A Very Happy New Year!

To all of our followers, we wish a very happy and prosperous New Year!  While you are enjoying your parties this evening, please remember to drive safely and responsibly. 

We look forward to talking to you next year!


$6 Million That You Don’t Get Back

Quietly, on December 14th of this year, the County Commissioners and UMC decided to do a $6 million ‘capital substitution’ with the 2013 bond money (you can read the 12/14/15 meeting minutes here).   UMC had been able to get $6 million in Medicaid Supplemental Funding for one of their projects, that left the bond with a $6 million surplus.  Rather than refund it, they decided to spend it:

Agenda item

Obviously these items weren’t critical since “These items were on UMC’s long-range IT plan and would be implemented as funding became available.” (read the summary here).  They just had the money laying around, they might as well spend it now.  Here is what they decided to spend it on:


Source:  http://www.epcounty.com/agenda/Coversheet.aspx?ItemID=21935&MeetingID=519 under attachments

Kudos to UMC for finding additional funding!  However, as a tax payer, wouldn’t you want that money back?  Or at least, get a say in how it would be used?  $6 million is a lot of money – that could rent a Children’s Hospital for a year!

We suppose it makes sense that the County Commissioners didn’t see fit to ask you about the money; a pickpocket doesn’t ask you how to spend the money he’s taken from you, either.

Exploreum Closed Down

Yesterday the closest thing to a Children’s Museum in El Paso, The Exploreum, closed its doors.  The Exploreum opened 2 years ago with the expectation that it would be folded into the Children’s Museum passed in the 2012 Quality of Life bond.  Unfortunately, that project is now so far in the future, it was not economically feasible for the Exploreum to continue.

“We’re at the beginning stages of a new children’s museum as far as progress on a timeline and so we are looking at 10 to 12 years before a children’s museum is open and it’s just not economically feasible to keep the Exploreum open for that length of time,” said president of the El Paso Exploreum, Michael Churchman told ABC-7 in October. (read the KVIA story here).

At this point, we are more likely to get an Arena before we get a Children’s Museum (you can read about the progress on the Arena here).  It only makes sense to build The Arena before the Children’s Museum – there is only the Convention Center and the Coliseum for large gatherings, there is nothing resembling a Children’s Museum and having redundancy is VERY important when it comes to spending tax payer money.

This makes us wonder, just whose quality of life is actually being enhanced by this bond?

You can read the KFOX article here.

We Were Wrong

An eagle-eyed reader pointed out an error that we made in our post Rent, On Demand.  Our graphic stated that UMC got approximately $7 million a year in property taxes.  Actually, that should have been $7 million a MONTH in property taxes.  So, that means that UMC receives $7 million a month in property taxes as well as $650,000 a month from El Paso Children’s Hospital for rent + base rent.

Property taxes are being used to pay down the bond, at a very slow rate. On a $120.1 million bond, UMC has managed to pay down a little less than $4 million in 6 years. According to UMC CFO Nunez in his second deposition (document page 184), the rent that is being paid by El Paso Children’s Hospital would eventually go toward depreciation but currently just goes into UMC’s general fund (bolded letters are Nunez, non-bolded is EPCH lawyer asking questions):

Nunez Depo

So, there is no separate fund for the depreciation, no way these funds are segregated out for this time in the future when the building needs repairs.  This money just goes into UMC’s general funds to be used for… whatever.  What is to keep UMC from spending this money now and then raising taxes or additional bonds later to pay for repairs on the building ?  They should be segregating the money into a separate account and using AT LEAST a portion of it to pay down the bond.

By Request

In June of this year the El Paso Chamber of Commerce issued a letter to then El Paso Children’s Board Chair, Rosemary Castillo.  In it they asked “the leadership of both UMC and El Paso Children’s Hospital to put their differences aside to come to a solution that: 1) will be financially sustainable, 2) in the best interest of the children of our region, and 3) and will not impose an additional burden to the taxpayers of El Paso.” You can read the entire letter here. Since that time, UMC, El Paso Children’s and the County Commissioners Court have come to an agreement on a plan.  But does that plan fulfill the requests set forth by the El Paso Chamber?

