Loading...
Nederland Texas Comprehensive Plan 1974-1994 Phase III Technical Report3 3484 00060 4824 MAY REF -ARCH 352.0764145 COM 1974-1994 comprehensive plan 1974-1994 NEDERLAND, i975 TEXAS PHASE III ... TECHNICAL REPORT CAPITAL IMPROVEMENT PROGRAM 3 3484 00060 4824 ROBERT W. CALDWELL AND ASSOCIATES P L A N I N G C O N S U L T A N.T S 3202 South College Avenue D. Bob Henson .,..,. P, O. Be% 3026• Braun, Tcxas 77801 MemorialLibrary May 30, 1975 1903 Atlanta Honorable Homer E. Nagel, Mayor Nederland, Te=44 77h27 Mr. D. B. Henson, City Manager Members of the City Council Members of the Planning and Zoning Commission Members of the Zoning Board of Appeals _., Members of the Citizens Advisory Committee Ladies and Gentlemen: It is our pleasure to present to you this report entitled CAPITAL IMPROVEMENT PROGRAM. We would like to express our appreciation to you for affording us the opportunity to work with the City of Nederland's officials, staff, and citizens. It has indeed been a pleasure to assist the City in the preparation of the COMPREHENSIVE PLAN. We sincerely hope it will be utilized over the coming years and updated as necessary. Specifically for this report, we would like to thank Mr. Bob Henson, City Manager, and his staff and Mr. David C. Perrell, P.E. the City Engineer.of Charles R. Haile Associates, Inc. for their assistance in providing background information, setting priorities for projects, and for supplying some of the unit -- -cost estimates used in this report. This report should be used as a guideline for determining which improvements should be accomplished over future years. The CAPITAL IMPROVEMENT PROGRAM presented herein is basically the Consultant's opinion as to which projects are most needed and which can be feasibly implemented, although the City staff was involved in setting priorities. The final decision is, however, a local one to be made by the City's governing body, staff and citizens. Certain changes in the development of the City may require alterations in the CAPITAL IMPROVEMENT PROGRAM and/or the Capital Needs List. These changes may be substan- M tiol or they may just require an altering of the priority of the affected improvements. It should also be pointed out that certain assumptions had to be made in order to forecast future revenues, expenses, and bond retirement requirements. For example, revenues and " expenses were projected basically on a straight line using recent years as a historical base. Obviously, a larger expenditure than anticipated in the projection may require adjustments in the tax rate or some other revenue producing process. Although these recognized short- comings do exist, the projection should still be accurate enough for the purpose intended. That is, to give the City some guidelines as to what to expect in the way of revenues and expenses as related to the implementation of the proposed improvements. Sincerely, ROBERT W. CALDWELL_AND ASSOCIATES Robert W. Caldwell CWC/rc URBAN PLANNING • REGIONAL PLANNING • LAND PLANNING • LANDSCAPES ARCHITECTURE COMPREHENSIVE URBAN PLAN NEDERLAND, TEXAS 1974-1994 MAY, 1975 CAPITAL IMPROVEMENT PROGRAM 1975-1981 CONSULTANTS ROBERT W. CALDWELL AND ASSOCIATES PLANNING CONSULTANTS BRYAN,.TEXAS ROBERT W. CALDWELL, PLANNER -IN -CHARGE CHARLES W. CALDWELL, PROJECT PLANNER ` TABLE OF CONTENTS CAPITAL IMPROVEMENT PROGRAM . . . . 1 ._, , . . a 0 , . Introduction , 00 , . . , . . , 1, Funds of the City 2 Summary. . , . . . , . . . . . , „ , . . . . , . . . , 3 Methods of Financing , , , .3 Notes of Interest 14 Estimated Overlapping Debt Statement 15 Capital Needs 0 a a . . , , a 0 a 0 a 0 0 0 0 a 0 0 . 15 Recommended Street Construction Standards . 17 Capital Improvement Program , , , 25 Cost Estimates ._, . . . . 0 . . . . . .. . . . . . . . . 25 Unit Cost &Estimates 25 Types of Improvements . . . , . . , , , , , , , , . 27 Non -Revenue Improvements . . . . . :. . . . . . . . . . . 27 Revenue Improvements . . . . . .. . . . . . . . . . . . 30- Capitol Improvement Program Summary a , 31 TABLES Table 1 Historical Ad Valorem Tax Levys 0 , , , 4 Table 2 Historical General Fund Revenues and Expenditures . . , . . . . , . , , , , . . . . .5 Table 3 Historical Water Fund Revenues and Expenditures , , 6 TABLE OF CONTENTS Table Historical Garbage Department Fund Revenues and Expenditures . .7 Table 5 General Obligation Bonded Debt Requirements . . 9 Table 6 Revenue Bonded Debt Requirements (Water Fund) . 11 Table 7_ Revenue Sharing Fund" . r 13 Table 8 Capital Needs List 18 . Table 9 Recommended General Obligation Improvements 32 Table 10 Projected General Fund Revenues and Expenses, . 35- Table ll Projected General Obligation Bond Retirement Schedule . �. . . . . . . . . . . . . . . . 36 _Table 12 Projected Ad Valorem Tax Rate Requirements . 37 Table 13 - Recommended Revenue Bond Improvements . . 38 Table 14 Projected Revenue Bond Retirement Schedule . . 39- Table 15 Projected Water and Sewer Fund Revenue and Expenses . ;. . .-40 MAPS Proposed Circulation Improvements, 41 Proposed Public, Buildings. . 42 - Proposed Storm Drainage 43 Proposed Water System . 44 Proposed Sewerage System _ 45 CAPITAL IMPROVEMENT PROGRAM INTRODUCTION In previous phases of the Comprehensive Plan for the City of Nederland attention has been focused on such topics as historical background, population, housing and land use. More recently, elements on circu- lotion, community facilities and utilities have been completed. Within several of the above topics, proposals have been made which, if implemented, would result in a capital improvement. Such an improve- ment is generally regarded as those physical improvements which benefit the entire community and which are designed and built to last more than ten years. To merely propose these improvements is not in itself enough. Setting up priorities on which improvements should be accomplished first; estimating the cost of the improvements and sources of funding should also be outlined to better direct efforts of implementation. Prior to such a discussion, it is necessary to review some of the finon- cial background of the City in order to determine its ability to pay for improvements. This study is made through the use of past official audits and budgets of the City of Nederland. The study is, in no way, intended to replace the audit reports, the City's auditors themselves, nor the City's financial advisors. Prior to an issue of bonds or a committment to make a major capital improvement, the City's financial advisors should be consulted. This report is intended to give a general guide as to approximately when on improvement should be made and how it can be paid for. The City of Nederland is a home rule City and is limited in its taxing power by the Texas Constitution to a maximum of $2.50 per $100 assessed valuation. The present tax rate in the City is $1.62/$100 assessed valuation. This rate has been in effect since 1963. The basis of assessment is currently 40% of actual value. This yields an adjusted tax rate of $.640 (assessment basis X tax rate) which is the best way to evaluate Nederland's tax status to other Texas cities. The $.640 adjusted tax rate is comparable, according to Texas Municipal Taxation & Debt, published in 1972, to that of 72 cities reporting with popular tions of between 10 and 25,000 persons for which the median adjusted tax rate was $.800. Nederland, with a population of 16,810 in 1970, would of course fall into the 10 - 25,000 class. This information indicates that Nederland is fairly taxing its citizens when compared to other Texas cities of comparable size. Table 1, Historical Ad Valorem Tax Levy, shows that assessed valuation has increased at an average annual rate of about 3.7% since 1969. The 1 CAPITAL IMPROVEMENT PROGRAM current estimate of assessed valuation is $39, 175,589 based on a 40% valuation. This is estimated to yield a levy of about $596,000. Total tax collections, current and delinquent, are collected at over 98% with - about 94% being estimated for the current year. The ad valorem tax of $1.62 will be collected and split this year, $.8952 to the General Fund and $.7248 to a Bonded Debt Interest and Sinking Fund. This will mean that about $329,314 will go to the General Fund and $266,686 will be put into the I&S_Fund. FUNDS- There are three principal funds in the City of Nederland, which directly OF THE produce revenue. Other accounts are operated from these funds but CITY these reflect the major local sources of revenue and expenses. These funds are shown in Tables 2,3, & 4. The funds are the General Fund, Water Fund and Garbage Fund. The following discussion and the tables are intended to show the major trends evident in each fund, the major sources of revenue and the major expenditures. General Fund Table 2 shows a summarized record of revenue and expenses for the General Fund for the years 1970-1975 budget estimates. Total revenue has increased by 40% since 1970 or at a rate of about 7%o per year. Total expenses have increased 52% approximately, or 8% per year. The major sources of revenue for the General Fund are: Ad Valorem Taxes (current and delinquent) 46%, City Sales Tax 26%, and Street Rental 16%. These three sources account for about 88% of the total General Fund revenue. Current tax revenue has increased approximately 3.3% per year while sales tax revenue has increased about ,.,.. 