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Federal relief helps Pearsall overcome shortfalls
Pearsall’s elected officials kicked off a contentious budget season on Thursday, June 29, as the city recovers from the economic wreckage of the coronavirus pandemic.
“I want to commend Santos [Alarcon, finance director], Fred [Reyes, city manager] and department heads for all the work done to prepare the budget,” Mayor Ben Briscoe told councilors in an opening statement during the Thursday evening meeting. “They have provided a great place to start.”
Briscoe told councilors the city has been blessed with unforeseen financial assistance from federal grant monies such as the COVID-19 Recovery and the recent American Rescue Plan (ARP).
The city received $557,708 in COVID recovery reimbursement in March for expenditures related to the coronavirus. The city was able to use $401,000 of that amount for first responder salaries. The funding helped the city recover from losses in sales tax revenue, according to city staff.
“We also had a step up with the property tax appraisals which put us in a much better position,” the mayor said. “We are blessed with the American Recovery Plan but we are very thin on reserves and have a debt service.”
The city’s annual debt service for bond payments is $1.9 million, a cost Briscoe is aiming to lower by refinancing. The mayor says the 2020 draft audit would be ready by next week. Submission of the audit by March 2022 would help increase the city’s credit rating, subsequently making the municipality more appealing to creditors.
Briscoe applauded the administration’s desire to have a six-month operating reserve and encouraged councilors to ‘aspire to do that.’
Reyes presented councilors with the goals of the administration for the upcoming fiscal year that included having the 2020 audit submitted on time; establishing tax and utility rates that are more equitable; allowing maintenance on city infrastructure; a plan to clean up the city; support the business community with creation of a Chamber of Commerce; and to retain and invest in city staff.
Although the city has not received the funding from the ARP, Reyes anticipates the first $1.2 million payment by the end of the year.
“I ask that the council, when we get the money, spend on the goals we have set,” the city manager said.
In a quick review of the the budget, the city manager is proposing allocations of $600,000 on street improvements; $175,000 for infrastructure improvements to solid waste; $25,000 for the removal of brush at the wastewater plant; $200,000 to establish a Chamber of Commerce; $300,000 for the city’s comprehensive plan and drainage study; $250,000 for the maintenance of the ground and elevated water storage tanks; $55,000 to purchase five, “up-fitted police units;” and a $75,000 contribution to the county for ambulance services.
Reyes said the APR funding, requests for additional staff, municipal election, and monies from the STEC PILOT agreement were not included in the proposed budget presented to councilors.
According to the city manager, five additional police officers, one utility supervisor, one park staff member, two water maintenance staffers, one permit assistant to the city manager and a full time municipal judge are among the requests.
“Also the estimated cost of the staff which is about half a million is not included,” Reyes said.
Alarcon, who called himself fiscally conservative, encouraged councilors to approach the budget “in a way that would provide the city with future options for capital improvements and better financial footing.”
“The methodology is to get with the department managers and get a request of their needs so that we can provide optimal service to the citizens of Pearsall,” the finance director said. “Also, this anomaly of the pandemic and the government funding is never going to happen again. It is great from the financial prospective and can get the city to a place they have never been before.”
The finance director said councilors should be cognizant that the first bond call is approaching in 2022 and the city could refinance the 2012 bond.
Mayor Briscoe warned that inflation is not part of the budget and councilors should remain conscious of that possibility.