El Paso City Council Special Meeting on FY2025-2026 Budget – July 7, 2025

This special meeting of the El Paso City Council was held on July 7, 2025, from 9:04 AM to approximately 4:30 PM (with a one-hour lunch recess from 11:56 AM to 1:00 PM) to present and discuss the proposed FY2025-2026 budget. The meeting featured presentations from the City Manager, Chief Financial Officer, Human Resources, and multiple city departments. No formal votes were taken; the council will consider adoption of the budget in August.

Discussion Items

• City Manager Overview (Dionne Mack): The proposed budget includes a 3.8% overall increase (4.1% general fund, 3.5% non-general fund). The initial budget gap of $51 million was reduced to $24.8 million through $26.1 million in efficiencies and reductions. Key drivers: 77% of the increase is for compensation and public safety staffing, $2.8 million in IT contracts, and $1.4 million for police/fire contracts. Water utility costs also increased. The city recommends no increase to the property tax rate (maintaining 0.761%). The average home value increase results in about a $9/month impact, with $80 attributed to public safety. The debt service property tax rate is the lowest since 2012. Additional tax relief for over-65 and disabled exemptions is proposed, raising the exemption from $42,500 to $45,000, affecting about 41% of homesteads. The city will use $4 million from the fund balance (down from $7.2 million in FY2025). Staffing levels for police are returning to pre-COVID levels (2020) with 120 cadets. 48 firefighters are being transferred from expiring grants to the general fund. Pay-go funding for street resurfacing remains at $10 million, with an additional $250,000 for lane striping and $500,000 for park amenities.
• Compensation Initiatives (Mary Wiggins, Monika Kretschmer): The city’s minimum wage has increased 52% since 2021 to $15.75/hour. Phase two of the compensation strategy proposes raising the starting salary for professional/managerial pay plan from $20.85 to $23.00, impacting 461 employees, with a projected cost of $3.1 million. This also addresses compression and tenure. Police and fire collective bargaining agreements include step increases (police: 5.8% average step adjustment, 4.5% between steps; fire: 3% step adjustment, 5% between steps). Health care premiums have been maintained since 2020; the city is self-insured. The vacancy rate is declining due to improved recruitment – a 49% increase in hires from February to May 2025 compared to the prior year. Turnover has decreased 43% for civilian and 9% for uniform employees.
• Department Presentations (selected highlights):
  • Economic & International Development (Karina Bracale): General fund increase due to personnel; non-general fund (economic development restricted funds) payments increasing. Highlights include the comprehensive economic development strategy rewrite and international business outreach. KPIs: 3 Chapter 380 agreements in FY2025, 99 incentivized housing units (downtown/uptown), 860 small business visits.
  • International Bridges (Roberto Tinajero): Budget variance due to salaries and contracts; revenue increase from proposed elimination of empties program for commercial vehicles. Projects include toll collection system upgrade, ITS implementation, and $5 million feasibility study for the Isleta/Saragosa Bridge. Five-year capital improvement plan of $67.4 million. KPIs: 3,500 hours of CBP overtime, ~5 million vehicle crossings, $76 billion in trade.
  • Parks & Recreation (Pablo Caballero): Budget increase due to salaries, water utilities, and park amenities. $500,000 added to park amenity replacement fund (total $1.5 million). East Side Regional Park Phase 2 construction starting late 2025. KPI: recreation program participation target of 2.2 million for FY2026 (1.9 million year-to-date).
  • Animal Services (Terry Kepshaw): Budget increase of $2.4 million for salaries, materials, contracts. West Side Adoption Center opening soon. Surgical efficiencies – over 12,500 surgeries completed year-to-date. Restructured interlocal shelter agreement projected to increase revenue by $1.7 million. Live release rate trending at 84% (target 90%).
  • Libraries (Norma Martinez): General fund variance due to salaries and grant match. Fine-free policy has returned 40,000 items. Enhanced library cards expanded to 10 branches. Career Online High School graduated over 200 participants. KPI: program attendance target 120,000 (81,915 year-to-date).
  • Museum & Cultural Affairs (Ben Fife): Variance due to salaries and increased stipend for La Nube (from $1.9M to $2.5M, contractual cap). Mexican American Cultural Center set one-day attendance record (10,000+). Working toward sensory-certified city certification for 40+ facilities. KPI: 624,000 visitors year-to-date (surge year due to new facilities).
  • Destination El Paso (Jose Garcia): Third-party contractor for tourism, events, and water parks. Highlights: Coldplay concerts at Sun Bowl broke records – 16 million in ticket sales, visitors from 49 states, 94.5% hotel occupancy. New event “Provecho El Paso” planned for 2026. KPI: 18,000 future hotel room bookings targeted, 2% increase in facility rental revenue.
  • Public Health (Vinny Tanasia): General fund variance due to transfer of food inspections to code enforcement. Non-general fund variance reflects grant recording, but actual cuts of $3.5 million have been absorbed. 25 positions lost due to grant cuts, mitigated to 8 FTE losses. New headquarters opened; Medical Center of America building under construction. KPI: 29,000 clinic visits targeted, but subject to funding.
  • Planning & Inspections (Philip Etue): Budget consistent; variance due to salary increases and transfer of 15 positions to code enforcement. KPIs: 98% of inspections conducted within 24 hours; average one-stop shop wait time reduced to 5.1 minutes.
  • Purchasing & Strategic Sourcing (Claudia Garcia): General fund decrease from position elimination; non-general fund increase from sponsorships. Initiatives: support for Supply El Paso, revisiting Hire El Paso First program, implementing contract administration academy. KPIs: increase vendors on EP Marketplace to 55, maintain 50% local spend.
  • Sun Metro (Anthony DeCazer): Enterprise fund; 2026 budget $100 million (down from $110 million). Using zero fund balance. Sales tax and grants revenue fluctuate. Sun Metro Rising initiative to optimize fixed route service (465,000 riders will see improvement). Streetcar ridership at highest post-COVID. Half of paratransit fleet going electric. KPIs: 90% on-time performance for fixed route and paratransit; 10 complaints per month out of 583,000 riders.
  • City Attorney, City Clerk, City Manager, Community Driven Innovation, Internal Audit, Strategic & Legislative Affairs, Fire, Police: Presented budgets with variances primarily due to compensation and staffing adjustments. Fire: 9.5% increase due to CBA; 50.5 FTE increase from grant positions returning to general fund. Police: 11.1 million increase due to CBA; 120 cadets planned; staffing returning to pre-COVID levels. Strategic & Legislative Affairs: new department; $152 million in grants secured since creation; 89th legislative session update; climate action plan and veterans services plan forthcoming.