18% per year since 1970. Expenses are more evenly distributed. General government/administration accounts for only 10.4% of the total. Fire Department expenses account for 15%, Police Department expenses comprise about 25% of the total " expenditures while street and drainage maintenance expense is the major item at 38% of the General Fund expenditures. While revenues have not always exceeded expenditures, occasional financial aid has been transferred from either the Water Fund or the Garbage Fund. This transfer is authorized by City Charter to repay the General Fund for debt retirement on water and sewer General Obligation Bonds, Water Fund: This is actually a water and sewer fund. Revenue Bonds for water and sewer improvements are paid for out of this fund. The major source of revenue is from fees collected for water and sewer service. This source is estimated to account for $500,000 out of a total fund revenue 2 CAPITAL IMPROVEMENT PROGRAM of $526,000. Other revenue is derived from tapping fees and miscellaneous income. The primary expenditure out of this fund is for salaries. It is estimated that over $218,000 will be spent for salaries and wages. Expenses have, - increased at approximately 10% per year since 1970 while revenue has only increased at 7.3%. However, revenues have substantially exceeded expenditures in each year studied. Net revenue has exceeded debt service requirements by a minimum of 1.8 X (times) to a maximum of 2.7 X. A minimum ratio of 1.5 X net income to debt service is a rule of thumb required to retire Revenue Bonds. The Water Fund has produced enough of a surplus in recent years to leave substantial amounts, between $70,000 and $120,000, available for capital outlays and other necessary expenditures. This data is shown in Table 3, Garbage Fund Table 4 shows revenue and expenditures for the Garbage Fund. The only major source of revenue for this fund is through garbage sales. Approximately $203,000 is estimated in sales this year. There are two major sources of expenses for this fund, wages and miscellaneous service. Total expenses have increased about 77% since 1970 while revenue has increased 74%. On a yearly basis this amounts to 12.9% m and 12.2% respectively. One of the reasons for the increased expense is the purchase of plastic bags by the City, the expense of which is only partially offset by customer charges. Occasionally this fund has produced _.. enough excess funds to transfer to other funds, principally the General Fund. SUMMARY The preceding brief discussion indicates that the funds of the City have been well utilized over the years. The three principal revenue producing funds are self-supporting with exceptions occurring only periodically. These exceptions have been in years when large capital outlays were made. At those times, either transfers from one of the other major funds or the beginning balance in the account has covered the expense. All of the data points to a conclusion that the City of Nederland is a good credit risk. The City has never defaulted on a bond service requirement and is in a good position to issue additional bonds, particularly revenue. bonds. Additional comments on the bondability of the City will be presented later. METHODS OF There are several methods normally used to finance capital improvements FINANCING by a City. The most popular of these are through: current revenues, general obligation bonds, revenue bonds, special assessments. Each of these methods is discussed below. 3 TABLE 1 HISTORICAL AD VALOREM TAX LEVYS - 196975 NEDERLAND, TEXAS Assessed Tax Tax- Percent " YEAR Value Rate Levy Collected 1968-69 $31,182,694 1.62 $505,191 98.71 1969-70 32,801,698 1.62 531,397 98.66 - 1970~71 34,108,874 1.62 552,573 98.58 1971-72 35,186,969 1.62 570,029 _ 98.29 1972-73 36,023,918 - 1.62 583,597 97.84 1973-74 37,172,727 1*62 602,198 96.22 1974-75 39,175,589 1.62 596,000 94.00 Average annual increase of 3.7% in Assessed Value, Source: City Audit Report 1974 and 1975 City Budget *Collections include delinquent taxes. 4 TABLE 2 HISTORICAL GENERAL FUND REVENUES AND EXPENDITURES NEDERLAND, TEXAS TAX YEAR 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 Revenues: Current Taxes Collected $275,254 $309,794 $297,478 $305,001 $315,129 $329,314 Delinquent Taxes Collected 10,899 91643 10,845 15,205 15,532 17,000 Tax Interest & Penalty 71041 51876 71468 61578 71698 71000 Tax Costs 546 485 425 363 418 500 Sales Tax 96,245 157,355 173,605 190,649 2031591 200,000 Occupational Tax 71756 10,508 71301 91757 81373 11,000 Street Rental 90,682 92,319 101,337 118,046 126,828 120,000 Inspection Fees 71655 81396 81901 10,370 61999 91000 Fines & Court Costs 17,876 21,401 20,217 251657 26,975 25,000 Interest & Other Income 20,244 19,398 25,657 30,688 39,912 30,000 Tax Certificates 435 665 621 590 506 Transfer from Water & Garbage 14,767 88,341 41,135 60,655 27,219 TOTAL REVENUE $549,403 $724,184 6941787 $773,563 $779,184 7481814 Expenditures: General Government & Administration $ 88,014 $ 89,743 $102,252 $104,703 $106,963 $ 78,383 Fire Department 80,994 89,062 95,423 96,515 104,678 118,720 Garage & Warehouse 18,952 18,280 11,258 12,128 131779 14,240 Police Department 99,433 112,144 135,998 148,899 1671447 188/050 Inspection Department, 23,614 25,139 26,624 26,673 29,735 33,625 Streets & Drainage 1651360 164,670 _304,015 286,609 239,341 287,276 Parks, Recreation & Grounds 16,621 171405 18,955 21,451 19,351 28,520 Insurance -0d 15,675 -0- Engineering Service -0- 11838 -0- Street Repair -0 130,707 -0- TOTAL EXPENDITURES $492,991 $516,447 $694,627 $845,203 $681,318 _'$748,814 EXCESS REVENUES 561412 $207,737 T 61 ($71,340) T�q7,-$"b3 Source: City Audit Reports 1970-1974 and City Budget 1975 Note: Figures above in whole dollars, cents have been dropped, may not add up to total. _5 TABLE 3 HISTORICAL WATER FUND REVENUES AND EXPENDITUES NEDERLAND, TEXAS TAX YEAR 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 Revenue: Water & Sewer Service $339, 889 $385, 294 $411, 846 $411, 293 $505, 758 $500, 000 Water & Sewer Tapping Fees 10,475 12,907 91567 91704 10,072 12,000 Miscellaneous Income 15,979 19,185 10,566 18,359 13,608 14,000 TOTAL REVENUE $3661344 $417,387 $431,980 $439,357 $529,438 $526,000 Expenditures: 'Salaries & Wages $128,582 $136,924 $145,321 $151,560 $192,137 $218,068 Supplies 54,630 53,927 61,841 65,292 63,803 691540 Maintenance & Repairs 12,456 13,528 34,738 35,749 55,799 21,300 Miscellaneous Services 23,922 261341 29,865 35,108 45,702 50,100 Sundry 51654 61500 71500 71900 10,000 12,700 TOTAL EXPENDITURES $225,247 $237,221 $279,267 $295,609 $367,422 $371,708 NET OPERATING INCOME $141,097 $180,165 $152,713 $143,748 $161,996 $154,292 Other Revenue: Interest and Sinking Fund Income $ 10,576 $ 12,654 $ 81757 $ 91271 $ 11,441 -0- Transfer from Garbage Dept. 21057 -0- 14,550 -0- -0- -0- Available for Debt Service $153,730 $192,819 $176,020 $153,019 $173,437 $154,292 Debt Service Requirements 71,383 72,493 74,209 82,846 76,756 72,887 Available for Capital Outlay $ 82,347 $120,326 $101,810 $ 701172 $ 96,681 $ 81,405 & Other Expenditures Total Capital Outlays & 46,021 114,838 1041481 70,351 50,974 19,100 & Other Expenditures Excess of Revenue over Expenditures $ 36,326 $ 51488 $( 21671) $ (178) $ 45,706 $ 62,305 Ratio of Net Income to Debt Service (Should exceed 1.5X) 2.2X 2.7X 2.4X 1.8X 2.3X 2.1X Source: City Audit Reports 1970-1974 and City Budget 1975 NOTE: Figures above in whole dollars, cents have been dropped, may not add up to total 6 TABLE 4 HISTORICAL GARBAGE DEPARTMENT FUND REVENUES AND EXPENDITURES NEDERLAND, TEXAS TAX YEAR 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 Revenue; Garbage Sales $117,016 125,781 153,241 163,487 - 167,668203,000 Delinquent Taxes Collected 12 31: 38 -0 -0- 0- Total Operating Income 117,028' 125,812 153,280 - 163,487 1671668 203,000 Operating Expenditures: Salaries & Wages $ 67,879 73,559 83,100 86,935- 91,054- 101,980 Supplies 41707 41684 4,947 61647 91485 61600 Maintenance & Repairs 11,124` 61779 12,618 13,170 91960 71000 Miscellaneous Service 26,393 27,302 34,786 36,036 64,558 79,800 m., Sundry 31000 3,500 4,300 41500 51000 51970 Total Operating Expenditures $113,104 115,825 139,752-147,289 180,058 201,350 Net Operating Income 31924 91986 -13,527' 16,197 (12,389) 1,656 Non -Operating Expenditures: Capital Outlay $ 23,772 27,244 51608 61505 91612 7,750 Transfers to other funds. 