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02162018 - Denton Parks Foundation Investigation (Feb. 2018)
-4��r FOR IMMEDIATE RELEASE DENTONJessica Rogers • (940) 349-7531 • Jessica.Rogers@cityofdenton.com City of Denton Discloses Parks Foundation Report and Findings DENTON, TX, Feb. 16, 2018—The City of Denton has released the final report and findings related to the recent review of the City's relationship with the Denton Parks Foundation. The review was initiated by the City Auditor's Office following an anonymous tip received through the City's fraud hotline on Sept. 12, 2017, which raised concerns about financial transactions between the City and the Foundation. Following the departure of former City Auditor Craig Hametner, the City Council hired the law firm of Lynn, Ross, and Gannaway, LLP and accounting firm BKD, LLP to complete the review. The scope of work included conducting interviews with City and Foundation staff; reviewing agreements between the City, the Foundation, and the Youth Sports Association; documents and transactions regarding the Foundation Morale Fund Account, Eureka 2 project, and Youth Sports Enhancement Fees; and the general processes and relationships between the City and the Foundation. Representatives from Lynn, Ross, and Gannaway, LLP and BKD, LLP will present their findings to the City Council on Tuesday, Feb. 20 at the Council Work Session beginning at noon. While there are many conclusions identified in the report, legal counsel did not find a violation of the Fraud Directive. Additionally, many of the findings center on the informality of the relationship between the City Parks Department and the Foundation, which was not clearly defined in the Service Agreement that expired on Sept. 30, 2017. The City Council and Parks Foundation will need to evaluate and consider potential options on how to move forward. A copy of the final report is attached and available on the City's website at www.cityofdenton.com. Visit www.cityofdenton.com for more news and to stay updated. OUR CORE VALUES Integrity•Fiscal Responsibility•Transparency• Outstanding Customer Service ADA/EOE/ADEA www.cityofdenton.com TDD(800)735-2989 Parks Foundation Press Release Attachments 1. Presentation for City Council Work Session on Feb. 20, 2018 2. Lynn, Ross, and Gannaway, LLP Report on Findings 3. BKD, LLP Forensic Investigation Report Gannaway/BKD Investigation for Cityof Denton The City's Relationship with the Denton Parks Foundation Scope Period: October 1 , 2012 through September 30, 2017 BKD Backg und 00 • Concerns raised from a tip received from the City's anonymous hotline Investigated by the City's Fraud, Waste & Abuse Committee about the relationship between the City of Denton Parks Department (Parks) and the Denton Park Foundation (Foundation) • Questions had been raised about amounts City had sent to Foundation and whether the Foundation had a duty to return any of the funds • Facility User Agreements — Fees assessed by City and given to Foundation • Foundation selling advertisements to entities on City property • Foundation usage of City staff and resources BKD Investigation Team • Julia Gannaway, Attorney • Todd Burchett, Partner • Partner in law firm which BKD's Forensics & Valuation specializes in municipal Services, South Region Leader employment law CPA, CFF, CFE Over 15 years of experience in • Over 24 years of legal experience investigations and litigated matters working with state and local Experience in dealingwith media governmental entities p g driven or citizen driven complaints • Conducted investigations for Case studies: OKC Disaster Relief Fund and City of Port Arthur, Texas employers assessing legal exposure Expert witness experience Investigation Team • Julia Mast, Director Keith P. Seiffert, Managing Consultant BKD's Forensics & Valuation Services BKD's Forensics & Valuation Services CPA, CFE CPA, CFE 12 years of experience in investigations Over 6 years of experience in detailed and litigated matters financial analytics and vouching of Experience in dealing with media driven general ledger amounts or citizen driven complaints Experience in dealing with preparing • Case studies: City of Port Arthur, Texas and accounting evidence for use in Junction City, Kansas arbitration mediation and trial • Former City Treasurer and elected City Expert witness experience Council Member for Pleasant Valley, Missouri Expert witness experience FF F Everyone needs a trusted advisor. Who's yours? BKD r ! Scope of Work Requested 1 ..- Phast.- ......" A 11P), liff 7� • Assess the City's Internal Auditor's working papers and files Read and analyzed documentation pulled by Internal Auditor and other members of Fraud , Waste and Abuse Committee, which included items such as: • Interview notes of City employees • Lighthouse Reports, included Lighthouse Reports not related to BKD investigation • Agreements between the City and the Foundation, Youth Sports Association • Various documents regarding the Foundation Morale Fund account, Eureka 2 project, Youth Sports Association Enhancement Fees • Email correspondence between City employees and Foundation Scope of Work"*-Requested 1 st Phase , cont' d A 11iff • Interviews of the City management to understand background on investigation and known progress as of date Lynn , Ross & Gannaway, LLP and BKD were engaged • Evaluation of potential procedures to perform in additional phases • Discussions with legal counsel BKD Scope of Work Requested 2nd Phase A "'Pe • Scope Period — October 1 , 2012 to September 30 , 2017 • Conduct interviews of City and Foundation personnel • Obtain financial information and document the interactions between the Parties • Analyze books , journal entries , transactions between parties , noting : Potential conflicts of interest Sources of Foundation revenue BKD Scope of Work Requested 2nd Phase wit. A liff • Obtain and read : Policies and procedures Minutes of City and Foundation • Follow up on any open matters discovered by Fraud , Waste & Abuse Committee , and Address areas of concerns raised BKD Scope of Work"*-Requested 1 st & 2nd Phases A liff • The scope of our work did not include a full accounting of the City of Denton Parks Department or of the Denton Parks Foundation , nor did we perform a compilation , review or audit of financial statements . BKD h Timeline---� • On or about September 12, 2017, the City received an anonymous complaint related to the Foundation not reimbursing the City for costs on the Eureka 2 park project that the caller believed were owed to the City. • In the days that followed , the City's Fraud , Waste & Abuse Committee began conducting an investigation and received several comments regarding the relationship between the City Parks Department and the Foundation . • On October 4, 2017, the City sent a letter to the Foundation (the October 4 Letter) notifying them to temporarily suspend fundraising efforts on behalf of the City until a review was conducted . This letter was leaked by an unknown source to the news media. The determination of the source of the information was beyond the scope of our work. h LLs, Timeline--- continued - • On October 13, 2017, the City released a statement to the public clarifying the October 4 Letter and communicating about the status of the City's Fraud , Waste & Abuse Committee work. • On October 16, 2017, the City's Internal Auditor resigned for unknown reasons. • On October 20 , 20171 BKD was retained to initially assess the Internal Auditor's work and provide feedback to the City on potential next steps. • In early November, BKD was retained through , and we have worked with the City's outside legal counsel , Julia Gannaway, to conduct the work we have performed , which is the subject of our report. Conc that were investigated • Have the City Parks Department and Foundation representatives fairly represented the nature and amounts of transactions to the City Council? • Does the City have a written policy that clearly defines how it was to conduct business with the Foundation? • Should the City have been reimbursed for the two expenditures paid for the Eureka 2 project? • Was the Mayor and City Council properly informed about their ROI in June 2016? Or, at any point before and after? BKD Conc that were investigated fir • Were there payments to City vendors who were also Foundation employees, and vice versa? • What is the condition of the books and records of the Foundation? • Did the Foundation comply with contractual obligations? (Legal ) • Were any violations of City's Fraud Directive uncovered? (Legal ) • Did City Council authorize the Foundation to place signage on City property? (Legal) • Did the City Council authorize assessing Field Enhancement Fees and remitting those to the Foundation? (Legal) se Metho"ds--Use • Analysis of information from a wide range of sources Interviews Analysis of applicable policies and procedures City and Foundation accounting records Internal memoranda Minutes of City Council meetings Minutes of Parks Foundation meetings BKD h se Metho"ds--Use -.t- - - ir-.4v • Interviews Marc Culp, Foundation President — Interviewed cooperatively without condition . Simone Royster, Foundation Treasurer — Declined to participate in a face-to-face interview. Molly Tampke , Executive Director — Interviewed with her attorney present; was cooperative . Foundation Administrative Staff — Interviewed ; was cooperative . City employees — Interviewed ; were cooperative . Cooperation Received from the. , Cit A "Forio • We asked for: Full and complete access to personnel , books, records and documents. A "let the chips fall where they may" investigation . We would include areas that are warranted based upon the evidence that we uncovered during the investigation . • We received a high level of cooperation from City personnel and officials . BKD Cooperation Received from the n atio continued • We asked for: Information from the Foundation pursuant to the City's contract with the Foundation. Adequate records to establish that the City funds are used for the purposes authorized by the agreement between the parties. Access to Foundation's books. • We received : The initial requests for information from the Foundation were provided. A second request for additional information was resisted by the Foundation President. The Foundation President was concerned that he did not know what the nature of our investigation was. We told him that we were working under the contract that the City had with the Foundation and that the Foundation was required to provide us access to their books and records. Ultimately, the Foundation complied. BKD Cooperation Received from the n atio continued A W10 • In written correspondence dated December 11 , 2017, the Foundation President stated that it was unfair to conduct interviews without us offering more information about the nature of our investigation. He stated that he would interview with us "without condition". He stated that he believed the entire process to be unfair, including whether any of the interviewees might want to consult with their legal counsel before submitting to our process. • Two Foundation witnesses obtained legal counsel and resisted being interviewed without making demands for certain concessions from us. These demands included a list of areas of inquiry, a list of questions to be answered, a statement from BKD, LRG and the City that our investigation would not involve anything for which violations of the penal code may be brought; insisting that responses would be provided only in writing, and, ultimately refusing to engage in a personal interview. We interviewed one of these witnesses with her attorney present. We did not reach an agreement to interview the other