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MISSION – After rejecting a draft budget presented by staff during a budget workshop held July 16, the Mission City Council approved a revised 2012-13 preliminary budget in a special meeting held Monday, July 30. The proposed budget of $41,081,000 is $73,590 less than the budget adopted for the current fiscal year ending Sept. 30.

The revised version of the city’s preliminary budget presented Monday included several changes designed to bring up the projected fund balance in the General Fund to an acceptable level. The new fund balance figure that is projected at the end of 2012-13  is now at $4,737,000, according to the revised numbers – up from the preliminary number of $550,000 presented by staff to the council two weeks ago. Mayor Norberto "Beto" Salinas made it clear to staff during the prior workshop that the numbers presented were not acceptable.

20120730 CityofMission PreliminaryBudget FY 2012-2013-3Click the image to view the preliminary budget in PDF format.

City Manager Julio Cerda explained to the Progress Times this week that the budget numbers presented on July 16 were just the first draft, and the council had not seen those numbers before the workshop held two weeks ago.

"The council had not seen the proposed (draft) budget at all at the time it was printed. Since that time they have looked at the figures and made several adjustments to the budget," Cerda said.

Since that meeting, city staff has been working on ways to improve the fund balance, which, according to city Finance Director Janie Flores, is required to be two months of the city's operating expenses for the General Fund. As of July 18, using preliminary budget numbers, that figure was estimated to be $5,908,000.

The preliminary budget approved Monday had several key differences from the first draft budget presented two weeks ago. According to city officials, those changes include approximately $1.5 million in cuts to the budget, $1.5 million additional in transfers into the General Fund, and $1 million in funds coming back into the city from Mission Economic Development Authority, boosting the fund balance by approximately $4 million.

The proposed 2012-13 budget shows a beginning unrestricted fund balance of $5,025,000. The budget also includes total revenues of $32,455,000, and transfers-in of $3.6 million, for total available resources of $41,081,000. Transfers from the utility fund were increased from $2.2 million (first draft) to $3.6 million, (in Monday's version).

Appropriations are projected to be $36,344,000.

The budget does not include any salary increases or hiring of additional personnel. The only capital outlay is in street improvements.

When asked about the budget, Salinas said only the police budget had been increased in the interest of public safety. He said he hopes that as the new tax roll comes in, along with sales tax increases, the city would be able to purchase the new fire truck the fire department has requested. Otherwise, no special items are being budgeted for any department.

On the bright side, sales tax revenues have increased by 6.04 percent compared to last year. Sales tax revenues estimated for the current fiscal year are $10,575,000, and the city is using the same figure for next year's budget forecast.

While the current projected unrestricted fund balance for 2012-13 is still $1.17 million less than the $5,908,000 target, Salinas expects that when the official certified tax roll becomes available in August, the city will benefit from increased tax revenues not factored in the preliminary budget numbers. The expectation is that the increase will make up some, if not all of the difference.

"We also have a large fund balance of approximately $6 million in the utility department so we have more than adequate funding for any emergencies the city might face," said Salinas.

The mayor plans to continue his policy of dropping the tax rate by one cent each year. The tax rate for 2012 was $0.5388, but the proposed rate for the coming year is $0.5288.

"When people look for a place to buy a home or establish a business, they look at ad valorem tax rates," Salinas said. "If Mission has a tax rate of $0.5288 while another city has an ad valorem tax rate of $1.25, which city is the developer going to choose to set his business and his home?" he asked.

While the ad valorem tax rate will decrease, the city will receive an increase in revenue from increased fees in the Planning Department and other city operations.

The new budget is based on revenues the city had last year when the certified tax roll was $4,255,246,666. For the last few years the city has not received the official certified tax roll from the county until August.

The city will hold a public hearing on the proposed 2012-13 budget at 4:30 p.m., Aug. 13 at city hall. The proposed budget is available for inspection at the office of the city secretary, or CLICK HERE to view it via PDF.

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