After abandoning a plan to issue $100 million in certificates of obligation, the El Paso County Commissioners Court instead broke down the proposed bond into two debt plans – making it harder for the public to petition against them.
Last month, commissioners court voted to publish a notice of intent to issue $59 million in certificates of obligation for “essential public infrastructure projects” such as improvements to the county courthouse, sheriff’s office, streets and telecommunication and information technology systems, as well as for major upgrades to Ascarate Park and to expand the county airport in Fabens.
The notice is required before government entities vote whether to issue the certificates of obligation, which is debt that doesn’t require voter approval but is repaid primarily through property taxes. Commissioners will vote whether to issue the bonds on Jan. 30.
Commissioners court also voted to issue $41 million in tax anticipation notes, a short-term debt instrument similar to a bond issue. The tax note has a seven-year maturity, which in this case would cut interest costs by about $19 million, said Jose Landeros, the county’s director of capital planning. The tax notes don’t require a published notice and aren’t subject to petition like the certificates of obligation.
The tax note funds will be used for “critical public safety projects” – to replace or upgrade fire alarms, heating and ventilation, and safety access systems to the county jail, jail annex and the juvenile justice center, as well as to expand the medical examiner’s office.
Karla Sierra of the LIBRE Initiative, a national conservative advocacy nonprofit organization, was among a handful of people who spoke out against the county’s plans during the Dec. 12 meeting where commissioners voted on the two debt instruments.
“It’s finding a loophole within a loophole of certificates of obligation,” she said. “The optics of that for the community do not look very positive.”
“Just because our elected officials are able to utilize (COs), does not mean that they’re ethically or morally correct to do so,” Sierra said, adding that LIBRE would rather the county use tax anticipation notes or put a bond issue on the ballot.
Sierra this week told El Paso Matters that the group would not collect signatures to petition against the certificates of obligation, citing a short window to do so given the holidays. The petition with 25,000 valid signatures would have to be turned in before the Jan. 30 vote.
Commissioner Iliana Holguin voted against the public notice for the certificates of obligation, saying she believed some of those projects should be on a ballot. She voted in favor of the tax notes. Commissioners Carlos Leon and David Stout, as well as County Judge Ricardo Samaniego, voted in favor of both issuances. Then-commissioner Carl Robinson was not present for the votes.
The bonds would not require a tax rate increase, though county taxes could go up if property valuations increase.
The county’s current tax rate is 42.6 cents per $100 property valuation; of that, about 5 cents goes to pay off debt. Because the county will pay off old debt before taxpayers begin paying off the new bonds, the 5 cents would remain the same, Landeros said.
The $59 million in certificates of obligation would mature in 2047, with a total estimated payoff of about $100.6 million, according to county documents.
The county on Dec. 21 sent out a media release on its upcoming “capital finance community meetings,” but does not make mention of its published notice of intent to issue the certificates of obligation or of the approved $41 million in tax notes. It only refers to a proposed finance plan for $100 million in “critical public safety and essential public infrastructure project needs.”
The county’s public meetings are as follows:
- 6 p.m. Jan. 11: Ascarate Golf Course Clubhouse, 6900 Delta
- 6 p.m. Jan. 12: El Paso Water, 1154 Hawkins
- 10 a.m Jan. 14: San Elizario Fire Rescue, 1415 San Antonio St., San Elizario
- 6 p.m. Jan. 17: EPCC Northwest Campus, 6701 S. Desert
- 6 p.m. Jan. 18: EPCC Administrative Building, 9050 Viscount
- 9 a.m. Jan. 19: County Courthouse – Special Session, 500 E. San Antonio
- 10 a.m. Jan. 21: County Eastside Annex , 2350 George Dieter
The public may email comments or questions to CapitalPlanning@epcounty.com.
The commissioners court in November paused its plans to issue up to $100 million in debt after residents spoke out against it, threatening a petition that if successful would also prohibit the county from spending any funds on the projects for three years.
In October, the LIBRE group stopped University Medical Center of El Paso from issuing $346 million in certificates of obligation for an array of projects. The county oversees the hospital, whose leaders have not indicated whether they will put the bond on a future ballot for voters.