San Benito scores clean audit; shows dramatic economic growth

May 21—SAN BENITO — Boasting a record cash cache, City Hall's landed a clean opinion on its annual financial audit showing dramatic economic growth during the last 10 years.

In the last fiscal year, the city's fund balance climbed to $15.4 million, up from $14.3 million the previous year while soaring from $3.5 million in 2014, the certified public accounting firm of Cascos and Associates stated in the city's annual comprehensive report.

"We did very good," Mayor Rick Guerra said Tuesday in an interview. "We're moving forward. We're here to manage the finances of the city and we do it right and we're transparent to the people."

Part of the auditor's report covered a turbulent period at City Hall during which commissioners worked with interim city managers, Finance Director Stephanie Sarrionandia and department heads to draft the city's general fund budget.

After a May 2023 election swept a new city commission into office, commissioners fired City Manager Manuel De La Rosa following about six years on the job before hiring Gavino Sotelo, a former Laguna Madre Water District general manager, to serve as interim city manager.

Three weeks later, Sotelo suddenly resigned before commissioners appointed City Secretary Ruth McGinnis to serve as interim city manager.

Then in late October, commissioners hired City Manager Fred Sandoval, a former longtime Pharr city manager, to take over at City Hall.

During a May 1 presentation, auditor Carlos Cascos gave officials a clean opinion on the audit covering the 2022-2023 fiscal year.

"The city earned an unmodified opinion," he told commissioners. "An unmodified opinion is the most favorable opinion that any entity can receive from a CPA firm. Nothing came to our attention that needed to be reported to the administration or to the city commission."

During the last fiscal year, officials amassed a cash reserve fund big enough to run the city's operations for 270 days in case of emergency, Cascos said.

"That rainy day fund is not used, or should not be used, for the operation of the city," he said. "Operations are perpetual — they go on forever. So the amount is used for one-time projects, whether it's street improvements or acquisition of fixed assets, but not for operations."

The audit showed Fitch Ratings upgraded the city's credit rating from A+ to AA in 2020, while Standard & Poor's rate jumped to AA from A during the same time period, with Moody's rating the city at A1.

In the last 10 years, the city's net position has soared, climbing to $40 million from $37.9 million the previous year, up from $12.2 million in 2014, the audit showed.

During the last fiscal year, the city's total assets climbed to $60.2 million, with $21.8 million in liabilities.

Meanwhile, the city's total debt on its outstanding certificates of obligation and general bonds stood at $19.1 million.

During the 2022-2023 fiscal year, officials set the city's general fund budget at $16.8 million, covering $16.7 million in expenditures.

While the city collected $6.2 million in property tax revenue, sales tax revenue climbed to $6.8 million from $6.7 million the previous year.

Within the city's general fund budget, the police department took the biggest chunk of revenue, operating at $4.4 million, with the fire department's budget at $2.5 million.

While the public works department's budget stood at $4.1 million, officials earmarked $2.7 million for street maintenance.