City Attorney Andy Segovia in February 2018. Credit: Scott Ball / San Antonio Report

As it stands, bond issuances can be used only for public works in San Antonio. That could change if Council decides to expand the rules and voters agree.

City Council members discussed Wednesday a proposed charter amendment that Mayor Ron Nirenberg wants to bring to voters in the May 1 election. His proposal would expand the scope of bond funding to include affordable housing projects.

Affordable housing has been deemed public improvements by courts, City Attorney Andy Segovia told Council members Wednesday.

A few Council members expressed concern over the breadth of the proposed language.

Like some of her colleagues, Councilwoman Melissa Cabello Havrda (D6) said she did not want to see the amended charter be an unexpected boon for developers.

Proposed changes
to city charter language

The City shall have power to borrow money on the credit of the City and to issue bonds to construct, acquire, equip, renovate, improve and repair public works for permanent public improvements or for any other public purposes purpose not prohibited by the Texas Constitution or the general laws of the State of Texas. …

“I’m concerned that this is going to turn into a larger scale and perhaps abused form of funding going directly to the developers instead of those in need of immediate housing,” Cabello Havrda said. “I don’t want to create a larger opportunity for local funding that goes to the developer and developer fee. If we’re going to debt-fund, I want to make sure that it’s going directly to those most in need.”

Segovia said the proposed language closely aligns with what state law allows and cities such as Austin and Dallas have in their charters.

He said the language had been reviewed by the Charter Review Commission and had been vetted some time ago, but the City missed its opportunity to put the amendment on the ballot.

“The last change we made to the city charter was in November of 2018 and under the city charter, we can only make changes every two years,” Segovia explained. “So this May is the first opportunity we have to make changes to the charter.”

Cabello Havrda said she would support adding the proposition to the May ballot when Council votes next week. Though Councilwoman Rebecca Viagran (D3) said she wanted more “specificity” in the amendment, she also firmly supports the proposal. Councilwoman Ana Sandoval (D7) was not as unequivocal.

“I am certainly in support of expanding the housing toolkit that we have for San Antonio,” she said. “I served on … a housing bond committee [in 2016]. So I’m familiar with the limitations and some of the flexibility that we already have. And I know that this was one of the tremendous limitations. So I fully support us exploring this.”

However, Sandoval said she has watched people move into San Antonio from higher cost-of-living areas and effectively price out lower-income residents who have lived in the city for generations. Any affordable housing efforts needed to take into account those people, she said.

“I want to have some assurances that the people who most need it – at 30% or 50% of the annual average median income – are the ones who will benefit from this,” she said.

Councilman John Courage (D9) agreed, pointing out that the phrase “public purposes” could entail bond money funding projects such as sporting arenas.

“There doesn’t seem to be a protection that affordable housing will be the primary use of these funds,” he said.

“My biggest fear is that economic development could squeeze out the importance of affordable housing through this process. … Conceptually, I think we do need to give ourselves more flexibility, but too much flexibility also can distract us [from prioritizing affordable housing].”

City Manager Erik Walsh assured City Council members that the proposed language change served only to give them room regarding what projects could use bond funding. The direction those projects take is still up to Council, he said.

Walsh added that another meeting for City Council is scheduled for March 18 to walk them through the bond process. The current municipal bond program covers projects between 2017 and 2022. The next bond election will take place in May 2022.

Councilman Clayton Perry (D10) was the only person absent from the Wednesday meeting; he was hospitalized Monday after testing positive for the novel coronavirus. His spokeswoman Landry Stafford said he was being discharged from University Hospital and expected to be back at home Wednesday night.

Council members will take up the issue at their Feb. 11 meeting, when they are scheduled to call the May election. The final day to do so is Feb. 12.

Jackie Wang covered local government for the San Antonio Report.