Local Government and Public Budgeting

E. Rey Garcia, MPA Candidate
Original Date: 10/11/2015
Local Government & Public Budgeting
The University of Texas-Rio Grande Valley (UTRGV)
College of Liberal Arts
Master of Public Affairs-Administration
PAFF 6304: Public Budgeting & Finance
Fall 2015, Module One
Dr. Aziza Zemrani
The Budgetary Framework of the City of Weslaco’s Municipal Budget FY2010, with Highlights from 2011-2015
An MPA Graduate Term Paper
Revision 2, October 13, 2015

LOCAL GOVERNMENT & PUBLIC BUDGETING 1
Intentionally Left Blank

2 LOCAL GOVERNMENT & PUBLIC BUDGETING
An MPA Graduate Term Paper
LOCAL GOVERNMENT & PUBLIC BUDGETING
The Budgetary Framework of the City of Weslaco’s Municipal Budget FY2010,
with Highlights from 2011-2015
October 11, 2015
The University of Texas – Rio Grande Valley (UTRGV)
www.utrgv.edu
College of Liberal Arts
Master of Public Affairs-Administration
PAFF 6304: Public Budgeting & Finance
Fall 2015, Module One
Dr. Aziza Zemrani

Intentionally Left Blank

Table of Contents
I. Abstract 6
II. Organizational Environment 7
Public Budgeting 7
Political Environment 8
Economic & Social Culture 9
Demographics 9
III. Budget Process – Agendas and Minutes 12
The Four Phases of Public Budgeting 12
Citizen Engagement 13
Open Government / E-Government / Gov. 2.0 13
City Council Meetings, Budgets Workshops, & Public Hearings 15
Agendas, Agenda Packets, & Minutes 15
City Council Video-Recorded Meetings 17
City Council Districts, Relations & Issues 17
IV. Budget Trends 18
Economic Growth 18
Economic Decline 18
Revenue Sources and Prospects 19
Expenditures 19
Tax Structure 19
V. Capital Budgeting 20
Project Rankings 20
Factors Promoting or Compromising Capital Development 21
VI. Financial Oversight for 2010 22
Governmental Funds 22
Proprietary Funds 22
Fiduciary Funds 23
Government-wide Financial Analysis 23

VII. Comprehensive Annual Financial Report (CAFR) & Audits 24
Financial Highlights 24
General Fund 24
Adopted Budget 2010-2011 25
Volunteer Separation (VSP I) 25
CAFR’s and Audits (from 2011-2014) 26
Adopted Budgets (from 2011-2014) 26
Revenues and Expenditures for 2010 GAAP Accounting Procedures) 26
Bond Ratings 27
VIII. Understanding Budgeting in the City of Weslaco 28
Reform Efforts 28
Transparency Efforts 28
Performance Measurement 29
Result-Oriented Budgeting 29
IX. Summary and Concluding Recommendations 30
X. References List 31

Abstract
This research study examines the practices and methods of public budgeting for the City of
Weslaco, Texas’ Municipal Budget Process from 2010, with highlights through 2015. It analyzes
the budget trends, capital investments, financial oversight and accountability, reform, e-
Government and transparency efforts, citizen engagement methods, and the city’s budgetary
responses and future challenges.

Local Government & Public Budgeting
The Budgetary Framework of the City of Weslaco’s Municipal Budget FY2010,
with Highlight from 2011-2015
October 11, 2015
Organizational Environment
The framework that makes-up the budgetary process for the City of Weslaco, consists of
three key factors that constitute an organizational culture with a political environment comprised
of the status-quo group, who are members of the local community opposing change, and the
reform group, who are members of the community promoting change. The framework also
consists of both economic and social cultures and their effects on the budgeting process.
Weslaco’s demographics plays a key role in the realm of economic development and
investments as noted in the budget process. This term paper attempts to define the budgetary
trends, capital budgeting, and the financial oversight and auditing practices implemented by the
City Council. This study also takes a closer look at the reform and transparency efforts adopted
by the City of Weslaco. Finally, it seeks to explain what performance measurement policies are
adopted by the city, and if such measurements have created a results-oriented budgeting practice.
Public Budgeting is defined by Robert D. Lee, Public Budgeting Systems, 9th
edition, as
a process of “selection of ends and the means to reach those ends.” Budgeting is about
information, budget systems help governments gather the best information, helping the decision-
makers in the making of both technical and political decisions and the allocation of resources to
propose.

