Tribune News Service — The city of Harlingen's cash reserve stockpile jumped to a record $41.3 million, up from $38.1 million, while its revenue stream climbed to $66.5 million, up from $62.1 million a year before, records show.
The city's finance department's bookkeeping led the certified public accounting firm of Cascos and Associates to give Harlingen a "clean opinion" on its annual comprehensive financial report covering the 2024-25 fiscal year.
"This is the best opinion that an entity can receive," auditor Alfredo Vera told city commissioners during a March 31 meeting. "The reason I say it's earned is because of the work that's done here by the finance group, the city and you all."
The audit shows city officials are keeping tight internal controls over finances.
"From the testing that we have found, there have been no instances of non-compliance related to internal controls," Vera said.
In its general fund, the city's $41.3 million fund balance includes an unassigned fund balance of $37.4 million, enough to operate the city for 191 days in case of emergency, he told commissioners, adding calculations show it costs about $192,000 a day to run city operations.
"This is very good," Vera said, adding his firm recommends cities maintain unassigned fund balances capable of running operations from 60 to 90 days. "You all are well over that."
Under the general fund, the city's total revenues stood at $66.5 million, up from $38.1 million the year before, while total expenditures came in at $70.8 million, with additional funds pumping $7.4 million into the budget.
During his presentation, Vera described the city's $37.4 million unassigned fund balance as a savings account.
"This unassigned balance is what we refer to as the rainy day fund," he told commissioners. "The city can use this for any purpose that it wishes, at its discretion, and we recommend that you do not use it for anything that will deplete it such as salaries or raises."
During discussion, Commissioner Michael Mezmar, pointing a recent stock market dip, warned a significant drop in the market could force the city to tap into its cash reserves to fund its employee retirement plan operated under the Texas Municipal Retirement System.
"We may have to pay up later in the year millions to keep the defined benefit plan solvent," he told commissioners.
Meanwhile, Mayor Norma Sepulveda noted the state Legislature has been slashing the amount of revenue cities can generate from property tax rates.
"Year after year, each session of the Legislature has looked at reducing funds for cities in terms of property tax, so we definitely want to keep on eye on that moving forward," she said.
In the last 10 years, the city's fund balance has more than doubled, climbing up from $15.9 million, records show.
During the 2022-23 fiscal year, the city's fund balance stood at $35.6 million, an increase of $4.7 million over the previous year.
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Harlingen Fund Balance Climbs to Record $41.3M
What to Know:
- The city of Harlingen ended fiscal 2024-25 with a record $41.3 million fund balance and $66.5 million in revenue, both up from the prior year.
- An independent audit gave the city a clean opinion and found no instances of noncompliance tied to internal controls, signaling sound financial management.
- The city’s $37.4 million unassigned balance could cover about 191 days of operations, though officials said they are watching risks tied to retirement costs and state limits on property tax revenue.
