The big item on this meeting’s agenda is the nearly $650 million bond referendum. Big purchase necessary. Details inside.
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Review City Council agendas and minutes here.
Executive Session (starts at 5:00 PM)
(Review agenda here)
- Legal Advice:
- Regulation of building materials and aesthetic methods
- DART
- Economic Development Consideration
Preliminary Open Meeting (after Executive Session ends)
(Review agenda here)
Regular Meeting (starts at 7:00 PM)
(Review agenda here) Notable Consent Agenda items are at the bottom of this post.
- Proclamation: February is Black History Month
- Certificate of Appreciation: Parks and Recreation Planning Board – Hayden Padgett
Comments of Public Interest: at the end of every meeting, anyone can speak for up to three minutes by Zoom, with 30 total minutes allotted for this segment.
Items for Individual Consideration
- Item (1): $647.9 million in the Big Bond Referendum of 2025™. Details are in the link to the agenda item. I’ve gone into more detail at the bottom of this.
- Item (2): $12,986,776 to build the Oak Point Parks Maintenance Facility. Funding for this was approved in the last big bond referendum, which isn’t as big as this big bond referendum. To be clear, “Oak Point” describes the location of the Parks Maintenance Facility, not the beneficiary park. The facility will help service far more parks than Oak Point.
Notable Consent Agenda Items
Total of $10,391,310 of your money in proposed expenses
- Item (c): $2,898,759 for Big Lake Sediment Removal (not Big Bond Sediment Removal). The project includes the removal of large debris, such as downed trees and other obstructions, as well as sediment and silt. Eww.
- Item (h): $5,557,587 over three years for Microsoft licensing. This includes the addition of Microsoft Teams Voice and extended Microsoft Defender licensing, but no synthetic meat.
The Big Bond Referendum of 2025™
We’re considering $649.9 million in bonds on the May 3rd ballot. I’ll break down what we’re looking at (you can see full details here). Before that, though, here’s a brief primer on municipal bonds from my article about the 2021 bond referendum:
“In the business world, debt, like a stock offering, is a useful mechanism to finance the growth of your business, where the idea is that if you borrow money at at a certain rate of interest, you can use it to generate more money than you have to pay back by investing in your business, growing it, and earning more money.
However, government doesn’t produce anything of marketable value, so municipal bonds are more like your personal debt. You take out loans for big things that you expect to last a while, like a home or a car. You don’t take out a loan for your weekly grocery shopping. Municipal finance works the same way. You have routine, ongoing expenses, and then you have the occasional big stuff. Your property tax rate is broken down into two categories, which combine to determine your overall tax rate:
- Maintenance & Operations (M&O) rate: as the name suggests, this is for day-to-day operations, like staff salaries and paying the bills
- Interest & Sinking (I&S) rate: this is just a confusing way of saying “payment on debt”
The city takes on bond debt for the same reason you take on a mortgage: even if you could afford to pay for your house all at once, it would be incredibly painful to do so, and making regular payments provides some stability, so you don’t have your expenses going up and down like a roller coaster every few years as you incur large costs. In addition, local governments have an even better reason to do so–to make sure the people benefiting from an expense are the ones paying for it.
The police officer who responds to your call this year is paid for this year from M&O taxes collected this year. He may retire next year, and while we’ll miss him in the Plano PD and wish him well, you won’t still be paying next year for the income he earned this year. Roads, however, are not only really freaking expensive, but they also have a lifespan of thirty some odd years. Unlike the police officer, who earns his paycheck one day at a time, a road is paid for all up front when it’s first built. By issuing a 30-year bond to pay for the road construction, I&S tax receipts will be used to repay that debt, plus interest, over a 30-year period, which means that if you move out of Plano next year (we’ll miss you too), you aren’t stuck with the entire bill for a road you’re no longer going to use.
And so bonds are a necessary component of municipal finance, but you, the voter, hold the power to approve them.”
The Bond Items
- $316,470,000 for street improvements
- $155,155,000 for a new Police Headquarters
- $51,000,000 for a new Police Training Center
- $37,485,000 for other Public Safety Facilities (addition of Fire Station #14, Fire Station #8 remodeling, and land acquisition and design for future Fire Station #3 expansion)
- $45,135,000 for a new Fleet Maintenance Building
- $1,870,000 to renovate Schimelpfenig Library
- $40,795,000 for Parks & Recreation improvements and land acquisition
My take
This is a giant horse de-wormer of a pill to swallow. The mantra “vote against all bonds” misses the legitimate purpose of municipal bonds I wrote about above. Don’t vote against all bonds. Vote for some and against others. Determining which is which is the tricky part.
Items like the new facilities are exactly why we use bonds, to capitalize long-lived assets over their lifespan. However, most of this bond package is for maintenance. That leaves us in a difficult situation. Bonds shouldn’t be used for maintenance. The property tax rate is broken into two components:
- Maintenance & Operations
- Interest & Sinking (this means debt, which means bonds)
Maintenance expenses should go under Maintenance (that should go without saying). The work needs to be done though because Plano, and surrounding areas in North Texas, became much larger and more prominent, and put more wear and tear on our roads, water and sewer lines, facilities (and dumped more silt into our lakes) faster than anyone prepared for. So we don’t have hundreds of millions of extra dollars to do all that maintenance now, and we don’t want to try to jack up the Maintenance & Operations portion of the rate for all the reasons I laid out above, but also because Senate Bill 2, passed in 2019, which yours truly was proud to champion, instituted property tax reform to restrict how much your taxes could be hiked in a given year without you being allowed a vote on it.
Moreover, most of the maintenance is for roads, and people simultaneously want the roads to be fixed and want us to stop doing so much road construction. I feel your pain.
The roads do need to be fixed, and we also need to give our people a break on all the construction. I think creative options to maintain our city infrastructure while minimizing disruption are in order, and I’ve had recent conversations in which the City Manager has presented some ideas, which I’ll bring up in public meeting tomorrow.
Tune in tomorrow for the exciting conclusion of The Big Bond Referendum of 2025™!
