Mercedes city officials moved forward with implementing increases in the city’s property tax rate, and water and sewer rates during a special meeting Tuesday night. The city commission also approved the budget for fiscal year 2021-22.

After weeks of city meetings and budget workshops that devolved into arguments, and even the abrupt, but temporary suspension, of one public meeting, the city commission moved forward on the financial decisions with little fanfare Tuesday night.

But, as had also become clear during preliminary votes over the past several months, the commission’s final votes were divided.

Mayor Oscar Montoya, Commissioners Jacob Howell and Joe Martinez all voted in favor of increases to the property tax rate and water and sewer rate. They also voted in favor of accepting the city’s $12.3 million budget, just as they had during the statutorily required first round of votes last week.

Also echoing their votes from last week, Commissioners Leonel Benavidez and Jose Gomez voted against all three items.

“I’m glad the commission now realizes the serious issues that we face, right, as again, I have in the past, for six years prior to becoming a commissioner, spoken up about. And now we see the severity,” Benavidez said.

“The only issue here is that we did not have the dialogue. … We were just presented, the day of, a plan that we were gonna vote (on) by the financial advisers,” he said.

Benavidez was referring to several presentations from financial advisers with Estrada Hinojosa who recommended that the only way the city could accomplish its goals of balancing the budget, tackling major infrastructure projects, and starting the process of getting the utility fund to be self-sustaining was via a combined approach of raising property taxes, increasing the water and sewer rate, and taking on new debt.

For Benavidez and Gomez, the commission was left uninformed over whether any of those objectives could have been accomplished, at least in part, via other means, such as more stringent budget cuts.

“And again, there’s still some issues that I would have liked to have discussed, but definitely options and being efficient and so that’s why I’m voting against in this case,” Benavidez said.

Gomez echoed that sentiment a few minutes later, but also added his thoughts on how the city is attempting to do too much with non-existent resources.

“Bottom line is, we could not balance the budget because there was more expenditures than revenues. So if we can’t balance the budget, I really think, how can we move forward, you know, trying to do things that we can’t?” Gomez said.

“When you balance the budget it means you’re cutting where it needs to be cut, regardless. If it’s personnel, it’s personnel. Whatever it is. It has to be cut just to balance it,” Gomez said.

But throughout the budget process, the commission majority had seemed unwilling to consider a reduction in force to balance the budget.

And though the finance staff had repeatedly referred to the proposed budget for fiscal year 2021-22 as “barebones” where few other, if any, cuts could be made, the budget itself tells a slightly different story.

For one, through their 3-to-2 vote, the commission approved an operating budget of nearly $12.3 million. That figure is a $1.15 million increase over last year’s $11.1 million budget.

Too, after property valuations rose substantially countywide over the last fiscal year, the new budget will generate nearly half-a-million dollars in additional revenue compared to last year, the budget shows.

That $437,068 in additional property tax revenues represents an increase of just over 9%.

There were some areas of the budget which showed substantial decreases in expenditures where officials made targeted cuts. For instance, the city’s two largest departments — police and fire — each tightened the purse strings.

The police department budget for 2021-22 will shrink by just over $50,000 — that’s $2.98 million compared to last year’s budget of about $3.04 million.

And the fire department’s budget is shrinking, too, though by a more modest $15,628 in the coming year.

But while those two departments — which not only have the largest budgets, but also have the most personnel — saw their budgets shrink, other sectors of the city saw additional money allocated to them. That includes money set aside for street repairs and maintenance, and so-called “non-departmental” expenditures.

The streets department budget will grow by $88,000 in the coming fiscal year. Meanwhile the non-departmental budget has increased by about $773,000.

That figure assumes that the Rio Grande Valley Premium Outlets will agree to accept a lesser amount than the city owes it via an agreement to share sales tax revenues.

Early on in the budget process, the retail center had demanded the full amount of $1.5 million. However, the outlets seemed amenable to a lower amount, explained Mercedes Finance Director Nereida Perez during a previous meeting.

The non-departmental budget shows the city expects to pay some $616,993 to the outlet mall.

For the commission majority, the budget decisions were a necessary step in addressing financial problems that have gone ignored for years.

“Four years ago a different commission was told, if you don’t take this action, down the line this is where you’re gonna be. They kicked it down the road, now it’s still here,” Commissioner Joe Martinez said.

“And for us to kick that problem down the road is only gonna mean that when it comes down to whether it’s us or anybody else in the future, it’s gonna be worse,” he said.

Howell, too, emphasized the importance of taking action now.

“These are the tough decisions but that’s what sometimes leadership is about. It’s about making these tough decisions,” Howell said.

Meanwhile, the mayor stressed that all five commissioners, regardless of where they stand on spending, are trying their best to keep the best interests of Mercedes residents in mind.

“All five of us, for or against, are thinking of the poorest of the poor,” Montoya said.

“My house doesn’t flood, but I’m willing to pay for somebody else’s who does,” he said, referring to the tax increase.

The new budget goes into effect Oct. 1.

[email protected]


Mercedes moves closer to a nearly 7 cent tax hike