NEW PHARR CM GETTING SETTLED INTO HIS NEW ROLE

PHARR -- For interim Pharr City Manager Juan Guerra, the new experience of sitting in the city manager’s seat must seem almost surreal in a sense, because it wasn’t all that long ago that he was butting heads with then-City Manager Fred Sandoval. Now he occupies Sandoval’s officeon the top floorof the downtown city hall.

During a recent interview with this newspaper, Guerra said he doesn’t really want to discuss past issues with his former boss, and today, he only has kind things to say about Sandoval since Fred’s surprise departure earlier this month from the city as both city manager and director of the PEDC (Pharr Economic Development Corporation).

Confidential city sources, however, said the real issue between the two men had to do with the business of finance and development and the city’s approach to them.

Some say, Guerra was more conservative as opposed to Sandoval. 

This year’s HubPhest, for example. Guerra was opposed to the city’s investment in it, at the level it was, and he was opposed to the city’s development of the Produce Park, at least in the way it first played out. Not so much the fact that such a park near the international river bridge might benefit the city in the long term, but simply that in his view as the city’s chief financial office, there wasn’t a proper feasibility study done to determine its viability, nor enough proper management and planning put into its development before the city went all in by buying up the 90 acres for $11.1 million.

But for awhile, from approximately 2008 to mid-2014, there was little doubt that Guerra was Sandoval’s golden fair-haired boy inside city hall. He came to the city in 2007, after all, when the city’s finances for all intents and purposes, were in shambles. There was no money in the rainy-day fund. Monies were being transferred back and forth, according to Guerra, between city funds, and the city commission and staff were having a hard time keeping track of Pharr’s exact finances. On top of that, the audit reports were almost always arriving late, making next year’s budget-planning process that much more difficult.

Working 12-hour-plus days after he arrived in the Hub City in 2007, Juan Guerra said he worked long nights working the financials into shape. And then came the light. The numbers jived, the audits were delivered on time, and Sandoval was a happy boss.

So much so that in 2012, Sandoval upgraded Guerra’s job title from finance director to chief finance officer, and then in early 2013, the new CFO was given the job of de-facto bridge director. And that’s when Guerra’s light, so to speak, came to full fruition. He got out from behind his finance desk and started leading the bridge the same way he directed his finance department, with direction and focus, said at least one city source. He convened regional meetings with neighboring bridges, brought in maquiladora managers and started talking about more regional partnerships, which was the same thing for which the McAllen and Donna bridge contingents were advocating: pull together as a team, united behind a common south Texas front when approaching the federal government for additional monies and resources.

So far, so good.

But then something happened inside city hall between Sandoval and Guerra. At least one source who spoke to this newspaper said the city manager showed reluctance to move Guerra to the role of assistant city manager – not sure exactly why – especially since, according to Guerra, they had discussed the move since 2007.

Always looking to expand his professional horizons, since he was not able to advance in Pharr, Guerra then applied for the job of Donna city manager when the job became vacant in 2014. But he didn’t tell his boss about his decision. At the time, Pharr was in negotiations with Donna about possibly buying a portion of the Donna bridge. When Guerra’s Donna application came to light, the proverbial stuff hit the fan; he was stripped of his bridge duties; and assigned to the city’s version of the dog house, where he stayed until this year when Sandoval resigned, and surprising to some, Guerra was brought in from the dog house and handed the city manager’s interim post by a city commission majority.

Recently, Juan Guerra sat down for an interview to discuss this amazing turn of events. He was making $106,000 per year as CFO. The city is paying him a $2,000 stipend on top of that while he serves as interim city manager. Currently, the city is advertising for the position of full-time city manager. Whether or not Guerra will get the full-time job is yet to be decided. Although he admits, he hopes he gets the nod.

Meanwhile, the fate of the former city manager, Fred Sandoval, has yet to be determined. After resigning as city manager, he declined the city’s offer to serve as director of the EDC. He’s currently without any contract with the city.

Officially, the only thing he’s due is his vacation time and sick pay. Whether the city commission majority ultimately decides to pay him a severance package even though he voluntarily quit is yet to be determined.

Meanwhile, Guerra remains upbeat about the city’s prospects as it continues its move into the new millennium.

So, with regard to the former city manager, Fred Sandoval, even though people say you two butted heads in the latter years, what’s your position?

Guerra: “He was here for 10 years. He has his way of doing things, and it worked for him. And 10 years (as city manager; 18 with the city) is a long time to dedicate to the city, so I want to thank him for his years of service.”

Give us some background about yourself for those who may not know a lot about you.

