Earlier this week, City Manager Manuel De La Rosa proposed a $13 million general fund budget along with $14.6 million worth of expenditures.
“We’ll balance it,” City Commissioner Rene Garcia said Thursday.
The proposed budget shows a marked decrease in revenue compared with the city’s current $14.1 million general fund budget.
“It’s going to be very, very tight,” Mayor Rick Guerra said, referring to next year’s budget.
During meetings, De La Rosa has told commissioners he’s not planning to call for a boost in the city’s property tax rate of 72 cents per $100 valuation.
Officials described the proposed figures as “very preliminary” as they await the Cameron County Appraisal District’s certification of the tax rolls next month to determine if newly appraised property values will boost revenues.
Street repairs top priority
At City Hall, officials Thursday didn’t disclose the city’s projected fund balance.
In April, the city’s annual financial report for the previous fiscal year showed $6.1 million in the cash reserve fund, enough to run the city for 198 days, more than doubling the state’s recommended minimum of 90 days.
During a workshop Tuesday, officials reviewed the proposed revenues, including a $5.2 million property tax collection along with projected sales tax revenues of $4 million.
“It’s very conservative. That’s a good thing so we don’t go overboard,” Garcia said of the proposed budget. “I’m not going to say it’s a wish list. To me, it’s needs — what we need — how to prioritize the needs of the city to see what we have to budget.”
Like Garcia, Guerra described street repairs as a top priority.
“We’re seeing if we can move forward to work on the streets,” Guerra said.
For years, officials have set aside about $450,000 to fund street repairs.
But in March, commissioners launched a $1 million project aimed at paving parts of 12 streets — about 53.5 blocks — scattered across town.
To fund the project, De La Rosa pulled $550,000 from a $4 million reserve, bolstering the annual $450,000 street repair account to fund the $1 million street program.
Last month, Garcia said officials could tap the city’s cash reserves to fund street repairs.
Water rate study
Next year, residents now paying some of the Rio Grande Valley’s biggest water bills might see their rates climb.
Last month, commissioners agreed to pay a consulting firm $33,000 to conduct the city’s first water rate study in more than 10 years to determine whether to boost rates to help fund operations.
Late last year, Don Gonzalez, the city’s financial advisor with Estrada Hinojosa & Company in San Antonio, recommended officials consider a water rate hike to help fund a $9 million bond issue largely aimed at overhauling the city’s sewer system to comply with a 2012 Texas Commission on Environmental Quality order requiring the city meet a March 2023 deadline or face severe fines and corrective action.
During last summer’s budget workshops, De La Rosa told commissioners he planned to call for a water rate study, discussing the possibility of boosting water rates to offset a water production fund shortfall of $880,000.
The new study might recommend boosting rates higher than two cents, he said last month.