[9:58] Mhm.
[14:13] » Very good.
[14:17] afternoon, everyone, and welcome to
[14:20] the Harlingen City Commission special
[14:22] meeting. The time is now 5:30. We'll
[14:26] call this meeting to order. It It has
[14:28] been posted as required by state law. We
[14:31] have a quorum of the commission as
[14:32] everyone is present. At this time, I'll
[14:35] ask everyone to please rise as
[14:36] Commissioner Modales leads us in our
[14:37] invocation.
[14:42] In the name of the Father, Son, Holy
[14:44] Spirit. Amen.
[14:46] Heavenly Father, as we enter this holy
[14:48] week,
[14:49] we pray for the wisdom to understand the
[14:51] true meaning of Easter,
[14:53] making us worthy of the promises of your
[14:55] son, our Lord and Savior, Jesus Christ.
[14:58] Amen. Amen.
[15:00] And the pledge?
[15:03] >> [clears throat]
[15:03] >> I pledge allegiance to the flag of the
[15:05] United States of America, and to the
[15:07] republic for which it stands, one nation
[15:10] under God, indivisible, with liberty and
[15:12] justice for all.
[15:18] Do any of you have any conflicts of
[15:20] interest
[15:21] Under state law, a conflict of interest
[15:23] exists by council member or certain
[15:25] members of that person's family has a
[15:26] qualifying financial interest in an
[15:28] agenda item. Members with a conflict of
[15:30] interest cannot participate in the
[15:32] discussion or vote on the agenda item.
[15:34] Are there any known conflicts of
[15:35] interest to disclose at this time?
[15:37] None. None. None. None. None. None.
[15:43] All right. Moving on. Um it is my
[15:45] understanding, Miss Meyer, we don't have
[15:47] anyone signed up for citizen
[15:48] communication. So, we'll go right into
[15:50] our action items. We have a presentation
[15:54] and acknowledgement from the city of
[15:56] Harlingen's annual comprehensive
[15:58] financial report for fiscal year
[15:59] 2024-2025
[16:02] from Castellanos and Associates. Good
[16:03] evening, Mayor and commissioners. Uh we
[16:05] did conclude our audit last week. And
[16:08] so, we have Alfred Vera from Castellanos
[16:10] and Associates here to give a brief
[16:12] overview and presentation of our
[16:14] audit and financial statements.
[16:20] Good evening, Madam Mayor
[16:21] and commissioners. My name is Alfred
[16:23] Vera. I am a principal with Castellanos
[16:25] and Associates, and it's been a pleasure
[16:27] working with you all, uh working with Robert and his his group. Um
[16:34] Things are a lot go a lot easier when
[16:37] you get good cooperation, when things
[16:39] are well organized, and you go through
[16:40] the audit and request items and they're
[16:43] provided. So,
[16:44] uh I want to give, you know, thanks to them and for you all on the oversight
[16:49] as well. And we thank you all for
[16:51] choosing us to do your audit again this
[16:53] year.
[16:54] I'm here to present to you the annual
[16:56] comprehensive financial report for the
[16:58] year ended September 30th, 2025. I will
[17:01] go through a couple of items um
[17:03] interest on the report, and then if you
[17:06] all have any questions, I can answer
[17:07] those. Anything more
[17:09] specific, I will turn it over to to
[17:11] Robert.
[17:12] >> [clears throat]
[17:12] >> If you'll turn with me over to page 31.
[17:29] contains the independent
[17:31] auditor's report.
[17:33] As independent auditors, what we do, we
[17:35] come into an entity, we review the
[17:41] policies and procedures, and then we
[17:43] pull samples, and we test against those
[17:46] policies and procedures, and we review
[17:49] the financial statements, and we provide
[17:51] reasonable assurance that the financial
[17:53] statements are fairly stated and free of
[17:56] material misstatements. However, we do
[17:58] not provide absolute assurance because
[18:00] of our our limited scope. If we were to
[18:03] do that, we would just we would to test
[18:05] all transactions, and that would be very
[18:07] costly and it would take a long time.
[18:09] But, from what we have reviewed and
[18:11] tested,
[18:13] the city of Harlingen for the year ended
[18:15] September 30th, 2025 has earned an
[18:17] unmodified or clean opinion.
