HARLINGEN — City Manager Dan Serna is facing challenges as he works to balance a proposed $49.7 million general fund budget coming with an $854,132 shortfall and a hefty $26 million cash reserve.
During the city’s first budget workshop Wednesday, Serna told city commissioners he’s reviewing employee health insurance proposals after Blue Cross Blue Shield boosted its premium by $1.1 million, from $5 million to $6.1 million — a 41 percent increase.
So far, other carriers have proposed premiums as much as 25 percent over the city’s current cost, he said.
“We are going to see a substantial increase,” he told commissioners.
To help offset costs, Serna said he’s considered boosting employee contributions by 15 to 20 percent.
“We had some catastrophic claims that really had an impact on our rate,” he said.
Call to reopen Tony Butler short course
Meanwhile, Serna said he plans to pull $268,706 from the general fund to offset losses at the 18-hole Tony Butler Golf Course as Commissioner Rene Perez called on officials to reopen the so-called nine-hole short course closed to cut maintenance costs last year.
“I agree we have to open the back nine,” Perez said after newly elected Commissioner Frank Morales asked whether the proposed budget included the short course’s reopening.
In late 2019, commissioners voted to close the nine-hole short course while trying to sell the 30-acre tract running across holes 19-23, prime land along Interstate 69’s frontage road with an estimated value of about $5 million.
As part of the move, they planned to use the money to fund upgrades, based on a national consultant’s recommendations.
However, officials turned up a decades-old city resolution restricting the land’s use to parks and recreation, Commissioner Frank Puente has said, adding voters would have to decide whether the city could sell the land.
More than a year later, the question of whether the city will sell the nine-hole short course hangs in limbo.
During the workshop, Mayor Chris Boswell suggested requesting the Harlingen Community Improvement Board fund an additional $1.2 million after the agency agreed to finance $1.9 million of an overall $3.1 million project aimed at upgrading irrigation, drainage and greens across the 18-hole course.
Last month, the board’s budget, funded through a one-eighth-cent sales tax earmarked to finance quality-of-life projects such as parks, fell short after setting aside $4.1 million to fund the second phase of the multimillion-dollar plan that’s turning Lon C. Hill Park into a destination park.
“I think they have the cash flow to fund that,” said Boswell, who projects city sales tax revenue will pump about $3.5 million into the board’s budget within the two years it will take to complete the destination park’s second phase.
Streets, drainage projects
Amid discussions, Perez requested Serna consider funding a grant writer’s position, calling for help in financing drainage upgrades.
“Our city needs major improvements in our drainage,” he said.
As part of the proposed budget, Serna plans a $2.5 million street paving program funded through a $1.1 million draw from the general fund along with $1.4 million generated through a monthly street maintenance fee.
“We need to start doing more streets,” he told commissioners. “We need to get caught up. We drive around our city and we have fallen behind at street paving.”
Meanwhile, Serna plans to tap part of the city’s first $10 million installment of its overall $21 million grant from the American Rescue Plan Act to fund drainage projects along 21st Street and Jefferson Avenue, where officials plan to widen storm sewer lines.
Sales tax revenue projected to climb
Under the proposed budget, Serna projects a 4 percent boost in sales tax revenue expected to climb to $20.1 million.
“I think this is the third year sales tax is overtaking property tax as our main funding source,” he said.
The city’s property tax rate, which stands at about 63 cents per $100 valuation, is expected to generate $19.5 million.
New positions, purchases proposed
Under the proposed budget, Serna’s calling for eight new positions including an MIS specialist, three dispatchers, a booking officer and an animal control officer, totaling $169,372 in salaries and $166,555 in benefits.
The proposed budget also includes $1.3 million in one-time purchases, including a $272,000 street sweeper and $300,000 set aside to build downtown restrooms.
