"Its as bad as I've ever seen," said City Manager Eleazar "Yogi" Garcia, describing Raymon-dville's budget outlook for the coming year.

Earlier this summer Garcia prepared the mayor and commissioners for a budget shortfall caused by a sharp $100,000 sales tax revenue decline. With a month to go in the city's 2010 budget year Garcia's prediction seems to be in line with what is happening.

"We had an 8.5 percent sales tax increase for July but the numbers came in for August last week and we were down by 12.5 percent," the city manager said.

"This is the tightest budget we have ever had," he declared, and "we cut out any machinery and equipment from the budget before we cut people and benefits."

Two commissioners Zeke Cavazos and Mary Gutierrez favor salary hikes for city workers and Commissioner Yolanda Alexandre is also sympathetic to the employees needs.

"The cost of living is effecting our employees and there is nothing they can do about it," said Cavazos.

Mayor Orlando "Lonnie" Correa commented, "He (Garcia) is talking about what we should do. We never promised anybody a raise every year. If we bring up taxes we need to use the money to fix the streets."

Clifton Smith said, "I remember when we had to borrow money at the end of the year just to pay bills. I don’t want to get back in that situation again."

Garcia pointed out several things about the new budget.

"We only budgeted $55,000 for street dept. repairs. No new vehicles and no new machinery."

Garcia said the city tax valuation from the Appraisal Dist. is $144 million and the city has an 80 percent tax collection rate. A penny in new taxes he said, will raise $12,295 in revenue. The current tax rate of .71694¢ can be raised to a maximum of .76614¢ without triggering a roll back election. The 04.84¢ tax increase would mean an additional annual tax of $44.85 on a $60,000 home, he said.

The tax increase would result in about $60,000 in increased revenue for the city, but in order to raise taxes several public hearings will be required under state law, and publication of the required tax schedules and hearing notices in the newspaper.

Zeke Cavazos said, "We might as well get the ball rolling. and propose a 04.8¢ tax increase. We can always change it later. His motion was seconded by Clifton Smith and passed by a unanimous vote.

In other business:

Robert Pena of Champion Energy, the city's electric provider, presented a new contract with a rate of 06.64 down by one cent from the current rate. Pena said based on the city's electric usage the lower rate will save the city $60,000 in the coming year.

Officer Cesar Sepulvedo resigned from the police dept. to move to McAllen and his resignation was accepted.

Elizabeth Corteyo was given 90 days to repair or tear down her vacant house at 752 West Sauz. Corteyo said she has recently mowed the grass and has plans to pay the back taxes dating to 2002.

She also plans to tear down the house and to sell the real estate, she said.

A public hearing was held on other condemned property but no one showed up to discuss the matter. Property at 840 West Chihuahua, 474 West San Francisco and 346 E. Charles has also been condemned.

"Its not the taxes, it is the condition of the house," Commissioner Alexandre told Corteyo.

The city manager estimates it would take $2,500 to $3,000 to demolish it.

A first reading of new water and sewer rates was held. The minimum charge of $3.42 for 1,000 gallons of water will increase to $3.72 as the result of the new ordinance No. 1144. Garcia said the city has borrowed $1.5 million from the Texas Water Development Board which must be repaid over time.

Municipal Judge Armin Martinez will soon move his office from the police dept. building, to the second floor of city hall.

Judge Martinez said he will use the commissioners meeting room as his courtroom. Data entry and the detectives will also move to city hall while patrol officers will remain at the police station. At this point plans for a new police station have been put on a back burner due to the state of the economy.

"Even if we got a 75-25 grant match, we couldn't afford it," said the city manager about a plan that looked promising a year ago.

Judge Martinez will occuply offices left behind by the Chamber of Commerce when they recently moved into the UTB/TSC Learning Center on FM3168. The EDC offices also moved to that location.

Finally, the city may be interested in selling the old city landfill north of town. No one knows for sure how many acres are involved but Garcia promised to have the information available at the next meeting.

Commissioner Smith said the land is worth $2,500 to $3,000 an acre and would be easy to sell to hunters, because deer and wild game are often seen on the land which touches the southern border of the King Ranch.