DONNA — By a split vote Wednesday, the Donna City Council approved an $11.5 million budget for the 2020-21 fiscal year, which began Oct. 1.
Described by Donna City Manager Carlos Yerena as “tight,” it includes some $210,000 for employee pay raises, as well as grant-funded monies for parks improvements. But the council’s adoption of the budget didn’t come without some debate, including whether the city should continue paying some $277,000 in fees to various consultants.
The adoption of the budget came during one of four meetings of the council and the city’s two economic development corporations held back-to-back, 15 minutes apart, at the Donna Recreation Center.
Each entity discussed and approved their respective fiscal budgets.
Though the city has been providing virtual attendance options for the majority of its public meetings due to the COVID-19 pandemic, no such online attendance options were made available Wednesday.
The coronavirus pandemic hasn’t just affected how government entities hold public meetings, it has also impacted and constrained their budgets. Donna has been no different, as the city manager explained.
Between pandemic-related decreases in international bridge traffic, as well as looming debt obligations, Yerena urged the council to be conservative.
“We’re going to have to really, really watch what we spend,” Yerena said. “Every single penny,” he said.
Yerena urged the council to nix pay raises and consultant fees and instead apply those monies to paying down the city’s debt. Two of the commissioners seemed to agree, at least in part, with Yerena’s recommendations.
Commissioners Oscar Gonzalez and Arturo Castillo spoke in favor of dropping the various consultants, while still keeping staff pay raises.
“By gaining that whatever amount of money you’re paying the consultants, that would be beneficial to the city employees,” Castillo said.
Gonzalez also said he was concerned the lean budget meant staff would not have the resources they need.
“I’ve been talking with several department heads and they said that based on what they’re being budgeted for, it’s gonna be hard for them to run their departments,” Gonzalez said.
Among the cuts Yerena spoke of was the elimination of capital outlay expenditures, which cities typically use for big ticket expenses, such as new construction or large equipment purchases.
The city is currently in the planning stages for a new police department.
Nonetheless, the city manager expressed confidence that city staff will be able to make do with their budget allocations.
“I think we were very mindful of giving them exactly what they needed to operate, but there’s no thrills or frills,” Yerena said in response to Gonzalez’s queries.
However, there has been one positive in Donna’s financial outlook, according to Finance Director David Vasquez, who said sales tax collections were “up double digits” this year.
“Thank God for sales tax. It’s keeping us alive,” Vasquez said with a small laugh.
But, as for the rest of the city’s fiscal budget, several questions remain.
The proposed budget was not available online prior to being adopted by the council Wednesday — one day after the deadline to do so, according to the 2020 budget calendar published by the Texas Municipal League.
It was only after the council approved the budget — with Commissioners Gonzalez and Castillo voting against it due to the inclusion of the consultants fees — that a nine-page document outlining the city’s finances was posted to the city website.
The document is far different from the 211-page 2019-20 fiscal budget the city posted online last fall.
Binders handed out to the council Wednesday contained little more information.
Missing from the new budget are the itemized breakdowns of revenues and expenditures for each city department that are required by the city charter to be included.
State law now requires budgets to include a cover sheet that shows how property tax revenues have changed from the addition of new property to the rolls, as well details regarding the tax rate and what percentage of the tax rate is used to support debt.
Instead, the document lists only broad overviews of seven of the city’s funds. It also includes one-page summaries for the city’s two EDCs.
Despite the council’s protracted discussions Wednesday of staff pay raises, as well as a brief mention by the city manager of increased health insurance costs, the budget contains no itemized lists of payroll expenses, fringe benefit costs, or other ancillary expenses related to the city’s various departments.
The four-page section titled “Personnel Summary” simply lists the number of full and part-time staffers in each department but does not include figures regarding the costs of maintaining those employees.
The single page “General Fund” section shows the city expects to generate nearly $11.6 million in revenues this fiscal year and expend that same amount; however, there is no data regarding the city’s unrestricted fund balance.
Known as the reserve balance, the unrestricted fund balance acts as a type of “rainy day” fund which municipalities use to calculate how many days they can remain in operation should revenues cease. Donna is expected to maintain a reserve fund equal to at least 25% of expenditures, according to city policy.
The summaries for the city’s two economic development corporations are just as inscrutable.
Questions regarding the particulars of the EDC budget led to an extended discussion during the first of the four meetings Wednesday, when Dr. Michael Flores — a new member of the EDC 4A board of directors — noted the board hadn’t been given the proposed EDC budget until their arrival at the meeting.
As Yerena and Vasquez worked to explain various parts of the EDC budget, including personnel services, debt service obligations and revolving loans, the doctor continued to press for more detail.
“I’m not trying to be rude, I just don’t know if this is the right place to ask in this venue,” Flores said, before adding he wants to be prepared in case members of the public have questions about how the EDC functions.