County Commissioners Delay Approving Bond Underwriting Team

When the public comment period kicked off Monday morning, two locals addressed El Paso County Commissioners with fiery words and accusations about $110 million worth of certificate of obligation bonds expected to be OK’d in the coming weeks.

“I’ve been walking around with a great stone in my shoe, and that stone is certificates of obligation,” said Salvador Gomez. He deemed the bonds unnecessary.

On Monday the El Paso County Commissioners Court was set to approve the underwriting team for an upcoming bond issuance. Instead, they tabled the discussion for another week due to what some Commissioners considered a lack of information.

Due to a short timeline, County employees narrowed 16 potential firms down to four. The four firms would work together to.underwrite those bonds. Those four companies were presented to the Commissioners Court on Monday, but few details were made available about how the companies compared to one another.

“This is the sketchiest backup I’ve ever seen,” said Commissioner Dan Haggerty, who felt few details were made available.

Commissioner Sergio Lewis, who also raised concerns over information he felt was missing, said he was not against the bond, but felt uncomfortable making a decision on so few details.

In order to prevent a 2-2 vote since Commissioner Anna Perez was not in attendance, County Judge Veronica Escobar suggested the commissioners wait to vote on the issue until next week’s meeting.

Among the things not known by commissioners before the meeting began was how much money would be paid to the underwriters of the bonds.

According to Mark Valenzuela, a member of the auditor’s office, the underwriters would agree to guarantee the $110 million in bonds to the county by purchasing the bonds. In return, they would become the salesmen of 110, $1 thousand bonds which they sell. For taking on the risk of guaranteeing the bonds they receive what is called a “takedown,” or a monetary amount they’re paid per bond, a sum the County is hoping to be below $4.50/bond which amounts to $495,000.

Escobar said the issuance of these bonds was critical to improve infrastructure issues within the county, adding that this is a more in-depth bond process than County Commissioners Court has oversaw in the past, but her goal was to make sure everyone was comfortable before moving forward.

Once a team is selected to underwrite the bonds a price can be negotiated and bonds can be issued. The original goal was to issue the 2012 bonds in mid July.