IN SANTA FE Study: Public bank is feasible for city

Here’s a look at some of the local news over the past week:

Starting up a public bank in Santa Fe is feasible, and could potentially improve fiscal management, create a healthier local lending climate and generate better interest rate margins for the city, according to a consultant’s report released Wednesday. In addition, the feasibility study — produced by El Paso-based Building Solutions LLC and the Arrowhead Center at New Mexico State University at a cost of $50,000 — states that the positive fiscal and economic impact for the city could be more than $24 million in the first year of implementation.

Mayor Javier Gonzales said the study was a first step in determining whether creating a public bank was worth pursuing. “The idea would be to go forward and develop a model — be it in the form of a bank or some other structure — that takes the public’s treasury, allows for maximum transparency in terms of how it’s invested and uses it in a way that has greater benefit to the public than currently exists,” he said.

The bank could serve the city by funding capital improvement projects with internal funds without raising taxes or using bond proceeds, according to the report. Gonzales said the city now pays 3-5 percent in borrowing costs on bond issues that goes to Wall Street and such financing could come from a public bank in the future, saving money that could go to city initiatives.

And, he said, “Right now, the big banks are the beneficiary of our deposits.” The public bank potentially could be utilized by the city, Santa Fe County and Santa Fe Public Schools to broaden funding strategies and, in time, could work to combat predatory lending practices by pay-day lenders against individual borrowers.

A bank offering home loans or car loans to individual citizens wouldn’t happen right away, if at all, the mayor said. “We’re a ways away from that,” he said, adding that the city would take a slow, methodical approach to building a public bank model.