HARLINGEN — The waiting’s almost over.
A McAllen private investigations firm is set to present its findings of its review of the city’s investments and its policy about two months after members of the new commission hired the company for $80,000.
Safe Track’s report, to be presented to commissioners in open session, will come five days before early voting opens for the city’s biggest election in more than 20 years.
On Monday, Jorge Cisneros, the firm’s president, did not respond to messages requesting comment on his report’s findings to be presented to commissioners Wednesday.
In February, commissioners voted 3-2 to hire the firm to conduct a compliance review of the city’s investments and its investment policy after Commissioner Richard Uribe questioned moving $5 million into a certificate of deposit at Texas Regional Bank, which Finance Director Robert Rodriguez said offered a far higher return on investment than other banks.
Meanwhile, concerns arose surrounding the firm’s qualifications to conduct a financial review.
Firm’s findings hushed
At City Hall, City Manager Gabriel Gonzalez said the firm had not disclosed its findings.
However, the firm’s officials specified they wanted to disclose their findings before the public, he said.
“They said they wanted it in open session so they could release the report not only to the commission but also to the public,” Gonzalez said.
On Monday morning, City Commissioner Frank Puente, who agreed to hire the firm, said the company had not disclosed its findings to him.
“We want to get to the bottom of how the decisions are being made regarding investments, why those banks were chosen and was it the best course of action,” he said, referring to the firm’s compliance review. “Ultimately, it will help us improve the process of how our investments are being administered.”
No surprises expected
Meanwhile, Mayor Chris Boswell said he’s expects the firm found Rodriguez followed the city’s investment policy when he placed $5 million into a CD at Texas Regional Bank.
“My expectation is they’ll find that was the best rate offered and the finance department was in complete control of the process as directed by policy,” he said. “I don’t know of anything that would be controversial.”
Boswell declined to comment on the firm’s decision to release the report during the meeting set to be held five days before early voting opens for the May 7 election, in which he, Puente and Uribe are running for re-election.
“Right now, that would be pure speculation,” he said.
Boswell said he doesn’t expect the report to disclose surprising findings.
“It depends on what’s in the report and if the report sticks to the subject matter or goes beyond it,” he said.
Investments questioned
In February, Uribe, Puente and Commissioner Frank Morales voted to hire Safe Track for $80,000 to conduct the financial review.
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, adding the Harlingen WaterWorks System had placed $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 moved $5 million into a CD at Texas Regional Bank because the bank offered a rate of 0.46 percent, far higher than other banks he contacted in 2020.
Meanwhile, Frost National Bank offered a rate of 0.0001, TexPool offered 0.147, BBVA Compass offered 0.20, Lone Star National Bank offered 0.3 percent and the U.S. Treasury offered 0.12 percent, he said.
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.
Qualifications questioned
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.
While Commissioner Rene Perez stood behind the majority’s call for a compliance review of the investment policy, he joined Mezmar in voting against Fast Track, suggesting commissioners give the job to the international accounting firm of Ernst and Young, also arguing the private investigations firm didn’t have the experience and staff to perform the review.
Awaiting performance audit
Commissioners are also awaiting a report from Ernst and Young.
In November, members of the new commission hired the London-based firm for $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.
Meanwhile, Boswell said then-Police Chief Tom Whitten investigated an allegation stemming from lost scrap metal about 10 years ago, finding no basis for the claim.
On Monday, Gonzalez said Ernst and Young has not indicated when it plans to present its report to commissioners.