witness, the Foundation Treasurer. h Conclusions • Legal counsel did not uncover a violation of Fraud Directive • Legal counsel found the parties complied with their contractual obligations • Legal counsel found that City Council did not authorize the Foundation to place signage on City property • Legal counsel found that City Council had not authorized assessment of Field Enhancement Fees • These statements are based on the information that we were able to gather considering the scope and the limitations imposed by those we were not able to interview. Conclusions AAA 01" o'Y1 • The City did not have a written policy on how it was to conduct business with the Foundation . • From time to time , City Council minutes provide information on the intent of a particular project or transaction . But other than those minutes and the 2017 Service Agreement, which was signed in February of 2017 , there were not any communications that established a clear operating relationship between the City/Parks and the Foundation . • The 2017 Agreement expired on September 30 , 2017 . BKD h Conclusions 01" • Most interviewees noted that there were concerns regarding "blurred lines" between the two entities. City/Parks employees were used on Eureka 2, including maintenance and marketing. City/Parks employees were diverted for months from their typical work to assist with the Eureka 2 project. City/Parks employees were requested to design and/or print off flyers promoting Foundation activities/events. • From our analysis of the City Council minutes, our assessment is that the City Council did not know the full scope of the assistance and the amount of City time that went into a Foundation project. • During much of the Scope Period , a City/Parks employee was tasked with keeping the Foundation books on a current basis and periodically reconciling with the official books kept by the Foundation Treasurer. h Conclusions • In interviews with the City/Parks (former) Director, he: Stated that the line has always been blurred, but Eureka 2 assistance required by the City helped expose this even further, "mainly due to the time crunch." Stated that he would tell potential donors to send donations through the Foundation because "it was easier to expend dollars," expenses don't have to go to bid, and "he could select" what projects he would want to do and how the money was spent. We have not found any evidence that the City management had any knowledge of this or gave approval or instructions to do this. He indicated that he had influence on spending at the Foundation. The Foundation has no written controls surrounding procurement. So, he had the ability to avoid the City's restrictions on procurement by running purchases/expenses through the Foundation. In addition, we noted that there is no formal conflict of interest policy in place at the Foundation that we were provided. Conclusions AAA 01" A 'I �* • The usage of City/Parks personnel and the providing of other City resources to support the Eureka 2 project was far more than the $ 173 , 828 amount identified in the payroll records incurred by maintenance employees . Interviewees indicated that the Foundation became accustomed to using City/Parks staff for certain administrative functions , and this caused frustration by City/Parks staff after the Eureka 2 project was finished . BKD Conclusions • There is an ongoing disagreement between the City and the Foundation regarding two Eureka 2 expenditures that the City paid when the Foundation was building that project. At the time , the Foundation did not have the funds to cover the amounts that were due . The payments were for: Playground equipment of $95, 000 on November 10 , 2015 Pour and play of $85 ,000 on March 1 , 2016 BKD Conclusions AAA 01" • We find the PID Staff Report presented to the Mayor and City Council was inaccurate : ROI calculation inputs and assumptions Amounts raised by the Foundation Not accounting for the additional investments by the City for office space, personnel , etc. BKD Conclusions AAA 01" • The Foundation signed a signage "Sponsorship" agreement with an outside company, S&B Visionary, for a campaign to advertise on City Property for $40 ,000. Twenty-five percent of the proceeds were to go to S&B Visionary as a fee for promoting the sponsorships. This was done without City management approval . • Interviewees had noticed other commercial advertising at the pool and baseball facilitates, including a bank sign on the Eureka 2 playground equipment. • The City's agreement with the Foundation does not address the Foundation selling advertising on its property. BKD Conclusions oJ 4W O�A A 0 �* • The City/Parks department has an agreement with the Youth Sports Association (Association ) for collection of an "Enhancement Fee" of $5 per registered player. The payments are made payable to the Foundation who is not a party to the agreement. The Foundation's records indicate that from October 2012 to September 2017, the Foundation collected $48,450 from the Association . The records we analyzed indicated that the Foundation holds the funds and remits them back to the Association for field enhancement projects. Expenditures were $54,675 for this fund during the same period . • Due to the Scope Period being measured, it appears the Foundation expended more than it brought in. Presumably, the Foundation had received funds in prior periods and disbursed them during our Scope Period. BKD Recommendations — Assuming Parti-Les Mov Forward Togethelo- Agreement with the Foundation/Clarification of Boundaries • Evaluate periodically the City's arrangements with the Foundation and determine whether it is in the City's interest to continue the relationship/arrangement for a given time period. • Develop a memorandum of understanding which sets out the understanding of the relationship between the Foundation and the City, clearly defining roles and expectations between both, benchmarks to achieve, and expected flow of money. In addition, develop policies for City employees for guidance with their interactions with the Foundation. • Develop policies and procedures around the interactions between the City and the Foundation, related to: generally and specifically related to monies that flow from one entity to the other; related to employees of either entity; • Define how the ROI calculation should be computed and any other metrics of measuring the success of the Foundation by the City. • Define a reporting mechanism for the Executive Director of the Foundation to report to someone at the City, other than the City/Parks Director to provide a control. Recommendations YSA Fee A- Ole Accounting for Youth Sports Association fees • Payments should be remitted to the City of Denton under the current agreement. The City would then be responsible for administering those funds. • Alternatively, the City could terminate its agreement with the Youth Sports Association and develop a new arrangement for supporting the organization . • The City should ask the Foundation to provide its own accounting of the funds collected and disbursed for these purposes. BKD Recommendations Mae City Operations • Implement a Code of Conduct policy. • Perform annual conflict of interest disclosures for City Council and department heads that identify business relationships and family. The focus should be about transparency regarding with whom the City does business . • Require that any receipt of money donated to the City or for its use be documented through written Donor Agreements . BKD Recommendations LLs, Foundation Operations • Implement control processes similar to the City for cash handling and procurement. This should reduce the temptation for individuals to direct activities towards a certain vendor. • Develop of a Conflicts of Interest policy and a Code of Conduct policy to assist them with identification of potential conflicts of interest. • Have more timely entry of financial transactions (within one to two weeks) in its bookkeeping records so that more accurate reports can be provided, both internally, to the Foundation's Board, and to the City. • Set up procedures to ensure the recording and tracking of pledges, preferably by utilizing the accounting software. • Enter the addresses of its vendors in its accounting software program to further help identify potential conflicts of interest. Questions ? Thank You '. HE LYNN Ross � 306 WEST BROADWAYAVENUE FORT WORTH,TEXAS 76104 817.332.8505 MAIN/817.332.8548 FAX MM GANNAWAY, LLP LABORCOUNSEL.NET Report on City of Denton and Denton Parks Foundation February 15, 2018 Mayor Chris Watts and the City of Denton City Council City of Denton 215 E. McKinney St. Denton, TX 76201 Introduction This firm was tasked with investigating the relationship between the City of Denton and the Denton Parks Foundation from the period of October 1, 2012 through September 30, 2017. This report is the result of review of Parks Foundation and City of Denton documents, state laws, and personal interviews. City staff and the Parks Foundation invested significant time and effort in complying with the investigators' request for documents. Six City employees were interviewed, as well as the Executive Director of the Denton Parks Foundation, one part-time employee, and the Parks Foundation Board President. The Parks Foundation Treasurer declined to participate in a personal interview. Contractual Obligations Between the Parties The City and the Denton Parks Foundation entered into an agreement in 1998,through Ordinance 98-430. In this Agreement,the City agreed to provide office and meeting space rent-free,utilities, telephone and computers and incidental staff support. The Foundation agreed to conduct and monitor fund-raising activities to benefit the Parks and Recreation Department and to generate funds sufficient to support its own operating budget. In 2013, the Parks Foundation asked the City Council to fund an Executive Director position, for three years, in the amount of$35,000 per year. The City Council approved that expenditure, and the Council minutes reflect that the City Council was informed that after three years, the Parks Foundation would be expected to be able to pay for its own Director. The City Council approved $35,000 for fiscal year 2013-2014, $35,000 for fiscal year 2014-2015, and$35,000 for fiscal year 2015-2016, and the 1998 Agreement remained in effect. However, in 2016-2017, the Parks Foundation asked for the City to increase its funding to $77,000.00 per year, and it was approved in the budget for 2016-2017. On February 7, 2017, the City Council adopted Ordinance No. 2017-037,which authorized an Agreement wherein the City paid the Parks Foundation $77,000.00 for the Executive Director Salary and a part-time support staff. The 1998 Agreement was terminated when the Parks Foundation and the City entered the 2017 Agreement.The 2017 Agreement expired in September 2017,and no contract currently exists between the parties. Report City of Denton—Denton Parks Foundation Page 2 Notably, the City affords more services to the Parks Foundation than was reflected in the 2017 agreement. Specifically, the City has provided rent-free office space, originally at City Hall East and then, later in the Civic Center, which continues to date. The City also provided staff support and temporary staff to the Parks Foundation, prior to the Parks Foundation hiring a part-time employee in 2017. City's Participation in Eureka 2 Has Been Understated A former City employee did not make the City Council aware of the nature of the relationship and the extent that the City's employees assisted the Parks Foundation. When asked if he could quantify the City employees' work on Eureka 2,the former City employee said