Donna bets on a big bridge investment

DONNA — August is typical budget planning season for local government entities, and things were no different in the Heart of the Valley, where officials recently met to review the city’s fiscal projections for the coming year.

And while those discussions included standard talking points about payroll costs, property tax revenue and the like, something new was at the heart of the conversation — hopes pinned on an upcoming multimillion-dollar investment as Donna embarks on the next phase of its international bridge .

The city is constantly working on widening the Donna-Rio Bravo International Bridge to accommodate commercial traffic.

Things started in October 2019 when officials began building two southbound lanes for so-called “empty” or commercial trucks returning to Mexico after delivering their cargo here in the U.S.

This phase of the project was funded with more than $20 million in state and federal grants, as well as about $35 million in revenue bonds.

Donna now has her sights set on the next phase — building two northbound lanes for fully loaded Mexican trucks to cross into the United States.

That phase of the project will be financed entirely through financing, but exactly how much new debt the city will take on remains unclear, as officials have cited conflicting figures in recent weeks.

During budget talks Thursday and again Saturday morning, city administrators indicated they expect to hit the market with about $60 million in revenue bonds as early as next month.

However, during a meeting of Tax Increment Reinvestment Zone No. 2 earlier this month, Donna City Manager Frank Perez indicated that inflation has had an impact on how much the project will cost.

Perez said the city originally expected to issue about $40 million in revenue bonds, but that number has increased significantly.

“About $77 million total, with everything in it,” Perez said at the Aug. 2 meeting, which was held at the Chase Tower in McAllen. “It started (at) about $40 million and I think it goes up every year.”

However, if the bond sale is successful in September, construction could begin as early as December or January, Perez said.


Donna Finance Director David Vasquez was optimistic about the city’s finances. He began Saturday’s seminar by going over some big highlights.

Property assessments are up 16 percent, meaning the city can expect to generate more revenue, Vasquez explained. The city expects to generate nearly $295,000 more in ad valorem taxes next fiscal year — a 6 percent increase.

And the opening of The Shops at 493 earlier this year brought in a significant sales tax windfall.

Sales tax revenue is expected to grow by more than $800,000 — or 30 percent — next year, according to figures in the proposed budget.

Employees will also receive a 3% pay raise.

But while there was optimism about the city’s growth and its future, there were also some concerns — mainly among Donna’s two economic development corporations.

The 4A and 4B EDC boards also met last week to discuss finances.

During those Thursday meetings, directors learned that Donna is counting on the EDC to absorb some of the debt from the bridge expansion.

Donna is asking the EDC to each shoulder about $10 million of the $60 million in bond debt the city will assume.

“What our financial advisor is proposing is to have the EDCs assume a certain amount of that debt,” Vasquez, the CFO, explained during the EDC 4B meeting.

“We don’t know the final number until we go to market,” he said.

This amount will burden the EDCs with debt service of just under $500,000 per year for the next 30 years.

Also, that figure is in addition to about $60 million in bonds and certificates of obligation that Donna has been paying off since the bridge was originally built in the early 2000s.

But the board had questions, including how and if the corporation would ever be repaid for taking on the debt and how the bridge is currently performing.

“I asked you how the bridge is right now,” Principal Norman Cordova said.

“There’s no money to be made,” Vasquez said.

“It’s an enterprise and it involves risk,” he added a little later.

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