Political Environment
The political environment of the City of Weslaco has recently been split between two
groups. The Status-Quo Group, are those who want to keep the system as is. The Reform Group,
are those who favor reform and restructuring of the organization.
From 2010 through 2014, the Status-Quo Group, consisted of a minority City Council
members and a very-vocal constituency in support of Unions, which includes the Weslaco Police
Department and the Weslaco Fire Department. The status-quo group strongly opposes change
and reform, which constitutes the elimination of 50 plus jobs and the re-visiting of contracts.
From 2010 through 2014, the Reform Group consisted of an administration headed by
City Manager, Leonardo Olivares, and Mayor Miguel D. Wise, with a City Council that was
majority in favor of reform and organizational and budgetary restructure. It called for the
elimination of mid-management and to delegate more job responsibilities to the Directors and
staff. It called for the modernizing the overall culture of the organization, which included
performance measuring, budget training for Directors, re-defining job descriptions and salary
grade levels, emphasis on employee evaluations and job performance. This also included the
hiring of more qualified department heads and re-negotiating contracts with suppliers and
vendors, and creating a modern virtual Information Communications Technology (ICT) network
that connects all employees and public to the organization’s administration, via a secure
Intranet, consisting of the internal fiber network, connecting employees to the main information
data servers at city hall; and an Extranet, consisting of an external network, via the Internet,
connecting citizens, public, and other governments to the administration, and therefore,
promoting citizen engagement, or instant interaction between the city and the community via the
city’s portal website, mobile web, and social media network.

Economic & Social Culture
The City of Weslaco has experienced a boost of economic growth and it is noticeable
with the 2014 high-ratings from the budget auditors, Standard & Poor’s and Moody’s as reported
in the city’s 2014 Comprehensive Annual Financial Report (CAFR). Weslaco is centrally located
in the mid-Rio Grande Valley, making it an ideal place for cultural events, travel, lodging, dining,
shopping, education, medical needs, and economic development.
Weslaco is minutes away Mexico and South Padre Island. It is home to the Onion Fest, a
joint-venture by the City of Weslaco and the Weslaco Area Chamber of Commerce, who funds
the event, and the Alfresco Weslaco, Music and Art on the Street, a joint venture by the City of
Weslaco and the Weslaco Economic Development Corporation. It is also home to three nature
centers, Estero Llano Grande State Park (A World Birding Center), Frontera Audubon, and the
Valley Nature Center. The Mid-Valley Airport, caters to private planes and business travelers.
The South Texas College division provides higher education within reach of mid-Valley
residents. Knapp Medical Center, a Level III Trauma hospital, providing medical services to
residents of the mid-Valley. The Weslaco Museum, which provides cultural-rich exhibits and the
Tower Theater, providing an intimate setting, where acts and plays, often involve the spectator.
Shopping is just minutes away from the Rio Grande Valley Premium Outlets. All of these
establishments help generate economic-growth for the city’s budget.
Demographics
The following demographics are from the City of Weslaco, including population,
transportation, utilities, electricity, natural gas, Internet, phone and cable, and recycling
information, are provided via the Weslaco Area Chamber of Commerce at:
Website: http://www.weslaco.com/pages/Demographics.

Population: Is based on the most recent Census at www.cenus.gov.
Year Population
1990 21,877
2000 26,935
2010 35,770
2013 (est). 37,093
Transportation: Methods of transportation include air, bus, and automobile.
Air Travel:
Mid-Valley Airport - Is located in Weslaco, a facility for private aircrafts that
features on-call Customs and Border Protection inspections Monday – Saturday, 8 am to
5 pm. (Must provide a 2-hour notice). Website: http://www.weslacoairport.com/
McAllen International Airport – Is located approximately 20 miles to the west
of Weslaco, in McAllen, Texas. Website: http://www.mcallenairport.com/
Valley International Airport – Is located approximately 25 miles to the east of
Weslaco, in Harlingen, Texas. Website: http://www.flythevalley.com/
Brownsville-South Padre Island International Airport – Is located
approximately 41 miles east of Weslaco, in Brownsville, Texas.
Website: http://www.flybrownsville.com/
McAllen, Harlingen, and Brownsville-South Padre Island airports all serve the
Rio Grande Valley’s air-traveling needs via the following airlines: United Airlines,
American Airlines, U.S Airways, Allegiant Air, Aeromar, Southwest Airlines, Sun
Country Airlines and Delta Airlines.
Bus
The Lower Rio Grande Valley Development Council provides public
transportation through the Valley Metro bus system. The routes travel primarily through

