2018-04-10 Audit/Finance Committee MinutesAGENDA
AUDIT/FINANCE COMMITTEE
April 10, 2018
Meeting Minutes
After determining that a quorum is present, the Audit/Finance Committee of the City of Denton,
Texas, convened in a regular meeting on April 10, 2018, at 10:00 a.m., in the City Hall Conference
Room, at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be
considered:
PRESENT: Mayor, Chris Watts; Mayor Pro Tem Sara Bagheri; Council Member, John
Ryan
STAFF PRESENT: Bryan Langley, Deputy City Manager/COO; Mario Canizares, Assistant
City Manager; Antonio Puente, Jr., Director of Finance; Kevin An Mullen,
Treasury Manager; Harvey Jarvis, Controller; Cody Wood, Assistant
Controller; Umesh Dalal, City Auditor; Cassandra Ogden, Director of
Procurement and Compliance; Jamie Lindsey, Compliance Officer; Karen
Smith, Purchasing Manager; Scott Gray, Airport Manager; Todd Estes,
Director of Capital Projects; William R. White, Deputy Chief of Police;
Chad Allen, Deputy City Engineer; Dean Hartley, Facilities Manager;
Nancy Towle, Budget Manager; and Theresa Jaworski, Recording
Secretary.
Council Member John Ryan brought the meeting to order at 10:02 a.m.
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A. Consider approval of Audit/Finance Committee Minutes of March 6, 2018.
Mayor Chris Watts made a motion to approve the minutes. Motion was seconded by John Ryan.
Vote was unanimous.
Council Member Sara Bagheri joined the meeting at 10:04 a.m.
B. Receive a report, hold a discussion, and give staff direction regarding the status and options
for capital projects related to the 2014 bond program.
Tony Puente, Finance Director, reminded the committee of Apri127 meeting when staff inet with
the committee on several presentations given to the bond oversight committee, including options
and recommendations on how to fully fund the Capital Improvement Program. The City Council
had posed several questions on three speciiic projects that staff will address with presentations
they have prepared.
The Ruddell Extension had an original budget of $5.78 million included in the bond election.
The revised estimate taken to the Council and the Bond Oversight Committee was a little over $7
million. The City Engineer will go through that project and advise of the plan and alternatives
for the committee's consideration.
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Director of Capital Improvement Projects Todd Estes, explained the Ruddell Extension project.
This project was initiated due to safety concerns at the intersection at Ruddell and the City
Service Center to the south. Willis Street is one of the primary entrances and exits for the
Service Center laydown yard and any equipment or materials taken out to various work sites
must go over the railroad tracks making an unsafe scenario. Estes noted the need for Ruddell to
play a larger role in the City's Mobility Plan has been recognized in the past and reviewed the
layout with the committee pointing out that roads not intended to handle heavy traffic, continue
to build traffic and ties into the Ruddell project.
Estes reviewed scope of the project that consists of realigning Ruddell Street on the south side of
the Union and Pacific Railroad tracks to square it up with the same street on the north side of the
tracks, providing a suitable rail crossing for heavy construction vehicles and other traffic
associated with the Service Center redirecting the traffic flow from the surrounding
neighborhood. Union Paciiic Railroad was requiring the closure of existing crossings at Willis
and Partain Street in conjunction with the new crossing for Ruddell Street. The new alignment
would improve connectivity and railroad crossing safety for both neighborhood and City
vehicles. It also integrates well with the TWU master plan, while providing a better entrance to
the university.
Estes explained that Ruddell was originally funded in 2014 to make a four-lane crossing, realign
Ruddell recognizing that it will have more impacts in the future for mobility in the City. It
eliminated two railroad crossings and a proposed traffic management center that would have
been on the corner of Lattimore and Pertain. As needs changed over time and the desire to have
that building has not materialized, and a lot of the need for constructing that building for future
operations and the need for improvements on the roads went away. This becomes more of a
focus for Service Center Traffic to safely go out onto Mingo up Ruddell and vice versa to make a
safer crossing. The need for Ruddell and that improvement is imperative, but it does not
necessarily need to be done immediately. As staff was reviewing the Capital projects and where
the budgets were, this is one of the projects where we had thoughts that this might be a project to
expand at a grander scheme for the future and a future debt program but not necessarily build the
ultimate project today.
Mayor Watts asked if this information was included in the backup for the meeting and suggested
that it be added so that the public has an opportunity to see the plans. When discussing the
Ruddell extension and the need to handle increased traffic, we are spending $7 million. But the
road to get us to this intersection is not going to be improved to handle that trafiic in the near
future.
