AFTER EXECUTION OF ALL DOCUMENTS, PLEASE CONTACT …

CITY OF EL PASO, TEXAS

AGENDA ITEM DEPARTMENT HEAD’S SUMMARY FORM

DEPARTMENT: El Paso Water Utilities Public - Service Board (EPWater)

AGENDA DATE: Introduction - ___________, 2020

Public Hearing - ____________, 2020

CONTACT PERSON/PHONE: James Wolff, Real Estate Manager, 594-5511

DISTRICT(S) AFFECTED: District 4.

SUBJECT: APPROVE the following Ordinance

Authorizing the City Manager to sign a Contract of Sale with El Paso Electric Company for the

sale of approximately 5 acres of land being a portion of Tract 5, John Barker Survey No. 10, City

of El Paso, El Paso County, Texas. (District: 8) EPWater, James Wolff, Real Estate Manager

(915) 594-5511.

BACKGROUND / DISCUSSION:

This parcel of land is owned by the City of El Paso and managed by the El Paso Water Utilities -

Public Service Board (EPWU/PSB). On January 9, 2019, the Public Service Board declared the

property inexpedient to the water system and authorized the President/CEO of El Paso Water to

obtain an appraisal of the property. The property appraised by Ralph Sellers & Associates at

$18,000 per acre.

PRIOR COUNCIL ACTION:

Has the Council previously considered this item or a closely related one?

October 6, 2015, the City Council approved the sale of approximately 0.2281 acres of land

owned by the City of El Paso and managed by EPWater, to El Paso Electric for expansion of a

subsation.

AMOUNT AND SOURCE OF FUNDING: N\A

BOARD / COMMISSION ACTION:

On January 9, 2019, the El Paso Water Utilities - Public Service Board declared the property

inexpedient to the system and authorized the President/CEO to sell the property.

On September 9, 2020, the El Paso Water Utilities - Public Service Board recommended that the

property be sold to Northtowne Village Joint Venture and authorized the President/CEO to

forward the recommendation to the El Paso City Council for approval.

AFTER EXECUTION OF ALL DOCUMENTS, PLEASE CONTACT

JAMES WOLFF TO PICK UP THE DOCUMENTS. 594-5511. THANK

YOU.

ORDINANCE NO. ________________20-1008-156 | 1030979Sale of 5 Acre Parcel to the El Paso Electric CompanyRAB Page 1 of 2

ORDINANCE NO. ____________________

AN ORDINANCE AUTHORIZING THE CITY MANAGER TO SIGN A CONTRACTOF SALE AND SPECIAL WARRANTY DEED AND ANY OTHER DOCUMENTSNECESSARY TO CONVEY TO THE EL PASO ELECTRIC COMPANY, A 5 ACREPARCEL OF LAND IN TRACT 5, JOHN BARKER SURVEY NO. 10, CITY OF ELPASO, EL PASO COUNTY, TEXAS.

WHEREAS, the El Paso Water Utilities Public Service Board (EPWater) holds certainreal properties in its land inventory that are owned by the City of El Paso but are under themanagement and control of EPWater; and,

WHEREAS, at its regular meeting on January 9, 2019, the Public Service Boarddetermined approximately 5 acres of land being in Tract 5, John Barker Survey No. 10, City ofEl Paso, El Paso County, Texas, to be inexpedient to the water system and should be sold inaccordance with state law; and,

WHEREAS, at its regular meeting on September 9, 2020, the Public Service Boardawarded the sale bid to the El Paso Electric Company for the bid amount of $136,000.00, andadopted a Resolution making the findings set forth hereinabove and requesting the El Paso CityCouncil pass an Ordinance authorizing the City Manager to sign a Contract of Sale and a SpecialWarranty Deed and any and all necessary documents to complete the conveyance to the El PasoElectric Company;

NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THECITY OF EL PASO, TEXAS;

That the City Manager is authorized to sign a Contract of Sale, Special Warranty Deed,and any other necessary documents, in a form approved by the City Attorney’s Office, conveyingto the El Paso Electric Company, the following identified real property:

Approximately 5 acres of land being in Tract 5, John Barker Survey No. 10, City of ElPaso, El Paso County, Texas and more particularly described in Exhibit “A” attachedhereto and made a part hereof for all purposes.

(Signatures begin on following page)

ORDINANCE NO. ________________20-1008-156 | 1030979Sale of 5 Acre Parcel to the El Paso Electric CompanyRAB Page 2 of 2

ADOPTED this _____ day of _______________, 2020.

CITY OF EL PASO:

________________________Dee Margo,Mayor

ATTEST:

__________________________Laura D. Prince,City Clerk

APPROVED AS TO FORM:

__________________________Roberta Brito,Assistant City Attorney

APPROVED AS TO FORM:

_________________________ Daniel Ortiz,General Counsel

TO: Roberta Britto, Assistant City Attorney FROM: James W. Wolff Real Estate Manager DATE: September 22, 2020 SUBJECT: Placement of Item on City Council Agenda

City Council authorizing the City Manager to sign Contract of Sale and Special Warranty Deed conveying 5 acres of property located on a portion of Tract 5, John Barker Survey No. 10, City of El Paso, El Paso County, Texas

____________________________________________________________________________________________________________ This is a request for review and of the documents necessary to place an item on the City Council agenda for approval of the above referenced sale of property from the City of El Paso to the El Paso Electric Company. All of the standard documents are attached including the DHS form, proposed Ordinance, Deed, and Contract of Sale. The subject property is City of El Paso property managed and controlled by the El Paso Water Utilities - Public Service Board (EPWater). The Public Service Board determined the land inexpedient to the water system and was forwarded to City staff for consideration as required by the Joint Resolution between the City and EPWater. City staff reviewed and approved the sale. We would like to place this item on City Council agenda for introduction and public hearing for approval of the sale. Also attached are the following documents: Attachment A - DHS Attachment B - Ordinance Attachment C – Special Warranty Deed Attachment D – Contract of Sale Attachment E – Title Commitment Attachment F – Appraisals

The wording of the Ordinance should be as follows: AN ORDINANCE AUTHORIZING THE CITY MANAGER TO SIGN A CONTRACT OF SALE AND SPECIAL WARRANTY DEED AND ANY OTHER DOCUMENTS NECESSARY TO CONVEY TO THE EL PASO ELECTRIC COMPANY, A 5 ACRE PARCEL OF LAND IN TRACT 5, JOHN BARKER SURVEY NO. 10, CITY OF EL PASO, EL PASO COUNTY, TEXAS. (District 8) El Paso Water Utilities, James Wolff, Real Estate Manager. (915) 594-5511.

TO: Tomás González, City Manager for The City of El Paso, Texas THROUGH: Marcela Navarrete, Vice President of Strategic, Financial and Management Services FROM: Alma de Anda, Utility Land & Water Rights Manager DATE: September 22, 2020 SUBJECT: Request to place Item for Introduction on October 14, 2020 and for Action on Regular City

Council Agenda for October 28, 2020 for Contract of Sale, Special Warranty Deed and Other

Documents Necessary to Convey 5 Acres of Land

Agenda Posting Language:

An Ordinance Authorizing the City Manager to sign a contract of sale, special warranty deed and any other

documents necessary to convey 5 acres of land more or less, being described as a portion of Tract 5, John

Barker Survey No. 10, City of El Paso, El Paso County, Texas to El Paso Electric Company at a value of

$18,000 per acre.

.

(All Districts) El Paso Water Utilities, James Wolff, Real Estate Manager, (915) 594-5511.

This agenda item is pursuant to Contract of Sale, that was considered and approved by the El Paso Water

Utilities-Public Service Board on September 9, 2020, requesting the City Council of El Paso to authorize the City

Manager to sign a contract of Sale, Special Warranty Deed and any other documents necessary to convey 5 acres

of land more or less, described as a portion of Tract 5, John Barker Survey No. 10, City of El Paso, El Paso

County, Texas to El Paso Electric Company at a value of $18,000 per acre.

EPWU has determined 5 acres of land more or less to be inexpedient to the water system and authorized the

President/CEO to have the land appraised and thereafter to forward the recommendations to the El Paso City

Council for the sale of the identified property.

If there are any questions, please call me directly at 594-5513 or email me at [email protected].

Thank you for your attention to this matter.

Attachments: Department Head Summary Form Contract of Sale

Proposed City Council Ordinance Memo to City Attorney-Sale

Appraisal by Martha Gayle Reid Title Commitment

Survey

cc: The Honorable Mayor Dee Margo (email) John Balliew, P.E., President/CEO EPWU-PSB (email)

City Council Representatives (email) Art Duran, CFO, EPWU-PSB (email)

Karla Nieman, City Attorney (email) Daniel Ortiz, General Counsel, EPWU-PSB (email)

Robert Cortinas, CFO (email) Laura D. Pine, City Clerk (email)

Olivia Zepeda, Chief of Staff, Mayor (email) Diana Cedillo, City Attorney’s Office (email)

Paul Braden, Norton, Rose, Fulbright, Bond Counsel (email)

A REAL PROPERTY APPRAISAL PRESENTED IN A NARRATIVE REPORT FORMAT

AS OF: SEPTEMBER 13, 2019

(Primary Inspection Date)

PREPARED FOR:

Ms. Alma De Anda EL PASO WATER

1154 Hawkins Boulevard El Paso, Texas 79925

PREPARED BY:

Martha Gayle Reid Lynch, MAI Gayle-Reid Appraisal Services, Inc.

600 Sunland Park Drive, Building #4, Suite 100 El Paso, Texas 79912

MOUNTAINOUS RAW LAND

WEST OF INTERSTATE 10 &

NORTH OF EXECUTIVE CENTER BLVD. EL PASO, EL PASO COUNTY, TEXAS

(PROPERTY OWNER: CITY OF EL PASO

A REAL PROPERTY APPRAISAL PRESENTED IN A NARRATIVE REPORT FORMAT

MOUNTAINOUS RAW LAND

EL PASO, TEXAS

AS OF: SEPTEMBER 13, 2019 (Subject is a 5 Acre portion of a Larger 23 Acre Parcel)

5 Ac. Location

GAYLE-REID Appraisal Services, Inc.

Gayle-Reid Appraisal Services, Inc. • 600 Sunland Park, Building #4• El Paso, Texas 79912 • Phone: 915-203-2465 i

September 19, 2019

Ms. Alma De Anda EL PASO WATER 1154 Hawkins Boulevard El Paso, Texas 79925

Re: Proposed 5 Acre sale to El Paso Electric Company (West of I-10 & North of Executive Center Boulevard).

Dear Ms. De Anda:

In accordance with your instructions, I have prepared a Narrative Appraisal of the as is value of the 5 acre tract of land located north of the City’s waste water treatment plant and west of Interstate 10 in Northwest El Paso, Texas. This appraisal is presented in a Summarized Report Format.

The as is market value is as of September 13, 2019, the date of my primary inspection. The market value estimated below is subject to the assumptions, limiting conditions, and certifications that are set forth in the following appraisal report. No professional topography maps, survey, or useable area determinations have been made available to the appraiser. Along with information provided by the client I have estimated the required information; however, it cannot be guaranteed as I am neither a surveyor nor an engineer. The gross land area of the larger parcel been supplied by the El Paso Central Appraisal District and the part to be sold to El Paso Electric Company was provided by the client. The client provided legal description.

All factors believed to be pertinent to the appraisal assignment have been investigated and analyzed. Market data researched included sales of comparable unimproved parcels of land. The Sales Comparison Approach was used in this analysis. From the adjusted comparable data and reconciliation of indications, an estimate of value was concluded for the subject 5 acre parcel.

Based upon these investigations and analyses, and my judgment and experience as an appraiser, it is my professional opinion that the applicable market value of the fee simple interest in the subject property to be sold to the El Paso Electric Company as of September 13, 2019 was:

$90,000 OPINION OF MARKET VALUE

(5 Acre Tract of Raw, Undeveloped Land)

Page Two of Letter of Transmittal Dated September 19, 2019

Gayle-Reid Appraisal Services, Inc.• 600 Sunland Park, Building #4 • El Paso, Texas 79912 • Phone: 915-203-2465 ii

The appraisal was based upon the larger parcel analysis. The subject 5 acres does not have access without the larger parcel via other land owned by the City of El Paso. As the highest and best use of the remainder (after the sale of the 5 acres from the larger 23 acre site) remains the same as before the proposed sale and has no physical or economic adverse effect from the reduction of the 5 aces; no damages are associated with the proposed sale.

The following appraisal report was prepared for the El Paso Water and the City of El Paso. The amount of my fee was in no way contingent upon the value reported. The client intends to use the appraisal report for establishing a sale price for the 5 acre tract of land to facilitate the sale to El Paso Electric Company for a future substation.

In my opinion, the following appraisal report of the subject property was prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Foundation, and the Code of Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. Should you have any questions concerning the value estimates or data in the report, please call. Thank you for the opportunity to provide this service.

MGR: me Attachments

SUMMARY OF SALIENT FACTS

Gayle-Reid Appraisal Services, Inc. • 600 Sunland Park, Building #4• El Paso, Texas 79912 • Phone: 915-203-2465 iii

Subject Property: 5 Acre portion of a 23 Acre Tract of Lands Type of Property: Vacant; Mountainous Land Property Address: W of I-10 & N of Executive Center Blvd. El Paso, Texas Zoning Classification: M-3, Industrial Flood Zone Designation: Flood Zone C School District: El Paso Independent School District Zip Code: 79912 “As Is” Effective Appraisal Date: September 13, 2019 Date of Report: September 19, 2019 Purpose of the Appraisal: “As Is” Market Value Use of the Report: Establishing Market Value for Sale to EPEC Property Rights Appraised: Fee Simple Highest & Best Use of Land If Vacant: Open Space, Flood Control, and Drainage Uses Marketing Time Estimate: 3 to 5 years

INDICATED MARKET VALUE ESTIMATE:

$90,000

AS OF SEPTEMBER 13, 2019

ASSUMPTIONS & LIMITING CONDITIONS

Created by Martha Gayle Reid Lynch, MAI Page iv

General Assumptions

The certification of value and conclusions developed in the appraisal report are subject

to the following assumptions and limiting conditions. Should any of the assumptions be

proved to be incorrect, the appraised value of the property could change.

• The Appraiser assumes no responsibility for matters of legal nature affecting the property appraised or the title thereto, nor does the Appraiser render any opinions as to the title, which is assumed to be good and marketable. All liens and encumbrances have been disregarded. The property is appraised as though free and clear (unless otherwise stated in the report) and under responsible ownership and competent management.

