The Tuesday, July 22, 2014 city council agenda has three items placed on it by our chief financial officer.
Our former chief financial officer. Her last day was to be Thursday, July 17.
Agenda items have a “Department Head’s Summary” form and other material attached to them as they are submitted to be placed on the agenda if the rules are followed. These three items list the former chief financial officer as the contact person.
Why would she do this? Many of us would leave this to the new person in charge if we knew that we would no longer be in charge when council considers the item. Is she trying to tidy up some loose ends in her reign of financial misdirection?
The three items don’t make sense to me.
Item 7.1 on the regular agenda is the first. It proposes authorizing $72 million in certificates of obligation for the city to “fund and reimburse itself for ongoing capital project”. Once again she wants us to go into debt. These proposed bonds will carry a maximum interest rate of 4.85% and will mature 26 years from now in December of 2040. We would pay $130 million back with $56 million of it being interest. Bond counsel and underwriter fees will cost extra.
As we have seen before, the backup material does not indicate which projects have already been paid for and which ones are yet to be done. What we do know is that some of them have already been paid for. Why spend almost twice as much to finance something that we already own? Is it because the money that was used was really for other city commitments and now the council really has no choice?
Item 7.2 proposes $59 million in general obligation refunding bonds. We already issued bonds in 2005 and 2006, with the 2005 bonds being for the Plaza Theatre. Now they want to refinance the debt at 4.15%, presumably a lower rate of interest. The catch? The new bonds will mature December 31, 2031, at least 26 years from now. Bond counsel and the underwriters will get paid again.
The third item is number 7.3 on the regular agenda. On the face of it this looked like a good move. She wants to take $5.3 million of our new Mesa street mess created by the new rapid transit system and move the obligation to Sun Metro. This would remove the money from “tax-supported debt” and move it “to Sun Metro self-supporting debt” Once again bond counsel and the underwriters will be paid extra.
Baloney!
Sun Metro is not self-supporting. Millions of dollars of our local tax money are transferred to Sun Metro every year. Every new dollar that they have to spend will have to be subsidized by our tax money.
These items are designed to free up operating money so that the city can spend more.
The net effect of her signatures? The new people don’t have to have their names associated with this.
We deserve better
Brutus
elpasospeak 
If she wanted these things done she should have presented them to council before her last day on the job. She no longer has authority nor responsibility and council should move to table all three items for review and possible resubmission by current staff.
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So where is she working now? Did she get a gig with one of our benevolent overlords?
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One rumor is that she does not have a job but is waiting for the county administrator job.
Brutus
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You ask: “Why spend almost twice as much to finance something that we already own?” Good question.
It looks like we are leveraging our assets just like so many consumers did with home equity loans. Like all the folks who got in financial trouble before the market collapse in 2008, we are using our current assets as ATMs to fund a lifestyle that our current income doesn’t support. The leveraging of corporate assets also hasn’t worked out well for many businesses in the private sector.
This is all part of city management’s shell game of moving dollars around to suit their own agendas. These are the same people who wanted to trade trade transportation project dollars with the State so that additional dollars could quietly, unknowingly be used for ballpark related projects.
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You might also consider the discussion about whether the city can increase its contributions to the police and fire department pension fund. The Times story would lead you to believe that these funds are in great shape “the once-troubled” fund…) and the funds’ reports will show that they are. The Texas Association of Public Employees Retirement Systems ranked the El PAso fund as #3 in the state. As this ranking is based on 60 survey respondents (how many in El Paso was not noted) who are members of these systems, it’s hard to know what it really means. But if you read the El Diario story and discover that the Fund still has a defict of $307 million, and the audit done in 2012 by Buck Consultants put the period for amortization of the fund at 76 years for the fire department and “infinite” for the police, one has to wonder how the Fund can now claim that these periods are 23 for the police and 32 for the fire department. Must be some magical financial management going on there…
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I try to stay at one post a day, one topic per post.
I’ll move the topic up to tomorrow’s post.
Thank’s for participating in the discussion.
Brutus
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Does the fact that the “contact person” is no longer an employee invalidate the referenced submissions? If I were a city rep or mayor, there is zero chance that I would consider, vote for, or approve a proposal submitted by a city administrator, who will have no accountability for the financial recommendations being considered.
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OK, sorry to overdo!
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PS – I will repeat here part of a comment on an earlier post, as it relates to the Brio system. Who will profit from the huge expenditures for this system is hard to discover – there is no Brio company per se, Brio being the name that Sun Metro created for its “almost Rapid Transport.” What is the claimed benefit of the Brio bus system, the construction of which on Mesa is way behind schedule, and hugely expensive – some $27 million (the full system will cost $141 million, according to the Sun Metro site, although it’s easy to guess that this is an underestimate – and more than half comes from El Paso taxpayers). Other cities have articulated buses without the need to build new platforms and elaborate bus stops. How many new riders does the city project will use this system? Is it intended just to make it easier for people to get to the ball park? Meantime, the works on Mesa continue to disrupt traffic, as they have done for many long months – and they’re not done yet!
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Many of the bus stop shelters that were framed months ago still don’t have roofs or benches. It is one of the most poorly managed construction projects I have ever seen. They must be getting paid by the hour because they are sure dragging this thing out. Either that or the construction company has exceeded its own cost estimates and is intentionally slowing down the completion.
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