HARLINGEN — Officials plan to dip into a deep pocket of cash to balance a proposed $41 million general fund budget.
In a workshop yesterday, City Manager Dan Serna told city commissioners he planned to pull $144,807 from the $15.1 million cash reserve to balance next year’s proposed budget.
Officials proposed the budget without a property tax increase.
But the city faces a projected 7-percent increase in health insurance costs and anticipated requests for police and fire department salary hikes, Serna said.
Health insurance costs are expected to jump from $3.7 million this year, Finance Director Elvia Treviño said.
Meanwhile, the local police union is negotiating possible salary increases as part of collective bargaining talks.
“It’s going to be pretty close,” Serna told commissioners, referring to balancing of the proposed budget.
Officials have planned no employee raises.
Serna said he plans to pull $500,000 from the cash reserve to fund a street improvement project.
This year, the city took $500,000 from cash reserves to pay for $1.5 million in street repairs, Serna said.
Serna said the city does not plan to buy police cars this year.
“Our fleet is in very good shape,” Serna said after the meeting.
But Commissioner Tudor Uhlhorn said he was concerned the city stopped funding the replacement of patrol cars and other vehicles.
“I’m not comfortable with it,” Serna told Uhlhorn.
In 2010, the city scrapped a general fund account used to replace patrol cars and other vehicles, Serna said.
Meanwhile, the city’s cash fund reserve has grown to $15.1 million.
In case of an emergency, the fund could operate the city for 133 days, Serna said.
Mayor Chris Boswell said he wanted to hold on to a strong cash reserve to help maintain the city’s new AA+ bond rating.
In May, Fitch Ratings upgraded the city’s bond rating to AA+, which helps the city qualify for lower interest rates.
The proposed budget earmarks 34.6 percent of revenues to the police department and 28.7 percent to the fire department.
It comes after meetings with department heads.
Serna said he trimmed department heads’ $6 million-wish list to come up with the proposed budget.
“We went through everybody’s budget and made reductions,” Serna said. “It’s all about balancing the budget. You’ve got to work with money available. We’re not living outside our means.”
Officials plan to set a second workshop for next week.