• Information, including the legal description of the property, income and expense estimates (if applicable), and opinions furnished to the Appraiser and contained in the report were obtained from sources considered reliable and are believed to correct. However, no warranty is given for its accuracy.

• Any plats and sketches in the report may show approximate dimensions and are included to assist the reader in visualizing the subject property; however, no responsibility is assumed for the accuracy of these diagrams. The Appraiser has made no survey of the subject property for the purpose of the report.

• Any engineering studies, soil reports, environmental studies, or other such studies prepared by third parties and referenced in this report are assumed to be correct.

• It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures (if any) that render them more or less valuable. The Appraiser assumes no responsibility for such conditions, or for engineering and/or any other studies that may be required to discover them. A visual inspection was made and items of deferred maintenance or physical defects (if any) have been noted and considered in the report.

• It is assumed there is full compliance with all applicable federal, state, and local environmental regulations and laws unless the lack of compliance is stated, described, and considered in this report.

• It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined, and considered in this report.

• It is assumed that all required licenses, certificates of occupancy, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based.


Created by Martha Gayle Reid Lynch, MAI Page v

• It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report.

• The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate valuations for land and improvements must not be used in conjunction with any other appraisal, and are invalid if so used.

• The Appraiser is not qualified to detect hazardous waste and/or toxic materials. Any comment by the Appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The Appraiser’s value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions or for any expertise or engineering knowledge required to discover them. The Appraiser’s descriptions and resulting comments are the result of the routine observations made during the appraisal process. The client is urged to retain an expert in this field, if desired.

• Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine whether or not it is in conformity with the various detailed requirements of the Americans with Disabilities Act (ADA). The presence of architectural and communications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property’s value, marketability, or utility. The ADA became effective January 26, 1992.

• Any proposed improvements (if applicable) are assumed that they will be completed in a professional manner and in accordance with the submitted plans and specifications.

Specific Assumptions

The value estimate and conclusions developed in this appraisal report are subject to the

following specific assumptions. If any of the assumptions are subsequently proved to be

incorrect, the appraised value of the property could change.

• The land area of 5 acres has been provided by the client, the City of El Paso (El Paso Water) and the intended purchaser El Paso Electric Company. The subject is part of a larger 23 acre parcel. A survey has not been provided; however, for the purposes of this report the areas of the subject and the larger parcel are


Created by Martha Gayle Reid Lynch, MAI Page vi

considered reasonably accurate and has been used in this appraisal. Should the area change, the value estimate could also change.

• Specific amount or locations of usable area have not been provided by the client; I have estimated the useable area based upon aerials and my onsite inspections. The useable area is only an estimate and should a definite area be required; an engineer/surveyor should be consulted.

Limiting Conditions

Use of this appraisal report and the value estimate and conclusions developed herein

are subject to the following limiting conditions.

• The appraisal of any interest less than the whole fee simple estate relates only to the fractional interest defined. The value of such a fractional interest plus the value of all other fractional interests may or may not equal the value of the entire fee simple estate considered as a whole.

• The author of the appraisal report is not required to give further consultation, testimony, or be in attendance in court with reference to the appraised property, unless arrangements have been previously made.

• Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the Appraiser and in any event only with proper written qualification and only in its entirety.

• Neither all, nor any part of the contents of this report (especially any value conclusions, the identity of the appraiser, or reference to the MAI designation) shall be disseminated to the public through advertising, public relations, news, sales, or other media without the prior written consent and approval of the appraiser. Neither my engagement to make this appraisal (or any future appraisals for this client), nor any compensation therefor, are contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event.

SCOPE OF THE APPRAISAL

Created by Martha Gayle Reid Lynch, MAI Page vii

To the best of the Appraiser’s knowledge, this appraisal has been made in accordance

with all of the Uniform Standards of Professional Appraisal Practice as promulgated by

the Appraisal Standards Board of the Appraisal Foundation, rules of the Texas Real Estate

Commission, and accepted techniques, standards, methods, and procedures of the

Appraisal Institute. My assignment was to estimate the unencumbered, Fee Simple Market

Value of the subject parcel.

An appraisal report is an economic analysis of the subject property. This analysis is

used to estimate market value. It is not an environmental analysis, physical or engineering

study, and no items of legal nature are to be considered legal opinions. If there are any

questions concerning any of these items, the appropriate expert opinion should be sought.

In preparing this appraisal, (1) I have inspected the subject parcel on site, from

Interstate 10, via adjacent properties and aerial maps; (2) researched the surrounding

neighborhood and local area for factors that affect value, (3) gathered and confirmed

information on comparable vacant land sales that are located at or near the base of

mountain ranges or mountainous tracts of land and listings for sale that have similar

terrain, (4) developed the Sales Comparison Approach to value to arrive at estimates of

market value for the subject property as vacant land, and (5) prepared a narrative appraisal

report presenting the factual data and a value conclusions for the parcel.

The subject and larger parcel are considered slope land with significant grade

elevations and arroyos running from the east to the west. The area can generally be used

for open area requirements and maintained in its natural condition. The subject has been

valued as such using comparable properties.

This Complete Appraisal Report is a recapitulation of my data, analyses, and

conclusions.

Created by Martha Gayle Reid Lynch, MAI

APPRAISAL REPORT OF:

SLOPING, MOUNTAINOUS RAW LAND LOCATED

WEST OF INTERSTATE 10 &

NORTH OF EXECUTIVE CENTER BOULEVARD (Below the Proposed Mesa Parkway)

EL PASO, EL PASO COUNTY, TEXAS

Subject is the northerly 5-acre portion of the larger 23 acres outlined.

Subject 5 acres

APPRAISAL INTRODUCTION

Created by Martha Gayle Reid Lynch, MAI Page 1

Location, Size, and Description

The subject property is the northwesterly 5 acres of a larger 23 acre larger parcel of

land owned by the City of El Paso. The parcel is to be acquired by El Paso Electric

Company for a substation. The parcel is west of Interstate 10 and east of Paisano Drive,

and between Executive Center Boulevard and Sunland Park Drive in Northwest El Paso,

Texas. The proposed Mesa Parkway (according to exhibits provided by my client) is

adjacent to the subject parcel on the north. No surveys or professional engineering maps

have been provided. The exit for the Mesa Park Drive will be over I-10 and is presently

under construction. The Mesa Parkway will be an extension from the east and continue

onward to Loop 375 according to the provided exhibit. The subject is basically a square

parcel of land (based upon drawings provided) from the larger irregular shaped 23 acre

tract. The subject and larger parcel are and characterized as sloping land with severe

topography challenges.

The subject has been valued as part of the larger 23 acre parent parcel.

SUBJECT PARCEL LOCATIONS

APPRAISAL INTRODUCTION


Legal Descriptions of the Subject Property

The subject is legally described as a five acre portion of Tract 5, Barker Survey 10,

Abstract #7, El Paso, El Paso County, Texas. The legal description has been provided by

the client and the El Paso Central Appraisal District.

Ownership History

According to the client and El Paso Central Appraisal District, the subject parcel is

owned by the City of El Paso and has been for many years. It was purchased in a larger

parcel (larger than the 23 acres) according to warranty deeds provided by my client. To

the best of my knowledge the parcel is not being marketed or listed for sale. The El Paso

Electric Company is interested in purchasing the subject property from the City for a

proposed EPEC substation.

PREMISE OF THE APPRAISAL


Purpose Of the Appraisal

The purpose of this appraisal is to estimate the Market Value of the subject property in

accordance with the Definition of Market Value presented on Page 5. The property has

been valued in terms of cash or financial arrangements equivalent to cash.

Intended Use of the Report

It is my understanding the report will be used by the client for asset valuation and a

proposed sale to the El Paso Electric Company.

Intended User

The intended user of the report is El Paso Water for the benefit of the City of El Paso.

Property Rights Appraised

For purposes of this report, I have estimated the unencumbered, fee simple interest in

the subject property. The subject is unencumbered and undeveloped raw land. Fee

Simple, Leased Fee, and Leasehold are defined as follows.

A fee simple estate is absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the government powers of taxation, eminent domain, police power, and escheat.1

A leased fee estate is an ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others; the rights of lessor (the leased fee owner) and leased fee are specified by contract terms contained within the lease. 2

A leasehold estate is the right to use and occupy real estate for a stated term under the conditions conveyed in the lease. 3

1 The Dictionary of Real Estate, Fifty Edition, Published by The Appraisal Institute, 2010, Page 78. 2 The Appraisal of Real Estate, Fourteenth Addition, Published by the Appraisal Institute, 2013, Page 72. 3 Ibid.

PREMISE OF THE APPRAISAL


Effective Date of the Value Estimate & Date of the Report

The subject property has been valued as of September 13, 2019, the date of my initial

inspection. The property was personally inspected on this date and various other dates.

Research and analysis pertaining to the subject property was completed during the months

of August and September 2019. The appraisal report is dated September 19, 2019.

DEFINITION OF MARKET VALUE


The following market value definition, which appears in Title XI of the Financial

Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), is used for

purposes of this report.

Market Value means the most probable price, which a property should bring in a

competitive and open market under all conditions requisite to a fair sale, the buyer and

seller each acting prudently and knowledgeably, and assuming the price is not affected by

undue stimulus. Implicit in this definition are the consummation of a sale as of a specified

date and the passing of title from seller to buyer under conditions whereby:

(1) Buyer and seller are typically motivated;

(2) Both parties are well informed or well advised and acting in what they consider their own best interests;

(3) A reasonable time is allowed for exposure in the open market;

(4) Payment is made in terms of cash in U.S. Dollars or in terms of financial arrangements comparable thereto; and

(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.4

4 Federal Register, vol. 55, no. 163, August 22, 1990, pages 34228 and 34229; also quoted in the introduction to the Standards of Professional Appraisal Practice of the Appraisal Institute.


DATA PRESENTATION


EL PASO METROPOLITAN AREA DESCRIPTION

EL PASO METROPOLITAN AREA DATA


Introduction

The City of E Paso is in the far western corner of the U.S. and state of Texas. As of 2018, the population estimate for the city from the US Census was 682,669. The metropolitan area covers all El Paso and Hudspeth counties in Texas and has a population of estimate of 840,758 (2018). The El Paso metropolitan area forms part of the larger El Paso-Las Cruces (New Mexico) CSA with a population of 1,053,267. El Paso is the nation’s largest border city and the sixth largest city in Texas. El Paso is also in the top 20% of US performing economies.

El Paso is situated on the Rio Grande River across the Mexico-US border from Ciudad Juarez, the most populous city in the Mexican state of Chihuahua. The two cities, along with Las Cruces in the neighboring state of New Mexico, form a combined metropolitan area referred to as the Paso del Norte or El Paso-Juarez-Las Cruces. The region has over 2.7 million people and covers 256.3 square miles.

In 2010 and 2018, El Paso received an All-America City Award. Forbes (2016) reported El Paso, Texas as listed as #169 for best places for business and careers. The major industries were reported to be defense and education, with a gross metro product of $34.2 billion; median household income of $40,377, median home price of $142,000, job growth of 2.4% (2015) and cost of living 3% the national average according to the latest publication by Forbes Magazine. El Paso has ranked in the top three safest cities in the U.S. since 1997.

The history of El Paso spans 400 years beginning in 1582 when the Spaniards came through the Pass of the North (known as the El Paso area) to test the missionary and mining possibilities of New Mexico. Indian groups then inhabited the area.

Labor/Employment

According to the US Bureau of Labor Statistics, the unemployment rate available as of June 2019 was 3.3% as compared to July 2018 of 4.8% as compared to July 2017 of 4.4%. The current total civilian labor force was last reported to be 363,300 as of April 2019 compared to 357,900 in July 2018 versus 360,000 in November 2017. The top employment sectors are health-care, customer service, tech support, transportation and distribution, and the utility sector.



The top public employers in El Paso for 2018 were: Fort Bliss (Military and Civilian), El Paso Independent School District, Ysleta Independent School District, Tenant Hospitals (Combines Sierra Medical and Providence Hospitals), City of El Paso, T & T Staff Management LP, El Paso Healthcare System, LTD (Las Palmas & Del Sol combined), University of Texas at El Paso, El Paso Community College, El Paso County, and University Medical Center.

Economic data published by the US Bureau of Labor Statistics is now presented.







Labor Statistics for El Paso

EL PASO METROPOLITAN AREA


Local Government (Sources: Redco.org & City of El Paso website)

El Paso operates under a council-manager form of government. This system combines the leadership eight elected council members and an appointed local government manager to carry out its directives and oversee the delivery of public services. The mayor and council members serve staggered four-year terms. El Paso is the largest U.S. city to adopt this government type. The El Paso County Government operates under the Commissioners Court. Every four years, a county commissioner is elected in each precinct (4 electoral precincts). The county judge is elected countywide for the same term as commissioner and presides over the Commissioners Court. Voters in each precinct elect county attorneys, county and district clerks, county treasurers, sheriffs, tax assessor-collectors, justices of the peace and constables.

Transportation/Accessibility (Sources: El Paso International Airport, City of El Paso)

Located 6 miles east of downtown El Paso and 1.7 miles north of Interstate 10 (Exit 25), the El Paso International Airport serves as a gateway to west Texas, Northern Mexico, and Southern New Mexico and covers approximately 7,000 acres of land. Contributing greatly to regional transportation as well as industrial, commercial, and cargo activity, the El Paso Airport contains seven airlines that travel to eight of the nation’s ten largest connecting hubs. The El Paso Airport served a total of 3,065,393 passengers in 2011. Latest 2015 estimates indicate that on average 7,500 people travel in and out of EPIA every day. Airfreight that moved in and out of EPIA for 2015 was 176,758,000. There are 15 gates, 4 airlines, and 57 nonstop flights per day (2015)

El Paso international rail service is provided by Burlington Northern Santa Fe Railway (BNSF), Union Pacific (UP) and Ferromex. BNSF travels about 32,000 route miles in 28 U.S. states and two Canadian provinces. It delivers cars, coal, clothing, games, and many other products found in homes and businesses. Union Pacific is the largest railroad in North America, operating in the western two-thirds of the United States. Also operating key north/south corridors, the railroad serves 23 states and is the only railroad to serve all six major gateways to Mexico. UP delivers chemicals, coal, food and food products, forest products, grain and grain products, intermodal, metals and minerals, and automobiles and parts. In the spring of 2014, Union Pacific opened a major intermodal facility just west of El Paso in Santa Teresa, New Mexico, adjacent to the El Paso City Limits to the northwest.

