“On the cusp of new growth”

By Marc Robertson - Editor | May 4, 2023

COTULLA’S NEW FINANCE DIRECTOR DESCRIBES CITY IN STRONG ECONOMIC POSTION

Ernesto Garcia III

When he was in his final year as a finance major at the University of Texas at San Antonio, Ernesto Garcia III put his home town near the top of the list for career options.
Today, he has taken over the position formerly held by consultant Jorge Flores, who has advised several administrations at both city and county governments, and Garcia believes his town is poised to witness a surge of new growth.
The 2017 Cotulla High School graduate earned his bachelor’s degree in December 2022 and immediately applied to work at City Hall, where he has now taken over daily operations in finance. Job duties include preparing financial statements to present to administrators and city councilors, keeping tabs on revenues and expenditures, and closing out the city’s books each year for an audit. The next will be returned in the form of a full report to the council before the end of June.
At the same time, the city government has converted its computer systems to a new finance software package that was recommended by Flores, who helped install the system at the end of 2022. The past six months have been a time of transition that Garcia says could not have worked smoothly without his predecessor’s guidance.
“All credit to Jorge Flores, for sure,” Garcia said last week. “He seriously helped with the transition, and he’s the best guy to learn from. He has been a big part of everything here.”
Garcia describes the timing of his degree and the job vacancy as ideal.
“Cotulla was a front runner for a career for me,” he said. “It’s a place I’d like to have ended up at. I was drawn home, so to speak, and my affiliation here is strong.
“I see Cotulla on the cusp of new growth,” the finance director said. “We have to be prepared for it, when it comes. This whole region is about to witness more economic development.”
Garcia points to his monthly reports to the city council as evidence of Cotulla’s current economic strength. At the April meeting, he reported that sales tax revenues for the previous month had totaled more than $173,000 with a year-to-date tally of over $1.29 million during the fiscal cycle, which begins each October.
That total, he said, represents an increase of at least 38 percent over the same period of the previous year.
Similarly, hotel occupancy tax revenues have continued rising, and while the city is restricted in how it may use the funds, they remain an indicator of local economic traffic.
For the second quarter of the fiscal year, Cotulla collected over $279,000 in hotel taxes, and the year-to-date total exceeds $649,000. The figures fall in line with both Garcia’s and Flores’ projection that the city may draw at least $1.5 million to the special fund by the end of the summer.
“That tells me right there that we are thriving,” Garcia said. “We have seen a rebound after the pandemic, but this tells us there is a greater economic movement. Business down here is going well. There is no sign of a slow-down.
“I was in school when the economic boom happened over the Eagle Ford Shale,” Garcia said. “The first thing we all observed, as Cotullans, was the traffic. Yes, that means traffic on the streets and in line at the stop light… but it also means at the stores and restaurants. Suddenly, there were crowds of people in line at the register, or waiting to be served in cafes. That’s the kind of business that feeds an economic engine.
“Everything suddenly multiplied, the needs and the supplies, and I think Cotulla was caught by surprise a bit by that,” he added. “We are coming to grips with it now. We are better prepared, having been through it, and we can supply the demand.
“What we are going to see is new growth with truck stops, freight movement, warehousing, and accommodation,” the finance director said. “The next expansion may be the airport area, with the application for a foreign trade zone there, so at City Hall we have to ask ourselves what we should expect from that. Well, from a financial standpoint, we have to know that it won’t be overnight. Things take time. Development has to grow and become established.”
An overview of the city’s utility departments shows Garcia that Cotulla continues on its path to having each branch of municipal service operate on balanced books and no longer dependent on fund injections. Notoriously a money pit for the city over the past two decades, the gas utility fund is now operating “in the black” with revenues of $219,000 exceeding expenditures of $127,000 since the start of the budget year.
“These are indicators of good money management, and I’m here to show the council that their decisions are made with sound advice,” he said. “A council has to know whether it can carry out the projects that the residents demand.”
Although the finance director’s position largely calls for him to record and present the city’s economic picture to the council, Garcia believes all city officials should operate with an eye on preparedness.
“The city has to ensure that it has the funds available to meet sudden demands, and that includes emergencies,” Garcia said. “From my position, I can determine whether we have what it takes to step up to the plate if something happens. When a utility component goes down, such as a water well, these repairs aren’t little. We might be preparing for the future, but we’ve got to have the funds on hand to maintain what’s here now.”
Stock market investments are a financier’s forte, and Garcia is no exception. He offers a caution, however, to anyone wanting to pour large amounts into accounts that cannot easily be tapped.
“For investing city money, you can take advantage of tax pools,” he said. “You still needs funds available. You can’t sink all your revenues into long-term investments, even though the stock market is a way to make money. Your contributions multiply over time.
“Investments are key, and whatever the city can do to grow its money is worth looking at,” he said. “It may not be traditional, but it may be essential.”