The City Council indicates planning to consider the authorization to sell $18.5 million CO's at its June 28, 2010, meeting, without seeking voter approval.
On May 10th, the Richardson City Council consented to publish a notice of intention to issue bond debt in the form of certificates of obligation. They plan to do this without seeking voter approval. This amount is in addition to the general obligation debt that was proposed and agreed to by voters in the 2010 bond package.
7. CONSENT AGENDA
B. CONSIDER THE FOLLOWING RESOLUTIONS:
1. RESOLUTION NO. 10-8, APPROVING AND AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION IN AN AMOUNT NOT TO EXCEED $18,500,000.00.
According to City of Richardson documentation, it appears that $7.63 million of this proposed debt would be payable by ad valorem (property) tax. (The rest would be a lein on and a limited pledge on net revenues of the City's combined Waterworks and Sewer System). The City Council indicates planning to consider the authorization to sell $18.5 million CO's at its June 28, 2010, meeting.
The City of Richardson Charter states under ARTICLE 19. ISSUANCE AND SALE OF BONDS
The City of Richardson shall have authority to issue bonds, payable from the ad valorem taxes, when authorized by the qualified voters of the city, for any purpose for which a city may issue bonds under the Constitution and the laws of this state.
And
In Section 19.02. Bond election.
Any proposition to issue new or additional bonds, payable from the ad valorem taxes as authorized herein, shall be first submitted to a vote of the qualified voters of the City of Richardson at an election to be held for that purpose.
However, Texas Local Government Code (CHAPTER 271, SUBCHAPTER C. CERTIFICATE OF OBLIGATION ACT of 1971) outlines permissions in regard to debt that work to trump the charters of cities that express contrary limits (the Charter of The City of Richardson retains voter approved limitation on the handling of the City debt but Local Governement Code 271 looks to supercede it).
A provision for a voter petition is included in the Chapter, but additional exclusions make it a large, but not impossible, challenge for voters to protest a local government issuing debt without voter approval. Obtaining enough signatures (5% of qualified voters in this particular case under Chapter 271) to block an issue is typically a high bar to meet.
An interesting article on this topic of issuing debt without voter approval in the form of certificates of obligation is found in The Daily News (Galveston County),
But when city council members tried to pay for the renovation with certificates of obligation — debt without voter approval — residents overwhelmingly opposed the plan.
In one afternoon, Former Mayor Katherine McIntyre collected enough signatures on a petition to block the city from taking on debt without voter approval, making Clear Lake Shores residents the second group of Galveston County residents to successfully kill plans to issue certificates of obligation. Earlier this year, five Friendswood residents opposed a plan to issue certificates...
The article goes on to quote Peggy Venable and John Boyle.
...John Boyle, an Irving attorney specializing in municipal finance who was a state legislator in 1971, said certificates of obligation were meant to help cities pay for projects quickly without having to call an election. “This hasn’t been used to sneak around the voters,” he said.
But,
The taxpayer advocacy group Americans for Prosperity argues that, when cities take on debt without voter approval, city leaders leave residents in the dark about the large amounts of debt saddled on taxpayers’ shoulders. Director Peggy Venable said people find it shocking when they discover the amount of debt carried by schools, cities and counties.
I have seen enough that I do not trust our governments (at any level) to the point of freely agreeing to provide carte blanche. Even if I did, I disagree with cutting out we the people, voters, to the large degree we are. The law using the reasoning that such laws (as it decimated) requiring voter approval for significant debt are “cumbersome laws” doesn't hold water when a city just held an election regarding bond debt.
On May 10th, the Richardson City Council consented to publish a notice of intention to issue bond debt in the form of certificates of obligation. They plan to do this without seeking voter approval. This amount is in addition to the general obligation debt that was proposed and agreed to by voters in the 2010 bond package.
7. CONSENT AGENDA
B. CONSIDER THE FOLLOWING RESOLUTIONS:
1. RESOLUTION NO. 10-8, APPROVING AND AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION IN AN AMOUNT NOT TO EXCEED $18,500,000.00.
According to City of Richardson documentation, it appears that $7.63 million of this proposed debt would be payable by ad valorem (property) tax. (The rest would be a lein on and a limited pledge on net revenues of the City's combined Waterworks and Sewer System). The City Council indicates planning to consider the authorization to sell $18.5 million CO's at its June 28, 2010, meeting.
The City of Richardson Charter states under ARTICLE 19. ISSUANCE AND SALE OF BONDS
The City of Richardson shall have authority to issue bonds, payable from the ad valorem taxes, when authorized by the qualified voters of the city, for any purpose for which a city may issue bonds under the Constitution and the laws of this state.
And
In Section 19.02. Bond election.
Any proposition to issue new or additional bonds, payable from the ad valorem taxes as authorized herein, shall be first submitted to a vote of the qualified voters of the City of Richardson at an election to be held for that purpose.
However, Texas Local Government Code (CHAPTER 271, SUBCHAPTER C. CERTIFICATE OF OBLIGATION ACT of 1971) outlines permissions in regard to debt that work to trump the charters of cities that express contrary limits (the Charter of The City of Richardson retains voter approved limitation on the handling of the City debt but Local Governement Code 271 looks to supercede it).
A provision for a voter petition is included in the Chapter, but additional exclusions make it a large, but not impossible, challenge for voters to protest a local government issuing debt without voter approval. Obtaining enough signatures (5% of qualified voters in this particular case under Chapter 271) to block an issue is typically a high bar to meet.
An interesting article on this topic of issuing debt without voter approval in the form of certificates of obligation is found in The Daily News (Galveston County),
But when city council members tried to pay for the renovation with certificates of obligation — debt without voter approval — residents overwhelmingly opposed the plan.
In one afternoon, Former Mayor Katherine McIntyre collected enough signatures on a petition to block the city from taking on debt without voter approval, making Clear Lake Shores residents the second group of Galveston County residents to successfully kill plans to issue certificates of obligation. Earlier this year, five Friendswood residents opposed a plan to issue certificates...
The article goes on to quote Peggy Venable and John Boyle.
...John Boyle, an Irving attorney specializing in municipal finance who was a state legislator in 1971, said certificates of obligation were meant to help cities pay for projects quickly without having to call an election. “This hasn’t been used to sneak around the voters,” he said.
But,
The taxpayer advocacy group Americans for Prosperity argues that, when cities take on debt without voter approval, city leaders leave residents in the dark about the large amounts of debt saddled on taxpayers’ shoulders. Director Peggy Venable said people find it shocking when they discover the amount of debt carried by schools, cities and counties.
I have seen enough that I do not trust our governments (at any level) to the point of freely agreeing to provide carte blanche. Even if I did, I disagree with cutting out we the people, voters, to the large degree we are. The law using the reasoning that such laws (as it decimated) requiring voter approval for significant debt are “cumbersome laws” doesn't hold water when a city just held an election regarding bond debt.
A challenge with complaining to state representatives is that they are often tightly aligned with city, county and school government politicians and staff who helped them become and stay elected. As well, the Texas Municipal League is a very strong force and it honestly works for government officials and staff more than it can be argued that it works for the average citizen (tax payer), in my opinion. Of course, the average resident does not vote in municipal and other elections.
The law passed the House and Senate unanimously during the tumultuous 62nd session — lawmakers were called back to Austin four more times after the regular session that year to redistrict legislative seats — and it was overshadowed by more riveting legislation, including the ratification of a federal law allowing 18 years old to vote and a new tax on mixed beverages.
(Charles Ferguson) Herring, (an Austin state senator) the father of certificates of obligation (Act of 1971), died in 2004.
