RIO GRANDE CITY — Starr County is running out of time to decide what to do about $2.5 million borrowed last year, County Auditor Boyd Carter reported Friday to the county commissioners.
During a budget workshop meant to discuss possible amendments to remedy budget shortfalls in various departments, Carter notified the commissioners he received a message from Lone Star National Bank.
The bank notified him the county’s short-term $2.5 million loan matured on Jan. 31 and the bank expected it to be repaid by that date.
Carter said there was $2.7 million cash in the general fund as of Thursday and only $2.1 million budgeted.
“So the county is about to face a crises of what to do about that loan on or before Jan. 31,” Carter told the commissioners.
“There are not many options,” he said. “None of them will be politically popular, I can tell you that.”
One option he suggested was that the county pays $1 million of the loan balance, including interest, and requests a 60-day extension on the remaining balance.
“And then I would ask Lone Star National Bank, when the extension comes due, to convert it to a tax anticipation note for a one-year term,” he said.
A tax anticipation note, or TAN, is a short-term note that state or local governments issue and plan to repay with future tax revenues.
That process, Carter said, would require approval by the Texas Attorney General’s office, take about 45 days, and cost $15-20,000.
County Attorney Victor Canales suggested holding another workshop specifically addressing the loan.
After Friday’s workshop, Commissioner Eloy Garza didn’t think they made much headway regarding the requested budget amendments.
“It was just a waste of time,” Garza said over the phone. “We couldn’t vote on it.”
“We started with a budget that was made to do some cuts to try to pay the deficit,” he said. “We did some cuts that were needed and there’s a few things that might need to be refunded, but not all of them.”
The workshop was scheduled after County Auditor Boyd Carter presented a budget amendment during commissioners court Monday, Jan. 8.
“Various department heads and officials have brought to our attention that there are some projected operating deficits in some of the departments,” Carter said during commissioners court. “Therefore I am presenting this proposed budget amendment to correct those shortfalls.”
While County Judge Eloy Vera and County Commissioner Ruben Saenz were for the amendment, the majority of the commissioners were hesitant. The item was tabled and that’s when the workshop that was held on Friday was proposed.
Vera and Saenz were also united in opposing the budget when it was first approved by the commissioners Sept. 25.
That day was the first time he had seen that version of the budget, Vera said. He was also concerned with the budget cuts that went beyond what he had previously proposed.
The budget amendment would increase funds in the county-wide fund to pay for autopsies, computer updates, contractual services, indigent defense expense, capital outlay, and postage.
It would also give more money to specific departments including the county court at law, the agriculture extension service, the detention center, the sheriff’s office, and the county judge’s office.
“Every line item proposed to be changed here is very carefully considered,” Carter said during the Jan. 8 commissioners court. “I’ll tell you that for certain line items in here, I’m already holding invoices that I can’t pay because there’s no money in the budget so some of our vendors are going to be calling us very soon wondering why they haven’t been paid.”
Representatives from the departments addressed the commissioners during Friday’s workshop explaining why they needed, and therefore were requesting, an increase to their budgets — increases that are really just reinstatement of funds. However, it remains unclear when the commissioners will bring the issue back up for a vote or how likely it is to pass.