonds, which are supported by property taxes, to finance the expansion. The project, which was required by the American College of Surgeons in order for Ben Taub to retain its Level I Trauma Center status, will not be completed for another several years.
This was the first time in many years the county used property tax debt to finance a hospital project, Harris County Budget Chief Bill Jackson said at the June 27 meeting. Typically they are financed with revenue debt, he said.
"It worked out very nicely," Jackson said. "Property tax works with hospitals because there are so many changes in the health care business and property tax-based debt is more stable."
Port of Houston
With projections indicating that more than 500 semi trucks will be accessing the Port of Houston per day by the end of 2017, county officials are working with port officials to address needed infrastructure improvements. The county collects property taxes to cover debt services payments at the port, which are $53 million for fiscal year 2017 and are projected to be about the same for the next five years. Officials are looking at ways to help identify funding sources for infrastructure without issuing additional taxpayer supported debt, Jackson said.
"We're working with the Port of Houston and Commissioners Court to take a look at revenue sources to address infrastructure," he said. "It's not something the road and bridge money allocated to Precinct 2 will be able to take care of."
Harris County Judge Ed Emmett also encouraged officials to consider implementing an on-dock rail system, which would allow trains to carry more containers and would ease the burden on existing infrastructure.
Harris County Sports & Convention Corporation
Several projects are expected to be brought before Commissioners Court over the next year related to improvements at NRG Park, including upgrading phone systems and resurfacing parking lots within the complex. The county cannot use property taxes for NRG Stadium—where improvements are mainly funded with hotel occupancy tax revenue—but it can use property taxes for improvements at the rest of the park.
Central Technology Services
The department is in the process of implementing a new enterprise accounting system, which is expected to cost $35 million over the next two years. The budget office recommended $20 million in new borrowing over the next year to get CTS projects up and going. CTS will be bringing priority projects before commissioners for approval as needed.
Harris County Engineering Department
County Engineer John Blount said construction is underway on several projects including a joint processing center—off Baker Street north of Buffalo Bayou downtown—and a new 911 call center servicing the north Houston area. Both projects could be completed within the next 12-18 months. A new multi-service center at 6301 Pinemont Drive is expected to come before commissioners for approval later this year to finish the design phase.
Blount said his department will be more focused on the repair and replacement of existing facilities in FY 2017-18. Maintenance projects—including roof repairs, elevator replacement repairs and major system repairs at various facilities—will cost approximately $70 million, which Blount said is the largest ever recommended budget for the county's Facilities & Property Maintenance program. The budget office is recommending up to $50 million in new borrowing over the next year for these projects.
The budget office is also working with the county engineer to reorganize the management of county-owned downtown parking lots. The goal is to eventually provide parking or mass transit options for all county employees working downtown, Jackson said.
The county is moving forward with a $105 million plan to repurpose the Houston Astrodome, and commissioners at the June 27 meeting voted unanimously to bring on a construction manager at risk. The CMAR would help provide construction estimates as engineers and architects work through the design phase. The design phase is expected to last into 2018. Blount said the goal to have the new Astrodome open for events is 2020, but he said any timeline this early on in the process is subject to change. Read more about the Astrodome plan here.
Harris County Flood Control District
HCFCD receives $120 million in funding each year, $60 million of which goes into maintenance and operation and $60 million of which goes to new capital improvement projects. Officials are looking into increasing the amount that can be used on capital projects and decreasing maintenance and operations funding by finding efficiencies. Another goal is to ultimately have a set tax rate similar to county's hospital district that can increase over time as the county's needs increase, Jackson said.
Harris County Toll Road Authority
With many large projects underway—including extending the Hardy Toll road downtown and extending the Tomball Tollway to the Harris County line—officials have added $400 million in new borrowing capacity, up from $200 million, over the last few months. Jackson said the new capacity will help fund ongoing projects and a new toll road bridge over the Houston Ship Channel. The new borrowing capacity comes in the form of short-term commercial paper debt, which will eventually be rolled into longterm debt, Jackson said.
"When [the debt] gets down to about $300 million, we will roll that into longterm debt," he said. "By paying 1 percent [interest] on commercial paper and 4 percent on longterm, that saves us millions of dollars. We're working with the auditor to make sure it flows smoothly."
Debt and financing update
Harris County has paid down about $400 million in longterm debt over the past 5 years—from $3.3 billion to $2.9 billion—which puts it in a good position to start issuing debt related to the 2015 bond election, Jackson said.
"When we proposed the bond election in 2015, we said we wouldn’t issue debt until we had the ability to pay for it," he said. "After 5 years, we have a good platform to start doing more projects and allocating out some of that voter debt. We feel good that we have such a strong balance street."
The budget office is still recommending that the allocation of debt only be used after the nondebt funding the county already has in the bank, such as mobility funds, has been utilized.
Emmett finished the meeting by emphasizing the population growth that has taken place in Harris County over the past decade, especially in unincorporated areas. He said efforts by state legislators to limit the county’s revenue growth to population plus inflation would put the county in a serious bind when it comes to providing services to those unincorporated areas, including road construction, park development, flood control and law enforcement.
"Harris County's growth rate since 2000 has been 38 percent, but when you look at just the unincorporated areas, the growth rate has been 95 percent," Emmett said. "If we’re limited to 38 percent of revenue growth but unincorporated Harris County is growing at 95 percent, we can't meet the needs of Harris County."