The El Paso County Commissioners Court on Thursday paused efforts to issue up to $100 million in debt after a handful of residents spoke out against the proposal and promised to petition against the bonds.
Commissioners Court voted 4-0 to delete the item from the agenda, instead directing staff to conduct more public outreach and consider alternative funding sources for some projects. Commissioner Carl Robinson was absent.
The agenda item called for Commissioners Court to authorize the publication of a notice of intent to issue certificates of obligation, a required step before government entities vote to officially issue debt that doesn’t require voter approval but is repaid primarily through property taxes.
The county’s proposed $100 million in COs would fund at least 25 projects, including major reconstruction of critical connecting roadways, building a new medical examiner’s office, renovating or replacing basic safety and security systems at the detention facilities, improving Ascarate Park and expanding the Fabens airport.
Commissioners Court at a later date could vote to issue the notice of intent for the bonds at the same or lower amount and for different projects. The notice starts the clock on a public input period before the court could officially vote to issue the bonds.
“LIBRE is very disappointed in our commissioners for trying to pass COs again without voter approval,” said Karla Sierra, director of the LIBRE Initiative, a national conservative advocacy organization with ties to the Koch brothers funding network.
Sierra told Commissioners Court the organization will petition against the COs if it moves forward with its plan to issue the bonds.
A LIBRE petition this fall stopped University Medical Center of El Paso from issuing $346 million in certificates of obligation. The hospital, which is under county oversight, has not indicated whether it would pursue putting a bond on a future ballot for voters to decide whether to approve the debt.
Representatives from the El Paso Republican Liberty Caucus also spoke out against the county using COs, calling the funding mechanism “highly unethical” and urging the County Commissioners Court to instead cut spending and lower the tax rate.
Some of the speakers pointed out that some of the projects listed to be funded by the COs – Ascarate Park and the Fabens airport, in particular – are not urgent and should instead be included in a quality-of-life bond proposal on a future election ballot.
Commissioner Iliana Holguin reiterated her concern that the COs would fund projects that she doesn’t consider public safety or emergency priorities, adding that the county shouldn’t issue debt just because it has the capacity to do so.
That the proposed debt wouldn’t increase the tax rate is commendable, she said, “but reducing the tax rate even more than the county has already done would certainly be better.”
Commissioner David Stout said the county has been fiscally responsible in paying off old debt and keeping taxes low.
“I understand no time is a good time to raise taxes,” he said, adding that county facilities cannot fall into disrepair that would later cost more to fix them.
The county’s proposed $100 million issuance is estimated to cost the owner of a $165,000 home just under $23 a year.
County Auditor Edward Dion, who was asked by County Judge Ricardo Samaniego to clarify the tax impact to the public, said property owners would not see a change in their tax bills over the previous year unless their property values increase.
But under truth-in-taxation requirements, a tax increase is defined as a government entity collecting more in taxes on the same properties than the previous year – regardless of whether the change was a result of increased property valuations or an increase in tax rates.
The county last issued certificates of obligation in 2012, when the Commissioners Court approved $100 million for the Tornillo port of entry, new law enforcement vehicles and other projects. The county is in litigation with the Internal Revenue Service over those bonds. The IRS alleges the county didn’t meet certain expectations to spend proceeds of the bonds in a timely manner – an opinion the county is appealing.
County leaders in an email statement to El Paso Matters this week said they couldn’t comment on the matter since it’s under litigation, but added that the IRS determination is not final and would not impact its ability to issue new bonds regardless of the outcome.
The county is also looking at putting a quality-of-life bond of up to $100 million on the November 2024 ballot as part of its capital plan, which would include more park improvements and other projects.
Some of the projects initially considered for the certificates of obligation could instead be placed on the ballot. County Administrator Betsy Keller reminded Commissioners Court that the county could not spend any money for three years on any projects voters may reject.