he"couldn't take a guess." Based on interviews and my review of documents, significant City resources were expended during the community-build project Eureka 2. The Denton City Council was informed, in 2015 and in 2016, that expenditures it authorized for Eureka 2 ($95,811 and $84,892.00, respectively) would be reimbursed by the Parks Foundation. The investigation revealed the Parks Foundation Board did not authorize any reimbursement to the City. Further, a former City employee assigned City employees to work substantial overtime to complete the project on time and City staff were assigned to assist in marketing and provide other support to Eureka 2. The Parks Foundation and the community significantly participated in the success of Eureka 2, but the City's contributions were not fully quantified. Legal Elements Summary No violation of Fraud Directive. When these allegations arose, it was reasonable for the City to initiate an investigation which could have uncovered possible criminal conduct. Had the investigation uncovered suspicious activity, the investigators were directed, through the City's Fraud Directive (Policy No. 509.01), to refer information to the appropriate law enforcement entity.No suspicions arose,and after conducting interviews and reviewing City documents,Parks Foundation expenses that the City incurred ultimately benefitted City of Denton parks and properties. Ads on City Property. It was confirmed through the investigation that the Parks Foundation received donations in exchange for placing ads on City property, without City Council's knowledge or consent. The Parks Foundation represented it had the authority to engage in this activity, but the Parks Foundation is not the City. A former City employee knew about this issue and allowed it, but the former employee lacked authority to approve this usage of City property. Field Enhancement Fees. There was no City Council authorization for the City to assess a Field Enhancement Fee and remit that to the Parks Foundation. ©0 Report City of Denton—Denton Parks Foundation Page 3 Recommendations • The City Council is vested with policy-making authority for the City parks, unless the City Council expressly delegates that authority to City management for a specific purpose. The City Council sets priorities for Parks funds expenditures,not City staff. • If the relationship between the Parks Foundation and the City continues, the City Council should formalize the relationship between the City and the Parks Foundation through negotiate, written agreements. Each patty's obligations should be described in the contracts. • Written donor agreements should be used to ensure transparency and accountability of funds donated to the City or for the City's benefit whether that be to the Parks Foundation or any other entity which receives donations on the City's behalf. Best Regards, im way Direct Dial (817) 332-8512 Gannaway@laborcounsel.net City of Denton, Texas Forensic Investigation Report February 16, 2018 BKOLLP CPAs & Advisors Contents ReportOverview..............................................................................................................................3 ExecutiveSummary..........................................................................................................................4 Approach to the Investigation ..........................................................................................................5 Cooperationfrom the City.....................................................................................................................................6 Cooperation from Certain Denton Parks Foundation Representatives.................................................................6 Denton Parks Foundation, a 501(c)(3) Charitable Organization.........................................................8 Agreements between the City and Denton Parks Foundation...........................................................8 Expectations between the City and the Foundation Regarding Eureka 2.........................................11 Evaluation of the Employee and Vendor Master Files..................................................................... 16 Assessment of the Foundation General Ledger............................................................................... 18 General Ledger, Bank Statement and Check Register Analysis ........................................................ 19 Foundation Sources/Uses of Income.............................................................................................21 OtherFindings................................................................................................................................23 Recommendations .........................................................................................................................24 Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Appendix 1 Appendix 2 Appendix 3 Appendix 4 BKD«. CPAs&Advisors BKD 10001 Reunion Place,Suite 400 1 San Antonio,TX 78216-4137 CPAs&Advisors 210.341.9400 1 Fax 210.341.9434 1 bkd.com Mayor Chris Watts Denton City Council City of Denton, Texas 215 E. McKinney Street Denton, Texas 76201 We have performed a forensic investigation for the City of Denton,Texas (City), in connection with concerns raised from a tip received from the City's anonymous hotline and investigated by the City's Fraud,Waste&Abuse Committee about the relationship between the City of Denton Parks Department (Parks) and the Denton Park Foundation(Foundation). Work performed was limited to the scope period of October 1,2012 through September 30,2017 (Scope Period). This report presents our findings and observations as of February 6,2018. After reading the report and file of the City's internal auditor,BKD recommended that certain forensic accounting procedures be performed. City management agreed with our proposed scope of work. In addition, City management agreed to allow us access to all information we requested and to a thorough and complete investigation. Forensic accounting and forensic investigation services generally involve the application of specialized knowledge and investigative skills possessed by CPAs to collect, analyze, and evaluate evidential matter and to interpret and communicate findings in the courtroom,boardroom, or other legal or administrative venue. These services often involve existing or potential dispute resolutions proceedings.' The term "forensic"is based on the Latin forensis,meaning"that which is suitable to present before a forum."z Black's Law dictionary defines"forensic"as"Used in, or suitable to, courts of law or public debate."' Our scope included procedures to focus on the relationship and transactions between the City/Parks Department and the Foundation. We have not made any management decisions or performed any management functions;the responsibility for which remains with City management and the City Council. Our services were provided in accordance with the Statement of Standards for Consulting Services promulgated by the American Institute of Certified Public Accountants and, accordingly, do not constitute a rendering by BKD, LLP or its partners or staff of any legal advice,nor do they include the compilation, review or audit of financial statements, and accordingly,we are not expressing an opinion on the City's or the Foundation's financial statements or their financial condition. Our procedures will not necessarily disclose all potential irregularities but were intended to address numerous questions that have been raised about the operations and financial activities of the City and the Foundation. The City's management is responsible for the design and implementation of programs and controls to prevent and detect fraud. 'AICPA Forensic&Valuation Services Practice Aid—Forensic Accounting—Fraud Investigations,page 8. See also AICPA Forensic&Valuation Services Practice Aid—Serving as an Expert Witness or Consultant,page 5, Definition of Forensic Accounting Services. 2 AICPA Forensic&Valuation Services Practice Aid—Forensic Accounting—Fraud Investigations,page 15. s AICPA Forensic&Valuation Services Practice Aid—Forensic Accounting—Fraud Investigations,page 15 and Black's Law Dictionary,91 ed.,(St.Paul,MN:West Publishing Company,2009) Praxity. GLOBAINDEPE atut FIRMS ar IYOEYE YOEIIf fIpYS Denton City Council February 16, 2018 Page 2 This report is based on work completed to date. We may supplement this report if we are asked to perform additional procedures by the Mayor, City Manager or City Council or if additional information should come to our attention. We understand this report will be used by the City and the City may release this report to the public. This report is the property of BKD, LLP. If any party intends to publish or otherwise reproduce this report and make reference to our firm name,BKD must be provided with the printer's proofs or masters for our evaluation and approval before printing or other reproduction and provided with a copy of the final reproduced material for our approval before it is distributed. February 16, 2018 City of Denton, Texas Forensic Investigation Report February 16, 2018 ME Report Overview BKD, LLP was retained by the outside legal counsel for the City of Denton,Texas (City),Julia Gannaway of Lynn, Ross &Gannaway,LLP, in connection with concerns raised from a tip received from the City's anonymous hotline and investigated by the City's Fraud,Waste&Abuse Committee about the relationship between the City of Denton Parks Department(Parks) and the Denton Parks Foundation (Foundation). The results of our investigation are summarized in this report. We hope that our findings will be carefully and thoughtfully considered in terms of historically what has happened and in the context of a plan moving forward. Communications between the City and the Foundation have been strained over the past few weeks. We were asked to be an objective participant in investigating the activities that have occurred between these organizations over the past five(5)years. Our hope is that our investigation can be a starting point for both organizations moving forward. See our recommendations beginning on page 24 of this report. Documentation we read indicated that the City and the Foundation had a relationship which was documented in a signed agreement in 1998. It is our perception that until the recent events,the parties have had a collaborative relationship, at a minimum,with many projects being produced together over the course of many years. Following is a timeline of events leading up to our investigation: • On or about September 12,2017,the City received an anonymous complaint related to the Foundation not reimbursing the City for costs on the Eureka 2 park project that the caller believed were owed to the City. • In the days that followed,the City's Fraud,Waste&Abuse Committee began conducting an investigation and received several comments regarding the relationship between the City Parks Department and the Foundation. • On October 4,2017,the City sent a letter to the Foundation(the October 4 Letter)notifying them to temporarily suspend fundraising efforts on behalf of the City until a review was conducted. This letter was leaked by an unknown source to the news media. The determination of the source of the information was beyond the scope of our work. • On October 13, 2017,the City released a statement to the public clarifying the October 4 Letter and communicating about the status of the City's Fraud,Waste&Abuse Committee work. • On October 16,2017,the City's Internal Auditor resigned for unknown reasons. • On October 20, 2017,BKD was retained to initially assess the Internal Auditor's work and provide feedback to