Maverick County’s Financial Problems Continue, Commissioners Court terminate Bond Counsel
By: Jose G. Landa, Copyright 2015, Eagle Pass Business Journal, Inc.
Maverick County’s financial problems continue to surface at Commissioners Court meetings, little by little the information trickles to the public spotlight at each meeting. At their regular monthly meeting on Monday, June 8, 2015, Maverick County Commissioners Court was advised by County Judge David R. Saucedo that the County was going to have to go out and borrow this summer an estimated $1 Million to $2 Million in the form of an “Anticipation Note with a Revenue Source” in order to cover the County’s budget shortfall for the remaining 2014-2015 fiscal year.
At the meeting, County Judge Saucedo noted that new Maverick County Bond Counsel Raul Villasenor of First Capital Southwest of San Antonio, Texas works better with certain Bond Counsels and therefore the County was going to terminate long-time County Bond Counsel Juan “Johnny” Aguilera, formerly of Eagle Pass, of Escamilla & Poneck of San Antonio and hire a new Bond Counsel recommended by Villasenor.
Maverick County financial problems continue with its operation of its two detention centers including the Tom Bowles Law Enforcement and Detention Center, also known as the County Jail, and the controversial Maverick County Detention Center. The operational costs of these two detention centers are using a large part of the County’s general operating funds to sustain them afloat while many needed public services around the County are going unmet due to the lack of County general funds for these services.
County Judge Saucedo stated at the meeting that Maverick County is in a unique financial situation as a result of several issues affecting the County budget such as the on-going negotiations with Bond Holders and Trustees of the controversial $43 Million Bond financed Maverick County Detention Center owned by the Maverick County Public Facility Corporation, an instrumentality of Maverick County.
Maverick County Commissioners Court recently terminated long-time County Financial Advisor Roberto Rodriguez of Southwestern Capital Markets, Inc. in the middle of negotiations with the Bond Holders and Trustees of the Maverick County Detention Center and actively promoted the non-appointment of former County Auditor Fidencio Ortiz in the middle of the current financial crisis hitting Maverick County. And now, they terminated County Bond Counsel Juan “Johnny” Aguilera in the middle of negotiations for the “Anticipation Note with Revenue Source” in order to pay the County’s budget for the remaining 2014-2015 fiscal year.
Commissioners Court were previously warned by their former County Financial Advisor Roberto Rodriguez and County Auditor Fidencio Ortiz of this financial crisis that the operational costs of the two detention centers are having on the County budget. Ultimately, Maverick County taxpayers will suffer if Commissioners Court fails to turn around the financial crisis affecting the County budget.
“We’re in continuous negotiations with the bond holders and trustees and we will be having a cash flow problem even when we bring U.S. Marshal’s to this side. In doing that there is a possibility that we will be going after a tax anticipation tax note. When you do the tax anticipation note you need bond counsel. The Financial Advisor usually works well with certain bond counsels, some of them have preferences and some of them don’t. The new Financial Advisor Raul Villasenor, has made a recommendation to utilize a different bond counsel. So that is the direction that we are going,” said County Judge Saucedo.
“It is just a process. It doesn’t mean we will not use Mr. Aguilera in the future,” added Judge Saucedo.
Judge Saucedo further explained that the process being taken under agenda item No.22 was to set up the structured plan needed if the county was to seek a tax anticipation note in the following months.
County Commissioners Court then proceeded to discuss the need for a tax anticipation note.
County Commissioner of Precint 4 Roberto Ruiz asked what was the time frame being seen to seek a tax anticipation tax note if needed.
“By July, 2015.” answered Judge Saucedo.
Judge Saucedo then explained that in previous years there had been a tax anticipation note without a revenue source projected to cover it by a past County administration.
“I’m still not keen on this. It is not a done deal that we are going to have to do this but it is in the realm of possibilities,” said Judge Saucedo.
Saucedo then stated that there is a process that must be followed and that all parts of such process must be accounted for just in case the county will have to go for such tax note.
“I’m not saying that we have to do that but we need to have all this in place in case we do have to do it,” said Judge Saucedo.
The anticipated amount of the tax note could be for $1,000,000 and no more than $2,000,000.
Judge Saucedo then established a point of revenue source that could be used to cover the tax anticipation note.
“We allowed the landfill not to give their county contribution this year. Last year what we had received from them was $1,400,000. We need to sit down and negotiate with them to see what their commitment will be this coming year,” said Judge Saucedo.
“The window of opportunity with them is kind of closing then,” said Ruiz.
“Absolutely, but they do understand that they have a commitment to the county. That is why the landfill was created. It is a revenue generating source for the county. We are not pulling a number from the sky we are anticipating that the number is going to be in place from the landfill because we forgave their commitment this year. We are coming back to it, next fiscal year,” said Judge Saucedo.
“What was happening prior to that, right before I came in the county had gone out on a $2,200,000 tax note with no anticipation of revenue for it. That was the year that came by the end of September, the then County Judge and administration gave $8,000 -$9,000 pay raises to elected officials. You know that was a great Christmas for the employees but they knew full well that they were saddling the next administration without any revenue source to make up for the $2,200,000 that they had taken,” said Judge Saucedo.
“We are not going to be irresponsible like that. I’m going to make sure that the money is committed to the county before we go out and get it,” added Judge Saucedo.
The tax anticipation note if taken on by the county would be structured to be paid back in one year.
After no further discussion into the possibilities of going out for a tax anticipation note, Commissioners Court proceeded to vote in favor of terminating Juan “Johnny” Aguilera as bond counsel for Maverick County.
Commissioners Court then proceeded to agenda item No.23 which called for the waiving of the selection of professional services for bond counsel and contract for same from the competitive proposal process.
After a brief discussion on the process, agenda item No.23 was passed unanimously.
Under agenda item No.24 which called for the selection of bond counsel and an approval of a contract, Commissioners Court selected Bill Avila of the law firm Bracewell & Giuliani from San Antonio as recommended by the new county financial advisor, Raul Villasenor.
This summer will be very critical to the financial crisis facing Maverick County. Only time will tell what is going to happen to Maverick County taxpayers with this financial crisis.
