by Judy Eychner
Place 4 Kerrville City Council
Let Us Vote, the citizen’s action group described by the Kerrville Daily Times as “dedicated to forcing the city council to make changes to its funding style,” will tell you that they scored a victory for taxpayers by forcing a halt to the city council’s plans to issue certificates of obligation (COs) to fund a new public safety complex.
In fact, they did just the opposite.
Had the city council been able to approve the issuance of $7 million in COs at the Aug. 24 city council meeting to begin financing a new public safety complex, the city could have quickly begun the process of providing Kerrville citizens with a more efficient, more coordinated public safety operation in the coming years. Furthermore, they could have done so without increasing the city’s existing debt outstanding or raising property taxes. The COs would have allowed the city to move swiftly on any potential real estate opportunities available for a public safety facility, and at a guaranteed low interest rate.
Let Us Vote put an end to that, and in the process pretty much guaranteed that the project, if it moves forward, will now cost taxpayers not less but more. Aside from rising interest rate concerns, the price of land in Kerrville is appreciating rapidly and construction costs are rising. Per the Kerr County Appraisal District, land values in Kerr County increased 11 percent over the last two-year measurement period, and upward pressure on those valuations is expected to continue due to Kerrville’s favorable status as a relocation hot spot. A 12-month delay in beginning this project will almost certainly result in having to pay a higher price for the amount of real estate and construction expenses necessary for a new safety complex (48,000-plus square feet). Add in the costs of a municipal bond election and the probability that future debt issuances will come at higher rates, and those costs only increase.
So how did Let Us Vote pull this off? Through misleading information promoted in Letters to the Editor and columns that were run with “facts” unchecked in the Kerrville Daily Times. Let Us Vote spokesperson Bethany Puccio stated in a prominently displayed KDT column that “A previous council had taken steps to identify the needs of stakeholders in a preparation for defining a Public Safety Complex project that was to be placed on a bond election in either November 2019 or May 2020.” Puccio added that “Mayor Bill Blackburn chose to lead the city to reprioritize public safety, which is a necessity, below elective projects, such as parks, the River Trail extension, Arcadia Theater renovations and sidewalks across the Sidney Baker bridge.”
All those comments are incorrect, and two of them show a complete lack of knowledge about how city finances work.
Regarding Puccio’s first statement, previous approved city capital budgets dating back to 2016 identified a new Public Safety Complex as a need, an assertion agreed upon by Kerrville citizens as the Kerrville 2050 Plan was adopted. A “Police, Court and Fire Administration Space Needs Assessment” was completed to address the city’s public safety needs and was delivered to city council by the consulting firm of Brinkley Sargent Wiginton Architects in November of 2019. This report came too late to allow for a bond referendum in November 2019, and the May 2020 election cycle was cancelled by the State of Texas due to the Covid-19 pandemic. In either case, the city’s property-tax funded debt capacity would not have allowed for the additional funding necessary to begin financing this project in either of those election cycles, or in the November 2020 or May 2021 election cycles. Without a property tax rate increase, no debt capacity was available in 2020 for the project, and to ask for a voter-approved tax rate increase seemed incongruent with the global pandemic and recession that occurred in 2020 and 2021.
As far as Puccio’s accusations concerning Mayor Blackburn, elective projects like the River Trail extension and the Arcadia renovations are financed by Economic Improvement Corporation (EIC) funds, which are derived from sales tax. Per state law, EIC funds can’t be used to finance a public safety facility, so Mayor Blackburn and the city council could not reprioritize these funds over new public safety complex funding.
The only reason financing for a new public safety complex hasn’t happened sooner is there hasn’t been available debt capacity in the city’s General Debt funding. The city’s previous CO debt issuance in early 2019 was used to finance streets and drainage repairs, which at that time were deemed a more immediate need than a new public safety complex and were ranked as the No. 1 priority for debt funding by the citizens of Kerrville in a community survey conducted in 2018. That street and drainage related debt utilized all of the city’s available capacity at the time. (Note: The vast majority of city debt is actually for water and sewer and Economic Improvement Corporation (EIC) quality of life projects. A much smaller percentage (19%) is paid with property tax revenues, and almost all of that is for street and drainage projects.)
As it stands now, with the city not able to purchase real estate due to a lack of CO funding, only a very basic building site plan will be able to be presented to the taxpayers. A fully-developed architectural plan will not be able to begin in earnest until a site is selected and bought.
The ironic thing about Let Us Vote is that many of its members will tell you they support a new Public Safety Complex. If that’s true, apparently it’s only if the complex is built at a higher price to taxpayers than could have been achieved through the city council’s CO financing plan.