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Comptroller releases debt report: Frisco outpaces other cities in debt accumulation
By Conner Hammett, chammett@starlocalnews.com
The office of Texas Comptroller Susan Combs has released a report analyzing the statewide growth of public debt during the past decade.
As of 2011, local government debt around the state totaled $192.7 billion, the report states. That's double the amount of debt local governments had accumulated as of 2001.
One-third of this debt comes from cities, which together owe $62.9 billion in bonds for public buildings, infrastructure and other capital projects. The largest growth sector for debt came from public schools, which together owe $52.7 billion.
"As taxpayers step into a voting booth to approve new debt, government should tell them how much debt they are already responsible for repaying and how much debt service is included," Combs said in a press release. "Elected officials are responsible for telling the taxpayers they serve about the price tag associated with new and existing debt."
According to the report, Frisco has accumulated the most debt of all Collin County cities with $591.4 million in total outstanding bonds, all of which are tax-supported.
Jeff Cheney, Frisco mayor pro tem, said the level of debt makes sense considering the rapid growth of the city, which was the fastest-growing in the country between 2000 and 2009, according to the 2010 U.S. Census. Frisco's debt service tax rate is 19.85 cents, or about 40 percent of the overall tax rate.
"We're always adding projects, and since we've had growth at such a rapid pace, we haven't had bond projects fall off," Cheney said. "If Frisco built out over a 50-year period, then obviously your debt levels are going to be lower because you're spreading all those capital projects over 50 years."
Nell Lange, assistant city manager, also pointed to growth as a main driver of Frisco's high debt, the growth rate of which has outpaced that of the city's population.
"What happens, I guess, in some cities is you don't grow in very small concentric circles from the center out," she said. "You grow in pockets. We cover 71 square miles, and we are developing in all quadrants of the city, so trying to get roads down to cover that 71 miles, it's difficult to keep up."
She also pointed out that the debt figures released by the state include certificate of obligation (CO) bonds, which are approved by the council and do not require an election to pass, in addition to the more standard, election-driven general obligation bonds.
"A lot of cities issue revenue bonds for their utilities as opposed to CO's," she said. "We don't do that here. We usually use CO's, but revenue bonds aren't voted on either. We just use the CO support our utility, which is supported by the water bills the customers are getting."
As of 2011, local government debt around the state totaled $192.7 billion, the report states. That's double the amount of debt local governments had accumulated as of 2001.
One-third of this debt comes from cities, which together owe $62.9 billion in bonds for public buildings, infrastructure and other capital projects. The largest growth sector for debt came from public schools, which together owe $52.7 billion.
"As taxpayers step into a voting booth to approve new debt, government should tell them how much debt they are already responsible for repaying and how much debt service is included," Combs said in a press release. "Elected officials are responsible for telling the taxpayers they serve about the price tag associated with new and existing debt."
According to the report, Frisco has accumulated the most debt of all Collin County cities with $591.4 million in total outstanding bonds, all of which are tax-supported.
Jeff Cheney, Frisco mayor pro tem, said the level of debt makes sense considering the rapid growth of the city, which was the fastest-growing in the country between 2000 and 2009, according to the 2010 U.S. Census. Frisco's debt service tax rate is 19.85 cents, or about 40 percent of the overall tax rate.
"We're always adding projects, and since we've had growth at such a rapid pace, we haven't had bond projects fall off," Cheney said. "If Frisco built out over a 50-year period, then obviously your debt levels are going to be lower because you're spreading all those capital projects over 50 years."
Nell Lange, assistant city manager, also pointed to growth as a main driver of Frisco's high debt, the growth rate of which has outpaced that of the city's population.
"What happens, I guess, in some cities is you don't grow in very small concentric circles from the center out," she said. "You grow in pockets. We cover 71 square miles, and we are developing in all quadrants of the city, so trying to get roads down to cover that 71 miles, it's difficult to keep up."
She also pointed out that the debt figures released by the state include certificate of obligation (CO) bonds, which are approved by the council and do not require an election to pass, in addition to the more standard, election-driven general obligation bonds.
"A lot of cities issue revenue bonds for their utilities as opposed to CO's," she said. "We don't do that here. We usually use CO's, but revenue bonds aren't voted on either. We just use the CO support our utility, which is supported by the water bills the customers are getting."
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