Featured, from left: Elías Longoria, Jr., Secretary/Treasurer, Edinburg Economic Development Corporation; Rep. Terry Canales, D-Edinburg; Sen. Juan “Chuy” Hinojosa, D-McAllen; and Edinburg Mayor Richard García, on Friday, March 17, 2017, during groundbreaking ceremonies for the Department of Public Safety Mega Driver License Center in north Edinburg. The multi-million dollar, 25,000 square foot facility, located at the corner of Davis Road and I69C, is one of the many examples of economic growth in the city. The public safety complex, which will bring almost 70 jobs, also represents the state government’s confidence in locating in Edinburg, in part because the city excels in promoting and protecting public funds at all levels.
Photograph By ALEX RÍOS
Edinburg’s municipal government, led by the Mayor and Edinburg City Council, meets the highest standards for U.S., state and local governments on how it handles its financial activities, according to a state-required annual audit that was presented during a public meeting at Edinburg City Hall on Tuesday, March 28, 2017, the Edinburg Economic Development Corporation has announced. The Edinburg EDC, whose Executive Director is Agustín García, Jr., is the jobs-creation arm of the Edinburg Mayor and Edinburg City Council. The Edinburg EDC Board of Directors is comprised of Mayor Richard García as President, Harvey Rodríguez, Jr. as Vice President, Elías Longoria, Jr., as Secretary/Treasurer, and Richard Ruppert and Dr. Peter Dabrowski as Members. As part of its mission to help create jobs, the Edinburg EDC uses key information from independent, reliable, and authoritative sources, such as the Comprehensive Annual Financial Report, released on Tuesday, March 28, 2017, to inform residents, and to maintain and increase confidence in the ethical practices of its city government, promote the expansion of existing businesses, and recruit new businesses to the community. At that meeting, held in the Council Chamber, Carr, Riggs & Ingram, LLC delivered an Unmodified Opinion, the best rating possible, following its examination of three aspects of the city’s financial operations: (1) internal controls; (2) statements, records, and accounting transactions; and (3) compliance with statutory and budgetary requirements. Ruben Moreno, CPA (Certified Public Accountant), Partner with Carr, Riggs and Ingram, LLC , and Aaron Ríos, CPA, Manager with Carr, Riggs and Ingram, LLC, presented the audit to Mayor Pro Tem J.R. Betancourt, himself a CPA, who was representing the mayor and fellow city councilmembers at the public session. The Unmodified Opinion, which covers the 12-month period that ended September 30, 2016, and other financial highlights by Carr, Riggs & Ingram, LLC send out a favorable message, locally and beyond, that Edinburg’s economy continues to be strong, and the city is a good place to call home, said Betancourt. Key financial statements by the city directly reflected positive growth in Edinburg’s economy that came without any increase in the city’s property tax rate or the local sales tax rate, Betancourt noted. “One of the great things about the audit is that is shows how well the city is doing, that we have a very fiscally strong budget, we have reserves in the bank to provide public services through emergencies,” the mayor pro tem continued. “The economy is doing well here and in the Valley. Edinburg has not been so fiscally strong in the last 10 to 15 years.”
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Edinburg EDC: Local government, led by the Mayor and City Council, meets highest standards in U.S. on how Edinburg handles its finances
By DAVID A. DÍAZ
[email protected]
Edinburg’s municipal government, led by the Mayor and Edinburg City Council, meets the highest standards for U.S., state and local governments on how it handles its financial activities, according to a state-required annual audit that was presented during a public meeting at Edinburg City Hall on Tuesday, March 28, 2017, the Edinburg Economic Development Corporation has announced.
The Edinburg EDC, whose Executive Director is Agustín García, Jr., is the jobs-creation arm of the Edinburg Mayor and Edinburg City Council.
The Edinburg EDC Board of Directors is comprised of Mayor Richard García as President, Harvey Rodríguez, Jr. as Vice President, Elías Longoria, Jr., as Secretary/Treasurer, and Richard Ruppert and Dr. Peter Dabrowski as Members.
As part of its mission to help create jobs, the Edinburg EDC uses key information from independent, reliable, and authoritative sources, such as the Comprehensive Annual Financial Report released on Tuesday, March 28, 2017, to inform residents, and to maintain and increase confidence in the ethical practices of its city government, promote the expansion of existing businesses, and recruit new businesses to the community.
Such an independent financial report, according to the Texas Municipal League, “provides a double check on the city’s financial status, a method for communicating with the citizenry, and a bona fide statement of the city’s financial condition, which will improve its ability to issue bonds.”
(https://www.tml.org/Handbook-M&C/Chapter6.pdf)
At that meeting, held in the Council Chamber, Carr, Riggs & Ingram, LLC delivered an Unmodified Opinion, the best rating possible, following its examination of three aspects of the city’s financial operations: (1) internal controls; (2) statements, records, and accounting transactions; and (3) compliance with statutory and budgetary requirements.
Ruben Moreno, CPA (Certified Public Accountant), Partner with Carr, Riggs and Ingram, LLC , and Aaron Ríos, CPA, Manager with Carr, Riggs and Ingram, LLC, presented the audit to Mayor Pro Tem J.R. Betancourt, himself a CPA, who was representing the mayor and fellow city councilmembers at the public session.
Carr, Riggs & Ingram, LLC, currently ranked as the 22nd largest accounting firm nationally, specializes in core industries including construction companies, manufacturing and distribution companies, healthcare entities, not-for-profit organizations, governmental entities, financial institutions, and insurance companies.
