Metropolis of La Marque
Officers in La Marque, Texas, are addressing town’s strained funds within the wake of delayed debt service funds, a bond ranking downgrade and an ominous warning from its just lately employed finance director, who proposed a fiscal stabilization plan earlier this month.
“Should you approve the plan, you might be the council that saves La Marque,” Finance Director Value Ferguson stated at a Sept. 8 council assembly. “Should you do not and do not do something, it’s extremely doubtless you may be the council that ends La Marque as a result of there aren’t different choices.”
By a 3-2 vote, town council Thursday authorized an
“We have to present that we’re a superb funding,” stated Council Member and Mayor Professional Tem Joe Compian, who voted in favor of the upper price. “We have to keep our credit standing.”
Administrative turmoil within the metropolis of about 20,000 — south of Houston in Galveston County — led to a delay till Sept. 10of Sept. 1 debt service funds on normal obligation bonds offered in 2014 and 2017 and certificates of obligation issued in 2018.
S&P International Scores cited the late funds when it lowered town’s AA-minus normal obligation ranking to A-plus on Sept. 18 and positioned it on a 90-day CreditWatch evaluate for a possible additional downgrade.
The motion displays turnover in key govt positions that resulted within the late principal and curiosity funds, in addition to “further disclosure indicating money movement points in fiscal 2025, which we consider may additional strain the ranking, probably by a number of notches,” the ranking company stated, referring to a
“We consider town has elevated governance construction threat in comparison with that of different rated entities within the sector given the content material of the submitting that states important turnover in key govt positions,” S&P’s ranking report stated. “We consider these governance shortfalls are a contributor to its just lately missed debt service fee and liquidity pressures that sign budgetary imbalance.”
La Marque is dedicated to sustaining a robust credit standing and can make upcoming debt service funds due Feb. 1 and March 1 on time, Ferguson stated in an emailed response to questions from The Bond Purchaser.
“The town believes the missed funds had been an remoted incident as new workers was introduced on board as additional described within the EMMA discover,” he stated. “Council has authorized a balanced price range that features all debt funds and contains the levy and curiosity and sinking fund tax adequate to pay debt service on town’s advert valorem tax debt.”
La Marque’s disclosure discover stated within the wake of three everlasting or interim metropolis managers resigning and monetary workers turnover since January, it employed an interim metropolis supervisor in July and Ferguson on the finish of August.
The discover additionally cited monetary pressure largely as a result of a failure to satisfy budgeted income projections and historic overspending and pointed to a projected money movement shortfall of roughly $3 million in the course of the first quarter of fiscal 2026, which begins Oct. 1, “assuming that town doesn’t expertise a hurricane or different pure catastrophe requiring further expenditures for protecting measures or remediation prices.”
The
Ferguson stated the property tax price hike will increase about $340,000, whereas a fiscal 2026 price range adopted Thursday by the council minimize bills by roughly $900,000.
“Between the added income and the decrease expenditures, town plans to start rebuilding reserves and supply for fee of any charges and curiosity prices related to a attainable tax and income anticipation observe,” he stated.
The town is contemplating issuing about $4.3 million of notes by a non-public placement or a direct buy, he added.
La Marque’s fiscal 2024 monetary audit was posted Sept. 24 on EMMA, almost a 12 months after the fiscal 12 months ended. It confirmed normal fund expenditures of $20.97 million exceeded income by $3.517 million with the fiscal 12 months ending with an unassigned stability of detrimental $273,098. The town had $2.15 million of GO bonds and $9.3 million of certificates of obligation excellent as of Sept. 30, 2024.
At Thursday’s council assembly, town’s potential to boost the property tax price regardless of the tardy audit was referred to as into query beneath a Texas legislation that took impact Sept. 1. The legislation authorizes anybody to submit a grievance to the Texas Legal professional Common alleging {that a} metropolis did not adjust to a state Native Authorities Code requirement to file its annual audit
If verified by the legal professional normal, town could be prohibited from adopting a property tax price that exceeds its no-new-revenue tax price for the tax 12 months that begins on or after the date of the legal professional normal’s willpower.
The no-new-revenue price would basically produce the identical quantity of income because the earlier fiscal 12 months. Within the case of upper assessed property values, the precise tax price might be decrease to offset that progress.
Metropolis officers stated no legal professional normal willpower has been obtained, thereby permitting for the tax price hike.
The audit-related laws breezed by the Republican-controlled legislature throughout a daily session that included a barrage of unsuccessful payments geared toward proscribing native authorities debt issuance. In subsequent particular classes this summer time, the Home and Senate failed to achieve a consensus on a invoice to restrict the annual progress in metropolis and county property tax income.
Gov. Greg Abbott has reportedly hinted at a 3rd particular session. The legislature’s subsequent common session is in 2027.
