How El Paso Reimagined Capital Improvement Planning During COVID-19

About This Episode

The fiscal impacts of COVID-19 are forcing cities to significantly rethink their budgets and spending decisions. In El Paso, Texas, when projected revenue shortfalls put most of the city's scheduled capital improvement projects on hold, planners saw an opportunity to rethink the capital improvement planning (CIP) and budgeting process and reprioritize projects using an equity-focused approach.

To understand how they did this, Ann Dillemuth, AICP, senior research and professional practice associate at APA, speaks with Alex Hoffman, AICP, director of the Capital Planning Division of El Paso's Capital Improvement Department. Alex provides planners with practical advice on how to reenvision their own communities' capital improvement planning processes, and he underscores how identifying priorities and aligning plans can make a city more resilient in the future, if and when another disruptive event like the coronavirus pandemic happens.

Episode Transcript


[00:00:04.000] Ann Dillemuth, AICP: Welcome to this episode of the APA podcast. I'm Ann Dillemuth, AICP, senior research and professional practice associate at APA. The fiscal impacts of COVID-19 are forcing cities to significantly rethink their budgets and spending decisions. But when projected revenue shortfalls put most of the City of El Paso's scheduled capital improvement projects on hold, planners saw this as an opportunity to rethink the city's CIP planning and budgeting process and reprioritize projects using an equity-focused approach. Here to talk to APA about El Paso's innovative work in this area is Alex Hoffman, AICP, director of the capital planning division of the city's Capital Improvement Department. All right, well, thank you so much, Alex, for joining us today. We really appreciate you taking some time out of your very busy schedule to talk to us about this important topic. To get started, how, how are you, how are things in El Paso right now?

[00:01:09.250] Alex Hoffman, AICP: So first of all, Ann, thank you very much for having me. I'm really excited to be here as well, and really appreciate you reaching out and letting me have the opportunity to speak about this. In terms of how things are going in El Paso right now, I think that recently we've seen, like a lot of other cities and states across the country, a pretty substantial increase, a spike, in our COVID cases. Just last week, we had more than 2,000 new cases just in the week. With a couple of days, we had close to or over a thousand. And so I think that, you know, we've been really seeing a sharp increase here. You know, locally I think one of the biggest challenges — and for some listeners who aren't familiar with where El Paso is, we're situated right on the U.S.-Mexico border. And so things are a little bit more challenging here than perhaps other places in that a major part of our economy is sharing that border with Mexico. And so with the border closures that we've seen, we've been really just substantially impacted by the lack of trade options or just travel between the two countries. And so I think that that contributes quite a bit to the fact that we've seen or that we're projecting a $65 million budget shortfall for our next fiscal year. And so that's, that's really the impact that we, that we've seen as an organization within the city context.

[00:02:40.760] AD: Yeah, that's, it sounds like it's a pretty universal challenge for most cities looking at their budgets for next year and the impacts of COVID on revenues coming in. Yeah, El Paso has a, kind of a unique situation, but maybe one that's shared by most other border communities. Right, so, yeah, so today we're going to dive into what you and the city are doing to address this budget revenue issue in terms of your capital improvements program and planning. So to begin, full disclosure, like many planners, I know a little bit about the CIP process but maybe not as much as I should. So can we just start off by you giving us a high-level primer on the capital improvements planning [CIP] and budgeting process?

[00:03:31.570] AH: Definitely. So, you know, I think the first place that's best to start when we talk about capital improvement planning is the comprehensive plan. The comprehensive plan sets the stage for development throughout the city. It prioritizes particular types of development, prioritize particular locations in your city. And so when you have a well-developed, comprehensive plan, one of the things that sometimes can be part of that is to actually identify a project list that would essentially allow for the exploration of private development and public improvements simultaneously and in concert with one another. And it really allows you to imagine the priorities and the strategies that are identified in the comprehensive plan to make sure that the two are happening simultaneously. In terms of the way that project lists are developed, a lot of times we're working directly with the respective departments or with the parks department and say, "OK, if the growth and development that we're identifying in the comprehensive plan takes place, what types of projects do you think are going to be necessary in order to help support or maintain the level of service that we want to see in the city?" Or, "If this new growth takes place in the city's fringes, fire department, what types of facilities are you going to be able to need in order to provide those services?" And so developing it that way essentially allows for your private development and your public investment to be happening simultaneously, one not outpacing the other, where you're trying to play catch up because you didn't anticipate the growth. From a high-level perspective, that's really what we're trying to to accomplish through capital planning. And then the second part to that is the budgeting component. And so, here in El Paso, one of the things that we're always cognizant of is making sure that our debt does not affect our bond rating. We'll probably get into this later in the episode, but one of the things that we see is that, because of limits within the state of Texas, our primary way that we fund these projects is through debt. And so we want to make sure that the level of debt that we have in the city is constantly maintained, that it doesn't go exorbitantly high. Because if our bond rating is affected, we get a lower grade; for example, an A to a B. That means our interest rate goes up, which means we end up paying significantly more for these projects over their lifetime. Just to bring it all together again, really using the comprehensive plan to set the stage, planning out to match the development that's taking place from the private side of things, and then really planning that out over the lifetime of your bond — say, five years, or your capital plan, three to five years — and then making sure that the projects are timed out so that way you're not issuing too much debt at once.

