2015-03-03 Audit/Finance Committee MinutesI1 �[f1� a ► � . .
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After determining that a quorum is present, the Audit/Finance Committee of the City of Denton,
Texas, met in a regular meeting on March 3, 2015, at 10:30 a.m., in the City Hall Conference Room,
at City Hall, 215 E. McKinney 5treet, Denton, Texas at which the following items were considered:
PRESENT: Council Member and Committee Chair, John Ryan; Mayor, Chris Watts;
Council Member, Joey Hawkins
STAFF PRESENT: George Campbell, City Manager; Bryan Langley, Assistant City Manager;
Howard Martin, Assistant City Manager; Jon Fortune, Assistant City
Manager; Chuck Springer, Director of Finance; Antonia Puente, Assistant
Director of Finance; Harvey Jarvis, Cantroller; Cody Wood, Assistant
Controller; Kevin Mullen, Assistant Controller; and Sarah Lollar,
Recording Secretary.
OTHERS PRESENT: Jerry Gaither, Engagement Partner; Sara Dempsey, Senior Manager from
Weaver, LLP.
The following items were considered:
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Chuck Springer, Director of Finance gave a brief summary of the audit findings. The City did not
receive a management letter. The overall net financial position remains strong; the total net
positian of the City increased by approximately $30 million, and unassigned fund balance in the
General Fund increased this year.
Springer thanked staff for hard work and favorable results. Springer introduced Jerry Gaither and
Sara Dempsey to present the detailed findings.
Jerry Gaither, Engagement Partner discussed the audit timeline and process that is performed in
accordance with general accepted auditing standards, and OMB Circular A-133. The Auditors
Results are an unmodifed (clean) apinion. There were no findings on the financial reporting
system. Internal contral over Federal programs also resulted in na findings.
Gaither highlighted a few of the Required Cammunications to the Audit Committee, stated that
the Financial statements are free of material misstatement and lastly stated that the audit process
does not relieve City staff of their responsibilities.
Gaither reviewed GASB 65 and 70 on page 18 that did not result in any modiiication of the
Auditors opinion.
Gaither stated no significant past adjustments or material adjustments made by the City.
Gaither informed the Committee of GASB 68 that will be implemented in 2016 that will require
the City to book unfunded pension liability in accordance with the pronouncement.
Gaither addressed Mayor Chris Watts' inquiry to define booking the unfunded pension by
explaining the liability will now be recorded on the Government Wide Financial Statements.
Council Member Joey Hawkins requested clarification of unassigned balance, equipment leases
and the differences in the retirement plans of the City.
Discussion took place about the percentage of General Fund unassigned balance and why the
City strives for a 20% balance.
Gaither offered further presentations for the Committee if desired.
2. Receive a report, hold a discussion, and give staff direction regarding the upcoming
issuance of General Obligatfon Bonds and Certi�cates of Oblfgation.
Springer presented follow up information from previous meeting held on February 16, 2015. He
stated that by using current market interest rates, the projected debt service decreased by $80,000
annually, Springer proposed moving the timing of the two fire station reconstruction projects one
year forward as shown on the Exhibit to the AIS. Under these new assumptions the debt service
tax rate is projected to increase by 1.9 cents in FY 2015-16 and an additional .85 cents in FY
2016-17.
Springer recommended scheduling a meeting on March 24, 2015 to address the Committee's
questions regarding CO's verses the Revenue Bonds and associated transfers to the Street
Improvement Fund.
The comrnittee agreed to this meeting.
Under Section 551.042 of the Texas Open Meeting Act, respond to inquiries from the
Audit/Finance Committee or ihe public with specific factual information or recitation of
policy, or accept a proposal to place the matter on the agenda for an upcoming meeting
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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, publYc 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 off�cial or employee of the municipality; or an
announcemeni involving an imminent threat to the public health and safety of people in the
municipality that has arisen after the posting of the agenda.
With no additional business to be addressed, the Committee adjourned at 11:05 a.m.
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J " RYAN
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CITY OF DENTON, TEXAS
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RECORDING SECRETARY
CITY OF DENTON, TEXAS
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