Cyrus Reed, Texas Center for Policy Studies*
Signing two new grants for construction of municipal solid waste landfills in Ojinaga, Chihuahua and Uvalde, Texas, the North American Development Bank (NADBANK) held their annual meeting on December 13th in San Antonio, Texas, and heard from the public that the proposal being considered by the U.S. and Mexican governments to merge the NADBANK with the BECC is not a good one - at least until a full review of the project development process occurs.
NADBANK Board Members in attendance included Chairman Alonso García Tamés from Hacienda, Jaime Sancho y Cervera, and US board members Dennis Linksey, representing State Department, Pat Koshel, representing EPA, and William Schuerch, from the US Treasury Department. NADBANK General Manager Raul Rodriguez and Deputy General Manager Jorge Garces were also present.
The meeting began with Chairman Garcia Tames discussing several new programs that were first approved by the NADBANK Board last November, including:
Garcia Tames said that the governments were now considering additional measures to these to make the institution better able to serve border communities. These changes, however, are still in process and in any case would continue the commitment to transparency, public participation and sustainability.
Schuerch then reviewed some of the progress made over the last year, including implementation of the low-interest loan program, previously called Value Lending Program but now called Low Interest Rate Lending Facility, approval of first two SWEP grants and approval of more than $60 million in BEIF funds. Like Tames, he emphasized that both presidents were engaged in continuing discussions about the two institutions which he expected to be resolved in the near future.
General Manager Raul Rodriguez then made a detailed presentation of NADBANK's year. In its existence, NADBANK has approved financing for 41 projects, including most recently La Unión, certified in early December by BECC. Some 35 grants have been made from the Border Environment Infrastructure Fund for more than $325 million, as well as $1.0 million in two SWEP grants and nine loans totaling $23.5 million. In this Fiscal Year, the NADBANK has more than doubled its loan capacity, approving two loans for $12.41 million, in addition to some $60 million in BEIF grants. In addition, the NADB is supporting 96 projects in 64 communities through its technical assistance program - the Institutional Development Cooperation Program -- including 13 projects approved this fiscal year. In addition, since it began in August 1999, more than 148 participants in 57 communities have participated in the Utility Management Institute.
Rodriguez also reviewed the Value Lending Program, recently renamed the Low Interest Rate Lending Facility, which allows up to $50 million from Bank's paid-in capital to be lent out at lower interest rates for water, wastewater and solid waste projects. The interest rate will range from 3.35% to 3.95%, as compared to 6.14 to 7.09%.
Another new project - the Solid Waste Project Development Program - is technical assistance monies for the planning and design of solid waste landfills, with a maximum grant of $200,000 or $300,000 for regional projects.
In the area of mandate expansion - projects outside the three environmental priority areas - Rodriguez said that thus far five projects have submitted an initial Step I application to the BECC, including street paving in Agua Prieta and Douglas, Arizona, construction of a bypass to reroute traffic away from downtown area in Nogales, Sonora, an incinerator in Anahuac, Nuevo Leon, a tire recycling facility in Brownsville, Texas and the use of fly ash waste product from power plants as an additive in cement in Coahuila. In addition, Rodriguez said water conservation has attracted interest, although no actual projects have submitted applications.
Jorge Garces then gave a brief overview of the two projects receiving grants under the Solid Waste Environmental Program (SWEP). The project in Ojinaga allows the city to improve collection service, increase the capacity of the landfill and close the existing dump. A SWEP grant of $500,000 will provide about 28% of the total project cost, with the rest coming from local, state and government sources. The project in Uvalde will allow that community to expand the landfill and increase service to 16,000 city and 26,000 county residents. The $500,000 loan will cover a significant portion of the total $3.4 million project cost, the rest covered by a $2.9 million certificate of obligation.
After both the mayor of Uvalde, and Ojinaga made comments thanking the NADBANK and others, including the BECC, for their efforts, the meeting was turned over to the public for comments. Approximately 22 individuals made presentations during the meeting.
A number of the participants brought up the issue of the ongoing discussions between the two governments, including the proposal to merge the BECC and the NADBANK. Among those opposing this particular proposal -for a variety of reasons -- included: Ralph Marquez, commissioner of the Texas Natural Resource Conservation Commission; Blake Hastings, from the Free Trade Alliance; Andre Abel of National Wildlife Federation, Cyrus Reed of the Texas Center for Policy Studies, Pete Silva from the State of California, Araceli Guenther from the San Antonio Hispanic Chamber of Commerce, Henry Sauvignet from the Director of International Relations with the City of San Antonio, and Leo Alivares from the City of Rio Grande.