Texas Department of Transportation has completed several projects and is working on additional projects citywide. These projects are designed for efficiency, traffic reduction and safety enhancement. The Loop 375 interstate quadrant was redesigned and has enhanced accessibility and safety. Lanes are being added to the interstate on both the east and west portions of the city. The interstate – Trans Mountain Boulevard along with the US



Highway 54 and Transmountain Boulevard intersection have also undergone substantial redevelopment. The Border West Expressway is located west of downtown El Paso and south of I-10. It extends 7.4 miles from Racetrack Drive near Doniphan Road and New Mexico Highway 273 east to US 54, one mile east of Park Street. The project adds more lane miles for drivers in the area (providing an alternative to the interstate) plus will also improve access to UTEP, downtown destinations, and border crossings as well as the medical centers.

Utilities

El Paso Electric provides service to approximately 380,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley. Its service territory extends from Hatch, New Mexico to Van Horn, Texas. Natural gas service is provided by Texas Gas Service (TGS). TGS is the third largest natural gas distribution company in Texas, providing natural gas to more than 603,000 customers in 97 communities.

Texas Gas Service provides natural gas service to customers in Austin, El Paso and Rio Grande Valley areas as well as Galveston, Port Arthur, Weatherford and several communities in the Permian Basin and the Texas panhandle. TGS has a firm capacity for natural gas in El Paso at 226,675 MCF (thousand cubic feet). Water and wastewater services are provided by El Paso Water Utilities. The Public Service Board (PSB) of El Paso, Texas is the seven-member board of trustees that manages and controls El Paso Water Utilities and its systems. The board also oversees expenditures and the application of revenues. Six members are appointed by the El Paso City Council and the seventh member is the mayor, who represents municipal government. Members must be U.S. citizens and reside in El Paso County.

Healthcare

Sierra Providence Health Network is comprised of six hospitals, which include 508-bed Providence Memorial Hospital, 106-bed Children’s Hospital at Providence, 334-bed Sierra Medical Center, 48-bed Sierra Providence Physical Rehabilitation Hospital, 100-bed Sierra Providence Eastside Hospital. Sierra Medical Center recently received recognition from Health Grades as having a general-surgery program that rates in the top 5 percent nationally. Sierra Providence Physical Rehabilitation Hospital is equipped to handle brain injuries and other serious disorders and is the only hospital in El Paso that holds nine CARF accreditations. A new hospital was recently opened at the Trans Mountain-I-10 intersection. Del Sol Medical Center is the only full-service hospital in East El Paso. The hospital specializes in emergency medicine, cardiovascular care, oncology, neuroscience, maternal/child services, women’s services, and rehabilitation. Del Sol also has nationally accredited Chest Pain Center in its emergency department. Two other specialty medical facilities and medical center offices have been completed for the



City of Horizon Area (First Horizon and Las Palmas Urgent Care, respectively), just southeast of the El Paso City limits.

University Medical Center of El Paso is the region’s only not-for-profit, community-owned hospital and health system, and a regional referral center for patients in need of specialty care. It is a three-time designee as one of America’s Top 100 hospitals. UMC is the only hospital in the region to meet the requirements established by the Texas and the American College of Surgeons for Level I Trauma Centers.

Las Palmas Medical Center is located on the West Side of El Paso. There are 905 employees that provide service to the El Paso area. The services at Las Palmas include surgery, women’s and children’s services, neonatal intensive care unit, pediatric intensive care unit, cardiovascular services, and oncology. Las Palmas Del Sol Medical Center has the only accredited Chest Pain Center programs in the region.

William Beaumont Army Medical Center is a Department of Defense medical facility. It provides comprehensive care to all beneficiaries, including active-duty military, dependents, and retirees. WBAMC is a Level II Trauma Center and is one of only two trauma centers in El Paso County. 60% of trauma cases treated are military. Construction is underway on a 1.45 million square foot facility to replace the existing WNAMC. The facility with a total of four building complex is projected to cost over $1 billion dollars with $946 million being allotted by Congress in 2015. The project is located at the intersection of Loop 375 and Spur 601 on 270 acres of federal owned land. The project is scheduled to be completed by 2018. El Paso Specialty Hospital is made up of a diverse team of highly skilled and highly trained physicians specializing in all aspects of orthopedic, neurosurgical, pain-management and rehabilitative care. It is ranked top 5 percent in the nation, and for two consecutive years has been rated the best hospital in El Paso for total joint replacements and back surgery. It has also received the prestigious President’s Award, Best in the Nation and the Award of Excellence.

Office Market

According to the second quarter 2019, CoStar El Paso Office Market has a total of about 29 million square feet of rentable area and a vacancy of 5.5%. As of mid-year 2018 the vacancy rate of 6.5%. The current average quoted rental rate is $18.14 per square foot as compared to $14.85 per square foot in mid-2018.

Retail Market

According to the CoStar Retail Report, mid-year report or June 2019 report El Paso has a total of about 51.4 million square feet of rentable area. The vacancy rate is 4.4% as compared to last year of 5.8%. The quoted rental rate is $14.58 per square foot and compared to $16.01 per square foot one year ago. Within the past 12 months 590,000



square feet has been absorbed. Overall retail rates are estimated at 7.6% and shopping center rates at 7.4%.

A major new addition to the El Paso marketplace is the development at the northwest quadrant of Interstate 10 and Paseo Del Norte. West Towne Marketplace opened in late 2017 with a new major retailer Cabela’s. Additional stores are being added. Several other smaller developments have been constructed and are being constructed in the immediate area. Top Golf opened in Northwest El Paso’s Monticello development.

Industrial Market

According to the CoStar Industrial Market Report, mid-year 2019, El Paso has a total rentable area of about 63.1 million square feet with a most current vacancy of 7.0% and a quoted rental rate of $5.94 per square foot. The 2018 estimate was 7.64% and a rental rate of $5.62 per square foot.

New Developments (Source: El Paso Times and Community Publications)

In the 2012 election, voters overwhelmingly voted in favor of the Quality of Life Bonds, Propositions 1 & 2. This approves spending over $470 million to improve area parks, libraries, museums, community centers, pools, and to build a multipurpose arena, making El Paso a more attractive place to live. In order to help fund these projects, homeowners will spend approximately $41.42 more a year through 2030 (for homes valued at $100,000).

New development has occurred with the construction of Southwest University Park, for the triple a baseball team (Chihuahuas). Another development has been approved for the Downtown area which is for a multi-purpose arena. A new 26-story Downtown El Paso mixed use development of primarily office is under construction. The project will include a mix of retail spaces, hotel rooms, and apartments and will be situated on a full city block. An eight-level parking garage is also part of this structure. Ongoing is the renovation of the Hotel Paso del Norte also in Downtown El Paso and The Camino Real is anticipated to complete its renovation this year (2019).

The Northwest El Paso, The Hospitals of Providence Transmountain Campus at the Loop 375 (Transmountain Road) and Interstate 10 overall quadrant opened in 2017. The property is a new teaching hospital with various medical office and research buildings surrounding the hospital.

Taxes

All real and personal property owned by companies doing business in El Paso is subject to payment of ad valorem property taxes. All facilities located within the municipal boundaries of El Paso are subject to property-tax levies from five taxing



entities: the city of El Paso, El Paso County, University Medical Center, El Paso Community College, and one of four school districts. Below presents a 2018 tax summary. 2019 data will not be published until October.



Sales & Use Tax Summary Tax Rate State Sales Tax 6.25% Municipal — City of El Paso 1.00% County — El Paso County 0.50% Municipal Transit — Sun City Area Transit Tax 0.50% Total El Paso Sales and Use Tax 8.25%

Summary & Conclusions

El Paso enjoys a relatively diversified and well-balanced, global economy that is influenced by three key ingredients: the national monetary trend, military programs, and the economic future of Mexico. The better of two nations, three states, and a multitude of ethnic groups come together between the banks of the Rio Grande river valley and the rugged Franklin Mountains. The economy is growing by all indicators. There is a good mix of manufacturing and trade. El Paso continues to attract new industry which is responsible for retraining the local labor force and is providing an investment and in areas of education and infrastructure. Continued population growth should increase demand for all types of real estate and services. New development is ongoing in Northeast, Northwest, Southeast, and Downtown El Paso.

NORTHWEST EL PASO MARKET AREA


Location and Description

The subject neighborhood and subject property are located in the city and county of El Paso, Texas. The neighborhood is commonly referred to as Northwest El Paso. The neighborhood is bounded by the Franklin Mountains on the east, University of Texas on the south, the Interstate 10, Paisano Drive, and Doniphan Drive on the west, and Trans Mountain Road and the newly developing residential subdivisions on the north. The subject neighborhood is located from three to fourteen miles northwest of Downtown El Paso. The subject property is located in the southwesterly portion of the neighborhood, west of Interstate 10 between Executive Center Boulevard and Sunland Park Drive.

Accessibility

Neighborhood accessibility is good. The major neighborhood arterials are Mesa Street (State Highway 20), Interstate 10, Executive Center Boulevard, Sunland Park Drive (that turns into Shadow Mountain Drive then turns into Westwind Drive), Doniphan Drive, Resler, Redd Road Artcraft Road, and Transmountain Boulevard. Within the neighborhood there are numerous minor arterials connecting the interstate with various residential subdivisions. The City of El Paso and Sun Metro are in the process of creating additional access routes through the subject neighborhood.

Road construction is ongoing at the North Mesa/I-10 and Sunland Park/I-10 interstate quadrants. The Border West Project by the Texas Department of Transportation is linking Paisano (Loop 375) with additional routes in the neighborhood. The projects are large projects and are increasing lanes also on the interstate in West El Paso. The El Paso International Airport is about 20 minutes from the subject and Downtown El Paso about 10.

Physical Features

The topography of the neighborhood is generally rugged, as erosion from the westerly slopes of the Franklin Mountains have creased ravines in an east-west direction. Significant arroyos and drainage channels (natural and constructed) run also in an east-west direction. Because of the topography features, development costs in the neighborhood have typically been higher than in most other areas of the city.

Population Characteristics

Population within the neighborhood boundaries as of December 2010 was estimated by the City of El Paso Planning Department to be 150,010. Over the census period of 2000 and 2010, the population has increased by 65%. Over 60% of the housing units are owner occupied. The subject neighborhood is one of the fastest growing areas in the city.

Development

The neighborhood is mainly residential in character with new subdivision development occurring. Residential development varies widely in the neighborhood. Houses range from



about $50,000 to over $1,000,000 and range in age from new construction to those over 50 years. The neighborhood contains few low-income housing projects. On average, most neighborhood residences are typically above the median El Paso home value.

Major commercial development in the neighborhood is found along North Mesa Street or in close proximity and around the regional mall at the intersection of Interstate 10 and Sunland Park Drive and the interstate quadrant with Transmountain Road. Other commercial development is found along portions of Mesa Hills Drive, Westwind Drive, Executive Center, and Thunderbird Drive.

At the far northerly portion of the neighborhood at the I-10 and Paseo Del Norte interstate quadrant is a partially completed 500,000 square foot retail development. The property is known as West Towne Market Place. Additional units of this development will be coming on throughout in 2018. At the northeast corner of Doniphan Drive and Sunset Road another commercial neighborhood development has recently been completed, the Sunset Station. These individual spaces are achieving some of the highest rental rates in the city.

Residential Development

Single-family homes in the subject neighborhood range in value from about $100,000 to over $2,000,000. The majority are in the $200,000 to $300,000 range. In general, the lesser expensive homes are found in the northerly portion of the neighborhood. The vast majority of neighborhood homes are owner-occupied. Hunt Building Corporation is in the process of developing single-family residential lots in the northern portion of the neighborhood in the Cimarron Subdivision and adjacent areas along with Desert View Homes that is developing the area north of Trans Mountain Boulevard (Loop 375 extension that connects Northwest El Paso to Northeast El Paso and travels through the Franklin Mountains). To the north of this development Enchanted Hills is being developed as a 750-acre mixed use development. It too is east of Interstate 10.

Duplex Development

Two-family to four-family residential structures are believed to account for less than 5% of the total housing stock. Statistical data segregating these types of developments are not readily available. Several “rows” of duplexes were noted within the neighborhood. Typically, these consisted of groupings of 10 to 20 duplexes near major arterials. In some cases, the rows of duplex development backed up to apartment development, and served as a buffer between the apartments and single-family residential subdivisions.

Apartment Development

Dispersed among the residential subdivisions are many garden-type apartment complexes. Most are located on major streets, and often serve as a buffer between a residential district and an arterial or commercial development.



Over the past ten years, apartment occupancy in the Northwest planning area has hovered in the upper 90%s. Apartment occupancy in the Northwest planning area is consistently above 95%. New construction has been recently completed near I-10 and Resler Drive and east of I-10 and north of Helen of Troy.

Industrial Development

Industrial uses are typically confined to the peripheral areas of Smeltertown in the southern portion, various industrial facilities along Doniphan Drive and within the Zach White Industrial District in the west-central portion of the neighborhood. Modern industrial development is also found in the newer areas known as Westport and Northwest Corporate Center. Industrial neighborhood vacancy for mid-year 2018 was about 21.1% with a total rentable area of industrial property of 6,204,603 square feet and reflects the vacancies of several very large industrial buildings in the Northwest Corporate Center. The quoted rental rate is presently $5.04 per square foot up from one year ago at $4.16 per square foot. The industrial market has been one of the slower El Paso markets.

Retail Development

The most active retail area is on and to the east of Interstate 10 at the Paseo Del Norte intersection with West Town Market Center developed by River Oaks Properties, a 500,000 square foot retail development (mostly completed); The Canyons at Cimarron (basically completed), a 92,000 square foot retail and office development by Riverbend Development at Paseo Del Norte and Resler; and the proposed 27,000 square foot Elements at Cimarron also fronting on Paseo Del Norte and just east of the Canyons. Also recently developed by Riverbend Development at the northeast corner of Doniphan and Sunset is The Station. These developments are upscale, modern construction.

The Outlet Shoppes at Trans Mountain is situated in this neighborhood. It has fairly recently completed Phase II at the intersection of Loop 375 (Transmountain Road) and Interstate Highway 10. Fast food restaurants, Discount Tires, and a convenience store are on found along the perimeter of the property.

Retail and hotel development is located at the intersection of Artcraft and Interstate Highway 10, with a Rudy’s B-B-Q Restaurant, Carl’s Jr., Holiday Inn Express Hotel and a Hampton Inn. Farther north and south of this intersection (and on the east side of I-10) MIMCO has developed additional retail centers with various phases and nearing total lease up. These centers and phases of centers have experienced good absorption.