[18:20] This is the best opinion that an entity
[18:22] can receive. So, congratulations on
[18:24] that.
[18:27] The reason The reason that I say it is
[18:28] earned is because of the work that is done here by the finance group,
[18:33] the city, and you all as an oversight as
[18:35] well.
[18:39] If you'll turn with me over to page 37.
[18:44] contains [clears throat] the
[18:46] management's discussion and analysis.
[18:49] The management discussion and analysis,
[18:50] otherwise known as the MD&A, contains
[18:53] financial highlights and analysis,
[18:56] comparisons to prior year, which is
[18:58] 2024.
[19:00] Uh
[19:00] the comparisons include comparisons for
[19:03] the net position,
[19:05] the statement of activities of the
[19:06] primary government,
[19:08] and capital assets and long-term debt.
[19:13] » [snorts]
[19:14] >> Now, if you'll turn with me over to page
[19:16] 57.
[19:21] contains the balance sheet for
[19:23] the governmental funds.
[19:25] For tonight's purposes, I will be going
[19:27] over the general fund.
[19:29] >> [clears throat]
[19:30] >> At September 30th, 2025, the city of
[19:33] Harlingen had total assets of 46 million
[19:36] 390,000,
[19:39] and a total fund balance in the general
[19:41] fund of 41 million 302,000,
[19:45] of which 37 million 44,000 is
[19:49] unassigned.
[19:50] This unassigned balance is what we refer
[19:53] to as the rainy day fund.
[19:55] The city can use this for any purpose
[19:58] that it wishes at its discretion.
[20:01] And we recommend that you do not use it
[20:03] for anything that will deplete it, such
[20:05] as salaries or raises, because you will
[20:08] see how this plays into your days of
[20:10] operations as I calculate those on the
[20:12] next page up.
[20:17] Page 59 contains the statement of
[20:19] revenues, expenditures, and changes in
[20:21] fund balances for governmental funds.
[20:23] Again, I'm looking at the general fund.
[20:27] For the year ended September 30th, 2025,
[20:30] total revenues for the city of Harlingen
[20:32] were $66,508,000,
[20:36] total expenditures of $70,810,000,
[20:38] [clears throat]
[20:40] and total other financing sources of
[20:43] $7,466,000.
[20:47] Now, if we take your total expenditures
[20:49] of the $70,000,000
[20:51] 809,
[20:53] and we divide that by 365,
[20:57] you get $192,000.
[21:00] That is what on average it is costing
[21:02] the city to open its doors each and
[21:04] every day.
[21:05] Now, if we take your unassigned fund balance
[21:13] of $37,000,000
[21:14] 44,000, and we divide it by 194,000,
[21:20] you get 191 days 191 days of operations.
[21:24] This means should no more money come
[21:26] into the city, would be able to operate for
[21:30] about 191 days. This is very good. We
[21:33] normally recommend anywhere between 60
[21:35] and 90 days. You all are well above
[21:37] that.
[21:38] Now, it's nothing to, you know,
[21:41] say we bring it down, or increase
[21:44] [clears throat] it. It's just your
[21:44] comfort level, but this is very, very
[21:47] good. So, congratulations on maintaining
[21:49] that [clears throat]
[21:49] healthy days of operations.
[21:55] If you'll turn over with me to page 74, contains the notes to the
[22:03] financial statements.
[22:06] contain summary of accounting policies,
[22:09] some information regarding the component
[22:11] units,
[22:12] details on deposits and investments,
[22:16] and more detailed information related to
[22:18] capital assets and long-term debt.
[22:23] Notes [clears throat] to the financial
[22:24] statements also contain information
[22:25] related to the pension plans, and the
[22:28] other post-employment benefits,
[22:29] otherwise known as the OPEB.
[22:33] And the last two items towards the very
[22:35] back of the report,
[22:41] the first being the on page 361 is the
[22:43] independent auditor's report on internal
[22:45] control over financial reporting and
[22:48] compliance based on an audit of the
[22:51] government auditing standards.
