By Rhiannon Meyers
The Daily News
Published February 28, 2009
FRIENDSWOOD — The city of Friendswood is moving forward with plans to fund $20 million in projects with a bond election and certificates of obligation.
While bonds require voter approval, certificates of obligation do not.
Voters will get the chance in May to decide whether to issue $9.6 million of bonds to build a new library, to convert the existing library into a community center and to improve parks. The city had planned to issue another $11 million in certificates of obligation to fund roads, parks, an animal shelter and a records building. But not all council members agree with that plan.
Councilman Jim Hill, who was one of two dissenting votes this week against a May bond election, said he thought all of the projects should be decided by voters. Certificates of obligation should not be issued, he said.
The city charter was amended by voters in 1997 to prohibit the city from issuing debt without voter approval that it could not finance from its own revenue streams, except in cases of emergency or “urgent public need.”
Mayor David Smith said there is a strong possibility the city could finance certificates of obligation without raising taxes, which would be allowable under the charter. Also, state law allows cities to issue certificates of obligation, City Attorney Bobby Gervais said. Despite what the charter says, the city could legally issue certificates of obligation per state law, Gervais said.
If voters approved the bond package and the city issued certificates of obligation, Friendswood taxpayers would see a tax increase, at most, of 6 cents per $100 valuation. That increase in the tax rate — which Smith called a “worst-case scenario” based on a prediction that the city would not grow at all — would push the tax rate to 63 cents per $100 valuation.
Read the full story HERE
