PGMUD Bond Authorization Review: Cost of Selling Bonds / Revisión de la Autorización de Bonos de PGMUD: Costo de la Venta de Bonos

As some discerning Pecan Grove residents have noticed, the project costs on the Open House boards don’t match the total of the bond authorization amount on the ballot. This is by design, and we want to take a moment and explain why.

Every bond issued comes with fees associated with it. Think of it like closing costs when buying a home; these fees fund the various parties that oversee, underwrite, and review the bond sale process. So, when the engineer writes the bond authorization report, they have to include these “soft costs” into the authorization total. See below for the breakdown from the report:

As this capital improvement plan also takes place over a projected 15 years, the engineer also has to account for inflation, escalation of vendor costs, and unforeseen contingencies (say, if a hurricane comes through during a planned construction phase). All these things are considered as part of the overall total amount required to be approved by voters.

What the bond authorization report does not consider are:

  • Grants, because those are not guaranteed and have high bars of qualification;
  • FEMA reimbursements, which require the project to be funded and completed before the money is reimbursed.

We hope this answers many of the questions residents have had as election day approaches. Early voting is still underway through the 30th, and election day is May 4th. If you have any further questions, please reach out to us via the Pecan Grove MUD website contact form.

 

Revisión de la Autorización de Bonos de PGMUD: Costo de la Venta de Bonos

Como han observado algunos residentes perspicaces de Pecan Grove, los costos del proyecto en las pizarras de la Casa Abierta no coinciden con el monto total de la autorización de la boleta de votación. Esto se diseñó así y queremos tomarnos un momento para explicarle el motivo.

Cada bono emitido viene con tarifas relacionadas. Piense en esto como los costos de cierre al comprar una casa: estas tarifas financian las diversas partes que supervisan, cubren y revisan el proceso de venta de bonos. Por lo tanto, cuando el ingeniero redacta el informe de autorización de bonos, tiene que incluir estos “costos indirectos” en el total de la autorización. Vea a continuación el desglose del informe:


Dado que este plan de mejora de infraestructura también se llevará a cabo durante 15 años previstos, el ingeniero también tiene que dar cuenta de la inflación, el incremento de los costos de los proveedores y las contingencias imprevistas (por ejemplo, si viene un huracán durante una etapa de construcción planificada). Todos estos aspectos se consideran como parte del monto total general que requiere la aprobación de los votantes.

Lo que la autorización de bonos no contempla es lo siguiente:

  • las concesiones, porque no están garantizadas y tienen altos niveles de cualificación;
  • los reembolsos de FEMA, que requieren que el proyecto esté financiado y completado antes de que el dinero se reembolse.

Esperamos que esto responda muchas de las preguntas que los residentes han realizado a medida que el día de elección se acerca. La votación anticipada aún se lleva a cabo, hasta el 30 de abril inclusive, y el Día de Elección es el 4 de mayo. Si tiene alguna otra pregunta, comuníquese con nosotros por medio del formulario de contacto del sitio web de Pecan Grove MUD.

May 4, 2019 Bond Election, Operation and Maintenance Tax Election/El 4 de mayo de 2019 Elección de Bonos, Elecciones de Impuestos de Operación y Mantenimiento

Notice of Bond Election, Operation and Maintenance Tax Election
Aviso de Elección de Bonos, Elecciones de Impuestos de Operación y Mantenimiento

Order Calling Bond Election, Operation and Maintenance Tax Election
Orden Para Convocar Elección de Bonos, Elecciones de Impuestos de Operación y Mantenimiento

Pecan Grove Residential Awareness Open House Summary

The Pecan Grove Municipal Utility District 26 (PGMUD) Board of Directors and the District’s consultants would like to thank all of our neighbors who took the time to attend our recent open house to learn more about the District and the upcoming bond proposal that will be on the May 4th ballot. Our Board members enjoyed speaking with you about the future of the District and we really appreciated your participation. Many great questions were asked, and we hope they were all answered.

For our attendees and those who were unable to attend, please find in this article the welcome video and a .pdf of the financial information provided at the open house.

View the Open House Digital Handout

Folleto Digital de Puertas Abiertas

Again, thank you to everyone that attended the open house events. If you have any questions or comments please reach out to us using the “Contact” page on the website.

Resumen de la Casa Abierta de Información Para los Residentes del Pecan Grove MUD

Pecan Grove MUD Authorization Election FAQ

As many Pecan Grove residents are aware, the district has called for an election on May 4th, 2019, to obtain authorization for bonds and to raise the cap on the maintenance and operations tax rate.

The May 4, 2019 election will include two propositions that registered voters of the district will be asked to vote on, Proposition A and Proposition B.

  • Proposition A provides the funding for the District’s plan for the rehabilitation and long term improvements to our aging water, sewer and drainage systems.
  • Proposition B provides the district an option, if needed in the future, to increase the Maintenance and Operations (M&O) tax rate beyond the current 25 cents cap instead of raising water rates to generate revenue that might be required for operations.