Hidalgo and Cameron counties, with service hours that are typically Monday – Saturday,
6 am to 8 pm. The Weslaco stop is located at South Texas College, 400 W. Border.
Valley Transit is a full-service bus operation with intercity, airport shuttle, charter
and package express service. The main route runs from Mission to Harlingen and
Brownsville and Harlingen with daily service. Additional service points include Roma,
South Padre Island, San Antonio and Houston. The Weslaco stop is located at the Stripes
Convenient Store, 1919 W. Business 83.
Automobile
Driver’s licenses are issued and renewed at the Texas Department of Public Safety
Driver and Motor Vehicle office located on 1015 and Sugarcane Dr. The phone number is
956-565-7200. Vehicles are registered at the Auto License Department/Hidalgo County
Tax Office, located at 1902 Joe Stephens Ave, #201. The phone number is 956-973-7825
Utilities
Water
Supplier: Hidalgo County Water District #9
Water Source: Rio Grande River
Plant Capacity: 8.12 mgd, Avg. Daily Use: 4.744
Peak Use: 6.688 mgd
Basic Rate: $10.06
Cost/1,000 gallons over Basic Rate: $1.79
Elevated Storage: 1.3 mgal;Ground Storage: 1.085 mgal

Budgetary Process – Agendas & Meetings
The budget cycle and process is made up of four phases of public budgeting, the
development, approval, execution, and evaluation of the budget. It provides financial reporting to
its constituents with detailed, itemized descriptions of the agency’s yearly expenses, and
promotes the organization’s initiatives on transparency, open government, and e-Government.
The Four Phases of Public Budgeting
1. Development - Propose departmental items are presented to City Manager and Finance
Director. This includes much planning and research by the Department Heads and Mid-
Management or Senior Staff.
2. Approval – The proposed items go through countless revisions and compromising before
it is approved by the Mayor and City Council. The City Manager and Finance Director
meet with Department Heads to review and justify the proposed budget and eliminate
unnecessary expenses or items not justified.
3. Execution – This is done through a series of budget meetings and budget workshops
involving the City Manager, the Mayor and City Council, and all Department Heads. It
allows the opportunity for the public to question or comment on the public budget. It
allows the vendors the opportunity to explain their services and address any comments or
questions about their contracts or the renewal of their service and possible bidding
process. Any other key participants, such as the Weslaco Museum, the Boys and Girls
Club, the Valley Nature Center, Estero Llano Grande World Birding Center, Frontera
Audubon, the Tower Theater, and any other nonprofit organizations receiving charitable
contributions from the city.

4. Evaluation – Yearly audits evaluate of all year-end financial expenses and reports. After
the audit is complete the auditor will address the city and council at the public meeting
and report on the city’s current financial ratings based on the General Fund and the
Reserve. Auditors performing the evaluation are sometimes local or national, such as
Standards & Poor’s or Moody’s. The city is presented with the Comprehensive Annual
Financial Report (CAFR), a financial report that complies with the accounting
requirements promulgated by the Governmental Accounting Standards Board (GASB).
Citizen Engagement
The participation of the community is evident in the City of Weslaco’s city council
meetings, budget workshops, and public hearings. Citizens are encouraged to engage during
regular meetings by completing a City Records Request - Public Forum to speak form, prior to
the regular meeting. Citizens can address the City Council directly during public comments of
the regular council meeting, however, the council cannot respond to the citizens, they can only
listen.
Open Government / E-Government / Gov. 2.0
Open Government is defined by the OECD (Organization for Economic Cooperation
and Development) as “the transparency of government actions, the accessibility of government
services and information, and the responsiveness of government to new ideas, demands and
needs” (Harper, L., 2013).

E-Government is defined by the World Bank as “the use by government agencies of
information technologies that have the ability to transform relations with citizens, businesses,
and other arms of government. These technologies can serve a variety of different ends: better
delivery of government services to citizens, improved interactions with business and industry,
citizen empowerment through access to information, or more efficient government management.
The resulting benefits can be less corruption, increased transparency, greater convenience,
revenue growth, and/or cost reductions” (Harper, L., 2013).
Government 2.0 is defined by Gartner Research as “the use of Web 2.0 technologies,
both internally and externally, to increase collaboration and transparency and potentially
transform the way government agencies relate to citizens and operate” (Harper, L., 2013).
As part of the transparency initiatives, the City of Weslaco keeps the community
informed of all budgetary-related governmental actions, by delivering information to the public
and transforming relations with the community, using Open Government, E-Government, and
Gov. 2.0, as the foundation that sets the building blocks of a truly transparency government.