[00:06:36.870] AD: OK, great. Thank you for that. So, so we're talking here about public investments in infrastructure, mostly?

[00:06:44.400] AH: In El Paso, that's correct. I mean, I think that what we see in El Paso is that we have two major bond efforts that were taking place. One is what we'll call our quality of life. So that's more of our parks facilities, our museums, those, those types of facilities. And then we have our public safety, which is our police and fire, and then separate and apart from that, and I'm sure a lot of communities can relate to this, is then the street infrastructure. And so those are our three major programs that we're trying to to run simultaneously. Again, timing them at different stages, so that way one program peaks while another one's tailing off towards the end. But those are the types of improvements that we're talking about, everything from facilities to, to streets to parks to libraries. So it's a lot of different things.

[00:07:33.150] AD: OK. And you had mentioned, or you had said that El Paso funds a lot of this through debt or through bonds. So then how does that relate to the, the forecasted budget shortfall? Does that mean that you wouldn't be able to pay back those or make those debt payments? Or how does, what is the relationship there?

[00:07:51.630] AH: Definitely. So one of the things that is unique about Texas is that we don't have things, such as concurrency, that other states have. So where essentially you can charge a fee to pay for those new facilities, we have limited funding sources, so we have an impact fee for, for streets only that we're allowed to do, and then water and wastewater facilities. All of our facilities have to be paid for through, through debt. And so one of the things that we saw and that really precipitated this conversation about maybe reprioritizing what our policies need to be was the fact that we ended up having to defer a number of projects. And by that I mean that projects that were originally planned to be started this year, where we would essentially be spending funds that were allocated through the capital plan for this fiscal year, we ended up having to not do them and basically put them on the shelf. And so what that meant is that we ended up not spending that money for this year. And so as a result of that, we had to really reprioritize the projects that we were going to do, and initially the conversation was really focusing on not adding operational costs to the city budget. So, as an example, if we had proposed to do a new library facility or a new fire station, we would have a long-term maintenance cost to that, and we'd also have the costs associated with hiring personnel. And so that was the initial conversation that took place is, OK, knowing that we have a budget shortfall, we're going to have to shelve these projects. Let's prioritize the ones that are going to add operational costs and really just focus on the ones that are more of routine — the streets projects, for example. Really focusing on, on those types of projects. And from there, it really [evolved] into this conversation of, maybe we need to have a bigger conversation about what our priorities are as a city moving forward, because, A, we don't know how quickly we're going to come out of what's happening with COVID and the effect that it has on the economy, but, B, part of being resilient is preparing for these types of things for the future. And so rather than doing this as a one-off task or just trying to solve this one issue, thinking about this long-term so that way, if a similar situation arises or something else that's pretty traumatic, catastrophic, on the local economy, that we have a policy or some type of methodology in place that will allow for us to quickly transform and adapt to whatever's happening at the city level.

[00:10:33.090] AD: That's great, and yeah, that's something that I think is really important because, as you say, COVID happened this year, but something else could happen next year, and cities will always be facing challenges that will have impacts on their budgets. So, yeah, I'd like to get more into the, the prioritization process, kind of how that came about, who the players were, what your focus was, just so that our listeners can get a better sense of if they decide to take this on in their own communities, how you went about doing it.

