On Monday, October 23 the County’s financial advisers, Brad Angst and Nancy Rocha, gave the Commissioners Court a Q3 market update under agenda item 8. Toward the end of their presentation, they briefed the Court on the capacity of the County to issue new debt in FY2025 without putting its coveted AA bond rating at risk.
According to them, the County may hold a bond election in November 2024 and ask the voters to issue up to $350 million in general obligation bonds, and then as early as January 2025 can issue an additional $150 million in certificates of obligation for “more essential projects” without voter authorization.
The first $150 million of new debt can be issued without impacting the current tax rate, because some older debt would be retired by the end of FY2024.
But adding another $350 million beyond that would increase our County tax by 3.5 cents, or $35 for each $100,000 in property valuation.
Commissioner Sergio Coronado seemed giddy about the prospect of issuing hundreds of millions in new debt, and asked how soon the County could issue COs.
Commissioner David Stout commented that borrowing up to the cap of $500,000,000 would result in an additional levy of only $6/month on a $200,000 home.
You can follow the 35-minute discussion on the County YouTube video starting at the 1:25 mark.
COUNTY SPENDING BINGE
Keep in mind that on December 12, 2022 the County voted to issue $100 million in COs and tax anticipation notes without voter authorization.
On August 28, 2023, they voted to increase the County property tax rate to $0.458889 per $100 of assessed value, which is five cents more than the no-new-revenue rate that would have spared us a tax hike, with Commissioner Holguin strenuously dissenting.
The Commissioners Court also voted to give themselves a 16.2% salary increase, which followed double-digit increases in 2016 and 2020, such that the Commissioners are now paid 112.9% more than they were paid only seven years ago.
And now the Court is considering issuing up to a half-billion dollars in new debt.
Enjoy your evening.