21057 *(151889) 14,550 14,250 -0- -0- Excess of Revenue over expenditures (21,905) (11369) (61630) (41558) (22,002) (6,100) *Tronsfered in from Water Fund Source: City Audit Reports 1970-74 and City Budget 1975. 7 CAPITAL IMPROVEMENT PROGRAM Current Revenues: The financial method which meets with a great degree of public acceptance is a pay-as-you-go approach for which current revenues are used, including the most recent source of Federal Revenue Sharing. This method can save large amounts of interest on borrowed money but it has several distinct disadvantages. One is that only small amounts of improvements can be financed annually, resulting in piece -meal phases on large improvements which can end up costing more. Perhaps the most noticeable disadvantage, however, is that it requires excessively high tax rates and utility rates when sizeable projects are undertaken. Further, since most capital improvements are designed for long periods of use, then it is quite logical and fair to spread the cost over on extended period of time. In view of this, it is not considered equitable to require the present taxpayers to pay the total costs of improvements for which future generations will benefit. Certainly minor projects with a relatively short life span and low costs can justify the use of current revenues, but these should be kept at a minimum. General Obligation Bonds: It is generally accepted that large scale non- revenue producing projects be financed through General Obligation Bonds or Tax Bonds. Improvements such as major streets, parks, storm sewers, and public buildings fall into this category. The tax-payingvoter, by way of referendum, approves the issuing of General Obligation Bonds, The City in turn sets aside the necessary portion of the ad valorem tax dollar for the retirement of outstanding bonds. Additional limits on the sale of General Obligation Bonds exist in the fact that they must be approved by the Attorney General of the State of Texas. As a general rule, General Obligation Bonded Debt should not exceed 10% of Assessed Valuation. The City of Nederland's General Obligation Bonded Debt is shown in Table 5 on the following page. The schedule shows that there are approximately $3,379,000 in General Obligation Bonds outstanding with an approximate 1974-75 requirement of $266,038. Texas Municipal Taxation and Debt shows $2,000 in General Obligation Bonds were authorized in 1966, but as of March 28, 1974, were unissued. Using a 10% assessed valuation limit as suggested by the Attorney General's office, the City could have about $3,917,558 in General Obligation ` Bonds outstanding. in other words, the City could issue an additional $538,558 in GeneralObligationBonds. This computation is, of course, only academic. For example, if only an average increase in assessed valuation occurs in 1975~76, then the adjustment would allow about $806,000 in bonds to be sold. 8 TABLE 5 CITY OF NEDERLAND, TEXAS GENERAL OBLIGATION BONDED DEBT REQUIREMENTS September 30, 1974 Total Requirements Total Maturity Bonds Interest Requirements 1974-1975 $ 123,000*00 $ 143,886.25 $ 266,038000 w 1975-1976 126,000000 138,038*75 264,038*00 1976-1977 130,000*00 132,067.75 262,067*00 1977-1978 138,000*00 125,687.75 2631687*00 1978-1979 1421000.0O 119,172*25261,172.00 1979-1980 151,000*00 112,492*75 263,492.00 1980-1981 160,000000 105,393.00. - 265,393.00 1981-1982 164,000000 98,228.00 262,228*00 1982-1983 172,000.00 901805.50 2621805.00 1983-1984 176,000000 83r070.50 2591070.00 1984-1985 182,000.00 75,110950 257,110000 1985-1986 192,000.00 66,721*75" 258,721*00 1986-1987 201,000*00 57,849*00 258,849*00 1987-1988 181,000000 49,227.50 230,227*00 1988-1989 189,000*00 40,897.50 229,897.00 1989-1990 187,000000 32,845*00 219,845*00 1990-1991 160,000*00 26,237.50; 186,237*00 1991-1992 130,000*00 - 21,225*00 151,225.00 1992-1993 115,000*00 16/700000 1311700.00 1993-1994 1201000.00 12,000900 132,000*00 1994-1995 120,000.00 71200*00 1271200.00 1995-1996 120,000*00 21400*00 122,400900 $3,379.000.00 $lr557,256.25 $4,936,256*00 Source: 1974 City Audit Report. 9 CAPITAL IMPROVEMENT PROGRAM' Adjusted Assessed Valuation $ 40,625.085 X 10% Total General Obligation Limit 41062,508 Less Outstanding 31256,000 Could Issue $ 806,508 Still other adjustments could be made: for example, the property could be re -valued to bring it more in line with current values, the assessment basis could be raised to a higher percent- age, or if the City annexed additional land, this could substantially affect its total assessed valuation, and, in turn, its bonding limits. It is interesting to note that approximately $1,422,000 of the City's General Obligation indebtedness is actually attributable to the finon- cing of water and/or sewer improvements. This, although not unusual, is not generally thought of as the best way to finance a revenue producing improvement. General Obligation Bonds are usually used to finance an improvement which is not a "money maker". The w. City of Nederland has chosen this method in order to save approximately 1% in interest. Revenue Bonds: Revenue producing facilities such as water, sewer, electrical and garbage collection are normally financed with revenue bonds when major improvements are required. General tax revenue or current revenues should not be used in retiring this type of bond unless the City desires and can obtain a lower interest rate. Again, as in the case of General Obligation Bonds, such issues must be approved by the voters. Revenue bonds stand on the revenue producing ability of the utility systems. In effect, the City is borrowing money against the earning power of the utility. To sell revenue bonds, adequate per- formance records and proof of expected income must be shown to cover all costs of operation plus bond retirement requirements. Generally, net revenue from the utility systems should exceed 1.5 times the maximum debt service requirements. Nederland could increase its water and sewer rates by $2.00 per customer per month and still be comparable with other mid -county cities. This would yield about $120,000 or more per year in revenue. The City of Nederland has shown a very impressive record of debt service capability. According to Table 6 computed by the consultants, the minimum rate of 1.5 times has been exceeded regularly. Compu- tations by Texas Municipal Reports shown even higher rates, (i.e. 1973 - 2.66X, 1972 - 2.80X1 1971 - 3.35X). The City has no 10 TABLE 6 CITY OF NEDERLAND, TEXAS REVENUE BONDED DEBT REQUIREMENTS _. (WATER FUND) September 30, 1974 Total Requirements Total Maturity Bonds Interest Requirements 1974-1975 $ 32,000.00 $ 421104.00 $ 74,104000 1975-1976 33,000000 40,894*00 - 73,894400 1976-1977 351000.00 391644.00 74,644*00 1977-1978 361000000, 38,227*50 74,227000 1978-1979 38,000*00 36,766.00 74,766*00 1979-1980 39,000000 351225.50 74,225.00- 1980-1981 41/000000 _ 33,640.00 74,640.00 1981~1982 43,000000 31,962.50 71,962.00 1982-1983 45,000*00 30,195*00 75,195*00' 1983-1984 46,000*00 28,347.50 74,347.00 " ,,.. 1984-1985 48,000*00 26,455.00 74,455*00 1985~1986 511000.00 24,472.50- 75,472.00 " 1986-1987 52,000*00 22,355.00 74,355*00 ,.,., 1987-1988 55,000*00 20,192.50- 75,192900 - 1988-1989 - 57,000.00 _ 17,903*75 74,903*00: 1989-1990 45,000900 15,525900 60,525.00 ,,. 1990-1991 501000.00 ' 12,800*00 62,800*00 1991-1992 50,000*00 81800*00 ' 58,800*00 1992-1993 60,000.00 4/800000 64,800*00 $ 856,000.00 - $ 5101309.75 $11366,309.00 Source: 1974 City Audit Report 11 CAPITAL IMPROVEMENT PROGRAM Revenue Bonds authorized but unissued. According to City Audit Records, a total of approximately $856,000 in Revenue Bonds are outstanding. Revenue Bond service requirements of about $74,104 are shown for 1974-75. In addition to these Revenue Bonds, the City owes about $106,699 in "floating debts". These are refundable contracts to Class I subdivision developers in Nederland. The amount of repayment is 50% of water and sewer gross revenue from the subdivision involved over a period of not more than 20 years. They are non -interest bearing notes. This is a method used by many cities to encourage development. In effect, a developer will install utilities, streets, or other improvements and be reimbursed for all or part of the expense. While this may be a desirable arrangement for a particular city, the Consultants recommend that this practice be reconsidered. Justification can be found in requiring the developers to install streets and utilities at his expense to desired standards through subdivision control. Care must be taken to not set standards so high that the cost of the property will be raised beyond market limits. He will in turn include the cost of these improvements in the sale price of the lot. The purchaser then has an advantage in, knowing that all improvements