OVERVIEW OF THE 2017 BOND ISSUE FOR NCTONIANS

On Saturday, May 6, 2017, City voters – to include our roughly 4,000+ registered voters here in NCTONA – will be asked to decide on an $850 million bond issue, the largest in San Antonio’s history.

NCTONA is providing this background paper with facts, numbers, and background data to help you decide the merits of the bond issue.  Our purpose is to provide NCTONIANS with enough information – not always available either from Express-News or Council District 9 – upon which to base an informed opinion prior to voting “yes” or “no” in May 2017. 

Each voter should study this bond issue carefully since bond money is, after all, only borrowed money and at some point must be repaid with interest from your tax revenues.  NCTONIANS should evaluate each project being promoted by City Council or City Staff by asking two questions:   (1) Does this project address a key infrastructural need?  Bond issue monies are to be invested in capital improvements that prepare San Antonio and its citizens for the future.   (2) Does this project benefit the community at large or only a select group, such as a favored Developer or special interest group? 

BACKGROUND

San Antonio is widely expected to receive another one million residents over the next fifteen years.  It is immediately apparent that the influx of thousands of new San Antonians will affect almost every aspect of the City’s current form.  At its present 1.7 million residents, San Antonio already has serious problems with growing traffic congestion, weak public transit systems, poor stormwater management, and City services that already are inadequate to our current needs.  Add one million new San Antonians and, if bond funds are not spent wisely to improve transportation, curb flooding, or beef up public services, our current problems will only become markedly worse.

Given these considerations, San Antonio stands very much at a crossroads in its history.  With wise use of public funds, our City can prepare for its new citizens.  But if bond funds are spent on a variety of “Cinderella Projects,” we taxpayers are still on the hook to repay the principal and interest on the bonds -- totaling eventually $1.1 billion by 2026 -- but will have little to show that makes life easier for the people who live here today, or for those who will call San Antonio home by 2030.

2017 BOND ISSUE IN PERSPECTIVE

The first step in understanding the 2017 bond issue is to understand its structure – how it differs radically from the bond issues of 2007 and 2012 and how, if approved, the $850 million would be spent. The numbers are important, but they tell only part of the story.  What is needed for real understanding of the bond issue is background and explanatory information that highlights “who benefits and how.”

The bond issue consists of three parts: “Urban Core” projects, “City-wide” projects, and Council District allocations.  (There are ten Council Districts of which we are District Number 9.)  The City-wide projects include the “Urban Core” projects which are located largely in Districts One and Two.

As stated, the proposed 2017 bond is the largest in San Antonio’s history at $850 million.  The 2012 “Castro” bond issue was $590 million and the “Hardberger” bond issue of 2007 was $550 million.  Apart from the fact that the 2017 bond is 30% larger than that of 2012, what makes it fundamentally different is the fact that City-wide projects would consume $382 million (or 45% of the total.) 

By contrast, the “Hardberger” bond allocated $89 million to City-wide projects (16% of the total) with $18.5 million devoted to the Urban Core.  Mayor Castro’s 2012 bond issue allocated $127 million for City-wide use (22% of the total) and bumped up the Urban Core number to $89.2 million.   Both bond issues were criticized at the time in the press and by citizens’ groups as being overly generous to the Urban Core, which is largely commercial and oriented toward San Antonio’s tourist and hospitality industry.  Whereas the two earlier bonds gave each Council District roughly 8% of the money apiece, the current bond allocates an average of 5% per district – a shortfall of about $20 million to each of the ten Council Districts.  The 2017 bond sets aside between $40-50 million for each Council District. 

THE URBAN CORE 

Mayor Taylor’s plan is to spend $231 million to enhance the Urban Core.  Taylor’s proposal is therefore more than double the combined amount for developing Downtown by Mayors Hardberger and Castro. Critics might argue (correctly) that the disproportionate share of bond funds to City Center substantially reduces amounts earmarked for each Council District and, in effect, compels taxpayers in outlying Council Districts to subsidize development of the Urban Core.  Proponents would counter (probably equally correctly) by saying that the Urban Core is the “face” that visitors see, and that increased tourism would help repay the bonds.  What is clear is that a quarter of a billion dollars for the Urban Core would set off a building boom in the City Center that will increase the value of commercial real estate there while pushing up rents for those who live or work there.

