RAYMONDVILLE — The cash is stacking up for a $2.4 million street project.
Earlier this week, city commissioners approved borrowing the money as part of a plan that includes boosting the city’s property tax rate of 75.9 cents per $100 valuation by 1.7 cents.
Commissioners approved issuing certificates of obligation at an interest rate of 3.39 percent over a 20-year term.
By 2040, the city will have paid about $3.4 million.
The tax rate increase is expected to generate an additional $33,000 a year to help pay off the debt, Mayor Gilbert Gonzales has said.
The city’s first tax rate increase in about 10 years will boost taxes on the average $50,000 home by an additional $9 a year.
“If we didn’t need to do it, we wouldn’t spend that kind of money,” Gonzales said yesterday of the project.
He said the city recently paid off bonds used to borrow $1.5 million to fund the last major street project in 2003.
“We paid off the loan and we’re taking on more debt,” he said.
The city plans to repair 32 streets, most west of Business 77, City Manager Eleazar Garcia said.
Garcia said the streets were selected for repair based on criteria including street conditions, traffic volume, proximity to major thoroughfares and schools and residents’ complaints.
“We’re going to fix some streets that need to be worked on,” Gonzales said. “They’re going to get worse and worse — some of them are already there.”
The city is expected to launch construction on the one-year project in August, Garcia said.
$2.4 million bond issue
3.39 percent interest rate
1.7 cent tax rate increase
Projected to generate $33,000