El Paso City Council overturns Mayor Leeser’s veto of non-voter approved debt

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EL PASO, Texas (KTSM) — The El Paso City Council overturned a veto made by Mayor Oscar Leeser over nearly $100 million in non-voter approved debt after a heated discussion on Tuesday.

Joe Molinar and Claudia Rodriguez voted against the measure to overturn Leeser’s veto. All other members of the council voted to move on with using the debt to pay for various projects throughout the city.

Three-quarters of the City Council must vote to override a veto made by the mayor.

“Enough is enough and I think we can find money to be able to do these projects and continue to work together as a body,” Leeser said. “We’ve done a really good job as a body working together and I look forward to continuing having a great working relationship with you all to find different ways of financing.”

Residents called into the meeting to urge the City Council to stop the use of non-voter approved debt. Some also called to encourage the council to continue funding projects throughout the city.

“The issue is not that we need certificates of obligation,” Kenneth Bell said. “The issue is that our City Council representatives are not prioritizing what’s important.”

Peter Svarzbein, Mayor Pro Tempore and District 1 Rep., said he agreed with the sentiment that “enough is enough,” but said issues over certificates of obligation came up three days after the City Council adopted its 2022 budget.

“What it would’ve done, was jeopardize the completion of these projects,” Svarzbein said. “And, it was a fiscally irresponsible and haphazard approach towards governance. We could have been having these conversations about our budget, about these certificates of obligation, for the last six months.”

In February, the El Paso City Council also sought the issuance of a different set of certificates of obligations to pay for major quality of life projects, public infrastructure, public safety facilities and general upkeep of facilities. That issuance was set at $93 million.

The council then announced its intention to issue $96 million in certificates of obligation to pay for streets, facilities and the proposed Mexican American Cultural Center.

Certificates of obligation are a form of non-voter approved debt, which are different from general obligation bonds, also known as GOs.

GOs are bonds secured by a city’s ad valorem taxing power and are approved by voters through bond elections. Certificates of obligation are a form of debt that can be used to fund public works quickly, according to the state’s comptroller’s website.

“COs often are associated with emergency spending, but their use isn’t restricted to such purposes,” the website says. “They can be used to fund public works as part of standard local government operations.”

On Friday, Leeser announced his veto of the certificates of obligation, citing data from the Texas Bond Review Board. Figures from the bond review board showed El Paso leading major Texas cities in the issuance of certificates of obligation and interest owed.

The El Paso City Council adopted a proposed $1 billion budget for 2022 on Tuesday without an increase to the property tax rate.

City officials said the tax rate freeze is to assist residents feeling economic hardship from the ongoing COVID-19 pandemic, which began in 2020. It is the second consecutive year the city adopts a budget with a tax rate freeze.

But officials are still expecting more revenues from property taxes compared to last year as valuations generally increased throughout the county this year. For now, El Pasoans can budget a $0.907 per $100 valuation on their properties in upcoming tax bills.

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