County administrator urges holding new tax revenue in reserve amid state and federal uncertainty

El Paso County Administrator Betsy Keller told Commissioners Court on Aug. 21 that the roughly $28.3 million of additional revenue generated by the recently adopted 2024 tax rate should be placed in fund balance rather than immediately committed to recurring expenditures.

Keller presented four options for the court and recommended option 4: deposit the full amount into fund balance. She said the recommendation reflects multiple near-term uncertainties — pending state legislation, a potential federal funding shift, and the fact that the county used one-time revenue sources in the adopted budget that will not recur in FY2027.

"I recommend option 4," Keller said, explaining that the county used a number of one-time accounting maneuvers and transfers this year (for example, an infusion from the risk-pool fund and ARPA salary offsets) that raise the risk of creating recurring obligations the county could not sustain. Keller estimated option 4 would temporarily raise the countys unassigned fund balance to roughly 9.36 percent and said the auditor close may show a figure above 10 percent.

Why it matters: county leaders emphasized fiscal prudence given possible state-level property-tax reforms and other legislative action that could lower future revenue or add new obligations. Commissioners reiterated the need to keep operational cuts and a hiring freeze in place while reserves are rebuilt.

Budget options summarized by staff included varying mixes of replenishing reserves, restoring one-time reimbursements and adding capital or personnel contingencies. Keller recommended funding reserves because several fiscal uncertainties could reduce available revenue next year; two one-time budget sources she cited total the rough equivalent of two cents on the tax rate.

Commissioner comments: several commissioners supported the conservative approach and said if the court has room later it should consider investing additional resources into the Economic Impact Fund, which currently holds about $3.8 million and has a county policy target of $10 million. Commissioners described use of the economic fund for workforce training and site infrastructure as high-priority investments that help attract employers while preserving recurring operating flexibility.

Next steps: the court gave direction to incorporate option 4 (reserve funding) into the proposed FY2026 budget to be returned for adoption on Sept. 15. Keller said a finalized budget book reflecting any changes discussed would be produced for that meeting.