Financial Audit Draft Lists Five Material Weaknesses; Magnolia Approves Pinemoor Rezoning; City Secretary Resigns After One Meeting | Recap of Magnolia City Council, November 2026

Introduction to the Meeting

November 10 - The Magnolia City Council met at 6pm in the Sewall Smith Council Chambers on Buddy Riley Boulevard. Mayor Christopher Blair presided, with council members Caleb Small, Brandon Jacobs and Raymond Gaskin on the dais.

Geoff Beyer was absent during the meeting. Position 2 of City Council is still empty after Buck Perino resigned in October. That left three council members on the dais. The city has a new interim city secretary, Chance Garrett; more on that below.

Most of the agenda moved quickly. The longest stretch belonged to the city's auditor, who walked council through a draft of the fiscal year 2025 audit: a clean opinion, along with five findings in the city's internal controls. Council tabled it until December, when the finalized audit is expected. Later in the night, City Admin Bob Harvey told the room the city secretary who previously started in October had already resigned.

The Quick Highlights

• --Council adopted Ordinance O-2026-031, rezoning about 60.05 acres at Mill Creek Road and FM 1488 for the Pinemoor residential development. It was the same item council pushed back in October.

• --Council approved a 10-year renewal of the police department's Axon package: body cameras, in-car video, Tasers and Evidence.com. The city's price sheet puts the 10-year cost at $2,183,246. The sheet projects $305,164 in savings compared with two five-year contracts. Chief Kyle Montgomery said there is a five-year opt-out. When a resident asked whether the system ties into Flock cameras, Blair said Magnolia no longer has them.

• --Council approved a $1.168 million State Infrastructure Bank loan agreement. Blair said it covers utility change orders tied to the FM 1488 work. Gaskin suggested asking the 4A or 4B corporation to pick up the payments, as he said happened when FM 1774 was widened.

• --$271,244.05 in federal ARPA money was moved off the Water Plant No. 1 and No. 2 rehab project and onto payroll. City Engineer Chris Bogert said the wells are running about 16 hours a day, so they can't be taken offline for the work in time to spend the money before the Dec. 31 deadline.

• --Council accepted water, sewer and street conveyances from MUD 165 and MUD 174 in Mill Creek Estates and Escondido. Bogert said the city collects no property taxes from those sections and recommended annexing areas like them in the future.

• --Daniella Garcia resigned from the Capital Advisory Committee after taking a job with the City of Waller, per Mayor Blair. Destiny Rains was appointed to replace her.

• --Out of executive session, council directed staff to work on an amendment to a utilities agreement covering water and sewer extensions.

Council Approves Pinemoor Rezoning After a Resident Says the Agenda Left It Out

Council pushed this rezoning back in October so the city could check out questions raised about the land records. It returned this month as a bare agenda line: a zone change for about 60.05 acres at Mill Creek Road and FM 1488, with no ordinance number, no developer and no mention of Pinemoor.

During public comment, a resident called that inadequate and a violation of open meetings law, and said City Attorney Leonard Schneider "of all people should know this."

City Planner Dana Berry said it was "the same item that was presented to you in October." To clear up the confusion, Gaskin said he had since met with Berry and Bogert about last month's questions, including money paid for the land and timber rights.

"After my meeting with Dana and Chris Bogert, city engineer, everything the city has done on our end is correct," he said. Any remaining dispute, he said, looked like one between a developer and a landowner.

Blair said the new interim city secretary "forgot to put Pinemoor on there."

Gaskin added, "as far as I'm concerned, it was a mistake. We'll correct it."

Jacobs moved to adopt Ordinance O-2026-031, and it passed with no opposition.

4B Board Interviews Pushed to December; Applicants Will Get a Minute to Speak

Council was set to fill two seats on the 4B board, the Magnolia Community Development Corporation. Mayor Blair asked to postpone, saying the city had eight applications and wanted every applicant in the room at the December meeting, each with a minute to speak. Council tabled it with no opposition.

Councilman Jacobs, also the CDC board's president, encouraged residents to apply and said applications stay on file for a year. "We need people to participate," he said.

Blair said the format is similar to one council used a few months back.

Draft Financial Audit Gives Magnolia a Clean Opinion and Five Material Weaknesses

The auditor, from JGV CPA, presented during the meeting an unmodified, or "clean," opinion on all five parts of its financial statements, including the 4A and 4B corporations.

