CEDAR PARK, Texas (KXAN) — The City of Cedar Park is considering a May bond election that would cover projects in transportation, parks and recreation and public safety, but the total dollar amount is being looked at closely as the pandemic has caused some major market changes.
“A cost escalation was applied to determine the future costs,” said Kent Meredith, Cedar Park’s director of finance. “We were able to estimate that the future cost of the bond program will be about $158.8 million.”
The cost of the projects Cedar Park is considering would be about $125.3 million on today’s dollar, but officials are having to take into account what inflation will look like with time. City officials said they are anticipating a 5% increase to the hard and soft projects’ costs.
“I think a lot of us, some of us that have done home improvement projects over the last year, have realized materials have gone up, but we’re expecting that to level off,” said Cedar Park City Council Member Jim Penniman-Morin.
At Angelou Economics, an Austin-area economic consultant, experts said they expect the pandemic cost “scaries” to go down as well.
Executive Vice President Matt Patton said once supply chain issues shore up and the labor force levels out, inflated prices are expected to go down a bit. But until that happens, some city governments and local school districts who have issued bonds in the past are having to make some decisions.
“Local government leaders are responsible for keeping the lights on and making sure those essential services are going, so there might have to be some difficult decisions as to how that’s done,” Patton said. “But, certainly we don’t want to burden property owners with additional property taxes.”
In 2017, Austin Independent School District voters approved a $1 billion bond proposal with roughly $900 million coming from construction-related costs. The district chief of operations said roughly 85-95% of the construction projects have been completed, but the district has felt the clock tick.
“Since 2017 and up until now, we’ve been seeing about an 11% to 12% annual escalation cost, which means for every $100 million in construction-related projects, about $12 million is lost if not completed that year,” said Matias Segura, Austin ISD’s chief of operations.
There’s a variety of ways the district has had to makeup for inflated pandemic costs, like procuring different parties sooner, pushing projects up and breaking up bid packages. It’s all in an effort to not touch taxpayers bank accounts, Segura said.
“We do not have the ability to increase the tax rate, that is not happening,” said Segura. “What we do have to do is take budgets that were identified in 2017 and make it work for the project that we have committed to the voter to complete.”