A listing of the Urban Core projects, as we have them, is shown immediately following this section.  This listing does not include $20 million for low-income housing or $8 million in “public art,” most of which will be used in the Urban Core despite being carried under City-wide projects.  These will be carried as “Neighborhood Improvements” and would be centered in Districts One and Two.  Justification for the overly heavy expenditures at City Center and the Urban Core is, of course, San Antonio’s Tri-centennial gala in 2018.  Unfortunately, even if voters approve the bond “as is” in May 2017, many of the proposed projects are unlikely to be completed until 2022 or later, well after the gala.

URBAN CORE BOND PROJECTS

 Broadway Corridor -- $43 Million – mainly street improvements

Hemisfair Park -- $26 Million

New Police Substation -- $20.5 Million – public facilities

San Pedro Creek Development -- $19.5 Million – commercial upgrading, streets

Commerce Street -- $20 Million

Santa Rosa Street -- $14 Million

Alamo-area Streets -- $13.7 Million

Main & Soledad Streets -- $12 Million

South Alamo Street -- $9 Million

Alamo -- $8.7 Million – this falls under “parks”

Brackenridge Park -- $7.8 Million

Botanical Garden -- $7 Million

San Saba Street -- $7 Million

Expanded Zoo Parking -- $12 Million

Cameron Street -- $4.5 Million

Central Library -- $3 Million – this falls under “public facilities”

Witte/Brackenridge Parking Garage -- $2 Million – “public facilities”

La Villita -- $1.3 Million

 

CITY-WIDE PROJECTS

In this section we will explore in greater detail some of the specific projects that have been identified.  A list of City-wide projects -- other than Urban Core, listed above -- follows this section.  These City-wide projects would consume an additional $151 million for a total of $382 million of the total bond amount.  Listed here is the $20 million for low-income housing and $8 million for public art – although most will be spent in the Urban Core.   City-wide projects are defined as those projects that, in theory, benefit all citizens of San Antonio regardless of their location.

As is generally known, over the last twenty years San Antonio has grown primarily to the north and to the northwest, basically along the U.S. 281 and I-10 corridors.  Very little growth has taken place to the south and southwest and only moderate growth has taken place in the eastern areas and City Center.  Based upon past trends it appears likely that the majority of the million new residents will locate in Council Districts 6, 8, 9, and 10.  What is curious is that Council Districts Six, Nine, and Ten will be given significantly smaller amounts of bond money than the other districts. 

The expected influx of new residents is what, in part, fuels the current controversy over annexation of unincorporated areas along U.S. 281 and I-10.  The argument advanced by Mayor Taylor and CM Krier favoring annexation is that the new residents will bring in greater tax revenue.  What is generally not emphasized is that a larger area and more citizens will require expanded City services, thus intensifying demands placed on the City’s already over-extended police, fire, public works, and other agencies.  It is a matter of debate whether the new tax revenues from the annexed areas will exceed the increased costs of providing services.  Many County residents oppose annexation fearing a tax increase.  As can be seen, the bond issue does not directly address the issue of the projected population growth, with the exception of low income housing and some individual street improvements.


GENERAL CITY-WIDE PROJECTS (less Urban Core)


Council Districts 8, 9, 10

Capital Little League Baseball Fields -- $2,000,000   (located in CD-10)

Hardberger Park land-bridge -- $15,000,000      (located between CD-8 and CD-9; half roads, half parks)

Wurzbach Corridor Improvements (Hardberger Park) -- $2,000,000

Classen- Steubing Ranch Park Development -- $5,510,000    (park will be in CD-10)

Classen- Steubing Ranch Park Property Acquisition -- $4,000,000

[All these issues will be carried under “parks” on the ballot.]