Estes explained that staff's recommendation is to design this for what it needs to be so that when
it goes to construction it is what you really need for the future in a later bond program and utilize
the dollars that were actually purposed for this in 2014 for other project needs. We propose to
use a portion of the 2014 bond dollars to reevaluate what needs to happen to Mingo, Ruddell
long-term and put the plans together so they are shovel-ready for a 2020 bond program or a
future bond program or if an alternative funding program came along before that time to build the
realignment of this intersection. Interest has been expressed to look at Mingo from Bell all the
way up to Old North and how we might improve on that as we look at the needs of the City.
That's going to play a bigger role as well. Our thought was to look at what really needs to happen
and repurpose the remaining dollars to other projects.
Watts added when this first came to the committee in the bond program, his initial objection or
concern was that we are still funneling that traffic through the neighborhood. If we do this, we
should look at it more comprehensively. We're trying to direct Service Center traffic out safely,
Now they are going through the neighborhood anyway. How can we eliminate funneling all that
traffic through neighborhoods? If Ruddell and Mingo is improved, that's where the traffic needs
to be flowing. I don't want to spend $7 million in the future to do that. There may be other
ways, with TWU expanding, there may be alternatives to consider. I'm glad we're taking
another look at this. I would be hesitant to spend $1 million on this design without considering
other options.
Deputy City Manager Bryan Langley mentioned that staff did not discuss this with the Bond
Oversight Committee. This discussion came from Council and the City Manager started looking
at different perspectives that need to be considered. Staff will take this back to the Bond
Oversight Committee for a recommendation on how to proceed in directing traffic down the main
thoroughfares and away from neighborhoods.
Watts agreed better alternatives would be more helpful.
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Dean Hartley, Facilities Manager gave a brief update on the Police Firing Range. Location is at
Western Boulevard running north and Airport Road on the corner, Ideal location for shooting
range with a natural berm. Land is in the process of being conveyed from Rayzor Ranch or 3.6
acres providing frontage on Western Boulevard. Hartley went over the challenges and
advantages of the range. Current status land donation is in Legal and real estate is being
confirmed as soon as the documents are complete that should happen and see no problems. Only
have a partial schematic design not too deep for any modifications for reducing cost. Some
improvements have been made. Remainder of funds remaining for project is $316,000. Estimate
for construction and all other improvements on option 1 is $1.1 million.
Watts asked if remaining funds available are from what amount.
Hartley replied the amount was $485,000.
Hartley stated the goals are to: provide training classrooms, restroom facilities, for public safety
department and provide required training for staff on our schedule and keep all sworn personnel
current on their skills.
Option 1. Floor plan is very high level, basic masonry building, 50-year, custom designed for the
intended use. Required security fencing for parameter to keep people from walking onto the
range.
Option 2. Could be savings, if given direction to reduce the cost using another product instead of
brick on the exterior, not metal. We could connect to City fiber at a later date, use the existing
entrance off Airport Road and improved parking already in place. $1.1 million included an
entrance off of Western Boulevard and the development would put it in as a shared entrance at
that location.
Watts asked if there was no estimate on the security fence. I need to understand this process.
This is a building that ammunition storage is secured. Need a breakdown on the actual cost of
the structure. The estimate of $350,000 -$400,000 the same schematic as this design.
A discussion followed on the fencing currently in place, additional fencing required, the type of
fencing that could be used to meet code, the restroom combination that will be placed on the
property. The size of the building, cost, and difference in building square footage between two
options.
Watts requested more detail to compare the two options
Langley added that the concept is not fully designed and that staff could come back with more
specific floor plan and dimensions.
The committee requested more information on the options, including square footage, materials, to
make a better comparison.
Langley stated that staff has received the committee's direction on the options presented and will
bring the requested details back to the committee
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Puente introduced the Fire Station #3 project and reviewed the information provided and the on
the spreadsheet.
Watts noted that 2014 bond package budgeted $8.6 million for this project for plan, acquisition,
design, everything. There was a financing shortfall. The cost of this project went up $400,000
or five percent or less. That can be from things that were missed. The project was short and we
had a decrease in the square footage which pushed the price per square foot up.
Langley noted that staff brought forth lots of projects at one time and lots of discussion on
different allocations of bond projects and just wanted to make sure all your questions are
answered. We will be happy to bring back more information if needed.
