Going Against Recommendations, County Takes on New Debt to Dig Itself out of Hole

The problems have been years in the making and the Maverick County Commissioners are quickly running out of options. The court has relied on bond issues, tax raises and empty promises as well as get rich quick schemes in the last several years; time however is quickly running out and so are their options. With a less than stellar Fitch rating the county now finds itself in troubled waters with little hope of staying afloat. The Fitch rating agency downgraded Maverick County earlier this year citing the following “The downgrade to 'BB' reflects the county's negative general fund balance, thin to negative balances in other major funds, prospect of a multi-year financial recovery, and poor debt management.” The downgrade however has done little to dissuade the court to take on new debt. Going against the recommendations of its own financial advisor the Maverick County Commissioners Court moved forward with a highly controversial bond refinancing plan.



According to Robert Rodriguez of Southwestern Capital, the firm chosen by the court to look after the tax payer’s best interests, the plan is not only a bad decision but a “blatant disregard.” Rodriguez, who has been one of the most vocal opponents to many of the court’s decisions, has reiterated time and time again the direction the county is heading in may lead to disaster. Rodriguez argues that although the bond restructuring would indeed lower taxes for citizens it would only be a temporary band aid. The new lower taxes would only be enacted for the first year but this would change overtime. The court has not been given the exact term or interest of the new 22 million dollar loan it has asked to pay off existing debt. The decision could potentially cost the tax payer millions of dollars over the next 20 years according to Rodriguez. Rodriguez estimates the tax payer could be hit with a 66% tax hike in coming years. Rodriguez stated the following in a memo dated July, 2009, “The structure of this financing shows that after lowering taxes in 2010 minimally from their current rate, taxes must be raised every year for ten years and must remain at this peak rate for an additional fifteen years until 2034. If this is truly the Court’s intent, it would clearly ...