 

All Other Council Districts

Low income housing -- $20,000,000 – falls under “Neighborhood improvements”

Public art -- $8,000,000 – “Neighborhood improvements”

Port San Antonio Comprehensive Drainage Improvements -- $24,000,000 – falls under “flooding”

Vance Jackson Low Water Crossing Improvements -- $6,357,000

UTSA Athletics Complex Facilities -- $10,000,000 – carried under “parks”

UIW Sports in Brooks City Base -- $2,800,000

Brooks City Base South New Braunfels -- $10,400,000 – commercial development, streets

Brooks City Base Research Plaza -- $10,000,000 – commercial development, streets        

Brooks City Base-Inner Circle Louis Bauer to Research Streets -- $3,000,000

World Heritage/ Cultural Arts Center Facilities -- $5,000,000 – falls under “public facilities”

World Heritage Park & Land Acquisition -- $2,500,000

Lone Star Area Streets (World Heritage) -- $5,000,000 – falls under “streets”

World Heritage Trail Signage -- $5,000,000 – falls under “parks”

Mission Road San Antonio River -- $2,000,000

Martin Luther King Park -- $3,100,000

Pearsall Park -- $3,000,000

Woodlawn Lake Park -- $3,000,000

Roosevelt Avenue HWY 90 to Loop 410 -- $8,000,000 – carried under “streets”

Medical Center Phase X Ewing Halsell at Louis Pasteur --$7,170,000 – falls under “public facilities”

Medical Center Right Turn Lane Louis Pasteur and Babcock Streets -- $1,600,000

South Presa S.E. Military to Southcross -- $5,000,000 – “streets”

Southcross IH 37 to IH 35 -- $5,000,000 – “streets”

O.P. Schnabel Park Entrance -- $1,100,000

Apart from plans to create HOV lanes on major roads such as U.S. 281, there is nothing of a broad, fundamental nature proposed to ease traffic congestion in San Antonio’s northern Districts.   What is striking about the 2017 bond issue is that, with only two exceptions, no provision has been made on a City-wide basis either for major control of flooding or fundamental improvement of transportation.  The two exceptions are:  Port San Antonio ($24 million) and Brooks City Base ($23 million total) both in the south.  The justification for declaring these to be “City-wide projects” is that persons from the entire metropolitan area work there.

HOW WERE BOND PROJECTS PICKED?

The decision-making that shaped the bond issue was done by three City agencies.  The first is the Council-appointed Planning Commission, consisting of nine members, five of whom (a voting majority) were nominated by the Real Estate Council of San Antonio (RECSA.)  Second, and overseeing the lion’s share of projects, is the City’s Transportation and Capital Improvements Department (TCI) under its director Mike Frisbie.  Third, and to a much lesser degree, the City’s Planning and Community Development Department (PCD), formerly headed by Mr. John Dugan and presently directed by Ms. Bridgett White, solicited citizen input through a series of meetings called “SA Tomorrow.”  Although visionary, the “SA Tomorrow” findings were heavily redacted by the RECSA-dominated Planning Commission members to favor Development interests, especially as they relate to maintaining impervious cover (asphalt and concrete) and continuing environmentally unsound construction techniques which promote flooding and light pollution.

The Development community’s hand can be seen in a number of Urban Core projects.  For example, El Centro Partnerships, a Downtown special interest group headed by former Deputy City Manager Pat DiGiovanni, was the driving force behind the majority of Urban Core projects such as the Broadway Corridor ($43 million) for various improvements “from Houston to Hildebrand,” San Pedro Creek ($36 million) near I-35 Downtown, and the Zona Cultural ($43 million) for unspecified improvements.  While City Staff, notably TCI, will carry out some projects, it is a foregone conclusion that possibly as much as $500 million in contracts will be awarded to benefit private Developers for Urban Core, City-wide, and some Council District specific allocations. 

It is unfortunate that citizen input was anemic, and even those public views contained in the forward-looking “SA Tomorrow” comprehensive plan were largely eviscerated by the Planning Commission.  As mentioned above, the City’s Planning and Community Development Department (PCD) commissioned a mixed group of City Staff and private sector experts to spearhead “SA Tomorrow.”  The “SA Tomorrow” group had two purposes:  (1) seek public input and recommendations for bond issue projects, and (2) hold public seminars to inform citizens about new construction techniques and technologies applicable to urban areas.   “SA Tomorrow” seminars were held in various parts of the metropolitan area from November 2015 to March 2016, and were quite informative.

Likewise, each Council District was asked to appoint members to five committees to study District needs for (1) streets and sidewalks; (2) flooding and drainage control; (3) parks and recreation; (4) public facilities; and (5) “Neighborhood improvements.”  This last category includes construction of low income housing and public art.  Construction of police and fire stations, libraries, and other public buildings such as senior centers fall under “public facilities.”  Each committee was to visit all parts of a Council District, talk with the people, listen and take notes, and transform public wishes and needs into Council District-specific bond issue projects.

