El Paso City Council Special Meeting – June 23, 2026: Financial Report and Budget Workshops
El Paso City Council Special Meeting – June 23, 2026: Third Quarter Financial Report and FY2026-2027 Budget Workshops
The El Paso City Council held a special meeting on June 23, 2026, at 7:31 PM, adjourning at 9:59 PM. Mayor Johnson presided, joined by Mayor Pro Tem Chavez and Representatives Nino, Limon, and Canales; Representatives Acevedo, Rocha, Trejo, and Fierro arrived later. The meeting focused on two agenda items: the third quarter financial report for fiscal year 2025-2026 and the second round of budget workshops for FY2026-2027. Key decisions included a failed attempt to fund the Welcome Center using ARPA investment interest and several unsuccessful motions related to budget adjustments.
Public Comments & Testimony
- Representative Canales, as Chair of the Animal Shelter Advisory Committee (ASAC), read a letter from the committee unanimously requesting that the city council add funding for free public spay/neuter programming in the FY2027 budget. The letter cited an opportunity to partner with Greater Good Charities to hold high-volume, low-cost clinics targeting 1,000+ surgeries per event at a cost of $119,000–$128,000 per event. The request was noted but no action was taken.
Discussion Items
- Third Quarter Financial Report (Item 1): Budget Director Robert Cortinas presented the Q3 report covering September 2025 through May 2026. Overall revenue was $29.2 million (5.8%) higher than the same period in FY2025, driven primarily by property and sales tax. Sales tax revenue reached $113.2 million, a $7.9 million increase over the prior year, partly due to El Paso Electric’s infrastructure investments. The city projected a slight surplus of $185,000, with no use of fund balance needed. Total fund balance (restricted and unrestricted) remained at approximately $154 million. The rainy day fund was expected to finish at 70 days of operating expenses, down from 73 at the start of the year. Cortinas noted that franchise fees were under budget by $3.1 million, mainly due to lower Paso Electric and telecom collections.
- FY2026-2027 Budget Workshops (Item 2): Cortinas provided a detailed recap of the May 27-28 budget workshops, including community feedback from eight meetings (June 1-11) and the budget simulator tool. The simulator received 74 completed submissions out of 1,400 page views; 15 of 24 property tax adjustments increased taxes. The presentation outlined challenges: loss of revenue from exemptions, increased fixed costs (e.g., $1.5 million for the November election, $3 million+ for public safety radio system upgrades), and a $26.2 million savings from deleting vacant positions. A review of outside contracts, professional services, and materials/supplies found $243,000 in potential additional reductions, but Cortinas cautioned that these would limit departmental flexibility. The council also reviewed nine budget adjustment requests submitted by members, totaling $2,605,000, including proposals for a community center, traffic signals, the Welcome Center, council staff salaries, and solar lights.
- Welcome Center Funding: A central debate concerned the Welcome Center, a homeless triage facility serving approximately 50 people per day. The center was previously funded by ARPA and was set to close August 1, 2026. Cortinas identified $430,000 in ARPA investment interest as available one-time funding. Representative Canales moved to allocate this amount to sustain the Welcome Center for about seven months. The motion initially passed, but on reconsideration, the council deadlocked 4-4, and Mayor Johnson broke the tie by voting no, causing the motion to fail. A subsequent motion by Representative Limon to redirect $48,000 from council travel budgets (six districts at $6,000 each) to the Welcome Center also failed 3-5. Representative Canales then moved to direct the city manager to bring the Opportunity Center and strategies for continued funding to the next meeting; that motion died for lack of a second.
- Council Salary Increase: The FY2027 budget includes a 15.2% salary increase for the mayor (from $94,774 to $109,200) and council representatives (from $63,183 to $72,800), as set by a prior voter-approved charter amendment. Several council members expressed concern about the size of the increase compared to 2.5% for civilian employees, and some indicated they would donate the increase.
- Other Items: Representative Acevedo moved to allocate $315,000 from professional services, outside contracts, and materials/supplies to increase council staff salaries; the motion died without a second. Representative Chavez noted that hotel occupancy tax revenue from short-term rentals was not included in the budget; Cortinas recommended waiting one year to base projections on actual collections.
Key Outcomes
- No approval of Welcome Center funding. The allocation of $430,000 from ARPA investment interest failed on reconsideration (4-4 tie, mayor breaking tie no). The center will close August 1, 2026, without alternative funding.
- No changes to the proposed tax rate increase. The budget currently assumes a 2.8-cent increase (not percent) on the property tax rate, equating to an estimated $105 annual increase for the average home with a homestead exemption. The approved ARPA interest allocation did not affect the general fund or tax rate.