are included in his purchase price, the subdivider has improved the marketability of his lots and the City has protected prospective buyers of the lot by requiring proper installation while not incurring a capital expense. The final decision as to whether to engage in refunding contracts or not is, however, a local one. The City of Nederland obviously feels that it gains more benefits by accepting refunding contracts with developers than by the other methods. A policy of having the developer install such improvements to standards for later takeover at no additional expense by the City is recommended. Special Assessment: When it can be shown that only a select portion of the community benefits from certain public improvements, special assessments may be used in financing the projects. Depending on the assessment policies established by the City's government, property directly benefited by the improvement may be required to pay for all or a part of the improvement. Improvements such as residential street paving, curb and gutters, sidewalks, and street lights would be included in assessment programs. Sometimes, however, improvements may be declared as a "public necessity" and be financed by the City. Nederland's policy has been to make "Public-ot-Large-Benefit" major thoroughfare improvements by others (Drainage District No. 7, State, 12 CAPITAL IMPROVEMENT PROGRAM or Federal) in the amount of about 509/o of the improvement, and to finance the remaining 501/o by General Obligation Bonds for 30 years, which is normally the projected life of the improvement. Upon comple tion of the project, the adjacent properties are revalued to about 50% of market value, which has been determined to produce additional revenue approximately equal to the annual debt requirement to reimburse the City for such expense. This seems to be an acceptable system to the citizens of Nederland. Revenue Sharing: Another important source of funds is the recent payment of General Revenue Sharing Funds from the Federal Government. These are funds returned to individual communities for stipulated uses. Generally, these funds have very few strings attached and can be used for such items as: General Obligation Bond retirement, specific capital improvements, - city -owned parking lots, social services for the poor and aged, libraries, public transportation, public safety, recreational facilities, environmental protection and planning. They cannot be used for matching money with other Federal Programs. A separate fund and strict accounting is required. Although it is possible that these funds will be continued hereafter, the City should not count on them in their official financial plans and should not lower taxes except perhaps for allowing homestead exemptions for senior citizens,which Nederland has done, because the allocation is based on a formula which includes the tax rate. These funds, if they are continued, should be thought of as supplemental funds and used to make ' necessary improvements which may normally have a lower priority. The following.is a. reflection of how revenue sharing funds are being used in Nederland: TABLE 7 REVENUE SHARING FUND FISCAL YEAR ENDED 9/30/74 Cash Balance 10/1/73 $ 15,478.91 Receipts - 139,152.00 TOTAL FUNDS AVAILABLE $154,630991' DISBURSEMENTS: Streets & Sidewalks $ 31,022.78 Ice Machine 1,580.00 Police Cars 9,602.00 Hydro Scopic Machine 48,105.26 Garbage Trucks & Sanitation 33,883.72 Trucks 8,305.30 Tractor with Bockhoe 9,950.00_ Street Lights & Sewer Plant Power 10,398.97 TOTAL DISBURSEMENTS $152,848.03 Cash Balance 9/30/74 $ 1,782.88 SOURCE: City Audit Report, 1974 13 CAPITAL IMPROVEMENT PROGRAM Community Development: This is the most recent source of funds avail able to the City.Created out of the Housing and Community Development Act of 1974, monies from the Department of Housing and Urban Develop ment may be available pending acceptance and approval of application for funding. Without going into detail, these funds will be available for specific improvements aimed at assisting low and moderate income families through at least 1979. Due to the nature of this program, improvements made with these monies will have to be decided as the program develops and if money is available at that time. In addition, due to the under^estimation by the Federal Government in setting up the program, it appears that there will not be sufficient money for cities less than 50, 000 population, discretionary cities, to participate at this time. NOTES OF There are several points of interest as reported by the Texas Municipal INTEREST Report dated March 28, 1974. -These are identified below for the reader's benefit. Industrial Zone Agreements: In March, 1961, the City established an Industrial Zone by annexing a 10400t strip of land around an area containing properties of the Pure Oil Company and the Sun Oil Company, The City then entered into separate 5-year agreements (tax years 1962- 1966) with the two companies which provided that the companies be assessed an amount that when applied to the then current tax rate would yield the City the sum of $35,580 annually in taxes. These agreements were extended in 1966 for seven years with the assessed valuation to be placed on the properties increased to an amount that when applied to the then current tax rate would yield the City $53,690. Pure Oil Com pony contributes $50,OOO of this amount and the balance of $3,690 is paid by Sun Oil Company. In return the City has agreed that during the seven year period they will not annex any additional properties of the companies. On March 20, 1973, the City entered into a seven year agreement (tax years 1973-1979) with Big 3 Industries whereby the company's properties will be assessed at a value which will yield $5,828 annually. At the City's current tax rate, the assessed value of the three companies amounts to $3,673,949. Principal Taxpayers 1973 Assessed Name Type of Property Valuation 1. Union Oil Co.; Oil Refinery Property 310971919 (Portion of) 2. Southwestern Bell Telephone Co. Telephone Utility 978,880 CAPITAL IMPROVEMENT PROGRAM (Principal Taxpayers) 1973 Assessed Name Type of Property Valuation 3. Nederland State Bank Bank $ 593,274 4. Mid -Jefferson County Hospital Hospital411,750 5. Weingarten's Grocery Store & Acreage 381,625 6. Gulf States Utilities Co. Electric Utility 359,745 7. Airport Towers Motel 3471425 8.- C. Doornbos Family Residential and Commercial Property 314,260 9. Donald S. Elliott Apartments 279,590 10.' John Blackwell et al Apartments 270,090 Total (18.91% of Total Assessed Valuation) $7,034,558 ESTIMATED OVERLAPPING DEBT STATEMENT Net Debt Amount Taxing Body Amount As of % Ovlpg Ovlpg Jefferson County $4, 16,252 11-30-73 2l $ 100 6 Jefferson Co. DD #7 6,325,852 11-30-73 4.17 263,788 Nederland ISD 6,382,060 12-31-73 33.89 21162,880 Total Net_Ovlpg Debt $2,527,124 Nederland, City of $2,383,325- 12-3.1-73 100.00 21383,325 _Total Direct and Ovlpg Debt (13.20% of A.V. $292.11 per capita)- $4,9101449 SOURCE: Texas Municipal Reports, March 28, 1974 CAPITAL The Comprehensive Plan for the City of Nederland presented many NEEDS recommendations for tangible improvements which in the Consultant's opinion should be accomplished. These can be termed as capital needs. These improvements are those which fit the capital improvements definition presented earlier. Obviously all of the capital needs may not be accom plished since funds are limited to those which can be generated by either ad valorem taxes or by utility revenues or by several state or federal funding programs. From the capital needs list, a selection must be even tuolly made which includes those high priority items which can be occom 15 CAPITAL IMPROVEMENT PROGRAM plished in a given period of time. In this particular case, the time interval is approximately six years. Selection of these projects will comprise the Capital Improvement Program. This Capital Improvement Program is important for other reasons. The City may not grow as planned, which may cause changes in priorities or it may develop certain other types of needs which cannot be forecast at this time. This may change the capital needs as well as the priorities. The following is the Capital Needs List. It documents all of the capital improvements by category recommended in the various elements of the Comprehensive Plan. The list requires some explanation since it was necessary to "code" the improvements to simplify the text descriptions. Proposed improvements for the circulation, water, sewer and storm drain- age systems and for public buildings are also shown on maps at the end of the report. For the circulation system, each street was initially divided into segments based on a change in either existing right of way width, pavement width or proposed construction standard. The proposed construction standards referred to were presented in an earlier report and are presented below for the reader's benefit. Each segment was given an identification number. Since some segments required no substantial improvements, they were subsequently eliminated. This left only those segments which required some type of improvement, i.e. additional right of way or paving to a recommended.standard as was presented in the Circulation Plan. For example, Avenue H has eleven identified segments but only segments 1, 2, 10 and 11 require substantial improvements to meet the recommended standard. These identification numbers appear on the Circulation Improve- ment Map and in the Capital Needs List. Improvements for the water, sewer, and storm drainage systems and for public buildings are less complicated to identify. Each improvement has been given an identification number and is shown on the needs list and on the respective improvement map. Each group of recommended improve- ments has been set up in priority order as seen at this time. The street improvements involve three responsible agencies: The Texas Highway Department (THD), Jefferson County (Jeff. Co. or JC) and the City of Nederland (City). Since this is the case, the street section has been set up into priorities for each agency. 