Texas Bond Review Board

The Texas Bond Review Board does not have oversight authority over local government issuance, nor does it approve the legality of state security issued by a local government.  They collect and analyze local government debt and make this information available on their website.  The following is what they understand about COs, as an agency that analyzes local government debt.

Certificates of Obligation (COs) are authorized by the Certificate of Obligation Act of 1971, Subchapter C of Chapter 271 of the Texas Local Government Code. COs are generally issued as tax-supported debt to pay for the construction of public works; purchase of materials, supplies, equipment, machinery, buildings, land, and rights-of-way; and to pay for professional services such as engineers, architects, attorneys, and financial advisors.

Debt for COs is paid from ad valorem taxes and/or a combination of revenues available from other sources.  

CO issuance does not require voter approval unless a valid petition of 5 percent of the voters requesting an election is presented.

https://statutes.capitol.texas.gov/Docs/LG/htm/LG.271.htm
[Scroll to]: SUBCHAPTER C. CERTIFICATE OF OBLIGATION ACT

Texas Bond Review Board Website:  http://www.brb.texas.gov/local_debt_search.aspx

Bond Review Board
Searchable Debt Databases

State Debt Outstanding

Local Debt Outstanding

Local Bond Elections

State Debt Issuance Fees

Local Debt Issuance Fees

The Local Debt Outstanding database and the Local Debt Issuance Fees database go back 10 fiscal years.

What is the Published Debt for McGregor, Texas?

It appears that at the end of the fiscal year 2018 total principal outstanding for all bonds/COs was $17,527,065 and interest outstanding was $5,661,202.  At the end of the fiscal year 2019, the total principal outstanding was $18,644,000 and interest outstanding was $5,785,576.  The issuance of the additional CO in the fiscal year 2019 (Series 2018A – the McGregor Exchange – Community Center) is why there was an overall increase of principal and interest outstanding during the fiscal year 2019 compared to 2018.

How do I search for City Debt information myself?
Texas Bond Review Board Website:  http://www.brb.texas.gov/local_debt_search.aspx

bond_review_board_mcgregor

As of FY 2019 McGregor is in debt $24.4 million dollars – reference the table [above] with the CO’s – [by year].

What are the “real costs” associated with Certificates of Obligation?

The TOTAL “Local Debt Issuance Fees” listed here by the Texas Bond Review Board = $500,864.46

How do you feel about paying a half-million dollars in FEES for basic Banking Services?

Certificate of Obligation – [COs] – Debt Fees listed by year by the Texas Bond Review Board – [2014 – 2019]

Listed below are the Fees specific to the new McGregor Exchange – [Community Center].
bond_review_board_mcgregor_fees_2
Below are the published Fees for the $24.4 million dollars the City borrowed using Certificates of Obligation.
bond_review_board_mcgregor_fees_2014-2019
takedown_fee

The state’s fiscal years run from September 1 to August 31, so the most recent completed fiscal year would be 2019 which ended on August 31, 2019.

House Bill 477 passed during the 86th Legislative Session, effective September 1, 2019, added additional requirements for the publishing of notices of intention to issue a CO prior to the date the issuer intends to pass an order or ordinance authorizing the issuance of a CO.

With the passage of House Bill 1378 during the 84th Legislative Session, effective January 1, 2016, a CO may not be issued if the voters rejected a bond proposition for the same purpose within the preceding three years, except in the case of public calamity, public health, unforeseen damage to public property, or to comply with a state or federal regulation. Only counties, certain cities, and Health and Hospital Districts and Authorities (HHDs) are authorized to issue COs.

https://www.tasb.org/legislative/documents/2019-lege-summary-members.pdf
[Scroll to]: House Bill 477

What can be done?

Find Your Voice – Help Our City.
Contact  Your City Councilman
Angelia Sloan – City Secretary — [254] 840-2806 — asloan@mcgregor-texas.com