[00:11:10.080] AH: Definitely. I think that where we started from was really when we first heard that the federal government was going to be giving assistance to local government through the CARES — CARES Act. We had identified what our project needs were, how we're going to use that fund at a leadership level within the city. The city manager really directed and led that effort. And part of that was really looking at what was our COVID response going to be as a community from the perspective of public safety but also public health. And really the impetus for really trying to imagine, or reimagine, what our policy goals and objectives need to be, at least from my perspective, was that NPR was nice enough to publish a piece about Texas cities and how they were not having an equitable response to COVID testing. And one of the things that they found, and I don't recall all of the cities, I believe Austin and Dallas was in, and then maybe Houston was in that analysis, along with El Paso, where they basically identified the fact that the testing locations in those Texas cities, including ours, were predominantly located in higher-income areas throughout their respective cities. And it really helped really spur in me the fact that part of our response is that we need to consider is this equitable response, thinking about communities that don't have access to health care, that don't have access to public transit, because we saw that a lot of the testing facilities were these drive-thru facilities, the prerequisite being that you own a car. And so it was really using that as this spur, if you will, to think or reimagine how we're, how we're delivering these types of services. When we were developing this policy, El Paso, again, is a little bit unique in that we're predominantly a Latino community. We're 87 percent Latino. And so when we talk about equity, equity that we're looking through specifically here is more of the socioeconomic equity. Whereas other cities — and I know that Baltimore, for example, has a really big or really great equity policy for their CIP. They're really looking at through not only the socioeconomic but also, also the racial lens. I just want to disclose that it's a little bit different here, that it's not as [high priority of a] factor to consider in El Paso just because predominantly we're speaking about one, one ethnic group. And so, with that being said, we were developing this policy, and really what we were looking at were, were four factors. And the rationale for these factors really came out, again, in conversations we were having with the leadership and leadership level about where we need to be locating these COVID facilities that then dovetailed into a fuller conversation about our CIP and our CIP budget. And so the factors that we were really looking at were, first, that it was an area that was identified in our strategic plan as a priority area. And so one of the great things that our leadership did a couple of years ago — and again, it wasn't necessarily in response to COVID, but certainly, when COVID hit, allowed for us to have this already in place — was having a strategic plan that identified within the city where are priority areas that we want to see investment take place. And so we're really making sure that where we're investing, whether it's infrastructure or whether it's in response to COVID, that it's a priority [area] identified by our strategic plan. And that had certain geographic areas within the city that were identified, and we mapped those out and identified those locations. The second one that we looked at was benefiting low- to moderate-income populations. And the reason for that was that when we were doing the analysis of where to locate these COVID facilities, that we saw that spatially, and this is something that was discussed, and part of, you know, one of the unfortunate things about COVID is that when we're talking about low- to moderate-income populations, they're also the ones that are most affected by a whole slew of other issues. And so when we were identifying populations that didn't have access to private health care, it was the same geographic areas. When we looked at areas that didn't have access to personal vehicles, same areas. And so really that identified for us, at least, that these areas that we needed to prioritize from a capital investment perspective is really benefiting these low- to moderate-income populations. And the third factor that really ties into that and how, from a financing standpoint, you're able to do that is that you prioritize projects that also have high returns on investment. The rationale being that in most situations, when you're talking about, you know, low- to moderate-income populations, from a taxing standpoint, they may not be some of your most tax-productive areas of the city. And the loss that you have on those projects are offset by these projects that have relatively high return on investment. And so those two variables work really well in tandem with one another because you can use one to offset the other. And then the last factor that we used to prioritize locations was identifying our service gaps. And so we have, you know, service areas for each type of facility, so our fire station serves a certain radius, our police stations serve a certain radius, parks serve a certain radius. And so really trying to prioritize projects that, if that facility were to not be maintained and go away, or if it's a new facility, prioritizing those locations where there's service gaps so that way we're not prioritizing a project that already overlaps with multiple other facilities. One of the really good tools that we found that helped us to at least begin this exploration was the Urban Institute. They actually offer a spatial equity tool. Basically you can map a bunch of points, latitude, longitude. You can plug it in to their little calculator and it will spit out a map that will show you the spatial locations, whether or not you're over-representing certain areas and some of those demographic factors. And so it was really interesting when we were first talking about doing this, to put it in there and see what the, what the result was, because it — in our instance, it actually showed us that we were on the right path, which was actually a surprise, right? Because if you're not being intentional about these types of things, sometimes the results can be not so positive. And so, you know, that's one thing I would really encourage people is, like, don't be afraid to start this process because, you know you can't do anything about the projects that you've done in the past, but you can use that to inform your decisions for the future and really then be able to compare what you were doing before to what you're doing now and be able to monitor those results and show how this is actually had a positive benefit on, on reprioritizing your projects in this way.

