Behind the Scenes
A lot goes on after voters approve a bond election, such as the $650 million bond election for the Denton County Transportation Road Improvement Program (TRIP 2022) held last year on Nov 8.
Overwhelmingly approved by voters by more than a 3 to 1 margin, the $650 million in bonds will fund more than 100 projects in 32-plus municipalities including state highways, arterial roads within cities, safety improvements, and county roads and bridges.
The funds are not made available all at once for two main reasons – there is no way Denton County could manage $650 million worth of road projects at once. Limited material supplies have made it more difficult to get the necessary construction items, such as concrete, due to market demand.
The strategy is to issue bonds over a 7- to 10-year period with one or potentially two bond issuances each year. Several factors can impact the timing of issuing bonds such as the market conditions or if ongoing road projects are delayed.
When it is time to issue a portion of the bonds, officials look to see what existing debt can be refinanced at the same time to reduce bond issuance costs for the benefit of our taxpayers. The county works with legal, and auditing offices as well as with companies that specialize in the issuance of bonds. Following interviews with Moody’s and Standard & Poor’s, the county receives a bond rating. Denton County is one of only eight counties in the State of Texas to maintain an AAA bond rating, which is the highest score.
Once all of the paperwork and multiple reviews by different parts of the government are finished, then underwriters put the bonds on the open market. The 25-year bonds are then bid on by companies. Once on the market, the closing date is a few weeks later. Once additional reviews and paperwork are completed, the county receives the funds.
The funds are then ready for the first projects slated as part of the Denton County TRIP 2022 program. Expenditures and other related paperwork on each project are also accounted for by the Auditor’s Office, which keeps track of the projects in an annual report.
This week, we started the process of selling $110 million in bonds as our first tranche from the $650 million TRIP 2022 package.
More details will be forthcoming soon on upcoming projects that will be part of the first issuance of bonds. Please stay tuned.
