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El Paso City Council release documents related to ballpark financing, proposal for new financial adviser

El Paso City Council has approved the release of financing documents related to the Downtown baseball stadium.

City Council on Tuesday, Dec. 1 voted to waive their attorney-client privilege and share with the city manager and the general public a report related to the sale of bonds for the ballpark. The privileged documents released are a report by Norton Rose Fulbright on the baseball stadium financing.

In a separate vote, City Council also approved releasing documents related to the City soliciting requests for qualifications for a financial adviser. The other documents relate to the solicitation for requests for qualifications (RFQ) for a financial adviser.

A written report on the RFQ solicitation for a financial adviser will be provided to City Council on Wednesday, Dec. 2.

Bonds financing the ballpark were sold in August 2013 with the long-term debt based on an interest rate that was higher than originally estimated resulting in the City borrowing about $20 million more than originally anticipated for the stadium.

Delaying Ballpark Financing

Anemailfrom former City Manager Joyce Wilson confirms former City Representatives directed her behind closed doors to delay the sale of the ballpark bonds until after the mayoral election of a stadium supporter in order to avoid more bad publicity, a decision that cost the city $22 million.

When the City initially presented a ballpark financing plan, it was supposed to land a favorable deal that would yield up to $27 million for the City’s general fund. But the reality is far from the ideal financing mode and the City Attorney has recently said the delay for the election is the main culprit the city lost out on a $22 million surplus.

“We got delayed with the issuance of the bonds because of the litigation. Remember we had litigation and so we couldn’t proceed to the bond sale until after the bond validation suit happened. After that we were ready to go and there was a decision made by management after consulting with city council members to wait until after the election and that was a critical time frame when you waited until after the election,” City Attorney Sylvia Firth recently told council.

In an August 2013 email obtained through an open records request, Wilson outlines for Firth the reasons the sale of the ballpark bonds were delayed, including the election.

“Several council members raised concerns about the timing of this activity in relation to the upcoming general election, specifically because of the ongoing controversy over the project… Specifically no one said that a delay would be harmful to the financing or project costs. Further, I advised the former mayor and (mayor) pro tem of this request and both concurred it was better to hold off until after the general election if it was practical to do so,” Wilson wrote in the email.

Former City Rep. Steve Ortega, a ballpark supporter, was running for mayor against Oscar Leeser in 2013. Ortega in a phone conversation with ABC-7 last week said he did not order or know the City had purposely delayed the sale of the bonds until after his election, which he lost.

The Mayor and Mayor Pro Tem whom Wilson refers to in the email are John Cook and Ann Morgan Lilly.

The email also confirms the delay of the sale of the bonds cannot be pinned on the city’s financial advisers, First Southwest. City Rep. Larry Romero this Spring suggested City employees should seek new financial advisers, expressing displeasure on the ballpark financing.

An El Paso Times investigation showed Romero has former business ties with Estada Hinojosa, the firm that was also competing for financial advising work for the City.

The City’s Chief Financial Officer began the process to essentially fire First Southwest, at the suggestion of Romero, until he was stopped by current City Manager Tommy Gonzalez in October.

Gonzalez said on Nov. 23 the same email obtained by ABC-7 was what prompted him to stop the process to hire new financial advisers, proving First Southwest had not given the council bad advice.

How Proposal For New Financial Adviser Came Up

City Representative Larry Romero said he had nothing to gain if the City had hired his former business partner, Noe Hinojosa, and had only recommended Hinojosa’s company because of its good reputation and because “they’re good people.”

“You all have me as the most powerful person here at City Hall. You all think I can go to purchasing and I can say ‘hire this person.’ I can go to streets and say ‘do these streets.’ That’s not my job. The city manager runs the city. He’s the one who makes the decision. And yet you all keep coming on me like I’m the one who keeps doing everything,” Romero told reporters on Monday.

ABC-7 approached Romero at city hall after he has refused interviews for the last week.

