By Juan Montoya
During a recent update on the financial condition of the City of Brownsville investment bankers Estrada and Hinojosa told the city it had a little more than $347 million in existing outstanding debt that the generations of Brownsville will continue paying until 2026.
Most of these were issued as Certificates of Obligation, a favored method of incurring debt which are passed by the city commission without having to go to the public for a vote.
Nonetheless, Noe Hinojosa – at the behest of the city administration and commission –presented a proposed Capital Improvement Plan (PIC) for the next five years starting in 2017 with a price tag of an additional $236 million.
How to pay for the additional debt?
The financial advisers came up with the imposition of a new "drainage use" tax which would add an additional tax burden of $27 million to city taxpayers, have the Greater Brownsville Incentives Corporation "loan" the airport $27 million for the new airport terminal, and aggressively seek federal and state grants. That's in addition to the property tax already levied on the residents.
But it is the role of the PUB in the cash "transfer" payments for some of the improvements on the CIP that raised some eyebrows. It also made some of the listeners take a closer look at how consecutive city commissions have used the PUB as a source of cash to offset their chronic deficit budgets.
In fact, since 2003 (that's as far back as the analysis went) PUB has made cash transfers to the city starting at $3.7 million and provided $3.1 million in free utilities. In that year, the combined transfers and utilities totaled $6.8 million.
By the end of this year (2016), the cash transfers had increased to $9.5 million and utilities to $4.7 million. The total in cash and free utilities today are $14.2 million.
The 2017 budget has a $8.6 million cash transfer and a $5.0 million in utilities for a total of $13.6 million from the utility to the city.
This has made some people question whether the city's continued habit of making cash and utility "transfers" from the PUB amounts to a double tax on local residents.
"As long as you have the PUB as a cash cow there really is no need to trim costs or reduce waste," said a city critic whose comments during city meeting are blacked out as per advice of city legal counsel Mark Sossi. "Why watch costs when you can just lean on the city-appointed PUB members and they will fork over the cash?"
In fact, in 2010 and 2011, the city went to the PUB for additional "economic assistance" to help tide them over in those lean years. In 2010, they got $3 million more and in 2011 they settled for and additional $2.5 million.
Now, with an additional $90 million piling up in the PUB coffers due to the increases in utility rates approved by the city commission starting in 2013 to build an 800 MWs electric generating plant with Tenaska, a private corporation, city officials are salivating at the idea of raiding the PUB again to pay for part of the CIP.
That project, envisioned for completion in 2016, has been delayed to start until 2018 because Tenaska has found no customers for 600 of the 800 MWs it will generate. The city will get 200 MWs for its $325 share of the cost.
"(City Manager) Charlie Cabler has been trying to talk the PUB to share some fo the wealth, but some of the members are not buying it," said the critic. "They don't think it's right that the ratepayers be taxed once again for the projects that the city commission wants to fund."
Will the PUB give in to the pressure exerted by the city and hand over some of the loot paid by ratepayers? Or will some crusading attorney come in nand put a stop to the pigs feeding twice at the same public trough?
8 comments:
How else do you think Jessica T Kalifa can afford her trips to Disney World twice a year, stay at luxurious 1/2 million condos at SPI and use those funds to install new equipment or upgrade the parks in District 2? Of course who is the engineer that designs the layout? Who is the company that does the impact study including the soil smamples etc. Not only on the Perkins Park but the Charlie Cabler Park. Nice to see that the citizens have so much money to re-do parks in District 2 yet we have no covered bus stops, the flooding of the streets is an ongoing issue not to mention the pot holes. Ohh but Jessica makes them give her thousands of easter eggs for her to give to her children. When I say her children I mean hers not yours or anyone else.
So what? Nothing will come of this.
Hi Shannon! How's that contract looking for your dad?
Portway Acres Park , in Jessica's district, is a drugs-infested hang out that no police patrols. Trashcans are regularly set on fire, lots of beer drinking and no bathroom . Lights are always getting broken , ghetto park!
The PUB board, gave $10,000 to the Mr Amigo association for the next year.
we already have a drainage tax. it is called the cameron county drainage district no. 1 tax. sorry hinojosa, no thank you to a new drainage tax
luis saenz, if you can do it to pete Sepulveda why not the city of Brownsville commissioners and da mayor, todos iguales.
You wonder why COB has a deficit? Trying asking Tony Martinez where all the money is - in the pockets of his friends from whom he is buying every old building in Brownsville and spending other millions renovating it for what? What about the money spent on all the new lightening for downtown. Who goes downtown at night if not only the guys looking for extra-curricular activities at 11th and Jefferson. Martinez has a rubber stamp with the signatures of all the commissioners and a white-out cover-up by Cabler.
They have been warned about this but could care less.
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