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Mhm.

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» Very good.

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afternoon, everyone, and welcome to

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the Harlingen City Commission special

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meeting. The time is now 5:30. We'll

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call this meeting to order. It It has

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been posted as required by state law. We

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have a quorum of the commission as

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everyone is present. At this time, I'll

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ask everyone to please rise as

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Commissioner Modales leads us in our

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invocation.

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In the name of the Father, Son, Holy

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Spirit. Amen.

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Heavenly Father, as we enter this holy

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week,

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we pray for the wisdom to understand the

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true meaning of Easter,

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making us worthy of the promises of your

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son, our Lord and Savior, Jesus Christ.

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Amen. Amen.

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And the pledge?

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>> [clears throat]

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>> I pledge allegiance to the flag of the

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United States of America, and to the

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republic for which it stands, one nation

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under God, indivisible, with liberty and

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justice for all.

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Do any of you have any conflicts of

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interest

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Under state law, a conflict of interest

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exists by council member or certain

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members of that person's family has a

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qualifying financial interest in an

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agenda item. Members with a conflict of

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interest cannot participate in the

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discussion or vote on the agenda item.

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Are there any known conflicts of

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interest to disclose at this time?

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None. None. None. None. None. None.

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All right. Moving on. Um it is my

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understanding, Miss Meyer, we don't have

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anyone signed up for citizen

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communication. So, we'll go right into

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our action items. We have a presentation

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and acknowledgement from the city of

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Harlingen's annual comprehensive

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financial report for fiscal year

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2024-2025

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from Castellanos and Associates. Good

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evening, Mayor and commissioners. Uh we

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did conclude our audit last week. And

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so, we have Alfred Vera from Castellanos

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and Associates here to give a brief

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overview and presentation of our

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audit and financial statements.

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Good evening, Madam Mayor

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and commissioners. My name is Alfred

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Vera. I am a principal with Castellanos

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and Associates, and it's been a pleasure

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working with you all, uh working with Robert and his his group. Um

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Things are a lot go a lot easier when

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you get good cooperation, when things

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are well organized, and you go through

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the audit and request items and they're

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provided. So,

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uh I want to give, you know, thanks to them and for you all on the oversight

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as well. And we thank you all for

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choosing us to do your audit again this

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year.

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I'm here to present to you the annual

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comprehensive financial report for the

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year ended September 30th, 2025. I will

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go through a couple of items um

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interest on the report, and then if you

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all have any questions, I can answer

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those. Anything more

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specific, I will turn it over to to

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Robert.

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>> [clears throat]

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>> If you'll turn with me over to page 31.

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contains the independent

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auditor's report.

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As independent auditors, what we do, we

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come into an entity, we review the

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policies and procedures, and then we

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pull samples, and we test against those

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policies and procedures, and we review

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the financial statements, and we provide

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reasonable assurance that the financial

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statements are fairly stated and free of

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material misstatements. However, we do

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not provide absolute assurance because

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of our our limited scope. If we were to

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do that, we would just we would to test

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all transactions, and that would be very

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costly and it would take a long time.

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But, from what we have reviewed and

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tested,

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the city of Harlingen for the year ended

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September 30th, 2025 has earned an

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unmodified or clean opinion.

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This is the best opinion that an entity

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can receive. So, congratulations on

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that.

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The reason The reason that I say it is

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earned is because of the work that is done here by the finance group,

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the city, and you all as an oversight as

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well.

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If you'll turn with me over to page 37.

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contains [clears throat] the

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management's discussion and analysis.

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The management discussion and analysis,

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otherwise known as the MD&A, contains

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financial highlights and analysis,

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comparisons to prior year, which is

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2024.

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Uh

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the comparisons include comparisons for

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the net position,

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the statement of activities of the

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primary government,

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and capital assets and long-term debt.

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» [snorts]

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>> Now, if you'll turn with me over to page

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57.

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contains the balance sheet for

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the governmental funds.

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For tonight's purposes, I will be going

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over the general fund.

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>> [clears throat]

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>> At September 30th, 2025, the city of

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Harlingen had total assets of 46 million

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390,000,

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and a total fund balance in the general

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fund of 41 million 302,000,

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of which 37 million 44,000 is

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unassigned.

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This unassigned balance is what we refer

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to as the rainy day fund.

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The city can use this for any purpose

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that it wishes at its discretion.

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And we recommend that you do not use it

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for anything that will deplete it, such

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as salaries or raises, because you will

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see how this plays into your days of

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operations as I calculate those on the

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next page up.

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Page 59 contains the statement of

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revenues, expenditures, and changes in

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fund balances for governmental funds.

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Again, I'm looking at the general fund.

