On Monday, the county commissioners will be voting on issuing $54 million in non-voter approved debt using certificates of obligation. Certificates of obligation are a debt instruments paid for by tax dollars that are issued by governmental bodies to pay for governmental infrastructure projects. At the same meeting, the county commissioners will also be voting to issue another $155 million in general obligation bonds. El Paso County taxpayers are responsible for paying both bonds if the county votes to issue them. In total, the commissioners will be voting to issue over $200 million in public debt.
The two types of public debt vary in that general obligation bonds require the approval of the voters before they are issued, unlike the certificates of obligation that only require the approval of the county commissioners. However, both impact the amount of taxes paid for by the property owners in the county because the repayment of the bonds is paid for through the fees and especially property taxes.
The $155.02 million in general obligation bonds the county will consider on Monday are to fund the three projects that voters approved on November 5, 2024. Voters approved $95.6 million in Proposition A to fund improvements in the county’s parks and recreational areas. County voters also approved another $26.7 million to fund improvements for the Medical Examiner’s office in Proposition B. The third ballot measure approved by the county’s voters is $32.7 million in Proposition E to fund upgrading the county’s Animal Shelter.
Proposition A was approved by the voters with 56% to 44% of the votes. Voters also approved Proposition B with 51% voting in favor and 49% voting against the measure. The last measure approved by the voters was Proposition E which was approved by 64% of the voters.
Voters, however, rejected ballot measures C and D. Proposition D was to fund improvements for the County Courthouse with $63.2 million. The other bond measure, Proposition D, was for funding improvements to the County Coliseum with $105.5 million. Proposition C failed with 42% of the vote to 58%, and Proposition D failed with 49.8% to 50%. There was a difference of 668 votes rejecting improvements to the County Coliseum.
It is important to understand that both measures, if approved by the county commissioners, is to issue “up to” the amount the agenda items list. The final tally will not be known until the bonds are issued, if approved by the county commissioners.
The total amount proposed for the voter approved general obligation bonds is $155,025,000. The county anticipates issuing the voter approved debt in two cycles, the first this year for $40 million with a second $115 million in 2027. The county expects to pay 5.13% interest on the bonds. The interest rate is set by factors like the Standard & Poor’s (S&P) ratings and the county taxpayers’ ability to ensure the repayment of the bonds. Standard & Poor’s rated El Paso County as AA+. An AA+ rating from S&P is the second highest rating issued by them.
FitchRatings also rated El Paso County at AA+ last month. On April 2024, the county carried a rating of AA from FitchRatings. The high credit rating will likely ensure a lower interest rate for El Paso property owners.
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The Non-Voter Approved Proposed Debt
According to the county’s online dashboard promoting the issuance of $54 million in non-voter approved debt, the money, if approved by the county commissioners will go to four projects. The largest amount – $33.5 million – is slated to go towards providing access to drinking water and sewer services to 560 families. Thirty-eight households with 110 residents will receive access to public water, if the county commissioners approve the measure for the Hillcrest Estates Water Project. Another 450 families in the northwest part of the county will benefit from wastewater infrastructure improvements. The expected cost to the county taxpayers would be $59,821.43 per family, plus interest.
The second proposal for the certificates of obligation is to fund $16 million for improvements to Ascension Road between Horizon City and Montana Vista, and Pellicano Drive between Darrington and Loop 375. The third project the county commissioners will consider on Monday is to issue $2.5 million in non-voter approved debt to address flooding issues on 1st Street in Canutillo. The last proposal on Monday is $2 million to add five industrial air conditions to the Youth Services Center.
Several public meetings were held to allow the community to ask questions about the proposed issuance of non-voter approved debt over the last few weeks. Sergio Coronado, who will be voting on the two measures on Monday, told KFOX on Thursday that “some meetings had minimal attendance.” According to Coronado, the low turnout suggests that voters support the non-voter approved debt, because “people [who] are against a project” turn out to the public meetings.
Currently the county carries $231.7 million in public debt, including several non-voter approved debt totaling $82 million, according to the county’s Fiscal Year 2025 Annual Operating Budget. Almost all the current certificates of obligation, or around $82 million, have been issued under Ricardo Samaniego, who recently announced he is seeking reelection. The last non-voter approved debt that county issued was $57.1 million in 2023.
Should the county commissioners approve the two public debt measures on Monday, El Paso County voters will owe a total of $285.7 million in public debt. According to the county, the certificates of obligation are expected to carry an interest rate of around 4.7% interest.
The two measures are expected to be approved by the county commissioners on Monday with the likelihood of Iliana Holguin being the sole dissenter on the issuance of the $54 million in non-voter approved debt. Holguin has consistently voted against the issuance of certificates of obligation for non-emergency use.
The discussion on the issuance of public debt is expected to begin around 1:00pm, according to the county commissioners’ agenda.