- Failed motions: The $48,000 travel budget reallocation (3-5); the $315,000 council staff salary increase (died without second); and the directive to bring a new presentation on the Welcome Center (died without second).
- Next steps: The city will present the fee study on July 6 or 7, 2026; certified property values and the tax rate introduction are scheduled for August 3, 2026, followed by a public hearing on August 17 and budget adoption on August 18, 2026.
- Ongoing review: The budget office will continue monitoring ARPA expenditures and may bring forward additional one-time funding recommendations. The council can revisit budget adjustment requests at any time.
Meeting Transcript
Ms. Prime, I think we're ready. Yes, sir. Good evening. This is a special meeting of the El Paso City Council for Tuesday, June 23rd, 2026. It is 7 31 p.m. Mayor Johnson is present and presiding in council chambers along with Mayor Pro Tem Chavez, Representative Nino, Representative Limon, and Representative Canales. Item number one is presentation and discussion on the fiscal year 2025-2026 third quarter financial report. Okay, is there a motion? Hang on, Miss Prime. There's no action on this answer. Robert. Good evening. Good evening, Mayor and City Council. Take your time, please. Yes, sir. Why is everyone laughing? We all had dinner all right. I told the mayor I had a bag of chips. I'm good for another person. That's all I had to do. Take your time, Robert. All right. So this item is the third quarter financial report. So this is coming our current fiscal year from the start of September through the end of May. So the first nine months of this current fiscal year. So overall, um, pretty much everything is trending as expected. So overall revenue right now is 29.2 million higher than FY 2025 again for that time period that I mentioned, that first nine months, or about 5.8%. A lot of that is being driven by property tax and sales tax, primarily sales tax, which will I'll show you a few slides here in just a minute on how well sales taxes are performing on the expenditure side right now, overall increase of 20 million or about 5.1%. Again, and a big drive of that, as you will see, is our biggest cost driver is going to be in the form of our salaries, benefits, and taxes for our city employees, as well as some contractual items we had in the budget for this current fiscal year. So key takeaway is on this slide here. So overall revenue and expenses, you'll see overall revenue right now projected at on that far right-hand column, 625.3 million, slightly under budget, expenses at 625.1 again, um, under budget by about 600,000. So as you look to those projections, though, I think the important thing to point out is that that's less than about a tenth of a percent difference from projections, yeah, projections to the uh budgeted amount for both revenues and expenses. Um, but again, the key takeaway here is that you all, as you look at the bottom of the slide, is that when you adopted the budget last year, and you've heard us talk a lot about this, you adopted a budget with a use of fund balance plugged in of $3.25 million into the budget for this year. Um, so I'll have to report that included in this of what you're seeing today in this projection is no use of fund balance and a slight surplus of about $185,000. So again, revenues performing pretty much on target expenditures. We've been able to hold the line, but um again, right now projecting when we finish this fiscal year with uh right now about 185,000 surplus. So you'll see our overall starting fund balance, and this is total, restricted and unrestricted fund balance will remain um in that 154 million dollar amount. As we look to revenue comparison by categories here, you will see again um similar format that we've used for the last couple of years. So in the blue there, this is the current fiscal year, and then you get on the far right-hand side there, those two columns comparisons to the prior fiscal year. Just to provide some uh comparison data, overall property um taxes you'll see at 98.8 percent compared to prior year at 99.4, so slightly down, but again, pretty much in line with what we expect to see this time of year. Um, if I draw your attention to that bottom line, total revenue for this current fiscal year at 85.2 compared to last year at 84.1, and the two big drivers of that are going to be in the sales tax category and the operating transfer is in. So sales taxes you'll see right now, we're at 113.2 million again, September through May, about 77% of the total budgeted amount. Uh, compared to last year at this time, we were at 105 million or at about 74.9 million. So sales tax is really performing extremely well, and I'll again I'll show you those slides here in just a minute. On the operating transfers in one of the things that's helping that particular category down at the bottom, you'll see again those percentages 73% so far this year compared to 62 last year. International bridges, so international bridges transfer to the general fund is up about 17% so far for the first nine months compared to last year. So one of the fee increases that was built into the FY26 budget was the increase in the empty cargo, that 50 cents. So that's really helping come in a little bit more than we expected, and so that's helping again the overall revenue for this year. As we look to the projections for these categories, you'll see some pluses and minuses, but at the end of the day, and we'll have a little bit of discussion about this when we get to not only the expenditures for this current fiscal year, but when we get into looking at FY 2027, you'll see some pluses and minuses.
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