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):
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.