The Unmodified Opinion, which covers the 12-month period that ended September 30, 2016, and other financial highlights by Carr, Riggs & Ingram, LLC send out a favorable message, locally and beyond, that Edinburg’s economy continues to be strong, and the city is a good place to call home, said Betancourt.
“We had no (negative) findings, which is great. In this audit, it means we are not in any type of jeopardy with any type of government agencies, with the Internal Revenue Service, nothing like that. It is a very clean and smooth audit,” said Betancourt.
An example of the city properly handling public funds, according to the audit, involved a $5,405,000 loan, secured by Sen. Juan “Chuy” Hinojosa, D-McAllen, from the Drinking Water State Revolving Fund to finance the planning, design, and construction of improvements to and expansion of the West Water Treatment Plant, which is located at 1752 S. Mon Mack Road.
“I applaud Mayor Richard García and the Edinburg City Council for working together with the State to invest in infrastructure for the city’s future growth and provide safe drinking water to the citizens of Edinburg,” said Hinojosa. “Clean water and wastewater services are essential to the development and health of our communities. The impact of this infrastructure improvement will promote economic development and safeguard against public health concerns.”
Key financial statements by the city directly reflected positive growth in Edinburg’s economy that came without any increase in the city’s property tax rate or the local sales tax rate, Betancourt noted.
“One of the great things about the audit is that is shows how well the city is doing, that we have a very fiscally strong budget, we have reserves in the bank to provide public services through emergencies,” the mayor pro tem continued. “The economy is doing well here and in the Valley. Edinburg has not been so fiscally strong in the last 10 to 15 years.”
Ríos’ findings supported Betancourt’s views.
“Total revenues for Fiscal Year 2016 were $47.5 million. The previous fiscal year’s total revenue for the General Fund were about $44.1 million, an increase of about $3.4 million. The cause of that increased amount was mostly that property tax revenue did go up, even though the property tax rate of 63.5 cents per $100 assessed valuation remained,” Ríos said. “The overall valuations of properties increased, so that led to an about a nine percent increase in property tax revenue. Local sales tax revenue also increased by about 3.5 percent.”
Usually, a city’s largest operating fund is the General Fund. The services paid from the General Fund include most basic city services such as police, fire, streets, parks, library, human services, health, animal care, and code Enforcement.
(http://www.sanantonio.gov/Portals/0/Files/budget/FY2015/FY2015BudgetHighlightsWeb.pdf)
Betancourt’s credentials and experiences as a CPA also play important roles or his fellow elected city leaders in helping comprehend the many complexities of government financing.
“I am able to help my council members understand some of the things they want to do. Many times, people say I don’t speak much during the city council meetings. But I do a lot of talking behind-the-scenes, when we go behind closed doors in executive session,” he illustrated. “That’s when the mayor and city councilmembers bring up their ideas and plans. I help explain how to ‘earmark’, and much money would be involved, and help them find the funding,” Betancourt said.
Earmarking consists of funds (or capital) that are set aside to pay for a specific project or event.
(http://www.investopedia.com/terms/e/earmarking.asp)
“I work well with our city staff leadership, sit down, and try to find the needed money. We have found money when we needed it, and we haven’t increased the city property tax rate in 15 years, and that is something many cities can’t say,” Betancourt added.
City Manager Richard Hinojosa, Assistant City Manager Sonia Marroquín, Ascensión Alonzo, Director of Finance, and City Secretary Myra Garza were among other key city staff and members of the public who attended the noon meeting.
The audit also helps any municipal government to qualify for revenue from state sources or through bonds at a lower interest rate, which saves money for taxpayers, Betancourt explained.
“In order to qualify for different types of funding from state agencies, for example, the city needs to have a good financial backing, have a good audit report, and be current with our audit,” the mayor pro tem said. “Also, for bond credit ratings, the first things asked for are your financials and audit reports for the past three years, to make sure there are no (negative) findings, to be sure you are not undercapitalized or underfunded in any way, and that you have enough money to meet your debt requirements. That is huge. It is like any local businessman trying to get a bank loan. You need to make sure you have the reserves to do all the things you want to do.”
The Office of the California State Treasurer provides a good explanation on how bonds work for governments (http://www.treasurer.ca.gov/cdlac/bonds.asp):
Government agencies sell bonds to finance a variety of projects and activities. When investors purchase bonds, they essentially lend money to the bond seller, or issuer. In this way, a bond is similar to an IOU. In return for the bond proceeds, the issuer promises to pay the investor a specified rate of interest over the life of the bond and to repay the bond when it comes due.
Bonds issued by government agencies are called municipal bonds.
The funds are used to finance projects that benefit the community such as roads, schools, bridges, sewers, parks, water treatment or low-income housing. Most bonds issued by government agencies are tax-exempt. This means bondholders do not have to pay federal income taxes and, in most cases, state income taxes on the interest they earn.
In addition to the tax-exempt status, investors benefit from the taxing authority of the government agencies. That authority strengthens the security of municipal bonds, giving investors greater assurance they will get paid on time and in full.
The tax-exempt status and minimal risk of default lead investors to agree to lower interest rates relative to other forms of borrowing. As such, government agencies, and thus the taxpayers, can benefit from lower borrowing costs as compared to standard market loans or even taxable bonds.
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For more information on the Edinburg Economic Development Corporation and the City of Edinburg, please log on to http://edinburgedc.com or to http://www.facebook.com/edinburgedc.
