McAllen budget hinges on retracting raises from fire, police unions

McALLEN — City officials are asking McAllen’s police and firefighters to give up raises in the upcoming fiscal year to shore up the new budget due Oct. 1.

McAllen is facing falling revenues this year for the first time since 1994 and has taken steps to rein in expenses. The last step is to shave off an additional $2.4 million in salaries, with $850,000 coming from the police and fire departments, City Manager Mike Perez said. The remaining $1.6 million in savings will come from leaving 85 non-civil-service positions vacant and reducing the raise for non-civil-service employees to 1 percent.

“The City Commission and the mayor, their marching orders to me is to be prudent, but for us to be able to do that we’ve got to have the participation of (the police and firefighter unions),” Perez said. Otherwise, he will have to make up the difference by further reducing costs among the non-civil service employees.

The police union is entering the second year of a two-year collective bargaining agreement and is due a 3.5 percent raise. The firefighters union is entering the final year of a three-year agreement and is due a 4 percent raise.

The firefighters union will vote on a potential compromise with the city this week that calls for a 4 percent raise coupled with a one-week furlough. The city has also requested reducing minimum fire truck manning from 40 to 36, which McAllen Firefighter’s Association President Amado Cano called a “safety issue.”

“We’ve had tremendous growth in this city,” Cano said. “I’ve been here for 23 years and (the fire department) has only grown by one station.”

City officials have asked the police union to accept a 1 percent raise. The two parties expect to meet again this week.

“We’re going back to the table and hoping we can come out with an agreement,” said Sgt. Ed Suarez, president of the McAllen Police Officer’s Union. “I’m hoping that what we can negotiate our membership will accept.”

The city expects to have $45 million in cash reserves at the end of the month, but Perez warns that money will continue to get eaten up as revenues come in short. In the 2008-09 fiscal year, the city has already drawn $400,000 from its reserves.

“When you start living on reserves, if the economy doesn’t come back the following year, then what you’ve done is postponed some difficult decisions that may compound themselves and make it worse,” Perez said.

The city came in below revenue projections in two key areas this year. Sales tax and bridge traffic revenues were down 9 and 12 percent, respectively. In the proposed budget, the city has reduced funding for outside agencies — like the McAllen Economic Development Corp. — by 4 percent across the board, has decreased funding for capital improvement projects and has cut $1 million in spending for recycling and repaving city streets.

The recession and decreased border traffic have been the main factors in the city’s revenue shortfalls, Perez said. The peso devaluation and concerns over border violence have slowed the flow of Mexican nationals coming to McAllen to shop.

City leaders hope to adopt the new budget at their next City Commission meeting on Sept. 28.

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Nick Pipitone covers McAllen and general assignments for The Monitor. You can reach him at (956) 683-4446.