San Benito mulls public-private partnership

SAN BENITO — The city might be taking steps to enter into a public-private partnership to finance as much as $25 million to repair streets and upgrade its sewer system.

Later today, city commissioners are expected to consider City Manager Manuel De La Rosa’s request to help set guidelines aimed at entering into a public-private partnership.

In San Benito, the city would be breaking new ground if it entered into this type of partnership.

City Commissioner Esteban Rodriguez has requested the city consider options including entering into its first public-private partnership.

As part of a public-private partnership, the city could borrow money from a private developer who would fully finance the city’s project while hiring contractors for the job.

Rodriguez said a public-private partnership would save taxpayer money, produce high-quality work and complete projects faster than the public sector.

“I think it would be beneficial to the city to finance projects,” Rodriguez said yesterday. “We can’t just stick to one way of doing things.”

In the past, the city has worked with its financial advisor to borrow money through the sale of bonds to fund projects.

Another option includes applying for grants, which would likely require the city to put some of its own money on the table.

“I don’t think the city is the (financial) position to match (its share of funding),” Rodriguez said.

In today’s meeting, commissioners are expected to consider making preparations that would open the door to a possible public-private partnership.

“City administration is in the process of preparing local guidelines,” De La Rosa stated yesterday, adding “we are at the stage where (commissioners’) direction and input are necessary for the completion of the guidelines. The decision to adopt the guidelines is that of the city commission.”

The city would submit its guidelines to the Texas Facilities Commission as part of the steps to enter into a public-private partnership, Rodriguez said.

Rodriquez has proposed a $25 million project to fund street repairs and sewer system improvements.

As part of that proposal, an $11 million project would upgrade six sewer lift stations.

The Texas Commission on Environmental Quality is giving the city three years to upgrade its sewer system or face fines stemming from sewer discharges about nine years ago.

Rodriguez’s proposal also includes a $14 million project to repair 34 of the city’s 70 streets.

How we got here

In January, Damian Guevara with McAllen-based Avery Resource Consultants proposed the city enter into a public-private partnership in which he would privately finance 100 percent of a $22 million project to repair streets and upgrade sewer lift stations.

As part of the project, Guevara would hire the project’s contractors.

Meanwhile, the city, which would put no money down, could pay back its debt within 25 years.

This private financing could save the city about $1.5 million, Guevara said.

He added it would cost the city $23.5 million to complete the project within four to five years.

But Guevara said he could complete the project within three years at a cost of $22 million.

Guevara said he selected two construction firms and two engineering companies which have evaluated the streets and sewer system to determine the proposed project cost.

Guevara’s January presentation marked the second time commissioners have considered his proposals to privately finance city projects.

Last October, commissioners’ split vote led the city to halt Guevara’s plan to finance a proposed $11 million aquatics center.

Under that proposal, Guevara told commissioners he would finance a competition-sized swimming pool with two water slides.

As part of the plan, the city would put no money down while paying back the debt over a 25-year period.

At that time, commissioners requested De La Rosa and City Attorney Ricardo Morado research Guevara’s proposal.