The Odessa City Council will consider issuing upwards of $93 million of debt via certificates of obligation, commonly referred to as a CO, rather than using a bond proposal that allows voters to decide whether to accept large amounts of debt to pay for public projects.
The regular method local governments are supposed to use in funding major public projects is the issuance of a bond proposal, which allows voters who will ultimately be responsible for paying the debt to make the decision.
However, statutory language does not restrict the issuance of a CO to emergency circumstances, leading to increased usage by local governments wishing to fund projects without seeking consent from the voters.
The city council plans to use the money to fund a host of construction projects, including a new facility for a police academy, fire stations, and an animal shelter.
Recently, the city saw the cost for the construction of a hotel and a convention center construction project funded by hotel occupancy taxes (HOT) increase by $3.5 million over the original estimates.
Mayor David Turner reportedly stated that hotel taxes could not be used towards projects such as a new fire station.
This past legislative session, lawmakers approved a measure allowing the City of Odessa to use HOT dollars to fund the construction of either a sports facility or a convocation center “capable of hosting intercollegiate athletic events” on property the city will lease from the University of Texas at the Permian Basin.
Notably, the bill required the hotel taxes to be reimbursed by the city’s general fund in seven years, placing the cost of the project back on local taxpayers.
Multiple inquiries from Texas Scorecard to city officials regarding the convocation center have not been answered.
The city council will meet tonight from 5-7 p.m. to discuss the issuance of the debt certificates.
