DALLAS - Houston have approved a $2.55 billion capital improvement program that calls for the issuance of $1.72 billion in revenue and general obligation bonds in the next five fiscal years.

The program, which was approved unanimously by the Houston city council last week, is a scaled-back version of a $3.9 billion plan proposed by Mayor Bob Lanier earlier this year. The mayor withdrew the plan in January after receiving criticism over a proposal to ask voters to authorize $450 million more in general obligation debt.

The adopted capital improvement program calls for no new bond elections or taxes, but still funds the priority projects in the next several years, said Richard Lewis, the city's director of finance and planning.

"It's a more realistic approach on the work we can get done," Lewis said. "We are comfortable with it. It is well within the parameters that would avoid any type of tax increase in the future."

Under the plan, $425 million in general obligation bonds and $1.3 billion in revenue bonds is scheduled to be issued from fiscal 1995, which began July 1, through fiscal 1999.

The issuance of the general obligation debt would exhaust all of the bond authorization approved by Houston voters in 1991. It would consist of $76 million in fiscal 1995, $108 million in fiscal 1996, $106 million in fiscal 1997, $75 million in fiscal 1998, and $60 million in fiscal 1999.

Major projects would include replacement of the police headquarters building, rehabilitation of the branch library system, parks improvements, building renovations to meet fire codes, and street, bridge, and traffic control improvements. The street and bridge program alone covers more than 100 projects and will exceed $200 million. The largest amount of debt - $1.09 billion in revenue bonds - would be issued for major water and sewer improvements.

Plans call for issuing $150 million in revenue bonds in fiscal 1995, $240 million in fiscal 1996, $250 million in fiscal 1997, $250 million in fiscal 1998, and $200 million in fiscal 1999.

In addition, other funds would be combined to bring the water and sewer program to a total of $1.76 billion for the five years. The program is designed to help the city comply with state and federal environmental regulations and provide new service to more than 5,000 families. City officials said they don't expect to propose water or sewer rate increases for the next three years.

In other revenue bond issues, about $207 million in debt is expected to be sold in the next four years to support airport projects. The timetable is: $60 million in fiscal 1995, $56 million in fiscal 1996, $42 million in fiscal 1997, $49 million in fiscal 1998, no issues are planned for fiscal 1999.

Combining funds from other sources, the total aviation program would amount to $373.4 million and include a parking garage at Houston's Intercontinental Airport and expansion of Houston's Hobby Airport. The program would also fund design and construction of a maintenance facility for Continental Airlines that would bring 750 new jobs to the area if the city successfully completes negotiations with the Houston-based air carrier.

The plan does not provide funding for a proposed Westside Airport, which has drawn fire from environmentalists and stirred much controversy.

The airport is one of many projects that total $650 million and remain unfunded after the capital improvement program was scaled back. Despite the pruning of the capital improvement budget and the administration's claims that no new tax increases will be necessary, city Controller George Greanias has blasted city officials and the city council for not looking more closely at financial implications.

Greanias has said the next mayor would be stuck without bond authorization and has criticized the Lanier Administration for increasing the city's indebtedness.

"The mayor is using all the remaining bond authorization, and there is not an adequate financing plan in place," said Maryann Young, a spokeswoman, for the controller.

Responding to Greanias, finance director Lewis said, "Mr. Greanias criticizes the plan, but he doesn't offer ... alternatives." Lewis said the capital improvement program is based on no growth in the city. If growth does occur, say 4%, the city could fund the program on a "pay-as-you-go" basis without further debt, he said.

"We would have a significant sum of money that we could use for capital construction," Lewis said. He said taxable values in the city have been increasing modestly but steadily since calendar year 1992 or fiscal 1993. Also in an effort to boost available funds and revenue sources, Lewis said Lanier is lobbying to get increased federal, state, and local transportation funds, including moneys through Harris County and a Texas urban street program.

Earlier this year, the city approved a 3.5 cent increase in the property tax rate to meet growing debt service demands and to hire additional police. Some critics have said that additional tax increases will probably be needed to pay higher debt service costs after a large restructuring delayed debt payments in 1992.

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