SULLIVAN CITY — Sullivan City’s fund balance took a hit after unexpected expenses caused the city to spend more than it brought in last year, an audit report showed.
Guillermo Reyna — an associate with Oscar R. Gonzalez CPA & Associates, P.L.L.C. — presented the 2018 fiscal year audit to city commissioners on Monday, highlighting some of his key findings.
In the city’s general fund, revenues came in at about $1.7 million, but the city’s expenditures totaled $1.9 million, leaving a deficit of about $233,000 for the 2018 fiscal year, which ended in September 2018.
That caused the city to dip into their fund balance, which had $536,478 at the beginning of the fiscal year in October 2017, but ended at $228,331.
“Your fund balance took a hit this year,” Reyna said, recommending that the commissioners focus on the budget on a month-to-month basis and hold off on any “wish list” expenses.
“Look at that fund balance and try building that fund balance as much as possible,” he said. “That’s my professional recommendation on that.”
The audit reported a shortfall in the city’s overall projected revenues. The city had budgeted $1,881,301 in revenues, but only brought in $1,712,328.
The biggest shortfalls were in franchise taxes — which were estimated at $198,758, but only brought in $105,781 — and “other revenues” — which were budgeted at $115,000, but only brought in $32,439.
On spending, the city had budgeted approximately $1.87 million in expenditures, but ended up spending $1.94 million.
That was caused by unexpected expenses, according to Mayor Leonel Garcia, such as the purchase of equipment, issues that arose from a street improvement project and costs associated with ensuring the city is in compliance with the Texas Commission on Environmental Quality.
Garcia explained that about seven or eight years ago, trash was being dumped behind the police department and TCEQ eventually found out about it.
TCEQ threatened to fine the city because of the practice, so officials began working on removing trash, which the city is still working on. The cost of addressing those problems was not immediately clear.
Garcia also noted that the city had to pay between $120 and $130,000 to settle a lawsuit with Starr County that dealt with the city’s attempt to annex property within Starr County.
Despite the decrease in funds, Garcia said he wasn’t concerned about the city’s financial situation.
“Most of (the expenses) went back to where the city needs it,” he said. “As far as everything that we did, it was more of a need than a want for the city.”