A successful petition drive thwarted plans by the El Paso County Hospital District, Texas, to issue $345.7 million of certificates of obligation to finance expansion projects at its University Medical Center and Children's Hospital.
County commissioners on Monday were unable to vote on the debt issuance after announcing that the submitted petition contained a sufficient number of valid signatures, the district said in a statement.
The Libre Initiative, a Latino advocacy group, said it collected more than 25,000 signatures to require voter approval of the debt.
"We have sent a strong message to everyone watching that we are not a blank check," Karla Sierra, the group's engagement director, said in a statement. "Before we have to pay more in property taxes, voters should have a say."
Under Texas law, certificates of obligation do not require voter approval unless 5% of qualified voters within the issuer's jurisdiction petition for an election.
The district said "it will evaluate its options and next steps in addressing its capacity constraints."
Ryan Mielke, a district spokesman, said the petition drive only addressed the $345.7 million of certificates of obligation and that the district could reconfigure its request to the county for non-voter-approved debt or or even choose to pursue general obligation bonds, which would require placement on the ballot.
The district planned to use the debt to expand bed capacity, as well as add operating rooms and new outpatient surgery and comprehensive cancer care centers. Property tax rates would increase over the 25-year life of the debt.
Last week, Moody's Investors Service revised the outlook on the hospital district's Baa2 rating to stable from negative, citing an expectation the district will maintain an adequate financial position.
"While cash is expected to improve through fiscal 2022 according to interim unaudited financials; a draw is budgeted in 2023 to cash fund capital projects," the rating agency said in a report. "The district expects to maintain at least 75 days of cash on hand after fiscal 2024."
The district is rated A-minus with a positive outlook by Fitch Ratings and BBB-plus with a stable outlook by S&P Global Ratings.
The children's hospital