the City on potential next steps. BKD was then retained through, and we have worked with the City's outside legal counsel,Julia Gannaway,to conduct the work we have performed,which is the subject of this report. The scope of our work did not include a full accounting of the City of Denton Parks Department or of the Denton Parks Foundation,nor did we perform a compilation,review or audit of financial statements. The specific details of the procedures that we performed are listed in Appendix 1 in our November 3,2017 letter to Ms. Julia Gannaway. The results of those procedures are described in this report. The questions raised by the original hotline report and then accentuated by the City Fraud Waste&Abuse Committee's investigation and questions asked by City management mainly center on oversight of the 3 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 ME City/Parks Department and the financial arrangements and relationship between the City and the Foundation. This controversy involves public funds entrusted with the City government as well as a public charity,the Foundation,which has a fiduciary responsibility to its donors to use the funds they raise for the purpose they were intended and has had a requirement to report to the City how its funds are being used. In particular,there was a specific project,the Eureka 2 project,where City management raised questions regarding why the City was not reimbursed for certain costs that the Foundation had allegedly committed to reimburse. To help the readers of this report,we have organized our report into several sections to make it easier to constructively evaluate some of the various factors and considerations that went into our analysis. Executive Summary • The City did not have a written policy governing its relationship with the Foundation. From time to time, City Council minutes provided information on the intent of a particular project or transaction. But other than those minutes and the 2017 Service Agreement(Agreement), which was signed in February of 2017,there were no communications that established a clear operating relationship between the City/Parks and the Foundation. • Most interviewees noted concerns regarding"blurred lines"between the two entities. City/Parks employees were used on Eureka 2, including maintenance and marketing. City/Parks employees were diverted for months from their typical work to assist with the Eureka 2 project. City/Parks employees were requested to design and/or print off flyers promoting Foundation activities/events. From our analysis of the City Council minutes, our assessment is that the City Council did not know the full scope of the assistance and the amount of City time that went into a Foundation project. • During much of the Scope Period, a City/Parks employee was tasked with keeping the Foundation books on a current basis and periodically reconciling with the official books kept by the Foundation Treasurer. • In interviews with the City/Parks Directors,he stated that the line has always been blurred between the City and the Foundation,but Eureka 2 assistance required by the City helped expose this even further, "mainly due to the time crunch." He also stated that he suggested to potential donors that they send donations through the Foundation where he indicated he had spending influence. • The usage of City/Parks personnel and the providing of other City resources to support the Eureka 2 project was far more than the 6,398 man hours and the $173,828 identified in the payroll records incurred by maintenance employees. Interviewees indicated that the Foundation became accustomed to using City/Parks staff for certain administrative functions, and this caused frustration by City/Parks staff after the Eureka 2 project was finished. • There is an ongoing dispute between the City and the Foundation regarding two Eureka 2 expenditures that the City paid when the Foundation was building that project. At the time, the Foundation did not have the funds to cover the amounts that were due. The payments were for the following: 5 The City/Parks Director's last day of employment was on December 15,2017. 4 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 00 o Equipment of$95,000 on November 10, 2015 o Pour and play of$85,000 on March 1,2016 We explain the details more fully in the report below. • The Foundation signed a signage"Sponsorship"agreement with an outside company, S&B Visionary, for a campaign to advertise on City Property for$40,000. Twenty-five percent of the proceeds were to go to S&B Visionary as a fee for promoting the sponsorships. This agreement with the Foundation was done without City management approval. Interviewees had noticed other commercial advertising at the pool and baseball facilitates, including a bank sign on the Eureka 2 playground equipment. At this time,the City's agreement with the Foundation does not address the Foundation selling advertising on its property. • The City/Parks department has an agreement with the Youth Sports Association(Association) for collection of an"Enhancement Fee"of$5 per registered player. The payments are made payable to the Foundation who is not a party to the agreement. The Foundation's records indicate that from October 2012 to September 2017,the Foundation collected$48,450 from the Association.6 The records we analyzed indicated that the Foundation holds the funds and remits them back to the Association for field enhancement projects. Foundation records indicate that there were expenditures made in the amount of$54,675 to the Association during the same period.' Approach to the Investigation Our approach to this investigation included analysis of information from a wide range of sources including interviews, applicable policies and procedures, City and Foundation accounting records, internal memoranda, and minutes of City Council meetings for the Scope Period, October 1,2012 through September 30, 2017 (the Scope Period). The interviews included City and Foundation personnel, as described above. As previously mentioned, the agreed upon scope and methodologies BKD employed were designed to assist the City with investigating the concerns raised by an anonymous hotline call received by the City and to determine the activities and relationship between the City and the Foundation. So,this was the core focus of our investigation: to address concerns that had been raised about the transactions,arrangements and organizational structure between the City Parks Department and the Foundation. Phase I of our investigation included an assessment of the City of Denton internal auditor's working papers and files(i.e., City Auditor);8 interviews of the City of Denton, Texas management; and an evaluation of potential procedures to perform in additional phases of our investigation. We recommended additional procedures on November 3,2017 (Phase 2)and the City agreed that we perform procedures including additional interviews, electronic data analysis, and analysis of documents,bank accounts and books and records. Appendix 1 includes our engagement letter for Phase 1 and our addendum for Phase 2, including the description of our specific procedures. 6 Due to the Scope Period being measured,it appears the Foundation expended more than it brought in. Presumably, the Foundation had received funds in prior periods and disbursed them during our Scope Period. 7 A determination of how the funds were used by the Association is beyond the scope of this engagement. 8 The City's internal auditor resigned on October 16,2017. 5 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 00 We were not asked to, and did not perform, a full accounting or audit of the books and records of the Foundation or of the City Parks Department. We conducted all of our interviews in a confidential manner,respecting the privacy of the individuals with whom we spoke. Unless necessary for reporting on our findings herein,we have not shared the identity of the persons providing information with anyone outside of our investigation team. Cooperation from the City Prior to taking on this project,we specifically advised City management that we did not want to take on the investigation unless they were fully committed to permitting our investigators full and complete access to personnel,books,records and documents. We also advised City management that we did not want to move forward with the investigation unless they were prepared to"let the chips fall where they may"as a result of our investigation and that we would include areas that are warranted based upon the evidence that we uncovered during the investigation. We can report that we received a high level of cooperation from City personnel and officials in providing information relevant to our investigation. We also had complete and unfettered access to City personnel, files and records. We were able to interview a number of key personnel in the City Parks Department, including the Director of Parks and Recreation,prior to his departure on December 15,2017. No question we asked of the City personnel went without an answer. No request for information went without a response. Cooperation from Certain Denton Parks Foundation Representatives The Agreement between the City and the Foundation requires the Foundation to"maintain adequate records to establish that the City funds are used for the purposes authorized by"the agreement between the parties. In addition,the Agreement states that the Foundation"will permit authorized officials of City to review its books at any time." Therefore, in our work on behalf of the City,we requested information from the Foundation pursuant to the Agreement. The initial requests for information from the Foundation were provided. Later,when we asked for additional information, including interviews of Foundation personnel,those requests were resisted by the Foundation President,Marc Culp. The Foundation President wanted to know the nature of our investigation. We explained that we were working on behalf of the City under the Agreement that the City had with the Foundation and that the Foundation was required to provide us access to their books and records. Ultimately,the Foundation complied. When we issued a second request of documents,the Foundation President pushed back on our request stating that the request would be difficult for them to respond to and that the Foundation team lacked the technical sophistication to access and provide some of the requested information. He also stated that the Treasurer has a full-time CPA accounting practice to which she must give priority. The Foundation President continued to raise concerns that he did not know what we were investigating and that what we had asked for was broad and far reaching.' After making these complaints,he ultimately provided the information requested within a reasonable time period. The Foundation President continued to express frustration over not knowing what we were doing and demanded that we inform him of our objectives. He complained that the City was working from a "decade old contract"to demand the Foundation information. However,the City had an Agreement from February 2017 that requires the Foundation to have its records open and available. In addition,the Foundation President felt that the City's October 13 press release and meeting prior to that did not 'Email from the Foundation President to Julia Gannaway,City's outside legal counsel and numerous other City officials and Foundation representatives,dated 11/17/2017 6 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 00 engender"hope for the necessary future cooperative spirit critical"to the relationship between the parties.10 We found this behavior somewhat hindered our