By DINA ARÉVALO
Port Isabel-South Padre Press
editor@portisabelsouthpadre.com
The Port Isabel City Commission voted unanimously Tuesday to pass the first reading of a $4.8 million budget for the 2015-2016 fiscal year that is expected to generate a surplus of over $7,000. The Commission also approved a tax rate decrease.
After learning in July that the City was facing a $1 million deficit for the current fiscal year, the Commission quickly approved budget-tightening measures at the recommendation of Interim City Manager Jared Hockema, including instituting a hiring freeze and ceasing capital expenditures.
The efforts were successful, reducing the deficit by more than half. “This fiscal year, we don’t have the final tally, but our deficit is probably going to be around half a million dollars,” Hockema said. “We were able to ameliorate it somewhat, but we had those expenses beyond budget earlier this year,” he said.
The City will continue those measures into the coming fiscal year. “We took the roughly $500,000 that you had been allocating for capital (expenditures), of course, that’s been allocated back into the General Fund directly, so you’ll see that’s now generating a million and a half (dollars) instead of a million (dollars). We have the vacant positions that were not filled,” Hockema said.
“With the revenues that we’re proposing with each department, and the expenses, we’re showing a surplus of $7,694,” he said.
“It’s a break-even budget,” Hockema said Thursday.
Hockema has also worked to rectify overestimating expected revenues while simultaneously underestimating costs, a practice which helped create the deficit.
Expressing concern that a similar discrepancy could again occur, Mayor Joe E. Vega asked if money for expected repairs and maintenance, such as the air conditioning systems in City buildings, had been allocated in the new budget.
“We did set aside some money for that, obviously not everything,” Hockema said. “We increased some of those budgets,” he said, explaining that the previous non-allocation of those funds in the current budget helped contribute to the deficit. “It’s better to appropriate it up front,” he said.
The Commission also voted unanimously to approve a tax rate of $0.626327 per $100 valuation. “That is the same tax rate we have currently,” Hockema said. “It is below the effective rate, which is around 64 cents. Overall, … it is considered, under Truth in Taxation, to be a tax decrease,” he said.
Hockema explained Thursday, that though the tax rate looks lower on paper, the tax rate property owners will pay will remain the same. “We have a sales tax that was adopted in order to reduce property taxes about 25 years ago, then we have the TIRZ (Tax Increment Reinvestment Zone), and those have the effect of pushing up our effective rate, rather than lowering our effective rate,” he said.
The City expects to collect more than $1.7 million in property taxes. “It’s going to be $1,713,827. That’s the gross levy,” Hockema said. He added that after accounting for delinquent taxes, as well as discounts given to property owners who pay early, the net amount will be closer to $1,685,000.
In other business, the Commission listened to a discussion on hazard mitigation plans. “We are working with the City of Los Fresnos and other cities in the region to develop our hazard mitigation plan. What that is, is that there are funds that become available … after a presidential-declared disaster,” Hockema said. “In order to qualify for those funds you have to have project identified with … a hazard mitigation plan,” he said. Previously, such plans were created at the county level.
Finally, during the section of the meeting allocated to hear reports from City department heads, the Commission learned the police department is working to fill several vacant dispatcher positions. The department has received 4 – 5 applications for three available positions.
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