Among the most vociferous in their opposition were the representatives from San Antonio. Hastings said the Free Trade Alliance were opposed for both real and symbolic reasons. First of all, they felt a merger would merely be cosmetic and that expanding the bank's geography and mandate would be a better response. In addition, San Antonio has always supported free trade and the bank has always been supported by the community and is seen as a symbolic example of their ties with Mexico. San Antonio's Sauvignet highlighted three reasons to oppose the proposed merger, including:
In addition, Maria Josefina Guerrero from BECC's Advisory Council presented a summary of meetings held on the Mexican side of the border to receive public input on the BECC-NADBANK proposed reforms. Guerrero, reading from a summary document, reported that during the five meetings held in Mexican border communities between October 3rd and November 12th, 152 individuals attended, with only 30 making verbal comments. In terms of the proposal to merge the two institutions, Guerrero said that 21 persons opposed the merger proposal and only five supported it. In addition, the 30 commentators made a number of suggestions, including:
For example, Santillan noted that Brawley had already paid back its loan from NADBANK in 18 months, and was benefiting from the water plant and wastewater treatment plant certified by BECC and funded by the NADBANK. Santillan said that because of the increased infrastructure, the community had attracted a beef processing plant, attracted a satellite campus of San Diego State University with 4,000 new students, promoted in-fill in its city limits and was attracting a steel pipe manufacturer. He said the city was currently seeking ways to acquire 27 acres of land north of the wastewater treatment plant to create aeration ponds and constructed wetlands to help clean up the New River and Salton Sea.
Also addressing the Board was former NADBANK general manager Victor Miramontes and current BECC general manager Fernando Macías. Miramontes noted that in his current role with American City Vista attempting to build affordable houses within city limits, he had begun an $80 million housing project along the border in Laredo in a subdivision in the south part of the city. He noted that while the project would be served by the City's water infastructure, part of the reason they were able to invest in the area was the knowledge that the colonias south of the area now have water and wastewater infrastructure. He said these NADBANK funded projects serve as "little catalytic converters" that lead to economic development and change.
Macías noted that even though the staffs of the two sister institutions often don't get much attention or credit, they are continuing discussions about how to improve the process and efficiency of the institutions on a day-to-day basis and many improvements have been made. The management from both institutions are identifying additional ways to make the process more responsive and are working together much more closely. Macias noted that 55 projects have been approved and 93 present projects are in the review stages, and that this progress had been made despite the challenge of coordinating with two federal governments, states and local communities in a binational setting.
There were two specific complaints made during the public comment period. Barry Sullivan from the City of Presidio sent in a letter essentially complaining that he had received no response from the NADBANK about an application for an IDP technical assistance application despite repeated calls and canceled meetings. Manuel Salinas from a cattle ejido complained about a proposed aqueduct in the Juarez area, that would lead to drilling for water on their land, despite an unsettled lawsuit in the area.
In response to the two complaints, Rodriguez noted that the Juarez proposal has not even been approved for certification and NADBANK involvement is a long way off, but of course the legal issues and Salinas's request would be considered. He said he expected the Presidio application to be resolved - and approved - in the coming months, but that the demand has been so great for the IDP that there is a significant delay. He also said in response to Pete Silva's ideas that the NADBANK has worked closely with the Texas Water Development Board as well as the California revolving loan fund, but that coordination could and should be improved with these and the other states.
In response to the repeated calls for no merger, Chairman Alfonso Garcia Tames said that Mexican Treasury had a continuing obligation to review the progress of NADBANK. While they saw NADBANK as a very successful institution in terms of giving out grants, they continued to be concerned about the lack of credit activity. He said changes at the federal level with Fox and Bush represented an opportunity to make changes to fix this area of deficiency, while always respecting the sectoral focus, transparency, accountability and public participation.
He noted that we were still in the middle of discussion stage and no decisions have been made about merger or anything else. He said the present meeting was an example of part of a public participation stage to receive comments and those comments would be considered. In addition to the merger question, other proposals being considered included geographic coverage and additional mechanisms to free up more lending.
The Treasury's Schuerch echoed many of these comments. He said while there has been progress, the NADBANK continues to manage resources that have not been effectively used and there is a $300 million gap between what has been received and what has been lent out. He also said there is overlap between what the BECC and NADBANK do, and while all overlap is not bad, there are real problems of coordination between the two institutions and governments. He thanked the participants for their comments, which he viewed both as a constructive vetting of opinions and as educational.
Finally, the chairmanship was passed from Garcia Tames to Schuerch for the coming calender year.
*As always, summary is mine alone, and any inaccuracies or misspellings are also mine.