By Juan Montoya
Despite objections from Cameron County Commissioner David Garza that changing bank depositories would cost county coffers more than $300,000 a year, a majority of the court opted to go with Alonso Cantu's Lone Star National over committee-recommended BVVA-Compass.
The majority made up of County Judge Eddie Treviño and commissioners Sofia Benavides and Alex Dominguez voted to change the county long-standing relationship with BVVA-Compass and deposit approximately $120 million in Lone Star.
Commissioner David Garza spoke out against changing depositories and pointed out that the $76,000 that Lone Star guaranteed the county in interest was almost $300,000 less than the $393,000 BVVA's proposals paid under one scenario and the $453,000 paid in another.
'It's hard for me to leave $300,000 on the table," Garza said. "With $300,000 we could pave three miles of road or improve a park, or buy equipment for our sheriff or constables..."
Three banks submitted responses to the county's Request For Proposals. They were Wells, Fargo, BVVA-Compass and Lone Star. The evaluation committee made up of Auditor Martha Galarza, Treasurer David Betancourt, Tax Office manager Jesse Garcia, Asst. Administrator Xaxier Villarreal, Planning and Management Director Mark Yates, Anthony Lopez and Charles Hoskins.
Their evaluation favored BVVA-Compass by more than 14 points (see graphic)
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Treviño and Dominguez said that the BVVA's proposal had a fixed interest rate that would be disadvantageous to the county with interest rates almost certain to rise. The rising rates would make Lone Star's variable rate proposal almost certain to leave more dollars for the county, they said.
At that the BVVA-Compass representative rose to explain that their "bank managed" proposal was a variable rate.
"That's not what your proposal said," Treviño responded.
Dominguez later said that while Lone Star's interest rate was tied to the interest paid by U.S. Treasury notes, BVVA-Compass' rates would be up to the bank manager.
In the end, the commissioners directed county staff to negotiate with Lone Star to lower its service fees and increase its annual payments.
"If they cannot agree on favorable terms, we are not bound by the selection and we could return to BVVA," Dominguez said. He said that he thought the evaluation committee gave too much weight to some of the some parameters and less to others. The interest-earning potential, for example, was only given 5 percent of the score.
Treviño said that part of his rationale was that although BVVA-Compass and Wells Fargo have branches in Cameron County, they are not local banks, while Lone Star is a local bank.
Lone Star first came on the scene during the Gilbert Hinojosa administration and owner Alonso Cantu is a Democratic Party heavyweight known for his fundraising for the national party. He is seen as a bosom buddy of the county judge who is now the chairman of the Texas Democratic Party. Treviño once shared law offices with Hinojosa.
"Gilbert is back," said a longtime county observer.
Despite objections from Cameron County Commissioner David Garza that changing bank depositories would cost county coffers more than $300,000 a year, a majority of the court opted to go with Alonso Cantu's Lone Star National over committee-recommended BVVA-Compass.
The majority made up of County Judge Eddie Treviño and commissioners Sofia Benavides and Alex Dominguez voted to change the county long-standing relationship with BVVA-Compass and deposit approximately $120 million in Lone Star.
Commissioner David Garza spoke out against changing depositories and pointed out that the $76,000 that Lone Star guaranteed the county in interest was almost $300,000 less than the $393,000 BVVA's proposals paid under one scenario and the $453,000 paid in another.
'It's hard for me to leave $300,000 on the table," Garza said. "With $300,000 we could pave three miles of road or improve a park, or buy equipment for our sheriff or constables..."
Three banks submitted responses to the county's Request For Proposals. They were Wells, Fargo, BVVA-Compass and Lone Star. The evaluation committee made up of Auditor Martha Galarza, Treasurer David Betancourt, Tax Office manager Jesse Garcia, Asst. Administrator Xaxier Villarreal, Planning and Management Director Mark Yates, Anthony Lopez and Charles Hoskins.
Their evaluation favored BVVA-Compass by more than 14 points (see graphic)
At that the BVVA-Compass representative rose to explain that their "bank managed" proposal was a variable rate.
"That's not what your proposal said," Treviño responded.
Dominguez later said that while Lone Star's interest rate was tied to the interest paid by U.S. Treasury notes, BVVA-Compass' rates would be up to the bank manager.
In the end, the commissioners directed county staff to negotiate with Lone Star to lower its service fees and increase its annual payments.
"If they cannot agree on favorable terms, we are not bound by the selection and we could return to BVVA," Dominguez said. He said that he thought the evaluation committee gave too much weight to some of the some parameters and less to others. The interest-earning potential, for example, was only given 5 percent of the score.
Treviño said that part of his rationale was that although BVVA-Compass and Wells Fargo have branches in Cameron County, they are not local banks, while Lone Star is a local bank.
Lone Star first came on the scene during the Gilbert Hinojosa administration and owner Alonso Cantu is a Democratic Party heavyweight known for his fundraising for the national party. He is seen as a bosom buddy of the county judge who is now the chairman of the Texas Democratic Party. Treviño once shared law offices with Hinojosa.
"Gilbert is back," said a longtime county observer.