Tomorrow the El Paso City Council will vote on a measure to indefinitely postpone the proposed arena in Duranguito.
Let’s take this opportunity to remember that the whole package of Quality of Life bond projects was based on lies, misrepresentations and omissions.
The City’s Chief Financial Officer, Carmen Arrieta Candelaria, told us that the QoL bonds would have a minimal impact on our property taxes. Here she is in the September 30, 2012, El Paso Inc.:
As El Paso taxpayers look ahead to the Nov. 6 quality of life bond election, some are asking how the city can pay for all those projects and everything else without imposing huge tax increases.
The city’s chief financial officer, Carmen Arrieta-Candelaria, confidently says it can.
The two quality of life propositions that will appear on the November ballot total $473 million. That makes it the biggest bond election in the city’s history – by far.
Not on the ballot are $210 million in certificate of obligation bonds, or COs, that the city intends to sell over the next decade to fund street improvements.
Also not on the ballot are $29.2 million in COs the city will sell to pay expenses related to moving City Hall to make way for a new baseball stadium.
That $29 million will go to the purchase of the El Paso Times building and the building at 801 Texas, along with remodeling and move-in costs.
Altogether, that comes to $712 million.
The city is currently carrying $878 million in bonded indebtedness.
Do a little quick math and that adds up to $1.6 billion in debt – an 81 percent increase. But the quick math would be wrong, Arrieta-Candelaria said.
The quality of life bonds will be sold not all at once, but over seven to 10 years, starting with $33 million in 2014 with the first payments the following year.
Meanwhile, the city’s older debt will be dropping rapidly.
Over that time, the city’s tax rate, now at 66 cents per $100 valuation, will rise by only 5 cents, she says, peaking for two years before starting to decline.
That nickel on the tax rate will cost the owner of a home valued at $150,000, after exemptions, about $75 a year.
Boy, a nickel looks pretty good right now. So does $1.6 billion in bonded indebtedness.
Brutus, over there at ElPasoSpeak.com, reminds us that the City of El Paso is $2,670,400,000 (two billion, six hundred and seventy million, four hundred thousand dollars) in debt right now. $1.6 billion is a dream. And we haven’t issued all the debt those unbuilt QoL projects will encumber us with. If we build that arena, we’ll be saddled with another $250 to $500 million in debt.
Those QoL advocates also promised that all those QoL bonds would create economic development. Here’s the QoL poster boy, Tripper Goodman, in the July 29, 2012, El Paso Inc.:
Organizers are accelerating efforts to form a political action committee to back the proposed $468-million quality of life bond, concerned that growing opposition to a new Downtown ballpark might spill over into the bond election.
Although the ballpark is not part of the quality of life bond issue, organizers of the El Paso Tomorrow PAC say the backlash against the city’s decision last month to build one in Downtown has made them aware of the need to get out and educate people on why they should approve the bond in November.
“This is something we can learn from and we should. That’s why we are really ramping this thing up now,” says PAC chairman Leonard “Tripper” Goodman, president of Goodman Financial Group.
. . .
“This is an economic development issue. More importantly than anything, that is what people need to understand,” he says of the bond.
. . .
“It would be a transformational change for this community,” Goodman says.
It’s transformational, all right. Those QoL bonds have transformed your money into the City’s money.
But the lies keep coming. Here’s J.P. Bryan refuting Mayor Dee Margo’s storytelling in a show that aired on KVIA this weekend.
Mayor Dee Margo is fond of storytelling. He says El Paso is one of the fastest growing cities in Texas, despite U.S. Census Bureau estimates that contradict that position. Of course, the Census Bureau is in the business of counting people, and Dee Margo drinks single-malt Scotch.
Who are you going to believe?
But the lies keep coming.
Here’s El Paso Downtown Management District Executive Director Joe Gudenrath in an email he sent out today to encourage people to voice their opposition to suspending the arena:
Not long ago, we were in the midst of unprecedented growth and investment because of the implementation of our long term vision and economic development strategy. We must be ready to regain our momentum when the time is right. It is important that we tell the Council not to undermine our long term vision for our downtown and greater community.
There has been unprecedented investment in downtown. Growth, not so much.
Remember that Downtown El Paso is covered by Tax Increment Reinvestment Zone 5, which means that any increases in tax revenue from development in downtown El Paso are reinvested in downtown El Paso. Economic development in downtown El Paso won’t do anything to relieve you of your tax burden, or generate more income for the City’s General Fund.
That’s right. Even in the unlikely event that an arena in Duranguito generates economic development nearby, despite widespread expert opinion to the contrary, your property tax bill will only be impacted by the increase in taxes as a result of the issuance of the additional bonds.
Your taxes will only go up. There’s no conceivable chance that the City’s debt, and your property taxes, will go down, even in the unlikely event that the arena succeeds.
And remember that building the arena is only a down payment. There are still operation and maintenance costs to be considered.
How come no one talks about O & M?
If we have to build a downtown arena, let’s wait. Let’s wait till we get some of that economic development the bond advocates promised us. Let’s wait till we retire some of the existing bonds.
You have to wonder why our elected representatives, none of whom were in office in 2012, continue to endorse the lies of the previous administration.
You have to wonder why our current elected officials sit by while the same lies, and new ones, are repeated today.
I don’t know the answer to those questions. I can only speculate.
As usual, well said, Rich. I think it is time for us to look into selling out, and leaving this soon to be bankrupt city. It’s obvious that letting our world turn into an oligarchy hurts way more people than it helps, and even though we – who have NOT been helped – outnumber they – who are helped – it still hasn’t occurred to us to take to the streets?
This situation continues. Have a good look at any and all the TIRZ (how many are there now?), that’s Tax Increment Reinvestment Zone. TIRZ takes tax money from new developments, that would have gone into the general fund, and instead gives that tax money back to the developer. Apparently, the developer needs that incentive to build on open space.
In TIRZ 13, the developer plans to build 9,500 residences as well as necessary other stuff.
Related question: Where will the developer get the water?