El Paso County staff outline $52 million certificate of obligation plan to fund water, sewer and storm projects

El Paso County officials on Thursday presented a staff plan to issue up to $52 million in certificates of obligation (COs) in 2025 to finance water, sewer, stormwater and road projects they said are “shovel ready.”

The presentation by Jose Hernandez, strategic capital development staff, laid out a 30‑year debt structure with an estimated interest rate “a little over 4½ percent” and total projected debt service of about $92 million. Hernandez said the proposed structure would use the county’s 5¢ debt service tax rate capacity and would be issued as tax‑exempt debt because there is no private use tied to the projects.

County staff said the $52 million cap reflects a scenario that anticipates leveraging interest buydowns and loans if available from the Texas Water Development Board and the Texas Department of Transportation (TxDOT) State Infrastructure Bank (SIB). Staff noted an $18.5 million carryover for two stormwater projects on Road and First Avenue already directed by the court, which reduces the remaining borrowing capacity; the proposals under consideration include about $33.5 million for first‑time water and sewer connections and fire hydrants in multiple unincorporated neighborhoods.

Hernandez told the court the water and sewer projects would benefit about 600 homes and roughly 2,100 residents in neighborhoods including Hillcrest Estates near Montana and Saragossa, Ponderosa, Western Village, Schuman and Serene Acres. He said hydrant networks reduce development costs by lowering the need for large sprinkler systems, improve emergency response and can lower insurance costs for both residences and commercial development.

Why it matters

County officials emphasized the projects are framed as essential public purpose work — replacing or adding fundamental infrastructure rather than discretionary amenities — and that the proposed CO structure is intended to be tax‑rate neutral by using the county’s existing debt service capacity. Commissioners raised the possibility of a citizen petition to force a public vote on debt issuance and urged a robust outreach campaign.

Discussion and next steps

Commissioners and staff discussed a two‑step statutory process for COs: the court could adopt a Notice of Intent (NOI) at its March 17 meeting, which would start a 46‑day waiting period; authorizing the sale would require a second vote (staff proposed putting that authorization on the May 5 agenda). Hernandez emphasized adopting an NOI does not automatically authorize a sale and that the court must still approve a May sale authorization vote.

Staff outlined alternatives the court could request: a tax‑note issuance (shorter repayment term, seven years) with a lower maximum (previously analyzed at $35 million) or a split approach — covering the carryovers with a tax note and reserving a general obligation or CO for the remainder in November. Staff warned a tax‑note approach could shrink capacity to take advantage of Water Development Board buydowns or TxDOT SIB loans and might require raising interest and possibly the interest & sinking (I&S) side of the tax rate to cover larger projects.

Commissioners stressed outreach, transparency and rapid public information to counter possible misinformation from petition groups. Several commissioners asked staff to prepare mailers, media briefings and other communications describing which projects would be funded, where they are located and why the county considers them essential. Staff said a news release was sent after Monday’s discussion and that a mailer design is in development if the court approves the NOI.

Risks and uncertainties

Staff and commissioners identified several contingent elements that could change the final structure or timing: (1) whether the Texas Water Development Board will confirm buydown terms before May 5 (staff said the county expects notice in April but there is no guarantee), (2) whether TxDOT SIB loan terms and any federal BUILD (formerly RAISE) grant outcomes are confirmed, (3) the potential for a citizen petition that would force a ballot measure, and (4) possible state legislation that could alter the county’s ability to use COs. Commissioner comments noted that petition drives can be targeted and rapid, citing prior petition experience.

Staff requested direction from the court on whether to proceed with the March 17 NOI timeline or to return with restructured scenarios (tax note vs. CO) for further court consideration. Staff noted project estimates are being confirmed with Public Works and that public outreach planning and project readiness work continues.

Ending

No final vote was taken. The court’s next opportunities to act on the debt issuance schedule are the March 17 NOI item and a potential authorization vote on May 5; staff said they will continue to refine project budgets, coordinate outreach and follow up on state loan/grant outcomes that could affect financing needs and timing.