City of Presidio balances budget after fraught conversations about tax rates, property sales 

PRESIDIO — At Monday’s meeting, Presidio City Council voted to approve the city’s budget for the upcoming year and to adopt its proposed property tax rate. This year’s tax rate will decrease from last year’s rate by 2.27% but will raise a total of $40,538 in new revenue. None of that revenue will come from new property on the rolls. 

Monday was the deadline for the city to adopt its new budget. That deadline loomed at a public hearing on Friday afternoon, when City Administrator Pablo Rodriguez explained there was a budget deficit of around $400,000 at the beginning of the budget drafting process — but the city’s finance department had been able to slash that number by over half.

The city had three days to figure out how to fill those gaps. Rodriguez suggested selling off some of the city’s property — a discussion that had come up a few weeks prior at a council meeting when the city debated whether to sell land it was currently leasing out at a rate well below market. “We don’t want to sell ourselves short on property,” he said. 

None of these speculative transactions could make it into the final budget, so Rodriguez and Finance Director Glorisel Muñiz had to think on their feet. By Monday night, the budget had been carefully shaved in order to be balanced. He hoped that the future sale of the land would help fill in the gaps. “It’s not an easy thing to do,” he said. 

Monday night’s meeting began with a disagreement between Rodriguez and former finance specialist Malynda Richardson. Richardson — who was transferred to the city’s EMS department as a cost-cutting measure — felt that the city was missing out on around $70,000 in revenue because their tax rates were not calculated correctly. 

For communities with over 30,000 residents in Texas, tax rates are proposed year to year by calculating 3.5% of the entity’s tax revenue the previous year. Then they work backward, figuring out what tax rate is needed to equal the 3.5% figure. 

This figure is known as the “voter approval rate,” which — as the name implies — does not require an election to approve and voters may not petition to roll back the rate. 

But smaller municipalities like Presidio play by different — and confusing — rules. The state comptroller’s Truth in Taxation initiative explains that “special districts” may instead adopt an 8% increase. Special districts that pull from property taxes include hospital districts and river authorities. These rules come with an asterisk: municipalities under 30,000 can be calculated differently. Chapter 26 of the Texas Tax Code gives these small cities the power to calculate their voter approval rates with the 8% increase threshold as though they were a special district

Richardson said that the city had adopted the 8% increase for last year’s budget after reaching out to the city’s legal counsel, Bojorquez Law Firm, for the green light. The attorneys found no issue with these calculations.

Rodriguez, on the other hand, said that he had asked Natalia Williams, the county’s tax assessor-collector, for her input. “She is not a tax attorney,” Richardson said. 

Mayor John Ferguson conceded that because this conversation was taking place on the deadline for the new budget to be adopted, it was too late to make changes or ask for clarifications. “There’s nothing we can do to change this,” he said. “So it’s kind of water under the bridge at this point.” 

Councilmember John Razo was disappointed that this year’s budget team hadn’t reached out for help from multiple people. “My concern here is that we’re getting all our information from the tax [assessor-collector] and that’s just one source,” he said. “We can look around and ask more questions.” 

Rodriguez conceded that it was too late to change the budget — but that they would fine-tune their process for the following year. “This is not something that was done on purpose,” he said.