  1. Financially Sustainable – if you have been following our posts, you will see how UMC was taking money from the Children’s Hospital at every opportunity:  Rent, Overcharging on contracts, even El Paso First was under reimbursing EPCH. Finally, there is the matter of the County Commissioners choosing control over the Children’s Hospital INSTEAD of Money.  If things don’t change, we’re going to rate this one as a big fat NO.
  2. Best Interest of the Children – this is a fuzzy one.  There will still be a children’s hospital, so we’re told.  However, it depends on how that hospital continues as to whether or not the physicians stick around.  We’re going to rate this one a MAYBE.
  3. Additional Tax Burden – HA!  We’ve spoken at great length about how UMC and the County Commissioners have decided to maintain control instead of allowing EPCH to have a higher reimbursement rate.  In fact, you can read Veronica’s letter about this here.  They think it will be ‘a wash’ but they don’t know.  So far, it looks like the hospital is being set up to fail… again.  Just like the last 3 years, expect anything that is going wrong at UMC to be blamed on El Paso Children’s Hospital.  So, just like #1, if things don’t change, we’re going to rate this one a big fat NO.

So far, it isn’t looking that great for the Chamber of Commerce’s requests.  There is still time, UMC and the County Commissioners can still fix this.  However, the clock is ticking and January 8th is rapidly approaching.  After that date, many of the items set in motion can no longer be corrected.  Hold onto your hats, folks, it’s going to be a bumpy ride!

Check Road & Airport Conditions Before You Leave

Although El Paso didn’t get a white Christmas, we did get a nice snowfall that trapped many here and the weather continues to be snowy.  For those of you who have family who are trying to leave (or you’re trying to get rid of), please ensure that you check road and airport conditions prior to departure:

Texas Road Conditions:  http://conditions.drivetexas.org/current/

El Paso Airport Departures:  http://www.elpasointernationalairport.com/flight-info.php?info=departures

Local Weather Conditions: http:/www.weather.com

Safe Travel!

Board Selection & Nominating Process

Some interesting blog posts lately on how UMC chose their 4 board members for the El Paso Children’s Hospital:

Martin Paredes talks about what he found at as a result of his FOIA records request here.

Jim Tolbert talks about a friends of his who actually submitted an an application here.



UMC Got How Much Money?

We received this picture from a follower.  It details out how much money UMC and El Paso First gained from the El Paso Children’s Hospital vs. how much money the Children’s Hospital actually cost them.  So, according to the picture, they received an ADDITIONAL $57 MILLION that they would not have received without the Children’s Hospital.  How is it that UMC and the County Commissioners can’t use the $6 million a year that they receive in rent to pay down the bond?  Why does UMC get to hoard all of this money while STILL collecting additional property taxes from you?

A Bond Is Like A Mortgage

According to UMC’s audited financials from September 2014, pg 42, “The outstanding balance was $116.335 million and $118.255 million at September 30, 2014 and 2013, respectively.”  So, on a $120.1 million bond, UMC has managed to pay down a little less than $4 million in 6 years.

For the majority of us, when you buy a house you have to take out a loan.  That loan has an interest rate and a time frame associated with it (for example, 7% over 15 years).  When you apply for the loan, the bank calculates what your monthly payment is going to be and that is a mixture of interest, property taxes and principle (money that goes directly to paying for the house).  Any extra money you pay each month goes directly to the principle and pays down the house faster so that you pay less for the house in the long run.

It is the same with a bond.  When UMC ‘issues’ a bond, they are basically taking out a loan that has interest and a time frame.  They are committing to take the property taxes that they receive from you and using those to pay down the interest + principle on that loan.  Any extra money that they pay goes directly to the principle and pays down the bond faster so that YOU pay less for the bond in the long run.  As part of the deal with EPCH, UMC will be receiving $6 million a year in rent.  Imagine how much faster that bond would be paid down, how much less money you would pay for it if that rent money was being used to pay the principle.

Right now, we’re being told that the money is being saved for ‘depreciation’ with no indication that it will be held in a separate account or when/how that money will be applied to the EPCH building.  But, use the rent money to pay for the bond and, for tax payers, the burden of paying for the $120.1 million bond will be relieved MUCH faster, allowing our property taxes to go down that much sooner.