16 CAPITAL IMPROVEMENT PROGRAM Recommended Street Construction Standards (Minimum Standards) Type Right -Of- Pavement Width Moving Traffic Parking ConstructionWay Needed Back to Back Lanes Lanes Median Urban Major Alternate Type MB-1 100' - 120' 64' 4 -12' lanes w/ 2 - 8' shoulers None 14' Major � Type M 80' 100' 46' 4 -11'6" None 14' Collector -Type C 60' - 70' 46' 4 -11'6" None None Secondary - Type 5 60' 37' 2 -10' 2 None Residential - Type R 50' - 60' 31' 2 -11' 1 None Residential Cul- de-sac Radius of Residential Cul-de-sacs should beat least 33 feet " Commercial Cul- "` de -sac Radius of Commercial Cul-de-sacs should be at least 4116" SOURCE: ,Consultants, Refer to Circulation Plan Phase l Report 2 for Details. 17 TABLE 8 CAPITAL NEEDS LIST (In Priority Order by Responsible Agency) ,. Streets RECOMMENDED RECOMMENDED RECOMMENDED Prior. STREET NAME CONSTRUCTION PAVEMENT ADD. ROW RESPONSIBLE Level & SECTION # STANDARD WIDTH NEEDED AGENCY 1 Nederland Ave., „e Sec. I &&2 M (Curb and Gutter Only) THD Sec.3 M X 10' THD Sec.4" M X 20' THD Entire Length M PLT @ Major intersections THD „ 2 27th Street Sec. 6-' M 46' 30' Jeff. Co. Sec. 7 ` M 46' 40'_ Jeff. Co. Sec. 8 M 46' 30' Jeff. Co. u. Sec. 9 M 46' 20' Jeff. Co. Sec. 10 M X ' 20' Jeff. Co. ,... Sec. 11 M 46' 30' Jeff. Co. Sec. 12 M X 30' Jeff. Co. Sec. 13' M 46' 30' Jeff. Co. 1 14th Street Sec.2; S 37' X City_ _u Sec.3' S 37' X City, 2 SH 347, Sec._3 MB-1 X 40' _ THD 2 18th Street Sec. 2' C 46'_ X Jeff. Co. Sec. 3 C 46' X Jeff. Co. 2 17th Street Sec.5 C 46' X City 3 FM 365 Sec. 1-5 MB-1 - 48' X THD_ s. 3 Airport Access Sec. 1 S 37' 60' Jeff. Co. 3 S. 21st Street Sec.4 C 46' -- City Sec, 5 - C 46' 10' - City, .. Sec.6= S 37' 10' City 18- TABLE 8 (Continued) CAPITAL NEEDS LIST (In Priority Order by Responsible Agency) Streets RECOMMENDED RECOMMENDED RECOMMENDED Prior. STREET NAME CONSTRUCTION PAVEMENT ADD. ROW RESPONSIBLE Level 8. SECTION N STANDARD WIDTH NEEDED AGENCY 4 Avenue H Sec. 1 C 46' X Jeff. Co. Sec. 2 C 46' 10' Jeff. Co. Sec. 10 S 37' 5' Jeff. Co. Sec. 11 S 37' 10' Jeff. Co. 4 S. 3rd St. Sec.2 C 46' X City 5 Helena Ave. Sec. 1 C 44' X Jeff. Co. Sec. 4 C -- 10' Jeff. Co. 5 N. 3rd St. Sec.3 S 37' X City 6 Helena Ave. Sec. 6 S 37' 10' Jeff. Co. Sec. 7 S 37' 20' Jeff. Co. 6 17th St. Sec.4 S 37' X City Sec.7 S 37' 60' City 7 Spurlock Rd. Sec. 1 C 46' 20' Jeff. Co. Sec. 2 C 46' X Jeff. Co. 7 14th Street Sec.4 S 37' 10' City 8 Canal Sec. 1 S 37' X Jeff. Co. Sec. 2 C 46' X Jeff. Co. Sec. 3 S 37' X Jeff. Co. 8 22nd Street Sec.2 S 37' X City Sec.3 S 37' 60' City 19 TABLE 8 (Continued) CAPITAL NEEDS LIST (in Priority Order by Responsible Agency) Streets RECOMMENDED RECOMMENDED - RECOMMENDED Prior, STREET NAME CONSTRUCTION PAVEMENT ADD. ROW RESPONSIBLE Level. & SECTION # STANDARD WIDTH NEEDED AGENCY 9 17th Street Sec. 3 C 46' 60' Jeff. Co. 9 Detroit Ave. Sec. 1 S 46' X City 10 27th Street Sec. 2 - M 46' 40' Jeff. Co.' Sec. 3" M 46' 20' Jeff. Co. Sec. 4 M 46' 25' Jeff. Co. Sec. 5 M 46' 35' Jeff. Co. 10 17th Street Sec .6 - C X 10' City 11 Airport Ent, Sec. 2 S 37' 20' Jeff. Co. 11 21st Street Sec.7 S 37' 60' City 12 18th Street Sec. 4 S 37' X Jeff. Co. 12 Hill Terrace Sec. 1 S 37' X City 13 22nd Street - Sec. 1 S 37' 60' Jeff. Co. 13 14th Street Sec.5S 37' X. City - Sec.6 S 37' X City 14 First Avenue Sec. 1 S 37' X Jeff. Co. 14 - 9th Street Sec. 1 S 37' X City 20 TABLE 8 (Continued) CAPITAL NEEDS LIST (In Priority Order by Responsible Agency) Streets " -- RECOMMENDED RECOMMENDED RECOMMENDED Prior. STREET NAME CONSTRUCTION PAVEMENT ADD. ROW RESPONSIBLE Level & SECTION # STANDARD WIDTH NEEDED AGENCY 15 Central Blvd. " Sec. 2 S 37' X Jeff. Co. Sec. 1 S 37' 60' Jeff. Co. 15 Gage Sec. 1 S 37' X City 16 27th Street Sec, 1 M 46' 80' Jeff. Co. � 16_ 3rd Street Sec.4 S 37' X City 17 18th Street Sec. 1 S 37' 60' Jeff. Co. 17 Boston Ave. Sec.4 C 46' X City Sec.5 C 46' X City 18 First Ave. Ext, Sec. 2 S 37' 60' Jeff. Co. X-- Present Conditions Adequate Grade Separations Priority Level PROPOSED IMPROVEMENT RESPONSIBLE AGENCY 15 FM 365 @ SH 347 THD 16 Nederland Avenue @ RR THD Note; Grade Separations involving the Proposed Beaumont Outer Belt are omitted from list. Traffic Signals 1 Nederland Avenue @ SH 347 THD 2 Nederland Avenue @ 27th Street THD 21 TABLE (Continued) CAPITAL NEEDS LIST (In Priority Order by Responsible Agency) Traffic Signals Priority Level PROPOSED IMPROVEMENT RESPONSIBLE AGENCY 3 Nederland Avenue @ 21st Street THD' 4 Nederland Avenue @ 17th Street THD - 5 Nederland Avenue @ 3rd Street THD b Helena Avenue @ 27th Street THD 7 27th Street @ Avenue H THD -- 8 Helena Avenue @ 17th Street THD 9 Spurlock Road @ 18th Street THD Public Buildings Priority, IMPROVEMENT 1 Add New Police Department on Existing Site 2 Community Center @ 3 4_ Doornbos Pork Swimming Pool @ corn as Park Acquire Branch Fire Station Expand City Hall Acquire Library Site Acquire Site Behind City Hall Construct Branch Fire Station 9 Construct Library Water System Priority Level PROPOSED IMPROVEMENT SIZE OF FACILITY 11,700 sq. ft. 1 Expand Existing Water Plant Site, 3.5 acres 2 Add 2 mill. gallons ground storage RESPONSIBLE AGENCY City City/BOR City/BOR City Ciry RESPONSIBLE AGENCY City City EY' TABLE 8 (Continued) CAPITAL NEEDS LIST (In Priority Order by Responsible Agency) Water System Priority Level PROPOSED IMPROVEMENT RESPONSIBLE AGENCY -- 3 Refine Existing Treatment Procedures City 4 Elevated Storage Tank Site Near Doornbos Park, 1 acre City 5 Construct Elevated Storage Tank Near Doornbos Park, .5 mill, gallons City 6 10,800' of 10" line (23rd Street Area) City 7 9,600' of 12", 8" & 6" line (18th Street Area) City 8 Elevated Storage Tank Site Near Forest Lawn, 1 acre City 9- Elevated Storage Tank Near Forest Lawn, .5 mill. gallons City 10 - 23,400' of 10", 8", 6" and 4" lines (Rosebud Area) City -- 11 4,800' of 8" line (Peterson Street Area) City 12 - 4,800' of 10" line (Sun Oil Area) City 13" 12,000' of 12", 10" and 8" lines (Central Blvd. Area) City -- 14- " 16,800' of 10" and 8" lines City 15 ,Add 1 MGD Filter to Existing Plant City 16 - 14, 400' of 10", 8" lines City Sewerage System 1 - Renovate Existing STP for 1 MGD Extra ) City 2 10,200' of 8" and 10" line and 21 Manholes (Fairbanks Avenue Area) City 3 23,600' of 18", 12" and 8" line, 51 Manholes (Rosebud Area) City 4 15,100' of 18", 12" and 8", 25 Manholes (Green Ave. Area) City 5 28,000' of 30", 24", 12" and 8" line, 52 Manholes (Price Street Area) City 6 Acquire future STP site and Construct Future STP City Storm Drainage System 1 1400' of 36." Arch (A), 42" A & 48" A Pipe City 2 300' of 18" Pipe City 3 - 1100' of 18" & 24" Pipe City 4 r 300' of 24" Pipe City 5 300' of 18" Pipe City 6 300' of 18" Pipe City 7 - 1500' of 18", 2411, 36" & 42" Pipe City 8 1600' of 15", 24" & 30" A Pipe City 23 TABLE 8 (Continued) CAPITAL NEEDS LIST (In Priority Order by Responsible Agency) Storm Drainage System Priority Level PROPOSED IMPROVEMENT RESPONSIBLE AGENCY 9 400' of 24" & 36" A Pipe City 10 700' of 18" Pipe City 11 300' of 18" Pipe City 12 300' of 24" Pipe City 13 300' of 24" Pipe City 14 600' of 18" & 24" Pipe City -- 15 2,700 ' of 24", 36", 36"A & 42"A Pipe City 16 1500' of 30", 36" & 42" Pipe City 17 2200' of 18", 3011, 24", & 42" Pipe City -- 18 800' of 24" Pipe City 19" 700' of 18" Pipe City 20 400' of 24" Pipe City Note: City has recently asked Drainage District 07 to provide 24" and larger pipe for several projects, some of which include some of the above projects. This request is valid and should not be confused or be circumvented by the above list which represents those improvements proposed in the