[00:18:28.550] AD: Wow, that's great, one — because yeah, one thing as we know that's very important in planning is benchmarking metrics indicators. It's one thing to adopt a policy, but if you're not tracking the, the impacts of that, how do you know if it's working? How do you know if it needs to be rethought? So it sounds like that's a great tool for, as you say, perhaps in the past, the decisions have not been made, you know, on that equity basis, but to be able to see where you were or — and are, and then to be able to track your progress in going forward, very valuable for, for planners and planning.

[00:19:03.430] AH: Definitely. And that's one of the really good things, or probably one of the few good things, I should say, about what happened with COVID was that, because our projects got placed on hold, it allowed us this opportunity to really rethink the way that we were doing these things and develop this policy and have it be put in place and then being able to then roll out when we, when we have that conversation, and it hasn't taken place yet, but when we roll out our CIP again with our, with our projects that, you know, were previously shelved and now we're going to bring them forward again, we'll come out with a new reprioritized list that's based on, you know, the factors that I had outlined that were reprioritized based on those. And so it's, it's a really unique opportunity, and it allowed us to hit the reset button, if you will.

[00:19:51.110] AD: Yeah, and I think that's so important. So just to emphasize that, the importance for planners of really looking for the opportunities in the COVID situation. Because it's been such a big disruptor, there, there are these opportunities to, to, A, make changes that in, in regular times may not be able to be quickly approved, like opening up streets to shared use, sidewalk dining. But then also, as you just said, kind of taking a pause and, like, a reset and a reevaluation of past policies and then how you want to move forward so that when the time comes to start up again, you have everything in place to really do things differently, not just go back to the status quo. Because the status quo has not always been working that well, has not always had, you know, the right priorities in place. But, but to really move towards a future where, yeah, we're able to address these things.

[00:20:46.140] AH: Yeah, definitely. And I think that's, you know, my biggest piece of advice to any listeners would be really just being prepared. You know, I think that sometimes planners sometimes wait for the ideal situation to arise to really put their expertise out there and to really try to insert themselves into different projects. Part of it is just really always being ready. You never know when the opportunity is going to arise, and so one of the things that I take on as a personal mission and that I really try to instill in, in my staff is, you know, OK, sure, right now there isn't a political appetite to do this particular policy change or to develop, you know, some type of analysis that, that we want to do. But it's really important to have it and to have it ready, because you never know that day at council when they're going to bring up some issue that, lo and behold, we've been working on the last six months. And that's really the value in having something like a strategic plan in place that tells you that these are the priorities and you can start working on those things separate and apart from any other directive you have, because you know that you're working towards a certain goal. And so developing policies that support the strategic plan, this unified vision for your city, really can help to, to prioritize within your respective department, where you have your sphere of influence, really work towards that, that common goal.

[00:22:26.360] AD: That's great, and yeah, great that you've been practicing that and, and we're ready to, to jump in and seize this opportunity. Before we go on, I wanted to back up a bit and ask about one of the prioritization criteria that you had mentioned. So the projects with a high return on investment, what do those look like? And then also it seems like that might conflict with the other, like, the first two. You had said that the projects with the high ROI aren't always in those underserved areas. So how do those two, I guess, or how do those different criteria balance each other out when you're, when you're applying the criteria?

