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OPENPUBLICA · PUBLIC MEETING RECORD

Record of Proceedings

El Paso City Council Work Session: CIP, Budget, and EPE Rate Case – March 17, 2025

City Council — Monday, March 17, 2025

BodyEl Paso, Texas

SessionCity Council

DateMonday, March 17, 2025

StatusFILED

Video Record

0:00 / 2:42:23

Transcript — VerbatimClick a timed line to jump · ⧉ to share it

0:22

Mayor, would you like to convene the council work session?

0:24

Yes, please.

0:25

Thank you.

0:26

Good morning.

0:27

This is a council work session of the El Paso City Council for Monday, March 17th, 2025.

0:33

It is 924 a.m.

0:35

Mayor Johnson is present in presiding along with Mayor Potem Chavez, Representative Acevedo, Representative Maldonado Rocha, Representative Oyatrejo, Representative Nino, Alternate Mayor Pro Tempiero, Representative Limon, and Representative Canales.

0:50

Mayor, we have a quorum.

0:52

Okay.

0:53

Agenda item one is presentation and discussion by the Capital Improvement Department on the Capital Improvement Plan.

0:59

CIP mid year update for active program and completed capital projects for FY2025.

1:06

Thank you.

1:07

Good morning.

1:08

Good morning, Mayor and Council.

1:10

Gilbert Guerrero, interim director of capital improvements.

1:13

I'm here to present our mid-year updates for capital improvement projects.

1:18

Can I too please bring up the presentation, please?

1:31

So again, this is our mid-year uh update on a capital improvement projects.

1:37

We'll be going over the mid-year results, accomplishments, and also uh briefly go through the voter approved bonds that we have been um working on since uh 2012.

1:51

Our strategic goals are number four enhancements of past or quality of life through recreational cultural and educational environments, enhanced a sustainable pastor uh infrastructure network.

2:04

And for 2025, our encumbrance that means that this are our money that we already have set aside, we have the POs ready to go, working with our contractors, with our suppliers.

2:14

So far, we have encumbrance uh 88 million dollars.

2:21

And our expenditures so far we have expended uh 34 million dollars overall from FY 2018 to 2025, over 856 million dollars.

2:32

Again, this is all money that's gone back to the community, our taxpayers to make our community a lot better.

2:38

Okay.

2:42

And the impacts of the spending of the 34 million dollars.

2:46

So for every million dollars uh of construction projects is roughly 500,000 in labor.

2:53

Uh this is a labor cause that we pay our contractors, subcontractors, improve the quality of life.

2:59

Uh contractors the one that construct all the other projects for us.

3:03

And again, all this money, taxpayers' money goes back to the community.

3:09

Job supported, over 1900 uh jobs have been supported uh so far in this mid-year, and from 2011 to 2025, over 53,000 jobs that we have supported through the capital projects.

3:27

Working with over 170 contractors as well, their contractors, subcontractors, and other staff that work on the projects again to make our projects completed and beautify the city.

3:42

So far, we have completed 24 projects as of uh this year.

3:46

We're right on schedule.

3:48

Typically, we complete 50 projects a year, so we're right on schedule and projects completed.

3:54

Okay.

3:57

And there's a short video that I'd like to go out and present to you on some of the projects that we have completed.

4:18

Can you run the video, please?

4:29

And it's a great video, so just keeping you in suspense, all right.

4:41

And it was there because I did look at it.

4:43

So this is the part where you do a magic show or something, Gilbert.

4:52

Yeah, I was gonna say I was gonna say a joke, but I'm not really a really have too much joke.

5:00

So anyway, as you have seen a lot of our projects, hopefully, you all I know it's a lot of the new uh members here, and um we have completed a lot of projects throughout the year.

5:12

So we have completed a lot more coming up.

5:15

So hopefully you have the opportunity to visit some of the projects, and I've seen some of you in some of the ribbon cutting ceremonies.

5:22

So hope to see you there for more of them.

5:25

And as a presentation uh goes, we do have a couple of projects that are completed and ready for some ribbon cutting as well.

5:34

Very good.

5:35

I guess we don't have a video.

5:36

So well, we'll come back to the video.

5:39

Um the voter approved bonds.

5:42

We'll go briefly over the border-approved bonds and some of the projects we have completed.

5:46

Uh, right now, the one that has the most money, the 2019 public safety bond and the community progress bonds.

5:52

The other ones, because we've done so much work, they're dwindling down and coming down to two and then.

5:58

But I mean, the budget that we have over uh 1.5 billion dollars.

6:01

So you can see it's a lot of work that we have done for this community.

6:07

Under 2012 quality of life uh bonds, uh projects that we have in design, uh Central Flatfields, Podesto Goldman's representative.

6:16

I think we're very familiar.

6:17

It came back up.

6:18

It came back on.

