Council approves refunding and defeasance moves to free $4.3M for general fund, finish Eastside Sports Complex work

The El Paso City Council approved two related measures aimed at lowering the city’s debt burden and freeing restricted redevelopment funds.

At the first reading (item 42) council delegated authority to the city manager and pricing officers to proceed with a general obligation refunding issuance (aggregate principal not to exceed $285 million) intended to refinance callable 2015 and 2016 certificates of obligation and general obligation obligations to capture debt service savings. City Finance staff estimated net present value savings around $4.6 million and projected a borrowing true interest cost well below the council’s maximum threshold; staff sought delegated authority so the city could move quickly with market windows.

Council also unanimously approved (item 55) a resolution that authorizes the defeasance and redemption of outstanding obligations tied to Tax Increment Reinvestment Zone (TIRZ) No. 9. Finance staff explained the defeasance will use approximately $13.45 million in escrowed funds to retire roughly $17.9 million of principal and interest outstanding for bonds tied to the Eastside Sports Complex project. As a result of paying those obligations off early, roughly $4.3 million of property tax increment revenues currently restricted to the TIRZ will become unrestricted and flow to the general fund starting in FY2026. The city plans to allocate about $2.3 million of those now‑unrestricted funds toward remaining completion items at the Eastside Regional Sports Complex — including lighting and shade canopies in District 5 — and to use the remainder to support the FY2026 budget.

Why it matters: Finance staff said the city has reduced its overall outstanding principal by about $300 million since FY2022 and that careful debt management has contributed to the city’s double‑A ratings. The refunding and defeasance are intended to accelerate savings, avoid extending maturities, and preserve the city’s credit profile while returning formerly restricted incremental tax revenue to general fund use.

Council discussion and next steps: Finance Director Robert Cortinas walked council through the structure of the refunding, the plan to offer a bond tender for non‑callable series, and the timelines that anticipate July pricing and closing. For the TIRZ action, Cortinas said the escrow will be managed by Computershare Trust Company and that the dissolution of TIRZ No. 9 (a separate ordinance scheduled for public hearing July 8 and effective Sept. 1) will leave the public improvement district that funds ongoing operations intact.

Council voted unanimously on both items. Staff will return with pricing results after the July pricing date and will incorporate realized savings into the FY2026 budget.