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“We have budgeted conservatively for the past two years,”
Pearsall councilors voted 4-3 to accept the city’s annual proposed budget for the 2023 fiscal year during a meeting on Tuesday, August 9.
During a presentation by Federico Reyes, the city manager reviewed a recap of the proposed operating budget that included capital improvement projects, an increase in property taxes, the elimination of unfulfilled job vacancies and a one-time pay incentive.
“The city has had a minimal increase in the utility rates that will bring in an additional $112,000 revenue,” Reyes said. “We have also eliminated two gas, one right-of-way crew, one street and one utility manager position.”
According to Reyes the 2022 fiscal budget allocated for 79 positions within the city last year, this budget accounts for 74 city employees. However, no current employee is in jeopardy of losing his or her job due to budget constraints.
City administration is seeking a one-time pay incentive of $2,000 per eligible employee.
The city finance department is anticipating a $300,000 increase to the sales tax revenue prompting the administration to budget $2.3 million.
Reyes reassured councilors that the proposed budget included increases in fuel costs and other fleet-related expenses.
Earlier this year the city completed a long-anticipated drainage study that outlined ten projects at an estimated cost of $35 million.
Reyes remains cognizant that the city is unable to fund all projects but noted that possible funding through the Nueces River Association (NRA) is possible.
“Next week we have a meeting with NRA and we are going to ask them to consider funding some of those projects,” the city manager said. “That is the significance of that study; the good thing for us is we have done some analysis for those projects.”
The city manager outlined investments to the water and wastewater capital improvement projects that included using American Rescue Plan funds to finance various projects.
According to Reyes, approximately $609,000 has been encumbered from the ARP funds for design of the Business IH-35 waterline and the water model study; $115,000 was utilized for improvements to the second clarifier at the wastewater treatment plant; $46,000 was allocated for the replacement of two submersible pumps at the lift station; and $27,000 was used for payments for the replacement of water meters.
Over the next ten years, the city will invest $2 million for the revitalization and repair on the ground elevated water storage tanks. City administration anticipates that ARP funds will help pay for approximately $650,000 of this project over the next two years.
A nearly $14 million request was made to the Texas Water Development Board for various waterline extension projects. The project included extending an eight-inch waterline to existing homes and businesses along the north portion of Business Loop IH-35; replacing waterlines along Colorado Street; and the construction of a new water well and elevated water storage tank to serve existing customers west of Interstate 35.
The city did not qualify for the grant, contingent on future approval the city would have 70% of the loan forgiven, according to Reyes.
As new development continues in the city, Reyes has advocated for the creation of a Tax Increment Reinvestment Zone (TIRZ), which is an economic development tool to incentivize both development and redevelopment.
The city manager has budgeted approximately $141,000 for the city’s contribution to the TIRZ for the fiscal year.
“Now, it is budgeted but does not mean we will deposit that much, we cannot deposit what we do not collect,” Reyes said.
The city manager hopes to fund the design cost and reuse the wastewater to improve the Victor Trevino Sports Complex, making the facility more appealing to investors.
“I believe it will develop the community and spur economic development,” Reyes. “If we can find a way to improve our facilities. If we can use some of our water from our wastewater system, it will make for some nice practice fields. We do not have dollars to lay turf but we do have money for wastewater, it is just a matter of treating it.”
The city’s comprehensive plan is slated for completion by this fiscal year and will serve as a vital tool to help the city qualify for grants, particularly Texas Parks and Wildlife.
In an effort to continue to beautify the city, councilors have budgeted $32,000 for brush disposal.
In the past three years there has been little to no increase in utility or tax rates,” the city manager said in closing. “We have budgeted conservatively for the past two years; it was exceptionally hard during the pandemic. In that respect, we still were able to improve fund balance. We understand peoples’ needs with [utility] bill assistance, but come January 1 we cannot continue to do it, we will begin assessing late penalties.”
The city is proposing a tax increase of .02 per hundred dollar of the assessed value; September 6 is the first public hearing for the proposed tax rate from .86 per hundred dollar assessed rate to .88.