McAllen deals with $3.3M shortfall

Small business grant rules changed

McALLEN — Commissioners here amended the budget Monday to cover a $3.3 million shortfall caused by three COVID-19 programs designed to provide relief to residents and business owners.

Last week, McAllen commissioners agreed to spend a total of $5.56 million on the three relief programs: $2 million to offer small businesses $5,000 grants; $1 million to help homeowners affected by the virus make their rent and mortgage payments; and $2.56 million to install Wi-Fi capabilities in residential areas south of Pecan Boulevard.

“We’re recommending that projects that you voted on last week be completed through the development corp.,” McAllen City Manager Roy Rodriguez told commissioners Monday. “It only causes us one problem: If you do them all, it shows that we’re going to be in the red.”

So in order to cover the shortfall, commissioners will deplete the fund balance and continue to hold off on some projects, including the City Entryway Project, the $3.4 million Daffodil Extension Project and the Motocross Park Project, which is estimated to cost $750,000.

The only project that commissioners agreed to unfreeze was the relamping of the tennis courts at McAllen High School, citing an increase in use and a minimal budgetary impact.

Commissioners, at one point, considered approving a negative budget because they expect Hidalgo County to reimburse the city for the three COVID-19 related projects via relief funding, but that idea quickly soured.

“I’d hate to go into a negative budget without getting that reimbursement,” Mayor Jim Darling said. “I don’t think it’s appropriate. It’d be unprecedented for sure.”

McAllen has already submitted the interlocal agreement and the budget the county requested from the city, but county officials have yet to respond, Rodriguez said.

“We’ll probably be emailing them every day,” he added.

Commissioners also ironed out some of the finer points of the three programs. For example, Darling suggested the city place the Wi-Fi infrastructure every 600 feet, instead of 300 feet to save money or increase the coverage area.

“I think before we put one on every post, which is 300 feet normally, we’d want to do a test run,” he said.

The mayor also noted the importance of getting the rent and mortgage assistance program off the ground.

“I think the mortgage and rent (program), now that the Supreme Court has lifted the foreclosures, it’s going to be really important,” he said.

City staff will review a similar program put forth by the county and will mimic it if they deem it successful.

And lastly, they amended the small business grant rules, which formally disqualified all businesses that had a yearly income above the million dollar mark. That cap is now set at $1.2 million.

The grants will also only be for $5,000, as opposed to the first round of grants, which afforded larger businesses $10,000 grants.

Steve Ahlenius, president and CEO of the McAllen Chamber of Commerce, spoke about the first round of grant recipients.

“First of all, if you had a chance to hear these businesses when we contacted them that they had been awarded these grants, it’s really amazing how appreciative they are; how excited they are to get the money and what a difference that money is making for them,” Ahlenius said.

Most of them are using it for back rent or mortgages and replenishing inventory, he added.

He then turned his attention to those businesses that remain in line for the second round of grants.

“They’re really hanging on by a thread,” he said.