City Council Meetings, Budget Workshops, & Public Hearings
City Council Meetings are formal and must not stray from the agenda items. Under the
Texas Open Meetings Act (the Act), the general rule is that every regular, special, or called
meeting of a governmental body, including a city council and most boards and commissions
(depending on membership and authority), must be open to the public and comply with all the
requirements of the Act. The Act does not apply to purely social gatherings or conventions and
workshops, as long as any discussion of city business is incidental to the purpose of the gathering
(TML, 2015). An Executive Session, a private closed-door meeting, where the Mayor and City
Council, City Manager, City Attorney and any other required participant(s) discuss and
deliberate extensively over unresolved agenda items, some examples are lawsuits, and supplier
and vendor contracts, all which may affect the city’s budget.
Budget Workshops are less-formal “round-table style” meetings where staff, city
council, vendors and suppliers, media, and the public discuss the budget in greater detail,
allowing a two-way communication between the staff and the community. The city promotes
accountability by encouraging public comments and participation, and earns both trust and
credibility from the community.
Public Hearings are a type of public meeting, containing detailed literature, however,
with the distinctive aspects that make a hearing different. Abigail Williamson and Archon Fung
define a public hearing as “an open gathering of officials and citizens, in which citizens are
permitted to offer comments, but officials are not obliged to act on them or, typically, even to
respond publicly.” The purpose public hearings is to allow citizens the chance to voice their
opinions and concerns over a decision facing a legislature, agency, or organization, which may
reflect items on the budget process (Williamson, A., & Fung, A., 2004).

Agendas, Agenda Packets, & Minutes
Agendas are an outline of what is to be discussed at a City Council Meeting and must be
posted seventy-two hours prior to the meeting. They must be approved and signed by the City
Manager and often contain much feedback from City Council members, before they are
approved. With the agendas, Agenda Packets are also posted and contain a detailed copy of
reports and supporting documents for each agenda item. The Minutes are protocols that serve as
the instant written record of the meeting and contain details and informational notes about the
agenda items discussed at the City Council meeting(s).
The posting of Agendas, Agenda Packets, and Minutes is the responsibility of the Office
of the City Secretary, and the Information Technology Department (IT). The City Secretary posts
approved agendas and approved minutes to the city’s bulletin board, located outside of city hall.
An electronic format of both the agendas, agenda packets, and minutes is forwarded to the IT
Department to post to the city’s portal website, mobile web, and to promote via social media.
Budgeting information may be dedicated to an entire agenda or may be an item within the
agenda. Agendas may include such budget-related items, as the approval from the Mayor and
City Council of supplier-vendor contracts, the awarding of bids, proposed capital expenditures,
and the awarding chartable monies to nonprofits as a public purpose. Currently, agendas,
packets, and minutes are posted to the following:
Current Agendas & Packets (July 2012 – Current Date): Are posted to the following
website: http://www.weslacotx.gov/Agendas.html.
Historical Agendas & Packets: Are not available online and must be requested by
completing a City Records Request Form and submitting it to the Office of the City Secretary,
Ms. Elizabeth Walker and wait until approved and ready for pick-up.

Current Minutes (July 2010 – Current Date): Are posted to the following website:
http://www.weslacotx.gov/Minutes.html.
Historical Minutes: Are not available online and must be requested by completing a
City Records Request Form and submitting it to the Office of the City Secretary, Ms. Elizabeth
Walker and wait until approved and ready for pick-up at City Hall.
City Council Video-Recorded Meetings
The City of Weslaco’s Information Technology Department is responsible for recording
and editing approved video meetings of the City Council and posting to the city’s YouTube site
and broadcasting it via the PEG Channel or the Local Access Channel.
YouTube City Council Video Archives: Video archives of approved recordings are
located at: https://www.youtube.com/user/CityOfWeslaco.
City Council Districts, Relations & Issues
Overall, the City of Weslaco’s City Council is divided by Districts, which are divided by
each City Council member’s represented territory, marked off for administrative, electoral, or
other purposes. City Council members build strong relations with their constituents and
supporters. The relations with the constituents and supports are based on issues that represent
each district or the city as a whole. Depending on how the issues affect the district, it may or may
not curtail the approval of agenda items proposing new or budgeted expenditures.

Budget Trends
When organizational conditions are changing, developing a budget that expects where the
trend is going is both sagacious and appropriate. The budget manager or analyst review historical
empirical data, and draw conclusions based on those facts and balance that knowledge with
current market conditions and what is believed to happen in the future.
Economic Growth
Before 2010, the City of Weslaco had experienced the rewards of the economy’s financial
growth that also affected the growth of the municipal budget; and it reflected on the spending
measures. The city was generous with department head salaries, rewarding costly, yet local
vendor contracts, and the support for generous donations to other non-for-profit organizations.
The unions, Weslaco Fire and Weslaco Police, were salaried plentiful monies.
Economic Decline
In 2010, the City of Weslaco experienced the reality of downsizing. The city had to
reorganize its budgeting practices and spending methods. The city was headed for bankruptcy if
measures were not implemented immediately, which included the elimination of 50-plus jobs, via
Voluntary Separation Plan (VSP), (City of Weslaco. CAFR, 2010, p. 5). The cancellation and/or
renegotiation of costly vendor contracts. New procurement measures included re-visiting
existing contracts, comparative research on possible new suppliers and vendors, new fair and
equitable bidding techniques, and the request for vendor qualifications posted to solicit new
contracts that would not exceed the budgetary policies, and were equitably selected to provide
services to the city.