[00:23:06.830] AH: Sure. So, you know, in terms of how the return on investment was done was that we developed a metric that essentially allows for us to identify the per-capita cost of delivering services down to the individual parcel that we extrapolated out to the block level, just because once you look at individual parcels, it's really, really hard to make any sense of what you're looking at. And we basically looked at that at a per-acre basis. And so when we're looking at return on investment, the return on investment that was higher certainly had certain development characteristics that I think you would expect from productive land use. And when I say that, what I mean is that, for example, from an urban-form perspective, you're talking about more of the traditional blocks, really looking at the areas of the city where mixed uses are much more common. We know locally here that commercial uses are more tax productive — and that's true everywhere — than residential uses. But then obviously the areas that we had higher density residential were a lot more tax productive. And so when we look at return on investment, we're talking traditionally about areas of the city that are pre–World War II neighborhoods, our downtown, and the less productive areas would be more of our ranch, farm, agricultural type of uses, some of our older second-ring suburbs that are more car dependent, that don't have mixture of uses, and those types of things. Now, in terms of how that works in concert with the low- to moderate-income [areas], one of the things that I think some people assume that isn't always true is that low- to moderate-income areas are not always — not tax productive. When you think about where lower-income people traditionally live within a metropolitan area, a lot of times they're in those first-ring suburbs that, from a form perspective, are actually really great, that are tax productive. And so some of the areas where we have our low-income population — certainly not all of it, of course — but we actually have pretty financially productive areas, just because when you think about revenues per acre, you know, if you have houses that are built on 2,000-square-foot lots, they're going to be a lot more financially productive than the suburban new development that's 8,000-square-foot lots. And so that is something I think that is important to keep in mind, is that tax productiveness doesn't always equate to socioeconomic status or demographic characteristics. But that being said, I mean, I think one of the things that, that when we were developing this policy, that we're going to have to see how it plays out moving forward. And I think it's something that I know Baltimore has done, and I think Philadelphia is looking at as well, is that they earmark a certain percentage of their projects to benefit certain neighborhoods that are low to moderate income because they recognize that otherwise they won't win out, if you will. And so I know that some cities use percentages, so 20 percent of your projects will go towards benefiting low- to moderate-income population. So you used your other criteria to prioritize within that geographic extent and then all the other projects identify all the other criteria that you're talking about. So in our case, you know, you throw out the low- to moderate-income projects, you prioritize a certain percent, and then all the other projects are looking at the other four criteria that we've developed. And so, yes, it can create a challenge, where if you don't set aside a certain percent, that your low- to moderate-income population, the projects that serve them may not be the highest-rated projects. But the way to counteract that would be to say, as a policy, we're going to set aside x percent to benefit the specific population.

[00:27:20.300] AD: OK, great. Thank you for explaining that. That makes a lot of sense. And, and the piece about the tax productiveness of some of those lower-socioeconomic neighborhoods, I hadn't really thought about that. So, yeah, great. So something to keep in mind there.

[00:27:36.690] AH: Yeah, I mean, and I think that's one of the benefits of doing the analyses that, that you do, even if you're not looking at doing a new policy, for example, is just to be able to have those conversations, just because it inevitably comes up in a lot of different planning type of conversations. And so being able to just do these analyses for yourself, for your own city, seeing where the productive areas of your city are, just so that way, at least whenever a policy decision does come up, you can speak about these things factually and have that information to share with the public and the elected officials.

[00:28:11.970] AD: Great. So that was, I think, a really good overview of the prioritization policy that you put together, and you said that this, this came out of decision making around CARES Act funding. So I wonder if you could get back to how, how the, the CIP prioritization process kind of started and played out. Like was, was that all the planning department taking this on? Were there elected officials that directed you to do it? And then were the planners the [ones] leading that effort?

[00:28:44.900] AH: Yeah, so, you know, like I mentioned, I mean, it was the CARES Act funding that really precipitated this conversation. I know that when we were trying to identify specific areas where we wanted to locate some of these facilities, it was the conversations that we were having with our leadership group, but then also with our elected officials that ultimately led to, you know, what these criteria we were going to use to prioritize certain areas were. So, you know, it was really my group facilitating those types of conversations, providing the data inputs. But it was a collaborative effort between both elected officials' leadership group that encompasses all of our, or represents, all of our city departments, but then it really was our group that, that led that. And one of the unique things, I guess, if you will, is that under the capital planning umbrella that we have is also real estate. And so we're able to, through our property acquisitions and just acquisitions and property holdings in general, is to really insert that planning practice into our decision making and our decision-making lens. That's one of the great things about having this capital planning, or the CIP arm, under the long-range plan is that it really gives implementation a really big boost. Sometimes I know, in previous lives and previous places I've worked, it's been frustrating because a lot of times you're developing the policy and you're not really having the opportunity or as direct of a hand in implementation. Really having the capital plan and having the funds attached to those plans be the implementation really allows for planning to be implemented and is really a unique opportunity that I know is in El Paso, but then other cities I know have a similar set up. And that's a really good opportunity to see a lot of planning efforts and planning best [practices] be implemented. And so it was a really unique opportunity in this instance that we were able to be the driving force, if you will, behind where the site selection was ultimately made and then dovetail it into a CIP policy in general. But I do think it's one that can be replicated.

[00:31:16.460] AD: Hopefully our listeners, if they're not already involved in the CIP process in their own communities, will start looking into what they can do to become more involved.

