"Texas faces the biggest bond questions by far, with about $10 billion of state issues alone..."
by Jason Philyaw
The Bond Buyer
Voters nationwide on Tuesday will decide the fate of more than $29 billion of bond referendums.
Texas faces the biggest bond questions by far, with about $10 billion of state issues alone, and another nearly $10 billion of local referendums, including major debt requests from several fast-growing school districts.
New Jersey voters will see propositions for $200 million of general obligation debt to acquire and develop land for recreation and conservation, and $450 million for stem-cell research.
Denver will present voters with eight bond questions amounting to nearly $550 million, while Maine's electorate will decide on $135 million of state-level bonds after lawmakers there passed their largest bond package ever earlier this year.
Last November, a record $78.4 billion of debt was voted on nationwide and nearly 89% was approved, according to figures from Ipreo and The Bond Buyer. That month, voters in November saw $43 billion in state propositions in California alone.
While the amount is smaller than 2006, this year's total is a record for an off-year election. Historically, odd-numbered year elections have fewer bond questions because they are non-presidential and non-congressional elections.
Next week, Lone Star state voters will consider $5 billion of GOs for highway improvements and $1 billion of GO debt for three prisons, maintenance to courthouses and historical sites, and a new facility for the Texas Youth Commission. They also will asked to vote on $3 billion of GO bonds to establish a Cancer Prevention and Research Institute of Texas, $500 million for student loan programs, and $250 million for water and wastewater infrastructure upgrades in various "economically distressed" parts of the state.
Harris County, including Houston,has gained nearly 500,000 new residents this decade. Voters there face six different propositions totaling $880 million, including $630 million for parks, roads, a jail, and a family courthouse, and $250 million for the Port of Houston.
The Houston Independent School District seeks passage of a $805 million bond package, while suburban Cypress-Fairbanks Independent School District wants approval for $806 million.
HISD is the largest in Texas with about 210,000 students. The district has built 41 schools and renovated more than 100 schools with proceeds from two prior authorizations. The final installment of its building plan calls for construction of 24 more schools and renovations to 134 others.
Cy-Fair ISD is third largest and one of the fastest-growing districts in the state. The student population of the suburban system just northwest of downtown Houston has swollen to nearly 97,000 from 55,800 a decade ago. Officials project the enrollment to reach 112,500 in 2010.
Cy-Fair wants to build 14 new schools, acquire property for 10 more, and purchase 275 buses among other projects.
Denverhas almost $550 million on the ballot in eight propositions, and a mill levy question that would establish a new dedicated property tax increase of 2.5 mills to create "a new dedicated funding stream for the repair, rehabilitation, and replacement of existing city infrastructure."
The largest proposition - nearly $150 million - is for upgrades to streets, transportation, and public works systems. Other bond questions include $70 million to expand a symphony center and build a storage facility for the museum of nature and science, and $93.4 million for improvements to parks and recreation centers.
New Jersey's $450 million of bonds for stem-cell research would raise the state's stem cell bonding capacity to $720 million. Proceeds from the debt would fund grants to higher educational institutions and biomedical laboratories across the state through the New Jersey Commission on Science and Technology.
Bonding for stem cell research remains contentious.
Earlier this month, California held the first ever stem cell bond sale, roughly three years after voters in the state authorized up to $3 billion of GOs to fund the research. Lawsuits by anti-abortion activists and a taxpayers group stalled the issuance, but the opposition was defeated in trial court and on appeal. The state Supreme Court declined to hear the case.
Opposition in New Jersey was dealt a blow late in September when a court upheld the decision to put the $450 million question on the ballot. Appeals are likely, but with election on Tuesday, it appears voters will get to decide the divisive issue.
Some of the fastest-growing communities in the country and their school districts continue to tap the debt market.
In rapidly growing area of Charlotte and Mecklenberg County, N.C., voters are considering three propositions: $516 million for schools, $30 million for Piedmont Community College, and $35.6 million for parks and a library.
In 2005, $427 million for schools was rejected, as was $66 million for land acquisition to expand county parks.
Sarah Heasley, deputy finance director, said the county already has a bond sale scheduled for January that would be expanded to include some of the new authorization, if approved.