Revenue Sources and Prospects
The City of Weslaco’s revenue sources are in the form of taxes, licenses and permits,
services for Vital Statistics, fines and forfeits, miscellaneous, and intergovernmental.
Expenditures
Expenditure are in the form of departmental operating costs, public safety, public works,
Vital Statistics, Parks and Recreation, and cultural. Another form of expenditures are charitable
contributions to non-profit organizations.
Tax Structure
A good tax structure is one that is both equitable and efficient. According to Johnson,
Linda, M. “An equitable tax system is one that fairly distributes the tax burden. An efficient tax
system, is one that minimizes both the compliance costs to the taxpayer and the administrative
costs to the government.”
The City of Weslaco uses the progressive or reformist approach, similar to the efficient
approach, on sales tax and hotel-occupancy tax, and a regressive or reverting approach, which is
an unfair to those of a lower-income bracket. Property taxes are a combination of progressive
and regressive and depends on the market value of the property, which is usually based on
location.

Capital Budgeting
Capital budgeting is defined by Google Online Dictionary as “the planning process used
to determine whether an organization's long term investments such as new machinery,
replacement machinery, new plants, new products, and research development projects are worth
the funding of cash through the firm's capitalization structure.” Often capital budgeting involves
ranking of capital projects, and promoting based on need, and compromising from within the
organization and the Mayor and City Council members.
Project Rankings
Little ranking information is available online from 2010 through 2015. Capital projects
included: IT and computer equipment (thin-clients, computers, network equipment and servers
for city hall and police), fiber network, Online Bill Pay System for Utilities, Water Treatment
Plant, new police units, and mobile laptops for both police and fire units. Rankings were done
via spreadsheets by the Department Heads and forwarded for approval to the City Manager and
Finance Director, who would prioritize and rank based on need-basis and budgetary limits.

Factors Promoting or Compromising Capital Investment
Factors promoting capital investments, have been implemented because the city was or is
in need of such equipment. For example, in 2010, the computers and servers at city hall had
reached end of life and were nearly 10 years old. The IT Department had to assess the needs of
the organization and phase out the old equipment and gradually transition to new technology.
This capital expense required the approval from the Mayor and City Council. Other capital
investments that included a procurement process of bidding and qualifications from prospective
vendors, were the building of a new fiber network, the new Water Treatment Plant, and the
Online Bill Pay system, which was an add-on to an existing system and contract with existing
vendor.

Financial Oversight for 2010
The financial oversight for the City of Weslaco’s Municipal Budget is under the direction
the City Manager, Finance Director and Mayor and City Council. A fund is a grouping of related
accounts that is used to maintain control over resources that have been segregated for specific
activities or objectives. The City of Weslaco, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of
the funds of the City of Weslaco can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds (City of Weslaco. CAFR, 2010, p. 5).
Governmental funds. The City of Weslaco uses governmental funds to account for
essentially the same functions reported as governmental activities in the government-wide
financial statements.
As of the end of the current fiscal year, the City of Weslaco’s governmental funds
reported combined ending fund balances of $4,242,611. Approximately 64.52% of this total
amount $2,737,153 constitutes unreserved fund balance, which is available for spending at the
government's discretion. The remainder of fund balance is reserved to indicate that it is not
available for new spending because it has already been committed 1) to liquidate contracts and
purchase orders of the prior period, or 2) to pay debt service
(City of Weslaco. CAFR, 2010, p. 5).
Proprietary funds. The City of Weslaco maintains two different types of proprietary
funds, enterprise and internal service. Enterprise funds are used to report the same functions
presented as business-type activities in the government-wide financial statements. The City of
Weslaco uses enterprise funds to account for its water and sewer fund, for its sanitation fund and
for its airport fund. Internal service funds are an accounting device used to accumulate and

