By the time the realities of the public policy come to bear the full context is lost and those that predicted the outcome have long moved on to other issues. Case in point is the recent admission that the children’s hospital is facing a major short fall in its financial profile. It owes $59 million to UMC. Late last week, after the possibility that taxes would need to be raised to shore up the shortfall, Veronica Escobar and some who make up the board of the Children’s Hospital started going to the community promising that taxes would not be raised to make up the difference.
However, here is the problem with these pronouncements of no tax increases; everyone has agreed that the children’s hospital owes UMC at least $59 million. The University Medical Center is a taxpayer funded institution that relies, in part, from property taxes levied by it. The rest of its funding comes from other sources of taxes and to a lesser extent some fees paid for by members of the community.
So we know that a committee has been tasked to search for ways to keep the children’s hospital viable and to bring it current. The problem is that no matter what the committee, the board members or Veronica Escobar say, the $59 million is the responsibility of the taxpayers. Unless, and it is very unlikely this would happen, the $59 million were gifted from private individuals to the children’s hospital then the amount, even if it were “forgiven”, would come from taxpayer monies.
The only entity that can “forgive” the amount due is UMC, which must make up the difference from other sources, the taxpayers. Or, the children’s hospital would have to pay the amounts due and those, again, would come from the taxpayers of the community. There is no other way to satisfy this debt.
Unfortunately most in the community don’t understand this because Veronica Escobar and some board members are “promising” that taxes won’t go up as a result of this fiasco and because the context in the discussion is missing. What about “restructuring the debt”, as some are insinuating, as a way out of the financial mess. Restructuring debt is nothing more than changing the terms of the loan that results in paying more interest over a longer time period. In this case, it is the taxpayers that will be paying the interest on the debt, regardless of the pretty graphs the supporters will show you arguing that the “fees” will be paying off the debt.
Like the ballpark fiasco the El Paso Children’s Hospital centered on the notion of economic development and prosperity for the community if only the community would buy into the concept. Like the ballpark there were those that challenged the assertions and argued the economics of the project. Unfortunately all of that happened seven years ago and the context of the debate and the arguments have lapsed into history leaving us devoid of the full context to understand the issue. This is precisely what the politicians bank on to impose their schemes on you.
The same thing will happen with the ballpark fiasco. But to remind you here is a quick recap of the vote to sell the $120 million of bonds in 2007 that is now the genesis of the $59 million question the taxpayers will ultimately pay.
They All Lined Up To Soak in the Latest Scam
In February 2009, amidst singing children, the taxpayers witnessed the spectacle that was the latest celebration of the fleecing of the taxpayers. During the ground breaking ceremonies, Dr. Carlos Gutierrez stood before the adoring crowds and he said;
“This hospital is going to be such a boom to our economy, such a boom to the whole city. Jobs are going to be coming here that never would have been had if we had stayed with the status quo.”
Among the crowds celebrating the further fleecing of the taxpayers were Steve DeGroat, Ron Acton, Jim Valenti, Joe Moody, Willie Gandara, Susie Byrd, Veronica Escobar, Dolores Briones, Emma Acosta, John Cook, among others. Look at those names and see how each of them ties in with the scams played on the taxpayers of the community.
Reconcile that with Gutierrez’ quote and the $59 million shortfall in the children’s hospital and see how each of those have had a part in the schemes that El Paso taxpayers ultimately fund. Like the ballpark, the children’s hospital was the missing piece in El Paso prosperity went the argument. The reality is that today, the children’s hospital is yet another load on the taxpayers of the community.
Veronica Escobar, a county commissioner at the time, held a press conference on October 17, 2007 asking the community to fully support the children’s hospital and the issuance of the $120 million in taxpayer backed bonds. During the press conference, Escobar stated;
“This is a historic time in El Paso: we are redeveloping downtown, preparing for unprecedented expansion at Fort Bliss, building a medical school, and we are investing in our community like never before. The children’s hospital is yet another piece of the renaissance so many have worked towards for a long, long time. It’s an exciting time.”
Escobar added that the proposed hospital was “a vital piece of the economic development engine we are building in our community”.
As with all taxpayer funded initiatives there are two or more sides, in support and against the bond campaigns. The Children’s Hospital was no different. In support of the initiative was Thomason’s, now University Medical Center CEO; Jim Valenti. Other than community activists the more vocal organization against the bonds was Providence Memorial Hospital Children’s Hospital, through its CEO, Irene Chavez. Chavez, on behalf of her employer, argued that the children’s hospital was unfairly using public financing to compete against for-profit hospitals.
One of the other controversies leading up to the vote was the notion that the taxpayer funded children’s hospital would be able to levy taxes. Jim Valenti stated, through the news media, that the taxpayer funded entity would not be able to levy taxes.
The El Paso Chamber of Commerce issued a statement on July 24, 2007 shortly before the bond vote. In the statement, the chamber resolved that it supported the creation of the hospital and the $120 million in bonds.
The Bond Vote
The $120 million in bonds for the Children’s Hospital passed with a margin of only 768 votes. There were 22,596 votes cast in favor and 21,828 against. This was clearly not a mandate for the children’s hospital. The bonds were sold in April 2008. Thirty-one million of the $120 million in bonds were purchased by El Pasoans.
Another Example of You-Scratch-My-Back-and-I’ll-Scratch-Yours
As an aside but nonetheless another example of the mentality that is El Paso’s incestuous relationships where political appointments are made as a result of political favors. On September 4, 2013, Larry Romero posted an agenda item asking that Audrey Ann Marrufo be appointed to the City’s Ethics Commission. Reviewing Marrufo’s resume you will notice that from 2001 through 2006, Marrufo listed herself as the Production Manager for KTSM TV. Prior to that she worked in the news media industry.
In 2007, according to her resume, Audrey Marrufo was the Campaign Coordinator for El Pasoans for a Children’s Hospital. Forgetting the notion of a conflict of interest between the news media, that reports the information to the community from which it casts its votes, doesn’t it seem improper to everyone else that passage of a bond levying taxes on taxpayers is a resume item for job prospects? I do not know if she was paid for the position but if she was doesn’t that seem like a bastardization of the process of getting voter support for a project based on the viability of the project for a community rather than the “purchasing” of the votes to pass a bond election imposing taxes on a community?
Aren’t votes cast supposed to be about the good of the community rather than the marketing schemes often times enabled by a complicit news media? I would argue that having to pay for advertising to gather votes is a form of corruption.
More importantly is that this latest fiasco is a prelude to what you will be seeing from the ballpark in the next few years. Keep an eye on how the $59 million will be “reconciled” and who will be touting how it’s all good for El Paso. It will be the same people telling you that you need a new city hall and that the ballpark was just one peg in the renaissance of El Paso.