Times are getting tough at Mission City Hall. Preliminary budget figures show the city faces a fund balance falling from $9.7 million last September to just $550,000 next year. Despite difficult financial times ahead, Mission Mayor Norberto “Beto” Salinas, in a city budget workshop on finance this week, insisted on reducing the city’s ad valorem tax rate another penny this year, as was done one year ago.
However, the city is required to maintain a fund balance of at least two months of operating expenses for the General Fund. Using preliminary budget numbers, that figure is estimated to be about $5,908,000, according to City of Mission Finance Director Janie Flores, leaving a shortfall of $5,358,000 projected for next year.
Salinas instructed city staff at the workshop to “get down to the nitty gritty,” and find a way to reduce expenses to meet the budget. “If not, just get with us (city council) and we’ll do the cutting. Don’t ask for anything we can’t afford.” he said.
Later in the meeting, Salinas told the finance director to transfer half of the Utility Fund balance, or approximately $3.5 million, to the General Fund to help balance the city’s budget. Flores said she would need to check with the city auditor to see if the city could legally transfer those funds.
Flores told the mayor that the proposed budget for 2012-13 does not include any salary increases, salary adjustments or new positions, or any capital outlay, other than $900,000 for streets.
City Manager Julio Cerda said the proposed budget is just a continuation of this year’s budget.
According to city documents obtained by the Progress Times, a combination of factors have led to the current budget dilemma.
A three percent pay raise across the board for city employees, combined with other salary adjustments and additional personnel, all contributed to a $2.26 million increase in payroll and benefits costs this year. A document prepared by Flores also listed lawsuit settlement, land purchased, lower ad valorem tax rate, no significant increase in property values, the economy (fewer building permits and a reduction in payment of fines and fees), and other unforeseen expenditures. All these factors contributed to using an estimated $5.23 million from the fund balance in 2011-12 to meet expenses.
During the workshop, Councilman Ruben Plata said the property valuations should go up, due to new construction that has taken place in the city. However, Flores said that, according to the preliminary numbers provided by the county appraisal district, most of the increases in property values will benefit the Tax Increment Redevelopment Zone (TIRZ), rather than going into the city’s General Fund. The city finance director, using estimated numbers provided by the appraisal district as of July 9, projected ad valorem tax revenues to remain flat for the upcoming budget year at about $13,500,000 in the General Fund. The final certified tax rolls will not be available until late July or early August, she said.
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