HARLINGEN — The city might have to wait before tapping into one of its main funding sources to bank-roll more big projects.
That’s because the Harlingen Community Development Board’s fund balance has fallen from $6.38 million to $2.6 million.
About $3.7 million in expenses for the Harlingen Convention Center and the proposed super park have dropped the fund balance to its lowest level in at least five years.
The board’s budget was used to fund $1.08 million for the Harlingen Convention Center and $2.6 million for the destination park project at Lon C. Hill Park.
Meanwhile, until 2040 the board will continue to fund annual payments of $690,000 to pay off the $16.7 million convention center’s debt service totaling $20.14 million.
Yesterday, Mayor Chris Boswell said the board had planned to accumulate its $6.35 million fund balance — nearly two year’s worth of savings — to fund the two projects.
“This was something that was anticipated,” Boswell said. “The fund balance is not as high as usual because the board was saving money to do the convention center project and the destination park.”
Boswell said the city’s growing retail sales tax collections will help replenish the fund balance, which will continue to help finance projects.
“I’d say the future of (the board’s funding capacity) is excellent and very healthy financially,” Boswell said. “As projects arise and are identified they’ll decide how they want to address them, either building up (the fund balance) or expending revenue on smaller projects.”
In the last 10 years, city sales tax collections climbing from $19.6 million in 2008 to $25.29 million last year have helped boost the board’s revenues.
That’s helped the board’s fund balance grow from $2.99 million since 2014.
The board will continue to build its fund balance to finance projects, City Commissioner Tudor Uhlhorn said.
“I’m not worried about it,” Uhlhorn said. “I don’t think there will be any dramatic change. The money’s there.”
City Manager Dan Serna said he plans to search for grants to help fund the super park, described as an outdoor entertainment venue aimed at area families and tourist dollars.
Its proposed five phases would come with a price tag of $8.5 million.
“We do intend to pursue grant funding opportunities,” Serna said.
Last week, commissioners amended the board’s budget including its revenues and expenditures.
The board spent $2.6 million to fund the first of the destination park’s proposed five phases, Serna said.
Serna said $1.08 million was used to help fund the convention center’s construction costs, land purchase and financing.
Source of funds
The board, funded through an eighth-cent sales tax currently generating about $1.5 million a year, was created in 2007 to fund so-called “quality-of-life” projects.
Serna said those projects became the convention center and the destination park.
“The funds are exactly what they were intended to be used for, that is, quality of life projects,” Serna said.
How we got here
As early as 2017, officials had apparently planned to fund much of the destination park through the board’s fund balance.
As they planned the project, officials have slashed the super park’s original price tag of $12.9 million.
In May 2017, Commissioner Michael Mezmar cast the lone vote against approving the publication of a notice of intent to issue $3.8 million in certificates of obligation to borrow money to fund the destination park’s first phase.
At the time, Mezmar said he did not want to borrow money to fund what he described as park improvements.
Two months later, Uhlhorn told officials he had received calls asking him not to “borrow money to build a park.”
“I like the idea of not bonding up your money,” Uhlhorn said at the time. “We’ll have other projects we can do.”
Concerns apparently led Serna to review funding options including grants.
Serna also said he wanted to use cash to try to pay for more of the project.
As officials continued to plan the destination park, Serna said he was not setting a timetable for the project’s completion.
“The board and the city commission didn’t want to borrow but pay-as-you-go,” Boswell said yesterday.
Boswell said officials are carefully planning the park’s development.
“We’re going to take it one step at a time,” he said.