Borrowers Skirting Voters Face Bond-Sale Crackdown

Fort Worth, Texas, avoided voters when it sold $86 million of bonds last year to finance a police and fire facility. An El Paso hospital system plans new clinics using $162 million of debt taxpayers won’t have a say on.

Cities, counties and hospital districts in the second most-populous state raised $1.3 billion last year, 10 percent of their issuance, using securities called certificates of obligation. These bonds, which are financed through appropriations, don’t need to go before voters, unlike general-obligation debt backed by a municipality’s full faith and credit. The issuance faces tighter restrictions under bills in Texas, North Carolina and New York that would make it tougher to borrow without taxpayer approval.