There was a phenomenal article on the front page of the Fort Worth Star-Telegram last Sunday. It went into great detail how local municipalities are using more Certificates of Obligation (bonds) to fund projects in their respective cities. The main premise of the article is that voters have no say in whether cities take on these types of debts. The article also noted, “One knock on the certificates is a lack of transparency, critics say.”
The article from the Star-Telegram covered a lot of local cities including this comment on Grapevine:
Grapevine used money from three certificates to help pay for the $13.8 [million] Convention and Visitors Bureau Headquarters and Museum Complex, which has its grand opening this month. The complex includes animatronic gunfighters in a clock tower. Certificates funded a grab bag of other projects, including the purchase of vehicles to zip around the city golf course.
Where do we begin?
If you walked by the construction of the new Convention and Visitors Bureau over the last three years, you probably passed a rather large sign that read:
Funded through the City of Grapevine Hotel Occupancy Tax Proceeds.
Anyone else see the conflict here? If the building was completely funded by hotel tax revenue, why was there a need to issue Certificates of Obligation to help pay for the construction?
Because we like to double check things, we went to the city budget to determine if in fact Certificates were used to fund the CVB Headquarters. Here is a quote from the fiscal year 2011 budget talking about debt issued over the last decade:
During the same period, the City has also issued certificates of obligation (CO) debt of $43.7 million to finance vehicle and capital equipment replacements, computers, golf carts, land acquisitions, construction of the Palace Arts Center, construction of the CVB Headquarters & Museum Complex, improvements at the Vineyards Campground, and for the purchase of mobile electronic hand-held ticket writers.
And here is the chart from the city budget detailing what the certificates of obligation were used for:
It is interesting what you can discover just by reading. Of course it would be nice if people were just upfront and transparent with taxpayers to begin with. Maybe the city should put up a new sign. We suggest the following re-write:
“This New CVB Building funded entirely by local hotel tax revenue, certificates of obligation that you the taxpayer now owe, and potentially other sources of funds that we might disclose at a later time.”
And we did not even get to the fact that you the voter had no say in taking on this debt for this purpose.