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Are you ready to raise your taxes?

Cities can borrow money using General Obligation bonds (GOs) and Certificates of Obligation (COs). Farmers Branch has used both methods. Both methods are repaid with the property tax the city collects. If the debt service on the bond is greater than property tax revenue available to pay, the tax rate must increase to cover the costs. But there are differences between COs and GOs.

General Obligation Bonds are debt that is authorized by the voters. In November you will be asked to approve the Council borrowing money for Trails and Parks, DART Area Infrastructure Improvements and Neighborhood Revitalization using the city's Demo/Rebuild program.

Passage of the Bond Proposition authorizes the city to borrow the maximum amount of money stated in the Proposition. The Prepositions are worded in the most general way to give the Council maximum flexibility when issuing the debt. However, the city has released a detailed list of project that each Bond is expected to fund for your information. Finally, each project must be approved by a Council vote to spend the authorized money when the project is built. The Council doesn't have to follow the detailed list exactly as long as they fund projects in the broad categories listed in the actual propositions. Council, in fact doesn't have to borrow the money even though the voters authorized it. After a period of time, the authorization expires and the process would have begin again.

A Certificate of Obligation is debt that can be issued just by a majority vote of the City Council. There is not limit on the amount they can borrow. A common sense "rule of thumb" is that the Council should borrow sums in the range of $3 - 5 million for things that need immediate funding. For instance, the Council used CO's to fund our share of the joint emergency response system that we operate with our neighboring cities. However, COs have also been used to fund the purchase of the Albertson site, the Aquatic Center and in the 2017-18 proposed budget, the building of a new Fire Station in Holiday Park. All of these projects appear to be exceptions to the "rule of thumb". The only input voters have into the CO process is to hold individual Council members accountable on election day or to stop the sale if 5 percent of the total voters in the taxing area sign a petition and submit it prior to approval of the ordinance to sell such certificates.

Branch Forum urges you to become informed about the Bond propositions. This is the rare time when you have a real voice in setting your tax rate and telling the Council directly what investments you are willing to make in our city. To this end, Branch Forum will be looking at each Bond Proposition, analyzing it and giving you our opinion about whether we would vote for it.

We encourage you to do your homework, attend the city's information meetings, ask questions and make up your own mind. Then go and vote on November 7



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