After a year that saw many municipal finance directors struggling to maintain balance sheets amid a pandemic, increased public safety costs and other expenses, the city of Donna’s finances emerged from 2020 with top marks.
The news was delivered to the Donna City Council during a meeting Tuesday, where Carlos Cascos, the certified public accountant whose firm evaluated the city’s funds, presented his findings with a note of congratulations.
“Let me start off with congratulating the city for once again earning unmodified opinions in all areas,” Cascos said. “An unmodified opinion is the cleanest and best opinion that any entity can receive from an accounting firm.”
Among the key highlights of his findings, Cascos explained to the council that the city enjoys a robust, unrestricted fund balance — or discretionary cash.
“Your fund balance is $3.5 million. That’s an important number, and I’ll tell you why,” Cascos said.
“The unrestricted portion of that $3.5 million is $3.5 million,” he continued, explaining that none of those monies are encumbered by debt obligations.
The city is also currently maintaining an operating reserve above the 90-day minimum, which accountants generally recommend a public entity carry.
Donna’s revenues total $12 million, while expenditures come in just under that at about $11.8 million, Cascos said.
“What becomes relevant is your expenditures — the expenditures of $11,784,051. If you divide that number by 365 days, it costs you a little over $32,000 a day from the general fund activity to operate the city of Donna,” he said.
Dividing that figure by the unrestricted fund balance allows Donna to see how much cash it has on reserve, should revenue generation cease.
“It reflects your days of operation. Your days of operation are at 109 days, that’s almost four months,” Cascos said.
“You’re in a lot better shape than many of our cities are, especially considering what we’ve gone through the last year with the pandemic,” he said.
At the conclusion of Cascos’ presentation, Donna Mayor Rick Morales expressed his gratitude for the city’s financial health.
“That is awesome,” he said, before thanking Donna City Manager Carlos Yerena and Finance Director David Vasquez for their work.
“Mayor, God has been good to us,” Yerena said. “This was an exceptional year. It was a hard year. A lot of challenges with the pandemic. So, I want to thank Mr. Vasquez and all our staff — we were able to work through it.”
Tuesday’s presentation represented a marked shift from the concern and even worry city leaders and now-former elected officials expressed over the city’s finances last September, when the council was deliberating its fiscal budget.
In a series of council and economic development corporation meetings that were held back-to-back just after the statutory deadline for cities to approve their budgets had lapsed, then-Councilmen Gus Gonzalez and Arturo Castillo worried the city didn’t have enough money to meet its operational needs.
The pair were at odds with the mayor over the payment of some $277,000 in fees to various consultants when city staffers were being made to trim their department budgets so lean that they had approached the councilmen to express their concerns.
“I’ve been talking with several department heads and they said that based on what they’re being budgeted for, it’s gonna be hard for them to run their departments,” Gonzalez said at the time.
Yerena himself expressed some hesitations, urging the council to approve the city’s 2020-21 fiscal budget without those consultants fees, or staff pay raises.
“We do have some debt service requirements this coming year that are going to be very stringent on the city. So, we’re going to have to really, really watch what we spend,” Yerena said at the time. “Every single penny.”
Nonetheless, the auditors said Donna has done well over the last several years — going from receiving modified opinions on their audits as recently as 2018, to earning unmodified opinions every year since.
“It really hasn’t been that long and y’all have received clean opinions for the last three or four fiscal years, which is excellent,” Cascos said. “I entrust that you stay on that road and not go back to days of old.”