City staff outline 2025 certificate plan and long-term bond priorities as City Hall foundation needs major work

Highland Village City Council received an update June 24 on the capital improvement program (CIP), including a staff proposal to issue $7 million in certificates of obligation in 2025 to help pay for street and drainage projects and a review of facility needs that identified a multi‑thousand‑square‑foot foundation replacement in the police/admin side of City Hall.

The presentation, given during a budget workshop, summarized projects funded by the city's 2021 bond issuance (streets and drainage; parks and recreation) and by a 2024 $2.7 million tax note used primarily for equipment replacement. Staff said earlier 2021 bond proceeds totaled about $8.8 million for street and drainage work and about $6.4 million for parks and related improvements. Engineering only was included in the 2021 streets package for two major reconstructions, listed in the presentation as Highland Shores Boulevard and Highland Village Road; staff said an opinion of probable cost for those two corridors is about $13.5 million and that Denton County has identified roughly $6.4 million in potential matching funds.

Staff presented a proposed financing step: issue certificates of obligation in 2025 totaling $7 million, with staff seeking authorization from council around the September meeting and a plan of finance to be submitted at the July 8 workshop. The presentation emphasized that county participation was not yet final and that the amount the county would contribute could be less than a 50% match. No formal council action was taken during the workshop; staff described the proposal as a financing plan to be returned for formal authorization later this year.

Projects funded or advanced to date, according to staff: - Streets/drainage: engineering for three phases of a multi‑phase reconstruction (phases 1 and 2 complete, phase 3 pending); pedestrian crossings and a traffic signal at Brazos and Highland Village Road completed in 2024. - Parks: an original $6.4 million parks bond; about $1.8 million has been submitted/committed so far for park improvements including tennis court resurfacing (later funded from the general fund), dog park work, parking lot work and other smaller items. - 2024 tax note ($2.7 million): directed at equipment replacement. Staff said the note requires that about 85% of proceeds be spent within three years; purchases described as delivered or ordered included a concrete mixer, air compressor, limb chipper, excavator, grader/backhoe, two ambulances and a large tractor. Police department funds originally planned for a skywatch tower were being repurposed toward drones; staff said the police department demonstrated drones at Celebrate Highland Village.

The presentation also detailed facility needs identified in a recent facilities assessment. Scott (facilities assessor) told council that cores taken beneath City Hall found moisture and expansive soils under the police/admin side foundation. The assessment recommended removing and replacing the interior foundation for an estimated area of about 3,000 square feet that includes police administration and adjacent spaces. Scott said the exterior walls and roof appear separate from the interior foundation issue and do not require full building replacement. "The building's not gonna fall down on anybody anytime soon," Scott said, "however it does need to be done, it's gonna continue to move." Staff described potential displacement of some admin staff during construction but said dispatch operations would not be impacted and that sound and dust mitigation methods are available. Staff projected construction planning and budgeting in the 2028–2030 timeframe and described short‑term risk as negligible.

Staff also summarized long‑range options: a potential 2028 bond election to address drainage projects, facility projects (estimated in the presentation at about $4.3 million) and up to $4.0 million of projects from the Copperas Branch Park master plan. Debt‑service impacts were shown graphically; staff said they would seek to keep interest and sinking (I&S) as a share of the property tax rate modest (presented as a 14–16% target range) so maintenance and operations would not be unduly affected.

Next steps listed in the presentation included a July 8 general fund workshop (when staff planned to present a plan of finance and a notice of intent for certificates of obligation), a July 22 special revenue funds review, August utility fund and tax‑rate considerations, and first and second reads of the budget and tax rate in September (first reading Sept. 9; second reading Sept. 16). Staff said Hilltop Financial (the city's adviser) would present options at the July workshop.

No formal votes were taken during the budget workshop portion; staff characterized the certificate issuance and 2028 bond planning as items for future council authorization and formal action.