• July 16, 2019

City pursuing additional debt - Odessa American: News

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City pursuing additional debt

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Posted: Sunday, June 16, 2019 6:30 am

The Odessa City Council plans to pursue taking on potentially more than $90 million in debt to help pay for improvement projects to the city they consider much needed.

Council members met with the city’s financial advisor about possible options for pursuing a debt issuance last month, and Interim Assistant City Manager Cindy Muncy gave them two options of plans for pursuing debt — how much they would take on and what they would pay for.

The cheaper plan comes in at $83 million, with the second plan at $93 million. The only two differences in the more expensive plan include an additional $5 million toward road improvements and another $5 million toward the relocation and construction of Fire Station No. 6, to expand it into a larger headquarters with more offices.

There are numerous projects across several departments in the debt breakdown. Along with the plan for a new Fire Station No. 6 for Odessa Fire Rescue, they also are considering building a ninth fire station in Lawndale at a cost of about $8.5 million.

There is also money planned for the Odessa Police Department, for a new animal shelter costing about $10.5 million and the completion of their multipurpose building for their police academy, costing about $3.6 million.

Other priorities on the list include a $6 million renovation of Floyd Gwin Park, and $3.1 million worth of parks development and improvements. There is also several million dollars worth of money set aside for improvements to downtown, and for improvements to the east channel drainage basin.

The type of debt the city is pursuing is called a certificate of obligation, which is used for general purpose issuances and utility improvements. In order to pass this, the city council would first need to pass a resolution to publish a notice of intent to issue the certificate for two consecutive weeks, at least 31 days before the certificate is authorized.

The public can establish a petition in the meantime contesting the certificate, which would require signatures from at least 5 percent of registered voters in the city of Odessa.

George Williford, the managing director of Hilltop Securities, the city’s financial advisor, said these petitions rarely succeed.

“If you get enough feedback on this, it could cause us to not be able to do it,” Muncy told the council.

As far as which option they want to go for, District 3 Council Member Detra White and District 5 Council Member Mari Willis were partial to the $83 million option, while District 2 Council Member Dewey Bryant, District 1 Council Member Malcolm Hamilton and Mayor David Turner wanted to go for the full $93 million.

At-Large Council Member Peggy Dean said she wanted to go for $88 million because she felt the fire department needed the extra $5 million.

District 4 Council Member Tom Sprawls was slightly more hesitant about taking on the debt.

“We’re going the route of certificates of obligation because that’s the easiest thing to do for the council,” Sprawls said. “I really think we need some public input in this thing. Whether that means take it to the voters or not, I don’t know, but we’re spending a lot of their money.”

Sprawls conceded that everything on the list was a legitimate need, but said he wasn’t comfortable about voting to spend $93 million without some public input.

Muncy said the city could arrange a public agenda item to specify how much of the debt is going towards departments like OFR and OPD, but said they may not want to give specific amounts because the cost could change by the time the project is started.

Dean agreed the city has to tell people why they are pursuing this debt.

“I think it’s important for the public to know that this bond will allow us to construct two new fire stations,” Dean said. “You’ve got to throw that information in about the number of calls we’re doing. Our response time is longer …We need the animal shelter. We know people have continued to talk about it because we’re continuing to euthanize animals.”

City Manager Michael Marrero said the city could possibly develop a fact sheet detailing the intent of the certificate of obligation and how it will be used, and Dean said the council needs to make themselves available at least two or three times somewhere so people can come and ask them questions.

Bryant compared the idea to when they went for an improvements bond for their parks, saying there may have only been six people at their public information meeting about that, including his wife.

“I promise you there will be more than four people that will come and talk about this,” Dean said.

The city already currently has nearly $100 million worth of debt, but Williford told them at their last meeting about $43.29 million of that was self-supported by the utilities system, leaving $56.18 million in general purpose debt.

That number also will decrease by 2024 to about $50 million, about $32.36 million of that being general purpose debt, which Williford said would leave room for taking on additional debt.

The city has been spending a lot of money already on the construction of a new hotel and convention center, and that price just went up by another $3.5 million, but Turner said that’s being paid for through hotel/motel tax money, which can’t be used toward issues like roads, or a new fire station.

Odessa, TX

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