CORPUS CHRISTI, Texas — City leaders said there are several projects around town that need funding, and the way to pay for them is through revenue bonds and certificates of obligation.
It will be one of the topics of Tuesday’s regularly scheduled Corpus Christi City Council meeting.
Revenue bonds and certificates of obligation are options that local governments can use to finance municipal projects, such as construction, and they don’t require taxpayer approval.
Debt services, said Corpus Christi City Manager Peter Zanoni, which are well within state law.
But we wondered: What is the effect on taxpayers? Will city services cost more in the future to pay for these?
Councilman Gil Hernandez believes utility rates probably will go up this year if city council votes to use these debt services for city projects.
Typically, he said, the city adjusts utility rates every two years, and the timing isn’t coincidental – he said it was done to give councilmembers a feather in their cap when re-election time comes around.
“That was in the last budget presentations,” he said. “That was in August of last year where they didn't raise rates. So they can say -- the councilmember can go to his voters and say -- ‘I did not raise your rates. Because they only raise them in off-election years -- or at least that's the proposal."
Zanoni confirmed that utility rates are set every two years but could not say whether the timing was the result of a political tactic.
He also told 3NEWS that utility rates will be going up this year, but not because certificates of obligation or revenue bonds would be used to pay for various city construction projects.
He said it’s due to higher operating costs.
Whatever the reason, Hernandez said he doesn’t plan to vote in favor of using certificates of obligation to pay for these projects, but interim city finance director Alma Casas said Corpus Christi plans to use them correctly and conservatively if the proposal passes.
“Sometimes the certificates of obligation people feel, and maybe it happens in other places where, they have issued and issued and don't have to take it to voters and they've abused it,” she said. “That has not happened with us -- not by longshot."
Councilman Roland Barrera said these bonds and certificates are the same kind of tools people use when they buy a house or car.
“Construction never gets cheaper, so if we can go ahead and get the infrastructure completed now, we can get it at a savings," he said.
Casas confirmed to 3NEWS that the city already has a total debt right now of around $1 billion. If Council passes those revenue bond proposals, along with the certificates of obligation, that debt would hit the $1.4 billion mark.