HARLINGEN — Two firms have interviewed city officials while requesting documents in their reviews of the public works department and the city’s investment policy after the new city commission raised concerns during weeks of heated debate.
While the international auditing company of Ernst & Young conducts a performance audit of the public works department, Safe Track, a McAllen private investigations firm, is performing a compliance review of the investment policy and investments.
“I’m looking forward and excited to see what findings they come up with and looking forward to any recommendations they have,” City Commissioner Frank Puente said Friday. “We’ll have updated policies and procedures.”
Mayor Chris Boswell said the firms had reportedly completed short on-site visits, interviewing some City Hall officials while requesting documents.
“It’s been reported to me that both of them have concluded their on-site visit (and) document review and are making their reports,” he said.
Boswell, who said the firms didn’t contact him, said they interviewed City Manager Gabriel Gonzalez, Finance Director Robert Rodriguez, Public Works Director Rodrigo Davila, a purchasing agent, some commissioners and others.
Meanwhile, Puente said both firms contacted him.
“It was just background questions and some of my concerns,” he said. “My comments and concerns were about some of the practices, policies and procedures in some departments to see if there was room for improvement.”
What’s behind the firms’ hiring?
At City Hall, Gonzalez said the firms requested financial documents along with the public works department’s and the finance department’s policies and procedures.
Meanwhile, Boswell indicated the commission’s new majority hired the firms to review baseless allegations aimed at smearing his administration weeks before the May election in which he’s running for re-election while Puente’s and Commissioner Richard Uribe’s seats are up for grabs.
“I don’t believe that it’s coincidental it’s right before an election,” he said.
Puente denied the claim.
“I personally think that’s offensive and shows lack of leadership,” he said, adding he and the commission’s majority hired the firms “to make sure we have transparency and accountability.”
Public works department allegations
The reviews come after weeks of fiery debate among commissioners.
In November, members of the commission’s new majority hired Ernst & Young at $60,000 to conduct a performance audit of the public works department.
During a meeting, Uribe requested the audit’s scope include “all aspects of public works — the whole operation” during at least the last 10 years.
About 10 years ago, the city investigated complaints including accusations of theft, the alleged sale of scrap metal and motors along with what he described as “fake invoices and phantom checks,” Uribe said during a meeting.
On Friday, Boswell said then-Police Chief Tom Whitten investigated an allegation stemming from lost scrap metal about 10 years ago.
“I remember there was an allegation regarding the loss of scrap metal,” Boswell said. “He told me there was no basis for the allegation. That is the only thing and the only time I’ve ever heard of anything.”
Investment policy questions
Earlier this month, Uribe, Puente and Commissioner Frank Morales voted to hire Safe Track for $80,000 to conduct a compliance review of the city’s investment policy and investments.
During a meeting, Uribe questioned Rodriguez’s decision to move $5 million into a certificate of deposit at Texas Regional Bank, arguing the city wasn’t getting the best return on the money that could have funded drainage projects.
Uribe also said the Harlingen WaterWorks System moved $9 million into a CD at the bank.
In response, Rodriguez presented commissioners with a five-year summary of the city’s cash and investments while explaining he invested $5 million into a certificate of deposit at Texas Regional Bank because the bank offered a rate of 0.46 percent, far higher than other banks he contacted in 2020.
While Texas Regional Bank offered its rate of 0.46, Frost National Bank offered 0.0001, TexPool offered 0.147, BBVA offered 0.20, Lone Star National Bank offered 0.3 percent and the U.S. Treasury offered 0.12 percent.
Amid discussions, Morales said he wanted to review any connection between the city and Texas Regional Bank, which employs two airport board members.
While Uribe said Hilltop Securities, the national financial advisory firm that’s served the city for years, had limited its latest review of the city’s investment policy, Boswell said the company found the city’s investment policy, which commissioners had approved in April 2021, in compliance with Texas law.
During the meeting, Boswell and Commissioner Michael Mezmar argued Safe Track didn’t have the experience or staff of certified public accountants and attorneys to conduct a financial review.
Perez, who stood by the majority’s call for a compliance review of the investment policy, joined Mezmar in voting against Fast Track, suggesting commissioners give the job to Ernst and Young while also arguing the private investigations firm didn’t have the experience and staff to perform the review.
