Page 28 - APPROVED ANNUAL BUDGET BOOK FY 21-22

City of McAllen, Texas Adopted Budget 2022

Information Technology Fund

The Information Technology Fund was established to account for information technology projects, which have
demonstrated the economic feasibility of the project. The revenues generated or expenditures saved through the use
of each project are transferred back to this fund as a renewable funding source for these types of projects.
The Information Technology Fund generates $53K in revenue, mostly attributed to a Fiber Optic Lease� $65K has
been appropriated for a project this year�
Traffic/Drainage Bond Fund

The Traffic/Drainage Bond fund was established with Ordinance 2018-56 to account for all General Obligation Bond
Series 2018 proceeds for Traffic and Drainage Improvements within the City Limits.

The Traffic/Drainage Bond has initial Bond proceeds in the amount $25M. Traffic improvements projects will be
$1�0M and drainage improvements projects will be $12M� A detail listing of the projects that will be constructed
can be found in page 200�

Infrastructure and Improvements Fund
The Infrastructure and Improvements Fund was established to account for resources used for the acquisition and/or
construction of capital for improvements to the City.
The Infrastructure and Improvements Fund received resources from the American Rescue Plan Act through a transfer
from the General Fund� In FY 2021 the General Fund transferred $30M to establish the fund� This year, the fund
expects to receive another transfer of $18�7M to fund a total of $46�4M in projects. A detail listing of the projects
that will be undertaken can be found in page 206�
Water Depreciation Fund

This section also includes the working capital summaries for Water Depreciation Fund, which was established for the
sole purpose of replacing fixed assets. Funding for this fund is based on 35% of the monthly depreciation cost and is
transferred in from the Water Fund revenues.
Over twenty years ago, the McAllen Public Utility Board (MPUB) began setting aside 50% of actual depreciation from
the Water Fund in order to accumulate monies to be used for asset replacement. During the financial planning for the
Series 2000 bond issue, the MPUB carefully considered and decided to reduce the funded depreciation requirement
to 35%� This year it is estimated the Water Fund will transfer $1�7M into this fund� This fund will provide $1�2M for
replacements and $4�3M for projects, leaving a fund balance of $2�3M�

The Water and Wastewater Capital Improvement Funds/Bond Construction Funds were established to account
for all major projects such as: plant expansions, rehabilitation of water and Wastewater lines, future annexations,
rehabilitation of water towers, etc. Bond issues and Water and Wastewater revenues are sources for funding these
projects.

Water Capital Improvement Fund

Resources for this fund are primarily provided by transfers from the Water Fund� Expenditures are budgeted at $857K
and projects in the amount of $2�4M, leaving an estimated fund balance of $2�5M�

Water Revenue Bond Issues Fund
Resources for this fund are primarily provided by Bond Proceeds in the amount of $21�3M� Expenditures are budgeted
at $21�3M, leaving a remaining fund balance of $1�4M� Projects to be undertaken are presented in page 209 of this
budget document with the major project being the replacement of meters to an Advanced Metering Infrastructure
(AMI) platform�

Wastewater Depreciation Fund
This section also includes the working capital summaries for Wastewater Depreciation Fund, which was established
for the sole purpose of replacing fixed assets. Funding for this fund is based on 40% of the monthly depreciation cost
and is transferred in from the Wastewater Fund revenues.

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