San Antonio could be heading toward its smallest bond package in two decades at a time when the city has identified $5.8 billion in infrastructure needs.
Every five years, San Antonio puts a bond package before voters to fund infrastructure and capital improvement projects across the city. The 2022 bond reached a record $1.2 billion and funded 183 projects. For 2027, city staff has recommended $442 million.
The smallest bond voters approved in the past two decades came in 2007, when they approved $550 million. The 2027 proposal is more than $100 million smaller, even as construction and project costs have increased.
City staff presented the recommendation to City Council on Sept. 30, but several council members pushed for a package closer to $1 billion. A larger bond would require the city to account for additional debt-service costs and could result in a property tax-rate increase.
The bond process remains in its early stages. Council, community stakeholders, city staff and bond committees will continue reviewing projects and funding levels through early 2027. If council decides to put the bond on the May ballot, it must make that decision by Feb. 12.
Mike Shannon, director of the Capital Delivery Department, said staff identified more than 300 projects totaling $5.8 billion in needs. Drainage and flood control account for 43% of the total, while streets, bridges and sidewalks account for 37%. The remaining 20% includes facilities, parks and recreation, housing and other needs.
$1 billion or $442 million?
The size of the bond has emerged as one of the central debates.
Phyllis Viagran (D3) said she wants a package of at least $1 billion. Viagran pointed to the city’s growth and said a 4% to 5% increase in taxable values could allow the city to avoid a tax-rate increase while taking on a larger bond.
“We have an opportunity to take to the voters a bond that does not take us backwards, a bond that moves us forward and provides more project completion citywide,” Viagran said.
Under the city’s financial forecast, however, a $1 billion program would require City Council to vote in 2028 on a property tax-rate increase. The debt-service rate would rise from 21 cents per $100 of taxable value to an average of 23 cents, effective in 2029.
Avoiding that increase would require taxable values to grow between 3.75% and 5% annually, a level above the moderately conservative projections presented by city staff.
City Manager Erik Walsh emphasized that bond debt carries a long-term obligation. Unlike an annual budget decision, bond debt must be repaid over the life of the bonds, and the city is obligated to make those payments even if economic conditions worsen.
“We have an obligation to bondholders,” Walsh said. “So that’s an added level of complexity when we project out what we should do from a financial perspective in terms of the issuance of debt.”
Marc Whyte (D10) was among the council members cautioning against a larger package. He warned against asking residents to absorb another tax-rate increase shortly after budget and utility-rate discussions.
“If we go and we raise the amount of this bond by increasing taxes, we’re going to have something of a holy war on our hands,” Whyte said.
Mayor Gina Ortiz Jones suggested moving forward with the $442 million package in 2027 and considering another bond in 2029 if city growth supports it.
“I think what is the most fiscally responsible at this point would be going ahead with $442 million, understanding that we could all commit to looking at an FY 29 bond and understanding—with better clarity—what the size of that could be,” Jones said.
Equity and distribution
The total bond package is the umbrella over other debates. Council members from Districts 1 through 5 raised concerns about how bond funding has been distributed in previous cycles, particularly what they described as a concentration of investment in the city’s northern sector.
Those concerns have also contributed to the city’s first tax-rate increase in 30 years, as districts that have historically received less investment push for maintaining services and infrastructure their residents rely on.
Edward Mungia (D4) said his district still has underdeveloped parks, streets and other infrastructure, particularly in its poorest areas.
“The best time to plant an oak tree is 20 years ago, and the second-best time is now,” Mungia said. “The same is true for projects, right? The best time to have done all these streets and projects was 20 years ago when you could do it for a lot cheaper, but here we are.”
Sukh Kaur (D1) pointed to the number of “F-rated” streets in each council district, which showed Districts 1 through 5 having 10% or more of total street mileage rated an F, indicating city roadways in severe disrepair.
“In 2022, the entire streets portion of the bond was $471 million,” Kaur said. “District 1 only got $22 million of that. On the contrary, District 8 got $44 million and District 10 got $51 million of those streets projects.”
Walsh said the city could revisit its bond schedule before 2032 if circumstances change.
“There’s nothing that would prevent this council from, if we see a change in tide, doing something sooner than 2032,” Walsh said.
Project Marvel
Project Marvel, the proposed sports and entertainment district, has also factored into the bond discussion.
During preliminary bond discussions in May, city staff estimated that the district could receive as much as $250 million in bond funding. After the scope was narrowed, that figure fell to $35 million in the current $442 million proposal.
Walsh said the reduction was partly the result of removing an $85 million parking garage and a renovation of Durango Boulevard from the package.
Affordable housing
The 2022 bond allocated $150 million for affordable housing. Staff had anticipated another $150 million for similar projects in 2027, but the smaller proposed bond could reduce that amount by half.
Staff highlighted the previous housing investment as a success. The goal the city set in 2021 was 28,094 affordable housing units; the current total is 29,304.
Some council members nevertheless want to maintain or increase housing investment. Teri Castillo (D5), who credited the 2022 bond with helping fund more than 700 affordable units in her district, said reducing infrastructure investment could increase costs over time.
“If we fail again to invest in these infrastructure projects, whether it’s housing, streets, bridges, sidewalks, and so forth, it’s going to cost us more in the long run and we’re going to get less for more in terms of costs associated with these proposed projects,” Castillo said.
Drainage
Drainage is another major area of need. Staff identified more than $165 million in drainage projects in District 6 alone.
Ric Galvan (D6) identified drainage as one of his top priorities, advocating for citywide projects to address low-water crossings and flooding.
“We know the significant drainage needs across our city are fundamental,” Galvan said. “No matter what kind of area we’re looking at here, no matter who’s eventually impacted here, we should be making sure that no one’s at risk of drowning in our city; no one’s property is going to be destroyed by now more frequent catastrophic rainstorms that we know are the impact of our climate.”
Marina Alderete Gavito (D7) echoed those concerns, pointing to drainage needs in her district despite its lower number of low-water crossings.
Council members are also considering a potential stormwater-fee increase that could generate about $175 million for drainage projects.
Next steps
Bond discussions return to City Council on Oct. 14, when city staff is expected to provide additional information requested by council and outline project priorities.
The meeting is also expected to include a closer look at larger bond scenarios. As of the Sept. 30 meeting, several council members were advocating for further consideration of a package larger than the $442 million staff recommendation.
“There’s a fair amount of work that still needs to go on in terms of scale and scope and what those numbers and those projects mean, and that’s work that we will be doing over the next couple of weeks,” Walsh said.