The Board of Directors will be hosting a Resident Awareness Open House on Tuesday, April 16, 2019 at the Pecan Grove Plantation Country Club. We will be on the second (2nd) floor, from 6 p.m. to 8 p.m.; residents are encouraged to come at their convenience any time during that window to speak with resident directors and the district consultants and review the exhibits, regardless of whether they are registered to vote. There will be exhibits outlining the engineering plans for the district, drainage solutions, bond and financial details, and more. In addition to your 5 resident board members, district consultants will be on hand to answer your questions.

As this process has proceeded, many residents have asked a number of financial questions via the website. For those who may not be able to attend the open house, we have summarized the most frequently asked questions into this news post.

How much is the district asking to authorize in bonds with Proposition A?

  • The bond proposal is set for $33,600,000. If so authorized, the bonds would be sold in phases to allow for continued paydown of existing debt while accomplishing priority engineering tasks.Currently, the district Board has discussed all possible scenarios with the financial advisor and their goals are: once authorized, the bonds would be sold in phases to allow for continued paydown of existing debt while accomplishing priority engineering tasks, starting with critical drainage improvements.

What is the impact to my bills?

  • Current goals and assumptions are there be no planned impact to your water bill, and the anticipation is an initial 2.5 cents (0.025) increase in your annual taxes as a result of issuing approximately $5,450,000 principal amount of bonds in late 2019 to address critical drainage improvements. Assuming the best case with the information at hand, this would bring debt service to 39 cents (.039), which is roughly where it was 4 years ago. Assuming an average home value of $244,400, a 2.5 cent increase per $100 assessed value results in a capital increase of $61.10 to the tax bill annually, based on current assumptions and goals.The all-resident, PGMUD Board is dedicated to completing the projects in a timely fashion while managing existing bond debt efficiently, simultaneously being mindful of tax impact to all residents.

With Proposition B, is there a cap to increasing M&O tax rate?

  • Short answer: There is no current plan to raise the M&O tax rate if the M&O authorization passes.
  • Long answer: Currently, the cap is set at $0.25/$100 of your assessed property value. If the election were to pass, the cap would be raised to $0.75, giving the district the option to raise the M&O tax rate, if needed, in the future. However, at this time, the resident directors on the board do not intend or anticipate needing to raise the M&O tax; they are merely asking for the option to be able to raise it. The election is an authorization, not an actual increase. As residents, the directors are also impacted by tax rate increases and are committed to managing the rates and keeping them as low as possible to service the district needs.

Is the M&O tax rate applied as a tax on the taxable value of our property?

  • The M&O tax is part of your ad valorem tax (or, property tax) assessed by the district. Pecan Grove MUD assesses both a debt service tax and the M&O tax. The combined amount right now for your tax rate from the MUD is $0.615/$100 of your assessed property value. With the first bond issuance (if approved by voters) addressing critical drainage concerns, the anticipated debt service increase would be less than 3 cents per $100 ($0.025/$100). Keep in mind this is based on conditional research and estimates, but it is the anticipation that will be presented at the open house.

What is the current indebtedness of the district?

  • The current principal amount of the District’s outstanding debt is $51,515,000 and the associated debt service is 36.5 cents (0.365) per $100 assessed value. Thus, for the average home value of $244,400, that adds up to $892.06 per year. Over the last five years, the District has lowered the debt service tax rate through repayment and fiscal management from 41 cents (0.41) to the current rate of 36.5 cents.For more information on your tax rate and water rate, click here to view the EVO dashboard showing comparative tax and water rates.

What happens if the Propositions do not pass?

  • The capital improvements to the district still need to occur to maintain the quality of water service and wastewater removal that exists now. Systems age, and rehabilitation needs to happen; further, as all residents are aware, there are severe drainage issues to consider. There are only three ways to fund projects for districts (from lowest impact to highest):
      • Sell bonds, paid through debt service tax rate;
      • Raise the Maintenance & Operation tax rate; or
      • Raise water rates

    As residents, the Board of Directors do not want to increase water rates or taxes beyond that which is necessary, and only then to service the needs of the district. As you can see via the answers above, the lowest impact on residents is funding through the sales of bonds.

Again, we encourage everyone to come out to the Open House on April 16th, 2019, and ask questions of the resident directors and their consultants. If you can’t make it, be sure to share this information with your neighbors through social media!

Board News

Fond Farewell to Chad Howard

It is with great sadness and gratitude that we say goodbye to PGMUD President Chad Howard and his family. Chad served on the Board from May 2012 to May 2018. He has sold his home in the District and is building a home in Needville. The Board will miss his service and leadership for the community.