Additional new development referred to above is occurring at the Sunland Park-Interstate 10 quadrant to the west. A new Twin Peaks restaurant, Daddy O’s carwash, and a medium sized retail/office center have been completed at this quadrant.

CoStar’s mid-year report indicates that there is a total of 10,200,000 square feet of leasable area. The vacancy rate for this market is 6.2%. General retail overall rates are reported to be 7.1% and strip centers 6.9%.



Office Development

The neighborhood office vacancy rate as of 2018 mid-year report was 9.0% with the average quoted office rental rate of $16.47 per square foot. There is a total of 4,987,478 square feet in this neighborhood.

Services

All public utilities, including water, sewer, natural gas, electricity, and telephone are available throughout the neighborhood. Police protection is provided by the El Paso Police Department. The neighborhood is served by the El Paso Fire Department. Fire protection is considered adequate for present demands. Emergency medical treatment is provided by the County hospital, University Medical Center, located on Alameda Avenue in Central El Paso just southwest of the neighborhood. Two major hospitals are located in the adjacent neighborhood to the south near the intersection of Schuster and North Mesa Street with an additional hospital located to the east.

Tenant Healthcare Corporation has completed construction on a new hospital in Northwest El Paso known as Providence Transmountain Campus. Construction began in 2015 of the 138-bed hospital serves one of the fast-growing neighborhoods, Northwest El Paso as well as Southern New Mexico. This hospital recently completed also serves as an additional teaching hospital for the medical students and faculty from Texas Tech University’s Paul L. Foster School of Medicine. It is located at the intersection of Transmountain Road and Resler Drive and is expected to create 300 jobs with an average rate of $45,000 per year. Medical office buildings supporting the hospital area have been completed and addition buildings are under construction.

Schools

The market area is served by two school districts: El Paso Independent School District and Canutillo Independent School District. El Paso Community College has the Northwest Campus located in the northern part of the neighborhood. University of Texas at El Paso is located adjacent to the subject neighborhood on the east.

Employment

Persons living within the subject neighborhood are employed in a variety of occupations. A large number work within the neighborhood boundaries in various office buildings and retail outlets. Others work in manufacturing jobs in the various industrial parks. Many commute to the downtown central business district. Income levels within the subject neighborhood are well above the citywide average.



Summary

The Northwest Planning Area is one of the fastest growing areas in the city. As the market area grows in population, there will be an increased demand for both residential and commercial property. Road construction is significant in the subject neighborhood and will provide easy access to all properties and all portions of the city. Residential development will continue to be the dominant land use in the market area, with commercial development locating within the concentrations of population.

New development includes the recently completed Sierra Providence Hospital at Trans Mountain and I-10 along with supporting medical office buildings, Sunset Station at Doniphan and Sunset and the major retail center under construction at the northwest corner of Paseo Del Norte and Intestate 10 (West Towne Market Place) with many units already opened. Office and retail occupancies are high along with rental rates. Projects are being strongly supported. The outlook for the area is good.

Maps of the metropolitan area and subject neighborhood and other neighborhood exhibits are presented on the following pages.



NEIGHBORHOOD LOCATOR MAP

PROPERTY DESCRIPTION


Page 25

EL PASO METROPOLITAN AREA LOCATOR MAP



Page 26

Location, Size, and Shape

The subject property is a 5 acre portion of a larger 23.07 acre parcel situated to the

west of Interstate 10 and to the east of Paisano Drive and north of Executive Center

Boulevard in El Paso, Texas. From drawings provided by my client, the 5 acre parcel to

be sold to the El Paso Electric Company appears to have a square shape and will be

adjacent to the proposed Mesa Parkway. Mesa Park Drive according to right of way

personnel at the Texas Department of Transportation way will be an overpass to Interstate

10 that will connect the area to the east of I-10 and Mesa Street to Interstate 10 frontage

roads (as part of the CD or collector-distributor lanes project). CD lanes run adjacent to I-

10 in both directions. The parkway will continue eastward to Loop 375.

The subject is in the far westerly portion of Northwest El Paso and in the path of the

slopes from the Franklin Mountains. It appears from aerial maps and topographical maps

provided by EPCAD arroyos from east of I-10 affect portions of the larger parcel; these in

turn create ravines and slopes traveling from east and west. No specific topography maps

or survey information have been provided. Data is based upon non-specific topography

maps, aerial maps, and visual inspections. Refer to the location map below and a summary

of parcel data.

Various maps, exhibits, and photographs are presented throughout this section of the

report.



Larger Parcel, Adjacent to I-10 proposed frontage roads (under construction)

General 5 Acre Location



Accessibility

Due to the topography of the site, accessibility of the subject parcel can only be made

from maintenance roads for the EPEC power lines via easements. The easements provide

access to maintain overhead lines and generally travel in a north to south direction in the

subject area. Once the Mesa Parkway is constructed (from the drawings provided), access

to the subject will be available via this public right of way as well. Due to the

construction project along Interstate 10 in the immediate area, various unpaved paths have

been created.

The general area is accessed via I-10 exits at Sunland Park Drive and Executive Center

Boulevard. Paisano Drive is to the west of the subject parcel. During my onsite

inspection, I accessed various portions of the subject and larger parcel traveling north

from the City of El Paso’s Northwest Wastewater Treatment Plant (701 Executive Center

Boulevard) via an access and maintenance road between the two major overhead power

lines.

The subject is about 10 minutes from downtown El Paso and about 25 minutes from

the El Paso International Airport.

Physical Characteristics

The subject larger parcel is irregular in shape and the part to be acquired appears to be

basically square. The subject parcels are raw undeveloped land in their natural vegetate

state. The parcels are the continuation of slope land from the Franklin Mountains

foothills. Useable area has been estimated at less than 50%. The usable area is only an

estimate. Only an engineer or surveyor could determine the useable area should an

exact size be required. The site is level in some areas, sloped in some with portions being

affected by an arroyo.



According to Flood Zone Map 480214 0032C, it appears the subject 5 acre portion of

the larger parcel is located in Flood Zone C, an area of minimal flooding. However, due

to the arroyos in the area, many parts can be in flood zones and a portion of the larger

parcel appear to be located within an area inundated by 100-year flooding. A specific

determination for the subject is recommended.

Zoning

The subject parcel is zoned M-3, heavy industrial. The following is an excerpt from the

El Paso Municipal Code.

The area permits power plants, processing plants, conservation use, contractor yards,

detention and water collection, manufacturing, rail, concrete plants, automotive repair

garages. Considering the terrain and feasibility of development, zoning and use is not

considered an adverse condition of the site.

Improvements to the Site

The subject is unimproved, raw mountainous foothill land. There are no

improvements.

Easements and/or Encroachments

An Easement Survey was not provided; however, based upon inspection it appears that

there are El Paso Electric Company easements and possibly other utility easements on the



property. Due to the terrain, utility, and proximity to development any utility easements at

this point would not appear to have an adverse effect on the site.

Restrictions & Covenants

None provided, assume none exist.

Utilities

All utilities including electricity, natural gas, water and sewer are available in the

general area. Electricity is provided by the El Paso Electric Company, gas by Texas Gas

Company, and water and sewer by El Paso Public Service Board. Extensions will be

required at the time of development (if development and when development of the site is

determined feasible) would typically be the cost of the developer.

Surrounding Development

The majority of the surrounding development is undeveloped and affected by the same

challenging topography as the subject. Property location maps and other exhibits are

presented on the following pages.

Summary

The subject is raw land that reflects challenging topography and topography that

prevents most type of development. The cost involved with developing similar land is not

considered viable (at least nor for any time in the immediate future).



Page 31

SUBJECT LOCATION MAP



Page 32

CLIENT PROVIDED EXHIBIT

Subject



LARGER PARCEL PLAT LOCATION SUBJECT 5 ACRES IS THE NORTHERLY PORTION

(Note arroyo and ravines directions from the east) PORTION OF TRACT 5, JOHN BARKER SURVEY #10



Page 34

FLOOD MAP



Page 35

ZONING MAP (Subject is zoned M-3, heavy industrial.)



Page 36

TEXAS DEPARTMENT OF TRANSPORTATION

EXHIBIT OF MESA PARK OVERPASS & SUBJECT LOCATION

(From map one can see level area and slopes affecting subject parcel)

Subject general areas.



Page 37

Above: General Area. Below: EPEC access and maintenance road (assumed).

As no surveys have been provided, the area is based upon drawings from the client and

the El Paso Central Appraisal District.

TAX DISCUSSION


Page 38

The 2019 Assessed Value by the El Paso Central Appraisal District (EPCAD) is

$527,492. Using the 2018 tax rate (as the 2019 tax rates have not yet been published) the

2019 taxes are estimated at about $15,908. The Assessment indicates a value of $22,869

per acre or about $0.53 per square foot.

The subject property is located in the El Paso Independent School District and Tax

District #34. All real property in El Paso County is appraised on a periodic basis by the

CAD. Reevaluations occur every 3 years however reevaluation can occur at any time. By

State law, the assessed value of a property (for taxing purposes) is established at 100

percent of the appraised value as determined by CAD. Ad valorem tax rates are

established annually by the various taxing authorities. Typically, the tax rates are

published in October, and the resulting ad valorem taxes are due on or before January 31st

of the following year.

Tax Conclusion: The assessment for the subject parcel is a little high based upon recent

comparable data.

Tax Status: As the subject is tax exempt, no taxes are assessed or owing.


Page 39

SUBJECT PROPERTY ANALSYIS

HIGHEST AND BEST USE ANALYSIS


Page 40

Introduction

An essential element in the valuation of real estate is the estimating of the highest and

best use. Subject to the legal constraints, prevailing market conditions, and the

characteristics of the property itself, the highest and best use is the most probable use of

the property that yields the highest value or net return to the owner or investor. The

Appraisal of Real Estate defines highest and best as the reasonably probable and legal use

of vacant land or an improved property, which is physically possible, appropriately

supported, financially feasible, and that results in the highest value. 5 The highest and

best use analysis is first applied to the land, as if vacant. Even if the land has

improvements, proper appraisal technique requires that the value of the land should

always be based on its highest and best use as though vacant and available for

development to its most economic use. If the appraised property is improved or has

proposed improvements, the highest and best use analysis is then applied to the whole

property as improved. In some cases, the highest and best use of an improved property

may differ from the highest and best use of the underlying land. The highest and best use

of the property as though vacant and as improved (if applicable) must satisfy the following

four criteria.

• Legally Permissible Uses -- What uses are legally allowed given the existing (or possible) zoning, deed restrictions, easements, building codes, historic district controls, and/or environmental regulations?

• Physically Possible Uses -- Among the legally permissible uses, what uses are physically possible given the size, shape, topography, frontage, depth, and accessibility of the property?

• Financially Feasible Uses -- Among the uses that are legally allowed and physically possible, what uses would result in a reasonable positive net return on invested capital?

• Maximally Productive Use -- Of the financially feasible uses, what use produces the highest residual land value consistent with the rate of return warranted by the market for that use?

5 The Appraisal of Real Estate, Tenth Edition, published by The Appraisal Institute, 1992, page 275.



Highest and Best Use of the Site as Though Vacant

Legally Permissible Uses: The subject parcel is zoned M-3, a heavy industrial

zoning. The only improvements to the west of the I-10 have been industrial uses and

include (or included prior to TxDOT acquisitions for the recently constructed Loop 375)

were concrete manufacturing batching and material storage facilities, trucking yard, and

the City of El Paso’s waste water treatment plant (remaining). I have not been presented

with any restrictions or covenants that have an adverse affect upon the site. I assume there

are none. It is my opinion that there are no legally limiting features affecting the subject

site (and especially depending on and considering the amount of useable area and slope

steepness.)

Physically Possible Uses: The subject parcel consists of 5 acres and the associated

larger parcel 23 acres. The useable area is less due to slope and arroyo affected areas.

Considering the topography and access described earlier, I have estimated a useable area

of less than 50%. Presently access to the site must be made via other City of El Paso

owned land and if permitted via El Paso Electric Company maintained roads (via

easements). EPEC signage restricts access due to dangers possibly associated with the

power lines.

Although the subject five acre tract and part of the larger parcel appear to abut the

TxDOT right of way, access may not be likely due to the topography. Should topography

permit access, I-10 and the frontage road are most likely access denied from I-10. In the

future the subject parcel will have frontage on the Mesa Parkway; however, access and

elevations of the road with respect to the subject parcels are unknown. The obvious

physical limitation to the subject 5 acre and larger 23 acres is topography. This limitation

severely impacts any possible development.

Financially Feasible Uses: Each of the physically possible and legally permissible

uses of the site has been considered in light of its financial feasibility. Based upon



surrounding development, visibility, exposure, land area, zoning, and accessibility the

financial feasible uses for the usable area is considered to be future residential

development on the area that is level or currently to use as open space. Other possible

uses include storm and drainage uses, water control and run off related uses.

Development will only occur at those areas that have access, ability for extension of

utilities and sufficient level area for building pads. With similar areas the feasibility or

benefit of using similar tracts has not yet occurred. The development costs remain excess

in comparison to the final benefit.

Maximally Productive Use: In my opinion, the maximally productive and Highest and

Best Use for the subject property is open space, drainage use, and/or flood control. Flood

control and drainage from the mountainous areas to the east can channel the water away

from potentially affected development.

LAND VALUATION


Page 43

Introduction

The subject land value has been estimated using the Sales Comparison Method. The

Sales Comparison Method is when data on actual sales and listings are found and

similarities and differences are analyzed, compared, and adjusted for differences. The

Sales Comparison Method is believed to be the most preferred method of estimating site

value and is the method of valuation we have selected.

As will be determined in the valuation below and on the following pages size does not

appear to have an effect on value. In addition, location has not appeared to affect sale

price. When the purchase for the property is for open space or preservation of natural area

surrounding development, exposure, and visibility do not appear to affect value. Location

has been considered neutral with no affect. Adjustments have been made regarding

access, topography and useable area. The subject larger parcel and 5 acre parcel have

access (poor quality to reach the parcel) from the adjacent property that is in common

ownership. The comparables have access from a paved public right of way up to the

parcel which is considered superior in comparison to the subject. The comparables all had

utilities available in the area although in each case extension of lines would be required by

any future developer. In summary, no adjustments are required for location, size, or

utilities.

