ReBuild Houston PAY-GO (or pay as you go) financing was a bold story, designed to persuade just enough voters to pass a $100 million annual drainage fee (tax). A key feature of the ReBuild Houston program was that we were to no longer issue new debt for street and drainage projects. Over time as the existing debt would be paid down, more cash flow would be available to directly pay for projects. So, you see, just be patient, it will all work out.
Except, as any casual observer of local politics and city hall will tell you, there’s just too much money to be made advising, underwriting, issuing, rating, and insuring new bonds. But if the Charter doesn’t allow new bonds for street and drainage what can you do? Well, just get one of the over two dozen City of Houston TIRZ Zones to do it!
The plan was never to actually pay down debt, it was to just collect a new tax, because the new debt has just been issued by the TIRZ program. I reported last year TIRZ debt had jumped from $244 million in 2010 to a projected $675 Million for FY 2017. We’ll have this years numbers soon.
Here’s a snapshot of a document I’d never seen before, tucked neatly inside the budget approved by the TIRZ 20 (SW Houston) board recently. This budget and plan will be up for City Council approval in a few weeks. TIRZ 20 has planned additional bond sales of $23.6 and $18.6 million over the next few years, on top of the 2017 bond issue of $49.5 million.
Don’t be go down the path these are separate entities, with their own audits, and boards, and such. The Mayor controls every single detail about these zones. Their budgets and plans look increasingly like plain ole City of Houston CIP or capital plans. It’s been a clever way to beat the voter approved and very soft property tax cap, and the program has run up debt with no end in sight.
MAYORS COMMUNICATION STAFF REVEALS MORE TIRZ CIP INFO
Today, the Mayor Turners Office, released (on twitter) a screen cap of another revealing TIRZ program report. This document appears to be a list of all TIRZ “Planned Detention and Drainage” projects for FY2018-22.
A memorial area resident remarked: “These are not CURRENT drainage projects. Detention Basins A & B are like Charlie Brown’s football – long promised, never delivered. Tricky”
REPEAT IT WITH ME, THERE IS NO PAY-AS-YOU-GO!
Having debt is the only way that a government entity can guarantee its survival. The bigger the debt, the more likely it will be refinanced and rolled over.