Lucas City Council Approves Notice of the Issuance of $9,000,000 Certificate of Obligation Funding Reconstruction of Infrastructure Projects
Juggling to achieve the fine balance between providing appropriate roadway, bridge, water and other infrastructure needs against the costs of construction, repair and renovation is daunting for all city councils. Cities constantly struggle to achieve what their residents will perceive as the right balance between benefits and costs. Lucas is no different. Residents of Lucas, like all cities, want roadways that work well, water that is clean, police and emergency responders and, they want taxes that are affordable.
At its meeting of March 7, council members were presented with proposals for underwriting key future infrastructure projects involving roadways and water. Mack McLiney of SAMCO Financial Advisors, the city’s financial advisors, presented two financing options using certificates of obligation, one pegged at $7,000,000 and the other at $9,000,000. McLiney observed, “There is never going to be a time when any city will be left with no infrastructure projects to which they must attend.”
Funding for such projects can be structured in a number of ways but the most common approaches are a General Obligation Bond or the issuance of Certificates of Obligation (CO). Bond issues typically are placed on the ballot for voting that takes place each year in May and November. Bonds are debts that cities pay for using tax revenues. Residents’ votes serve as the means by which to approve the issuance of debt for all sorts of infrastructure. In the last several years Texas city’s CO debt has grown by about 85 percent while General Obligation Bonds have increased by 50 percent.
In 1971, the Texas Legislature approved the Certificate of Obligation Act that allows cities to issue COs for terms that can run up to 40 years and that do not require prior approval via a ballot by residents. The important distinction between Bonds and COs is that Bonds are generally issued for projects that can be anticipated in advance such as the construction of a new Public Library or a Police or Fire Station. COs, on the other hand, are issued when the timeline of a project has not been anticipated far in advance or when actions must be taken quickly such as following a natural disaster or failure of a bridge, water station or roadway. COs provide city councils with the flexibility they need to respond quickly and appropriately to infrastructure issues. To ensure that residents are properly informed of a city’s intention to increase its debt using COs, Texas law requires the councils to post a description of the projects to be underwritten in local newspapers at least twice, and at least 30 days before the council votes on a proposed CO, and then a week after the first notice has been posted. If at least five percent of qualified voters petition for an election on the proposed spending the council must respond by including the measure on a ballot for voters to approve or deny.
During the Lucas City Council’s extensive deliberations, several council members noted that complaints about poor roadways is the most common complaint they are receiving from constituents. Ultimately, Councilmember Wayne Millsap introduced a motion approving obtaining funding for future roadway and water reconstruction projects identified in the City’s Capital Improvement and Thoroughfare Plans and authorize City Staff to work with SAMCO Financial Advisors on the Notice of Intention Resolution to issue Certificates of Obligation not to exceed $9,000,000. The motion was adopted on a vote of 6-1 with Councilmember Fisher opposing the motion.
In other matters, the request of Anita Ahmadi of West McGarity Lane to install a gate on Allison Lane at the Council’s February meeting was revisited. Several council members voiced concerns about installing a gate on a public access road while also expressing support for Ahmadi whose only access to her home is constantly being degraded because large trucks use the dirt road as a means to access the Walmart at Lucas Road and Angel Parkway. The council adopted a motion to repave and maintain semi-annually Allison Lane with asphalt millings. Ahmadi thanked the council for its response and seemed genuinely pleased with the outcome.
The council approved the plans for landscape, site and architectural design of a new O’Reilly Auto Parts store located north of 571 South Angel Parkway.
City Attorney Joe Gorfida led the Council’s annual review of its Charter as required by Texas State Law. A series of minor housekeeping issues were address, none were considered substantive.
· During the portion of the meeting agenda labelled Citizen Input the council received comments urging the city to review dangerous traffic conditions at the T-intersection of Winningkoff and Blondy Jhune Roads and to take action to mitigate the danger. Several residents expressed their concerns that many accidents and near accidents have occurred due to excessive speed, failure to yield and road conditions themselves. The intersection lies at the bottom of a long and steep downhill section of Winningkoff Road. Mayor Olk asked city staff to look into the matter.
· Mayor Olk also noted the death on March 2nd of long-time city resident Karen Campbell and asked for a moment of silence.
· Volunteers are needed on April 6th at the City Hall park beginning at 9:00 am for the city’s annual Trash Off. Mayor Olk noted that last year he and Councilmember Duke actually hauled off an abandoned engine of some sort.
· Residents are invited to participate in Founder’s Day on May 11. Mayor Pro Tem Kathleen Peele noted the need for stick horses to restock the city’s stick horse corral. Contributions of more stick horses are needed and can be dropped off at Town Hall. The horses are furnished to children during the day’s celebrations for stick horse races. Contributions of new, used and stick horses in need of repairs will be gratefully accepted.
· One of the measures on the May 4th election ballot permits the extension of current water taxes. There is no increase in the tax rate but approval is required for the continuation of the existing debt.
· Mayor Olk noted the introduction of two legislative bills in Austin addressing the Volunteer Firefighters Pension Fund. HB 2178 by Noble and SB 1375 by Paxton allow a municipality to withdraw from the Texas Emergency Services Retirement System, a option that current law prohibits once a city enters the pension system. Persons interested in following the progress of the bills can do so online at https://capitol.texas.gov/BillLookup/BillNumber.aspx
The next meeting of the Lucas City Council takes place at 7:00 pm on Thursday, March 21 at Town Hall.