[00:31:26.390] AH: And definitely, and I think one of the, one of the really great things that happened recently within our capital plan is that, again, when we talk traditionally about capital planning, we're talking usually about hard infrastructure. One of the things that was really great is that as part of our most recent capital plan, our 2020 capital plan, we actually rolled in planning studies and planning documents into our funding. And so we were actually able to get several million dollars set aside as part of the capital plan to fund various planning efforts, again, looking at these areas that were already identified as being high priority by the city council, but giving us, again, the opportunity to be implementers and using that, those documents to identify future projects, but then also to address policy-level issues, doing the two in concert, hand-in-hand. And so it's a really great thing — I think that, you know, especially if you're in a city that does do quite a bit of capital planning, capital planning work. It's funny, I sometimes joke around with some of the people I work with because it's, you know, when you talk about [a] street reconstruction project that maybe you're only doing a mile or two and it's $20 million, you can really — not that you're going to sneak it in, right? But [laughs], but sneaking in a few million dollars for, for planning efforts is like a drop in a bucket in comparison to an overall capital plan. So, you know, we have two major bonds that are taking place, and combined they're about $700 million. And we have — in the small pot of money that, from a planning perspective, is a lot of money — three million dollars that we set aside for the next two years to do planning studies and planning efforts. And it really will help us to inform what our future capital projects are, but it's really a great opportunity at the policy level to help start addressing some of the issues that created the need in the first place. And so, you know, if you're — as an example, we're doing a growth-management plan right now, and part of it is to identify infrastructure and facility gaps in a certain area of our city. But then the policy side to it is, let's address the issues that led to this facility gap in the first place. And at the beginning, when I was talking about how do you match capital planning versus capital investment, that's your opportunity, just because it's — you're never going to have enough money to address all of the capital gaps and needs that you have in your city. But if you're also taking the opportunity to create new revenue streams, to create new policy that maybe you can help offset or at least, you know, partner the public with the private investment, you have some real significant opportunities to make those inroads. And so that's one of the things I would really encourage people is, you know, if you have an opportunity to weigh in on your capital plan, try to get some funds in there earmarked for planning studies, use those planning studies to not only identify the capital needs, but then also to address from a policy level, from a planning perspective, some of the issues that you're having in your city to help bring those two different issues together as one.

[00:34:44.250] AD: Yeah, that just so beautifully speaks to why, why we want to bring a planning focus to capital improvements — like, as you say, bad investments lead to bad outcomes, or maybe not thoughtful investments lead to bad outcomes. And so if we can bring that planning perspective, that long-term vision, that acknowledgment of the greater community needs and goals, so that decision making going forward is informed by that long-term vision and those community goals, better outcomes are almost inevitable. So well done in El Paso [laughs].

[00:35:21.000] AH: Thank you. Appreciate it. We're still working on it. I don't want to make it seem like it's, it's a, it's a done process. You know, it is really about building support internally from your organization, getting other departments to see the value and the need in doing good planning. And so it is a process. Again, I don't want to make it seem like, you know, we're there, but at the same time, we started with a really good comprehensive plan. It has this shared vision that led to our strategic plan that has a shared vision then with what we're trying to accomplish on the capital-planning side. And so it's like, you know, this, this cycle that we're trying to go through, and this is the process that, again, is going to inform our next comprehensive plan or our next capital plan. So starting to try to grease the wheels, and I think we're headed in the right direction, definitely.

[00:36:13.440] AD: Yeah, very inspiring to hear this. Great. So, in terms of applying the new prioritization policy to your process going forward, it sounds like things were put on hold for a while. You just talked about the reset. So where are you now in that process in terms of the new budgeting, planning cycles and looking forward?

[00:36:35.880] AH: So our new fiscal year started in September. Just because of the COVID impacts, we are not issuing any new debt for this fiscal year. And so where we're at right now is really trying to evaluate what the COVID impact is going to be. Again, we were projecting a $65 million budget shortfall. One of the things that we've seen with some of the revenue projections is that it's not as bad as we were projecting it to be. And so where we're at right now is we're in the process of reprioritization of our deferred project list. We're working right now with our city engineer to make that presentation to council to say, you know, here are the projects based on the revenue projections that we're now seeing, that we think that we should prioritize. Again, that hasn't taken place yet. I think we're still waiting to really see, with some of these revenue things, where we're at in the next couple of months. But it really is, from a timing perspective, actually pretty good because we recently did our public-safety bonds in 2019. And then in 2021, our existing quality-of-life bond actually is complete. And so one of the things that we're going to do is dovetail, hopefully, into a new discussion about what our new priority should be as part of, perhaps, a new quality-of-life bond. And so that's one of the things I think that we're looking ahead towards is, if we don't have the opportunity to fund the projects that were deferred with our existing capital plan, can they be rolled into a new capital plan that, hopefully, moving forward, we're in a different place economically, and it's something that's palatable to the voters who have to approve the bond. And perhaps we can be identifying additional projects through our different planning studies that we're doing to help roll out a new set of projects as part of a new capital plan. So to answer your question, I mean, we're, we're still in the process of finalizing that list. We're waiting to see how things shake out from a financial standpoint. But I think we're pretty confident, and we're very comfortable based on the policy recommendations in our, in our CIP prioritization policy of what our recommendations should be based on facts, based on data, and really not trying to let political influence sway the projects as much as perhaps they, they have been in the past.

