City approves $43.2 million budget; union requests loom

HARLINGEN — The city’s new $43.2 million general fund budget might be too tight to fund local union requests.

Earlier this week, city commissioners approved the budget, dipping into a $16.2 million cash reserve to offset a $764,715 shortfall.

“It is a very lean budget,” City Manager Dan Serna said yesterday. “There’s no wiggle room.”

Serna said the budget earmarks money to fund the first year of a proposed $835,000 pay package for the local police officers’ and firefighters’ union.

“We set aside just enough to cover those percentages,” Serna said.

But the unions have rejected the city’s proposals.

Now, the unions are preparing to present new offers.

“Every year, the budget has its different challenges,” Serna said, referring to the overall budget.

The police officers’ union has proposed a three-year contract in which officers would forgo pay increases for the first two years in exchange for a return to the Texas Municipal Retirement System, or TMRS, which would cover all city employees.

Under the proposal, employees would contribute 7 percent, which the city would match two-to-one.

In 2007, the city scrapped the state retirement plan in favor of the private Texas Capital Group’s plan, in which the city matches employee contributions one-to-one.

Yesterday, Serna said he did not have information on the police union proposal’s cost to the city.

Like Serna, Mayor Chris Boswell said there is no room left in the budget for unplanned expenses.

No more money

“I don’t think we can budget any more money than is in the budget,” Boswell said.

For the city, a point of concern has been TMRS’ current unfunded liability of about $6 million.

Boswell has expressed concern the city might have to pay any unfunded liability to pay employee retirement benefits.

The city is expected to meet with the police officers’ union Sept. 12.

Meanwhile, the firefighters’ union is working on a new proposal, Julio Zetina, the union’s president, said yesterday.

Zetina said the new proposal might be more costly.

How we got here

“It might be a little bit more but not by much,” Zetina said.

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.

“We’re trying to work with the city to try to negotiate something,” Zetina said. “We’ve been trying for two years and can’t seem to get it done. We want a solution, the sooner the better.”

But if the parties fail to enter into contracts, the city would approve a resolution to preserve police officers’ and firefighters’ salaries and benefits while entering into mediation, City Attorney Ricardo Navarro has said.

More on the budget

As part of the budget, Serna earmarked about $200,000 to fund proposed 2-percent raises for city employees other than police officers and firefighters.

Some of the proposed budget’s biggest expenditures include a new $587,000 fire truck and $114,000 worth of breathing equipment.

More money for streets

Serna said the city’s “top priorities” include a bigger street program.

This year, the city has proposed spending $1.9 million to improve the city’s streets — up from $1.5 million this year.

In past years, the city has funded its annual street program through its general fund budget.

Now, the city’s new street maintenance fee charged to all utility customers 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.

The budget also includes more than $300,000 to fund an increase in employee health insurance coverage.

Last month, commissioners approved a $6.5 million contract with Blue-Cross Blue-Shield, up from $6.2 million this year.

General fund budget

 $42.5 million revenue

 $43.2 million expenditures

 $764,715 deficit

 $15.5 million cash reserve

 $1.9 million street program

 2-percent employee raises