The Fiscal Ship is Sinking

Here’s a news flash from the El Paso Inc.: El Paso leads major Texas cities in debt not approved by voters.

(Seems like I’ve heard that somewhere before.)

Three years ago, and a month after Mayor Dee Margo took office, the new El Paso City Council unanimously adopted a new debt policy to allow the sale of bonds without voter approval to pay for quality of life projects.

Those bonds are called certificates of obligation, or COs, and even then El Paso had more CO debt than any other major Texas city to fund street improvements and other projects deemed essential.

El Paso still leads the state in debt that voters didn’t approve.

. . .

“Go back and look at the historical reports because you’ll see the city’s use of COs goes back 15 years, and you really start to see the increase in the use of COs,” [the City’s Chief Financial Officer Robert] Cortinas said.

But those COs didn’t finance major quality of life improvements as they do now because of a policy adopted during the administration of Carlos Ramirez, who was mayor of El Paso from 1997 to 2001. That policy restricted the city’s use of COs to basic and much-needed city projects, including streets, building repairs and equipment purchases.

The policy followed a successful $143 million bond election and was put forth by the head of the ad-hoc bond committee at the time, Dee Margo. And it remained in place until it was scrapped in a unanimous vote by City Council in 2017, soon after Margo’s election as mayor.

Margo declined to comment for this story, saying he’d comment on the city’s finances following budget hearings this week.

Remember, four of the City Representatives who voted to use debt not approved of by the voters are coming up for re-election this November. So is Mayor Margo, who promised during his mayoral campaign four years ago to “hold the line on taxes”. Let’s see what kind of campaign promises he makes for this run at the office.

Margo’s predecessor and a current candidate for mayor, Oscar Leeser, had a bit to say about certificates of obligation.

He recalled vetoing the sale of COs after they were approved by City Council early in his term.

“I don’t believe in the issuance of certificates of obligation without voter approval,” he said Friday. “We have to make sure that the taxpayers can afford it anytime we issue any type of debt.

“That’s always been important, and when I was in office, you would always hear me say that if we’re going to vote on something, we need to make sure that 100% of our citizens can afford the debt we’re issuing.”

There’s obviously a clear distinction between the two well-funded candidates for office.

District 3 Representative Cassandra Hernandez is also up for re-election in November. Here’s what she had to say in the El Paso Inc. article:

“While the debt has soared in recent years, the majority of the funds have been spent on critical street infrastructure,” she said in an email to El Paso Inc. “However, this model of debt accumulation is not sustainable.”

Instead, the city has imposed additional franchise fees on El Paso Water customers.

“This franchise fee has and is expected to yield millions annually to pay exclusively for a number of residential and collector road repavement projects that the revenues will allow,” she wrote.

Well, that should make you feel better. You’re not going to have to pay the City for critical infrastructure anymore. Instead, you’ll have to pay the water utility.

Like it makes a difference to you if the mob sends Paulie or Raul to collect protection money.

If we want better results, we have to elect better candidates.