[00:39:22.170] AD: Great. Yeah, I'm curious, like, when you're looking at your reprioritized project list versus the original list, are you seeing any trends in the types of projects that made it through or, or any, any other — yeah, I guess trends that you've noticed in, in these new outcomes?

[00:39:41.660] AH: Yeah, so I think that, you know, in terms of the projects — so we had about 75 that were deferred, that were in some stage of design, that hadn't made it to construction. And so those were the projects, the types of projects that were placed on hold. If they were contributing to our long-term maintenance, they placed on hold, and then also if they were not in construction, they were also placed on hold. And so the interesting thing, I think — we broke up our projects into two different groups, so one was more of our facilities group. And then the other types of projects were our streets group. And it was just because when we were doing the analysis, we were dealing with points versus lines. And so — in GIS, it has that limitation. That was really the rationale for it. But one of the interesting things was that from a facilities perspective, if it was a rehabilitation, it was more likely to be located in a lower-income area, because it was traditionally a facility that was built several years ago. And so some of the migration within our city has already taken place where some of the more affluent people have left those neighborhoods and moved to other neighborhoods. But then also, again, when we're talking about the built environment, those older neighborhoods then were more, more financially productive. And so one of the interesting things is that most of the time, when we're talking about rehabilitations where they're in these older neighborhoods that are already in good locations in the city, so that's what I was saying that was kind of interesting, that were — the location of a lot of our facilities are in the right places. I think the biggest change that we saw, though, was really on our streets projects, and it was really because of the return on investment. And I think that's something that should be applauded, because I think pretty much all cities are dealing with not having enough money for maintaining infrastructure for streets. And so I know that a lot of times cities rely on their pavement condition index [PCI], which basically gives a score to the pavement, and it's between zero and a hundred, and the higher you are to a hundred the better [the] street condition. I know that a lot of times cities prioritize based on pavement condition index. The problem with that is that it gives off the impression that at some point you're going to get to all the bad streets. And the reality is, is that you probably won't ever do that. I know in El Paso, our magic number is that we need to do $44 million each year for street maintenance to get our PCI score, our pavement condition index score, up to a 70, which is serviceable. We contribute $10 million each year. So that's a $34 million shortfall, and then it just has this precipitous effect that every year you don't get that $44 million, then your streets get worse and worse and worse [laughs]. The good news is, is that if you prioritize projects that have really high return on investment, at least from a, from a taxation standpoint, it's going to be focusing your dollars in areas that are most productive in your city, which has a multiplier effect when you think about investments. And so I think that was the thing that we saw that was most interesting and fascinating about approaching streets projects this way is that some of the projects that were high priority were high priority because of the PCI score. But then when you factored in return on investment, it was actually something that was quite different. And so obviously that's going to be part of the conversation going forward is, should PCI be part of the conversation as opposed to the conversation? Because traditionally, when we have prioritized streets projects, it was pretty much [based] on the most traveled streets and the PCI score, and adding this factor into it, I think, is going to be interesting to see how that goes.

[00:43:47.430] AD: Wow, that is fascinating. Yeah, so I think we've, we've done a pretty good job of covering the prioritization policy and how you're applying it. Is there anything else that you wanted to share about how that process is going in El Paso and what the outcomes are looking like?