In theory, each Council District staff would collect grass-roots studies of their District’s needs for new public facilities, flood control projects, street improvements, etc., and feed these into the bond issue process.  In practice, many if not most projects (eg. District 9) had already been pre-determined by CM Krier and TCI Director Mike Frisbie.  This being the case, the “SA Tomorrow” public input program and the work of the Council District committees played relatively minor roles.  For example, the D-9 Senior Center (which, if approved, also would contain Mr. Krier’s new offices) was foreordained as was the purchase of part of the old Steubing Ranch as a City park.  These decisions essentially trumped the District Committees and “SA Tomorrow.”

HOW IS THE BOND TO BE FINANCED?

Express-News columnist David Hendricks (Sunday, 2 October 2016) wrote that, due to San Antonio’s excellent “AAA” credit rating, it could obtain bond money for as little as 2.79% per annum.  On $850 million, at that rate the interest would amount to about $24 million per year.  Over ten years, therefore, the bond could cost taxpayers $240 million in interest payments in addition to repayment of principal.  The total cost of Mayor Taylor’s bond by the year 2026 therefore would be in the neighborhood of $1.1 billion.  If financed over twenty years, the cost could rise to $1.35 billion.  Municipal bonds would be issued through Wall Street brokerage houses.  They would be paid off through City taxation.

Cash raised by bond sales is not the only reward for those undertaking various projects.  City Council routinely offers “tax incentives” or “adjustments to assessed value” (ie. artificially low assessments) to Developers wishing to build in San Antonio.  These incentives boost the profitability of a given development, but the hidden cost to the taxpayer is paying the difference between the smaller amount of taxes collected versus what might have been collected.  Hence, “incentives” are gifts to the Developer by the ordinary homeowner who must make up the difference through taxes.  In effect, the incentives are a hidden part of the cost of the overall bond issue process.

WHAT IF VOTERS REJECT THE BOND? 

The chance of the bond issue as a whole, or any of its five parts being defeated is slim.  In the event voters defeat the 2017 bond or parts of it, City Council and City Staff will remove the projects voters find most objectionable – possibly slimming down the size of the bond – or shifting projects to certain Council Districts.  The revised bond then would be resubmitted to the voters either in late 2017 or early 2018.  Of course, changes on City Council or the Council-appointed Planning Commission could alter the shape of a new bond. 

Voters will not be permitted to vote “yes” or “no” on specific items such as the Brooks City Base work, the Hardberger Park “land bridge,” the proposed District 9 senior center, or any other item.  Rather, voters will accept or reject “packages” of proposals grouped under each of the five headings noted: streets, flooding, parks, public structures, and “Neighborhood improvements.”  This packaging forces the voter to accept some projects that he or she opposes in order to get other projects that the voter supports.   In effect, City Staff has “stacked the deck” to get some questionable projects approved that would otherwise be flatly rejected by the voters.

WILL COUNCIL ALLOCATIONS BE DISTRIBUTED EQUALLY?

Bond issue funds will not be distributed equally, but allotted on an “as needed” scale.  The “big winner” is CM Roberto Trevino (CD-1) who will net something like a total of $230 million in combined City-wide and District-specific funding.  He is followed by CD-3 (CW Viagran,) CD-2 (CM Warrick,) and CD-8 (CM Nirenberg) at roughly $100 million each (these sums also combine City-wide and District specific funds.)  As noted earlier, bond funding is heavily concentrated in Districts One and Two. 

The remaining districts range downward, generally at or below $50 million apiece.  CD-9 has been allocated $44.5 million, far short of what CM Krier had desired, but still more than Council Districts 6, 7, and 10 will receive. 

COUNCIL DISTRICT 9’s BOND ALLOCATION

As noted above, District 9’s share of bond issue money would be just above $44 million.  As mentioned, our District 9 allocation of funds does not include the Steubing Ranch purchase nor construction of the Hardberger Park “land-bridge,” both of which would be funded from “City-wide project” monies. 

High on Mr. Krier’s agenda is passage of the “land-bridge” at Phil Hardberger Park.  According to Mr. Doug McMurray of Associated General Contractors who strongly favors its construction, the “land-bridge” at a width of 150 feet would span the Wurzbach Parkway and connect the northern and southern parts of Hardberger Park.  Covered with grass and trees, the “land-bridge” would permit the passage of deer and other animals from one side of the park to the other.  A pedestrian walkway also is envisioned.   The cost of the bridge is given as roughly $15 million, though occasional press reports have estimated the cost as high as $25 million.

