City of Devine received glowing financial reports; No property tax increase anticipated

PRESS RELEASE –
CITY OF DEVINE – The recent water-sewer rate increases have yielded better than expected results for the City of Devine resulting in outstanding reports from both the city’s financial advising firm and the city’s annual financial audit.
According to Mark McLiney of long time advising firm to the city, Samco Capital, the water rate study has accomplished its intended purpose ahead of schedule and the water-sewer system is becoming solvent and self-sufficient, and will no longer be a drain on the General Fund.
“What a great year you had. Congratulations!” McLiney said. “The last couple of years, the City has covered Utility Fund Debt with the General Fund and now those funds can be moved back to the General Fund which will give the City the opportunity to borrow for General Fund projects without increasing the tax rate. I would estimate you could borrow between $4,500,000 and $5,000,000 later this summer…again without changing the tax rate.”
McLiney also suggested going forward, the City should program a 2-3% increase annually for water-sewer rates to keep up with inflation and avoid the pitfalls that resulted from 8 years of no increases. Such increases are normally enacted by municipalities for maintenance and operations.
“City staff and the City Council should be proud of these results,” McLiney said.
The City’s annual financial audit report by the firm Armstrong, Vaughan & Associates for the fiscal year ending September 30, 2025 presented in March by Carl Goering to the City Council also lauded the City’s performance.
“The audit opinion we gave is ‘unmodified’ which is the best opinion we can give on an audit. My goal as an auditor is to form an audit opinion and determine whether or not the financial statements are free of material misstatement and conform with generally accepted auditing principles,” Goering said.
“The audited numbers tell a story of financial stability directed with ‘great oversight’ by the city administrator,” Goering said.
Highlights of the audit showed the City with a Debt to Asset ratio of 41.5% with total debt of $17.62 million compared to total government wide assets of $42.43 million. This indicates the overall leverage of the government and about two-fifths of the city’s asset base is financed with bonded debt. Ratios below 50% are considered favorable.
The City also reported favorable numbers in the categories of Debt to Equity, Equity Ratio, Net Debt to Assets, Debt Service to Revenues, Interest Burden and Cash to Debt.
The report also stated the overall financial flexibility of the City is stable with the net position increasing during the year and the debt structure shows limited near-term repayment pressure.