City of Longview 2018 November Bond Election
Frequently Asked Questions & Answers: KNOW THE NUMBERS!
1. What will be the cost to the typical property owner?
The potential property tax increase is up to eight (.08) cents per $100 of valuation on my home. The average Longview single family home is valued at $128,000. For a family that owns a home in Gregg County that is valued at $128,000.00 by the Gregg County Appraisal District, then my potential tax increase is 1,280 x .08 = $102.40 per year. My property tax bill could increase up to $102.40 per year, or $8.53 per month.
2. When the bonds are approved, will my property taxes go up immediately?
No. The estimate of an eight cent (.08) increase is an estimate for the highest possible increase that may occur. It would build up to that amount over a period of five years and go back down after approximately five years as the City of Longview continues to retire debt.
3. Are we retiring any debt currently?
Yes. The City of Longview retires approximately 4-5 million dollars in debt each year and this has been factored in to the estimates regarding property tax increases.
4. What about homeowners over age 65?
Homeowners over age 65 can have their property taxes frozen on their residence when they apply to the Gregg County Tax Appraisal District to do so. For homeowners over 65 that have frozen their property taxes, the estimated tax increase will not result in an increase to them for their residence.
5. How much tax debt does the City of Longview currently have?
The City of Longview currently has $64,210,000 outstanding in debt and the final payment will be June 2033.
6. Will the new bonds be issued all at once?
No. We anticipate issuing the debt in three installments approximately two years apart. We are not able to undergo construction on all projects immediately, so receiving funds in three installments allows us to phase in the estimated eight cent (.08) tax increase in over the next five years.
7. When will the new bonds be paid off?
The bonds will be issued with a 20-year amortization schedule, so the final bond issue will be retired in June 2043.
8. Why can’t the City of Longview pay cash for these projects out of the annual operating budget?
The City of Longview annual operating budget is $69,548,752 for 2018/19 and covers all police, fire and emergency services as well as general operating costs for the City such as road maintenance and other essentials. There are not sufficient funds in the annual City budget to save up the necessary funds for these projects without a property tax increase larger than that estimated for the bonds. Similar to how individuals often take out a mortgage to buy a home, the City must take out a mortgage (issue bonds) to finance capital improvements to avoid imposing higher ongoing taxes on residents. The City also maintains a reserve fund with a minimum of 10% of the operating budget and currently the City of Longview has $12,196,218 in reserves.
9. How does Longview’s debt burden compare to other cities our size, or even nationally?
Comparing Longview to 21 other Texas cities with populations ranging from 52,000 to 122,000, Longview (with a population of 82,000) ranks 4th lowest in debt per capita and 5th lowest in debt ratio. Longview is also the 5th lowest in the amount of debt outstanding.
Debt is measured two ways: outstanding debt per capita and debt as a percentage of our tax base, called debt ratio. The City’s per capita debt is $778 and the debt ratio is 1.1%.
10. What is the City’s bond credit rating?
The City has a “AA” rating with a “stable outlook,” which is an excellent rating for our size community. The highest possible rating is “AAA”.
11. How does the City come up with the costs for the projects included on the bond?
The cost estimates for all bond projects were prepared by City of Longview staff, which includes professional architects and engineers. As with any City project, the estimates must be designed to be commercial grade construction and any equipment withstand significant public use, including weather and potential vandalism that will be reliable construction and equipment for many years.
12. Why does the Police Department building cost so much?
The current cost estimate for the Longview Police Department is 33.4 million. The current LPD building was built in 1977 and was designed to house only 82 employees with 31,000 sq. ft. In 2018, LPD employs 234 individuals and must rent space to accommodate its employees. Additionally, the technology necessary for LPD today is drastically different than what was available when the building was built in 1977. A police facility study informed the City of Longview that building a brand new facility would be less costly than attempting to renovate the current building as a result of those technology needs. This cost estimate includes the cost of land acquisition and the construction and complete outfitting of a state-of-the-art 66,412 sq. ft. Police Station with necessary technology for first responders and dispatch to provide public safety.
13. Will the bonds help the City of Longview save any money?
Yes. As a result of the bond projects, the City of Longview would be able to stop renting facilities for three different offices and house them in City owned buildings. This would result in a cost savings of more than $150,000 annually to the City of Longview.
14. I hear that Lear Park helps bring sales tax revenue into the City of Longview. Will the bond help this?
Yes. The bond proposes improvements and increased facilities at Lear Park. Lear Park is a sports facility that houses tournaments that draw teams and families to our community that spend funds locally that increases our sales tax revenue, as well as hotel occupancy taxes. In 2017, we hosted 1514 teams here in Longview with an estimated 8,465 hotel room nigh stays from out of area team participants and $5.3 million in direct economic impact to our community.