Weekly scoops daily newspaper

November 13, 2013

El Paso Inc. published an informative article last week about how the downtown management district (DMD) may have improperly  doubled the assessment on it’s property owners.

I find it remarkable that a feel-good weekly newspaper scooped our local daily newspaper on an article this important.

My view of the Inc. is that they try hard to celebrate what is good about El Paso and attempt to stay out of reporting with negative articles.  I respect them for that.  They have a business model and the integrity to follow it.

The Times also seems to have a business model.  I think that they pander to the cabal that captured our city government a few years ago.  I don’t see how they can continue down their same path for very long.

Brutus pointed out the other day that it seems that city council is gaining control from city staff.  Our new mayor unfortunately voted to raise taxes with an already bloated budget.

I suspect that his problem was that he was too new to city government finances to do as much as he wanted.  We will have to wait until next year to see if he will be able to do more for us.

It will be interesting to see if the Times changes it’s allegiance to its subscribers or if it continues to pander to the ones that think they know better than the voters.

I would be embarrassed if I was running the only daily newspaper in a city the size of El Paso and got scooped by a weekly that goes out of its way to stay neutral.

Muckraker

8 Comments | City government, El Paso Inc., El Paso Times | Permalink
Posted by Muckraker

Another reason why bidders avoid the city

November 12, 2013

On city council’s agenda today we have another example of El Paso businesses being hurt when city staff could do better.

The item is number 10A on the consent agenda.  It proposes to award a construction contract for continuing work on Barker Road.

This item was on the agenda in September.  The city received five bids.  City staff wanted to award the bid to the second lowest bidder.  The lowest bidder evidently wanted more for “mobilization” than the city wanted to pay.

Mobilization is a bid item that allows the contractor to be paid early in the contract for costs related to setting up the contract.  Normally work is only paid for when completed.  Mobilization gives small local contractors a way to afford bidding on work by letting them recoup some of their out of pocket costs (like bonding) earlier.  Large contractors often can afford to carry those costs until the project is complete.  Without mobilization the smaller contractors might not be able to take on the work.

In the September item the low bidder asked for more than the 5% that the city will allow for mobilization.  The situation was somewhat ironic in that the same two first and second place bidders had seen a similar situation where this had come up.    In that case the city allowed the bidder with the mobilization cost over 5% to get the business.  In the September case city council asked that the project be rebid.  In both cases the bidders claimed that the overage was a clerical error.

Contractors are not allowed to make errors whereas the city seems to have a full time department producing Scrivener’s errors.

Of the five bidders being considered in September, two (including the low bidder) decided not to bid again.  Many contractors have told me that they don’t bid on city business because of what they perceive to be unfairness.

Since the September bids were made public, bidding again was different.  This week’s low bidder at $316,998.76 was September’s high bidder at $401,532.46.  The new low bid was just slightly under the September low bid.  This contractor obviously read the competitive information and decided to chop almost 25% off his bid.

The city could fix the mobilization problem with better bid language and by moving the mobilization computation down to the bottom of the bid form (sub total, mobilization, grand total) to make it easier for a bidder to check the number.

We deserve better

Brutus

3 Comments | City government, Purchasing | Permalink
Posted by Brutus

El Paso city council asserts control

November 11, 2013

Something new happened in the city council meeting of October 29, 2013.

A city representative teed up the ball and the mayor knocked it out of the park.

City staff wanted to make a pitch to the Metropolitan Planning Organization (MPO) promoting a scaled down bicycle program as a trial.  I wrote about the original program  in A government agency with some common sense.

The city representative wanted city council to know what city staff was up to and get council’s approval or disapproval of the project.

The city’s chief sustainability officer (I wonder how many sustainability officers we have) started his presentation.

