The city issued about $200 million of bonds the other day.
We have to pay for the services of bond counsel as part of the issuances. It looks like the city uses the same counsel for many of its entities including the water utility, the airport, the housing finance organization, and the specially created entity that financed the ball park.
The most recent contract between the city and our bond counsel that we have been able to find is one issued in 2008. At that time the fees were set at:
The way we calculate it counsel’s paycheck for the recent issuances looks like this:
$35,375,000 of quality of life bonds at one dollar per thousand plus $5,000 to start comes to $40,375 in fees.
$62,000,000 in new certificates of obligation works out to $5,000 to start plus one dollar per thousand up to fifty million dollars and then 80 cents per thousand for amounts above fifty million. That comes to another $104,000 in fees.
The $110,000,000 in refunding bonds are special. They demand a higher fee since after all they are by their nature more difficult to justify. These bonds end up costing us the $5,000 to start, one dollar per thousand for the first fifty million and then 80 cents per thousand for the last 60 million. Then we have to add another 25 percent bringing the fee to $162,500. Also consider that when the original bonds were issued bond counsel was paid again.
There were probably some expenses like pencils and photocopies and maybe even some travel.
Jackpot
It looks like the haul for this latest round of debt will cost us about $306,875 in bond counsel fees.
Considering the fact that we issued more debt earlier this year we would guess that we are pretty good clients.
We deserve better
Brutus
elpasospeak 
As I’ve said before, El Paso is one helluva deep money well for everybody and his compadres to come drink and drink and drink again. One day the generous keepers of the well will realize that they should’ve taken better care of it.
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Apparently the current bond counsel doesn’t even have to find this business. His relationship with the City the city’s love of debt are gifts that just keep on giving. Has anyone ever asked why they keep using the same firm without any competitive bidding? Just because it’s legal doesn’t mean that it’s good business or that it doesn’t smell like insider dealing.
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There is Mo’ Money in Money…
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Who is El Paso’s bond counsel?
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Who is that masked man that gets away with all our booty?
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Perhaps that bond counsel does a really good job. He most likely does not charge more than other counsels. I don’t think, in a country based on capitalism, the counsel should be criticized for making what is most likely a fair market value. Look what happened to the county when they chose a counsel based on the idea that new is good — I think that guy is still in jail. — And, no, I am not related to the city’s bond counsel. I don’t even know who he / she is.
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The problem is that we don’t in fact know if we are paying fair market value because there is no indication that the city is shopping the prices. A person who benefits from the selling of bonds and whose fees rise with the value of the bonds, rather than based on hours worked, has every incentive to encourage the city government to incur more debt and continue refinancing existing debt rather than pay it off.
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