WESLACO — As the statutory deadline neared for municipalities to approve their budgets for the upcoming fiscal year, the Weslaco City Commission gathered last Wednesday to wrap up a smooth budget planning season.
The Weslaco City Commission passed the second and final readings of the city’s proposed tax rate and budget for fiscal year 2019-20 during the Sept. 25 special meeting.
Residents here will see a 3 cent increase in their property taxes, a result of $10 million in new debt approved by voters in May’s drainage improvement bond election. The commission approved increasing the rate from $0.6667 per $100 valuation to $0.06967 per $100.
Between the three-penny increase and a spate of new construction adding to the city’s tax base, Weslaco expects to see a 5.5% increase in revenue in the coming year, equivalent to some $639,000, according to the budget’s cover sheet.
The $10 million in drainage bonds will be in addition to $4 million in certificates of obligation the city approved for drainage improvements last November, as well as outstanding debt related to the city’s water and wastewater treatment facilities.
Despite its debt load, the city’s financial outlook remains positive. Weslaco has maintained an AA- financial rating and is projecting a small fund balance surplus of $1,311 in the new fiscal year, which began Tuesday. Too, the city has enough in its coffers to fund 103 days of operations, records show.
Weslaco City Manager Mike Perez was optimistic, saying in an interview last week that the final budget outcome was a result of carefully walking the line between available revenues, outstanding debt and capitalizing on good interest rates when borrowing.
“The department heads did a really good job in their presentations,” Perez said before the special meeting. “Did they get everything they want? No. Do they need more? Yes, but … we only have X amount of money,” he said.
Included in the budget is a 2% salary increase for the city’s non-unionized staff. It’s the first such pay increase for city employees in approximately four years, Perez said.
And after several low-key rounds of negotiations with the Weslaco Municipal Police Union earlier this summer, police officers will see a 2.5% pay increase this year, followed by an additional 2.5% increase next year.
According to terms negotiated last year, fire department staff will also see a pay increase this fiscal year. Theirs will be 1%, Perez explained.
Weslaco schoolchildren will also see an increased police presence due to a partnership between the city and Weslaco ISD that will fund eight additional school resource officers.
However, despite the all the positives, the city is still struggling to grapple with deficits in its airport fund.
The airport fund began the current year with a $370,000 deficit, and though expenditures this year were approximately $255,000 less than the previous year, sagging revenues were not enough to keep up, records show. As a result, the deficit for FY 2018-19 widened to some $481,000.
That gulf is expected widen even more — past the half a million mark — in FY 2019-20, according to budget figures.
Cities must approve their tax rate for the upcoming year by Sept. 29, according to guidance issued by the Texas Municipal League regarding statutory deadlines for taxes and budgets. As a result, the deadline for adopting a tax rate ultimately informs the timeline a city must follow to adopt its budget, as well.