We have the highest fund balance and the highest bond rating which hopefully allows us to leverage money for infrastructure projects we’re planning.
SAN BENITO — For seven years, officials here have been working to build the biggest cash reserves in the city’s history.
At City Hall, the general fund’s balance stands at $10.16 million, enough to operate the city for 188 days in case of emergency, six months after city commissioners passed a $15.8 million general fund budget.
Within the city’s overall budget, its unassigned funds balance is set at $8.14 million.
Now, officials are planning to tap into the fund balances to help finance projects, Mayor Rick Guerra said Wednesday.
“It’s a good feeling,” he said. “I’m glad we have these kinds of finances. It’s being held for projects. There are projects we’re waiting on.”
Meanwhile, officials are reviewing plans to spend $403,977 remaining intact from the city’s 2021 Coronavirus Aid Rescue and Economic Security Act stimulus check earmarked for the Community Development Block Grant program.
Planning projects
Rising property values and climbing sales tax collections helped build the fund balances, Commissioner Pete Galvan said.
“Property values went up, sales tax went up and savings occurred during the pandemic when there was less municipal spending and activity,” he said, noting Fitch Rating has boosted the city’s credit rating to AA.
“We have the highest fund balance and the highest bond rating which hopefully allows us to leverage money for infrastructure projects we’re planning,” he said.
Projects include building a $2.9 million surge tank at the city’s service center and a $1.2 million sewer lift station in the Landrum area to comply with a 2012 Texas Commission on Environmental Quality mandate requiring the city overhaul its sewer system or face severe fines stemming from a series of sewage spills in 2009 and 2010, Guerra said.
Meanwhile, officials plan to match state grants to fund projects aimed at upgrading and expanding Stenger Road and Business 77, he said.
Guerra said officials are also planning to upgrade a parking lot at a ballpark near the San Benito Boys and Girls Club, he said.
7 years building fund balances
I think we need to put it to use to take advantage of whatever is out there to help us rebuild the infrastructure or continue projects that make a difference in our community.
During a meeting, City Manager Manuel De La Rosa said officials have been working about seven years to build up the fund balances.
When he took office in 2016, officials had built a fund balance big enough to operate the city for 103 days, he told commissioners during the March 7 meeting.
A year later, officials boosted the fund balance to a level at which it could fund operations for 120 days, he said, adding commissioners set that benchmark as the general fund balance’s minimum.
“We’ve had a healthy revenue stream from that time,” De La Rosa said. “You have more leverage and a better bond rating when you have some of these reserves so you can leverage it.”
During discussion, Commissioner Rene Garcia suggested officials tap some money to help fund projects and match grants.
“We have to continue to use some of this money if there are opportunities for additional grants for roadways, for different infrastructure projects that we need,” he said. “I think we need to put it to use to take advantage of whatever is out there to help us rebuild the infrastructure or continue projects that make a difference in our community.”
During the meeting, Stephanie Sarrionandia, the city’s assistant finance director, told commissioners the city’s bond debt stood at about $2.3 million stemming from four bond issues used to fund projects including sewer lift station upgrades, park improvements and street work.
CDBG federal stimulus check in tact
Meanwhile, commissioners are considering plans to spend $403,977 in CARES funding earmarked in 2021 for the city’s CDBG program.
During the meeting, Martin Saenz, the city’s CDBG coordinator, said commissioners’ original plan to tap the money to help residents pay rent failed to attract qualified applicants.
“One of the main reasons the applicants wouldn’t qualify is that you can’t double dip,” he told commissioners, referring to coronavirus pandemic federal relief funds. “If you’re getting funds from this organization, you can’t get funds from CDBG.”
Amid discussion, Saenz said he was working with U.S. Department of Housing and Urban Development officials in San Antonio to discuss projects the city could fund with the money.
“It’s depending on what projects the city commission decides but it has to be connected to COVID-19,” he said. “It could be something, for example, like infrastructure related to COVID-19. It could be a nonprofit that was helping during the COVID-19 pandemic that didn’t get reimbursed through another organization.”
Officials have about five years to spend the money, he said.
