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2010-10-19 Audit/Finance Committee MinutesAudit/Finance Committee Minutes October 19, 2010 After determining that a quorum was present, the Audit/Finance Committee of the City of Denton, Texas convened in a regular meeting, on Tuesday, October 19, 2010, at 2:00 p.m. in the City Hall Conference Room at City Hall, 215 E. McKinney Street, Denton, Texas. PRESENT: Mayor Mark Burroughs; Council Member James King, Council Member Chris Watts, Chair STAFF PRESENT: George Campbell, City Manager; Fred Greene, Assistant City Manager, Bryan Langley, Chief Financial Officer, Antonio Puente, Assistant Director of Finance; Harvey Jarvis, Controller; Caroline Finley, Treasury Administrator, Michelle McCallum, Budget and Municipal Court Manager The meeting was called to order at 2:05 p.m. 1. Consider approval of Audit/Finance Committee Minutes of April 5, 2010. Mayor Burroughs moved to approve the minutes of April 5, 2010, with a second by Chris Watts. The minutes were approved (3-0). 2. Management Report — a. Audit/Ffnance Commfttee Action Item Matrix The Committee discussed Matrix Action Item 108, Provide results of the EMS Audit, and other audits that were in various stages of completion. Mayor Burroughs requested a summary and current status of each audit that was in process before the Internal Auditor left the City. Actfon Item Provide a summary of the outstanding audits being addressed and the current status of each audit. � r• I I 1 ! •.�� Bryan Langley, Chief Financial Officer, explained that the intent of this item was to give the Committee an opportunity to discuss the report and make suggestions on irnproving the report. Two additional improvements are under consideration. Staff is proposing that the Fund Balance Information be expanded for each of the major operating funds. There are some reservations or potential uses for those dollars and accordingly, we want to arrive at the true working capital figure available and include that information in the next report. For the first quarter report for 2010-11, we also will add the Airport Fund in the quarterly report. The committee discussed the value of knowing the fund balances and asked for information on all the fund balances to be included in the report. Action Item Provide a summary that will include fund balance information on all budgeted funds in future quarterly �nancial reports. c. Update on Fixed Asset System Implementation Langley reported that the Fixed Asset System is finally implemented in JD Edwards for the new 2010-11 fiscal year. We still have additions and deletions for the past fiscal year that need to be run through the system but that process should be complete by November 15. There were a couple of partners working on this. MarketSphere, a consulting firm that specializes in JD Edwards, was hired to help implement the software. We also hired Weaver and Tidwell to come back and validate the install to ensure that all assets were correctly stated and that depreciation calculations were performed properly. A discussion about depreciated fixed assets and income from the sale of those items followed. 3. Receive a report, hold a discussion, and give staff dfrectfon regarding revfsions to the City of Denton's Investment Policy. Langley reminded the committee that the Investment Policy is required to be approved by the City Council once a year. Along with staff titles, explained the following changes: • Incorporation of the utility reserve fund into the City's intemal investment pool. • Providing a summation of cornmittee meeting discussions rather than formal minutes. • Designation of the Investment Policy as the primary guideline for the City's investment program and procedures. • Securities and Exchange Commission (SEC) required changes for all AAAm, Aaa, or equivalently rated money market mutual funds to maintain a 60 day or less weighted average maturity. • Inclusion of bank balances in the definition of investment pool liquidity. • Establishment of bidding procedures for purchases of certificates of deposit. Langley also reminded the committee that staff would like to present the revised policy to the City Council at the November 2, 2010, meeting. The committee questioned the merit of providing a summation of cornmittee meeting discussions instead of preparing actual meeting minutes. 2 AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks congratulations or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. Council Member Watts requested information on the City's policies related to developer escrow agreements. Specifically, Council Member Watts requested a summary of developer escrow deposits and construction spending that has occurred by the City over the past several years. Langley offered to provide that information in a future meeting. Action Item Provide information on the City policies and financial activity related to developer escrow agreements. Langley advised the committee of a tentative Audit/Finance Committee meeting date for the November 16 time frame. We are looking at bringing the bank contract and reviewing that with you. We hope to place this item on the December 7 Council Agenda. After we have a chance to go through the contracts, we will get back to you. With no more items to consider, tl�� meeting adjourned at 2:37 p.m. CHRIS '�`�'11' i`� ` ¢ �.' COMMITTEE CHAIR CITY OF DENTON, TEXAS �_ , . , ,� � � �, � ��� �� ���� s���a�u��� L . �f ����<< � a�m��..��.. THERESA J� �(�F� � l RECORDING SECRETARY CITY OF DENTON, TEXAS 4