investigative process, as he had been our only identified contact at the Foundation. We note that in performing a forensic investigation, it is often necessary to request and analyze information and interview individuals without openly sharing the purpose or objective of the performed procedures, as doing so could influence the course of the investigation. The risk is that this influence could lead to faulty conclusions. Therefore, it is common, and we believe proper, for forensic investigators to keep certain aspects of their work confidential until the matter at hand is fully investigated. In written correspondence dated December 11, 2017,the Foundation President stated that it was unfair to conduct interviews without us offering more information about the nature of our investigation. However, he indicated that he would participate in an interview with us "without condition." He stated that he believed the entire process to be unfair,noting that interviewees should have the option to consult with their legal counsel before submitting to our process. Two Foundation witnesses obtained legal counsel and resisted being interviewed without making demands for certain concessions from us. These demands included changing our interview methods that we could only interview them if we would agree to never press charges for their conduct and so forth. We interviewed one of these witnesses with her attorney present. We did not reach an agreement to interview the other witness. On December 14,2017,we interviewed several City personnel. In addition, one of the Foundation staff agreed to meet with us and answer our questions. Marc Culp, Foundation President Mr. Culp agreed to meet with us for an interview on December 15,2017. He was cooperative and answered our questions. He also provided,via email, information regarding the Eureka 2 fundraising that was very helpful. Simone Royster, Foundation Treasurer We contacted Simone Royster,Foundation Treasurer,to request an interview with her regarding the working relationship between the City and the Foundation. We did not receive a response from Ms. Royster,but did receive a response from her retained legal counsel,Mr. Hugh Coleman. He cited her professional stature as a CPA and stated that it was important that her reputation not be tarnished by being questioned by us without first being informed of what we were seeking. He requested that we list our areas of inquiry and a list of written questions and stated that they would respond with written answers. In addition her attorney requested a statement from us that our investigation did not involve anything for which violations of the penal code may be brought against Ms. Royster. Only after we did these things, would they be willing to"consider assisting"our investigation. According to Mr. Coleman, "Ms. Royster agreed to co-operate by responding to written questions after being informed of the nature and content of the investigation." An investigation is a fact-gathering exercise. We cannot provide blanket assurances, and we would never conduct an investigation and agree to not seek out information for which violations may have occurred and where charges may be brought against someone. Unfortunately,Ms.Royster refused to participate in a face-to-face interview. "Email from the Foundation President to Julia Gannaway,City's outside legal counsel and numerous other City officials and Foundation representatives,dated 11/27/2017 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Wm We believed that Ms. Royster could have assisted us in our fact finding. Therefore, our findings are limited to the extent that Ms. Royster could have answered some questions related to the Foundation's financial information. We do not know how this would have influenced the results of our findings. Molly Tampke, Foundation Executive Director We contacted Molly Tampke,Foundation Executive Director,to request an interview with her on December 14 or 15. She responded to us and explained that she had retained an attorney,Richard Kelsey, and requested that we provide a list of questions that we planned to ask during the interview. Due to Mr. Kelsey being out of town for a funeral,we delayed our interview with Ms. Tampke until his return. We interviewed Ms. Tampke on December 21,2017,with her attorney,Mr. Kelsey,present. They were both cordial and cooperative. Denton Parks Foundation, a 501(c)(3) Charitable Organization The Foundation was formed in 1987 and its bylaws describe its purpose"is to enhance the ability of the City of Denton to provide excellent parks and recreational opportunities for the community."11 We were able to independently verify that the Foundation is a public charity through research with the Internal Revenue Service. Although its name includes the word"Foundation,"the Foundation is not a private foundation for tax purposes and is required to file an annual Form 990,Return of Organization Exempt from Income Tax. The Foundation is not governed by the City of Denton but is governed by its own Board of Directors. However,the City and the Foundation have entered into contracts or agreements over the years to work on projects. Agreements between the City and Denton Parks Foundation 1998 Agreement In 1998,the City entered into an agreement with the Foundation(the 1998 Agreement). The 1998 Agreement contained a Termination clause,which stated that the Agreement was terminated by agreement of the parties or until it is superseded by the agreement of the parties. City legal counsel believes that the 1998 Agreement terminated when the parties executed later agreements in subsequent periods.12 No monetary consideration was exchanged between the parties in the 1998 Agreement, in contrast with the 2017 Agreement. Although the City no longer provides utilities/telephone or computer usage(as was required of it by the 1998 Agreement), it has continued to provide office space to the Parks Foundation without charging any rental fee.13 The 2017 Agreement expired on September 30, 2017.14 Our evaluation of the Agreement between the City and the Foundation and the financial and operational relationships between the entities revealed the following concerns. 11 Bylaws of the Denton Parks Foundation,last amended December 18,2014 12 From discussions with the City's outside legal counsel,Julia Gannaway of Lynn,Ross&Gannaway,LLP 13 From discussions with the City's outside legal counsel,Julia Gannaway of Lynn,Ross&Gannaway,LLP 14 See paragraph III.Time of Performance of the Service Agreement attached to City Ordinance No.2017-037,also attached hereto as Appendix 2 8 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 ■■ 2013 Funding Request Approved to Fund the Foundation for a Foundation Executive Director According to City Council minutes,the City Council and Foundation started discussing hiring an executive director in August/September 2013. City Council was told that the $35,000 per year paid by the City to the Foundation would serve as start-up funds to support an Executive Director, and then after three years,the Foundation should be able to sustain itself. In the September 2013 budgeting process,the City approved the funding request for$35,000 annually for each of three consecutive years to fund a part- time Executive Director for the Foundation. Concern: Does the City have a written agreement that clearly defines the City's obligation for subsidizing the Foundation's Executive Director's salary? Finding: We have confirmed that there were no written agreements relating to the City's paying for the Parks Foundation Executive Director's salary in the 2013-2016 timeframe;the yearly amounts of$35,000 were allocated during the budgeting process and paid through the Foundation invoicing the City. 2015 Discussion of Activities of the Foundation before City Councills In the February 3,2015 City Council meeting and under the agenda item"Receive an update from the Denton Parks Foundation regarding the status of several projects including the Eureka Playground replacement and the City's first spray ground,"then Foundation President Couch introduced the Foundation's Executive Director,Ms. Molly Tampke. Ms. Tampke stated in the meeting that one of the major goals for the Foundation was to lead the fundraising efforts for the remake of Eureka Playground. The goal, according to the minutes of the Foundation's presentation,was to raise $1.5 million. Based on the interview of multiple parties,the Foundation's fundraising goal for Eureka 2 was ultimately set at$500,000. According to the minutes and related to a different matter,Ms. Tampke represented to the City Council that the Foundation had provided total scholarship money the previous year in the amount of$228,000. Concern: Have the City Parks Department and Foundation representatives fairly represented the nature and amounts of transactions to the City Council? Finding: We have not been able to verify that$228,000 in scholarships were provided during the 2014 time period. The Foundation financial figures demonstrate much lower receipts and disbursements for 2014. Total revenue in 2014 was $166,008. Total expenses in 2014 were $141,762.16 Using the books of the Foundation,their records indicate that total scholarships for the five(5)year period we analyzed were $66,497.25. See Exhibit 3. With City Council approval,the City paid for other miscellaneous projects for and through the Foundation. 15 City Meeting Agenda and City Council Minutes,February 3,2015,Appendix 3 16 2014 Form 990 of the Foundation;see Exhibit 4 9 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 A summary of the amounts paid by the City to the Foundation is presented below and in the "Bank Statement and Check Register Analysis" section: City Payments to the DPF 2012 $269 2013 4,611 2014 75,727 2015 10,862 2016 36,450 2017 79,701 TOTAL $207,620 *2012 represents October 1 —December 31 2017 Service Agreement Entered into between the City and the Foundation On February 7,2017, City Council passed an ordinance authorizing the City Manager to execute an Agreement with the Foundation. The Agreement called for the City to pay the Foundation$77,000 to be utilized for the salary of the Executive Director,Administrative Support, and office supplies.17 Concern: Does the City have a written policy that clearly defines how it was to conduct business with the Foundation? Finding: Based on the information that we gathered, although there was a written agreement between the City and the Foundation,there are no policies or procedures in place at the City that provide guidance on the operating relationship between City/Parks and the Foundation. There needs to be a Memorandum of Understanding(MOU)to ensure duties and responsibilities are clearly defined between the City and Foundation. • Most interviewees noted that there was concerns regarding"blurred lines"between the two entities. The Park Director stated that the line has always been blurred,but Eureka 2 assistance required by the City helped expose this even further,"mainly due to the time crunch". • City/Parks employees used to work on Eureka 2, a Foundation project, included departments such as maintenance and marketing. Employees were diverted for months from their typical work to assist with Eureka 2. It is unclear if City Council knew of the full scope of the assistance and the amount of City time that went into a Foundation project. • During much of our scope period, a Parks employee was tasked with keeping the Foundation books on a current basis and periodically reconciling with the official books kept by the Foundation Treasurer. • City/Parks employees are requested to design and/or print off flyers promoting Foundation activities/events. • The Park Director indicated that he has influence on spending at the Foundation. "See Ordinance No.2017-037,Appendix 2 10 BKD.. