The City Council approved a $50,000 contract Wednesday with a local firm that will investigate the business, financial and economic feasibility of a public bank in Santa Fe.

The council voted 5-2 in support of the contract with Building Solutions LLC.

Councilors Bill Dimas and Ron Trujillo cast the dissenting votes. Trujillo questioned the spending, saying he was getting tired of the city “spending all this taxpayer money on studies” that conclude that more money will be needed.

Mayor Javier Gonzales, a regent at New Mexico State University in Las Cruces, recused himself since Building Solutions will work on the feasibility study with the Arrowhead Center, a consulting arm of NMSU. Gonzales’ term as a regent ends Friday.

“What’s a little tough on this is that I have been an advocate for us pursuing this next level of study when it comes to a public bank, knowing the important role that it could play in our economy and helping small businesses,” Gonzales said. “But we’ve gotten to a point here in this process that there is a conflict.”

In other business, the council approved a resolution calling for the city manager to arrange a meeting with Santa Fe County commissioners to discuss a jointly owned electric utility. The item passed on consent without any discussion. Trujillo said he meant to pull the item from the consent agenda so he could voice his opposition, but it slipped by. When he asked his colleagues to pull it for discussion, his colleagues voted him down 5-3. Only Dimas and Councilor Signe Lindell supported Trujillo, who said the resolution was going to pass anyway.

Councilor Patti Bushee was absent.

Contact Daniel J. Chacón at 986-3089.

(11) comments

James Hannley

Assuming the City creates the bank along the model of the Bank of North Dakota, it will serve as a "bankers bank". It can first, buy back existing bond obligations using capital it either creates from its own collateral or from capital it secures from the regional Federal Reserve Bank. It can create more credit to fund loan programs administered through community banks. These loan programs can issue small business loans on very low collateral at affordable interest rates and terms of payment. If it cares to, it can also (through the community banks) refinance existing debt such as student loans and even commercial credit cards. Assuming much lower interest rates on these refinanced loans, the payments, too are much lower. This frees up much needed consumer purchasing power. The community banks, through their City underwritten loan programs can also foster agriculture enterprises for existing farmers or new farmers. The City, with its new finance capital can expand and add city services to make the City of Santa Fe more valuable, thereby increasing the equity of the City Bank. We are working hard to create a municipal bank here in Tucson. Best wishes, Santa Fe! -Jim Hannley, Co-Director, Arizonans for a New Economy.

Pat Shackleford

In other words, a community "bankers bank" is a sure-fire way to lose money AND collateral. However, I've no doubt you can sell this gobbledygook to the mayor and council.

james dean

Interesting.

Pat Shackleford

Are small businesses (which the mayor simply adores) not able to get loans from existing banks or credit unions presently? Would a city-owned bank actually be able to offer competitive interest rates? As to Mayor Caviar's fiscal credibility; wasn't he one of those who pushed for the too-expensive county jail, and helped get the disgraced-criminal Manny Aragon $200,000 to step-down as president of NM Highlands University?

This city-managed bank just smells like a way for friends of the mayor, or other well-connected associates, to get loans for projects that wouldn't otherwise get financed at a low interest rate. Expect common citizens to suffer the loss when defaults occur without sufficient collateral. Insiders will get sweet deals courtesy of local gullible commoners; many of the same who trust the clowns at city hall to operate a utility company that wouldn't bleed red ink.

Pat Shackleford

I know this column is about banking; but for an example of how sloppy the city is in how it handles the water company, consider this. When you complete your online payment, you're offered an opportunity to "print your receipt". Nowhere included on that receipt is your actual account number, or the date of your payment. Anyone that has multiple accounts might have some difficulty (at a later time perhaps) reconciling which account or address had been paid. The emailed receipt is the same. No account number included, and no date that you made the payment. This is the only company I've ever dealt with, anywhere, that doesn't include the date (and at least a few digits of the account number) on your receipt. That sloppy practice has been in effect for years. How in the world would you expect them to handle a bank, or electric utility? Dunces are us?

Pierce Knolls

The only people who would be a worse choice for safeguarding the financial best interests of Santa Fe's taxpayers than Wall Steet bankers are our local politicos and their cronies.

Joseph Hempfling

A major first step toward achieving financial independence free of the Wall Street shinanagans and casino capitalism and much to offer in keeping the dollar home. North Dakota has been doing it for over fifty years with splendid economic results for the state and it's development and am sure New Mexico will be able to do the same.
Lets get off the Wall Street tread mill once and for all and get on with true financial solvency. And the time to do it is now !

Pierce Knolls

"North Dakota has been doing it for over fifty years with splendid economic results for the state and it's development and am sure New Mexico will be able to do the same." - Because New Mexico has had so much success taking ideas that work in other states and implementing them here, right?

“Every calculation based on experience elsewhere fails in New Mexico.” - Governor Lew Wallace

Mike Johnson

Follow the money, the professional politician's game of rewarding cronies and donors has started here, more to come for sure.

Donald Sure

Appearently the city has lots of money. The city counsel hands out 50,000. For just about anything.

I hope the citizens of Santa Fe will get to vote on this issue when the study reveals thtat the Mayor gets what the Mayor wants.

It is not sufficient that the counsel vote for us on this one. Too much is at risk.

jim mathis

they have money but they sure know how to lose it fast. it was recently disclosed the city has been using CIP bond money to fund employee salaries. just imagine the mess they would make with a public bank and city owned electric utility company!

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