WESLACO — Walking into a budget workshop here is a study in organization and careful planning. City manager Mike Perez approaches each budget planning season with one eye on the present, and one on the future.
So when the COVID-19 pandemic upended every corner or our lives in the middle of the fiscal year last spring, Perez didn’t panic. He had planned for it.
He hadn’t planned specifically for a pandemic, but he had planned for a rainy day — and the coronavirus was quite the tempest, striking the entire world at once.
“I don’t want to sound arrogant, but no,” Perez said Friday evening when asked if he was surprised at how well the city of Weslaco has fared financially during the pandemic.
“I’ve always been fiscally conservative, you’re correct. But when they declared a disaster … then I knew I had a parachute. And that parachute is I could get reimbursed for all these additional expenses,” he said, speaking of the states of disasters declared at the local, state and federal level last March in response to the pandemic.
Even though the pandemic struck in the middle of the 2019-20 fiscal year, disrupting the city manager’s balance sheets, Weslaco ended the year in the black. The city’s 2020 fiscal audit, which was presented to the city commission in April, showed the city had continued a five-year growth trend.
And though operational expenditures had increased — due in large part to emergency COVID-19 related expenses — the city’s reserve fund also grew by about $2.6 million.
But those disaster declarations gave Perez some peace of mind in knowing the city would be able to replenish whatever rainy day funds it had expended as a result of its COVID response.
As a result, the city manager never worried about the money, but he did worry about the people who keep the city running.
“My moment of panic was how many people am I going to lose? … At one point, we had one-third of our fire department out with COVID. I was scared. How are we gonna — I can’t run an ambulance and fire department with one-third of them out,” he said.
“And that’s what scared me. How am I gonna keep city hall (running) and continue to provide service to the public? That scared me. … The money part I had it covered. People, I can’t,” he said.
Now, more than a year into the pandemic, the fiscally conservative lessons Perez has learned in his four decades as an administrator are paying dividends in figuring out how to keep a city running as waves of the virus continue to surge and ebb.
So, too, does the promise of additional COVID-19 relief funds.
Weslaco was ultimately reimbursed some $5.8 million as a result of the Coronavirus Aid, Relief, and Economic Security Act of 2020, or CARES Act, for expenditures it incurred last year.
That included paying for first responder overtime, personal protective equipment, facility upgrades, such as air scrubbers, and more, Perez said.
But while the CARES Act injected millions into the city’s coffers, Weslaco also lost revenue, including some $700,000 that should have come in from things such as utility payments and permit sales, Perez said.
Nonetheless, Weslaco was the only city in Hidalgo County to be reimbursed 100% for its coronavirus expenditures, he said — all due to the expertise the city has developed in disaster response.
A host of floods and other natural disasters has forced Weslaco to hone its disaster response, from switching payroll time clocks to a “disaster” setting that helps track disaster-specific hours worked, to every one of the city’s staffers being informed of disaster protocol, to regular internal audits to track disaster-specific expenditures.
That expertise helped streamline the reimbursement process.
“If it weren’t for the CARES reimbursement, we would be in a world of hurt. And if we didn’t get the money that we’re getting from the American Rescue Act (sic), we would also be in a world of hurt. Not as bad, but it has helped,” Perez said.
Weslaco expects to receive additional funds as a result of the American Rescue Plan, which was approved by Congress this March.
Unlike the CARES Act, the city won’t have to spend money first then wait to be reimbursed. Instead, it expects to receive just over $5 million this year, and another $5 million next year.
Weslaco plans to put the bulk of the funds to use on infrastructure projects, including additional drainage projects, Perez said.
“We’re gonna do a lot of infrastructure that really needed to be done years and years ago. And it’s gonna give us a chance to catch up,” Perez said, adding that the funds are giving Weslaco “room to breathe.”
The city has also been making plans for building a new police and fire station, as well as a new library. Though “the city on the grow” isn’t one of the county’s largest, Weslaco’s public library is the second busiest next to the McAllen Public Library system, Perez said.
For now, Perez continues to plan for the year ahead with optimism. The city held two budget workshops last week and has another three slated for this week.
Each city department is assigned a particular day to present their proposed, or “wish list,” budgets. It’s all laid out in a 168-page spiral-bound notebook Perez and the finance department have prepared just for this purpose.
Together, the department heads, Perez and members of the city commission will go through the budgets, paring things down into needs versus wants. Perez, the fiscal conservative, tries to strike a balance between the two, reminding staff and elected officials to think long term.
“You gotta look at five, 10, 15 years from now, and what’s that gonna cost? If you don’t plan it, then you’re gonna put your city in a real difficult position years from now,” Perez said.
“And that’s not fair to the residents and taxpayers of this community, because at the end of the day, that’s who we’re supposed to be serving,” he said.
But overall, the city’s finances are “in good shape,” he said.