Comprehensive Plan. CAPITAL IMPROVEMENT PROGRAM CAPITAL This section of the report is termed the Capital Improvement Program, IMPROVEMENT The Program is a determination of those improvements which can be PROGRAM implemented over the next six years based upon the City's ability to finance the improvement. The six year time period 1976-77 through 1981-82 is defined by the Consultant's comprehensive planning scope of services. Practically, however, the program should not be restricted to this time period. Perhaps a more desirable term would be to think -- of it as a Capital Improvement Program for the next "Several Years", The improvements recommended in the following Capital Improvement Program were derived from the Capital Needs List which was presented earlier. The priorities assigned to the improvements were made jointly by the City Administrative Staff, the Planning Consultants, and the City's Consulting Engineer. The Capital Improvement Program projects are shown for General Obligation Bonds in Table 9, while the Capital Improvement Program projects for Revenue Bonds are shown in Table 13. Refer to the respective Capital Needs maps for location graphically. COST Each improvement's cost has been estimated based on recent unit cost ESTIMATES estimates in the area. While it is recognized that construction costs have been increasing at such rapid rates that most projects which have gone out for bids recently have been bid for above the estimated cost, and the projects proposed are for at least a six year time period, the cost estimates shown herein will undoubtedly not be very accurate at the time of construction. Still, an attempt must be made at estimating the construction costs in order to determine approximately how many dollars worth of improvements can be financed. The following is a list of the basic unit cost estimates used in the Capital Improvement Program estimates. They all include approximately 15% for engineering and architectural fees, contingencies and legal fees. Unit Cost Estimates Streets Concrete Streets $ 15.00/square yard(sy) Curb and Gutter 9.40/linear foot (If) Appurtenances (moving utilities, inlets, etc.) 47.50/If Right of Way 2.00/square foot (sf) in developed areas $10,000.00/acre in undeveloped areas 25 CAPITAL IMPROVEMENT PROGRAM' (Unit Cost Estimates, continued) Water Lines (Installed) lines 4" 6" lines 8" lines 10" lines 12". lines Sewer Lines (Installed) 8" lines 10" lines 12" lines 18" lines 24" lines 30" lines Manholes Storm Drainage lines (Installed) 15" pipe 18" pipe 24" pipe 30" arch pipe 36" pipe 36" arch pipe 42" pipe 42" arch pipe 48" arch pipe Public Buildings $32.00/square foot for construction 0 10.00/If 12.00/If 16.00/If 20.00/If 24.00/1 f 12.60/If 14.25/If- 16.25/If - 24,90/If 35.00/if 45.00/If 750.00/each 13.00/If 13.00/1f 20.00/If 26.00/If 30.00/If 30.00/If 40.00/If 40.00/If 44.00/If The improvements proposed should be coordinated as much as possible. For example, if a street is proposed to be paved, then the storm drainage installation and the moving of existing utilities should be accomplished simultaneously. The cost estimates for street construction does include the anticipated cost of moving utilities and minor drainage facilities; however, they do not include major drainage facility costs. These costs will have to be considered based on engineering studies. Drainage costs are included separately for those specific projects recommended in the Comprehensive Plan, 26 CAPITAL IMPROVEMENT PROGRAM TYPES 01: Generally, there are two types of improvements proposed in the Capital IMPROVEMENTS Improvement Program, those which can be financed through the sale of General Obligation Bonds and those which can be financed through the sale of Revenue Bonds. Generally, streets, public buildings and storm - drainage improvements should be financed with General Obligation Bonds, while water and sewer improvementsshould be financed with Revenue Bonds. In addition to the two methods of funding describedabove, there are two other methods which may be utilized. These are Revenue Sharing Funds and Community Development Funds. Use of either of these methods is dependent first on the availability of funds from the Federal Government and secondly on the wishes of the local governing body. Historically, the City's Revenue Sharing Funds have been utilized for needed machinery, such as trucks and cars, office equipment and other items. The Consultants concur with this use of Revenue Sharing Funds and support its continuance. Community Development Funds are to be made available through the Department of Housing and Urban Development. However, due to the unexpected participation of many urban counties, funding for smaller " cities in this first year is in doubt, Funds for future years should be guaranteed to some extent pending an acceptable application. The City of Nederland does have a Community Development Fund application pending at present for several improvements, some of which are included in the Capital Improvement Program. " In order to evaluate the City's ability to finance the improvements recom- mended in the Capital Improvement Program, it is necessary to look into the City's capability of financing both General Obligation type improve- ments and Revenue Bond type improvements. The analysis which follows will show the various aspects of each type of financing. NON -REVENUE Improvements which do not produce revenue directly and which can be - IMPROVEMENTS defined as capital improvements are normally paid for by the sale of General Obligation Bonds, sometimes called Tax Bonds. The term obviously refers to the fact that retirement of these bonds is accomplished through the collection of ad valorem or property taxes. A portion of the total tax dollar is assigned to the retirement of the outstanding bonds for which the remainder is used for general government operations. In Nederland, as in most Texas cities, the general government is financed through on account called the General Fund. The 1974-75 Budget for the City of Nederland shows that out of the total $1.62 tax rate, 55.26% will go to the General Fund, while 44.74% will go for bond retirement. This percentage fluctuates from year to year depending on needs. The historical record of general fund operations was presented earlier in this report . 27 CAPITAL IMPROVEMENT PROGRAM The Recommended General Obligation Improvements, Table 9, shows approximately $4,500,000 of streets, public buildings and storm drainage improvements which would fall under the financial responsibility of the City of Nederland. As a whole, the CIP calls for slightly over $11 .9 - million of General Obligation improvements, $7.4 million of which may be financed by other agencies such as Jefferson County, Texas Highway Department, and Bureau of Outdoor Recreation. The next task was to determine what tax rate or assessment basis would be necessary to finance these improvements. To do this, it is necessary to project the General Fund Revenues and Expenses. This was done and is shown in Table 10. The method of projection is quite simple. Each item under Revenue was projected based on the average annual increase during the period 1969-74 unless there was some great fluctuation in any one year or in several years. In these cases, the item was based on an average increase over a more stable period, less than the five year interval. Expenses were projected as a whole or as one item. It should be noted that current ad valorem .tax revenue is omitted from the table. This was done so that the results of this table, plus the Projected Bond Retire- ment Requirements shown in Table 11, could be combined into Table 12 to project the ad valorem tax revenue needed to make the improve- ments recommended in the Capital Improvement Program. Table 10 shows an overall average annual increase in revenue (other than ad valorem tax revenue) of about 10.2% per year. Expenses are shown to increase about 8.49/o per year over the time period 1975-76 to 1981-82. Table 11 is a projection of a Future General Obligation Bond Retirement Schedule. It is proposed that $4.5 million in General Obligation Bonds be sold over the planning period in three increments; $2,000,000 in 1976-77, $1,000,000 in 1978-79 and $1,500,000 in 1980-81. The sale of this amount of General Obligation Bonds will keep General Obligation Bonded Debt within 10% of assessed valuation, which should be accept- able by the State Attorney General. Based on a current interest rate to be expected of 7.15% for General Obligation Bonds for a 30 year retire- ment, the annual anticipated retirement requirements have been calcu- lated and added to the existing bond requirements as shown in the 1974 City Audit. If a twenty year payout were chosen, an interest rate of about 6.75% could be anticipated. Table 12 shows projected assessed valuation, tax