Wishful thinking

August 27, 2013

The city manager’s budget introduction includes a 4.38% increase in sales tax revenue for the city next year.

Growth slow down

According to our local Federal Reserve Bank El Paso’s growth last year was 2.1%.

Also according to our local Federal Reserve Bank “Economic activity in the El Paso metropolitan area has slowed in recent months.”  “So far this year the El Paso index has averaged 0.9 percent annualized growth”.

 Who to believe

Given a choice between the city’s number and the Fed. I would listen to the Fed.  The numbers coming out of city hall recently have been notoriously wrong.

If the city is wrong then we should see lower than predicted Hotel Occupancy Tax collections (raising our cost to finance the ballpark) as well as sales tax revenue shortfalls.  That will probably lead to a double whammy and operating budget cuts during the year.

Last year the city had to institute spending restrictions mid-year because city staff planned to get 3 million dollars in extra property tax revenue from the refinery.

This is such a shame when prudent management could avoid the shortfall by reducing spending.

We deserve better

Brutus

4 Comments | Ball park, City government | Permalink
Posted by Brutus

Coincidence?

August 26, 2013

City staff is going to ask city council for permission to issue 65 million dollars worth of certificates of obligation at the August 27, 2013 city council meeting.

It appears that the purpose is to pay for the projects that the prior council authorized last year.

A little over 1.1 million dollars of the money is for the “Bataan Railway Reconstruction Project”.

Is this a ballpark cost?  Not according to the city.  The railway just happens to be physically adjacent to the new ballpark.  In fact from what I can see much of the seating on the first base line will be either over the railway or right next to it.

We have to wonder what the effects of noise, vibration, and fumes will be when a train passes during a ball game.  I hope that tickets for those seats cost less.

Remember that in Robbing Peter is robbery I pointed out how certain projects that should be part of the ballpark are being run separately thus keeping the public from knowing the true cost of the ballpark.

When will all of the construction bids be in so that we will know what they are willing to claim the cost is?

We deserve better

Brutus

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Posted by Brutus

Timely truth

August 21, 2013

The El Paso Times today chose to make it’s headline article today about city council deciding to spend 139 million dollars to make changes at our airport.

They relegated their articles about city council voting for a property tax increase and council voting to release the ballpark emails to the B section.

I guess we know what they think is important.

Freudian slip?

They also wrote in a section titled “Insight on the Budget”:

“What it means:  Homeowners in El Paso will have to pay the city an average of $841.80, or $283.37 more than last year.”

I’m not their editor but I think that they meant $28.37.

Then again maybe they have decided to be honest and the $283.37 number is a fair projection of what will happen to our taxes with all of the debt we are taking on.

No, wait.  Honesty is a word that does not often come to mind when thinking about the Times.

I think “sloppy” is the word I am looking for.

Muckracker.

Leave a Comment » | Ball park, City government, El Paso Times | Permalink
Posted by Muckraker

Robbing Peter is robbery

August 21, 2013

Recent developments in the whole tawdry mess that we call the El Paso baseball stadium have exposed another lie that the voters have been told over and over.

We have been told that the ball park will be paid for with hotel occupancy taxes and revenues generated by the operation of the stadium.

Texas state law specifically forbids the city to use property taxes to pay for the stadium because of the way the election was held.

Now because of the cost over-runs, inaccurate planning, poor execution, and maybe lying, the chief financial officer of the city  has just admitted that they will have to dip into general revenue funds to “augment” the stadium project financing.

How can that not mean using property taxes?  We have a budget shortfall this year.  The city manager is proposing an increase in property taxes for next year.

If we don’t have enough money to run this city now and we have to take money out of the general revenue funds for the stadium, how can that not effect property taxes?

Hiding the pea

Saying that they will not be using property tax money is simply a play on words.  Anyone with a household budget knows this.

The city could however:

Increase revenue by raising fees like traffic tickets, permits, service fees and the like.

Cut services so that the money can be spent instead on the ball park.

Do a better job of collecting the fees that they already impose.

Can they use general fund money?

Admittedly I am not a lawyer.  My reading of the Texas law that allowed the creation of the sports venue project is that it requires the voters to authorize specific sources of funds to fund the project.

General revenue sources were not included in that ballot initiative.   Chapter 334.0415 of the Texas Local Government Code appears to give the city the right to use other funds under certain circumstances.  It would appear that the city will do this.

I also think that what we will ultimately see is that the city will carve out parts of the stadium and declare them to be non-ballpark projects.

We have already seen this with the water and sewer changes that are necessary for the stadium.  They are not part of the stadium budget, but instead are being paid  for by the water users in the city.

The south entrance to the stadium ($500,000) is being funded out of the quality of life bonds.

I believe that the city is paying $800,000 for art in the stadium with funding  outside of the stadium funding.

The city staff tried to take $3,000,000 allocated to downtown street projects and wrap it into the stadium construction contract.  Council declined.  City staff decided to spend the money on projects around the stadium anyway.  They will administer it separately.

Don’t be surprised if some other part of the stadium gets carved out and put into the regular city budget.

We deserve better

Brutus

11 Comments | Ball park, City government, State Government | Permalink
Posted by Brutus

Risky business

August 20, 2013

A reader sent us this from the prospectus for the ballpark bonds:

The City and the Construction Manager at Risk have not yet negotiated a guaranteed maximum price for the Project. The cost of any project may vary significantly from initial expectations, and there may be a limited amount of capital resources to fund cost overruns.  If cost overruns cannot be financed on a timely basis, the completion of the Project may be delayed until adequate funding is available.  No assurance can be given that the costs of completing the Project will not exceed the amount of available funds or that completion of the Project will not be delayed beyond the current expected opening day.

That statement is from the group trying to sell the bonds.

Would you like to buy some?

What is the status of the bond sales?  Have they been successful?

How is the construction of the ballpark being paid for now, without the bond sales?  Is the money being “borrowed”?  What happens if the bonds do not sell again?

“Standard&Poor’s Ratings Services originally assigned the ‘AA-‘ rating, with a stable outlook, to the series 2013A and series 2013B bonds on Feb. 13, 2013, but the ratings were withdrawn on June 6, 2013 because the bonds did not sell.”

Someone needs to ask the city.

We deserve better

Brutus

1 Comment | Ball park, City government | Permalink
Posted by Brutus

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