Romero admits he spoke with former City Manager Joyce Wilson soon after he was elected about Estrada Hinojosa, Noe Hinojosa’s financial advising company. He said he did not disclose to Wilson he had worked with Hinojosa because it was so long ago.

“Even though it was 12 or 15 years ago, you think that makes it that relevant that I should have said something? You all are just focused on ‘you knew Estrada Hinojosa.’ Yeah I did. And I did work for them. But again 12 or 15 years ago. Did they contribute to my campaign when I ran for office? No, they didn’t. Have they given me money since then? No, they haven’t. So, what am I gaining out of this? ” Romero said to ABC-7.

Romero said he wasn’t pushy with Wilson when she told him the City would stay with financial advisor First Southwest instead of looking for a new firm. “So I backed off. I didn’t push it. I didn’t come out and say you better hire them or else. I just sat there and said ‘okay I just wanted to know what the process was.’ That was that.”

Romero also admits he called Hinojosa soon after being elected to “ask why he wasn’t doing business with the city” but only because of the company’s good reputation, he said.

“They’re the second largest firm in the state of Texas. Have you seen the work that they do? Go back and look at their portfolio. If we’re not going to get the biggest one in Texas, we should at least try to get the second biggest. Is that wrong? Obviously you all (media) think that I’ve been partners with them since 15 years ago and that’s not true but I knew they did good work. I trusted them. They’re very good people.”

The city didn’t go through with it, but in April did start to look for a new financial advisor, at Romero’s suggestion and again he did not disclose his history with Hinojosa who was competing for the job.

Leeser wants to know how the city started the process and then abruptly stopped in October to fire the current financial advisor. He’s ordered separate reports from the city manager and the internal auditor. Both reports are due Wednesday.

City Rep. Claudia Ordaz has expressed concern over the city investigating itself. “It was the administration’s doing of moving forward the bidding process without the public’s knowledge, without council’s knowledge and then we want the same administration to handle an investigation and I don’t think that’s appropriate,” she told ABC-7 last Wednesday.

The Internal Auditor reports to the City Manager but Leeser said he wants the auditor to report to his office for the report. Leeser said the city could hire an outside investigator too, but he first wants to see if answers can be found without spending tax dollars. “At the end of the day we look at it and if that’s not sufficient evidence, we will hire someone from the outside because it’s that important that we come forward but first thing we don’t want to do is spend taxpayer dollars if we can determine what happened.”

In a related matter, City Representative Emma Acosta on Monday said she will be returning two $500 contribution from Hinojosa. “Not because I think I did anything wrong but because I don’t want my constituents to be burdened by an issue of maybe an impropriety,” she said in an interview.

Acosta over the summer had accepted the donations from Hinojosa for her movies in the park events. She said she did not know Hinojosa was competing for a city contract at that time.

Acosta on Tuesday also asked the City Attorney to provide the council an updated list of lobbyists, litigants and people and companies bidding for city contracts so that city representatives could avoid accepting contributions from such individuals.

City Timeline Of Ballpark Funding

November 2012:Voters approve funding sources for ballpark.

May 2013:Council approves issuing bonds to finance ballpark.

August 2013:Ballpark bonds sold, council formally notified that long-term debt for ballpark would cost millions of dollars more to pay off than originally anticipated.

May 2014:Tommy Gonzalez appointed city manager.

June/July 2014:Council members share concerns with Gonzalez about the city’s finances, including the $7.5 million deficit, the $9 million reduction to the fund balance, and the ballpark financing costing millions of dollars more than originally anticipated.

August 2014:Pursuant to council concerns, City Manager authorizes solicitation for requests for qualifications for a financial adviser.

April 2015:City issues request for qualifications for a financial adviser.

September 2015:City Manager halts the solicitation for requests for qualifications for a financial adviser upon receiving a verbal report from legal on ballpark financing.

November 2015:City Attorney sends city manager an email supporting the report findings.

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