Friday, November 14, 2014

Another Charter Issue – Swiping Money from the Water and Sewer Fund

Someone pointed out to me a public notice the DMN printed for the City of Richardson. The content really got my attention.

Link to Public Notice

The City wishes to issues a CO for $11,425,000 to “… paying contractual obligations to be incurred for the acquisition of public park land and open space and professional services rendered in connection therewith ...” Ok, that isn’t so bad. They want to buy some property for a public use.

Not to what appears to be a problem, how it will be secured and paid for.

1)      “…such certificates of obligation to be payable from ad valorem taxes…” No problem there with ad valorem taxes paying for it.

2)      and a lien on and limited pledge of the net revenues of the City's combined Waterworks and Sewer System.

Putting a lien on the Waterworks and Sewer system is understandable. It is an asset of the city and a secured loan has a lower interest rate than a non-secured loan. But ..... if I am reading the current City Charter correctly, a lien cannot be put of the public works (Water and sewer department):

"Section 20.04. Liens on public property. 

No lien of any kind can ever exist against the public halls, parks or public works of the City of Richardson."

Well, that looks like a real problem. They want to let a lien be place on something, in an apparent violation of the charter.

The other problem with this issue is a “… limited pledge of the net revenues of the City's combined Waterworks and Sewer System.” The way I read that, and I may be wrong, money from the Water and Sewer Fund will be taken and applied to the repayment of the C.O. The way I read the City Charter, that is not allowed. I have a call into city hall to make sure I reading this correctly, that money from the water and sewer fund will be used as a apart of the way to repay the C.O. I spoke with David Morgan, he was unable to clarify this but said he would check with others and get an answer.

Here is a quote from the current city Charter:

Section 11.07. Transfer of appropriations.

The Council may at any time transfer an unencumbered balance of an appropriation made for the use of one department, division, or purpose; but no such transfer shall be made of revenues or earnings of any nontax supported public utility for any other purpose.

When it comes to the Water and Sewer Funds, those funds are supposed to be self-supporting, in other words, a nontax supported public utility. Already, it appears that the city in a continuous manner violates this portion of the charter in many of the nontax supported funds through the use of G&A transfers, PILOT (payment in Lieu of Taxes) and Franchise Fees for non-existent franchises.

So, in the big scheme of things, what is one more violation of the City Charter? Just normal business, maybe?

I would look for this section of the current City Charter to be modified to allow for the appropriation of the Water and Sewer Funds to be used for whatever they want them to be used for. After all, it seems, the city wants to change the charter to take away from the citizen of the city under the cover of the Charter Commission.


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