New Director Appointed

The Board has appointed long time Pecan Grove resident Jean Gobar to fill the unexpired term of Chad Howard. Jean recently retired from service with the Fort Bend County Sheriff’s office. While Jean served as Deputy, she was the security coordinator for Pecan Grove’s contract with the Sheriff’s office, so she knows our District well. She has attended many District meetings over the years. Although Chad’s role with the Board will be hard to fill, we look forward to the contributions that Jean will make to the district.

Election Results

Over 600 voters participated in the Pecan Grove MUD election during early voting and on Saturday May 5th. Fort Bend Elections Administrator certified the results on May 8th which re-elected Ryan Yokubaitis and Buddy Kluppel to the Board:

Ryan Yokubaitis – 490
Buddy Kluppel – 394
John Minchew – 218
Elizabeth Waltz – 124
Todd Johnson – 35
Total: 1,261

New Board Officers

The Board has re-organized. The new officers are:

Ryan Yokubaitis, President
Steve Crow, Vice President
G.E. “Buddy” Kluppel, Secretary
Jean Gobar, Assistant Secretary
Charles “Chuck” Bertrand, Assistant Vice President

A Message from the Board of Directors

The Fort Bend County Commissioners will conduct a workshop during the regular Commissioners’ Court Agenda on Tuesday, August 1, 2017 at 1:00 p.m. at 401 Jackson Street, Richmond, Texas to discuss the proposed Mobility Bond Election for Fort Bend County (Precinct 3 projects and Owens Road, Segments 1 and 2 are included) and then call a bond election for November, 2017. You can access the agenda at http://www.fortbendcountytx.gov/index.aspx?page=55 and view a proposed projects map and list at http://www.fortbendcountytx.gov/index.aspx?page=344. The meetings are open to the public.

A message from Chad Howard, President of the Board of Directors

The Fort Bend County Commissioners are planning a workshop on Tuesday, July 25, 2017 at 1:00 p.m. at 401 Jackson Street, Richmond, Texas to receive public comments on the proposed Mobility Bond Election for Fort Bend County (Owens Road, Segments 1 and 2 is included). You can view proposed project maps and a list at this link http://www.fortbendcountytx.gov/index.aspx?page=344. When the agenda for the special workshop meeting on July 25, 2017 is posted at the county, we will update the website to confirm the special workshop meeting of the Fort Bend County Commissioners and post the agenda link.

Director Election, Saturday, May 7, 2016 . Elección de Directores, sábado 7 de mayo de 2016

The 2016 Director Election for Pecan Grove Municipal Utility District is May 7, 2016, between 7:00 a.m. and 7:00 p.m. There are three (3) directors positions up for election. To save money on the cost of the election, the District is contracting with Fort Bend County to hold a joint election. The estimated savings for the District contracting with Fort Bend County is approximately $14,000.00. Early voting and election day voting in person is set by Fort Bend County during the designated dates and hours.

Early voting dates are Monday, April 25, 2016 through May 3, 2016. The complete list of early voting dates, locations and hours for voting as well as election day voting locations, will be posted on the District website www.pecangrovemud.com. Fort Bend County utilizes Voting Centers on election day which allows voters to vote at any of the voting locations on Saturday, May 7, 2016.

For additional information on voting in Fort Bend County visit their website at http://www.fortbendcountytx.gov/index.aspx?page=338.


La Elección de Directores de 2016 del Distrito de Servicios Públicos Municipales de Pecan Grove es el 7 de mayo de 2016, de 7:00 a.m. a 7:00 p.m. Hay tres (3) posiciones de director que serán sometidas a elección. Para ahorrar dinero en el costo de la elección, el Distrito acordó un contrato con el Condado de Fort Bend para celebrar elecciones conjuntas. Se estima que mediante este contrato con el Condado de Fort Bend el Distrito estará ahorrando aproximadamente $14.000,00. La votación anticipada y la votación en persona el día de elección la establece el Condado de Fort Bend en las fechas y horarios designados.

Las fechas de votación anticipada son desde el lunes 25 de abril de 2016 hasta el 3 de mayo de 2016 inclusive. La lista completa de fechas, lugares y horarios de votación anticipada, al igual que los lugares de votación para el día de elección, serán publicados en el sitio web del Distrito en www.pecangrovemud.com. El día de elección el Condado de Fort Bend utilizará Centros de Votación que permiten a los votantes votar en cualquiera de las localidades de votación el sábado 7 de mayo de 2016.

Para más información sobre la votación en el Condado de Fort Bend visite el sitio en http://www.fortbendcountytx.gov/index.aspx?page=338.

Early Voting Schedule and Election Day Schedule

Early Voting Schedule and Election Day Schedule
(Horarios de Votación Anticipada y Horarios del Día de Elección)

Early Voting Schedule for the May 7, 2016 Joint Election
(Horarios de Votación Anticipada de la Elección Conjunta del 7 de Mayo de 2016)

Election Day Voting Center Locations for the May 7, 2016 Joint Election
(Centros de Votación del Día de Elección de la Elección Conjunta del 7 de Mayo de 2016)