Court withdraws La Salle’s $50M certificates debt plan
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Commissioners have already committed millions for ballpark upgrades, downtown building purchase
A plan to fulfill a wishlist of public facilities was brought to a sudden halt in La Salle County on Friday morning, October 24, with a unanimous vote by commissioners to rescind a notice issuing $50 million in certificates of obligation.
The process had been put into motion on September 8 with the announcement that La Salle would use tax revenues to pay for upgrades to Martinez Park, buy and remodel a onetime downtown Cotulla grocery store into an events center, develop a food pantry, build offices for a justice of the peace, and divide remaining funds between precincts for road and bridge upgrades.
First proposed by County Judge Leodoro Martinez III at the start of the year, the broad scheme had called for as much as $75 million in certificates of obligation, which he said at the time would not require voter approval and would not significantly affect the county’s property tax rate.
The judge pointed to a number of refinanced debts and others reaching their pay-off point as signals the county would be able to use its mineral tax revenues to cover new projects.
Commissioners lowered the total to $50 million during the summer and unanimously supported the issuance of certificates in September.
The debt was to have been activated with a final vote by the court on November 10.
To date, the county has already committed itself to the complete resurfacing of ballfields at Martinez Park with artificial turf, new lighting and other enhancements; and has agreed to purchase the former Super S Foods building, which has also been a church hall and an energy company office, and to convert the structure on Main Street into a multi-purpose center with adjoining offices.
Those commitments have tallied approximately $7 million and were to have been paid with a portion of the certificates revenues.
Missing from the notice listing the projects that La Salle hoped to accomplish with the funds, however, was construction of a new fire and ambulance services substation beside IH-35. Having not declared that intent in its original notice, La Salle would have been unable to add the station to its list of expenditures from the certificates revenues.
According to financial consultant Carey Troell, representing Cantu Harden Montoya, LLC, and addressing commissioners last Friday, the amount of money earned from the certificates was higher than the cost of projects remaining on the list.
“After publishing the notice, there was a miscommunication,” Troell told the court. “It left off the terminology on fire stations. The option left was to issue certificates of obligation for more than the projects needed, but the law says that $50 million is more than necessary.
“Our recommendation is that you rescind this notice,” Troell added, “because we cannot over-budget. Reconsider a new plan of finance.
“If you take no action on this,” the finance consultant added, “certificates of obligation totaling $50 million would be issued on November 10, which would be an overage.”
The court’s legal counsel, Attorney Keith Franklin, said he believes there is concern among constituents over the county’s plan to issue the debt without having asked voter approval.
“There is a possible petition circulating to push the certificates of obligation to a public vote,” Franklin said. “There is some concern over the way that this item was published as a notice. Rescinding the certificates may not stop litigation. The plans you have for spending this money may be affected, contracts may be affected, if you have alterations to the plan for financing.”
The vote to rescind the certificates notice and stop the process of issuing the debt came on a motion by Comm. Jack Alba, seconded by Comm. Raul Ayala.
Finance consultant David Gonzales, representing PFM, told commissioners that the county may seek only half of its original funding request by issuing tax notes, much as it did in 2024 to buy new vehicles.
Gonzales reminded commissioners that they have already committed at least $7 million to ongoing projects that were paid from the county’s general fund and must be reimbursed, and that the remainder of a $25 million debt may be used for some of the projects on the county’s wishlist for public facilities.
“We realized there were projects that the county wanted that were not in the original notice,” Gonzales said. “Take them off the table. Consider your options.
“We can borrow $50 million,” the consultant added. “With interest at another $45 million over thirty years, you’re looking at $95 million in debt. We took that off the table. Now, consider your list of priorities. We are pivoting to $25 million in debt, with only $4 million in interest payments, paid off in seven years.”
“Seven million dollars for Martinez Park is already committed,” Gonzales said, and did not refer to the downtown building purchase or its remodeling costs. “You are actually going for $17 million, and that may be used for vehicles, equipment, machinery, fire stations and parks.
“With this option, you are not locked in for thirty years,” he added. “This is a completely different instrument with completely different projects.
“You are looking at a seven-year term for a total of $29 million, including interest, and your Interest and Sinking fund is not going to be impacted. We are refinancing some of your bonds and you are restructuring your debts. There is no I&S increase to the taxpayers.”
Gonzales said the county may take action on the new finance plan with tax notes instead of certificates of obligation along the same timeframe as originally intended. That decision, he said, will need to be made on Nov. 10.
Former County Judge Joel Rodriguez, addressing the court as a member of the public, had collected at least 240 signatures in a petition calling for the debt issue to be put on the ballot, although he stopped short of presenting the document to commissioners, as they had already taken action when he spoke.
Rodriguez said he believes it would have required less than 190 signatures to force commissioners to put the finance plan to a public vote.
The former judge also said he believes landowners are concerned over how much of a projected debt they will be asked to shoulder.
“Any certificates of obligation are secured by ad valorem taxes,” Rodriguez said. “The appraisal district shows our total valuation at $9.5 billion, but if you add up the values of all the homes, it comes to $60 million. Therefore, any debt is paid in taxes by landowners, business owners, minerals and oil companies.”
Rodriguez cautioned commissioners against committing heavy percentages of their debt on projected revenues whose values may rise and fall.
“In 2017, we had a drop in the mineral valuation, down from eight billion to six billion,” Rodriguez said. “It happened in 2021, and the tax rate was affected.
“You have kept your tax rate the same, but you collected $2.9 million extra,” the former judge said of the county’s revenues from higher valuations. “Your project was tied to the certificates of obligation. Is there an alternative? I’m not saying you did wrong. If you’re pushing for a fire station, I’m worried about the growth in staff numbers needed.”
Rodriguez contended that La Salle County is presently recording a decrease in the number of accident fatalities because of its fully staffed and paid fire rescue and EMS service despite a common belief that accident numbers are on the rise. The data, he said, may lead commissioners to consider upgrading other facilities instead of building a fire rescue and EMS substation.
“Yes, you need facilities,” Rodriguez said. “The county jail is forty years old, and it’s full of smugglers.
“I looked at the numbers,” he added, “and you’ve got some hard decisions to make.”
Last week’s decision to rescind the $50 million finance plan for public facilities came hard on the heels of an announcement that La Salle has begun talks with local landowner Brenda House, who has offered to donate ranch acreage beside IH-35 for construction of a fire station.
According to County Judge Martinez and Fire Rescue Chief Daniel Mendez, an additional fire and EMS substation west of the Union Pacific railroad line in Cotulla may serve not only as a multi-agency emergency response hub for local, state and federal agencies but could contribute to a further lowering of the city and county’s property insurance rates due to the added availability of responders and equipment.
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