Zoning Has Nothing to Do with Bond Ratings

Back on February 9, 2010, the City Council effectively nixed a proposal from Open Space to down zone some PSB land. The proposal had already won the approval of the Legislative Review Committee. No sooner had the LRC said "yes", EPWU top brass and City of El Paso staff went to work to defeat it in regular Council. The motion was finally made to delete the item so that no action was ever taken on it.

I remember that City Council meeting well. There had also been a lengthy debate about the United States drug war and whether Council should recommend that drug legalization be taken up by Congress. It was a long day. The minutes of Council do not reflect what really happened. The item regarding down zoning was moved to just about the very end of the meeting. Many who wished to speak in favor of down zoning had to eventually leave. Ed Archuleta had conveniently disappeared and did not re-appear until the end of the day. The Mayor insisted that he needed to be there for the discussion. The minutes only show the item discussed in the same order as posted in the agenda.

During the discussion about down zoning, EPWU officials argued that down zoning would affect their bond ratings. I sadly recall that they trotted out an older gentleman as an expert (and he probably was) who couldn't quite spit out the words that zoning affects bond rating. They whisked him away and brought another man to the podium who backed Archuleta's contention that, indeed if Council down zones, PSB's bond ratings would go to hell in a hand basket.

I write this only because we will soon face a Council decision on the public land (our land) managed by the PSB that is east of gas line road in the scenic corridor of Trans Mountain - land described in the NW Master Plan. EPWU brass will resist re-zoning to Natural Open Space. I will bet you nothing that they will resort to the same false argument that zoning affects bond ratings.

El Paso Water Utility bonds are rated by Fitch Ratings. In a conversation with one of the directors from the Austin, Texas office, I was told that zoning is not specifically mentioned in their criteria. They consider 4 areas: financing, debt and capital, service area, and legal documents. Over the last many years, zoning was not a major part of any discussion about bond ratings. Another El Pasoan had already learned that there are about 100 parameters Fitch uses to establish bond rating. 20 are objective and 80 are subjective. Zoning was not a parameter. A long-term, expert observer in El Paso told me that "the idea that downzoning PSB land damages their bond rating is crap."

Read the Fitch Rating publication, 2010 Water and Sewer Medians. (You may have to register in order to view this report.)

So, by law - by law - PSB cannot own land but can only act as an agent of the City and City Council can do whatever they want with land regardless of PSB's recommendations or the recommendations of the CEO of the EPWU . . . and, now it is clear that zoning does not affect bond rating as EPWU brass would have had us believe, then there is no excuse for this City Council not to re-zone everything in the NW Master Plan as Natural Open Space so that future City Council members won't claim that their hands were tied. Now is the time to do the right thing - preserve the scenic, natural Trans Mountain corridor.