Juan Guerra transforms Pharr Finances | City of Pharr

With its Financial House in Order, Pharr is Primed for Economic Development

Pharr Finance Director Juan Guerra?s star was on the rise in the City of Fort Worth. At 29, he was on the fast track for the Assistant Finance Director?s job and was being groomed to move even higher in city government. So it was difficult for his colleagues to understand his decision to leave Fort Worth after just a year to accept a position in Pharr, which was in struggling to meet payroll at the time.

But for Guerra, who grew up in the Rio Grande Valley, the opportunity to come home was too great to pass up.

?There really was no question for me,? Guerra said, from his office overlooking Cage Blvd. ?I knew I could help the City regain its financial health and the added benefit was that I would be close to my parents.?

Now, Guerra?s star is on the rise in Pharr. Since coming on board in 2007, Guerra has earned the respect of City Manager Fred Sandoval, City Commissioners and other department heads because he was able to bring the City back from the brink of bankruptcy to a sound financial footing without the need for layoffs or cuts in services. His management has led to a surplus in the City?s general fund, annual budgets are now submitted to appropriate agencies on time, and the City is primed to focus on economic development, thanks to sound planning.

While these achievements are indeed substantial; none of them were easy. It took nearly two years to turn things around.

?When I started here, the City?s finances were in disarray, audits were late and had been for 18 consecutive years and the City?s bond rating had been downgraded to just a step above junk bond status because of poor fiscal policies, a lack of monitoring, and unreliable financial reports,? Guerra recalled.? ?Also, the unrestricted fund balance in the City?s general fund was negative by more than $6 million.? ?

Guerra explained that revenue is generated from property and sales taxes the nicer homes bring in more tax revenue and residents who tend to spend more on shopping and dining out, which drives sales taxes. But there seemed to be no planning or thought given to how the City would grow. So, the majority of the developments were for low-to-moderate properties which didn?t generate enough taxes to cover the City?s expenses for infrastructure and basic services.

?It was a catch 22. Developers need infrastructure to put a stake in the ground, but the City couldn?t afford to do it,? Guerra said. ?That?s probably why the cities of Mission, McAllen and Edinburg were able to flourish while Pharr didn?t. There was no malfeasance that I could find. I think the problem was that the City?s population outpaced the property and sales tax revenue.?

The former Marine was up for the challenge, but credits Sandoval for allowing him the autonomy to implement his strategy and plan.

?The City Manager hired me because of my skill and expertise and then supported me,? Guerra said. ?I spent countless hours correcting the documentation process and updating the balances of all the accounts in the general ledger.?

He then identified major financial weaknesses and developed a long-term viability plan to correct them and ensure that they don?t occur again in the future.
?I called it the 12-Step Fiscal Plan of Action, not realizing that Alcoholics Anonymous also uses a 12-step plan,? he said, grinning. ?But I understand that the first step is very similar in both ? recognize that you have a problem.?

In less than four years, Guerra?s 12-step plan has led to a surplus in the City?s general fund and increased the City?s bond rating to AA minus. The City has also received its third Distinguished Budget Presentation Award from the Government Finance Officers Association, something which most City?s expect from their Finance Department, but which the City of Pharr had never received.

The list of Guerra?s accomplishments is truly amazing, from completing the City?s audit on time for the first time in 19 years to receiving state recognition. Here are a few:

Developed an investment report that meets professional investment requirements; Awarded the Governmental Treasury Organization of Texas? Certificate of Distinction in two consecutive years; Modified the City?s website to become the first in the region to win the Gold Leadership Circle for its online fiscal transparency; and successfully managed the City?s finances through the regional economic downturn while producing a balanced budget with no layoffs.

Source: http://www.pharr-tx.gov/juan-guerra-transforms-pharr-finances

elite eight