Kerrville's plans to build a new public safety complex to house the police department, fire administration and municipal court hit a snag Tuesday after a citizens group filed a petition to force an election on how to pay for the project.
In a news release, city officials said the earliest they can call a special election for a bond vote is May of 2022 — potentially delaying the project by nearly a year
Let Us Vote Kerrville, which has routinely challenged the City Council on the city's debt, needed 5% of the city's more than 16,000 voters to force a general obligation bond election. All the group needed was 825 registered voters to stop the city from issuing certificates of obligation. The city still has to verify the signatures of those who live within the city limits. The city said it would verify the petition by Aug. 23.
The development didn't sit well with some members of the City Council.
"We are ready to move on this building," Place 3 Councilwoman Judy Eychner said. "Putting it off six or eight months is not good in my book."
Councilwoman Kim Clarkson said Wednesday morning she's heard comments that a new police station is not needed. "I find that problematic," Clarkson said.
The city planned to issue about $7 million in debt to begin the project. An additional $10 million would be required to complete the facility. For more than a year, city officials have worked on ways to replace the aging police headquarters, which once housed a bus station.
But the debt battles have been raging in Council meetings for some time. Citing the city's $65 million debt as an example of poor management, Let Us Vote Kerrville was able to hammer down on the city by questioning its financial acumen and priorities.
However, the group also played loose with the facts. For example, more than $40 million of the long-term debt paid for city water infrastructure, paid down by water and sewer fees. The group said certificates of obligation were for "emergencies," another issue that is in dispute. The group also suggested that Mayor Bill Blackburn re-prioritized funds for quality-of-life projects, including the extension of the Guadalupe River Trail and the sports park. Sales tax revenue, overseen by the Kerrville Economic Improvement Corp., helps pay for those projects.
The battle over certificates of obligation has been simmering since last year when it was a campaign issue in the race for mayor and later when Roman Garcia won a seat on the City Council in May. The city's past issuance of certificates of obligation paid for road and drainage improvements, and the city has also refinanced debt to take advantage of low-interest rates.
Garcia issued a press release about the petition but declined to answer two specific questions from The Lead.
"I am unable to answer these questions because I have not seen the total project in the form of a CO or a GO," Garcia said via email.
The questions were:
- By not issuing the COs, the city will need to have a special election sometime in 2022. Is this an unnecessary delay to addressing the needs of public safety?
- Also, switching to a GO bond, at least from our understanding, puts the impetus directly on the voters through property taxes. Do you think there will be a requirement to raise taxes to pay for this project fully?
Garcia, however, offered praise of the effort to put it before voters.
"As always, I am a strong advocate for community involvement and awareness regarding city business," Garcia said via a press release. "I am pleased to see the citizens who became involved and voiced their opinions both for and against the use of COs for this project."
Texas Comptroller's Office explained issuance of certificates of obligation this way: "Given their streamlined adoption process, COs can be particularly attractive when a local government wishes to, for example, take quick advantage of lower interest rates, purchase a newly available property or come into compliance with a federal or state regulation."
With an AA credit rating, low interest rates and increased property values, Kerrville leaders said they were positioned to pay that down from existing revenue without raising property taxes. However, a general obligation bond may require increased tax rates because the bond requires repayment through property taxes. An exception would be school construction funding, which is backed by oil and gas royalties.