Judge Orlinda Naranjo of the 419th Judicial District in Travis County last week postponed a hearing on whether the Houston suburb of Friendswood can issue $11 million of certificates of obligation and use the proceeds to buy land outside the city limits for a park.
The hearing was reset for July 11 to give time for those opposed to the city’s plans to prepare their case.
Friendswood is seeking a ruling on its plan to issue certificates of obligation to buy land in Alvin that it promised to purchase in 2008.
Officials maintain that the city can issue the COOs without a favorable vote of citizens, but opponents cite a 1997 city charter amendment that prohibits the issuance of debt without voter approval except in emergencies.
Friendswood wants to use the proceeds to repair streets, improve its drainage system, construct a new animal shelter, and build a park on 60 acres of land in Alvin.
Texas Attorney General Greg Abbot issued an opinion last week that no election is required to issue certificates of obligation, unless a petition signed by at least 5% of the city’s qualified voters is filed.
However, Abbot also said Friendswood must prove that either the city charter or state law allows it to buy park land outside of the county in which it is located. The city is within Galveston and Harris counties, but the proposed parkland is in Brazoria County.
Friendswood voters rejected a $9.6 million bond package in May that would have funded park improvements, construction of a new library, and conversion of the current library into a community center. Those proposed bond projects were different from those slated to be funded by the certificates of obligation.
Friendswood’s GO debt carries underlying ratings of A1 from Moody’s Investors Service and A-minus from Standard & Poor’s.