Guerra: “I was born in 1978 and raised in Chicago. My dad was from San Nicolás, N.L. in Mexico. My mom, from Chicago. We moved down to the Valley in about 1992. I graduated high school at Nikki Rowe in '96, and I was in the Marine Corps by the next year where I was meritoriously promoted twice. Once as a sergeant at the age of 20. I was in the logistics field My main job was to inspect the departments and let the commanding officerknow the combat readiness in case we ever had to go to war.

“And then I got out, and I went to the city of La Feria in 2000. September 11th happened, and I volunteered for war, but they only called me up for six months as a military policeman at the Marine Corps Washington, D.C., and after that, I went back to La Feria for a total of about five years where I got my MBA and my CPA.

“I started accountant, and then I got promoted to financedirector. I got my MBA in 2001, and I got my CPA in 2004. Then I went to the city of Sherman (Texas). I was there for two years. The city manager at the time apparently saw my potential, and he was urging me to go to bigger and bigger entities, and I ended up in Fort Worth. I worked there as an accountant manager, which is in essence, city controller. I was only there for about six, seven months before I had to return to the Valley for a family emergency.

“So in July 2007, I came to the city of Pharr. I started out as financedirector, and after about fiveyears, I got promoted to chief financia office, which involved the duties of economic and industrial development analysis as well as the bridge director position. And then now in June 2015, I got promoted to interim city manager.”

Well, you know we talked about this before and some of them want to argue this, but when you came in '07, I mean, you spent a long time getting the city's financialsin shape, right?

Guerra: “Yes, sir. I'd come in at 8 and I'd leave at 7 or 8 at night for months on end initially, because what I had to do ... I had to clean the slate of the current finance department that was in place. I had to begin with the basics and grow it from there. There's a perception out there that I fired a lot of people, but the reality is, I didn't really fire that many people. A lot of people just were not ... I guess I raise the expectations to hold them (accountable), and some people didn't like change. Change is always hard to do. But when I first came here, the finance department needed some improvements. I helped to improve it, and after about two, three years, the city got a handle on its finances and became pretty much a shining star fiscall in recent years.”

During this recent election, the question was raised – in 2007, when you got here, was the city really $6.5 million in the hole?

Guerra: “There was no budget deficit, no. There was an unreserved fund balance deficit. The unreserved fund balance is more or less the indicator of all cities when it comes to its ability to go outside of its budget in case of emergencies and so forth. At that time, we didn't have a rainy day fund established. One of my goals ... or one of my tasks consisted of fixing the city's finances to physically separate the contingency fund from every other fund in the city so that the rainy day fund wouldn't be touched unless there was an extreme emergency. For example, a big hurricane…”

Because the standard is three months in the rainy-day fund, right? And that’s important for things such as bond ratings, etc.?

Guerra: “Definitely. And what happens with that is that if our bond rating isn't correct, then our interest costs are more extensive, and every city is going to have an issue from time to time, so having a good bond rating just helps out ... helps the city incur less costs when it issues (bonds).”

You know one of the criticisms of the former city manager was that he was wearing two hats – city manager and EDC director. But at one point in time you were actually wearing two hats yourself. You were finance director and bridge director. So what was the difference between the two scenarios?

Guerra: “For example, the bridge director reports to a non-binding-only recommending board, but in essence, he kind of works on his own as long as he provides guidance or updates the board on what he's doing, so there's not much responsibility in that area. The finance director only reports to the city manager, if you think about it. 

“Versus, the city manager actually reports to the mayor and six other commissioners.

“The city manager and EDC director have heavier responsibilities with regard to reporting as opposed to the bridge and the finance director. But that was once again just the way the city manager wanted to run the city. Finding qualified individuals is not an easy task either. So I'm not sure if the (former) city manager’s decision to assign me to be the bridge director was meant to be temporary or a permanent-type thing. It's more of one’s personal philosophy.”

If the current city commission were to ask you, "Hey, Juan, what do you think we should do with the Produce Park as this point in time,” what would you say?

Guerra: Well, I think the Produce Park would have to be re-evaluated, mainly because what's already taken place in the finance world is what we call, sunk cost. In other words, the cost is already there. It's hard to do anything about it. Whether it's good or bad, the cost has already been made.

“The purchase and everything. At this point, I would say, re-evaluate the project as a whole and set new metrics as far as attainable goals, because I'm not sure what the initial ones were when we initially purchased the produce district. That would be more of a question the current city commission would have to answer.”

Last question: how much debt is the city of Pharr in versus approximately five years ago?

Guerra: That's a good question. As far as more debt, we currently have about $19 million in new debt attributable mainly to... actually no, we have more. We have 7, and then 5, and then 11.

That’s $23 million.

Guerra: “I'd say we have about $23 million, $24 million more than we had previously, but those are really 100 percent due to the produce district project and the economic revitalization project on Jackson and the expressway. As soon as those projects are completed, hopefully they pay for the debt.”