There are many parts to this question. It requires some good thought. Let's start with some simple discussion, first.
You all are perfectly capable of forming up your own thoughts, however I thought I would share with you what I think. That way you'll know where I'm coming from when I offer in idea for your review.
In politics and finances, I am conservative. I hate government waste. I can forgive a government that makes a mistake, then admits it, and then moves on to correct the mistakes. On the other hand, I have no patience with government that is blatantly wasteful and makes no apologies for it. That is unforgivable.
After having said that, I must confess that in planning for the future, I'm a little bit of a liberal. Of course, that means that the same conservative principals must still apply to investment in the future. It's like buying stocks. There are conservative investments in stocks........and there are risky investments in stocks. Both are investments in the future, but one is more likely to produce acceptable yields while the other may....or may not.
Thought processes of citizens attempting to justify the selling municipal bonds are much the same, in my opinion, with a little wrinkle......tax revenue.
Larry Beckham, a good friend of mine, once wrote and shared some of his research on the pending bond sale. He had learned that some earlier bonds sold by Rowlett were approaching maturity and would soon begin to pay off. Therefore, the taxes collected to pay the debt load in the past would soon retire and presumably become available to either lower the tax rate, or pay for additional bonds. I know this circumstance to be fact. From a municipal bond point of view, Rowlett is in pretty good shape. Now, Larry's observation can be refined a little further. The bonds purchased several years ago in all probability had a much higher interest rate than the current bond market rates. Therefore, the tax revenue needed to retire older bond debt should now be well above adequate to retire new bonds at the current market interest rate. So, if new bonds are sold at a lower interest rate than the rate of retiring bonds, Rowlett should have a little extra cash. For example, let's suppose you bought a car for $20,000 four years ago. Now you just paid off the last payment of the car and you want to buy another new car for $20,000, but the interest rate is less. You don't need a raise in salary to buy the new car. Your payments will be less because the interest rate is less. You have already budgeted the payments for four years. Your new car will cost no more each month, in fact, a little less.
Now the question becomes whether you need another $25 million. Another question that occurs is why, if any, additional tax increase is needed for debt that we have already grown accustomed to paying. As mentioned above, the interest expense should be less and therefore less tax revenue should be needed to retire the new bond debt.
Any additional increase in tax could be needed (wanted) for other things. You need absolute clarification from Rowlett "officialdom." What's the new tax increase for?
Here is what I think city hall owes the citizens of Rowlett:
1. I think you should be informed on the schedule of debt retirement. You need to know how much debt is retired and the interest rate on the bonds.
2. I think you need a complete list of what the new bond debt of $25 million is for. It must be capital improvements. It can't be for new hires, banquets, or it can not be given away to developers under economic development programs. It must be for streets, alleys, parks, and new capital improvements. All the other niceties could be covered under the general tax revenue.
3. You need a list of where any tax increase is to be applied. In other words, a source and use of funds.
All of the above items should be presented to you in layman's terms. It should be easily understood. We don't need any bureaucratic gobblygook. Only when getting good, clear, information can you properly analyze the spending of your tax money.
Only then can we begin to understand where our money is going. We can then make intelligent decisions. If "officialdom" can't make it clear what we're being asked to approve, then vote no. It's only when a leader steps forward and explains fully what our options are, and what we're getting for our money, that maybe we can vote yes.
This post dovetails into another story about how well Rowlett "officialdom" shares knowledge with us. I honestly think they try, but just don't know how to do it.
More bond posts and sharing of information posts are coming up. Stay tuned. I'm still pretty busy, but I see a light at the end of the tunnel.