Weslaco to seek $300,000 credit line

WESLACO - City leaders will vote tonight whether to seek up to $300,000 from a local bank, after commissioners failed to approve a $1 million credit line earlier this month.

The move comes as the city is anticipating a delay in receiving property tax payments from residents, which - if unaddressed - could keep the city from meeting financial obligations like bill payments and making payroll, the mayor said.

Earlier this month, the city administration announced plans to seek a $1 million line of credit from First National Bank, drawing the ire of Mayor Buddy De La Rosa, who said he and the city commission had not been kept apprised of the situation.

The city commission took no action on the measure last week and agreed to take it up at a later date.

In a draft version of tonight's agenda - sent to commissioners on Thursday - city leaders were slated to decide on a $1 million credit line.

But now the city commission is slated to instead vote on a smaller, $300,000 line of credit.

"There was nothing scientific about the $1 million (figure)," said Finance Director James Hiebert, explaining the change. "It was a good round number."

A favorable vote would not automatically mean the city would have to take out the loan. It would, however, authorize the city to seek up to $300,000 in loans to cover property tax revenue that may not arrive as soon as hoped.

"I feel it's very possibly we won't even need that $300,000," Hiebert said. "It's more of a safety net."

De La Rosa said he met with City Manager Anthony Covacevich last week to discuss the issue, and he believes the city does have a financial problem.

"If the taxes were paid by everyone on time, we don't need the money," De La Rosa said. "We can't take that chance."

De La Rosa said as an alternative to a loan, Weslaco could take advantage of the money it earned earlier this year from the sale of the Boys & Girls Club building to South Texas College.

De La Rosa said he still has questions about the city's financial situation. "How we got here still has not been explained to me," said the mayor, a long-time critic of Covacevich.

Covacevich could not be reached on his cell phone after business hours Monday.

The commission is slated to vote on the $300,000 credit line tonight at 5 p.m. and hold a workshop to discuss the matter at 4 p.m.