allocate costs internally among the City of Weslaco’s various functions. Because these services
predominantly benefit governmental rather than business-type functions, they have been
included within governmental activities in the government-wide financial. (City of Weslaco.
CAFR, 2010, p. 6).
Unrestricted net assets of the Water and Sewer Fund at the end of the year amounted to
$731,156, the unrestricted assets for the Sanitation Fund amounted to $791,238 and those for the
Airport Fund amounted to $(42,644). Other factors concerning the finances of these two funds
have already been addressed in the discussion of the City of Weslaco’s business-type activities
(City of Weslaco. CAFR, 2010).
Fiduciary funds. The City of Weslaco uses fiduciary funds to account for resources held
for the benefit of parties outside the government. Fiduciary funds are not reflected in the
government-wide financial statement because the resources of those funds are not available to
support the City of Weslaco’s own programs. The accounting used for fiduciary funds is much
like that used for proprietary funds (City of Weslaco. CAFR, 2010, p. 6).
Government-wide Financial Analysis. In the case of the City of Weslaco, assets
exceeded liabilities by $48,041,208 at the close of the most recent fiscal year. The City of
Weslaco’s net assets available for capital projects acquisition is $4,069,728, which reflect 8.88%
of total net assets. On September 30, 2010, the City had an outstanding bonds balance of
$56,205,000 and had $4,669,338 in cash to be used for completing the 2007 bond issues projects.
Furthermore, the City of Weslaco’s net assets (3 percent) represents other resources that are
subject to external restrictions on how they may be used. The remaining balance of unrestricted
net assets is a $3,071,422. This amount may be used to meet the government's ongoing
obligations to citizens and creditors (City of Weslaco. CAFR, 2010).

Comprehensive Annual Financial Reports (CAFR) & Audits for 2010
Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-
term inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a
government's near-term financing requirements.
Financial Highlights
The financial highlights are based on the assets of the City of Weslaco, which exceeded its
liabilities at the close of the most recent fiscal year by $48,041,208 (net assets). Of this amount,
$3,071,422 represents unrestricted net assets. This amount may be used to meet the government’s
ongoing obligations to citizens and creditors. As of the close of the current fiscal year, the City of
Weslaco’s governmental funds reported combined ending fund balances of $4,242,611.
Approximately 55.94% of this total amount, $2,737,153 is available for spending at the
government’s discretion (undesignated fund balance) (City of Weslaco. CAFR, 2010, p. 4).
General Fund
The general fund is the chief operating fund of the City of Weslaco. At the end of the current
fiscal year, the general fund’s deficit unreserved fund balance was $(616,131), the total fund
balance reached $(34,679). As a measure of the general fund's liquidity, it may be useful to
compare both unreserved fund balance and total fund balance to total fund expenditures.
Unreserved fund balance represents 2.6 percent of total general fund expenditures, while total
fund balance represents 4.5 percent of that same amount. While it is recommended that the
General Fund should have an unreserved fund balance of no less than 5 to 15% of operating

expenditures, the City has placed the target for unreserved fund balance in the General Fund at
25%. The City has implemented a fiscal forecast model that is designed to increase the fund
balance in the General Fund to 25% by the year 2015 (City of Weslaco. CAFR, 2010, p. 4).
Link: http://www.weslacotx.gov/fin/CAFR2010.pdf
Adopted Budget 2010-2011 – The budget was adopted on September 2010.
Link: http://www.weslacotx.gov/fin/ABFY2010-2011.pdf
Volunteer Separation – The new budget included the reduction of workforce, as recommended
by the City Manager and the Finance Director. On August 5, 2010, the City of Weslaco offered a
Volunteer Separation Plan I (VSP I) to all fulltime employees. VSP I benefits included:
Employees with five (5) complete years of fulltime employment or less shall receive the
equivalent of five (5) weeks of base salary in one (1) installment. . Employees with more than
five (5) complete years of full-time employment will receive one (1) week's base salary for every
year of employment, to a maximum of 20 weeks, payable in a maximum of five (5) equal
monthly installments, and the separation benefits will be calculated as of September 3, 2010.
In addition under the VSP I employees shall receive payment of accrued vacation and sick leave
as allowable per: (1) The City of Weslaco Personnel Policies and Procedures Manual; (2) The
Collective Bargaining Agreement with the Weslaco Municipal Police Union; (3) The Collective
Bargaining Agreement with the Weslaco Fire Fighters Association, IAFF, Local #3207,
whichever is applicable. As of September 30, 2010, 39 employees signed the VSP I. Total VSP I
payable at September 30, 2010 was $790,405. Prior to the end of the fiscal year 12 employees
had separated; accrued salaries payable was $116,347. The remaining 27 employees separated
after September 30, 2010, the Volunteer Separation Plan Payable was $674,058 (City of Weslaco,
CAFR, 2010, p. 66).

