SAN BENITO — The city’s economic arm yesterday likely helped reduce possible property tax and water rate hikes for the residents.
The Economic Development Corporation board voted last night to fund $65,000 a year toward a proposed $8.4 million sewer system overhaul now required following a state order that has a March 2023 deadline for compliance.
With the EDC money, city officials will not have to increase one of the Rio Grande Valley’s already highest water and sewer rates by about 3 cents a month.
Last week, city officials discussed borrowing for the project, but also suggested they wanted to find a way to limit or eliminate the impact on taxpayers. It appears they have done that.
At the same time, city commissioners proposed earmarking next year’s $40,000 federal Community Development Block Grant allocation to reduce a proposed 2-cent property tax increase to about 1.5 cents, City Manager Manuel De La Rosa said after the 90-minute joint meeting last night.
Now, De La Rosa said he plans for budget cuts to eliminate any proposed tax hike specifically for the project.
“We have to do it,” City Commissioner Carol Lynn Sanchez said, referring to funding the proposed project. “We’re running out of time.”
City officials are setting the stage to borrow $8.4 million through the sale of certificates of obligation to fund the $8.4 million project stemming from a 2012 agreement with the Texas Commission on Environmental Quality, which requires the city upgrade its sewer system or face severe fines and penalties.
“Are we going to cripple the EDC or burden the citizens with a tax increase?” EDC board member Rene Garcia said. “We are going to do our part in cutting back. (City) administration needs to find a way to cut back so you can do your part of saving money as well.”
Mayor Ben Gomez said his administration is launching the multimillion-dollar sewer upgrade that past administrations did little to address.
“I think we need to stop being scared to do the right thing. We have to take care of the city,” Gomez said. “We’re not here for votes. I’m not here for a popularity contest. I have to do the right thing for the city of San Benito.”
The EDC’s annual $65,000 contribution, which it will fund for at least 10 years, will cut into its annual $1.3 million budget, of which $426,000 is set aside to fund its debt service, Executive Director Rebeca Castillo said.
EDC attorney Tony Torres said the proposed sewer project is an eligible expenditure.
However, EDC President Julian Rios expressed concern the $65,000 pledge will force the agency to cut back on funding incentives aimed at luring new business to town and reducing grants to help small businesses open shop as part of a program to revitalize the downtown area.
“All that puts us in a position that we stop funding economic development projects for 10 years,” Rios said.
Commissioner Rene Villafranco argued the sewer upgrade will help the city’s economic development.
“If we don’t have infrastructure in San Benito, who’s going to want to come?” Villafranco asked.
Last year, city commissioners scrapped a plan to borrow money to fund the project aimed at rebuilding six sewer lift stations after administrators had planned the bond sale for months.
Commissioners voted down the proposed bond issue shortly after the EDC board rejected a proposal to help fund a $2.7 million water line replacement, which was part of an overall $12.5 million project.
For nearly 10 years, the multimillion sewer overhaul has loomed over the city.
In October 2012, the city entered into an agreement with TCEQ to participate in its Sanitary Sewer Overflow Initiative program following a series of sewage spills near the Arroyo Colorado totaling 49,000 gallons from November 2009 to January 2010.