Odessa City Councilman Steve Thompson says he believes he might just have the answer to how the city can help pay for improved roads and water infrastructure, but whether it’s legal remains up for discussion.
Thompson would like the council to consider issuing revenue bonds through the Odessa Development Corporation. The councilman said the economic development group has roughly $23 million to $25 million in uncommitted funds and a portion of it could be used to address Odessa’s aging water system and/or to improve Odessa’s roads without impacting taxpayers.
The ODC uses sales tax revenues to provide companies with incentives to move to Odessa, but the grants they provide are paid on a staggered basis, so there is always funding available.
“What we would do is use the sales tax money to service the debt,” Thompson said. “That doesn’t add anything to our taxpayers and that’s the most important thing.”
Thompson said Midland’s economic development corporation routinely sets aside 30% of its funding for infrastructure needs and Odessa could consider doing that as well.
“I think it’s paramount that we try to get ahead of the curve here. For two years I’ve been on this council and so far all we do is play catch up,” Thompson said during Tuesday afternoon’s council workshop.
It’s time to identify projects and dedicate money toward them, he said.
For example, because of all of the growth in the area, he’d like to expand Yukon Road to create more retail opportunities and sales tax revenues.
Between using ODC funds and American Rescue Plan Act funds, Thompson said the city could address a lot of needs, noting the city is expecting roughly $13 million to $14 million in ARPA funds.
“I can see it being a series of bonds over the years. Because of our good faith and credit that the city enjoys, those interest rates are pretty reasonable. We could use up, as an example, $35 million and if sales taxes continues to grow or is not obligated, it might be a one year deal or two years or three years or it might happen next year if things continue to do like they’re doing,” Thompson said.
ODC Chairman David Boutin is hopeful the corporation will be able to help.
“I think it’s a little bit early for me to say (it’s do-able). I think we still gotta cross the T’s and dot some I’s, but it’s definitely worth exploring,” Boutin said. “I want to make sure that we continue to meet our mission, that we don’t do anything playing outside that. But we’re exploring all opportunities because the city’s growing and if we can help that growth that certainly helps the economy expand and helps us bring in workforce and new businesses and all that kind of stuff.”
ODC board member Tim Edgmon said in his opinion Midland using its economic development funding for infrastructure falls into a “gray area” and both the ODC and the city council appear to be split on whether or not Odessa should follow their lead.
“Midland’s ODC is run by a couple guys and the council has given them carte blanche. ‘If you say it’s OK, we’ll do it’ and they’re doing parks and doing all kinds of things and it kind of makes us look bad,” Edgmon said. “Then again when the guy comes in from the state and tells you that there’s no one that polices this, that there’s not anyone that looks to see that these projects…qualify or don’t qualify…so if you don’t get anyone to complain, you can pretty much do what you want to. So anything that you can get your committee or your board to agree to that’s eligible. Well, with the way our board is right now, we’ve got two or three on the ODC board that are pretty much against anything like that and three of us that might look into it.”
ODC board member Kris Crow said that in his opinion, the city would be prohibited from using ODC funding as Thompson would like.
The laws state the funding can only be used for infrastructure for specific projects intended to spur economic development, such as the Nacero project, Crow said.
However, Crow said, if he can be proven wrong, he’d be the “biggest champion” behind Thompson’s idea.
“You’d have to show me in black and white,” he said.
Odessa councilman Mark Matta suspects Crow might be right. However, if Crow is wrong, he is “intrigued” by the idea of setting a certain percentage of ODC funding aside for infrastructure. He’s opposed to revenue bonds, though.
Expenditures of that size need to be approved by citizens, Matta said.
Councilwoman Detra White would also like to look into Thompson’s idea of revenue bonds, but only as a “catch-up” measure as she wouldn’t like the city to rely on the extra funding indefinitely.
Thompson, Matta and White all noted how difficult it will be in the coming months to determine how to meet all of the growing city’s needs. On top of needing to address the city’s streets, water lines and sewer lines, the council was recently presented with a five-year plan that includes a possible sports complex, which would cost an estimated $28 million to $40 million, excluding the 100-plus acres to build it on.
Mayor Javier Joven suggested in July 2021 that the city could pay for the sports complex with a voter-approved bond measure and last month he floated the idea of placing a city water and sewer underground infrastructure bond on the ballot along with a city-wide road rebuild bond and a sewer plant bond. However, voters solidly rejected an Ector County Independent School District bond measure that would have paid for a new high school and Career and Technical Education Center.
Issuing additional certificates of obligation is an option, but there was a lot of fierce debate before the last one was approved to fund rehabilitating the city’s water treatment facility. Many council members wanted the issue to be decided by voters, before ultimately voting 6-1 to issue the debt.
Joven did not return a message seeking comment for this story.
