Schertz City Council on June 7 passed a resolution with the intention to purchase $19,855,000 in certificates of obligation.
The funds through the bonds would be used to cover FM 1518 road improvements, Main Street improvements, the replacement of the Northcliffe AC Pipe, the Live Oak Water Transmission Main and the relocation of utilities on FM 1518.
Council Member David Scagliola raised concerns about the funds not being voter-approved
“What is driving this $19 million worth of [certificates of obligation]? If it hasn’t been brought to the voters yet, what is our intention for actually making it public?” Scagliola said. “$19 million is almost half the city’s budget.”
City staff explained that a little over $11 million of the bonds are tied to water and sewer funds, which are not supported by taxes.
Scagliola said residents should be in the know, and the city should be transparent about the plan, despite the tax rates not being raised as a result of purchasing the bonds.
“I don’t like this idea,” Scagliola said. “I don’t like spending that kind of money without voter approval and without really having considerable input from residents themselves.”
Assistant City Manager Brian James explained that the projects do not result in new infrastructure and that community feedback suggests residents expect the city to maintain current infrastructure.
“What I have heard in the 10 years I’ve been here is residents expect us to deal with basic city services: police protection, fire protection, streets, water lines, sewer lines, basic maintenance of parks,” James said. “That is the thing that we routinely hear from our residents.”
Council Member Mark Davis agreed that since the list of projects focus on repairing and updating existing infrastructure, it can be passed without voter approval.
“We routinely bond to repave streets,” Davis said. “We went out and found money to redo Elbel and fix the drainage on Elbel when we had money laying around. We didn’t go back to the residents and ask them should we fix Elbel. They expected us to fix Elbel.”
City Council voted in favor of the resolution in a 5-1 vote with Scagliola voting against the item.
The approval of the resolution only shows an intention from the city to purchase certificates of obligation in the amount of $19,855,000.
Council will revisit the item Aug. 2, when it will approve the sale of the bonds after the bid process ends.
Schertz residents not in favor of the bonds can put together a petition to stop the sale of the bonds and move the bonds to the next ballot to be voted on. The petition needs to be supported by 5% of registered voters to succeed.
The deadline to submit the petition is 45 days following the approval of the resolution, meaning the petition would need to be submitted before the Aug. 2 issuance of certificates of obligation.
