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EDINBURG — The city council here realized the culmination of months’ worth of money talks when they unanimously approved a $155 million budget, as well as a 1-cent property tax rate decrease during a meeting on Tuesday evening.
With the approvals, city workers — including police officers — will see a 3% cost of living pay increase while Edinburg residents will see the lowest tax rate since 1991 at 63 cents per $100 valuation.
“This started in May and this here, with this action, will complete the process so we can start Oct. 1,” Edinburg Mayor Ramiro Garza Jr. said of finally reaching the end of the budget process.
But the approval of the budget and the lower tax rate didn’t come without some compromise.
City staff initially recommended a tax rate of 64 cents per $100 valuation. Decreasing the rate by a penny was enough to lower projected revenues by hundreds of thousands of dollars.
Earlier this month, the city council explained they felt it was important to bring property tax relief to residents as valuations have skyrocketed.
This year alone, property appraisals have risen nearly 13%. The year before that, they rose 10%.
But while property values have increased — along with the amount of new home construction, which will be added to the tax rolls — Edinburg will still have to dip into other funding sources to meet its expenditures.
“This doesn’t mean that we’re reducing services. Actually, we’re going to enhance services through different areas that are included in the budget,” Garza said.
Those other areas include using up any remaining federal COVID-19 relief funds, which expire in 2026, as well as monies the city has set aside as part of its capital lease program, whose coffers currently stand at about $5 million.
“I think it’s important the residents know that we did take everything into consideration. The budget includes our property tax and sales tax and fees for service. But we have to look at everything that’s available because our needs are so much,” the mayor said.
Between those three revenue streams, Edinburg will generate just over $85 million in general fund revenues.
The general fund is what pays for the city’s operating expenses, such as employee payroll and benefits, as well as the majority of equipment and supplies.
That $85 million represents a 7.78% increase compared to the $78.9 million Edinburg generated the previous year.
Nonetheless, it will still fall short of the city’s expenditures, which are projected to hit nearly $88.6 million.
Expenditures will exceed revenues by more than $3.5 million, even after an infusion of $5.75 million in cash from the city’s solid waste fund, according to data shown in the city’s FY 2023-24 budget book.
The budget book also shows that the solid waste fund will help subsidize other arms of the city, including the South Texas International Airport at Edinburg, as well as the city’s two golf courses.
Just over $1.2 million will be transferred from the solid waste fund to the airport while $255,000 will go to the Ebony Hills Golf Course.
Meanwhile, more than $478,000 will go toward paying down debt at the Los Lagos Golf Club, while another $596,000 will go toward that golf course’s operating fund.
However, the solid waste fund will invest more than $686,000 into its own capital improvement plan, or CIP, which is used to fund large scale and longer term improvement projects.
Over the next year, Edinburg will be investing in a score of other improvements, too.
The approved budget will pay for $2.6 million in street improvements using funds from the American Rescue Plan Act.
“This does allow us to fund over $5 million in additional new projects, as well, under the capital lease program,” Mayor Garza said.
And like most cities, the largest funding allocations will go toward public safety.
The budget allocates nearly $29.5 million for the police department, including the addition of eight new positions.
Meanwhile, just over 11.1 million has been allocated for the Edinburg Fire Department, and another $11 million for culture and recreation, which includes the public library, city parks and the World Birding Center.
Tuesday night’s approval of both the FY 2023-24 budget and tax rate took place without any fanfare. No members of the public spoke for or against the proposals during the public hearings held just prior to the council vote.
Both votes were unanimous; however, neither Councilmen Dan Diaz nor Jason De Leon were present.
The new budget goes into effect on Oct. 1.