Eagle Pass City Council approves Peso Exchange Rate at Wall Street Journal Rate Plus Three Pesos
By: Jose G. Landa, Eagle Pass Business Journal, Inc., Copyright 2016
The Eagle Pass City Council held their monthly meeting on Tuesday, April 5, 2016 in which they discussed agenda item No. 5 regarding the consideration and possible approval of an Ordinance amending Section 26-183, Article VII, Chapter 26 (Traffic) of the Code of Ordinances of the City of Eagle Pass, Texas, by adding new subsection (5); to adopt an exchange rate to allow for fluctuation of the exchange rate of the Mexican peso at both City of Eagle Pass International Bridges.
Eagle Pass City Manager Hector Chavez presented City Council a general background review of the agenda item and what was being sought under the proposed amendment and the first reading of the ordinance amendment.
Chavez noted that it has been a general practice of the City of Eagle Pass International Bridge System to allow an extra amount of $3.00 pesos to the going peso exchange rate to dollars versus pesos accepted at our International Bridge System.
“At this time what we’re proposing is that the Council approve it and to do the exchange rate based on the money exchange forms that we use to exchange the Mexican peso.” said Chavez.
Chavez noted that it was estimated that the City would raise about $800,000 pesos in 2016 under the city’s $ 3 peso fee added on for bridge crossings. That scale would produce the city close to $88,000 in additional revenues.
Chavez presented a general rundown of the differences in revenues that the City would generate depending on the added on charged rate to the bridge crossing rate. .
“We recommend that we go to $18 pesos for now or $20 pesos . So, we don’t come back to the council. We ask that administration be authorized to make the adjustment based on what the rate is at the money exchanges where we’re changing it to dollars. At the present time, we don’t exchange it at the bank but we will be going out to a bank if a deal can be worked out where they would exchange the peso based on whatever the rate for them.” said Chavez.
Chavez noted that administrations recommended to set the rate at minimum of $1 peso above and up to $ 3 pesos of the money exchange rate.
One thing that we must always look at is how do we best attract people to keep coming from Mexico. One peso might not seem like a lot but when you cross the bridges many times it adds up and that causes some hardships to the people that come over. The less money they have, the less money they will spend , the less taxes we will collect. We think that in the long run it will work out if we do keep a cushion in there so if it was to fluctuate (peso) overnight we still would not lose out.” added Chavez.
Eagle Pass Mayor Ramsey English Cantu stated that City Council would consider the recommendation upon looking at the options and what would be a best fit for the city and users of the Bridge System and the current trend being seen with the peso.
The city council, administration and legal counsel continued discussing the different proposed options that were being recommended and the accommodating of the peso fluctuation into the rate scale that would be followed in the proposed bridge fare rate.
The extra added on amount to the bridge fare rate has been an additional source of revenue for the last 15 years to the City of Eagle Pass coffers. In addition, these additional pesos may generate interest rate revenues to the City Bridge System.
Eliminating a certain amount of the existing rate would decrease the monthly amount that is transferred from the Bridge System to the city for daily operations.
The Eagle Pass City Council and legal counsel further discussed the responsibilities to keep up with the on going exchange rate and how the council could in fact delegate those responsibilities to the city manager and administration. Legal Counsel Heriberto Morales noted that the Wall Street Journal publishes daily the peso monetary exchange rate and the City could adopt that rate for its International Bridges. Morales also recommended the Ordinance should give discretion to the City Manager which rate to use.
Mayor Cantu stated that the council would just want to make sure that if that would be the case that they would need an assurance that it would be well followed and adhered to through each step.
“That is my only concern with it. I understand the fluctuation of the peso, we need to be on top of that. These are individuals that come in from Mexico , spend their money here and if we can facilitate some of that, even though its as little as what we can do. But working with them at the international bridge level , we can provide that opportunity, especially to assist the downtown merchant. We do know that sometimes that a lot of the individuals that are coming in that spend their money in that area.” said Cantu.
The Eagle Pass City Council approved the first reading of agenda item No. 5, Section 26-183, Article VII, Chapter 26 of the Code of Ordinances of the City of Eagle Pass by adding a new subsection authorizing the City Manager to adjust the equivalent value as necessary to account for fluctuations in the exchange rate for converting Mexican pesos to U. S. Dollars as notified by the local money exchange businesses and/or the Wall Street Journal Rate plus $3 Pesos.
The Amended ordinance needs to be read, discussed and voted on for another two additional readings at the next two City Council meetings in the near future before being finalized. The public is welcome to attend future City Council meetings and express their opinion concerning this issue as well as others.
