Page 17 - Budget FY 2022-2023 - Update

Adopted Budget 2023 City of McAllen, Texas

The City’s overall budgeted resources to be generated this year aggregate $575M� Of that amount, transfers-in account
for $62M with the balance of $513M related to revenues� Total appropriation of $641M and $62M of transfers-out
are budgeted with $22M for debt, leaving $619M in expenditures� Almost 58% of the budgeted expenditures are
for Capital Projects� City fund balances and/or working capital as of September 30, 2023, are estimated to total to
$214M—a $27M net increase mainly due to additional revenue on Taxes, a reduction in the American Rescue Plan
funding, as well as undertaking more capital projects. A detailed financial analysis of this year’s budget appears in
the Executive Summary, following this message�

LONG-TERM CONCERNS AND ISSUES

Growth

McAllen’s rapid growth in the recent decades has been accompanied by economic prosperity, but the speed of
growth presents its own challenges� Although much has been done to provide an adequate transportation system
that continuously alleviates traffic congestion within the City, including the maintenance of city streets, as well as
an adequate drainage system, much remains to be done and has been confirmed via formal surveying as top citizen
priorities�
Quality of Life Issues

The City has been developing over time from a small-to-medium sized city toward a larger city status, which has
brought about an increased emphasis on quality-of-life issues� In 2022’s Citizen Survey, McAllen was ranked very
high by its citizens for quality of life� We believe that efforts made over the last several years are a major factor in
why businesses and residents have chosen to be in McAllen�

Economic Development
As has been noted, the City’s economic progress over the last 10-15 years has been truly remarkable by almost any
standard, including growth in taxable values, job growth, and personal/family income�

Financing Capital Costs
Over the next five years, the City of McAllen will embark on an impressive schedule to complete 168 projects but not
all projects will be completed this fiscal year. Prior to this, a significant amount of capital projects has been financed
on a pay-as-you-go basis using surpluses generated by the General Fund as well as monies funded by State and
Federal Grants� This year 2022, the City of McAllen received a $63 million loan for the Anzaldua’s Land Port of Entry
Expansion Project from North American Development Bank (NADBank)�

Balancing Demands for Service vs. the Tax Rate
As the City considers all the requests for additional facilities and services, it must view them in relation to a balanced
property tax rate—at a level that is supported by citizens and taxpayers� Texas Senate Bill 2 (S�B2) will now limit cities
ability to increase property tax rates beyond 3�5% annually� While all these issues are indeed challenges that must
be addressed, they are indicative of a city on the grow and are considered favorable�

DISTINGUISHED BUDGET AWARD

The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished
Budget Presentation Award to the City of McAllen, Texas for its annual budget for the fiscal year beginning October
1, 2021� To receive this award, a governmental unit must publish a budget document that meets program criteria as
a policy document, as an operations guide, as a financial plan, and as a communications device.

This award is valid for a period of one year only� We believe our current budget continues to conform to program
requirements, and we are submitting it to GFOA to determine its eligibility for another award�

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