The city council agenda item that would allow the city to issue notice of intent to issue $62 million of certificates of obligation is another example of the double dealing we are seeing from our city government.
The backup material reads “for the purpose of paying contractual obligations to be incurred for the construction …”.
Can’t stop it
While the backup material says that they want the money to pay for bills to be incurred, the city has evidently already built the projects and rung up the bills. This was printed in the Times the other day:
Mark Sutter, the city’s chief financial officer, who will give a quarterly financial report on Tuesday, said the city has routinely adopted the use of certificates of obligation around this time of year “to reimburse itself for expenditures made on capital project debt authorizations that council has approved for various projects.”
In this case, Sutter said, the $62 million reimbursement covers four authorizations: transportation funding of March 2010, transportation funding of November 2010, short term capital improvement projects of April 2011, and street infrastructure of June 2012.
“The reimbursements cover expenditures since the last resolution (approximately April last year),” he said.
We deserve better
Brutus
elpasospeak 
So, in other words, we are already close to being in default on past obligations?! “transportation funding” from 2010? “Street infrastructure” from 2012? Do you think they could be more vague? Why weren’t these things paid for five and four, three years ago? Is this why no repaving gets done on our streets? Because they have not yet issued certificates of obligation for the cost? This is getting worse all the time!
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I’m waiting for my bank to open so I can call them to remind them that I made a mortgage payment in November 2011, a car payment in February 2012, a car payment in August 2012 and another car payment in September 2013 and ask if I can take out a loan to repay myself. Unfortunately I don’t sit on the board to vote to approve it but I have provided them with the El Paso city business model so hopefully they’ll see that it makes sense! I mean it does, doesn’t it?
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Regular expenses turned into . . . . . LONG TERM DEBT.
(With no change in sight for income or debt relief.)
That’s called Bankruptcy.
They are putting this off and your children will have to pay for it
over 25-30 years.
( But the city’s income or debt relief will not change and
will only get worse. )
As long as the city of El Paso can keep borrowing, they will.
Until. . . . all the money they receive, from us, will go towards interest only.
AS the City Counsel said when they decided to fund unlimited money towards changing EVERYTHING so that there could be Baseball downtown: “It will be exciting.”
and “I am excited.”
Yeah. . . . . it’s exciting to see all the debt and inconviences.
EXCITING. . . .
As my house payment has already gone up (due to property taxes) . . . Yeah, THAT’s EXCITING !
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I DID NOT enter into any agreement to pay INTEREST on my Property Taxes. To charge someone INTEREST they must agree with a whole bunch of terms and be allowed to refuse that agreement.
The property taxpayers should be able to sue the city and only have to pay the portion of property taxes that does not include INTEREST on loans.
IF the city was not paying interest on loans my property taxes would be stable throughout my mortgage.
If the mortgage company wanted to raise my mortgage payment they would have to get me to agree to it and 24 pages of documents would have to be signed.
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reminds me of check kiting
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So . . . as more and more of our property taxes goes towards INTEREST, how does that pay for the SERVICES that we need from the city?
(Paved roads, police protection, fire department and some local parks.)
When. . and as . . the property taxes we pay goes towards and approaches 100% INTEREST, How does that provide the city services that we need?
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This “Street infrastructure” is the 210 million dollars we borrowed to redo some of our streets. What is happening is the city now has to borrow money to keep the lights on.
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What Sutter is saying is that city management requests and council routinely approves tens of millions of dollars in projects for which funds are not available. Their budgets mean nothing. They are spending money assuming that they will be able to borrow later. That’s worse than running up your credit card bill because they are spending money without a credit line. Once the people who buy municipal bonds figure this out, interests rates charged to the City of El Paso will go up or the city will have trouble selling debt. The ratings agencies will also not look kindly on this.
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In the recent election did anybody say they would spend less???
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I have to hand it to you. You really have a great sense of humor.
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The way I see it, we are following in the footsteps of San Bernadino, CA who is trying to make arrangements for city bankruptcy. Average per capita income is $35,000 per year, and that poverty stricken city is spending 72% of their budget on police and fire departments with an average salary of those workers being $160,000 per year. Our city is heading toward bankruptcy due to a poor tax base trying to pay for a baseball stadium we couldn’t afford, and our razed city hall, museum, and purchase of new buildings which needed overpriced remodeling to house our new city hall facilities. I don’t see a bright future for our community.
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To make matters worse, I noticed on TV that there are too many empty seats at most of the baseball games.
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Stockton, California, which filed for bankruptcy in 2012, is a better example. The mistakes which led to Stockton’s financial disaster included excessive ill-timed bond offerings, a new baseball stadium, unmanageable pension obligations, and excessive optimism. Sound familiar? I’m sure they, too, though it was all good at the time.
Our city officials were selective in which cities they used for comparative purposes when the ballpark was being pushed down the public’s throats. They conveniently ignored Stockton even through Stockton was crashing and burning at the same time El Paso was making similar decisions.
http://cacs.org/research/how-stockton-went-bust-a-california-citys-decade-of-policies-and-the-financial-crisis-that-followed/
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