Cost Savings Won’t Lower The City’s Debt – See A Debt Comparison Courtesy Of The Texas Comptroller

Cost Savings and Future Costs

The Municipal Facilities cost has reached $21 million.

Council sang the praises of city staff at the January 7, 2019 council meeting for some cost savings – the cost for change orders for the Municipal Facilities was reduced to $302,516. 

So far the amount for the new structures, estimated in 2017 to run about $19 million, is now close to $21 million, paid almost entirely from bond funds.  Still to be completed is the demolition of the old city hall, the construction of a new Civic Center, parking lots,  landscaping, and miscellaneous costs. 

Public Works director Michael Leech and City Engineer James Andrews also explained that the projected cost for 47,000 feet of new water lines actually covered costs for the installation of 70,000 feet of lines. Whether that’s a cost savings or simply over-estimation of the original cost is debatable.  However Mr. Andrews stated there’s still 75,000 feet of old water lines to be replaced, at an approximate cost of $12.5 million, and the City is out of bond funds for this project.

Texas Comptroller’s Debt At A Glance

How does our Debt Compare?  Find the full report here.

With the discussion of another bond issue for infrastructure improvements it may be time to consider the following:

Bellaire’s debt is greater than at any point in the city’s history, and much greater per capita than similar sized cities. The chart at the right lists debt of similar sized cites as of August 31, 2017. 

That number has only increased in the past two years.  Per the 2019 City Budget, by the end of FY2019 Bellaire’s principal will be $129.8 million. Well over $180 million including interest.

From the State of the City presentation on February 4, 2019. Click to enlarge chart.

The problems with Bellaire’s debt began 10 or 15 years ago when City Councils regularly lowered the tax rate as our housing stock became more valuable.  While tax cuts are always welcomed those Councils continued to spend freely and then promote bond issues when funds ran short.  Now the tax rate has been increased to allow the City to maintain the current level of services.

Though drainage was a priority long before Tropical Storm Allison flooded more than 1400 Bellaire properties in 2001 and Harvey flooded 2000 homes in 2017,  a large portion of bond funds has been expended on discretionary projects.

  • Deferred maintenance on the police/courts building and city hall/civic center led to a decision to build all new facilities, with the cost, originally estimated around $19 million, now at $21 million and counting.
  • The Police/Courts building, built in 1974, was in poor shape due mainly to settlement and  waterproofing problems in the lower level.  Construction of a new building all on one level seemed warranted.  However…
  • The City Hall was constructed in the 1970s and the Civic Center was added in 1981.  No one disputed that there were problems with the structure, due mainly to foundation settlement which had been addressed by injecting urethane under the slab.  The question was whether the life of the building could have been extended another 10 or 15 years, rather than borrowing millions more to replace it now.
  • Did you know that the Public Works building was demolished in 2016, after it once again suffered flood damage, this time from the Memorial Day flood?  A new building will be a future project.  Sadly, even with the history of flooding we lost numerous Public Works vehicles left in that area during Hurricane Harvey.
  • Our aging wastewater plant could have been upgraded over time, but the city council voted in 2016 to spend $8 million on it and another $4.5 million on new water meters.  All part of a $12.8 million contract to Siemens, financed over 20 years from the 2016 Bonds for Better Bellaire.  We are supposed to be revenue neutral by 2026.  For now the final cost for the Siemens contract, including interest and additional annual costs, will be at least $20 million or more.
  • Numerous studies and payments to consultants.
  • Over a quarter of a million dollars for the Holly Street trail, which looks no better than before and now needs frequent repairs to the irrigation lines and constant maintenance.

Lost revenue from the tax cuts could have funded pay-as-we go capital improvements, or accrued in a Capital Reserve fund for future cash expenditures.  Instead almost a quarter of the annual budget will be paid out for debt service in 2019 and more debt is suggested.

Somehow West University, slightly smaller in size, has reduced its debt to $42.3 million and barring another bond issue will be debt free in 10 years.

The Texas Comptroller Transparency information:

Some questions about the waterline replacement and other Public Works projects: why are 3 or 4 contracts required? 

We usually have two (2) no-bid contracts awarded by the city manager to engineering firms for Design and Construction Administration and another for Third Party Review and Inspection (or sometimes Construction Management), then finally a request for competitive bids for the Construction contract.  Occasionally there may be four (4) contracts issued for one project.

This process has been in effect for the past several years and is used for almost every public works project, no matter the size or scope of the project.

So a project to replace sixteen  (16) blocks of waterlines required a$314K contract for Design and Construction Administration, a $20K Third Party Review contract, and the actual construction contract for $4.6 million.

Another project for six (6) blocks of street, drainage, and sidewalk construction required a Design and Construction Administration contract for $46K, two Third Party Review contracts totaling $400K, and the actual construction contract for $3.5 million.  Is this standard procedure for other cities similar in size to Bellaire?

As of 3/6/2019 the extra 3rd Party contracts on the current list of projects added $1.5 million to the cost.  It would be helpful to know the cost benefits from this practice.  If it’s such a great plan why not hire a full time Professional Engineer to review all City projects?

Bellaire’s Bonded Debt FY2019 will be $129 million by 9/30/2019
A $47 million dollar bond issue is under discussion for 2019
(Principal Debt only – Interest is not included in these figures)

Email your thoughts or opinions to the Mayor and members of City Council in care of our City Clerk, Tracy Dutton, at and request that she forward to City Council.

About Jane McNeel

Bellaire resident since 1956. Email: Find more information on 'About This Site' in the main menu.
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