Puente recapped items. On the Ruddell Project there will be some additional work on that
project then we will come back. We will discuss in the next agenda item what to do with the
$4.9 million in GOs for Ruddell, go ahead and issue or wait. We will also come back to you to
have a more detailed discussion with you on the Firing Range, the specific options with details
and schematics for comparisons. Fire Station 3 recommendation from you on issuance of COs
and will have more discussion in the next item. We have the direction that we need and will go
to the next item.
C. Receive a report, hold a discussion, and give staff direction regarding the upcoming
issuance of General Obligation Bonds and Certificates of Obligation.
Puente stated the total CIP Program, General Government, Utilities, for 2017-18 contemplated
the issuance for a little over $120 million for a combination of GOs and COs. The work we've
been doing over the last couple of months will recommend not issuing any debt, COs for any
utilities including Solid Waste and none of that is included in this recommendation, Our
recommendation is the issue of the next GO funded projects. We had a discussion with the Bond
Oversite Committee and the list of projects that includes the $4.99 million for Ruddell. If the
committee decides to hold back on that, we can do that. Total amount for Street Improvements is
approximately $20 million, Drainage is $2.5 million, $1.5 million for Playground Replacements.
We did advance funding for a playground at the Evers Park. We used funds previously for Vela
that had been issued to get that completed and $350,000 of the $450,000 will be going back to
the Vela Project for using those funds. Similar on the Tennis Center Remodel $250,000 we
advanced funds for the Northwest Trail from Evers to North Lakes to get that completed we used
the funds that we had from the 2005 bond election. That project is completed so there is no
reason to issue $250,000 for trails, project is completed. We will be reimbursing the Tennis
Center for the funds taken for the trails. Our recommendation is to issue $24.74 million in GOs.
This will be a 20 year bond. The current interest rates are about 4.5% and climbing so, the cost
of financing is getting expensive.
Langley added on the Ruddell Project discussion, we can pull back on issuing those bonds, the
$4.9 million. We are looking at bringing forward a parameters ordinance to Council which will
allow us to execute a bond sale up to six months. That will allow us time to go back to have a
discussion with the Bond Oversight Committee, then meet with the Audit/Finance Committee or
the full Council and discuss options for those bonds. We don't have to move forward with that
right away certainly on the $4.9 million. We don't have to make that decision. We can have
more discussion over the next 30 to 60 days with the Bond Oversight Committee and the full
Council on how to proceed.
Mayor Pro Tem Bagheri asked if the funding for the engineering part would be something funded
out of General Fund.
Estes advised the project already has about $800,000 and that is what has been utilized to
generate drawings to this point. Would need to check on that balance but we propose to work
with that fund for the design.
Bagheri confirmed, that there is no need for bond money,.
Watts asked about the difference in the original plan for $100 million and the $24 million in
total.
Puente explained that includes COs so there will be the additional $9 million in General
Government.
Watts reiterated that these are projects voted on and getting the funding so that we can get started
on them right away.
Langley confirmed. Some are still in design but ready to get started, along with all the other
projects that were presented. Absolutely. We are ready to go forward.
Watts stated he was in favor of pulling the Ruddell Extension out. Just do it when we need it.
Langley stated that would give us some time. If the decision is that we want to hold we can go to
the Bond Oversight Committee and Council, we would have the chance to discuss reallocating
those funds to Bonnie Brae or some other transportation area. That would give us a chance to talk
though that and we definitely concur if that is the direction you want to go.
Puente stated that in addition to the GOs, we are recommending minus the Ruddell Project we
recommending $9.9 million in Certiiicates of Obligation and will require a Notice of Intent to be
published. We are planning to bring that to Council on April 24. We will draft that but will have
to wait 31 days before we can issue these COs but after the 31 days we will come back to full
Council with recommendation to issue the COs and GOs at that time.
A discussion followed on vehicle replacement funding, Facility Maintenance and Airport
Runway match.
Puente stated the revised recommendation staff will back out the $4.9 million, making $29
million that staff will recommend to issue in total. We will bring back the $9.9 million to you on
April 24, with the Notice of Intent, wait 31 days per state law before issuing those bonds. Then
we'll get back to you towards end of May we will bring back to you an ordinance and we will
have six months to issue bonds.
Watts recommended a motion to move this forward to Council and that $4.9 million be excluded
for the Ruddell Project. Motion seconded by Council Member Ryan. Motion carried
unanimously.
Meeting adjourned at 11:09 a.m.
�he Audit/Finance Committee approved the April 10, 2018, Meeting Minutes on April 30, 2018.
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