Comparable market data consisting of closed sales, contracts expected to close and/or

listings for sale have been researched and details regarding the transactions have been

confirmed. Ten sales occurring over the past 10 years have been considered and five have

been selected for comparison to the subject parcel. These sales have been adjusted based

upon the differences between the sales and the subject parcel. The sales have been

analyzed on a price per square foot.

These sales and pertinent information are presented in the table on the following page

and is followed by a comparable sales locator map. Data on each comparable are included

LAND VALUATION


in the Addenda Section of the report. After comparison to the subject site and necessary

adjustments, each comparable provides a per square foot unit indication of site value for

the subject parcel.

Identification of the Selected Comparables

As Of Date: 9/13/2019 Subject Property #1 Property #2 Property #3 Property #4 Property #5

Property Identification W of I-10, W of McKinley Franklin Hills West of Resler W of Silver N side of

N of E - Barker Survey W of 54 E of Franklin Hills N of Mesa Springs Cloudview

Grantor Knapp Knapp Estate Hunt Armour Heidarian Martinez Grantee N/A City of El Paso City of El Paso City of El Paso City of El Paso City of El Paso

Land Area/Square Feet 1,004,760 80,776 3,033,206 540,208 1,574,694 736,892

Land Area/Acres 23.0661 1.8544 69.6328 12.4015 36.1500 16.9167

% Usable 50% 85% 65% 60% 50% 50%

Usable Acres 11.5331 1.5762 45.2613 7.4409 18.0750 8.4584

Area NE El Paso NE El Paso NW El Paso NW El Paso NW El Paso NW El Paso

TRANSACTIONAL INFORMATION: DATE OF SALE-LISTING N/A Jun-18 Nov-17 Dec-16 Dec-14 Nov-14

LAND SALE PRICE N/A $70,000 $1,665,000 $248,856 $763,163 $321,203PRICE PER SQ. FT. N/A $0.87 $0.55 $0.46 $0.48 $0.44

The following page presents a comparable sales locator map illustrating the comparable

sales location with respect to the subject’s location.

ADJUSTMENT ANALYSIS


Page 45

Comparable Sales Locator Map

LAND VALUATION


Adjustments to the Comparable Land Sales

The comparables identified on the earlier pages have been compared to the subject site

and have been adjusted for differences. The categories of adjustment considered in the

total analysis (including those not applicable but considered) are identified below.

Following the identification of adjustments, each category is considered in comparison to

the subject and adjusted when necessary. A discussion of the adjustments follows.

Categories of Adjustment

Property Rights

Financing Terms

Buyer/Seller Motivation

Improvement Demolition Costs

Improvement Contribution

Time or Market Conditions

Location & Access

Frontage & Corner Features

Size

Depth & Shape

Topography

Utilities

Easement and Other Encumbrances

Zoning & Use

Adjustments for the first five categories are applied on a dollar basis. All other

adjustments are applied on a percentage basis. After adjustment for all categories of

differences, each comparable yields an indication of fee simple site value for the subject

site. Reconciliation of the various value indication results in a market derived estimate of

fee simple subject site value.

LAND VALUATION


Property Rights Conveyed: Real estate transactions often include properties that are sold

subject to existing leases, particularly income producing property. This revenue

generating potential of a property is often contingent upon the terms and length of the

leases. Differences in these leases between market and contract rent and the remaining

terms of the lease must be considered in the adjustment process. All of the comparables

were owned in fee simple at the time of sale. The subject parcel is being appraised in fee

simple. Therefore, no adjustment to the comparables is necessary.

Financing Terms: This adjustment reflects whether or not the comparable sold with

favorable financing. If the property sold with favorable financing then an adjustment is

necessary to account for the difference in sale price. After adjustment the indicated sale

price reflects a cash-equivalent price. All of the comparables were either cash sales, cash

to the seller, or cash-equivalent. Therefore, none of the comparables require adjustment.

Motivation: Motivation adjustments are made whenever discussions with the parties

involved or other evidence reveals there may have been a particularly strong motivation to

buy or sale. During the confirmation process it was determined that there was no need to

adjust for this. To the best of my knowledge, the sales price was based upon the appraised

value in all of the sales.

Improvement Demolition Costs: This adjustment is applied if a comparable parcel sold

with improvements which had to be demolished before the site could be developed to its

highest and best use. The cost of razing the improvements is an additional capital

investment in the site. The amount of the upward adjustment is the estimated cost to

demolish the improvements and clear the site for development. None of the comparables

were improved at the time of sale. Therefore, no adjustments are necessary.

Improvement Contribution: This adjustment is made if a comparable site had

improvements with an interim contributory value over and above the land value. It is

often applied to land parcels, which receive income from billboards or sign rentals. The

LAND VALUATION


amount of the downward adjustment is the discounted value of the net income received,

over the period of time it is likely to continue. See above category for explanation. None

of the comparables used in this appraisal require adjustment in this category.

Time Since Sale: This adjustment category is used to handle changes in market conditions

over time. If market evidence suggests that land values are appreciating, the comparable

sales which occurred significantly before the appraisal date may require upward

adjustment. Conversely, if land values are declining, downward adjustments to the

comparables may be necessary. It is my opinion that arroyo or land with similar

topography has not shown any depreciation or appreciation in values over the time period

analyzed (sales dating back several years show a flat or stable market for this property

type).

Location and Access: Location adjustments are made when there are differences in

neighborhood characteristics, proximity of major arterials, site exposure, traffic count,

and/or surrounding development. If a comparable site is judged to have a superior

location, it is adjusted downward in comparison to the subject. If its location is judged

inferior, it is adjusted upward. Three of the sales are similar land located at the base of

the Franklin Mountains. Two are land sales that suffer from topography changes and are

in natural vegetative spaces even though adjacent to more development. Overall the

comparables and the subject are similar with respect to location or have offsetting

differences. No adjustments are required for location.

Access is also considered within this category. The five comparable sales had access

directly to a paved road or in immediate proximity. The subject access is required

traveling over an adjacent developed parcel although in common ownership. Access to

portions of the site appear to be over EPEC easements for maintenance of overhead power

lines. Warning signs discourage access on these roads.

LAND VALUATION


Future access will be provided by the Mesa Parkway; however the time for completion

of this project can only be estimated and is not shown on Texas Department of

Transportation simulations. In comparison to the comparables, all had superior access

and were adjusted downward.

Road Frontage and Corner Features and Access: This adjustment category relates the

amount of road frontage and whether or not the comparable has a corner location. No

adjustments are warranted.

Size: Typically smaller parcels sell for more per unit than larger parcels. Based upon data

analyzed over the past 10 years, size is not determined to be a factor in sales of similar

(arroyo type) tracts of land smaller than 100 acres in size. An adjustment for size is

considered warranted with respect to the parcels over 100 acres. In the case of the subject

and comparable data no size adjustments are warranted.

Depth and Shape: This adjustment category reflects the optimum shape of a property.

Those properties with a square or regular rectangular shape are more desirable than those

parcels with a highly irregular shape. Based upon the size and type of properties, no

adjustment is applicable for this category.

Easements & Encumbrances: This adjustment reflects the area loss due to easements and

other encumbrances. All of the comparables would be required to have utility easements

and extensions prior to development. No adjustments are considered warranted.

Utilities: The final adjustment category is one that reflects the utilities and access of the

subject in comparison to the comparables. All of the comparables are considered to have

similar access and proximity to utilities in comparison to the subject.

Topography: This adjustment category accounts for any variations in topographic features.

If a site has rough topography, it will be more expensive to develop than an otherwise

comparable level site. Also handled under this category are variations in usable site area.

LAND VALUATION


Losses in usable area can result from slopes, pond requirements, easements (already

considered), and other factors. Adjustments have been made accordingly.

Zoning and Use: Zoning differences can affect the use potential and allowable

development density of a site. In general, if a comparable site has a less restrictive zoning

than the subject site, it is adjusted downward in comparison. The only use possible type of

development at this time is for a drainage or open space related use. No adjustment is

necessary.

The following page presents a Land Sales Adjustment Grid. The adjustment grid

graphically illustrates the above adjustment process and illustrates the subject land value

indications developed from each comparable. Following the grid, the comparable

indications are reconciled into final, market-supported estimate of subject land.

ADJUSTMENT ANALYSIS


Page 51

As Of Date: 9/13/2019 Subject Property #1 Property #2 Property #3 Property #4 Property #5

Property Identification W of I-10, W of McKinley Franklin Hills West of Resler W of Silver N side of

N of E - Barker Survey W of 54 E of Franklin Hills N of Mesa Springs Cloudview

Grantor Knapp Knapp Estate Hunt Armour Heidarian Martinez Grantee N/A City of El Paso City of El Paso City of El Paso City of El Paso City of El Paso

Land Area/Square Feet 1,004,760 80,776 3,033,206 540,208 1,574,694 736,892

Land Area/Acres 23.0661 1.8544 69.6328 12.4015 36.1500 16.9167

% Usable 50% 85% 65% 60% 50% 50%

Usable Acres 11.5331 1.5762 45.2613 7.4409 18.0750 8.4584

Area NE El Paso NE El Paso NW El Paso NW El Paso NW El Paso NW El Paso

TRANSACTIONAL INFORMATION: DATE OF SALE-LISTING N/A Jun-18 Nov-17 Dec-16 Dec-14 Nov-14

LAND SALE PRICE N/A $70,000 $1,665,000 $248,856 $763,163 $321,203PRICE PER SQ. FT. N/A $0.87 $0.55 $0.46 $0.48 $0.44

ADJUSTMENTS TO CO MPARABLE SALE PRICE: Property Rights Conveyed Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple

Adjustment 0.00 0.00 0.00 0.00 0.00 Financing Terms Cash to Seller Cash to Seller Cash to Seller Cash to Seller Cash to Seller Adjustment 0.00 0.00 0.00 0.00 0.00

Buyer or Seller Motivation Normal Normal Normal Normal Normal Adjustment 0.00 0.00 0.00 0.00 0.00

Improvement Demolition Costs None None None None None Adjustment 0.00 0.00 0.00 0.00 0.00

Interim Improvement Contribution None None None None None Adjustment 0.00 0.00 0.00 0.00 0.00

ADJUSTED PRICE PER SQ. FT. $0.87 $0.55 $0.46 $0.48 $0.44

ADJUSTMENTS FO R MARKET CO NDITIO NS: T ime Since Comparable Sale Current Current Current Current Current

Adjustment 0.00% 0.00% 0.00% 0.00% 0.00%

UPDATED, ADJUSTED PRICE $0.87 $0.55 $0.46 $0.48 $0.44

CO MPARISO NS TO SUBJECT SITE: Location/Access Access Access Access Access Access Adjustment -10% -10% -10% -10% -10% Size Offsetting Offsetting Offsetting Offsetting Offsetting Adjustment +0% +0% +0% +0% +0% Topography & Useable Area Superior Superior Superior Similar Similar Adjustment -35% -15% -10% +0% +0% Prox. To Utilit ies Similar Similar Similar Similar Similar Adjustment +0% +0% +0% +0% +0%

Net Adjustment to Comparable -45% -25% -20% -10% -10%

INDICATED VALUE PER SQUARE FOOT: $0.48 $0.41 $0.37 $0.43 $0.40

Reconciliation of values is presented on the following page.

LAND VALUATION CONCLUSION


Page 52

Reconciliation of Values & Final Market Value Estimate of the Parcels

Data from the earlier presented, compared, and adjusted is considered reliable and

representative of the subject land market. The subject is adversely affected by challenging

topography with slopes varying in steepness and ravines running throughout. The parcel

has no paved road access other than via an adjacent property owner. The subject is in

common ownership; however, adjustments are required due to the quality of access. The

comparable sales are representative of this market. These sales along with six other

historical sales support the following conclusions.

In final analysis, I have concluded to a final estimate of market value for the subject 5

acre parcel (based upon a 23 acre parent tract analysis) of $0.41 per square foot. The

subject value is developed below.

5 Acres X 43,560 square feet (217,800 square feet) X $0.41 per square foot = $89,298

FINAL MARKET VALUE ESTIMATE

AS OF SEPTEMBER 13, 2019

$90,000

MARKETING & EXPOSURE DISCUSSION


Page 53

Marketing & Exposure Estimate

The estimate of appraised value assumes reasonable time of exposure on the open

market and professional marketing efforts. Based upon analysis of available market data

and interviews with market participants, it is my opinion that the reported market value

estimate for the subject is commensurate with a typical exposure time of 3 to 5 years.

CERTIFICATION


Page 54

I certify that, to the best of my knowledge and belief:

The statements of fact contained in this report are true and correct.

The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my personal, unbiased professional analyses, opinions, and conclusions.

I have no present or prospective interest in the property that is the subject of this report, and no personal interest or bias with respect to the parties involved.

My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event.

This appraisal was not based on a requested minimum valuation, specific valuation, or the approval of a loan.

My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP).

The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

As of the date of this report, I have completed the requirements of the continuing education program of the Appraisal Institute.

I have made personal inspections of the subject and the comparable properties used in the valuation.

No one other than the undersigned prepared the analyses, opinions, and conclusions concerning real estate values that are set forth in this appraisal report.

I have performed no appraisal services in the past three years prior to accepting this appraisal assignment.

Based upon the data and analyses contained in this report and upon my judgment and

experience as an appraiser, it is my opinion that the Market Value of the Fee Simple

interest in the subject parcel as of September 13, 2019 was $90,000. September 19, 219

ADDENDA

COMPARABLE SALES DATA SHEETS

COMPARABLE DATA SUPPLEMENT – LAND COMP #1

Grantor/Lessor: DAUCUs, LLC ( Estate Daniel T. Knapp) Grantee/Lessee: City of El Paso-El Paso Water Utilities PSB

Date: June 19, 2018 Recording Information: 20180048607 Key Map: NE (Central) El Paso

Address: West of Mc Kinley Avenue (and Alabama), El Paso, Tx Zip Code: 79930

Legal Description: Lots 12-16, Block 21; Lots 3-16, Block 22; Lots 1-6, Block 23; Lots 15 & 16, Block 23, Rosemont

Subdivision, City of El Paso, El Paso County, Texas.

Confirmed Price $70,000 Verified with: Jennifer Hill (Estate of Knapp); WB

Terms and Conditions of Sale: Cash

Land Size: 1.854 Acres or 80,776 square feet Unit Price as Vacant $0.87 per sq. ft./ $37,749 per acre

Type Street: Paved street. Access available. Utilities: All

Improvement(s) Description: None at sale date.

