LEAGUE CITY — League City plans to issue up to $6 million in debt this fall, money that city officials say will be used to build an addition to the animal shelter, buy software for the police, a fire truck, do design work for the new library and complete some road work.
According to a legal notice, the certificates of obligation would be funded through property taxes along with a “pledge of certain available net revenues derived from the operations of the city’s water and sanitary sewer system system.”
Monica Kohlenberg, the city’s finance director, said that did not mean the city would use water and sewer funds to pay back the debt.
“The city has never not levied a tax rate to pay off its bonds,” she said, adding that the practice of using utility dollars as a back up funding source when issuing certificates of obligation was common.
Kohlenberg said the city council also would issue revenue bonds for sewer and water projects this fall. This spring, the city plans to issue more revenue bonds and certificates of obligation.
The city council approved the projects as part of this year’s capital improvement budget, said Mayor Jeff Harrison.
Although some bonds require a vote of the public, certificates of obligation allow cities to issue debt as long as residents are informed via legal notices. Residents can then petition the city for an election if they oppose the projects.
The city council will consider approving the $6 million on Oct. 26.
The city will spend close to $8 million in fiscal year 2005 toward paying off debt. Earlier this spring the city twice issued certificates of obligation to help pay for the $18.9 million Big League Dreams sports park project.
