The Jersey Village City Council is currently considering placing a bond issue on the May 2022 General Election Ballot along with the election of three city council positions. Later in this article, some of the financial details will be discussed, but first, the issue of transparency will be discussed as this has been much touted by the current and some previous city council members. Transparency and Trust have been used along with the idea that elected officials are elected to make decisions for the voters. Jersey Village operations are managed by a City Manager hired to manage day-to-day operations with some legal approvals required by the elected City Council Members. The vast majority of the decisions/actions by the city do not require voter approval; however, in a “Transparent” world, major decisions involving spending millions of dollars that might or might not involve additional debt is a different matter. As long as residential property taxes are the main source of support for city operations including debts in any form, the city’s registered voters must be involved with the decision process involving major projects. For transparency to exist, the taxpayers need to know that their taxes are only as high as required for operating expenses and projects they have approved and not higher than required (overtaxing).
Why are any of the points listed above important, you might ask? Many JV Residents are aware of plans to build a new golf course clubhouse to replace the existing one that is in very bad condition. That project has been discussed before and the suggested building project has evolved to a much bigger project under current consideration. Before getting to more of the details of that project, let us review a recent project that was and maybe still being pushed by Jersey Village City Council. The Village Center Project has been a major effort to get done for several years with much talk about all the benefits to the city and to the residents in the form of lower property taxes. More details about what was presented for that project are available as other pages on this website; however, what needs to be included here is that there was a lack of transparency with that project and a lack of real research of those involved with the development side of the project. During that project, several things became evident that should concern many residents. First, the city council had made several major decisions without seeking voter approval including spending over $8 Million to purchase land across 290 that was to be the location of The Village Crossing that then became known as The Village Center. Also, the city council was planning to build a new city hall to be located within that project and was planning to spend up to $10.5 Million from “available” funds without submitting for voter approval. A Petition with over 900 registered voters was submitted to Jersey Village City Council in an effort to force a vote on the project to move city hall and it was rejected due to “wording” with JVCC then moving to sign a contract for the project development to begin as soon as possible. Some members of the City Council were pushing for approval to sign a contract to build the new city hall on part of that land even though the developer could not finance any portion of the project. For all of the years that the city has owned that land, that over $8 million from city funds was spent, not one cent has been received in the form of property taxes on that land or from any source from the project. An additional $400,000+ was paid for conceptual drawings that have no value, regardless of any future project on that land or even if a new city hall is built elsewhere. Now the question needs to be asked – “How did Jersey Village City Council have available funds to buy land for over $8 million and have another $10.5 million to build a city hall, all without requiring voter approvals?” Only one answer comes to mind – residential property taxes have been higher than required to cover all city operations for more than a few years. The State of Texas Legislature has passed several laws over the years to require taxing entities to have the voters approve tax rates when they increase over a certain level; however, cities that are already taxing their property owners at a rate greater than required are not required to put those rates up for voter approval.
Now to the Golf Club Convention Center Project details, in a transparent world, all of the financials would be part of the project details for everyone to review. It appears from past discussions; the city is at least discussing spending around $17.5 Million in major projects possibly without voter approval. To make that possible, up to or more than $21 Million in surplus funds have been accumulated by collecting higher property taxes than required to meet normal operational needs. This issue has been presented during many City Council Meetings during the Citizens Time without any response or explanation in any form to the residents. That does not demonstrate Transparency in Taxation nor has the city provided an answer as to where the “available” funds have been provided (approx. $21 million). The original new clubhouse floated was to cost less than $500,000, but when the first plans came back it was around $1.5 Million with the project expanding to a sticker-shock causing a pause with the project. Recently with the Village Center Project falling through due to a fold of the “players” on the developer side (no money), some members of the city council began pushing to revive the golf club building project. This time it has expanded to be much bigger and to include a convention center. The concept now includes a building in the estimated $7.5 Million with a new parking lot and driveways and other features that would put the estimated total around $10.5 Million. These new items are in addition to all of the other improvements made to the golf course itself like new restrooms.
During a budget workshop in 2021, selling municipal bonds was the method for paying for this project with three of the Council Members voting to put the Bond Issue on the May 2022 Ballot with two Council Members preferring to wait until the city’s debt (including the original purchase of the golf course) being paid off. While city financial reports include financial reports for the golf course operations, the transparency of what they actually show is a problem. The Golf Course Operations does not pay anything toward the cost of the purchase of the Golf Course that will be $12,793,114 when the debt is paid off plus the account that allows funds to be transferred between the General Fund and Golf Club Operations currently has a negative balance of $4,808,398.07.
Transparency, the Mayor or Council Members are heard reporting when the Golf Course Operations has a “Greatest Month Ever” but little is heard when the golf course income does not cover the cost of running the operation. So what will the total cost of borrowing $10+ Million by selling municipal bonds including 2.5% or 4.5% or possibility, even more, depending on what the market is at the sell date? One idea included paying a premium rate of $1.8 Million to have the right to be able to pay the debt off earlier than the scheduled retirement date. A statement was made by one of the Council Members that 4o year Bonds that pay for themselves in 36 years provides 4 years of “gravy”. No, consider the actual fact that 20 years after purchasing the Golf Course, the debt is nowhere getting paid off except by the property owners with ongoing subsidies to keep it operational.
At a time when hotels and other convention centers are all on a negative cash flow basis with conventions, Jersey Village is going to develop the expertise to not only be the “new player” in the business but make money when that business is in unchartered waters. Trust is built on past performances and matters being handled in the open with questions answered and not ignored.