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 ■■ Expectations between the City and the Foundation Regarding Eureka 2 Eureka 2 Playground Community Build The Eureka 2 playground replaced the original Eureka playground erected in 1995. The original playground was decommissioned and taken down in October 2015,and construction on the new Eureka 2 playground began in November 2015. When the original playground began to age,the Foundation began a campaign to raise funds for the community build. We were not able to find a formal agreement between the City and Foundation for the Eureka 2 project.'$ The City's expectations before additional funding for the Executive Director's salary for 2014/2015 and 2015/2016 would be considered included the following: • Fundraising by the Foundation for the replacement of the Eureka playground. The target amount was $1,000,000. • Fundraising by the Foundation for City/Parks and Recreations Department scholarships through the sale of commercials on Splash Radio at the Water Works Park or any other means. In January 2014, Ms. Molly Tampke was hired by the Foundation as their Executive Director.19 Concern: Have the City Parks Department and Foundation representatives fairly represented the nature and amounts of transactions to the City Council? Finding: The Parks Director represented to us that the Foundation had raised their agreed upon $500,000 for the Eureka 2 project. We have not found any documentation supporting a reduced goal of$500,000 rather than the originally stated$1,000,000. Further,the general ledger indicates campaign results of$434,387, lower than the $500,000 stated by the Parks Director. Finding: Interviewees indicated that the Foundation was counting pledges rather than received funds when speaking to the City Council and the public about how much money was raised for Eureka 2. Interviewees indicated that a significant amount of pledges were not collected. Finding: Based on our analysis of the accounting records and the procedures we performed, there are no indications that the Foundation tracks donation pledges in their accounting records. As such,we have not been able to determine the amount of pledges they received compared to the actual donations collected for programs such as the Eureka 2 playground. City's Investment in Eureka 2 During the course of our investigation, it was clear from our interviews that City personnel felt the City had contributed far beyond what had been expected for the Foundation's Eureka 2 community build. 18 We did identify a letter from the City/Parks Director to the Foundation Chairman,on January 15,2014,that set out expectations from the City. In this letter,the City indicated that they had budgeted$35,000 for the 2013/2014 fiscal year as a contribution to Foundation to help in the hiring of an Executive Director. The City stated that if funds were available,and progress had been demonstrated in the following areas(below),similar funding would be considered during fiscal years 2014/2015 and 2015/2016,and no funding would be available after September 30, 2016. 19 Employment Agreement for Executive Director of the Denton Parks Foundation,effective January 1,2014 11 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 00 Invoices paid by the City There were two instances where an invoice for the Eureka 2 project was due, and the Foundation did not have the funds to cover the payments due. • Equipment of$95,000 based on information from the November 10,2015 City Council meeting o The Agenda Information Sheet indicates the Foundation will reimburse the City. o City/Parks employees, including the Parks Director, stated that the City had expected the funds to be reimbursed. o Ms. Pete Kamp,Foundation Board Member, stated at the meeting that the funds would be reimbursed to the City. o ORD 2015-333—City Council authorizing expenditure of funds for Eureka 2 playground equipment($95,811)did not include any language requiring the funds to be reimbursed. • City Council approved emergency funding for Pour and Play of $84,892.60 at the March 1, 2016 City Council meeting o The Emergency Declaration stated that"City funds will be used to fund this work and, as remaining pledges are honored,the Park Foundation will reimburse the Parks and Recreation Department's expenses up to their$500,000 commitment." o ORD 2016-074—Ratifying the Expenditures by the City Manager for the Emergency Purchase of the Poured in Place ($84,892.60) it did not include any language requiring the funds to be reimbursed. Concern: Should the City have been reimbursed for the two expenditures paid, for the Eureka 2 project? Finding: Although the intent might have been for Foundation to reimburse the City for the amounts paid for the Eureka 2 project,the ordinances passed by the City do not contain explicit language regarding the repayment of funds from the Foundation to the City for these expenditures. Some City Council documents indicate that the City expected to be repaid for the two payments the City made on the equipment. The City/Parks Director indicated that one of the invoices was expected to be repaid but should be forgiven as the Foundation"fulfilled its obligation"of raising $500,000 for the project. The Foundation Executive Director believes that there was never a commitment to repay those funds. However, a Foundation representative gave a presentation to the City Council about the Foundation funds on the Eureka 2 project and indicated that the Foundation would repay the City. The actual City ordinance does not indicate whether the funds needed to be repaid by Foundation. 12 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Concern: Have the City Parks Department and Foundation representatives fairly represented the nature and amounts of transactions to the City Council? Finding: Potential Misrepresentation of Denton Parks Foundation's Progress to the Q In June,2016, City/Parks Director presented to the Mayor and City Council an"Informal Staff Report"(PD Staff Report)with the subject,"This report summarizes the Return on Investment during 2014-2016 from the Denton Parks Foundation, a 501(c)(3)non-profit organization. ,20 Within the PD Staff Report,the Parks Director contended that the City's three-year contribution to the Foundation for the Executive Director's salary helped grow the fundraising"to sponsor projects that would typically compete for City Capital Improvement Funds." To contrast to more current year fundraising accomplishments,the Parks Director stated: From 2001 through 2013,prior to the funding of the Executive Director position,the Denton Parks Foundation raised approximately$144,000. The PD Staff Report goes on to list the return on investment from 2014 to 2016 by dividing the amount raised by the foundation for every dollar invested by the City. • 2014: Raised$106,867,producing a Return on Investment(ROI)of$3.05 for every dollar invested by the City • 2015: Raised$552,183,producing an ROI of$15,78 for every dollar invested by the City • 2016: Projected to raise $148,700,projected ROI of 4.25 for every dollar invested by the City o The general ledger shows deposits of approximately$139,000 in 2016. Concern: Were the Mayor and City Council properly informed regarding the ROI in June 2016? Finding: We find the PD Staff Report presented to the Mayor and City Council was inaccurate in the following ways: • The ROI calculation is flawed. It is dividing the amount the Foundation raised in a year by $35,000. Therefore,the calculation assumed: o There was no fundraising performed at the Foundation before the$35,000 investment from the City and o Only because of the $35,000 provided by the City did the fundraising occur o The Foundation is an established entity in the Denton community and has provided successful projects(Eureka 1, sports scholarships, etc.)well before the City provided funding for the Executive Director. The average fundraising between 2007 and 2013 by Foundation was over$123,000 per year.21 Finding: The PD Staff Report misstated the amount raised by the Foundation during 2011-2013. Per the IRS form 990-EZ filed for the Foundation, over$350,000 was raised in those years. The PD Staff Report gives the impression that the Foundation is doing significantly more fundraising. 20 Informal Staff Report No.2016-047 dated June 17.2016,Appendix 4 21 Per IRS Forms 990-EZ 13 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Mm However,the 2014 result was actually$10,000+below the results from the prior year of 2013. Presented below are the Foundation fundraising amounts from the Foundation's tax returns: 2011 $ 135,097 2012 103,293 2013 118,997 $ 357,387 Finding: The PD Staff Report did not account for the additional investment by the City to the Foundation in the ROI calculation. Every year under the Scope Period,the City provided the Foundation with the following: • Office Space: Initially, Foundation personnel were provided office space in the City Hall "East,"then they were moved to the Civic Center. The City never charged the Foundation for the use of this space. The accounting of this resource was not included in the ROI calculation. • Personnel: City/Parks personnel were used to assist the Foundation. Examples of this include: o Designing flyers for Foundation projects o Printing flyers o Engraving pickets o Taking minutes at meetings o Keeping track of checks and deposits o Other administrative functions o Specifically for the Eureka 2 project,there was significant City/Parks employee time investment ■ City/Parks personnel supported all marketing and advertising needs including: • Eureka 2 branding • Eureka 2 logo for website • Eureka 2 marketing plan • Eureka 2 advertising campaign • Eureka 2 flyers o City/Parks maintenance employees supervised the Eureka 2 community build. Reports show they spent 6,398 man hours and in excess of$173,000, which included significant amounts of overtime. 14 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 00 o The City paid$7,789 for temporary staff to assist the Foundation during the Eureka 2 project.22 These amounts were not considered in the calculations of the Foundation's ROI presented to the City. • Use of City/Parks personnel with no charge for events such as"Juneteenth"and Cinco De Mayo • Payment of two invoices for the Eureka 2 project totaling$180,703.60 As none of these costs were considered in the calculation,the ROI figures presented in the memo are significantly overstated. The PD Staff Report included this chart: CITY OF DENTON RETURN ON INVESTMENT DENTON PARKS FOUNDATION EXECUTIVE DIRECTOR O CM lr—strr M ■Toni 5 Raised 600,000.00 515.78.5552.163 500.000.00 400.000.00 300,000.00 $3.05,S235,000 200.000.00 S4.2S.$148.700 I $3.05,1106867 577,000 100,000,00 $35.000 S35.000 MAN 2014 2015 2016 2017 We calculate an estimate of City expenses in the following chart to present a more accurate picture of the City's investment in the Foundation for 2015:23 22 There were payments totaling$161,534 paid to a temporary staffing agency"LC Personnel,Inc.",(or"Labor Finders"within the PO system),related to the Parks maintenance and Parks administration cost centers. The$7,789 total was identified based on the coding on the invoice and other relevant documentation,however there could have been additional temporary staffing benefiting the Foundation paid that was not coded to the project. 