Petition against UMC El Paso seeks voter approval for $345 million bond

A group of El Pasoans has launched a petition to force the University Medical Center to allow voters to decide whether the county-owned hospital can issue $345 million in bonds.

The LIBRE Initiative, a national conservative advocacy organization tied to the Koch Brothers Fundraising Network, has begun collecting petition signatures, said Karla Sierra, the group’s El Paso director.

“This petition is about a lack of transparency and giving El Paso residents a voice in how they are taxed,” Sierra said. “The crux of the matter is that the people of El Paso should decide how their hard-earned money is spent and we have been left out of that conversation.”

UMC spokesman Ryan Mielke said the hospital is holding community-wide meetings to explain the bond projects and the fiscal impact. UMC has also set up a website with information in English and Spanish about the bond issue.

“Our priority is to ensure that our community has the opportunity to get the facts about our proposal and the significant benefits it will bring to our community. Our goal is to ensure that we have the capacity to meet the current health care needs of our community,” Mielke said.

State law allows voters to petition for an election on the sale of bond certificates before they are issued. The petition is expected to be signed by 5% of registered voters, or just over 25,000 in El Paso County, by September 12.

Sierra said it collected about 1,000 signatures on Friday, using a mix of part-time paid staff and volunteers.

The El Paso Apartment Association is supporting the effort, association director Scott Lynch said.

A woman leaves the El Paso University Medical Center on July 31. (Corrie Boudreaux/El Paso Matters)

The UMC is asking the El Paso County Court of Commissioners to approve $345 million in bond certificates, a form of debt that does not require voter approval. The Court of Commissioners voted 3-2 in June to start the debt issuance process, with a final vote scheduled for September 12.

The bond issue would expand UMC’s intensive care unit, build nine more operating rooms, add a new central clinic in El Paso, build the eighth floor of El Paso Children’s Hospital with 26 additional beds and would create a new cancer treatment center.

In its presentation to the Court of Commissioners, UMC officials said paying off the bond issue would add about 5.7 cents per $100 of property valuation to the property tax rate. hospital between 2023 and 2033. From 2034 to 2045, this increase would drop to 2.9 cents per $100. of valuation. The hospital’s current tax rate is 25.8 cents per $100 of assessment.

For the average El Paso County home, which currently has an assessed value of about $168,000, the rate increase would add about $96 to the first-year hospital property tax bill.

UMC officials said issuing bond certificates, which do not require voter approval, would be cheaper for taxpayers than waiting for a public vote. This is because voter-approved bonds would be sold later and interest rates rise.

Commissioners David Stout and Iliana Holguin, who are both Democrats, say the UMC has made a strong case that El Paso needs more medical services. But they say such a large bond issue should be decided by voters, not the Court of Commissioners.

Iliana Holguin

“I think at the end of the day, it’s one of those issues that’s so important that the community really deserves a say,” Holguin said in an interview with El Paso Matters. “We are talking about a significant impact for taxpayers at a time when we are just emerging from a global pandemic, there is a debate about whether or not we are preparing to enter a recession.”

Issues of voter approval and transparency have repeatedly come up in briefing forums the Court of Commissioners has asked UMC to hold, Holguin and Stout said.

Such was the case Thursday at a community forum hosted by County Commissioner Carlos Leon, who asked the UMC to make a presentation to residents of East El Paso. Leon, along with fellow Democratic County Judge Ricardo Samaniego and Commissioner Carl Robinson, voted in June to begin the process to eventually issue bond certificates without voter approval.

“Why not submit the bond issue to a vote?” Eastside resident Ernesto Aguirre said. “I support the need, but the right thing to do is let the taxpayers decide. Don’t just shove it down our throats.

Jacob Cintron

UMC chief executive Jacob Cintron told Aguirre that the decision whether to seek voter approval for the bonds rests with the Court of Commissioners.

“At the end of the day, we can only meet our needs,” Cintron said. “It will be up to the commissioners.”

Stout said UMC gave different answers on the cost difference between issuing bond certificates and general obligation bonds, which require such a vote.

El Paso County Commissioner David Stout

“First they came out and said, oh, it’s going to be $100 million. … And then they came back and said, oh, no, it’s actually going to be somewhere between 37 (million) and 40 million dollars difference. And that’s the last number I heard until I saw them giving a presentation at a community meeting that I hosted, and they were saying we were close to 60 million dollars. So I want to see that information,” Stout said in an interview.

El Paso Matters asked UMC on July 8 to provide information on how it arrived at the cost estimates for the two bond issuance approaches. UMC declined to release the information because Hilltop Securities, the Dallas-based consultant that created the estimates, said its methodology for the estimates is a trade secret and protected from disclosure under the Texas Public Information Act.

UMC and Hilltop Securities asked the Texas Attorney General’s office for a legal opinion on whether the hospital could withhold a variety of financial modeling information sought by El Paso Matters.

UMC spokesman Mielke said it is projected that waiting for voter approval and then issuing bonds in July 2023 would add $62 million to total project costs, compared to issuing certificates. of obligation with the approval of the Court of Commissioners this fall.

El Paso Matters editor Ramon Bracamontes contributed to this story.

Julio V. Miller