The mayor interrupted.  Essentially his concerns were:

  • The presentation being made to council and the public was not the same one that had been made to council (sitting as the legislative review committee) the day before.
  • The proposed project required money for operation and maintenance once it was installed.  Council had been told originally (at the time the full project was being considered) that the project would be self funding and would pay for itself.
  • City staff wanted money for a feasibility study to be conducted once the trail project was over

The city manager denied knowledge of differences in the presentation.  The mayor essentially said that he did not appreciate being lied to.  He said he was insulted.  A city representative indicated that he feared that the presentation to be made to the MPO was different still.

The city manager explained the money was from federal sources and would not cost the city taxpayers.  The mayor said that he did not think that was a good idea.

The chief sustainability officer explained that the feasibility study was more of a “master plan” document.  The mayor indicated that we should do our planning before beginning a project, not after starting one.

Governance

After several strained exchanges the mayor directed that the item be deleted from the agenda.  Council voted to delete the item.  He then thanked the city representative for bringing the situation forward.

It appears in this case that city council performed it’s function and gave city staff clear marching orders.

Visibility

It now seems that council may be aware of the slight of hand that staff performs in front council.

We all remember city staff telling council that they could move out of city hall for $33 million.  That number is now over $70 million and climbing.

The $50 million ball park presentation came from city staff also.

It seems that they have not learned that telling the truth is easier than remembering what lie you told last time.

We deserve better

Brutus

3 Comments | City government | Permalink
Posted by Brutus

Ball park design

November 10, 2013

The city has evidently entered into it’s final, last, not one cent more contract with the construction company to build the ball park and have it substantially complete by April 28, 2014.  That’s only 17 days after the first game is scheduled to be played there.

Isn’t it time that we get to see the final plans?  What will it look like?

Between now and then we have Santa Claus coming and multiple visits from the Tooth Fairy.

The Easter Bunny is scheduled for April 20, so he or she will want to know what to look for.

While we are at it could we please see the minutes of the June 18, 2013 and August 1, 2013 meetings of the Downtown Development Corporation?  (That is city council acting in ball park mode).

We deserve better

Brutus

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

No principles

November 8, 2013

In  August of 2013 the city sold $60.7 million dollars of bonds at par.   These bonds were offered in two groups, $45.1 million in tax-exempt bonds, and $15.6 million worth of taxable bonds.  The city evidently received a premium of another almost $4.3 million on the bonds, presumably because of the high interest rate we were willing to pay.

The tax-exempt bonds were sold but the taxable bonds were not.  The underwriters had to buy them.

We paid $1.7 million dollars for the privilege of selling these bonds.

Hotel Occupancy Tax

According to a June 26, 2012 presentation from the city’s chief financial officer we can expect to get about $2.4 million each year from the increase in the Hotel Occupancy Tax.  You will remember that we were told that this tax along with lease payments from the sports group as well as revenue generated from the 77 games each year would pay for the ball park.

A document available on the city web site tells us that the cost to finance the bonds in 2014 will be $3,052,205.14 for the tax-exempt bonds and $1,091.175.50 for the taxable ones, totaling $4,143,380.64.  Those numbers go up slightly in 2015.

I guess the city has been right in telling us that we will have to use general fund revenue to make up the difference.

Those numbers do not include any payment of the principal.

The city’s presentation shows that they plan to make modest principal payments on the taxable bonds starting in 2019.  They will start making serious principal payments in 2024 with an ever increasing payment until those bonds are paid for.

No principles

As for the tax-exempt bonds, this chart tells what the city has done to us:

2013ataxexemptbonds

They are planning a “large bullet payment” of $17,455,000 in 2023.  The amortization chart is below:

2013aschedule

They optimistically talk about the potential of using “excess” Hotel Occupancy Taxes and of the potential of lower market rates.  We have already seen HOT taxes coming in under their projections.  As for lower interest rates in the future I think that we all know the answer.

Better future

We are not even planning to begin paying for the tax-exempt principal until 2023.  Where will that money come from?

We deserve better

Brutus

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

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