Discussion Breakdown — Share of Meeting

Public Utilities█████████████████████████████████████37%

Fiscal Sustainability██████████████████████22%

Engineering And Infrastructure█████████9%

Public Safety█████████9%

Public Engagement████4%

Public Comment████4%

Economic Development███3%

Veterans Affairs███3%

Property Tax Appraisal██2%

Summary of Proceedings

El Paso City Council Work Session: CIP Update, 5-Year Financial Forecast, and El Paso Electric Rate Case – March 17, 2025

The El Paso City Council held a work session on March 17, 2025, from 9:24 a.m. to 2:56 p.m. to receive presentations and discuss the Capital Improvement Plan (CIP) mid-year update, the 5-Year Financial Forecast, and El Paso Electric's (EPE) rate change application with the Public Utility Commission of Texas. The council also entered executive session to discuss ten items and took action on five of them. Public comments were heard on both the budget and EPE rate case.

Public Comments & Testimony

Keisha Bailey (District 8 resident, service-connected disabled veteran) opposed cutting veteran exemption programs; expressed concern about rising electricity costs for low-income residents and questioned EPE's profits.
Lisa Turner criticized the city's reliance on Tax Increment Reinvestment Zones (TIRZ), warned of tariff impacts on city costs, and questioned EPE about line loss and overhead vs. buried lines.
Leo Mendoza (former U.S. Marine, District 4) called EPE's presentation misleading, asserting that EPE sells power outside the region at district cost, and urged council to hold EPE accountable.

Discussion Items

1. Capital Improvement Plan (CIP) Mid-Year Update – FY2025

Gilbert Guerrero (Interim Director, Capital Improvement) presented the mid-year update. As of the meeting, $88 million had been encumbered (funds set aside with purchase orders) and $34 million expended in FY2025. From FY2018 to FY2025, over $856 million had been spent on capital projects.
For every $1 million in construction, approximately $500,000 goes to labor. The mid-year spending supported 1,900 jobs; from 2011–2025, over 53,000 jobs have been supported through capital projects.
24 projects completed to date; the department averages 50 completions per year. A video highlighted recent projects including the Central Flatfields recreation center, the animal shelter upgrade (completion expected by May/June 2025), and the fire department special operations division facility.
Voter-approved bonds: 2012 Quality of Life (200+ projects completed), 2019 Public Safety Bond (13 projects completed, including Fire Stations 14 and 16), Community Progress Bonds (canopies in each district), 2017 Capital Bond (East Side Regional Park Phase 2), and others. Over 1.5 billion dollars in total bond budget.

2. Budget Update – 5-Year Financial Forecast

Robert Cortinas (City Manager's Office) presented the forecast as a planning tool, not a budget. Key points:
- The FY2025 General Fund budget is $599 million, with 42% from property tax ($277M projected), 23% from sales tax ($141M), and the remainder from fees/charges.
- 75% of the General Fund goes to four departments: Police ($339.5M), Fire, Streets & Maintenance, and Parks. The remaining 19 departments account for 25%.
- To balance the last two budgets, the city used one-time sources (fund balance, unfunded vacancies, reduced debt funding by $3M) – these are not sustainable.
- Major cost drivers: minimum wage increase from $13.11 to $15.75 (20% increase, $12M full-year impact in FY2026), public safety staffing (three police academies per year), and inflation.
- Projected revenue growth: property tax at 4.8% average (6.1% in FY2026, down from 11.3% this year); sales tax at 4% annual growth.
- Tax relief from exemptions (homestead, over-65, disabled veterans) increased from $13M in FY2024 to $16.4M in FY2025 – about $3–4M less property tax revenue each year. Disabled veterans exemptions grew 135% over five years. The city received only $1.9M of its $6M state rebate request for 100% disabled veterans; new request for 2025 is over $9M.
- Multi-year forecast shows expenses exceeding revenues until FY2029–2030 when a surplus is projected (using conservative assumptions). Council must balance the budget by law; no deficit budgets allowed.
- Next steps: Strategic budget development session on March 20, 2025; community engagement; budget adoption by mid-August 2025.

3. El Paso Electric (EPE) Rate Change Application – PUC Filing

Daniel Perez (EPE) presented the company's January 27, 2025 rate review filing with the Public Utility Commission of Texas (PUCT). The process is expected to take 6–12 months; no rate changes occur until approved.
EPE serves 356,000 Texas customers, nearly 90% residential. The proposed average residential base rate increase is 19%, driven by $1.5 billion in capital investments since the last rate case (including generation, transmission, distribution, and intangibles). The requested return on equity (ROE) is 10.7%, compared to the current authorized 9.35% in Texas (the statewide average approved is 9.5%; utilities' requests average 10.6%). EPE noted it is currently earning below 8%.
Proposed changes include: increasing the monthly customer charge from $9.25 to $13.71 (nearly 50%) to better align fixed cost recovery; shortening the summer peak period from six months (April–September) to four months (June–September) and shifting peak hours from 12–6 p.m. to 2–7 p.m.; and adopting a monthly fuel charge formula (instead of periodic adjustments) to return fuel savings faster (e.g., $20M refund in Nov/Dec 2024 and a $30M refund filed for April–June 2025).
For the average residential customer (658 kWh/month), the estimated bill impact is an increase from $3.50/day to $4.25/day (about $22.50/month). EPE emphasized that economic development (attracting large commercial/industrial loads) can lower average rates by spreading fixed costs over more kWh.
Council members asked about the justification for the higher ROE, the revenue deficiency ($129M, including $40M already in rates via interim riders), the impact on low-income customers, and the risk of customer disconnection after summer bill spikes. EPE noted their low-income discount program would increase 50% with the customer charge change, and they offer budget billing and payment arrangements.