rate, levy and the items shown in the preceding two tables, projected "other revenue", expenses, and bond requirements. Assessed valuation of property is shown CAPITAL IMPROVEMENT PROGRAM to increase from its 1975 level of :M million to over $79 million in 1981. The original goal of the City's property assessment program was to assess property at 40% of its true value. The City presently estimates that due to inflation and the last full assessment of the property, which was over ten years ago; the assessed valuation shown is probably only equivalent to 30% of true value. Therefore, the Consultants recommend that the assessed valuation be increased in 1976-77 from its actual 30% to a more realistic 401/o. This would be an actual increase of 33.3% in the assessment basis. This process should be repeated in 1979-80 by increas- ing the basis of assessment from 40% to 50% or an actual increase of 25%. The projected assessed valuations shown in Table 12 have been increased by 4% in 1977, 1978, 1980 and 1981. This rate of 4% approximates the historical rate and is mainly attributable to new construction. By adjusting the basis of assessment in this manner, the tax rate could be lowered from its present rate of $1 .62/$100 assessed valuation to as low as $1.55/$100 assessed valuation for the remainder of the Capital Improvement Program period (through 1981-82), provided, however, that other general fund revenues and expenses do not increase at greater rates than projected, and that a 7.15% or lower interest rate on the new bonds is obtained. There are several considerations which will have to be considered further when the City and its financial advisors actually engage in the process of preparing the official material relative to the General Obligation and sale. These items have been recognized by the Consultants but have not been adjusted for in the report calculations. These are: (1) the various industrial zone agreements in force, (2) refunding contracts, and (3) senior citizen allowances. There are several other factors which could have an effect on these calculations. Some of these factors are listed below: 1. Annexation of additional land into the City. 2. A complete property assessment. 3. Increasing the present basis of assessment (i.e., from 40% of true value to perhaps as high as 60% of true value) 4. Increasing "other" general fund revenue at a higher rate than anticipated. 5. Decreasing the rate of increase on general fund expenses below the rate anticipated. 6. Selling fewer dollars worth of bonds or obtaining a lower interest rate than anticipated. 7. Maintaining a large balance in the interest and sinking fund. It should be noted that this factor was not considered in the tax rate computation. P3'i CAPITAL IMPROVEMENT PROGRAM REVENUE Capital Improvements which do produce revenue are normally financed IMPROVEMENTS through the sale of Revenue Bonds. In Nederland's case this would include water, sewer and solid waste capital improvements. No solid waste capital improvements are recommended for the City of Nederland. The Capital Improvement Program for Revenue Bond Improvements, Table 13, for the City of Nederland shows $1,988,072 in water and sewer projects, of which $654,172 are for sewer system improvements. The City's share of these improvements should be about $1,497,442, since the Environmental Protection Agency should participate in the sewer system improvements. The City's share of the $654,172 of sewer improvements should be about $163,542. However, all of the costs for the proposed $1,333,900 of water improvements will probably have to be carried by the.City. To accomplish the proposed water and sewer improvements would necessitate the sale of approximately $2,000,000 in Revenue Bonds in 1976-77. The current interest rate which can be expected on a 30 year Revenue Bond is about 7.25%. A 20 year Revenue Bond is currently costing about 7.01/o. Table 14 shows the projected Revenue Bond Retirement Schedule when adding $2,000,000 at 7.25% interest to the existing schedule. In 1977-78 the retirement requirement would jump from approximately $74,644 to $286,227. While there is no specified limit to the amount of Revenue Bond indebtedness which the City can incurr, net revenue from the utility involved must meet or exceed 1.5 times the annual bond service requirement for the bonds to be competitively salable. Table 15 shown the projected water and sewer fund revenue, expenses, and debt service requirements. It includes a 1976-77 basic rate increase of $2.00 per customer per month, which should produce an additional $120,000 in service revenue. These projections were accomplished in the same manner as those for the General Fund, based on historical rates of increase. A detailed rate study would be necessary to arrive at a system of rates which would create adequate income to retire these proposed bonds, which is beyond the scope of this planning effort. However, by projecting revenues, expenses and debt service, as in Table 15, the additional amount of income needed can be approximated by multiplying the projected debt service by 1.5 and subtracting the projected net income. As shown in the table, in 1977-78, an additional $145,528 over the expected revenue will be needed to meet the 1.5 times requirement while this figure will decrease to about $89,000 in 1981-82. As with the General Obligation Bonds, several factors could affect a great change in the amount needed. Some of these are: 30 CAPITAL IMPROVEMENT PROGRAM 1. Lower interest rate on the $2,000,000 bond issue. 2. Greater or lesser increases in both revenue and expenses. Amount of water sold and maintenance are primary factors. 3. Addition of new customers. 4. Amounts of surplus monies carried over from previous years. CAPITAL The following is a brief summary of the proposed Capital Improvement IMPROVEMENT Program. PROGRAM SUMMARY General Obligation Bonds: City Other Total Cost Agency Cost Cost Street Improvements 215181368 $7,153,0 $9,671,412 Grade Separations -- N/C N/C Traffic Signals -- 48,000 48,000 Public Buildings 11146,520 253,680 11400,200: Storm Drainage 833,200 -- 833,200 Total General Obligation Improvements $4,498,088 $7,454,724 $11,952,812 Note: N/C no cost calculated The ad valorem tax rate could be decreased from $1 .62/$100 assessed valua- tion to approximately $1.55/$100 assessed valuation by adjusting the basis of property assessment as shown. Revenue Bonds: City Other Total Cost Agency Cost Cost Sewer Improvements $ 163,542 $490r627 $ 6541172 Water Improvements 1,333,900 -- 11333,900 Total Revenue Bond Improvements $1,497,442 $490,627 $1,988,072 A utility rate study will have to be accomplished so that rates can be adjusted to provide enough revenue to support the total Revenue Bond retirement requirement. An increase of $2 per customer per month in the basic service charge is recommended. 31 TABLE 9 RECOMMENDED GENERAL OBLIGATION IMPROVEMENTS 1975-1981 STREET TOTAL SOURCE OF FUNDS IMPROVEMENTS COST CITY OTHER AGENCY Nederland Avenue Sec. 1 &2 ur & Gutter only) $ 44, 200 -- $ 44,200 THD Intersection Improvements ($146,000/yr) 846,000 846,000 THD 27th Street Sec. 6-13 from Helena to F.M. 365 1,348,909 11348,909 J.C. 14th Street Sec. 2-3 from Canal to Detroit 474,245 $ 474,245 -- City S.H. 347 y Sec. 3 from Luling to Ave._ B 400, 000 -- 400, 000 THD 18th Street Sec. 2-3 from Spurlock Rd. to Canal 360,615 -- 360,615 J.C. 17th Street Sec. 5 from Helena to Elgin 133,555 133,555 -- City F.M. 365 Sec. 1-5 from U.S. 69 to Texas Ave. 2,053,500 -- 21053,500 THD Airport Access Sec. l from Canal to U.S. 69 Bridge 477,130 -- 477,130 J.C. 21st Street Sec. 4-6 from Helena to Ave. H 1,161,440 1,161,440 -- City Avenue H Sec. 1-2 and Wool from U.S. 69 to 27th and from S. H. 47 to Texas Ave. 11222,000 -- 1, 222, 000 J . C. S. 3rd Street Sec. 2 from Gage to Nederland Ave. 106,853 106,853 -- City Helena Avenue Sec. 1 from U.S. 69 to S. 31st 390f690 -- 390,690 J.C. Sec. 4 (at 27th St.)(ROW only) 10,000 -- 10,000 J.C. S. 3rd Street Sec, 3 from Nederland Ave. to Ave. D 142,275 142,275 -- City 32 TABLE 9 (Continued) ,.._. RECOMMENDED GENERAL OBLIGATION IMPROVEMENTS 1975-1981 STREET IMPROVEMENTS TOTAL SOURCE OF FUNDS COST CITY OTHER AGENCY Residential Street Assessment Program For miscellaneous residential street improvements $ 500,000 $ 500,000 -- City Total Street Improvements $91671,412 $2,518,368 $7,153,044 GRADE SEPARATIONS 15 FM 365 n SH 347 n/c -- n/c THD 16 Nederland Avenue @ RR n/c -- n/c THD Total Grade Separations n/c -- n/c - TRAFFIC SIGNALS 1. Nederland Ave. @ SH 347 $ 61000 -- $ 61000 THD 2. Nederland Ave. @ 27th St. 6,000 -- 61000 THD 3. Nederland Ave. n 21st St. 61000 -- 61000 THD 4. Nederland Ave. Cad 17th St. 61000 -- 61000 THD 5. Nederland Ave. @ 3rd St. 61000 -- 61000 THD 6. Helena Ave. (a) 27th St. 6,000 -- 61000 THD - 7. 