Charged with performing financial, investment, procurement accounting and treasury functions, the Treasury Management Department’s mission is to develop and implement financially sound practices and policies that guide the utility in its efforts to provide the best and most economical water and sewer services, not only to our existing customers, but to future customers as well. According to a survey put out by the Texas Municipal League, McAllen’s water and sewer rates combine to be one of the lowest in the entire state of Texas, if not the lowest, for cities our size.
The Treasury Management Department staff strives to enhance the financial, accounting and reporting functions of McAllen Public Utility (MPU) by introducing a level of efficiency, transparency and accountability that promotes a positive perception to the public of how the utility operates.
It shall be a goal of MPU to have sufficient financial resources and ability to fund continued operation, maintenance, and construction of high quality and essential water and sewer services and facilities in an economical and equitable manner; to meet the managed service demands of its customers without compromising the ability of future generations to meet their own needs. As small as we are, however, we play a very important role within the organization…we handle the money.
Financial Reporting, Monitoring & Support
McAllen Public Utility’s newest department, having been established October 1, 2015, the Treasury Management Department provides support to the various utility departments in managing their departments as it pertains to
finances. The department houses MPU’s Director of Finance for Utilities, Assistant Investment Officer, Procurement Accountant and Procurement Clerk. The department provides managerial, analytical and financial administrative support to all utility departments. In its efforts to promote transparency, results of financial operations, revenues and expenses, are reported to the McAllen Public Utility Board (PUB) each quarter.
The guideline driving all activities of the Utility is the budget. Three major uses of the budget are to set rates through estimated costs; ensure that spending will not exceed anticipated revenues or resources; and, the budget serves as a guideline for the internal allocation of revenues in order to pay for necessary operating and capital costs timely.
The budget is a legal instrument filed with the County and is governed by the Texas Local Government Code. Amendments to the budget can be made, within certain parameters, but must also be filed with the County.
The budget process is a six-month effort to bring the department’s justified budget requests for the following fiscal year to a level that is efficient, prudent and necessary.
The monies that MPU has do not belong to the entity. We have been entrusted by the citizens of McAllen, or ratepayers, to spend the funds wisely and always with the well-being of the community in mind.
Financial Operations Group
In addition to the Treasury Management Department, the Director of Finance for Utilities also provides direct oversight to MPU’s Customer Relations, Utility Billing and Meter Reader departments.
Cash Managements & Investments
The money we receive from sales and property taxes, water, sewer, sanitation and other fees does not necessarily belong to the City of McAllen or McAllen Public Utility. We are only the stewards of those funds. We make sure that the monies are spent in accordance with the City’s ordinances and policies and that they are secured at the bank through FDIC insurance or bank securities. We also make sure that there’s sufficient liquidity to pay our bills and what’s not needed is adequately invested.
We are required to invest available funds in investments with the objectives of preservation of capital, liquidity and yield. In other words, investments are made in safe securities, keeping in mind our liquidity needs, and earning the highest interest possible. We also make sure that we don’t put all of our eggs in one basket and diversify our investments in CDs, government securities, municipal bonds and other investment types allowed under the City’s investment policy and state regulations. The City’s investment portfolio averages around $266 million.
Every three years we go out and solicit for banking services. Currently, the City’s depository bank is PlainsCapital Bank.
Debt Management & Procurement
Occasionally, the City or MPU will need to seek other sources of funding for major projects, so the City will authorize the sale of bonds as an alternative financing source. We are responsible for making sure we set aside sufficient money to make the periodic payments of interest and principal to the bondholders/investors and that we do everything necessary to comply with the terms of the financing. This includes annual reporting to the Credit Rating Agencies, such as Standard and Poors or Fitch, who have
assigned primarily an AA+ rating to our bonds.
The highest rating given is AAA. This rating determines the rate of interest we pay to the bondholders. The closer you are to AAA, the lower the interest rate on your bonds.
Some of the purchases staff makes are paid for with a procurement card (P-card), which is basically a City issued credit card. Our department verifies and reconciles all P-card purchases. Last fiscal year, over $4.4 million was charged using the P-card program.