HARLINGEN — The city will dip into its cash reserve war chest to balance a proposed $42.5 million budget that comes with a $700,000 shortfall.
In a budget workshop yesterday, City Manager Dan Serna proposed taking $694,972 from $16.2 million in cash reserves to offset the deficit.
The move would leave $15.5 million in cash reserves.
“That’s a very healthy fund balance,” Serna told city commissioners and department heads.
The proposed budget earmarks $587,000 for a new fire truck and $114,000 for breathing equipment.
This year, one of the city’s “top priorities” is a bigger street program, Serna said.
So he proposed spending $1.9 million to improve the city’s streets.
In past years, the city has funded its annual street program through its general fund budget, setting aside as much as $1.5 million a year for street projects.
Now, the city’s new street maintenance fee is expected to generate about $1.4 million during the upcoming fiscal year.
The city plans to add $460,000 in fees expected to be generated from last June, when the ordinance became effective, through Sept. 30, which marks the close of the fiscal year.
As part of the budget, Serna proposed 2 percent raises for city employees other than police officers and firefighters.
Meanwhile, the city appears close to reaching agreements with the local police officers’ and firefighters’ unions, both requesting pay increases.
“Negotiations are ongoing,” Serna said. “They’re going well.”
Last year, the unions failed to reach agreements on new contracts, so police officers and firefighters have worked under the contract’s so-called evergreen clause, which expires Sept. 30.
The proposed budget includes more than $300,000 set aside to fund an increase in employee health insurance coverage.
Earlier this month, commissioners approved a $6.5 million contract with Blue-Cross Blue-Shield, up from $6.2 million this year.
$42.5 million revenue
$43.2 million expenditures
$15.5 million cash reserve