December 3, 2008
Over the no votes of three and sometimes four city representatives, the El Paso City Council approved a $73 million budget for major capital acquisitions and projects in the coming year.
The Capital Improvement Program includes:
-- Eight Sun Metro projects, including four new bus terminals, totaling $21.6 million
-- Storm 2006, street and other comprehensive mobility plan projects eligible for state matching funds totaling $25.5 million
-- Forty new Sun Metro buses for $16 million and other motor fleet replacements for $10 million.
Although city officials are optimistic that additional federal funds will become available to offset some of the projects' cost, they conceded that the city could finance up to $73 million by selling certificate of obligation bonds without voter approval.
Deputy City Manager Bill Studer said the city will probably not need that much, but if it did, selling $73 million in bonds would add 1.9 cents to the city’s property tax rate, which would increase the city tax on a house taxed at $100,000 by $19.
Mayor Cook had to break four ties Tuesday in a series of more than a dozen votes, including one to replace the dilapidated Northgate Transit Terminal with a new larger terminal for $5.8 million in local funds and $2 million in federal matching funds.
Chiefly at issue for city Reps. Melina Castro, Rachel Quintana and Eddie Holguin, who voted against every project, was that all or part of the spending would be financed by bonds sold without voter approval.
The three representatives wanted the projects and acquisition Sun Metro buses and other vehicles to be put on the May city election ballot instead.
But Terry Quesada, the city’s capital improvement projects coordinator, said the city stands to lose a great deal of money if it waits six months.
For one thing, she said, the city would be eligible for proposed new line of federal stimulus funding that, if approved by Congress, would bring in $14 million for infrastructure projects that can be put out for bid in six weeks and completed in two years as part of an economic stimulus project.
“If we delay this further, the funding becomes jeopardized,” Quesada said.
The council approved eight Sun Metro projects for which the city has $19.6 million in federal funds that would be matched by $21.6 million in local money.
If the city also receives the $14 million, it would mean getting $41.2 million for $8 million in local funds.
In voting against all of the capital improvement projects, Castro also opposed the replacement of the Northgate Transit Terminal in her district.
For that reason City Reps. Steve Ortega and Beto O’Rourke also voted against that project on the grounds that if Castro wouldn’t support a project in her own district, then it shouldn’t be built.
On the first vote, the Northgate terminal was defeated on a 5-3 vote. That prompted Mayor John Cook, the former Northeast representative, to ask Ortega and O’Rourke to reconsider their votes because the terminal will be an important piece in Sun Metro’s redesigned transit system.
“I see what’s going on,” Cook said. “What we have to do is think about the needs of the entire city.”
“It’s up to the representative to step forward,” O’Rourke said.
“I don’t think the council should play that game,” Cook said.
O’Rourke agreed to support the Northgate project and moved to reconsider it. His changed vote resulted in a 4-4 tie, which Cook broke with a ‘yes’ to approve the project.
Regarding the Northgate project, Castro said she had been under the impression that the city had all the money in hand for the Northgate terminal.
“Nobody ever told me it was going to be a CO (certificates of obligation) when we voted to move forward with purchasing the Northgate terminal,” Castro said. “We were told we could find the funds later.”
Even though she voted against the project as it was presented, she said she has always supported replacing the old terminal.
“The existing terminal is very, very old,” she said. “We only have one restroom in there. Northgate (shopping center) has been abandoned for a long time,” she said.
But the bottom line for her, she said, is that they city should go to voters for approval of any debt.
Northeast resident Carl Robinson, who intends to run against Castro and was at the meeting, questioned her votes and those of Holguin and Quintana.
“I think the action on the part of several council members today was juvenile,” he said. “This is not student council, this is City Council. This is government in action.
“I am concerned about not paying more taxes, but I also look at the greatest good for our city. … We’ve got to balance the best interest of the citizens as well as their pocketbooks.”
40 new buses will complete new fleet
Under the capital improvement program, the city would also be buying 40 new buses for $16 million to complete the replacement of the city’s fleet and allow Sun Metro to begin expanding service.
Two years ago, Sun Metro had to cut back on routes because of a shortage of reliable buses in the Transit Department’s aged fleet.
Funds for that purchase could come from revenue bonds that would be repaid with Sun Metro revenues or certificates of obligation that repaid with tax money but reimbursed by Sun Metro’s sales tax and fare box income.
Holguin: $11 million would get all $73 million
During the meeting, Holguin contended that the city really only had to commit $11 million to draw down other funds to finance the entire capital budget.
“The problem here is that $11 million would leverage the $70-plus million that they’re trying to leverage, not $74 million out of COs (certificates of obligation),” he said after the meeting. “Five million form from transportation and four million from Sun Metro, that in itself would have leveraged the $70-plus million they’re trying to acquire.
“Instead, council decided to pass $73 million to actually fund everything.”
City Manager Joyce Wilson and Quesada said that is not true because the city has to commit to projects before federal agencies will offer matching funds.
“The $11 million local match would not be sufficient to totally fund the projects, so we would not have been able to move forward,” Wilson said afterward. “We not only did the project match but obligated ourselves to the projects shortfall to be in a better position to go get federal offset funding.”
Of the $73 million, she said $26 should be short-term equipment notes for buses and other vehicles. Of the remaining $46 million, she said, “potentially almost 50 percent could come from federal sources.”
While the city has committed to spending $16 million for the 40 buses, Wilson said she expects the city will find Federal Transportation Administration funds to offset part of that.
“We know there’s $15 million available for Sun Metro that we can go after it after the first of the year,” she said.
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To reach David Crowder, write to dcrowder@epmediagroup.com or call (915( 351-0605, ext. 30