This article in The El Paso Times failed to tell us what is really happening.
The reporter tells us that the bond rating organization named Fitch Ratings gave an A plus rating to the $51.4 million of city bonds being issued to finance the ball park.
You will remember that the city approved “a contract of about $40 million for the construction manager at-risk, the general contractor that will subcontract and oversee all the trade companies that will work on the Triple-A minor league baseball stadium. The remaining $10 million of the ballpark’s cost is for architects, consultants and other work to be performed before the ballpark is built” according to the Times.
40 + 10 = 51.4
What? The Times failed to explain the increase from the $50 million the city keeps claiming the ball park will cost.
The city formed the City of El Paso Downtown Development Corporation to organize the financial matters relating to the ball park. Earlier reporting in the Times quoted the chief financial officer of the city as saying “forming the corporation — a recommendation from the Texas Attorney General’s office, which reviews and approves bond issues — allows it to issue bonds without having to have a coverage ratio or a debt reserve fund, which in turn allows it to borrow at lower interest rates than the city could.”
Does the corporation have the authority to issue more than the $50 million we voted on? Here is the ballot language that the voters passed:
VENUE PROJECT AND HOTEL OCCUPANCY TAX PROPOSITION
“AUTHORIZING THE CITY OF EL PASO, TEXAS, TO DESIGNATE THE MINOR LEAGUE BASEBALL STADIUM PROJECT AS A SPORTS AND COMMUNITY VENUE PROJECT WITHIN THE CITY IN ACCORDANCE WITH
APPLICABLE LAW AND TO IMPOSE A TAX ON THE OCCUPANCY OF A ROOM IN A HOTEL LOCATED WITHIN THE CITY, AT THE MAXIMUM RATE OF TWO PERCENT (2%) OF THE PRICE PAID FOR SUCH ROOM, FOR THE
PURPOSE OF FINANCING SUCH VENUE PROJECT.”
What’s missing?
A dollar limit for starters. We agreed to raise the tax by 2%. We did not limit the amount of money that can be spent on the ball park. We did not vote to spend a certain amount. We voted to raise a tax. How much council spends is up to them.
A + is a two step downgrade.
Municipal bond ratings go from AAA (the best) down to AA+, AA, AA-, A+. A, and even lower.
Fitch rates El Paso municipal bonds as AA. These special ball park bonds have been rated two steps lower (riskier). A lower rating means a higher (more expensive) interest rate. Our chief financial officer told us that the new development corporation would allow us to borrow at lower interest rates than the city.
That does not look like it is true.
It does not look like the Times is watching out for our interests either.
Muckraker
elpasospeak 