Willacy proposes tight budget

RAYMONDVILLE — There’s still hope the Willacy County Correctional Center will reopen.

But County Judge Aurelio Guerra isn’t banking on it.

Now, officials are largely counting on wind farm revenue to help pull this county out of hard times, 18 months after the 3,000-bed prison closed, slashing a third of the county’s budget, Guerra said yesterday.

He said a proposed $7.1 million general fund budget is expected to carry the county through the upcoming fiscal year.

The proposed budget would come with a cash reserve fund expected to stand at $3.8 million to $3.9 million by the close of fiscal year this month, he said.

A public hearing on the proposed budget is set for Thursday.

This year, county commissioners haven’t had to make significant budget cuts because they slashed 25 jobs from the payroll last year, bringing staffing to the levels of 2008, Guerra said.

He said he’s not only working on a budget for the upcoming fiscal year.

Instead, he’s working on “a three-year plan,” counting on new wind farm revenue, not the prison’s reopening, to hold off budget cuts during the 2017-2018 fiscal year or the following year.

“We’ve already cut into all the line items we could cut,” Guerra said. “If we cut deeper, it would be with positions. I hope we don’t get to that point.”

But he didn’t rule out job cuts if new revenue doesn’t begin filling county coffers by 2017-2018.

“We’re still not where we need to be,” Guerra said. “We’ll do what has to be done.”

Now, the county’s counting on E.ON Climate & Renewables to expand its operations with construction of 115 wind turbines in an area north of FM 186 and east of I-69 near San Perlita.

The turbines are expected to be on the tax rolls by 2017-2018.

Under a contract, the county will give E.ON an 85-percent tax break on the $300 million project.

In exchange, the company agreed to pay the county about $200,000 a year in lieu of taxes during a 10-year period.

As part of the agreement, the wind farm, expected to generate 230 megawatts, will also pay the county $1,125 for every megawatt it produces per year for 10 years.

Under the contract, the wind farm will pay the county about $258,000 a year during a 10-year period, calculations show.

Another wind farm developer, EDF Energy, a London-based company, plans to build about 100 wind turbines along the Santa Monica and Willamar areas.

But the company hasn’t released further plans.

Last year, local leaders were still counting on reopening the Willacy County Correctional Center, even on a smaller scale.

Officials hoped Management & Training Corp., or MTC, the company that operated the prison since it opened in 2006, would win a Federal Bureau of Prisons, or BOP, bid to hold inmates at the prison.

But last month, the federal government announced plans to “phase out” the BOP’s private prison contracts.

Not even MTC knows whether the federal decision will affect its chances of landing the BOP’s bid to hold 1,200 to 2,000 “low-security” inmates at the prison.

“We’re still hopeful,” Guerra said of chances the prison could reopen on a smaller scale.

Now, Guerra’s counting on the prison’s insurance policy to pay the county for lost revenues.

Since last year, he said, the prison’s insurance has covered about four months’ worth of about $2.7 million in annual revenue.

Business interruption insurance covers revenue losses for up to a year, he said.

So he expects the county to receive more insurance payments.

But officials don’t know when they will receive the next check.

“We’re hoping we’ll get it before the end of this calendar year,” Guerra said.