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For the year ended September 30th, 2025,

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total revenues for the city of Harlingen

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were $66,508,000,

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total expenditures of $70,810,000,

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[clears throat]

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and total other financing sources of

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$7,466,000.

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Now, if we take your total expenditures

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of the $70,000,000

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809,

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and we divide that by 365,

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you get $192,000.

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That is what on average it is costing

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the city to open its doors each and

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every day.

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Now, if we take your unassigned fund balance

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of $37,000,000

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44,000, and we divide it by 194,000,

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you get 191 days 191 days of operations.

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This means should no more money come

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into the city, would be able to operate for

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about 191 days. This is very good. We

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normally recommend anywhere between 60

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and 90 days. You all are well above

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that.

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Now, it's nothing to, you know,

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say we bring it down, or increase

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[clears throat] it. It's just your

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comfort level, but this is very, very

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good. So, congratulations on maintaining

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that [clears throat]

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healthy days of operations.

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If you'll turn over with me to page 74, contains the notes to the

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financial statements.

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contain summary of accounting policies,

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some information regarding the component

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units,

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details on deposits and investments,

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and more detailed information related to

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capital assets and long-term debt.

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Notes [clears throat] to the financial

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statements also contain information

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related to the pension plans, and the

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other post-employment benefits,

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otherwise known as the OPEB.

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And the last two items towards the very

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back of the report,

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the first being the on page 361 is the

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independent auditor's report on internal

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control over financial reporting and

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compliance based on an audit of the

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government auditing standards.

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>> [clears throat]

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>> We do not provide an opinion on the internal controls, but from the

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testing that we have found, there have

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been no instances of non-compliance

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related to internal controls.

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Congratulations on that as well.

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And the last item on page 365

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is [clears throat] an independent

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auditor's report on compliance for each

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major program and internal controls over

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compliance required by the uniform

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guidance. This is what is known as the

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single audit.

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From the programs that we have tested,

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we found no instances of of

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non-compliance and no significant

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deficiencies or material weaknesses.

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This is also an unmodified opinion for a

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clean opinion. Congratulations on that

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as well.

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This concludes my presentation. Do you

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all have any questions?

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I don't have a question, but I would

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like to add that

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uh

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in compliance with the state statute,

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they filed a copy of the

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from the captain, which is the city

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secretary,

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on Friday,

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and it's already on our

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on the minutes.

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>> [clears throat]

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» So, thank you

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for doing a great job again. And I also

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want to thank our our finance department

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year after year.

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Even way before I was here, they've been doing a great job and

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continuing excellence in providing the

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opportunity for everybody to see on on

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our on our website, obviously, is is

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important. Thank you for for your hard

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work. Thank you, of course, to

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our finance department. Thank you.

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And

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uh Commissioner? Yeah, uh

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you mentioned the retirement plan. Uh

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we did have the defined benefit plan

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when I came in 13 and a half years ago,

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and markets went south and the city owed

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the actuary millions of dollars

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to keep the defined benefit actuarial

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people happy. And so, uh today was an

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update in market, but year to date, it's

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a down market. And should this continue,

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uh we all know there's headlines uh in

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the news, then we So, don't get

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poisoned by our own uh when you hear 191

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days of balance, because we may have to

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pony up later in the year millions

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to keep the defined benefit plan

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solvent.

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And I will also to that end just add

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that, you know, year after year, each

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session of the legislature has looked at

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uh reducing funds for cities in terms of

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property tax. [clears throat] So, we

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definitely want to keep an eye on that

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moving moving forward. But, in the

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interim uh or in the meantime, we've we've got a very healthy uh

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operating budget, working budget, and

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rainy day fund. And so, that's to the

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incredible work of uh

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staff and and city manager also for

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doing a great job and his uh staff as

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well. Is there any other um comments or

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questions from the commission at this

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time?

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>> [snorts]

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>> Having no other

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uh questions, then I think We just need

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to acknowledge the equipment. Yes, but

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with Mr. With Mr. Lopez.

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Okay, so at this time we'll just

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acknowledge um the report as presented.

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Um It doesn't show I don't think we need

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to

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You you you can move to acknowledge the

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report. Okay, can I get a a motion to

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acknowledge the presentation and

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acknowledgement of the city of

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Harlingen's annual comprehensive

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financial report for fiscal year

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2024-2025

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by Gasso & Associates?

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>> Motion to that motion. Second. Motion by

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Commissioner Lopez, second by

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Commissioner Pederson. All those in

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favor signify by saying "Aye." Aye.

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All those opposed? Motion carries. Thank

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you so much, and that is all the items

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that we have on our agenda. So, thank

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you. We are adjourned.

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I agree.

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» [laughter]