Per the presentation, that is the highest level of assurance an audit gives. He then listed five internal control findings, each presented as a material weakness:

1. #1 Large year-end adjustments were needed before the statements could be presented fairly.

2. #2 Several funds carried negative balances in the city's pooled cash, in effect borrowing from other funds.

3. #3 4A and 4B bank reconciliation items were not reviewed or cleared on time.

4. #4 The city did not track every cash account opened for 4A and 4B.

5. #5 A TIRZ fund required by a 2022 agreement with Shadyside Land Company, the Heritage Green developer, still did not exist at year end.

He said the findings also turned up last year, when the prior auditor found them but did not formally report them.

On the 4A and 4B cleanup, he said: "it's not anything that I would consider to be out of the ordinary, but definitely something that I felt council and management needed to be aware of."

The audit missed its original March 29, 2026 target, which the presentation tied to slow responses to document requests. The auditor said he expects to hit it next year; Blair corrected him from "should" to "will."

The Numbers from the CPA Presentation

• --The General Fund took in $6,908,408 and spent $8,884,603, a $1,976,195 gap. Transfers in ($1,362,865), lease proceeds ($350,721) and an asset sale ($29,256) partially offset it. The fund balance fell $233,353 to $5,061,389.

• --Spending ran $131,570 over the final amended budget.

• --The Capital Projects Fund ended with a deficit fund balance of $239,544, which the city expects to close with transfers, cuts or new revenue.

• --The Utility Fund earned $2,822,900 in operating income and transferred out $1,687,865. Utility transfers are part of what council's October general fund review is meant to examine.

It's important to note that these figures come from a draft audit and could change in the final version.

What Happens Next for the Financial Audit

Harvey said fixes are underway. He introduced Becky Roseberry, a contracted finance manager brought in to "help us clean up the financial house and get it better organized," and said she starts on the 2026 audit with the auditor the next morning.

The general fund review still has no firm under contract. Harvey said the city is talking to multiple external financial firms before putting the work out for bids but is not under contract with any specific firm.

City Secretary Leaves After One Meeting; Harvey Asks Residents to "Criticize Me, Not My Staff"

Harvey opened his departmental report with personnel changes. He said it took three months to hire Tiffany White as city secretary, and that she attended one council meeting, in October, before resigning.

Turning to the audience, he spoke frankly. "At the last meeting, there were several attacks on my staff," he said. He asked anyone with a complaint, including on social media, to come to him, and said staff are working under difficult circumstances they did not create.

"If you feel that you need to criticize anybody, please criticize me, not my staff," Harvey said.

Chance Garrett is now interim city secretary; not to be confused with Kandice Garrett, the interim before Tiffany White.

Topics to Keep on Your Radar

• --Dec. 8: Public hearing on Wild Rose Farm LLC's petition to annex about 15.713 acres. Schneider said council can annex the same night.

• --December meeting: The final audit, the 4B applicants and the Water Plant 4 land conveyance, held up by warranty items on the well.

• --Also December: David Ford, a developer who lives outside Magnolia, said his group expects a vote on its retail project at FM 1488 and Goodson Road. He said the Texas Comptroller ruled the city will collect two cents of sales tax there instead of one starting Jan. 1, 2027, put the project's value to the city at close to $40 million over 25 years, and said a developer outside city limits is courting his main tenant.

• --Before December: Public Works Director Charles Stroud is gathering bids on a hydro excavator. He said the city spent a little over $85,000 renting equipment last year.

• --Nov. 12: The EDC and CDC boards meet. In October, council referred an ethics complaint about their shared executive director to both boards.

• --Impact fees: NewGen Strategies and Baxter & Woodman are finishing a joint impact fee report for the Capital Improvements Advisory Committee.

Sources

• --City of Magnolia, Regular City Council Meeting Agenda, Nov. 10, 2026

• --JGV CPA, "City of Magnolia, Texas | FY2025 Audit Results," draft audit presentation to City Council, Nov. 10, 2026

• --Magnolia Police Department Price Sheet (Axon renewal), presented to City Council, Nov. 10, 2026

• --City Administrator Monthly Report, October, presented to City Council, Nov. 10, 2026

• --RECAP from Magnolia's October City Council Meeting, Dock Line Magazine

• --August Recap from Magnolia City Council: EDC Appointments, Flock Cameras and a Night of Public Debate, Dock Line Magazine