District 9’s $44 million allocation would be divided three ways: construction of a senior center, streets and sidewalks, and four very limited flood control projects.  There will be no funding for existing CD-9 parks nor for “Neighborhood improvement.”

The centerpiece of CM Krier’s 2017 District 9 bond issue effort would be construction of a “Senior and Constituent Services Center” at $13,212,000 (roughly one third of his total allocation.)  There are no plans for new fire or police stations or libraries in District 9, even should the District be enlarged northward as a result of the proposed annexation along the U.S. 281 corridor.  It is likely that the senior center would be built somewhere in the greater Stone Oak area.

District 9 would spend $21,346,000 on six road and sidewalk projects.  These include $6.3 million to connect Huebner with Hardy Oak which had been left uncompleted by the Developer; $5.1 million for intersection, traffic signal and sidewalk improvements, to include left turn lanes at Savannah Pass and Partridge Trail, and a dedicated right turn lane from Bitters to northbound Blanco Road; $2.7 million for corridor and intersection improvements on Evans Road from U.S. 281 to Caliza Drive, including median, acceleration/deceleration lanes and traffic signal improvements; $4.0 million to be spent on sidewalk improvements and pedestrian crosswalks to be installed at various locations in the District at CM Krier’s and TCI’s discretion; and finally, $1.6 million Mr. Krier believes is needed for improvements at the Jones Maltsberger - Burning Trail Intersection.  This project would reconfigure the intersection to provide left turn lanes on Jones Maltsberger with signal improvement as needed.  [NB. We are unclear why $1.6 million is needed for “improvement” at the Jones Maltsberger -Burning Trail intersection.  Although this intersection is part of NCTONA, we were not consulted on the need for this “improvement.”  It is thus something of a “surprise.”  NCTONIANS should visit this intersection and draw their own conclusions.]

 

There are four fairly minor Drainage and Flooding projects planned at a total of $9,600,000:  $4.3 million will be spent on Paso Del Norte (Shady Oaks Neighborhood) to build viaducts over creek beds that the developer had simply paved over when building the neighborhood, thus creating flooding;  $2.8 million to repave an alley between Auldine and Burr Oak that had been destroyed by stormwater from a Gold’s Gym commercial parking lot; $1.4 million for drainage improvements in the Blossom Park Neighborhood caused by stormwater off parking lots owned by Time Warner Corporation; and $1.1 million to remove excess sedimentation at Panther Springs Creek that resulted in unhealthy “ponding.”  The Shady Oaks and Burr Oak projects were prearranged by CM Krier with TCI’s Mike Frisbie well before the 2017 bond process began.  While these modest improvements are appreciated, they are a fraction of what is needed.  [NB.  Since Mr. Krier and City Staff decline to address the impervious cover issue of the large commercial parking lots which caused the flooding at Blossom Park Neighborhood and Burr Oak, the $4.2 million allocated to these two projects will likely soon be wasted due to continued stormwater erosion from those same large, impervious – and sharply sloping -- parking lots.]

No provision has been made for even modest improvements at the few existing parks in our District.  As noted, the only “City-wide” allocations for parks in our general area are for purchase of Steubing Ranch and $15 million for building the Hardberger “land-bridge.”  Nothing will come from CD-9’s allocation.

CONTACT

We encourage NCTONIANS who would like to offer their opinions on how bond issue monies should or should not be spent to use Express-News journalist Vianna Davila’s special website:  https://www.google.com/amp/www.expressnews.com/news/local/amp/How-should-the-city-spend-850-million-in-bond-9524308.php?client=safari.

NCTONIANS also are encouraged to ask questions or express their views or concerns to CM Krier, either directly or through his staff.  He can be reached at Joe.Krier@sanantonio.gov, by phone at (210) 207-0954, or by mail at 16500 San Pedro Avenue, Suite 290; SATX 78232.  His principal aide is Frances Collins who can be reached at Frances.Collins@sanantonio.gov or at the same phone and mailing address.

A further source of information may be found at www.sanantonio.gov; click on “Bond issue.”