Nassau Bay residents could see their property tax bills support $4.5 million in new municipal debt after the city posted a formal notice Tuesday, Aug. 11, that it intends to issue Certificates of Obligation to buy fire department equipment and build a new apparatus shelter.
The legal notice, signed by the city secretary on Aug. 10, spells out three spending categories: a ladder truck and a pumper truck for the Nassau Bay Fire Department, an enclosed metal parking structure to house fire apparatus, and costs tied to the debt issuance itself.
The city estimates total repayment at nearly $6.9 million in principal and interest over a term of up to 40 years, based on an assumed 5% interest rate the notice calls illustrative. The debt would be repaid primarily through ad valorem (property) taxes, with a token pledge of no more than $10,000 from water and sewer revenues.
A big jump in city debt
The borrowing would more than triple Nassau Bay's existing tax-backed debt. As of Aug. 10, the city carried just $1,435,000 in outstanding public securities secured by property taxes, with $1,532,059 in combined principal and interest left to pay.
That is a significant increase for a small city.
No public vote required
Under Texas law, Certificates of Obligation do not require voter approval. The Texas Comptroller's office describes COs as a tool that lets cities borrow without a referendum, noting that opponents of the mechanism argue it allows officials to burden taxpayers with long-term debt without adequate citizen input.
Residents do have one check: according to the Comptroller's published guidance, if at least 5% of a city's registered voters sign a protest petition before the council votes, the city must hold a public election on the borrowing. The exact number of signatures required in Nassau Bay was not available as of Tuesday.
What happens next
The Nassau Bay City Council is tentatively scheduled to vote on the ordinance authorizing the certificates at 7 p.m. Monday, Oct. 12, at City Hall, 1800 Space Park Drive, Suite 200. Texas law requires the city to publish the notice at least twice in a local newspaper more than 30 days before that vote.
Residents who want more information or wish to organize a petition can contact City Hall at 281-333-4211.
