If you don’t understand the uproar in Friendswood about the city’s plan to issue $11 million in debt without voter approval, just ask yourself a couple of questions: What if city leaders are completely right about the legal question? Is it still a good idea to borrow money without asking voters for their approval? Is a good idea to obligate them when they have clearly indicated they want a say about any debt they’d be responsible for?
City officials have asked a judge in Travis County for a ruling that says the city can issue certificates of obligation to finance the debt.
Voters are used to voting on bond issues to fund public improvements. Cities across Texas increasingly are using certificates of obligation to finance debt. Bonds require voter approval. Certificates do not.
In 1997, voters in Friendswood amended their city charter to prohibit the city from issuing debt that it could not finance from its own revenue streams without voter approval. The exceptions allowed under the charter are cases of emergency or “urgent public need.”
It’s hard to see either in the city’s plans for the $11 million. The plan is to build roads, parks, an animal shelter and a records building.
The city’s position is that its right under state law overrides the citizens’ right under the charter to control debt.
Even if city officials are correct, isn’t hanging that debt on taxpayers just a slap in the face at this point? Remember, voters in Friendswood have just rejected a $9 million bond package. One of the recurring criticisms was that the proposal was too vague.
What many voters want is something remarkably simple. They want their leaders to give them a specific list of projects and reasonable estimates of their cost. Voters want their elected leaders to sell them on the idea that the expenditures are worth it. And then voters want a say, at the ballot box, in the final decision.
That’s not too much to ask.
Asking a judge for permission to get around that traditional contract with the taxpayers isn’t good policy.
Incidentally, Friendswood isn’t the only community where this debate has erupted. Last year, Galveston’s leaders agreed to issue $19.5 million in certificates of obligation to fund water and sewer projects and a new fire station.
Water and sewer improvements are supposed to be funded with revenue bonds, which are financed with the revenues from user fees for water and sewer service — not from property taxes. Certificates of obligation, on the other hand, are backed by property taxes.
Why did Galveston officials put taxpayers on the hook for that debt? One answer is because they could.