CAFR’s and Audit Reports (from 2011-2014)
 CAFR 2011 - http://www.weslacotx.gov/fin/COW-CAFR-2011.pdf
 CAFR 2012 - http://www.weslacotx.gov/fin/CAFR-2012.pdf
 CAFR 2013 - http://www.weslacotx.gov/fin/CAFR%202013%20FY.pdf
 CAFR 2014 - http://www.weslacotx.gov/fin/2014%20CAFR%20City%20of%20Weslaco.pdf
 CAFR 2015: Not yet available.
Adopted Budgets (from 2011-2014)
 Budget 2011-2012:
http://www.weslacotx.gov/fin/Budget%20As%20of%20Sept%2027%202011%20.pdf
 Budget 2013-2014:
http://www.weslacotx.gov/fin/budget/Adopted-BudgetFY2013-2014.pdf
 Budget 2014-2015
http://www.weslacotx.gov/fin/ADOPTED%20BUDGET%20As%20of%209-12-14.pdf
 Proposed Budget for 2015-2016
http://www.weslacotx.gov/fin/budget/PROPOSEDBUDGETFY201609.01.15.pdf
Revenues and Expenditures for 2010 (GAAPAccounting Procedures)
Revenues (REVs). The amount of money that a company actually receives during a
specific period, including discounts and deductions for returned merchandise. It is the "top line"
or "gross income" figure from which costs are subtracted to determine net income. Revenue is
calculated by multiplying the price at which goods or services are sold by the number of units or
amount sold (Investopedia, 2015).

Revenues for 2010, include:
 General: 20,663,931
 Debt Service: 2,503,370
 Economic Development: 2,627,012
Total Expenditures for 2010, include:
 General: 28,841,627
 Debt Service: 2,284,703
 Economic Development: 4,862,028
(City of Weslaco, CAFR, 2010, p. 20).
Bond Ratings
Bond ratings are based on the CAFR’s audit report, and are expressed as letters ranging
from 'AAA', which is the highest grade, to 'C', which is the lowest grade. Rating are based on
services use the same letter grades, but use various combinations of upper- and lower-case letters
to differentiate themselves.
Most Recent Bond Ratings for 2014 & 2015
2014 - The following link is to the most recent bond rating awarded by Standard
& Poor. Weslaco receives an A+ Bond Ratings (City of Weslaco. Press Release, 2014,
Feb. 21).
http://www.weslacotx.gov/documents/Press/140221%20PR%20S&P%20Upgrade.pdf
2015 - The following link is the most recent bond rating awarded by Standard &
Poor is an A+ and Moody’s award Weslaco an A2 and A3. (City of Weslaco. CAFR,
2015, p. 14).
http://www.weslacotx.gov/fin/2014%20CAFR%20City%20of%20Weslaco.pdf

Understanding Budgeting in the City of Weslaco
Reform Efforts
The 2010 reduction in force, a reorganization and restructuring initiative was to evaluate
the city’s workforce and the municipal budget. A “Rightsizing” approach, rather than
“Downsizing,” was taken by former City Manager, Leonardo Olivares. Rightsizing is a positive
approach, which is designed to bring strategic direction to the city. Whereas, downsizing is a
negative approach, often seen as a reactive process. It can be depressing and destructive.
(Ambler, 2015).
Transparency Efforts - E-Government, Open Government, Gov. 2.0
The City of Weslaco’s Transparency Efforts are the responsibility of the Information
Technology Department. The city’s departments all work together to deliver content that is as
accurate and up to date as possible, to the public’s computers, laptops, mobile and smart devices,
via the city’s network, Internet, portal website, mobile web, and social media network.
Prior to 2010, the city had the Management Information Systems (MIS) division, a part of
the Finance Department. At the recommendation of City Manager, the Mayor and City Council,
dissolved MIS and created the new Information Technology Department, headed by former IT &
Social Media Director, E. Rey Garcia.
Garcia’s first task was to outline the overall information systems being used by the city to
deliver content to the employees and the public. The city’s ICT and IT infrastructure was beyond
the “end of life”. Servers, computers, monitors, laptops, along with other hardware and software,
had not been updated in nearly 10 years. Through a series of budgetary capital expense
approvals, the IT began its modernization process, which included new equipment that consisted
of virtual computing, thin-clients, a fiber network connecting all remote users and facilities to the

