HARLINGEN — As officials plan a proposed $51.2 million general fund budget, high fuel costs along with rising energy and health insurance prices will help determine if they tap into a $7.7 million reserve to help boost city services.
Earlier this week, City Manager Gabriel Gonzalez proposed the budget for the upcoming fiscal year, which comes with a $1.2 million surplus.
Meanwhile, he set the city’s total cash reserve fund at $24.5 million.
From the $24.5 million account, Gonzalez is setting aside $16.8 million to cover operations for a recommended 120 days in case of emergency.
Out of the proposed $51.2 million budget, that leaves $7.7 million in reserves.
“I’m not saying that this is what we can use,” Gonzalez told commissioners, referring to the $7.7 million account. “If you do want to fund some capital items that are not supported by the budget, this is where we’d need to take it from.”
Factoring in rising costs
Meanwhile, Gonzalez estimated the city’s health insurance premium would climb to about $5.8 million, up more than $400,000 this year, while its energy contract would jump from $3.2 to $3.28 million, up from about $1 million.
Officials have held off on estimating the cost of fueling the city’s fleet of trucks, he said.
“We’re still monitoring the fuel cost,” he said. “They’ve been coming down and hopefully they’ll continue that trend. But we will be adding an item if the trend continues upward to actually account for the added resources in fuel that we’re having to pay for our fleet. So those right now are still unknown.”
During discussion, Commissioner Daniel Lopez questioned whether commissioners should tap into the $7.7 million reserve fund.
“The way I’m looking at it, even though we have that $7 million fund balance, because there’s so many big-ticket items up in the air, being the health insurance, the gas, the electricity, to approve any of these extra purchases, we’re playing with money we may not eventually have,” he said.
Budget highlights
The proposed budget, which sets its voter-approved property tax rate at 61 cents per $100,000 valuation, comes with a $1.5 million street project generated through a monthly street maintenance fee, down from this year’s $2.5 million street project.
Meanwhile, Gonzalez plans to leverage grant money to fund drainage projects.
“Drainage has become a big issue for the city so we want to continue to fund those activities,” he told commissioners.
As part of the budget, Gonzalez proposed giving the city’s non-Civil Service employees cost-of-living increases ranging from 2 percent, which would cost $260,927, or 3 percent, which would be funded through a $376,432 package.
While the proposed budget projects property tax revenue to climb to $20.2 million, up from $19.5 million this year, the city’s sales tax collection is estimated at $22.6 million, up from $20.1 million.
Of the total proposed budget, about 72 percent will cover employee salaries, with the police department taking the biggest chunk at $15 million and the fire department’s share projected at $10.4 million.