Officials estimate they're adding more than 4,000 students a year in the public schools of North Carolina's largest county, which runs the school system and carries underlying triple-A ratings from Fitch Ratings, Standard & Poor's, and Moody's Investors Service.
Bond proceeds would fund 12 new schools, renovation or expansion of 14 others, and land acquisition for future campuses. The student population of nearly 138,000 is projected to climb to nearly 200,000 in the next 10 years.
Mecklenberg also hopes to replace a 40-year-old building and upgrade a citizens center on the main campus of the community college, which is experiencing about 4% annual growth and serves roughly 70,000 students at six campuses.
The third tranche of debt would be used to establish a nature preserve and expand greenways across the state's most densely populated county.
Charlotte is now the 20th largest city in the country with a population of about 630,500. The county's population of 850,000 is expected to top one million by 2010.
Just north of Austin, voters in one of the nation's fastest-growing school districts are heading to the polls to consider a $558 million bond package seven months sooner than expected. The Leander Independent School District had been using a three-year election cycle, which would have meant a May 2008 vote, but officials moved it up to Nov. 6 as the central Texas district needs to build 22 new campuses to keep pace with double-digit enrollment growth.
A recent study commissioned by the district projects enrollment at nearly 60,000 for the 2017 school year. The district began the current school year with an enrollment of more than 25,000.
The Fort Worth Independent School District has $593.6 million on the ballot for six new schools, improvements to existing facilities, and much-needed technology upgrades across the district.
Earlier this year, officials hired an educational consultant, Magellan K12, to help address the needs of the district, which has at least 75 buildings that are more than 50 years old and more than 900 classrooms in portable buildings.
"This is very different from how we've approached facilities planning in the past," superintendent Melody Johnson said. "We've thought district-wide and used a model more frequently seen in the business community rather than in the public sector."
The district, which serves more than 80,000 students in 144 schools, carries underlying ratings of Aa2 from Moody's and AA from Standard & Poor's.
In Salt Lake City, voters face a bond package of $192 million to replace an aging building with an emergency operations center, construct a police and fire precinct on the east side of town, and purchase new fire trucks, among other projects.
"The proposed structures will replace buildings that no longer meet the minimum requirements of the city," according to the city's police and fire departments.
Police officer Jacob Hatch, who works on the Salt Lake department's "bond squad," said the current downtown facility is nearly 50 years old and falling apart.
Hatch said the department has been trying for years to get the bond package before voters, but was consistently snubbed by City Council "as something else always seemed to take precedent."
"Our proposal from last year was for $170 million, now it's $192 million, and each time we've had to come back it's been more expensive," Hatch said. "We moved into the downtown facility in 1988 and its was only supposed to be for a few years and here we are 20 years later and we're still there."
He said the department especially needs to build a climate-controlled facility to store evidence in a centralized place, as it's now scattered across the city in a few different locations.
Just south of the state capital, voters in the suburban Jordan School District, which is the largest in Utah and bisected by the Jordan River, face a referendum to split the district. Residents on the east side want to secede but don't want residents of the west side - which accounts for just 18% of the taxable value and roughly a quarter of the 80,000 student population - to have a vote.
Earlier this month, opponents of the split lost a bid to halt the vote when the U.S. District Court ruled in favor of keeping the question on the ballot.
In September ahead of a $196 million sale of GO bonds, Fitch placed the school district on negative watch due to uncertainty caused by the proposition.
The agency also affirmed the district's triple-A underlying rating, citing gains in assessed valuation with projected growth, manageable debt with rapid amortization, strong finances with high reserves, and prudent financial management.
Moody's rates the credit at Aa1.
Another statewide referendum on the ballot in Utah seeks to allow tax-financed vouchers for students to attend private schools.
In Minnesota, voters in about 25 school districts are heading to the polls to decide on bond packages ranging from $133 million by the Elk River Independent School District to $1.8 million by the Alder-Conger Independent School District.
In Maine, voters face four state propositions: $50 million for technology research and development, $43.5 million for upgrades to colleges and universities, $35.5 million for land conservation, and $5 million for loans and grants to stimulate economic development.
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