Improvement(s) Size: (GBA) (NRA) Unit Price as Improved $:

Condition and Functional Design:

Current Use: Storm Control & Open Space Highest & Best Use: Storm Control & Open Space

PID:R843-999-0210-0100, R843-999-0220-5100, R843-

999-0230-0100, R843-999-0230-4900

Appraiser: Martha Gayle Reid Lynch, MAI

Comment: Arroyo/Mountainous land east of foothills of

Franklin Mountains. Natural terrain.

Sept 2019

Date


Grantor/Lessor: Hunt Communities Holding, L.P. Grantee/Lessee: City of El Paso-El Paso Water Utilities PSB

Date: November 7, 2017 Recording Information: 20170083931 Key Map: NW El Paso

Address: NE and E of Redd Road & E of Franklin Hills St., El Paso, Texas Zip Code: 79912

Legal Description: 69.375 acres & 0.258 out of H.G. Foster Survey No. 262, City & County of El Paso, Texas.

Confirmed Price $1,665,000 Verified with: Alma DeAnda-PSB & Closing Statement


Land Size: 3,033,206 sf (69.633 acres), 65% useable. Unit Price as Vacant $0.55 psf






Date of Inspection: 2015, 2017, and 5/7/2019 Zoning: R3A Flood Plain: C & A2

PID: Multiple


Comment: Arroyo land. Acquired for open space.

Deed reports 69.633 and 0.258 ac; M&B has correct.

Sept 2019

Date


Grantor/Lessor: Armour Self Storage Grantee/Lessee: City of El Paso-El Paso Water Utilities PSB

Date: December 21, 2016 Recording Information: 20160090624 Key Map: NW El Paso

Address: West Side of Resler Dr. Across from Cloudview Dr., El Paso, Texas Zip Code: 79912

Legal Description: Tract 10A and a portion of Tract 10J, AF Miller Survey 211, City & County of El Paso, Texas.

Confirmed Price $248,856 Verified with: Alma DeAnda-PSB Land Contracts+Closing St.


Land Size: 12.4015 acres or 540,207.50 sf per deed. Unit Price as Vacant $0.46 psf






Date of Inspection: 2015, 2017, and 5/7/2019 Zoning: P-R2 SC Flood Plain: various, yes.

PID:X211-999-0000-4500


Comment: Arroyo land. Acquired for preservation space.

Date: Sept 2019


Grantor/Lessor: Behrouz & Asadollah Heidarian Grantee/Lessee: City of El Paso-El Paso Water Utilities PSB

Date: Dec. 23, 2014 Recording Information: 20140083753 Key Map: NW El Paso

Address: W of Silver Springs & N & S of Camino Estancias El Paso, Texas Zip Code: 79912

Legal Description: Tracts 1E13,1E14, Foster Survey #259; Lots 1-9, Blk 1 & 1-18, Blk 2, Estrella De Coronado , City of El

Paso, El Paso County, Texas.

Confirmed Price $763,162.65 Verified with: Alma De Anda-PSB Land Contracts


Land Size: 36.148 acres per deed. Unit Price as Vacant $0.48 psf






Date of Inspection: 2015, 2017, 5/7/2019 Zoning: PR1&PMD Flood Plain: Both C & 100 yr.

PID:X259-999-F00B-1599, E957-999-0010-0100,

E957-999-0020-0100



Sept 2019

Date


Grantor/Lessor: Raymundo Martinez Grantee/Lessee: City of El Paso; El Paso Water Utilities PSB

Date: November 20, 2014 Recording Information: 20140075355 Key Map: NW El Paso

Address: North Side of Cloudview Drive, El Paso, Texas Zip Code: 79912

Legal Description: Tracts 9A1, 9D1A, AF Miller 211 + Tracts 2M12, 2LIC, 2L2, AF Miller Survey, City of El Paso, El Paso

County, Texas.

Confirmed Price $432,203 Verified with: Alma De Anda, PSB – 2015


Rental Data: n/a

Land Size:16.9167 acres/736,892 square feet per deed Unit Price as Vacant $0.44 psf

Type Street:Paved street. Access from Resler & Cloudview Utilities: All




Current Use: Vacant land Highest & Best Use: Open Space

Date of Inspection: 2015, 2017, 2019 Zoning: R-3, residential Flood Plain: Non-flood

PID: X212-999-0000-9400



Date: Sept 2019

EL PASO CETRAL APPRAISAL DISTRICT RECORDS

(Larger Parcel: X010-999-0000-0500 – 23.-653 Acres)

QUALIFICATIONS OF THE APPRAISER

MINUTES

PUBLIC SERVICE BOARD CITY OF EL PASO

January 9, 2019 The regular meeting of the Public Service Board was held Wednesday, January 9, 2019, at the El Paso Water Utilities Public Service Board Meeting Room, 1154 Hawkins Blvd., El Paso, Texas. PSB MEMBERS PRESENT Christopher A. Antcliff, Chair Henry Gallardo, Member Dr. Ivonne Santiago, Member Dr. Kristina D. Mena, Member Terri Garcia, Vice-Chair Bryan Morris, Member PSB MEMBERS ABSENT Dee Margo, Ex-Officio Member PSB EMPLOYEES PRESENT John E. Balliew, P.E., President and Chief Executive Officer Lee Ann Koehler, General Counsel EPWATER EMPLOYEES PRESENT Alan Shubert, Vice President – Operations and Technical Services Marcela Navarrete, Vice President – Strategic, Financial and Management Services Juan S. Gonzalez, Assistant General Counsel Art Duran, Chief Financial Officer Irazema Rojas, Capital Improvement Program Manager Stephanie Santiago, Engineering Program Administrator Gretchen Byram, Computer Media Specialist Lisa Rosendorf, Chief Communications and Government Affairs Officer Hector Gonzalez, Government Affairs Manager Zulema Jamis, Secretary Rosemary Guevara, Senior Purchasing Agent Levi Chacon, Purchasing Agent Robert Davidson, Contract Construction Administrator Israel Chavez, Senior Network Administrator Melissa Bell, Lead Public Affairs Coordinator Adriana Castillo, Engineering Division Manager Gilbert Trejo, Chief Technical Officer Christina Montoya, Marketing and Communications Manager James Wolff, Senior Land and Contract Administrator Jeff Tepsick, Fiscal Operations Manager Lidia Carranco, Treasury and Property Control Manager GUESTS Rick Giardina, Raftelis MEDIA None

PSB Minutes January 9, 2019 Page 2 The Public Service Board meeting was called to order by Mr. Antcliff at 8:05 a.m. A quorum of its members was present. After a moment of silence, those in attendance joined Mr. Bryan Morris, in reciting the Pledge of Allegiance.

REGULAR AGENDA 1. ADMINISTERED THE OATH OF OFFICE TO NEW PSB MEMBER Ms. Laura Prine, City Clerk, administered the oath of office to newly appointed Public Service Board Member, Mr. Bryan Morris. Mr. Morris was appointed to the Board by City Council on December 11, 2018. The term of appointment shall commence on January 1, 2019, for a four-year term.

CONSENT AGENDA

On a motion made by Mr. Gallardo, seconded by Ms. Garcia and unanimously carried, the Board took action on the following agenda items: 2. CONSIDERED AND APPROVED THE RENEWAL OF A CONTRACT WITH SUNGARD AVAILABILITY SERVICES LP FOR DISASTER RECOVERY AND BUSINESS CONTINUITY SERVICES WITH BUY BOARD PRICING THROUGH STATE OF TEXAS DIR CONTRACT NUMBER DIR-TSO-2736 FOR AN AGREEMENT TERM OF 12 MONTHS FROM FEBRUARY 15, 2019, THROUGH FEBRUARY 14, 2020, IN THE ESTIMATED AMOUNT OF $143,736.48, WITH THE OPTION TO RENEW THE CONTRACT FOR AN ADDITIONAL 12 MONTHS. The Board approved the renewal of a contract with Sungard Availability Services LP for disaster recovery and business continuity services with Buy Board pricing through State of Texas DIR Contract Number DIR-TSO-2736 for an agreement term of 12 months from February 15, 2019, through February 14, 2020, in the estimated amount of $143,736.48, with the option to renew the contract for an additional 12 months.

3. CONSIDERED AND APPROVED A CONTRACT FOR THE PURCHASE OF FORD PARTS FROM SOUTHWEST TRUCK SALES, MHC KENWORTH/FORD THROUGH ESC REGION 19 ALLIED STATES COOPERATIVE CONTRACT NUMBER 15-7166 IN THE ESTIMATED ANNUAL AMOUNT OF $100,000 WITH THE OPTION FOR TWO, ONE-YEAR EXTENSIONS. The Board approved a Contract for the purchase of Ford parts from Southwest Truck Sales, MHC Kenworth/Ford through ESC Region 19 Allied States Cooperative Contract Number 15-7166 in the estimated annual amount of $100,000 with the option for two, one-year extensions. 4. CONSIDERED AND APPROVED AN INCREASE OF $75,000 TO AN EXISTING CONTRACT FOR CELLPHONE AND MOBILE BROADBAND SERVICES THROUGH STATE OF TEXAS DIR CONTRACT NUMBER DIR-SDD-1779 AWARDED TO CELLCO PARTNERSHIP DBA VERIZON WIRELESS, FOR A REVISED ESTIMATED ANNUAL AMOUNT OF $275,000. The Board approved an increase of $75,000 to an existing Contract for cellphone and mobile broadband services through State of Texas DIR Contract Number DIR-SDD-1779 awarded to Cellco Partnership dba Verizon Wireless, for a revised estimated annual amount of $275,000.

REGULAR AGENDA 5. CONSIDERED AND TOOK ACTION ON THE STORMWATER BUDGET TO INCLUDE BUT NOT LIMITED TO, THE FOLLOWING ACTIONS: a. Adoption of the Annual Stormwater Budget in the amount of $48.367 million for Fiscal Year 2019-

PSB Minutes January 9, 2019 Page 3

2020. b. Adoption of a Resolution amending Public Service Board Rules and Regulations No. 2 Stormwater

Service, to amend the language concerning certain abbreviations and definitions. c. Adoption of a Resolution amending Public Service Board Rules and Regulations No. 3 Rates for

Stormwater Service to amend the language concerning certain abbreviations, definitions, exemptions and credits.

Mr. John Balliew, President/CEO provided a presentation to the Board regarding this item (copy on

file in Central Files). Mr. Balliew began his presentation with the Stormwater Fiscal Year 2019-2020 Budget Summary. The total stormwater budget is $48.4 million, the operating and maintenance budget was increased by $264,000 and the Capital budget is $31 million, with a new funding request of $19.3 million. Mr. Balliew then showed a comparison of last year’s budget to this year’s budget. For fiscal year 2018-’19, the operating costs came in at $6.8 million, capital budget was $34.1 million, and finally debt service was $10.2 million, total amounts coming in at $51.1million. For fiscal year 2019-’20, the operating budget is $7.1 million, capital amount is $31million and debt service comes in at $10.3 million for a total amount of $48.4 million. Next, the operating budget was discussed. For FY 2018-’19, the indirect cost allocation was $1.4 million, personnel services was $1.1 million, maintenance was $3.2 million and miscellaneous was $900,000 for a total of $6.7 million. The budget amount for FY 2019-’20 is $1.5 million for indirect cost allocation, $1.1 million for personnel services, $3.3 million for maintenance and $800,000 for miscellaneous, for a total amount of $6.9 million. Mr. Balliew went on to mention the changes to the two rules: No. 2 Stormwater Service and No. 3 Rate of Stormwater Service, which were discussed in detail in the December 3, 2018 budget workshop meeting. The FY 2019-2020 proposed fee increase is 0%. Current rates will remain the same. A chart showing the top 12 Texas cities and their current fees, El Paso is the forth cheapest, falling right below the state average of $4.28. Mr. Balliew distributed a chart to all Board members, which is part of a presentation that Portland, Oregon, does similar to ours, but it only includes Wastewater and Stormwater. Currently, their fee is almost $120, and this is primarily a wetland area. Next, Mr. Balliew went over projects scheduled for completion in 2019: Thomas Manor Park Pond and Pump Station Improvements $5.7 million, Kentucky Dam Improvement $4 million, Copia Pond and Discharge Conduit $2.5 million, Grand Teton Drive Ponding Area Improvements $1.5 million, and Silver Springs Arroyo Dam $3.4 million. In addition to those projects, there are bids for upcoming projects of 2019: Sam Snead Drainage System with an estimated cost of $6 million, Monsoonal Emerging with an estimated cost of $1 million, and others with a total estimated cost of $3 million. Finally, Mr. Balliew went over the recommendation, which is no fee increase next year despite last year’s projection for a 6 percent fee increase. Mr. Balliew addressed questions from the Board regarding this item.

On a motion made by Mr. Gallardo, seconded by Dr. Santiago and unanimously carried, the Board considered and took action on the Stormwater Budget to included but not limited to, the following actions:

a. ADOPTION OF THE ANNUAL STORMWATER BUDGET IN THE AMOUNT OF $48.367 MILLION FOR FISCAL YEAR 2019-2020. On a motion made by Mr. Gallardo, seconded by Dr. Santiago and unanimously carried, the Board Adopted the annual Stormwater budget in the amount of $48.367 million for fiscal year 2019-2020.

b. ADOPTION OF A RESOLUTION AMENDING PUBLIC SERVICE BOARD RULES AND REGULATIONS NO. 2 STORMWATER SERVICE, TO AMEND THE LANGUAGE CONCERNING CERTAIN ABBREVIATIONS AND DEFINITIONS. On a motion made by Mr. Gallardo, seconded by Dr. Santiago and unanimously carried, the Board adopted a resolution amending Public Service Board Rules and Regulations No. 2 Stormwater service, to amend the language concerning certain abbreviations and definitions.


c. ADOPTION OF A RESOLUTION AMENDING PUBLIC SERVICE BOARD RULES AND REGULATIONS NO. 3 RATES FOR STORMWATER SERVICE TO AMEND THE LANGUAGE CONCERNING CERTAIN ABBREVIATIONS, DEFINITIONS, EXEMPTIONS AND CREDITS. On a motion made by Mr. Gallardo, seconded by Dr. Santiago and unanimously carried, the Board adopted a resolution amending Public Service Board Rules and Regulations No. 3 rates for Stormwater service to amend the language concerning certain abbreviations, definitions, exemptions and credits.

