EPISD has a real problem.
In EPISD–some real numbers we pointed out that taking ten cents out of the interest and sinking fund rate and giving it to the operations and maintenance fund would leave the district without enough money to make their bond payments.
The district failed to mention that to the voters. The voters approved the move.
The district will have to add at least seventeen cents to our interest and sinking fund rate next year. That will not trigger a rollback election because state law allows them to raise the rate up to fifty cents per hundred without being subject to a taxpayer rollback effort.
Without more money in the interest and sinking fund account the district will not be able to honor its obligation to the bond holders. That could cause a bond default.
The district’s solution is shown in this document:
The document says “To make bond payments, there will be a transfer for the same amount from the GF (general fund, or operations and maintenance fund) to the DSF (debt service fund, or interest and sinking fund)”.
Texas attorney general
In July of 2017 the Texas attorney general wrote:
“Districts do not have authority to increase the maintenance and operations tax rate to create a surplus to pay debt service with maintenance and operations tax revenue”.
There you have it.
Their actions appear to be illegal.
We deserve better