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College Station City Council approves notice of intent to issue $43.3 million in Certificates of Obligation

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Specific projects weren't identified. Instead, they were described as high level buckets. To break down the buckets, $12.5 million is slated for existing and new facility upgrades. A city wide fiber for city facilities, not the citizens, is marked for $1 million. $5.5 million would go to sidewalks and paths, $7.7 million for parks and rec and the total for government funds would be $26.8 million. The city says it also uses Certificates of Obligations for utilities funds, and that they are packaged together to get better interest rates. $26.8 million would go to that.

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Here we go again.



https://www.kbtx.com/2024/05/24/college-station-city-council-approves-notice-intent-issue-433-million-certificates-obligation/

Had to look it up because it sounds a lot like a debt issue to me and it is without the voters voting on it. I never knew a city could issue debt without a vote. So basically they are betting on the future tax revenue which in their minds can always go up since they can make it go up.

So who is issuing debt and who is the city paying it back to?

Definition:
Certificates of Obligation (COs) allow certain cities, counties and certain hospital or health districts to issue debt without voter approval (unless a referendum is petitioned) and are backed by tax revenue, fee revenues or a combination of the two.

This is dangerous on so many levels.

Here is what happened to El Paso - 25% of their debt was not voted for by the voters totaling 851million.
https://elpasomatters.org/2023/03/17/opinion-end-use-of-certificates-of-obligation/

Apparently this (co) situation got so bad the legislature made an amendment to kind of restrict this activity but city governments just went around that as well as this instrument was to be used for emergencies not for the purposes it is being used for currently. (Fiber optic cable to the city buildings only). There is a lot on the comptroller website about this.

https://comptroller.texas.gov/transparency/local/hb1378/
https://comptroller.texas.gov/economy/fiscal-notes/archive/2017/january/co.php

Overview
The 84th Legislature passed HB 1378 to increase the transparency of local government debt. Under Local Government Code 140.008, political subdivisions, including counties, cities, school districts, junior college districts, certain special purpose districts, and other subdivisions of state government must annually compile their debt obligation data from the preceding fiscal year and either:
[ol]

report it to the Comptroller of Public Accounts for posting or, alternatively,

post the information on their own websites.

[/ol]For those who chose the first option above, the Comptroller's office has developed the Annual Local Debt Report (XLSX) form and an online submission form to enable entities or their third-party representatives to compile and submit the required information:

• Download, complete and save the Annual Local Debt Report form. Save these forms according to the following convention: "Annual Local Debt Report_Name of Political Subdivision_YYYY".
• Next, access the online submission form and upload your completed Annual Local Debt Report.