27th St. (a) Ave. H 6,000 -- 6,000 THD 8. Helena Ave. (a) 17th St. 61000 -- 6,000 THD Total Traffic Signals $ 48,000 $ 48,000 PUBLIC BUILDINGS 1. Add Police Department on existing Site 11,700 sq. ft. @ $32 $ 374,400 $ 374,400 City 2. Community Center @ Doornbos'Park 9,100 sq . ft . @ $32 291, 200 247,520 43, 680 BOR 3. Swimming Pool @ Doornbos Park Olympic Size, Bothouse, Parking 420,000 210,000 210,000 BOR 4. Acquire Site for Branch Fire Station (one acre) 17,000 17,000 -- City 33 TABLE 9 (Continued) RECOMMENDED GENERAL OBLIGATION IMPROVEMENTS 1975-1981 PUBLIC TOTAL SOURCE OF FUNDS BUILDINGS = COST CITY OTHER AGENCY 5. Expand City Hall 9,300 sq. ft. @ $32 $ 297,600 $ 297,600 -- City Total Public Buildings $1,400,200 $1,146,520 $ 253,680 STORM DRAINAGE Improvement # 1 _ $ 55,800 $ 55,800 -- City - Improvement #2 31900 31900 -- City Improvement #3 19,900 19,000 -- City Improvement N 61000 6,000 -- City Improvement#5 31900 3,900 -- City Improvement#6 31900 31900 -- City Improvement 07 37,900 37,900 -- City Improvement #8 331500 33,500 -- City Improvement09 9,000 9,000 -- City Improvement # 10 91100 9,100 -- City Improvement#11 31900 31900 -- City Improvement#12 61000 6,000 -- City Improvement41361000 6,000 -- City Improvement#14 91900 9,900 -- City Improvement015 79,400 79,400 -- City Improvement#16 53,200 53,200 -- City Improvement#17 58,800 58,800 -- City Improvement # 18 16,000 16,000 -- City Improvement419 9,100 9,100 -- City Improvement#20 8,000 81000 -- City Lump Sum Appurtenances & Participation $ 400,000 $ 400,000 with DID #7 Total Storm Drainage $ 833,200 $ 833,200 TOTAL GENERAL OBLIGATION IMPROVEMENTS $11,952,812 $4,498,088 $7,454,724 THD Texas Highway Department J.C. Jefferson County BOR Bureau of Outdoor Recreation n/c No Cost Calculated Source: Consultants Bil TABLE 10 PROJECTED GENERAL FUND REVENUES AND EXPENSES 1975-198i 75-76 76-77 77-78 78-79 79-80 80-81 81-82 REVENUES = (Excluding Ad Valorem Tax) Delinquent Tax $ 18,581 $ 20,309 $ 22,197 $ 24,262 $ 26,518 $ 28,984 $ 31,680 Tax Interest & Penalty 71140 71282 71428 71577 71728 71883 81040 Tax Costs 510 520 530 541 552 563 575 Sales Tax 220,000 242,000 266,200 292,820 322,102 354,312 3891743 Occupational Tax 11,770 12,593 13,475 14,418 15,428 16,508 17,663 Street Rental 132,000 145,200 159,720 175,692 193,261 212,587 233,845 Inspection Fees 91270 91548 91834 10,129 10,433 10,746 11,068 Fines & Court Costs 26,750 28,622 30,626 32,769 35,063 37,518 40,144 Interest Income 32,400 34,992 37,791 40,814 44,079 47,606 51,414 TOTAL REVENUE $458,421 $501,066 $547,801 $599,022 $655,164 $716,707 $784,172 EXPENSES $808,719 $873,416 $943,289 $1,018,753 $1,100,253 $1,188,273 $1,283,335 SOURCE; Projected by Consultants based on historical rates 35 TABLE 11 PROJECTED GENERAL OBLIGATION BOND RETIREMENT SCHEDULE 1975-1981 EXISTING G.O. NEW BONDS NEW BONDS NEW BONDS BOND REQUIREMENTS PRINCIPLE INTEREST PRINCIPLE INTEREST PRINCIPLE INTEREST TOTAL REQUIREMENTS 1975-76 $ 264, 038 $ 264, 038 1976-77 262,067 $2,000,000 Issue 262,067 1977-78 263,687 $66,000 $143,000 472,687 1978-79 261,172 66,000 138,281 $1,000,000 Issue 465,453 1979-80 263,492 66,000 133,562 $33,000 $71,500 567,554 1980-81 265,393 66,000 128,843 33,000 69,140 $1,500,000 Issue 562,376 1981-82 262,228 66,000 124,124 33,000 66,781 $50,000 $107,250 7091633 Note; New Bond Retirement Schedule based on current anticipated interest rate of 7.15% for General Obligation Bonds for thirty years. SOURCE; Projected by Consultants 36 r TABLE 12 PROJECTED AD VALOREM TAX RATE REQUIREMENTS 1975-1981 BASIS OF TAX % of A.V. ASSESS- TAX LEVY OTHER TOTAL BOND SURPLUS YEAR ASSESSED VALUE INCREASE MENT RATE @94% REVENUE EXPENSES REQUIREMENTS (Add on)* 1975-76 $40,625,085 .037 30% 1.62 $ 618,638 $458,421 $ 808,719 $264,038 $ 41302 1976-77 54,153,238 .333 40% 1.55 789,012 501,066 873,416 262,067 158,897 1977-78 561319,367 .04 40% 1.55 820,573 547,801 943,289 472,687 111,295 1978-79 58,319,367 .04 40% 1.55 8531396 599,022 11018,753 465,453 79,507 197940 73,215,177 .25 50% 1.55 11066,745 655,164 11100,253 567,554 133,609 198041 76,143,784 .04 500/0 1.55 11094,414 716,707 11188,273 562,376 209,081 1981-82 79,189,535 .04 50% 1.55 11153,791 784,172 11283,335 709,633 154,076 * Add Surplus from previous year SOURCE: Projected by Consultants 37 TAX YEAR ASSESSED VALUE 1975-76 $40,625,085 1976-77 54,153,238 1977~78 56,319,367 1978~79 58,319,367 1979~80 73,215,177 1980-81 76,143,784 1981-82 79,189,535 TABLE 12 PROJECTED AD VALOREM TAX RATE REQUIREMENTS 1975-1981 BASIS OF of A.V. INCREASE ASSESS- MENT TAX RATE LEVY @94% OTHER REVENUE TOTAL EXPENSES BOND REQUIREMENTS SURPLUS (Add on)* .037 30% 1.62 $ 618,638 $458,421 $ 808,719 $264,038 $ 41302 .333 40% .1.55 789,012 501,066 8731416 262,067 158,897 .04 40'/o 1955 820,573 547,801 943,289 472,687 111,295 .04 40% 1.55 853,396 599,022 11018,753 465,453 79,507 .25 500/0 1.55 11066,745 655,164 11100,253 567,554 1331609 .04 50% 1.55 11094,414 716,707 11188,273 5621376 209,081 .04 50% 1.55 11153,791 784,172 11283,335 709,633 1541076 * Add Surplus from previous year SOURCE: Projected by Consultants TABLE 13 RECOMMENDED REVENUE BOND IMPROVEMENTS 1975-1981 TOTAL SOURCE OF FUNDS COST CITY OTHER AGENCY Sewerage System 1. Renovate Existing STP for Extra 1 MGD $500, 000 $125, 000 $375, 000 EPA 2. Lines in Fairbanks Avenue Area & Clayton Subdivision 154,170 38,542 115,627 EPA Total Sewer Improvements $654,172 $163,542 $490,627 Water System 1.. Expand Storage Site at Existing Plant (3 1/2 acres) $ 171500 $ 17,500 -- City 2. Add 2 mill. gal. Ground Storage at Existing Plant 220,000 220,000 -- City 3. Refine Existing Treatment Procedures 200,000 200,000 -- City 4, Elevated Storage Site Near Doornbos Park 10,000 10,000 -- City 5. Construct .5 mill. gal. Elevated Storage Tank near Doornbos Park 500,000 500,000 -- City 6. Main Line Down 22nd & 23rd Streets 216,000 216,000 -- City 7. Lines from Storage Site to Clayton. Subdivision & School Area 170,400 170,400 -- City Total Water Improvements $1, 333, 900 $1, 333, 900 -- TOTAL REVENUE BOND IMPROVEMENTS $1,988,072 $1,497,442 $490,627 SOURCE: Consultants TABLE 14 PROJECTED REVENUE BOND RETIREMENT SCHEDULE 1975-1981 CURRENT R.B. NEW BONDS REQUIREMENTS PRINCIPLE INTEREST TOTAL 1975-76 $73,894 $ 73, 894 1976-77 74,644$2,000,000 Issue 74,644 1977-78 74,227 $ 67,000 $145,000 286,227 1978-79 74,766 67,000 140,142 281,908 1979-80 74,225 67,000 135,285 276,510 - 1980-81 74,640 67,000 130,427 272,067 1981-82 71,962 67,000 125,570 264,532 Note: Based on 7.25 % current market interest rate SOURCE:- Projected by Consultants 39 REVENUE: Water & Sewer Services Water & Sewer Tapping Fees Miscellaneous Income Total Revenue Total Expenses Projected Net Revenue Projected Debt Service Net Revenue to Debt Service Additional Income Needed To Support Debt Service TABLE 15 PROJECTED WATER AND SEWER FUND REVENUE AND EXPENSES 1975-1981 75-76 *76-77 77-78 78-79 79-80 80-81 81-82 $ 540, 000 $ 703, 200 $ 759, 456 $ 820, 212 $ 885, 829 $ 956, 695 $1, 033, 230 12,960 13,996 15,116 16,325 17,631 19,042 20,565 14,280 14,565 14,.856 15,116 15,457 15,766 16,081 $ 567, 240 $ 731, 761 $ 789, 428 $ 851, 691 $ 918, 917 $ 991, 503 $1, 069, 876 $ 411, 852 $ 456, 332 $ 505, 616 $ 560, 223 $ 620, 727 $ 687, 765 $ 762,043 $ 155, 388 $ 275, 429 $ 283, 812 $ 291, 468 $ 298,190 $ 303, 738 $ 307,833 $ 73,894 $ 741644 $ 286, 227 $ 281, 908 $ 276, 510 $ 272, 067 $ 264, 532 2.10X 3.6X 1.5X 1.5X 1.5X 1.5X 1.5X $ 145, 528 $ 131, 394 $ 116, 575 $ 104, 362 $ 88,965 * Increase due to $2.00 Basic W&S Rate Increase which is anticipated to produce approximately 120,000 in additional revenue, SOURCE: Projected by Consultants f ' quiRnC. 46QLTJRRT-----� CAPITAL NEEDS \ PROPOSED CIRCULATION IMPROVEMENTS �7 ID NUMBER 8 M-MAJOR THOROUGHFARE C-COLLECTOR 0 S-SECONDARY Q PROPOSED TRAFFIC SIGNALS 0 PROPOSED GRADE SEPARATION I I u ' aar. A«EAa .t it i� a comprehensive urban plan NEDERLAND, TEXAS RORERT W CALDWELL AND ASSOCIATES Planning Consultants Bryan, Texas CHARLLS R HAILE ASSOCIATES. INC. Coneuln no Enameers Neaenana, Toxax l of i a zLsr sr�—'------- 5,�UR9 7�� CAPITAL NEEDS PROPOSED PUBLIC BUILDINGS ® ID NUMBER �� 2-3 CAPITAL NEEDS PROPOSED STORM DRAINAGE © IMPROVEMENT NUMBER = LINE AND SIZE 1 10 ° 2 11= 3 x 13� 4 14 2:5 "-' 6 le 7 WJU =18 e' 19 a 120 CAPITAL NEEDS PROPOSED WA SYSI � LINE AND SIZE m ID NUMBER NNE r If IT r IN comprehensive urban plan I � 4\� i NEDERLAND, TEXAS i�Now _, ,." 0 go TINY) FREE I'Mad BEEN \\�,!� E. ✓ /� wen....• PDBEPT CAAND ASSOCIATES o.,r..� ...... C Planning Onwilantstanta Bryan, Texas IF CHARLES R. HAILE ASSOCIATES, INC. Consulting Engineers Nederland, Toaee j,_, F\ \IN oil FN IN M 1177flEXIT- =, r - F -IIN T J l p CAPITAL NEEDS \ PROPOSED SEWERAGE SYSTEMrNI ® ID NUMBER LINE AND SIZE � MANHOLE E { b F� NO i I LTweltr ME s*ENO a WIN Ed mwuNT IN fall _r F11�- - ON q we OF------- n r b e' Ili APPROXIMATELY - 6 :REATMENT PLANT