23 The value of unpaid rent and staff time are not easily quantifiable. We estimated$24,000 in unpaid rent and $300,000 for Park employee time directed to the Eureka 2 project. A more detailed study of City/Parks allocation of resources to Foundation projects is beyond the scope of our work. 15 BKD«. CPAs&advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 2015- Approx. City Investment Total $ Raised $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 ■ED Salary ■Invoices Staff Time r Unpaid Rent ■DPF Funds Raised Usage of Parks personnel to support the Eureka 2 was significant and not reflected in the Foundation's presentation to City Council regarding their return on investment. Evaluation of the Employee and Vendor Master Files Due to the nature of the relationship between the City and the Foundation,the employee and vendor master files assisted us in the evaluation of the interaction between the two entities to determine if there are any overlaps or potential conflicts of interest. For reference,the employee and vendor master files are an entity's comprehensive listing of employees and vendors and typically include information such as name, identification numbers, addresses,phone numbers, etc. We performed data analytics to compare the City employee and vendor listings to both the employees and vendors of the Foundation. In addition,we compared the Foundation employee and vendor listings to those of the City. It should be noted that this analysis was limited by the fact that the Foundation did not maintain the addresses associated with employees and vendors in its accounting software. Thus, our comparison could only be performed based on names. We expanded the employee listing to include both the Foundation Board of Directors and the current City Council. As such,the list of Foundation personnel used in our analysis included the following: Molly Tampke Executive Director Jennifer Collins Administrative Assistant Marc Culp Board President Pete Kamp Board Vice President Simone Royster Board Treasurer Don Edwards Board Secretary We also included the following individuals as part of our analysis of City parties who potentially could have received payments: Chris Watts Mayor Sara Bagheri Council Member Gerard Hudspeth Council Member Don Duff Council Member Dalton Gregory Council Member 16 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Nm John Ryan Council Member Keely Briggs Council Member Foundation Payees on City Vendor List Our analysis indicated that individuals from the Foundation employee listing were included on the City's vendor listing and received$23,478 in payments from the City during our Scope Period. A summary of those payments can be found in the chart immediately below. Ila • frorn City . . . PETE KAMP $23.151 6 MOLLY TAMPKE 228 1 JENNIFER COLLINS 100 1 TOTAL $23.478 8 We understand that Ms. Kamp served on the City Council until May 2014. Based on the transactional detail provided,the payments received by Ms. Kamp related to ordinary expense reimbursements she received while serving as a Denton City Council member and a payment related to a solar rebate program the City was offering. All the payments received by Foundation employees from the City appeared appropriate. City Employees on the Foundation Vendor List We noted City employees included as Foundation vendors that received$8,653 in payments from the Foundation during our Scope Period. A summary can be found below: Payments Received from the Foundation •from Foundation . Number of Payments �N 1296405 Terminated S3 400 6 Juneteenth 1328016 Active 1236 5 Various 176137 Active 1,097 1 Morale Fund 116695 Active 620 2 Cinco de Mayo 1621028 Terminated 600 1 Morale Fund 108214 Active 565 2 Morale Fund 2244607 Active 300 1 Morale Fund 2155022 Terminated 286 1 Denia Fall Festival 111755 Active 257 2 Morale Fund 1840634 Active 150 1 Adaptive Rec Programs 114227 Active 112 1 Morale Fund 168073 Active (A) (A) (A) 1660262 Terminated 30 1 Cinco de Mayo TOTAL S8.653 24 (A) Employee 168073 is the same as Employee 114227 As illustrated above, four of the 14 employees were considered"terminated"and no longer employed by the City at the time of our investigation. However,Employee 2155022 and Employee 1621028 were employed for a period of time during our scope. 17 BKD«. CPAs&Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 City Vendors on Foundation Payee List: There were no City vendors found on the Foundation payee list. Foundation Vendors on City Payee List: There were no Foundation vendors found on the City payee file. Concern: Were there payments to City vendors who were also Foundation employees, and vice versa? Findings: We noted no concerns found within the scope of our work. • The infrequency and/or dollar value of payments received from the Foundation by City employees did not cause any concern, after determination of the amounts received. • No known policy exists surrounding the receipt of monies by City employees from the Foundation. See the section on recommendations below. • No matches on the City vendor master existed in the Foundation employee and vendor master file. • Analysis was limited in nature due to the inability to cross reference physical addresses between the employee and vendor master files of the City and Foundation. Assessment of the Foundation General Ledger As we mentioned earlier in this report,Ms. Royster could have assisted us in our fact finding and regrettably,refused to participate in a personal interview. Therefore,our findings are limited to the extent that Ms. Royster could have answered some questions related to the Foundation's financial information. Many of the questions we would have asked her would have been related to Foundation's books and records, considering her role as the Foundation's Treasurer. The Foundation uses QuickBooks to track its financial activities. QuickBooks is a common accounting software utilized by small businesses and entities. The software contains a tracking mechanism and produces a report known as the Audit Trail. The Audit Trail report allows a user to view the timing of all entries made into the software, including modified,voided and deleted transactions. Further,this report contains details such as the entry/modified date,which user made the entry/modification,the"state"of the transaction,the accounting date and the account name,among other things. Throughout the course of the relationship between the City and the Foundation,we understand the Foundation would provide City employees, specifically employees of the City/Parks Department, and the City Council updates on activities, such as the fundraising completed by the Foundation. The Audit Trail report assisted us in determining the timing and to some degree the accuracy of the financial operations of the Foundation and therefore the accuracy of the financial updates provided to the City. Part of our analysis consisted of analyzing the General Ledger and comparing the"Entered/Last Modified"date to the accounting date to determine the length of the time between the two. We determined that entries in which these two dates are in excess of 30 days typically warranted additional investigation. We noted a significant amount of modifications that occurred more than 30 days from the accounting date. Additional testing was completed because of the regularity of the gap in days identified. See the Bank Statement and Check Register Analysis section below. We also understand that due to the relatively small size of the Foundation coupled with the fact that the Foundation Treasurer is a volunteer, 18 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 the frequency of entries made into the accounting software would be less,which would cause a greater number of days between date entered/modified and the accounting date. Concern: What is the condition of the books and records of the Foundation? Findings: Comments; something for the parties to be cautious about. • The entering of most Foundation transactions into the QuickBooks software is delayed(i.e., greater than 30 days). Additional testing was completed as a result—see Bank Statement and Check Register Analysis section below. • The delay in recording transactions may have contributed to inaccuracy of amounts being provided to the City and its council members at the time information was requested from the Foundation. • We were able to determine that there was only one log-in set up for an"Admin"user. o Due to the scope limitations noted above,we were not able to determine how many people are able to log-in with the"Admin"user, or who had access to the Foundation's books and/or who all were responsible for the recording of entries. • Due to the scope limitations previously mentioned,we were not able to adequately assess the controls around the Foundation's accounting functions and systems. General Ledger, Bank Statement and Check Register Analysis Due to the financial relationship between the City and the Foundation,we requested bank statements, including check copies and check registers. The primary purpose of requesting this information was to verify and trace transactions recorded in the accounting software of both entities to the bank statements. In addition, due to the significant amount of transactions in the Foundation's accounting records that possessed a date entered/modified that was in excess of 30 days of the accounting date,we utilized the bank statements to test the accuracy of the data being entered into their books. During our scope period,we noted that the City issued$207,620 in payments to the Foundation. The amounts are summarized by year below. City Payments to the DPF �M.M� 2012 $269 2013 4,611 2014 75,727 2015 10,862 2016 36,450 2017 79,701 TOTAL $207,620 *2012 represents October 1 —December 31 We traced each of the checks issued by the City to the Foundation books and noted that all checks,with the exception of one,were recorded. We noted that check number 365367 made payable to"Denton 19 BKD... CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Mm Parks Foundation"on May 25,2017, in the amount of$1,000 was not recorded in the books, nor has it cleared the City's bank account. See Exhibit 1. During the Scope Period,we discovered that the Foundation issued$116,575 in payments to the City. The amounts are summarized by year below. DPF Payments to the City �W.M. � 2012 $7,475 2013 3,635 2014 27,706 2015 16,199 2016 22,351 2017 39,209 TOTAL $116,575 *2012 represents October 1 —December 31 Based on our analysis of the Foundation books and bank statements,we were able to confirm that the Foundation checks written to the City cleared the Foundation's bank with the exception of two checks that were issued in September 2017. Check number 1759 made payable to the"City of Denton"on September 15, 2017, and check number 1760 made payable to the"City of Denton"on September 29, 2017 in the amounts of$328 and$17,030,respectively, likely do not show as cleared due to the cutoff of our Scope Period on September 30,2017, and the delay in recording entries by Foundation. As indicated in the"Assessment of the Foundation Audit Trail"from the section above,we traced transactions from the Foundation's operating bank statement.24 This analysis was completed on a sample basis and included the following months: • April 2015 • June 2015 • October 2015 • April 2016 • June 2016 • October 2016 • February 2017 • June 2017 Concern: What is the condition of the books and records of the Foundation? Findings: No exceptions. See recommendations cited later in this report. • We were able to match each transaction from the months indicated above and noted no exceptions. This included tracing outstanding items from one month to the subsequent month. As such,we are comfortable that the Foundation's books include all bank transactions. Of course,there are no guarantees that any potential"off-book"transactions did 21 AccessBank Account XX6280 20 BKD... CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Nm not occur,but we