by Rich Wright
I get it. If you can believe everything the City is telling us (always a dubious proposition), the City of El Paso, as an organization, is lots better off financially now than they were in 2014.
The new bond rating reflects years of work on behalf of Gonzalez and the El Paso City Council. When Gonzalez took his post as city manager in 2014, the city was facing 21 external audit findings and a nine-day operating balance ? since then, the city has seen seven years with no audit findings and currently maintains a 91-day operating balance.
. . .
Much of [the City’s improved financial position] has been achieved due to the creation of stabilization funds to increase reserves and prepare for long-term sustainability, annual set-aside funding for top priorities, refinancing old debt to the tune of $68 million in savings and the forthcoming “Pay-for-Futures Fund,” which Gonzalez has said will be presented to the council soon.
So how do you suppose the City got itself into such a favorable financial position?
What else have they got?
The City sure didn’t do it by trimming expenses.
In 2014, the tax rate was $0.68 per $100 valuation.
In 2023, the tax rate is $0.86 per $100.
In 2014, the General Fund budget (which is mostly funded by property tax receipts) was $351.3 million, and in 2023, the General Fund is $512.8 million.
A city’s bond rating is really a measure of how much the city is willing to stick it to the taxpayer, and the taxpayers’ ability to pay.
And the City of El Paso is completely willing to stick it to the taxpayer.
Kroll, or whichever bond company is issuing a rating, isn’t looking out for the taxpayer. They’re not looking far into the future of the city. Those rating agencies are just looking at a city’s ability to pay its obligations.
And if the City of El Paso is willing to stick it to El Paso taxpayers, the City of El Paso can pay its obligations.
In an ideal situation, the politicians would be looking out for the taxpayers. They’d be looking at the voters.
But not in El Paso. From that same ElPasoTimes.com article:
“I have been championing efforts to directly address the concerns from bond rates, such as developing a pension stabilization fund and increasing our rainy-day fund,” [East-Central city Rep. Cassandra] Hernandez said in a text message. “Through the experience of our city management and the persistence from past city councils, together we have achieved millions of dollars of savings for taxpayers at a time of economic uncertainty.”
It’s like the City of El Paso’s Strategic Plan. The City’s Strategic Plan isn’t about the taxpayers. The City’s Strategic Plan is about the health and prosperity of the bureaucracy.
Believe me, they care a lot more about themselves than they care about you.
They’re talking about how much more cheaply they can borrow money. More debt = more taxes.
We can’t spend our way to prosperity.
But even if you take the City of El Paso at its word (a dubious proposition at best), what does a higher bond rating mean to you?