San Antonio City Council voted Thursday to approve a $3.4 billion budget for the 2023 fiscal year, including a plan to give CPS Energy’s residential and corporate customers a onetime credit on a future bill.

The revival of the plan to return roughly $42 million in surplus revenue from the municipally owned utility to ratepayers came after council members shot the idea down in a work session at the end of August.

Council voted Thursday to lower the city’s property tax rate to $.54161 per $100 of valuation, from $.55827. Earlier this year it increased the homestead exemption from .1% to 10%, along with increases in exemptions for disabled people and people 65 and older in an effort to keep property tax bills from rising along with the region’s rapidly increasing residential valuations.

Conflict over the CPS Energy rebate plan has divided the council for weeks. But in the end, the budget including it passed on a 9-1 vote, with Councilman Mario Bravo (D1), who proposed his own plan for spending the CPS Energy windfall, casting the lone “no” vote and Councilwoman Phyllis Viagran (D3) abstaining.

The idea initially proposed by City Manager Erik Walsh included giving ratepayers 13% of their July bill back as a credit on their bill in October. The version approved Thursday will offer a slightly lower rebate, an average of $29 for residential customers, as more money was shifted to a low-income utility assistance program offered by CPS Energy. An option for customers to direct their rebate to the utility assistance program or home weatherization also was added.

The money comes from $75 million in surplus revenue contributed to the city budget by CPS Energy due to an extremely hot summer.

An amendment introduced by Viagran sought to temporarily put aside the $42.5 million designated for the rebates, buying the council time to discuss other options. Though most council members supported other uses for the CPS Energy money, her amendment failed Thursday.

“This is not the best deal [for constituents],” said Viagran, who pointed out that only $16.1 million of the $42.5 million in rebate funds would go to residential customers living in San Antonio.

“This is rushed. This is not transparent. This does not meet the equity lens,” Viagran said.

Council members Viagran, Bravo, John Courage (D9), Jalen McKee-Rodriguez (D2) and Teri Castillo (D5) voted in favor of the amendment. Another five members — Adriana Rocha Garcia (D4), Melissa Cabello Havrda (D6), Clayton Perry (D10), Manny Pelaez (D8) and Mayor Ron Nirenberg — voted against, while Councilwoman Ana Sandoval (D7) abstained, causing it to fail.

Liberal activists who signed up to speak against the rebate plan at Thursday’s meeting said Sandoval, who has worked on air quality and climate change projects for San Francisco Bay Area Air Quality Management District, had disappointed her supporters by not fighting for a plan to use the money for home weatherization and climate mitigation efforts.

Sandoval had previously expressed concern about the rebate plan, but her own plan to fund climate solutions was added to the city’s proposal for the CPS Energy revenue late this week.

“It’s really baffling to me that someone who puts themselves out to be such a progressive would offer to climate action proposal that makes up less than half of the 1% of the city budget,” Karen Munoz, an activist, said to Sandoval at the meeting.

The rest of the city’s surplus CPS Energy revenue will go toward sidewalks and an emergency supply warehouse.

Walsh described Thursday’s record budget — nearly 11% more than the 2022 budget — as a return to normal after the city slashed its budget during the early days of the pandemic. San Antonio also received significant federal funding for pandemic relief.

“We had made a number of cuts back in 2020 and were not able to afford to restore those in 2021,” said Walsh, who pointed to an additional ladder company the city had planned to add to its fire department two years ago but had to cut funding for until the 2023 fiscal year.

“Being able to do that affects response times citywide, and that had been an issue that we’d left undone for last two years,” said Walsh.

Among the areas making up funding ground, the new budget includes salary increases for city employees and makes the entry-level wage $17.50 per hour. Walsh said that change was necessary to recruit and retain personnel to see through projects in the city’s largest bond in history.

Late adjustments to the budget this week included:

  • City Council added money to help buy down loan interest for small businesses, something the city already does. The final budget includes $500,000 for this effort, for which the city received praise from the San Antonio Hispanic Chamber of Commerce. “A 0% loan program will be a life changer for so many small business owners and for aspiring entrepreneurs,” SAHCC President and CEO Marina Gonzales said at Thursday’s meeting.
  • Two city code enforcement officers will be redirected to begin inspecting apartment complexes, thanks to a final budget amendment. Members of the Texas Organizing Project showed up to promote this move, as part of the council’s ongoing effort to increase accountability for negligent landlords.
  • The city added $400,000 to help businesses that are being negatively impacted by construction from city bond projects. Council has received increasing complaints from business owners about projects that have deterred customers and are taking longer than expected to complete.
  • The Mexican American Civil Rights Institute received a boost of financial support, from $100,000 to $250,000.
  • City Council added an additional $200,000 to the previously $100,000 budgeted for the Martin Luther King Jr. March, following requests from the event’s organizers.
  • City pool hours will be expanded under the new budget, from six to seven hours per day during the regular season. Twelve pools will get an additional hour per day during the extended season.
  • Council members put aside $125,000 to fund a public awareness campaign around the May 2023 municipal elections, when they will be on the ballot.
  • Bravo, McKee-Rodriguez, Castillo, Sandoval and Courage will each get a new staff member for their districts. Other council members who said they didn’t need additional staff asked to dedicate the funds to other projects. Perry directed his district’s money for a staffer to go toward street repairs.

This article has been updated to correct Councilwoman Phyllis Viagran’s “yes” vote on the budget to an abstention. CPS Energy is a financial supporter of the San Antonio Report. For a full list of business members, click here.

Andrea Drusch writes about local government for the San Antonio Report. She's covered politics in Washington, D.C., and Texas for the Fort Worth Star-Telegram, National Journal and Politico.