6. CONSIDERED AND TOOK ACTION ON THE WATER, WASTEWATER AND RECLAIMED WATER BUDGET TO INCLUDE BUT NOT LIMITED TO THE FOLLOWING ACTIONS:

a. Adoption of the Annual Water, Wastewater and Reclaimed Water Budget in the amount of $387.675 million for Fiscal Year 2019-2020.

b. Adoption of a Resolution amending Public Service Board Rules and Regulations No.1 Furnishing and Control of Water and /Or Sewer Service, to amend the language concerning inactive service connections.

c. Adoption of a Resolution amending Public Service Board Rules and Regulations No. 5 Rates for Water Service, to amend the Rates and Tampering Fee.

d. Adoption of a Resolution amending Public Service Board Rules and Regulations No. 6, Rates for Sewer service to amend the rates.

e. Adoption of a Resolution amending Public Service Board Rules and Regulations No. 7, Various Deposits and Charges, to amend the charges for remote frequency meters, and fire hydrant meter water loss.

Mr. Balliew provided a presentation to the Board regarding this item (copy on file in Central Files). Mr. Balliew began his presentation with total water, wastewater and reclaimed water budget of $387.7 million. Capital budget is $185.5 million with new funding request of $143.1 million. Debt service expense increased by $1.5 million over previous year. The $102.4 million operating budget decreased by $2.9 million over previous year. Operational cost drivers were personnel went up 4 percent, maintenance went up 19 percent, river water went down 76 percent due to less of it, and chemicals went down 24 percent. Next, Mr. Balliew went over Water and Wastewater Budget summary. The total amount for FY2018-’19 for $490.3 million, with operating budget coming in at $105.4 million, capital budget coming it at $279.1 million, debt service coming in at $74.4 million, and other coming it at $31.5 million. The total amount for FY2019-’20 is $387.7 million, with operating budget coming in at $102.4 million, capital budget coming in at $185.5 million, debit service coming in at $75.8 million, and other coming in at $23.9 million. EPWater is recommending a 4 percent rate increase for water and an 8 percent increase for wastewater. Typical monthly water bill increase for the average residential customer will be $3.00. After the increase, the average monthly bill is 1.52 percent of the local median household income, well below Fitch’s affordability threshold of 2 percent. Mr. Balliew went on to explain the reason for the increase. In the past, we have gone to the Board with items regarding emergency corrective work to resolve these issues. In addition, an expansion is needed at the Roberto Bustamante Wastewater Treatment Plant. Mr. Balliew showed a slide for the FY2019-2020 proposed rate changes: current versus proposed and what the difference would be. He also showed a slide of the volume rate, Dollars per CCF and residential & commercial. Mr. Balliew went on to discuss the FY 2019-2020 Proposed Changes Rules and Regulations for No. 1, Water and/or Sewer Service, No. 5, Water Service Rate, No. 6, Sewer Service Rates and No. 7, Deposits and Charges. Mr.

PSB Minutes January 9, 2019 Page 5 Balliew shared a slide showing the average residential water/wastewater bill, this was from a regional city survey from 2018. The list included nine cities, with El Paso coming in the top four at the proposed rate, total amount of the average bill to be $56.70. This comes in under Fabens at $69.82, Paseo Del Este MUD at $82.75 and the top city of Ruidoso at $116.55. Mr. Balliew went on to compare average residential water/wastewater bill for the 10 largest Texas cities, using a survey from 2018. El Paso comes in second to the lowest, with the proposed rate. Mr. Balliew shared an article that came out in April 2018 in Forbes magazine; 13 Cities Where You Can Live Comfortably on Less Than $60,000 a Year, with El Paso ranking No. 1. El Paso Water took the 13 cities listed in the article and calculated their water bill, with El Paso coming out as the cheapest. Mr. Balliew and Mr. Shubert addressed questions from the Board regarding this item. Ms. Koehler made additional comments.

Mr. Antcliff opened the floor for comments from the public. No comments were made. On a motion made by Mr. Gallardo, seconded by Dr. Mena and unanimously carried, the Board considered and took action on the Water, Wastewater and Reclaimed Water Budget to include but not limited to the following actions:

a. ADOPTION OF THE ANNUAL WATER, WASTEWATER AND RECLAIMED WATER BUDGET IN THE AMOUNT OF $387.675 MILLION FOR FISCAL YEAR 2019-2020. On a motion made by Mr. Gallardo, seconded by Dr. Mena and unanimously carried, the Board considered adoption of the Annual Water, Wastewater and Reclaimed Water Budget in the amount of $387.675 million for Fiscal Year 2019-2020.

b. ADOPTION OF A RESOLUTION AMENDING PUBLIC SERVICE BOARD RULES AND REGULATIONS NO.1 FURNISHING AND CONTROL OF WATER AND /OR SEWER SERVICE, TO AMEND THE LANGUAGE CONCERNING INACTIVE SERVICE CONNECTIONS. On a motion made by Mr. Gallardo, seconded by Dr. Mena and unanimously carried, the Board considered Adoption of a Resolution amending Public Service Board Rules and Regulations No.1 Furnishing and Control of Water and /Or Sewer Service, to amend the language concerning inactive service connections.

c. ADOPTION OF A RESOLUTION AMENDING PUBLIC SERVICE BOARD RULES AND REGULATIONS NO. 5 RATES FOR WATER SERVICE, TO AMEND THE RATES AND TAMPERING FEE. On a motion made by Mr. Gallardo, seconded by Dr. Mena and unanimously carried, the Board considered Adoption of a Resolution amending Public Service Board Rules and Regulations No. 5 Rates for Water Service, to amend the Rates and Tampering Fees.

d. ADOPTION OF A RESOLUTION AMENDING PUBLIC SERVICE BOARD RULES AND REGULATIONS NO. 6, RATES FOR SEWER SERVICE TO AMEND THE RATES. On a motion made by Mr. Gallardo, seconded by Dr. Mena and unanimously carried, the Board considered Adoption of a Resolution amending Public Service Board Rules and Regulations No. 6, Rates for Sewer Service, to amend the Rates.


e. ADOPTION OF A RESOLUTION AMENDING PUBLIC SERVICE BOARD RULES AND REGULATIONS NO. 7, VARIOUS DEPOSITS AND CHARGES, TO AMEND THE CHARGES FOR REMOTE FREQUENCY METERS, AND FIRE HYDRANT METER WATER LOSS On a motion made by Mr. Gallardo, seconded by Dr. Mena and unanimously carried, the Board Considered Adoption of a Resolution amending Public Service Board Rules and Regulations No. 7, Various Deposits and Charges, to amend the charges for remote frequency meters and fire hydrant meter water loss.

7. AUTHORIZED THE PRESIDENT/CEO TO SIGN AN ADVANCED FUNDING AGREEMENT WITH THE CAMINO REAL REGIONAL MOBILITY AUTHORITY (CRRMA) FOR INSTALLATION OF WATER AND SANITARY SEWER INFRASTRUCTURE RELATED TO WINN ROAD FROM ZARAGOZA POE TO PAN AMERICAN DRIVE IMPROVEMENTS, IN THE ESTIMATED AMOUNT OF $779,375.65. Mr. Gallardo left the PSB meeting at 9 a.m. Mr. Alan Shubert, Vice President provided a presentation to the Board regarding this item (copy on file in Central Files). The Camino Real Regional Mobility Authority (CRRMA) will install roadway, storm drains, and relocate water and sewer lines on Winn Road. EPWater has prepared design drawings for the installation of 12-inch water mains as well as 12-inch sanitary sewer mains that were included in the CRRMA bid package. CRRMA bid the project October 3, 2018. EPWater and CRRMA concur it will be beneficial for all parties and the general public to include water and sanitary sewer facilities relocations in the CRRMA bid for concurrent construction with the new roadway improvements. This arrangement will eliminate delays and minimize inconvenience to the traveling public. On a motion made by Ms. Garcia, seconded by Dr. Mena and unanimously carried, the Board authorized the President/CEO to sign an Advanced Funding Agreement with the Camino Real Regional Mobility Authority (CRRMA) for installation of Water and Sanitary Sewer Infrastructure related to Winn Road from Zaragoza POE to Pan American Drive Improvements, in the estimated amount of $779,375.65. 8. CONSIDERED AND AWARDED A PROFESSIONAL ENGINEERING SERVICES CONTRACT FOR THE WILL RUTH POND AND CONVEYANCE IMPROVEMENTS TO MORENO CARDENAS INC. IN THE AMOUNT OF $178,800; FURTHER AUTHORIZED FUTURE TASK ORDERS OR AMENDMENTS TO BE ISSUED UNDER THIS CONTRACT TO PROVIDE ADDITIONAL DESIGN AND CONSTRUCTION PHASE SERVICES IN AN ESTIMATED AMOUNT OF $800,000, PROVIDED THAT FUNDING IS AVAILABLE IN THE APPROVED BUDGET FOR THE TASK ORDERS OR AMENDMENTS. Mr. Shubert provided a presentation to the Board regarding this item (copy on file in Central Files). On June 8, 2016, the Public Service Board awarded an Engineering Services Contract for the Northeast Sump Improvements to Moreno Cardenas Inc. (MCI) Under this contract, MCI was also tasked with seeking alternatives to complement improvements needed to mitigate flooding upstream. One of these alternatives was the Will Ruth Ponding Area Improvements. The pond is nearing 60 percent design, and additional capturing conveyance structures need to be designed to maximize the storage capacity of the pond. Future design and construction phase services will be required for the completion of the project. MCI was selected by the Architectural/Engineering Selection Advisory Committee on March 18, 2016, for the Northeast Sump Improvements project. The previous work completed by MCI makes them the most qualified firm to complete this job. Staff has worked with MCI to develop the scope of services. The negotiated fee is in line with the level


of effort required to complete the task and consistent with similar work completed recently. Construction phase services will be negotiated once the design services have been completed. Mr. Shubert addressed questions from the Board regarding this item. On a motion made by Mr. Morris, seconded by Ms. Garcia and unanimously carried, the Board awarded a Professional Engineering Services Contract for the Will Ruth Pond and Conveyance Improvements to Moreno Cardenas Inc. in the amount of $178,800; further authorized future task orders or amendments to be issued under this contract to provide additional design and construction phase services in an estimated amount of $800,000, provided that funding is available in the approved budget for the task orders or amendments. 9. CONSIDERED AND AWARDED A PROFESSIONAL SERVICES CONTRACT FOR ON-CALL SURVEYING SERVICES TO BROCK & BUSTILLOS INC., IN THE MAXIMUM AMOUNT OF $150,000 OVER THE 18-MONTH CONTRACT TERM AND AUTHORIZED THE USE OF COMMERCIAL PAPER. Mr. Gilbert Trejo, Chief Technical Officer, provided a presentation to the Board regarding this item (copy on file in Central Files). EPWater uses surveying firms for preparation of metes and bounds and boundary surveys, as well as checking quality control of contractors’ surveyors. This contract will allow staff to respond quickly when surveys or other documentation is needed to acquire or sell property and easements. Brock & Bustillos (B&B) had previously been an On-Call Surveying firm and have performed favorably in the areas of technical competence, project approach, team organization and availability, and project management and quality control. B&B has performed and met the needs of the Utility for surveying services and demonstrated excellent abilities in all the service categories. The Utility has validated the need for continuing B&B’s surveying services, particularly for long-term projects that B&B has been previously involved in. Therefore, staff recommends that B&B be issued a professional On-Call Surveying services contract, for a maximum amount of $150,000 over an 18-month contract term. On a motion made by Ms. Garcia, seconded by Dr. Mena and unanimously carried, the Board awarded a Professional Services Contract for On-Call Surveying Services to Brock & Bustillos Inc., in the maximum amount of $150,000 over the 18-month contract term, and authorized the use of commercial paper. 10. CONSIDERED AND APPROVED TASK ORDER NUMBER 1 AMENDMENT 1 TO THE PROFESSIONAL ENGINEERING SERVICES CONTRACT AWARDED TO CDM SMITH INC., FOR ADDITIONAL DESIGN AND CONSTRUCTION PHASE SERVICES FOR THE GEORGE DIETER – MONTWOOD AND REX BAXTER 24-INCH WATER TRANSMISSION MAIN REPLACEMENT IN THE AMOUNT OF $63,233; FURTHER AUTHORIZED FUTURE TASK ORDERS OR AMENDMENTS TO BE ISSUED UNDER THIS CONTRACT TO PROVIDE ADDITIONAL DESIGN AND CONSTRUCTION PHASE SERVICES IN AN ESTIMATED AMOUNT OF $20,000, PROVIDED THAT FUNDING IS AVAILABLE IN THE APPROVED BUDGET FOR THE TASK ORDERS OR AMENDMENTS. Mr. Trejo provided a presentation to the Board regarding this item (copy on file in Central Files). This task order amendment is for additional design and construction phase services associated with the George Dieter – Montwood and Rex Baxter 24-Inch SCCP Transmission Main Replacement. The replacement project consists of two milestones. Milestone 1 included replacing 330 feet of 24-inch SCCP water transmission main with 30-inch High Density Polyethelyne (HDPE) pipe at Rex Baxter Drive and George Dieter Drive and was substantially completed on November 2, 2018. Milestone 2 included replacing 711 feet of 24-inch SCCP water transmission main with 30-inch HDPE pipe in Montwood Drive and 542 feet of 24-inch SCCP water transmission main in George Dieter Drive. Construction of Milestone 2 is scheduled to begin in early January


2019 and be completed by late June 2019. Milestone 2 is a much more complex construction project than Milestone 1, and it is anticipated that alternate construction methods may be needed to minimize heavy traffic congestion at the intersection. The fees in Amendment Number 1 will cover the additional design and construction services required for Milestone 2. CDM Smith was previously awarded a contract for Task Order Number 1 in the amount of $99,827. The fees for Amendment Number 1 are in line with the level of effort required to complete the construction management of this project and is consistent with similar work done recently in Milestone 1. Mr. Trejo addressed questions from the Board regarding this item.

