Page 27 - Budget FY 2022-2023 - Update

Adopted Budget 2023 City of McAllen, Texas

The City issued a Certificate of Obligations of $25M for Drainage Improvements, which is to be paid through
contributions from the Tax Increment Reinvestment Zone (TIRZ) #1; an outstanding balance of $23�85M remains�
The City also has a $12M Certificate of Obligation for the Performing Arts Facility, which is to be paid with revenue
generated from the Hotel Tax Venue. After a partial refunding, this Certificate of Obligation has a remaining
outstanding balance of $555K� In addition, the City has a General Obligation Refunding Bond (Series 2019) in the
amount of $5�6M which will be paid with the Passenger Facility Charge (PFC) Fund� This General Obligation has a
remaining outstanding balance of $4�7M� Therefore, a provision has been made in the Airport Fund to allocate a
portion of the revenues for debt service�
Debt Service Funds – Revenue Bond Issues
Enterprise Fund/Sales Tax Revenue Bonds

The Debt Service Funds other than general obligation bonds are established by Ordinances authorizing the issuance
of revenue bonds. The fund provides for payment of bond principal, interest, paying agent fees, and a debt service
reserve as a sinking fund each year. Revenues of the activity related to the purpose of each bond issue are pledged as
security for repayment of these bonds.

The resources to fund debt service requirements on revenue bonds have been presented as transfers from the
operating funds to which each relates to such as the Water, Wastewater, Airport, or Bridge funds� See pages 206-207
for a listing of debt that relates to said funds�

CAPITAL PROJECTS FUNDS

Capital Improvement Fund
The Capital Improvement Fund was established to account for all resources used for the acquisition and/or construction
of capital facilities except those financed by proprietary fund types.
The City of McAllen’s Capital Improvement Plan is developed with input from several committees such as Drainage,
Library, Traffic, Right of Way/Land Acquisition, Parks and Information Technology. Each committee is composed
of a minimum; a staff member, a City Commissioner and a citizen� These committees play an important role in
determining the capital budget for the fiscal year. The City of McAllen values input from the citizenry on when, where
and what the community’s needs are�

Beginning fund balance of $9�4M is expected to be supplemented with revenues of $1�2M and a transfer-in,
amounting to $4�6M, to provide resources of $14�8M for projects� The projects to be undertaken as well as the
amounts budgeted for each are presented on pages 225-226 of this budget document. By fiscal year end, fund
balance is estimated to be at $356�0K�

Quinta Mazatlán – Center for Urban Ecology Fund
The Quinta Mazatlan - Center for Urban Ecology Fund was established to account for all resources used for the
construction of Quinta Mazatlan Center of Urban Ecology.
The Quinta Mazatlán- Center for Urban Ecology fund is expected to generate a total of $23M in revenues while project
costs amount to $45M� Fund balance is expected to be at a negative $11�8M balance� Additional funding will be
sought to offset the negative fund balance in the later years�
Parks Facility / Fire Station #2 Construction Fund

The Parks Facility / Fire Station #2 Construction Fund was established to account for all proceeds received from
Certificate of Obligation Series 2018 for the construction of a new Park Facility and Fire Station #2.

The City issued Certificate of Obligations in fiscal year 2018 to undertake the construction of a new Parks Facilities
and Fire Station in the amount of $6.2M. The Fire Station #2 construction was completed in the fiscal year 2019.
The City expects to appropriate $3M this year to complete the Parks Facility�
General Obligation Street Improvement Construction Fund

The General Obligation Street Improvement Construction Fund was established to account for general obligation tax
note proceeds used for the acquisition and/or construction of capital infrastructure.

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