Key Outcomes

No formal votes were taken on the three agenda items (presentations and discussion only). Public comments were heard on items 2 and 3. The council then moved to executive session.

Executive Session Actions (returned to open session at 2:48 p.m.):

EX1: OMB Grant Pause – No action.
EX2: Ricardo Rubio v. City of El Paso – Motion passed (unanimous) authorizing the city attorney to participate in mediation and settlement negotiations.
EX3: Ariel Perez v. Bowling Enterprises et al. – Motion passed (unanimous) authorizing settlement agreement. Multiple council members disclosed campaign contributions from Bowling brothers (Mayor Johnson, Reps. Acevedo, Nino, Fierro).
EX4: EPE Rate Case – No action.
EX5: Texas Gas Service Interim Rate Adjustment – Motion passed (unanimous) authorizing retention of outside counsel and suspension of the interim rate adjustment for an additional 45 days.
EX6: EPE Macho Springs Reassignment – Motion passed (unanimous) authorizing intervention. Multiple council members disclosed contributions from EPE Employee PAC.
EX7: EPE Economic Development Rate for Data Center – Motion passed (unanimous) authorizing settlement agreement.
EX8: TRO re: Sun Metro Fire – No action.
EX9: Central El Paso Economic Development Opportunity – No action.
EX10: Downtown Real Property – No action.

The work session adjourned at 2:56 p.m.

Meeting Transcript

Mayor, would you like to convene the council work session? Yes, please. Thank you. Good morning. This is a council work session of the El Paso City Council for Monday, March 17th, 2025. It is 924 a.m. Mayor Johnson is present in presiding along with Mayor Potem Chavez, Representative Acevedo, Representative Maldonado Rocha, Representative Oyatrejo, Representative Nino, Alternate Mayor Pro Tempiero, Representative Limon, and Representative Canales. Mayor, we have a quorum. Okay. Agenda item one is presentation and discussion by the Capital Improvement Department on the Capital Improvement Plan. CIP mid year update for active program and completed capital projects for FY2025. Thank you. Good morning. Good morning, Mayor and Council. Gilbert Guerrero, interim director of capital improvements. I'm here to present our mid-year updates for capital improvement projects. Can I too please bring up the presentation, please? So again, this is our mid-year uh update on a capital improvement projects. We'll be going over the mid-year results, accomplishments, and also uh briefly go through the voter approved bonds that we have been um working on since uh 2012. Our strategic goals are number four enhancements of past or quality of life through recreational cultural and educational environments, enhanced a sustainable pastor uh infrastructure network. And for 2025, our encumbrance that means that this are our money that we already have set aside, we have the POs ready to go, working with our contractors, with our suppliers. So far, we have encumbrance uh 88 million dollars. And our expenditures so far we have expended uh 34 million dollars overall from FY 2018 to 2025, over 856 million dollars. Again, this is all money that's gone back to the community, our taxpayers to make our community a lot better. Okay. And the impacts of the spending of the 34 million dollars. So for every million dollars uh of construction projects is roughly 500,000 in labor. Uh this is a labor cause that we pay our contractors, subcontractors, improve the quality of life. Uh contractors the one that construct all the other projects for us. And again, all this money, taxpayers' money goes back to the community. Job supported, over 1900 uh jobs have been supported uh so far in this mid-year, and from 2011 to 2025, over 53,000 jobs that we have supported through the capital projects. Working with over 170 contractors as well, their contractors, subcontractors, and other staff that work on the projects again to make our projects completed and beautify the city. So far, we have completed 24 projects as of uh this year. We're right on schedule. Typically, we complete 50 projects a year, so we're right on schedule and projects completed. Okay. And there's a short video that I'd like to go out and present to you on some of the projects that we have completed. Can you run the video, please? And it's a great video, so just keeping you in suspense, all right. And it was there because I did look at it. So this is the part where you do a magic show or something, Gilbert. Yeah, I was gonna say I was gonna say a joke, but I'm not really a really have too much joke. So anyway, as you have seen a lot of our projects, hopefully, you all I know it's a lot of the new uh members here, and um we have completed a lot of projects throughout the year. So we have completed a lot more coming up. So hopefully you have the opportunity to visit some of the projects, and I've seen some of you in some of the ribbon cutting ceremonies. So hope to see you there for more of them. And as a presentation uh goes, we do have a couple of projects that are completed and ready for some ribbon cutting as well. Very good. I guess we don't have a video. So well, we'll come back to the video.

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