Key Outcomes

• No increase to the property tax rate is recommended, with the lowest debt service rate since 2012.
• Tax relief for over-65 and disabled homeowners proposed: raising exemption from $42,500 to $45,000, effective October 2025.
• Use of fund balance reduced to $4 million (down from $7.2 million in FY2025), with a goal of eliminating reliance on fund balance in future years.
• Compensation: Phase two of civilian compensation strategy approved for January 2026, raising starting pay for professional/managerial to $23.00/hour, addressing compression, and providing a 1% cost-of-living increase for all civilian employees.
• Debt management: $300 million reduction in overall debt since 2022 (19% decrease); no new debt issued in over four years; recently approved refunding expected to save $9 million.
• Public safety: Police staffing projected to return to pre-COVID levels (2020) by end of FY2026 with 120 cadets; fire department adding 50.5 positions from grant transfers; new fire stations (38 and special ops downtown) opening.
• Infrastructure: $10 million in pay-go for street resurfacing maintained; $250,000 added for lane striping; $500,000 added for park amenities.
• Next steps: The council will receive certified property valuations on July 25, 2025, and hold a special meeting on July 31, 2025, to set the tax rate and begin public hearing process. Budget adoption is scheduled for August. The meeting will continue on July 8, 2025, with remaining department presentations.