main data and information servers at the city hall data center. A revised website, along with a
mobile web was put into place. A social media network that promotes Open Government and
transparency reaches out to the public via Facebook, Twitter, Linked-In, YouTube, Google,
Yahoo, Microsoft, along with cloud computing and apps.
Performance Measurement
Performance Management is defined as regular measurement of outcomes and results,
which generates reliable data on the effectiveness and efficiency of programs. Input. Resources
(human resources, employee time, funding) used to conduct activities and provide services.
The former City Manager, Leonardo Olivares added the discussion and possible approval
of Comparative Performance Measurement Program to the agenda of the Regular Meeting of
the Weslaco City Commission, set for Tuesday, April 6, 2010 at 6:00pm. In the Weslaco City
Hall Legislative Chamber. Section IV: The City Manager’s Report, Item “B” (City of Weslaco,
Regular Meeting of the Weslaco City Commission, 2010, April 6).
The Mayor and City Council approved Performance Management training for the city,
however, after one year, the city dropped the program. This training is strongly recommended. It
is a program that should be followed on a yearly-basis to keep the employees and departments
educated on the latest measurements and ongoing program trends.
Result-Oriented Budgeting
Result-Oriented Budgeting is usual linked to Performance Measurement. It ties the
budget expense to the measurement of outcome and results, and therefore, produces an effective,
efficient, and reliable budget. The City of Weslaco has not linked the budget to the measurement
of performance and is not following a Results-Oriented Budgeting.

Summary and Concluding Recommendations
The City of Weslaco continues to receive high-level bond ratings and should continue to
follow the best practices measures implemented by the Government Finance Officers Association
(GFOA) for Financial Management, which include, Risk Management, Public Engagement,
and the Role of the Finance Officer/Leadership, Process Management Improvement,
Performance Management, Grants Management, and Outsourcing (General Finance Officers
Association (GFOA).
Recommendations to the City of Weslaco are to re-visit the possibility of re-
implementing the Performance Management program. The city now has new department heads,
along with new City Council members, who never had a chance to experience the benefits of
being part of a performance measurement program that links the budgetary expenses and
therefore, reporting a result-oriented budget.

Reference List
Bigelow, L. (1995). How to Budget Based on Trends. Retrieved October 11, 2015, from
http://wiki.fool.com/How_to_Budget_Based_on_Trends.
Comprehensive Annual Financial Report – CAFR. (2010). Retrieved October 10, 2015, from
http://www.weslacotx.gov/fin/CAFR2010.pdf.
Comprehensive Annual Financial Report – CAFR. (2014). Retrieved October 10, 2015, from
http://www.weslacotx.gov/fin/2014%20CAFR%20City%20of%20Weslaco.pdf.
Harper, L. (2013, June 10). A Citizen's Guide to Open Government, E-Government, and Government 2.0.
In UNC School of Government. Retrieved October 10, 2015, from https://onlinempa.unc.edu/a-citizens-
guide-to-open-government-e-government-and-government-2-0/.
Johnson, L. (2009). The Makings of a "Good" Tax. In 2009 The Federal Tax Course (p. 105). Chicago,
IL: CCH Tax Law Editors.
Lee, Robert D. (2012, July), Introduction. In Public Budgeting Systems, 9th
edition. Jones & Bartlett
Learning.
Olivares, L. (2014, February 21). Press Release: S&P Raises Weslaco's Bond Ratings to the Highest
Level. Retrieved October 10, 2015, from http://www.weslacotx.gov/documents/Press/140221 PR S&P
Upgrade.pdf.
Public Hearing. (n.d.). In Participedia.net. Retrieved October 8, 2015, from
http://participedia.net/en/methods/public-hearing
Regular Meeting of the Weslaco City Commission. (2010, April 6). Retrieved October 10, 2015, from
http://www.weslacotx.gov/Regular Meeting Agenda 4-6-2010 @ 6PM.pdf.
Revenue. Definition of Revenue, 2015. In Investopedia. Retrieved October 11, 2015, from
http://www.investopedia.com/terms/r/revenue.asp.
Rightsizing vs. Downsizing? Big Difference! | Ambler. (n.d.). Retrieved October 11, 2015, from
http://ambler.com/article-library/rightsizing-vs-downsizing-big-difference/
The Official Site of The City of Weslaco, Texas. (n.d.). Retrieved September 23, 2015, from
http://www.weslacotx.gov.
The Weslaco Area Chamber of Commerce. (n.d.). Retrieved October 10, 2015, from http://weslaco.com.
The Texas Open Meetings Act at a Glance. (2015). In Texas Municipal League-TML. Retrieved October
10, 2015, from http://www.tml.org/p/Texas Open Meetings Act At-a-Glance_2015.pdf
Williamson, A., & Fung, A. (2004). Public Deliberation: Where We Are and Where Can We Go?
National Civic Review, winter 2004. Retrieved October 7, 2015, from
http://www.archonfung.net/papers/FungWilliamsonNCR04.pdf.

Local Government and Public Budgeting

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Local Government and Public Budgeting

Similar to Local Government and Public Budgeting (20)

More from E Rey Garcia, MPA, DCS-EIS Candidate

More from E Rey Garcia, MPA, DCS-EIS Candidate (20)

Recently uploaded

Recently uploaded (20)

Local Government and Public Budgeting