The city council approved a $3 million bond measure to cover tax appeals and rejected a $2.6 million borrowing measure for recreation facilities on Tuesday night. Council members cited the city’s eroding debt capacity to vote down the $2.6 million borrowing measure.
Mayor Jose “Joey” Torres’ administration presented two ordinances to the council seeking to borrow $5.6 million for tax appeals and recreation facilities. He needed the council’s affirmative votes on both measures prior to seeking approvals from the state’s local finance board.
Council president William McKoy said the mayor’s massive $35 million borrowing for road resurfacing left the council wary of approving future bond measures. “That changed dramatically our position and posture. That meant we had less room to go bonding going forward,” he said.
$2.6 million for recreation facilities
Council members Ruby Cotton and Maritza Davila complained about lack of information from the administration on where the $2.6 million would be spent.
“I don’t have a clear understanding,” said Cotton. She wanted a breakdown of where each dollar would be spent, but received convoluted information from the administration.
Kenneth Morris, councilman at-large, chairman of the finance committee, cited the city’s eroding bonding capacity. The city has $96.7 million left on its “credit card,” said Morris. The administration, including this round of borrowings, reached $20.7 million in bonding for the current fiscal year, according to city records.
“I don’t think we have the money right now. I don’t feel comfortable,” said Luis Velez, 5th Ward councilman. “When we get a better surplus, we can use the credit card.”
Council members rejected the $2.6 borrowing measure in a 6-3 vote. Council members Cotton, Alex Mendez, Morris, Velez, Michael Jackson, and McKoy voted against while Davila, Shahin Khalique, and Andre Sayegh voted in favor.
$3 million for tax appeals
The vote was reversed to borrow $3 million to pay for tax appeal settlements.
“See, this I can support, only because we’re backed into a corner. We have to pay the successful tax appeals. We have to pay successful litigations,” said Morris. “This is when you want to use your bond capacity to pay unanticipated expenses.”
Council members approved the $3 million borrowing measure in an 8-1 vote. McKoy vote against.
The council’s passage for the $3 million bond measure represented a preliminary approval. The council will hold a public hearing prior to final approval on Tuesday night at City Hall.