[00:44:03.930] AH: Yeah, I mean, I think the one thing that I would encourage people to do is if you're thinking about doing a prioritization policy, really making it something that's applicable to your local community. It just so happens that the factors that we were looking at were part of the conversation that was already taking place at some level for some of our projects. And so a return on investment was something that we were already looking at, for example, with some of our federal projects, streets projects, and how we prioritized those. And so it was something that people were familiar with, something that people were comfortable with. Your city or your elected officials may not be comfortable with that metric, and so as you develop your policy, utilizing some things, some, some issues, some data points that are very relevant to your community, I think, is something that's really important to do. I would also say, don't complicate your CIP policy just because at the end of the day, you have to get up and explain it to people. And I think that sometimes is a mistake that we as planners make is that we get so excited about the data and some of the theoretical aspects of what we do that when it comes to explaining to a layperson, the response sometimes is like, "I have no idea what you just said." And it's really important to keep in mind that your audience is perhaps elected officials who aren't super familiar with the planning process or planning concepts, and then also the residents of your city who may be more or less familiar with those things. And so I think, you know, as straightforward as the analysis can be, you know, have it be like that; have it be something that's very easy for people to intuitively look at and understand. And if you want to nerd out behind the scenes, if you will, do that, because people don't need to know the inner workings of how you develop these things, but just being able to explain in a way that's very concise and easy to understand. That was something I think is what I learned through this process is to not overcomplicate it. That's why we only went with four factors. You also, I think, want to be cognizant of when you're doing these scorings that you do have some opportunity to manipulate the data in a way that's actually for good, which is that, you know, just don't let the data speak for you. Really make sure that you interpret the data and interpret it in a way that makes your recommendations clear. And so when I say that, what I mean is that if you use a scoring system, and I'm not saying that this is what we did, but say it was a scoring system from one to five. One of the things that sometimes it gives the impression of people is that projects that are close in score are — maybe they can be interchangeable from a prioritization standpoint. So if there was like a half a point that separated it, they're like, well, it's only half a point. I think that creating sep— greater separation in your scoring is really helpful because then it really makes clear what your top priorities are and that the projects that aren't the priority, it's very clear that they're not the priority. And so that's what I mean when I say just not allowing the data to just dictate the discussion, but really being mindful of what it's saying and creating that clear separation of what your priorities are. And then the last thing I would say is, really, for us, it was really important to just get a process in place where you're maybe not necessarily thinking about the long-term policy implications of, of, for example, developing a new policy. Maybe that's not your end goal, but really, at least from a data collection, a data management standpoint, at least preparing your data to quickly do these analyses. I think that was one of the things that was really apparent during our response to COVID was that, man, we didn't have a lot of the data that we needed. And so we should at least start collecting it because we didn't know what the next thing that the public was going to need to know or what the elected officials [were] going to need to know. And so really just getting your data in place where, you know, if you start mapping out all the locations of all your projects and you have some socioeconomic characteristics that you're looking at, and then one day someone's like, we should have a CIP policy, and then you can quickly churn something out and at least make them aware of, OK, these are the locations of our projects in relationship to household income, you know. And I think, again, that goes back to my point of just being prepared, just because you don't know where the conversations will lead, and you need to, I think, as planners be quick and ready to respond as the questions come up.

[00:49:10.130] AD: Mmhmm. Yeah, and that, that piece about planners being the keepers of data is so important in terms of the value of planning. We've heard from cities like Seattle and New York City that really the planners have stepped up and taken over that role of gathering the data, interpreting the data, standardizing data from different sources so that it is easy to use. And so when officials or, yeah, other groups need the data, the planning department is there to provide that information in a really usable format. So it's great to hear that echoed [laughs]. So, Alex, where can listeners learn more about the City of El Paso's CIP-reprioritization process?

[00:49:54.670] AH: So, in terms of the resources that we have available, so we do have several dashboards that we've put together. Our dashboards are tracking things such as our active projects, our completed projects, our spending. We also have information related to each of our bonds and our bond-development process that went into that. We also have made available some different tools that we track things like our pavement condition index. And we also are going to be making a presentation, as I mentioned, in the upcoming weeks on our CIP-prioritization policy to city council as part of our recalibration of our deferred projects.

[00:50:43.790] AH: Great. We will get some links for some of those resources and we will post them to the episode page on planning dot org []. This has been a really inspiring conversation. Are there any final thoughts that you want to share before we wrap up?

[00:51:00.820] AH: No, Ann, you know, I really appreciate the time again, the opportunity to speak about what we're doing in El Paso. I hope that the listeners found it to be beneficial. And again, you know, if there's any follow-up questions, I'd be happy to answer those, if any listeners have those.

[00:51:17.400] AD: Great. Thank you so much, Alex.

[00:51:19.960] AH: Thank you. I appreciate it.


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