[22:53] >> [clears throat]
[22:54] >> We do not provide an opinion on the internal controls, but from the
[22:59] testing that we have found, there have
[23:01] been no instances of non-compliance
[23:04] related to internal controls.
[23:07] Congratulations on that as well.
[23:11] And the last item on page 365
[23:15] is [clears throat] an independent
[23:16] auditor's report on compliance for each
[23:17] major program and internal controls over
[23:20] compliance required by the uniform
[23:22] guidance. This is what is known as the
[23:24] single audit.
[23:25] From the programs that we have tested,
[23:27] we found no instances of of
[23:29] non-compliance and no significant
[23:31] deficiencies or material weaknesses.
[23:35] This is also an unmodified opinion for a
[23:37] clean opinion. Congratulations on that
[23:39] as well.
[23:42] This concludes my presentation. Do you
[23:43] all have any questions?
[23:46] I don't have a question, but I would
[23:47] like to add that
[23:49] uh
[23:49] in compliance with the state statute,
[23:51] they filed a copy of the
[23:53] from the captain, which is the city
[23:54] secretary,
[23:56] on Friday,
[23:57] and it's already on our
[23:59] on the minutes.
[24:00] >> [clears throat]
[24:02] » So, thank you
[24:04] for doing a great job again. And I also
[24:08] want to thank our our finance department
[24:10] year after year.
[24:12] Even way before I was here, they've been doing a great job and
[24:16] continuing excellence in providing the
[24:20] opportunity for everybody to see on on
[24:22] our on our website, obviously, is is
[24:24] important. Thank you for for your hard
[24:27] work. Thank you, of course, to
[24:29] our finance department. Thank you.
[24:32] And
[24:32] uh Commissioner? Yeah, uh
[24:35] you mentioned the retirement plan. Uh
[24:39] we did have the defined benefit plan
[24:43] when I came in 13 and a half years ago,
[24:46] and markets went south and the city owed
[24:49] the actuary millions of dollars
[24:51] to keep the defined benefit actuarial
[24:54] people happy. And so, uh today was an
[24:58] update in market, but year to date, it's
[25:01] a down market. And should this continue,
[25:06] uh we all know there's headlines uh in
[25:09] the news, then we So, don't get
[25:13] poisoned by our own uh when you hear 191
[25:18] days of balance, because we may have to
[25:21] pony up later in the year millions
[25:24] to keep the defined benefit plan
[25:27] solvent.
[25:29] And I will also to that end just add
[25:32] that, you know, year after year, each
[25:34] session of the legislature has looked at
[25:37] uh reducing funds for cities in terms of
[25:40] property tax. [clears throat] So, we
[25:41] definitely want to keep an eye on that
[25:44] moving moving forward. But, in the
[25:46] interim uh or in the meantime, we've we've got a very healthy uh
[25:51] operating budget, working budget, and
[25:54] rainy day fund. And so, that's to the
[25:56] incredible work of uh
[25:58] staff and and city manager also for
[26:01] doing a great job and his uh staff as
[26:03] well. Is there any other um comments or
[26:06] questions from the commission at this
[26:08] time?
[26:09] >> [snorts]
[26:11] >> Having no other
[26:13] uh questions, then I think We just need
[26:15] to acknowledge the equipment. Yes, but
[26:17] with Mr. With Mr. Lopez.
[26:21] Okay, so at this time we'll just
[26:22] acknowledge um the report as presented.
[26:29] Um It doesn't show I don't think we need
[26:31] to
[26:32] You you you can move to acknowledge the
[26:34] report. Okay, can I get a a motion to
[26:36] acknowledge the presentation and
[26:38] acknowledgement of the city of
[26:39] Harlingen's annual comprehensive
[26:41] financial report for fiscal year
[26:43] 2024-2025
[26:45] by Gasso & Associates?
[26:46] >> Motion to that motion. Second. Motion by
[26:48] Commissioner Lopez, second by
[26:50] Commissioner Pederson. All those in
[26:51] favor signify by saying "Aye." Aye.
[26:53] All those opposed? Motion carries. Thank
[26:56] you so much, and that is all the items
[26:58] that we have on our agenda. So, thank
[27:00] you. We are adjourned.
[27:04] I agree.
[27:07] » [laughter]