Rates Shrink Montgomery County's Next Road Bond Sale as Magnolia-Area Roads Get Finished
Commissioners approved a $35 million road bond sale, the smallest round yet, as rates climb. The county's own numbers estimate nearly as much in interest as principal.
Montgomery County is still building the roads voters paid for in May 2025. It is just borrowing more slowly than it planned, and the reason is the price of money.
On Oct. 8, the Commissioners Court approved selling $35 million in road bonds, the third sale under the $480 million road bond voters approved last year. County finance officials told the court this will be the smallest round the county sells, because interest rates have climbed past what they projected, Community Impact reported.
"National debt, the Iran conflict and inflationary fears have pushed interest rates up a lot higher than we projected," said John Robuck, who advises the county on its bonds.
What the county's own numbers show
The county's financing presentation, posted in the Oct. 8 agenda packet, puts current municipal rates at 5.21%, which it says is 1.14 points above the average since 2001.
The same document is worth reading for what it says about cost. It estimates that the $35 million in principal would carry about $34.5 million in interest over the life of the bonds, for roughly $69.5 million in total payments through 2051. The presentation labels that interest figure an illustration based on current tax-exempt rates, so the real number will be set when the bonds are sold. Put plainly, at today's rates, taxpayers would pay back nearly two dollars for every dollar borrowed in this round.
That is not a scandal. It is how long-term public debt works, and voters approved this program knowing it would be paid off with property taxes. But it is the number every taxpayer should keep in mind when officials talk about bonds as if they were free money.
According to the county's schedule, the bonds are expected to be sold on Nov. 19, locking in the rate, with closing and delivery of funds set for Dec. 17.
Why smaller, and why now
Robuck told commissioners this round should give the county enough money for road work through June, with the hope that rates settle by then, according to Community Impact. Budget Officer Amanda Carter said the county is spending about $11 million a month on roads and has $57 million in the bank for bond projects. She told commissioners they can still move forward on every project already budgeted.
The county has received $192 million from the road bond so far, and the money is divided equally among the four commissioner precincts, Community Impact reported.
Borrowing only what is needed, when it is needed, is sound stewardship. A family does not take out a bigger loan than it needs when rates are high, and a county should not either. The tradeoff is that if rates do not come down by summer, the county will have to borrow again anyway, possibly at a worse price. Residents should watch for that decision next year.
What has been built so far
The money is showing up on the ground, at least in Precinct 2, which takes in Magnolia and Pinehurst. Commissioner Charlie Riley's office lists these 2025 bond projects as complete on its road projects page, updated Oct. 9:
Goodson Loop (3 miles), Hardin Store Road (4.3 miles), Rabon Chapel Road (4.2 miles), Wright Road from Decker Prairie Road to the Pinehurst post office (2.42 miles), Mail Route Road (1.84 miles), Old Highway 105 West (2.2 miles), River Plantation Road (1.83 miles), Kidd Road, Pine Lane, Butera Road and Capitol Hill Road. Capitol Hill Road won the Texas Quality Asphalt Pavement Association's Best County Road award for the contractor, Texas Materials Group / Gulf Coast, according to the precinct.
Still under construction: Honea Egypt Road, 8.96 miles from Sendera Ranch Road to FM 2854, with the first mile done, and Kuykendahl Road from the Research Forest area to FM 1488.
Next up: Decker Prairie and Hardin Store at SH 249
Drivers in Pinehurst should plan ahead. The precinct's home page says intersection work at Decker Prairie Road and Hardin Store Road at SH 249 is expected to start Monday, Oct. 19. The plan adds two eastbound lanes and a dedicated right-turn lane on Decker Prairie approaching SH 249, one westbound lane and a right-turn lane on Hardin Store, and drainage work on both sides of the highway. The four-way stop at Decker Oaks Drive will be changed so east-west traffic on Hardin Store flows freely.
That project is not paid for with the road bond. The precinct says it is funded with toll revenue from the county's 3.4-mile portion of SH 249, and that studies show more than half of the toll road's users live outside Montgomery County. That is a fair way to pay for it: the people using the road help pay for the connections to it, and local property owners are not stuck with the whole bill.
Montgomery County residents can track the bond sale on the court's agenda and watch meetings in the county's video archive. The court's next regular meeting is Oct. 22.
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Hero photo: FreewayDan via Wikimedia Commons, CC BY-SA 4.0; cropped and resized, adaptation shared under the same license.