On a motion made by Dr. Santiago, seconded by Dr. Mena and unanimously carried, the Board approved approve Task Order Number 1 Amendment 1 to the Professional Engineering Services Contract awarded to CDM Smith Inc., for additional design and construction phase services for the George Dieter – Montwood and Rex Baxter 24-Inch Water Transmission Main Replacement in the amount of $63,233; further authorized future task orders or amendments to be issued under this contract to provide additional design and construction phase services in an estimated amount of $20,000, provided that funding is available in the approved budget for the task orders or amendments. 11. CONSIDERED AND APPROVED CHANGE ORDER NUMBER 3 (FINAL) – PLANNED WATER LINE REPLACEMENT PROGRAM PHASE VIII TO KARLSRUHER INC. DBA CSA CONSTRUCTORS IN THE AMOUNT OF $145,669.94. Mr. Trejo provided a presentation to the Board regarding this item (copy on file in Central Files). This is Phase VIII of the multi-phased program to replace cast-iron water lines throughout the City that have deteriorated and have one or more breaks. Change Order Number 3 reflects the adjustment to final as-built quantities. Quantities are paid using the unit prices established in the original bid. On a motion made by Ms. Garcia, seconded by Dr. Santiago and unanimously carried, the Board approved Change Order Number 3 (Final) – Planned Water Line Replacement Program Phase VIII to Karlsruher Inc. dba CSA Constructors in the amount of $145,669.94. 12. CONSIDERED AND AWARDED BID NUMBER 90-18, JONATHAN ROGERS WATER TREATMENT PLANT SURGE CONTROL IMPROVEMENTS, TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER, CUBIC WATER LLC, IN THE AMOUNT OF $1,193,650, AND AUTHORIZED THE USE OF COMMERCIAL PAPER. Mr. Shubert provided a presentation to the Board regarding this item (copy on file in Central Files). A 48-inch transmission main delivers water from the Jonathan Rogers Water Treatment Plant (JRWTP) to the Americas reservoirs. Pressure surges occur in a water transmission pipeline during startup and shutdown of the pumping station feeding the pipeline. Surge tanks and air release valves are used on these systems to protect the pumping stations and pipelines from pressure surges. The JRWTP water transmission system was designed with surge tanks. However, two new surge tanks are needed to further protect the plant pumping systems from pressure surges. This project will install two additional surge tanks on the 48-inch transmission main. EPWater received five bids for this project on December 10, 2018. The bidders were Cubic Water, Smithco Construction, Kiewit Water Facilities South, Spiess Construction and R.M. Wright Construction. The bids ranged from $1,193,650 to $1,766,700 or 0.39 percent to 48.59 percent above the engineer’s estimate of $1,188,986. The consulting engineer, CDM Smith, evaluated the qualifications of the apparent low bidder and has determined that Cubic Water meets the minimum general requirements as well as the minimum project specific criteria as specified in the bid documents. Staff evaluated the engineer’s evaluation matrix and recommends award of Bid Number 90-18, Jonathan Rogers Surge Control Improvements to Cubic Water as the lowest responsive, responsible bidder in the amount of $1,193,650. Mr. Shubert addressed questions from the Board regarding this item. On a motion made by Dr. Santiago, seconded by Ms. Garcia and unanimously carried, the Board awarded Bid Number 90-18, Jonathan Rogers Water Treatment Plant Surge Control Improvements, to the lowest responsive,


responsible bidder, Cubic Water LLC, in the amount of $1,193,650, and authorized the use of commercial paper. 13. CONSIDERED AND AWARDED BID NUMBER 111-18, MAINTENANCE OF NATURAL GAS ENGINES, TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER, SOUTHWEST COMMERCIAL ENGINES INC., IN THE ESTIMATED ANNUAL AMOUNT OF $924,000 WITH THE OPTION FOR TWO, ONE-YEAR EXTENSIONS. Ms. Rosemary Guevara, Senior Purchasing Agent presented a presentation to the Board regarding this item (copy on file in Central Files). EPWater has 24 natural gas engines located at multiple wells and booster stations. The 24 natural gas engines require maintenance service, which is based on run-time hours and allows for top end and complete overhauls of the units. The previous bid was awarded January 13, 2016. Additional line items were added to the current bid. Therefore, there was an increase of 7.37 percent in the current bid. EPWater received three bids. The bidders were Southwest Commercial Engines, Wagner Equipment Co., and Intertech Power Systems LLC. Staff evaluated the apparent low bidder and determined that Southwest Commercial Engines meets the minimum qualifications as specified within the bid proposal. Staff therefore recommends award to the lowest responsive, responsible bidder, Southwest Commercial Engines. Ms. Guevara and Mr. Balliew addressed questions from the Board regarding this item. On a motion made by Ms. Garcia, seconded by Dr. Mena and unanimously carried, the Board awarded Bid Number 111-18, Maintenance of Natural Gas Engines, to the lowest responsive, responsible bidder, Southwest Commercial Engines Inc., in the estimated annual amount of $924,000 with the option for two, one-year extensions. 14. CONSIDERED AND AWARDED BID NUMBER 116-18, LIQUIFIED CHLORINE GAS, TO THE SOLE RESPONSIVE, RESPONSIBLE BIDDER, DPC INDUSTRIES INC., IN THE ESTIMATED ANNUAL AMOUNT OF $926,190.90 WITH THE OPTION FOR TWO, ONE-YEAR EXTENSIONS. Ms. Guevara provided information to the Board regarding this item. Liquified chlorine gas is used both in Water and Wastewater treatment as a disinfectant. The previous bid was awarded on January 13, 2016. An 8.17 percent increase occurred in the current bid. One bid was received from the current provider. Staff evaluated the bid and recommends award to DPC Industries Inc. Ms. Guevara addressed questions from the Board regarding this item. On a motion made by Ms. Garcia, seconded by Dr. Mena and unanimously carried, the Board awarded Bid Number 116-18, Liquified Chlorine Gas, to the sole responsive, responsible bidder, DPC Industries Inc., in the estimated annual amount of $926,190.90 with the option for two, one-year extensions. 15. Consider and award Bid Number 117-18, Cleaning of Common Irrigation Ditches, to the lowest responsive, responsible bidder, Bella Luna Engineering & Building Maintenance LLC, in the estimated annual amount of $193,875 with the option for two, one-year extensions. Ms. Guevara provided information to the Board regarding this item. A total of 128 common irrigation ditches throughout the city of El Paso require twice-a-month maintenance from February through October, with a total area of 5,643,760 square feet. Maintenance includes but is not limited to the removal of trees, vegetation and debris. The previous bid was awarded on January 10, 2018. The current bid decreased by 2.24 percent. Four bids were received from Bella Luna Engineering & Building Maintenance LLC, MG Evergreen LLC, Abescape Landscaping LLC and EGL Construction Inc. The bids ranged from $193,875 to $515,000. Staff evaluated the bids and recommends award to the lowest responsive, responsible bidder, Bella Luna Engineering & Building Maintenance LLC. Mr. Balliew addressed questions from the Board regarding this item. On a motion made by Dr. Santiago, seconded by Dr. Mena and unanimously carried, the Board awarded Bid Number 117-18, Cleaning of Common Irrigation Ditches, to the lowest responsive, responsible bidder, Bella


Luna Engineering & Building Maintenance LLC, in the estimated annual amount of $193,875 with the option for two, one-year extensions. 16. CONSIDERED AND ACCEPTED EL PASO WATER’S 3RD QUARTER FINANCIAL AND PERFORMANCE MEASURES REPORT FOR PERIOD ENDING NOVEMBER 30, 2018. Mr. Jeff Tepsick, Fiscal Operations Manager provided a presentation to the Board regarding this item (copy on file in Central Files). Mr. Tepsick began his presentation with a chart comparison of water billed from FY 2018-’19 to FY 2018-’17. El Paso Water has billed over 28 billion gallons of water, and we have serviced 235,000 water customers, and 220,000 wastewater customers. The total budget for water and wastewater operating revenue for FY 2018-’19 was $259.075 million. As of the end of the third quarter, we came in at $205.099 million, compared to FY 2017-’18 for the same quarter we were at $189.415 million. Water and Wastewater operating expenses as of FY 2018-’19 third quarter was $82.668 million compared to $76.621 million for the same time FY 2017-’18. Mr. Tepsick went over Water and Wastewater capital project expenditures, in which total budget was $279.075 million, coming in at $132.331 million third quarter FY 2018-’19 compared to $81.485 million for FY 2017-’18. Next, Mr. Tepsick discussed the Water and Wastewater debt service coverage: 2.44 for FY 2018-’19 compared to 2.49 for FY 2017-’18, with the bond ordinance coming in at 1.50. Keeping in mind the budgeted amount for FY 2018-19 was 2.01. Mr. Tepsick went on to discuss the Stormwater operating revenues, total budget for FY 2018-19 was $23.684 million, third quarter coming in at $17.952 million for current fiscal year, and third quarter for FY 2017-’18 coming in close at $17.3 million. Next, Mr. Tepsick discussed Stormwater operating expenses; the budgeted amount for FY2018-2019 was $6.689 million, and currently ending the third quarter at $4.547 million. The stormwater capital expenditures were budgeted at $34.083 million for FY 2018-’19, currently coming in at $14.484 million. Next, the stormwater debt service coverage was discussed, the budgeted at 1.81 for FY 2018-’19 and the bond ordinance at 1.25, however at the end of third quarter FY 2018-’19 we came in at 2.01. Mr. Tepsick added that both Water, Wastewater and Stormwater are operating very efficiently and within budget. Ms. Garcia and Mr. Antcliff congratulated Mr. Tepsick on the great work EPWater is doing. Mr. Balliew addressed questions from the Board regarding this item. On a motion made by Ms. Garcia, seconded by Dr. Mena and unanimously carried, the Board accepted El Paso Water’s third Quarter Financial and Performance Measures Report for period ending November 30, 2018. 17. CONSIDERED AND ACCEPTED THE AUDIT, FINANCE AND INVESTMENT COMMITTEE’S THIRD QUARTER INVESTMENT REPORT FOR THE PERIOD ENDING NOVEMBER 30, 2018. Ms. Lidia Carranco, Treasury and Property Control Manager presented a presentation to the Board regarding this item (copy on file in Central Files). Ms. Carranco began her presentation with U.S. Fed Funds Rate; the approved rate has increased every year since March 2015, with two more rate increases projected for 2019. The portfolio value as of November 30, 2018, is $266,875,462 with 47 percent going to securities at $125 million, and Texpool Prime at $83 million or 31 percent. Ms. Carranco went on to discuss the third quarter portfolio activity comparison from FY 2019 that was $266,875,462 compared to FY 2018 which was $298,690,132. The difference was purchases in 2019 came in at $26.935 million, weighted average maturity date was 66 days and the weighted yield was 2.41 percent. In 2018, the purchases came in at $92.220 million, maturity was 25 days and the weighted yield was 1.20 percent. Next, the benchmark analysis for third quarter: 3-month T-bill came in at 2.37 percent, 6-month T-bill came in at 2.25 percent, 1-year T-bill came in at 2.7 percent and EPWater was 2.41 percent. Lastly, Ms. Carranco finished her presentation with interest earned comparison. The FY2019 forecasted interest was $5 million and the third quarter interest earned came in at just below $4 million, which is more than the last three fiscal years combined. Ms. Carranco addressed questions from the Board regarding this item. On a motion made by Ms. Garcia, seconded by Dr. Mena and unanimously carried, the Board accepted the Audit, Finance and Investment Committee’s Third Quarter Investment Report for the period ending November 30, 2018.


18. CONSIDERED AND APPROVED THE 2019 UPDATED PROPOSED IMPACT FEES. Mr. Balliew introduced Mr. Giardina, President of Raftelis, who provided an update on Impact Fees. On March 24, 2009, the City Council adopted Land Use Assumptions (LUA), a Capital Improvement Plan (CIP) and related Impact Fees pursuant to Texas Local Government Code, Chapter 395, Financing Capital Improvements Required for New Development. This statute requires the City to update its LUA and CIP, at least every five years. The last update of the LUA and CIP occurred in 2014. Over the past several months, EPWater and the City have been working on the 2019 five-year updates. The 2019 updated proposed impact fees for new development have been prepared by Raftelis Financial Consultants based on the 2019 updated LUA and CIP and are now ready for consideration and adoption by the PSB, the City Plan Commission (CPC), the Capital Improvements Advisory Committee (CIAC) and the City Council. The 2019 updated LUA and CIP were presented to the PSB at its November 14, 2018, and December 12, 2018, meetings. The 2019 LUA and CIP were presented to the CIAC on November 28, 2018, and the CPC on December 6, 2018. Ms. Navarrete and Mr. Balliew addressed questions from the Board regarding this item. On a motion made by Mr. Morris, seconded by Ms. Garcia and unanimously carried, the Board approved the 2019 Updated Proposed Impact Fees. 19. MANAGEMENT REPORT:

• 2018 Federal and State Funding - Mr. Gonzalez presented a presentation to the Board regarding this item (copy on file in Central Files). He began his presentation with the approved funded total at $19 million, with additional applications and submittals under review totaling an additional $38.6 million. The approved funding in 2018 covered several projects, starting with Strahan Water Line, with a funded amount of $2 million by the U.S Army Corps of Engineers. Boone Siphon Wastewater Line was another project funded by the U.S Army Corps of Engineers, for an amount of $4.5 million. In addition, the U.S Army Corps of Engineers funded two more projects, Northwest Flood Reduction Study at $50,000, and Rio Bosque at $40,000. Water and Wastewater lines in Northwest Industrial Park were funded by Economic Development Administration (Dept. of Commerce) at $1 million, Agricultural Conservation Demonstration project was funded by Texas Water Development Board for $130,000 and lastly Montana Vista Wastewater Project was funded by Texas Water Development Board-EDAP for an $11.4 million grant, with a $1.415 million loan. Next, Mr. Gonzalez went over several projects that are under review, two with U.S. Bureau of Reclamation: Advanced Water Purification Design for $2 million and Kay Bailey Hutchison Expansion – Phase 1 Construction also for $2 million. The next five projects are under review with FEMA: Will Ruth Ponding Area-Stormwater Detention Basin and Conveyance for $9.5 million, Dallas Outfall Pump Station for $7.4 million, Dall as Stormwater Basin for $6.3 million, Arroyo 1A Stormwater Basin for $4.5 million and lastly Flow Path 39A Dam for $6.9 million. Mr. Gonzalez then showed a slide, with several stakeholders providing letters of support including Dr. Santiago, Dr. Mena and Mayor Dee Margo. The objectives for 2019 are to continue to build support at the Corps of Engineers for funding of needed infrastructure improvements to dams and other stormwater structures, seek funding from Department of Defense for support related to new water supply sources (expanded desalination and/or ASR) and advocate for state legislative support to increase bonding authority for EDAP (if approved by Legislature and signed by the governor, initiation will be placed on ballot for voter approval). Mr. Balliew and Mr. Gonzalez addressed questions from the Board regarding this item.

• Equipment Training Simulator and Video - Mr. Shubert provided information to the Board regarding the simulator and then showed the video.