Certificates of obligation, like those to be considered by the Wichita Falls City Council on Tuesday, are a way in which local governments can spend money without getting voter approval, according to the Texas Comptroller’s Office.
Councilors on Tuesday will consider spending $26.9 million partly through certificates of obligation toward renovation of the former Kirby Middle School into a new police headquarters, renovation of Fire Station No. 4, renovation of the artificial falls at the Wichita River and completion of the circle hike and bike trail in the vicinity of Lake Wichita.
Wichita Falls Chief Financial Officer Stephen Calvert said at a March 17 council meeting that the city would borrow $26.9 million through the certificates of obligation to pay toward the projects, of which about $600,000 annually would come from property taxes.
Calvert said the spending would not require a property tax rate increase.
Tuesday’s agenda states the city’s Sales Tax Corp. would kick in $1.4 million per year for the funding for 20 years. The Sales Tax Corp. gets its money through a portion of the sales tax collected in the city.
The Comptroller’s Office said certificates of obligation differ from general obligation bonds that require voter approval or revenue bonds that are tied to specific revenue streams.
The government entity issues the certificates to investors who are repaid using a combination of property tax revenues or other sources, according to the Comptroller’s Office. Those investors would be paid on the principle and interest at regular intervals.
Five percent of qualified voters within the jurisdiction can petition for an election on any spending through certificates of obligation, the Comptroller’s Office said.
This article originally appeared on Wichita Falls Times Record News: WF city leaders to vote on spending millions without voter approval
Reporting by Lynn Walker, Wichita Falls Times Record News / Wichita Falls Times Record News
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