Not paying our bills

The other day in Re-re-financing we saw that the city council was going to vote on issuing new bonds to re-finance bonds that were issued in 2007.  The bonds that were issued in 2007 were used to re-finance bonds that were issued before that.  We haven’t been able to trace when they were originally issued.

Looking further into the issue the “Amended Continuing Disclosure Report For The Fiscal Year Ended August 31, 2014” showed us that:

The bonds that were issued in 2007 are being paid down at the rate of 3.2 million dollars a year in 2015 increasing to a rate of 5.7 million dollars a year in 2027.  It unfortunately was not going to stop there.  The final payment listed was going to be in 2032 for $32,795,000.

What they are doing is that they are selling bonds with slow payments in the early years and huge payments at maturity.

In fact, just looking at the final payments for some of the bonds they have already issued we can see that they are back-end loaded.  Our children and grand children will have to pay these bills:

2032 $32,795,000 General Obligation Refunding Bonds, Series 2007

2032 $11,355,000 Combination Tax and Revenue Certificates of Obligation, Series 2007

2032 $12,395,000 General Obligation Bonds, Series 2007A

2033 $17,530,000 General Obligation Bonds, Series 2008

2034 $17,700,000 2009B Combination Tax and Revenue Certificates of Obligation

2034 $49,470,000 General Obligation Refunding Bonds, Taxable Series 2014

2035 $48,245,000 Taxable General Obligation Pension Bonds, Series 2007

2036 $19,150,000 2010B Combination Tax and Revenue Certificates of Obligation

2038 $10,520,000 Combination Tax and Revenue Certificates of Obligation, Series 2012

2038 $12,870,000 Combination Tax and Airport Revenue 2014

2040 $22,705,000 Combination Tax and Revenue Certificates of Obligation, Series 2014

There are many more.  We left off the ones under ten million dollars.

No intention

The bonds above come to over $250 million that will be due in the 2030’s.

Remember that city council had to impose a franchise fee on our water utility just to cover a $3 million budget shortfall this year.

They simply will not have the money to pay off these bonds.  What will they do?  If we have city representatives  that think the same way our current ones do they will re-re-re-re-finance the bonds.

At some point in time this will fall on our heads.

Don’t think for a minute that businesses being asked to move to El Paso have not figured this out.

We deserve better

Brutus

14 Responses to Not paying our bills

  1. All great points, but you will re-elect the ship of fools and cry forever. Same thing with the county, spend and spend into stupidity. One out-of-control bull frog surrounded by emasculated boys.

    But, they will be re-elected as well. The problem and solution can be found by looking in the mirror.

    We’re unsinkable, probably the last words yelled on the Titanic. Unfortunately a vast majority believe the city and county when they yell the same thing.

    Like

    • Comanche, the survivor says:

      What’s this “you” stuff paleface? One person gets one vote. I, one person, will not re-elect these fools. Saying that the problem can be found by looking in the mirror is pure rhetoric and ignores the realities of the electoral process.

      Like

  2. […] this post on ElPasoSpeak, Brutus reveals the City’s dirty little secret: our bonds have balloon payments coming due in […]

    Like

    • J. P. Morgan says:

      I saw your post on elchquenco. Hire a CFO? We had a CFO. Look where that got us. She and the former city manager helped to create this mess.

      Like

  3. Anonymous says:

    kinda like the hyundai for 99 a month for 3 years and then the balloon payment is over 10k. haha. were doomed

    Like

  4. Reality Checker says:

    The only way to get rid of this debt is to pay it. The only way to pay it off or even reduce it significantly anytime soon is to both jack up taxes big time and cut services. No one wants to do either of those.

    The millions of dollars being spent just on San Jacinto Plaza, the mismanagement of that project, and the lack of transparency regarding that project all prove that El Paso government is a ship of fools.

    Like

  5. mamboman3 says:

    Look what happened with the housing crisis thanks to easy loans and balloon payments. We’ve got some major balloons down the line and the way young people think these days, I’m betting they’ll choose bankruptcy! I think their brains are nothing but hot air filled balloons. How stupid can we be just to pay for “entertainment venues.” This generation’s entertainment is going to be the vultures entertainment in the not to distant future. I don’t doubt that our wealthy “investors” will be well invested to make a killing on our downfall. I’m feeling sick about now. Where’s the bucket!

    Like

    • homeowner777 says:

      You are right.
      And I have SEEN. . . City Council. . . . staring at each other and one will say . ..”It’s LEGAL. . . RIGHT?”
      And things like. . .” Can we DO THAT, Is THAT Legal ?”

      So, yes, when presented with the Bankruptsy Option from the legal division, they will decide.

      Bankruptsy Option: No more bonds, no more financing, no more payments, but KEEP all new incoming money.

      Its very tempting.

      Like

    • Reality Checker says:

      You’re right except for one thing. They won’t “choose” bankruptcy. They will be forced into bankruptcy.

      Like

  6. Jerry K says:

    If you’re Paul and Woody, the city will print money for you.

    Like

  7. homeowner777 says:

    Why dont they just refinance everything for $5. per month with a balloon payment of One Trillion Dollars . . . . 90 years from now, and we will all be gone.
    (So will the ones that approved such bonds, the bond company, all underwritters, etc.)
    Surely there will be a Big Asteroid hit between Now. . . and then and no one will have to worry about anything.

    Like

  8. Maybe this is indeed why new business doesn’t want to come here. Maybe it is past time to bring this kind of “financing” to a complete halt?

    Like

  9. Haiduc says:

    They learned this refinancing trick from the Feds…
    only City Council cannot print money…yet

    Like

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