did not come across any indications of this in our limited review nor was it part of our scope of procedures. • There are no policies or procedures related to the handling of monies to/from both entities. • The Foundation's financial records provided to us appear to accurately reflect the activity from its operating bank statements. Foundation Sources / Uses of Income Based on our analysis of the documentation provided to us by the City and the Foundation,we understand the Foundation was, from time to time,asked to provide an ROI analysis to the City and City Council. Further,we understand this was a method in which the City and City Council would evaluate the investment of City funds in the Foundation for purposes such as the salary of the Executive Director, supplies, etc. In completing the ROI calculation,the Foundation,to our knowledge,would compare the receipt of money by the Foundation to the dollar contribution provided to the Foundation by the City. Foundation Sources of Income The following is a listing of the income by type as recorded in the Foundation's books during the Scope Period. Income Bettye Meyer's 87.00 Dev.Assistant Contract 15,000,00 ED Contract 166,500-00 Friends 1,000-00 Kroger Cares 5149 Martenance Fees 669,97 Membership Fees 50-00 Program Receipts 1,219,012.43 Scholarships 3,61t08 Splash Radio 10,650,00 United Way(Donor Designated) 11,272 96 Total Income 1,427,906-93 The"Dev. Assistant Contract"and`ED Contract"line items represent$181,500 of the $182,000 in assistance the City provided to the Foundation during the Scope Period. The remaining$500 received by the Foundation was recorded in"Program Receipts." The following chart is a further breakdown of the Foundation's"Program Receipts"by year: mmmmmm� $27,693 $108,296 $100,336 $600,008 $173,063 $209,616 $1,219,012 Additionally,Exhibit 2 represents the"Program Receipts"by class(i.e.,purpose)by year for our Scope Period. The classes are based on the designation made by the Foundation when the amounts were recorded. 21 BKD«. CPAs&Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Nw Foundation Uses of Income/ Expenses The following represents the uses of funds received by the Foundation during our Scope Period. Expense Administrative Fees 12.295.05 Advertising 71220 Audit Fees 12.700 00 Bank Charges 5000 Community Events 1,46032 Development Assistant 8,14288 ED Contracted Services 151,124 05 Grant expenses 30000 Insurance 4,15300 Memberships 2,58900 Office Expenses 1,78740 Office Supplies 2,381,42 Parking Expenses 49374 Postage 74651 Printing&Reproduction 2,229-86 Program Expenses 1,071,261 27 Total Expense 1,272,426.70 As shown above,the majority of the uses of the funds were for"ED Contracted Services"and"Program Expenses." The"ED Contracted Services"correlates to the"Dev. Assistant Contract"and"ED Contract" income illustrated above. As shown,the Foundation had only spent approximately$151,124 of the $181,500 it received by the City for the salary of the Foundation Executive Director and the assistant. The following represents a further breakdown of the Foundation's"Program Expenses"by year. mmmmmmm $33,781 $97,755 $112,676 $492,602 $253,216 $81,232 $1,071,262 We have included as Exhibit 3 the"Program Expenses"by class (i.e.,purpose)by year for our Scope Period. As indicated earlier,the classes represent the Foundation designations that were made when entered into QuickBooks. Eureka 2 Based on the data entered into QuickBooks,the revenue raised for the Eureka 2 playground project was $434,387. See Exhibit 2. The expenditures related to the Eureka 2 playground project were $392,623. See Exhibit 3. Thus, our analysis indicates that the Eureka 2 playground project had a project surplus of $41,764. However,the balance remaining in the"Eureka—2"cash account in QuickBooks as of the end of our Scope Period was $35,507, as shown below. 22 BKD«. CPAs&Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 DENTON PARKS FOUNDATION Balance Sheet As of September 30.2011 Sep 30.17 ASSETS Current Assets Checking/Savings AccessBank Checking Eureka-2 35.507.07 The Foundation records indicate that$6,257 was charged against the"Eureka—2"cash account that was unrelated to the Eureka 2 playground project,or expenses were not correctly classified when entered. Eureka 2 playground proceeds/revenue equaled$434,387 and expenses related to the project were $392,623. According to the Foundation books,there should be $41,764 in excess revenue related to the project,but only$35,507 is remaining in the"Eureka—2"cash account. The Foundation books and records do not track donation pledges. Other Findings • The Foundation books and records do not clearly reflect the amounts they have raised from the sale of advertisements on City property. o The City/Parks Director remembered approving/authorizing the advertising and has since recognized that it was wrong. During our interview with him,he stated that it did not occur to him at the time that it was a problem for the Foundation to collect revenue for advertising placed on City property. However, in an email in June of 2015,he asked the question, "Is there any issue in putting DATCU name on the playground structure?"and concluded"Think I'll just ask for forgiveness..." • For some time,Foundation offices have been located in City offices,representing an in-kind donation from the City to the Foundation. The City/Parks Director stated that he relocated the Foundation to the Civic Center not only because donors would have better parking and the Foundation office would be easier to find,but also at the insistence of City/Parks staff. • Customized pickets were sold as a fundraiser for the Eureka 2 project. A common theme through our interviews was regarding the poor handling of pickets by the Foundation,with complaints being made to City/Parks staff. City/Parks maintenance has continually asked the Foundation for a final list of the pickets,which has not yet been provided. • There was a donation to the Foundation in the amount of$1,500 for a memorial bench,based on an estimated cost of the bench. The actual cost to the City/Parks was allegedly$328, which was less than the citizen was charged. The money was deposited into the Foundation. Multiple City/Parks personnel were uncomfortable with the overage being absorbed by the Foundation without notifying the donor. 23 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Mm Recommendations Agreement with the Foundation/Clarification of Boundaries Assuming the City and Foundation decide to move forward with a working arrangement between the parties,we recommend the following: • Periodically evaluate the City's arrangements and financial relationship with the Foundation (and any other similar outside parties) and determine whether it is in the City's interest to continue the relationship/arrangement for a given time period. Document in an agreement that states clearly what amounts should be allocated for salaries, office supplies, etc., or if the City wants to give the money to be used at the Foundation's discretion. • Develop a memorandum of understanding which sets out the scope of the relationship between the Foundation and the City,clearly defining roles and expectations between both, benchmarks to achieve and expected flow of money. In addition, develop policies for City employees for guidance with their interactions with the Foundation. • Develop policies and procedures around the interactions between the City and the Foundation;related to: o generally and specifically related to monies that flow from one entity to the other o related to employees of either entity • Define how the ROI calculation should be computed and any other metrics of measuring the success of the Foundation by the City. • Define a reporting mechanism for the Executive Director of the Foundation to report to someone at the City,other than the City/Parks Director,to provide a control. Accounting for Youth Sports Association fees We recommend the following: • Payments should be remitted to the City of Denton under the current agreement. The City would then be responsible for administering those funds. • Alternatively,the City could terminate its agreement with the Youth Sports Association and develop a new arrangement for supporting the organization. • The City should ask the Foundation to provide its own accounting of the funds collected and disbursed for these purposes. City Operations We recommend the following: • Implement a Code of Conduct policy. • Perform annual conflict of interest disclosures for City Council and department heads that identify business relationships and family. The focus should be on transparency regarding with whom the City does business. 24 BKD«. CPAs a Advisors City of Denton, Texas Forensic Investigation Report February 16, 2018 Mm Denton Parks Foundation Operations We recommend the following: • Implement control processes similar to the City for cash handling and procurement. This should reduce the temptation for individuals to direct activities towards a certain vendor. • Develop of a Conflicts of Interest policy and a Code of Conduct policy to assist with the identification of potential conflicts of interest. • Have more timely entry of financial transactions(within one to two weeks)in its bookkeeping records so that more accurate reports can be provided,both internally to the Foundation's Board and to the City. • Set up procedures to ensure the recording and tracking of pledges,preferably by utilizing the accounting software. • Enter the addresses of its vendors in its accounting software program to further help identify potential conflicts of interest. • Conduct a review of internal controls and accounting controls to ensure that proper, accurate and timely accounting is done to support an accounting to the City. 25 BKD«. CPAs a Advisors EXHIBIT 1 Transaction Search Page 1 of 1 0 Transaction Search Details Date/Time Printed 01/2612018 02 31 PM PT Account Number 9600151331 Account Name CITYDENTOTE Check 365367 Amount 1000 00 USD Status Oulstand ng Posting Date As of Date Issue Date 05/25/2017 Payee DENTON PARKS FOUNDATION Bank ID 241253823 MICR Account Additional Item Details https://welissuite.welisfargo.coin!tsearch/login 1/26/2019 CITY OF DENTON TEXAS*OPERATING ACCOUNT'215 E MCKINNEY ST-DENTON,TEXAS 76201-4299 CHECK NO: 365367 VENDOR NAME:DENTON PARKS FOUNDATION VENDOR NO:548594 CHECK DATE: 5/25/2017 INVOICE NO. I DATE DESCRIPTION DROSS AMOUNT DISCOUNT AMOUNT NET AMOUNT 2017 SPONSORSHIP 5/11/2017 2017 SILVER SPONSORSHI 1.000.00 1,000.00 TOTAL 1,000.00 CITY OF DENTON TEXAS wEu s FARGO BANK,NA CHECK NO:00365367 OPERATING ACCOUNT VOID i F CASHED AFTER 80 DAYS i 215 E MCKINNEY ST DATE 58 W DEON DENTON,TEXAS 76201-4299 W2512017 „Z DEW ON PAY ONE THOUSAND AND 001100"'" ......... .f.....".r.......f.................."...... $***** 1,000.00 TO THE DENTON PARKS FOUNDATION FILE COPY ONLY ORDER OF RETURN TO PARKS DEPT MP FILE COPY ONLY MP 00032, S 36 ?III I:D4 120 38 241: 9600 IS 13 3 111■ CITY OF DENTON TEXAS 215 E MCKINNEY ST DENTON,TEXAS 762014299 DEWON DENTON PARKS FOUNDATION RETURN TO PARKS DEPT � 1 23 CHECK REQUISITION -VOUCHER - 3 (MUST BE PRINTED ON PINK PAPER) i ALL CHECK REQUISITIONS MUST BE SUBMITTED TO PURCHASING FOR APPROVAL PURCHASING WILL FORWARD TO ACCOUNTS PAYABLE FOR PAYMENT TO BE ISSUED PAY TO:��J` May 11,2017 VENDOR#: I NEW VENDOR '❑ VENDOR NAME&REMITTANCE ADDRESS: Juneteenth Committee! $1 000.00 l ' PO Box 51291 DEPARTMENT Denton Texas 78206 940-34"575 CHECK TO BE PICKED UP . RELEASE CHECK TO• i Elizabeth Bell INVOICE DATE,NUMBER,AND/OR EXPLANATION ACCT.NO. NET INV.AMT. Sponsorship-Denton Juneteenth Celebration 600005.7912.9160A $1,000.00 Silver Partner I l I i I I , ` TOTALI $1,000.00 i ' SPECIAL INSTRUCTIONS I 3 i THE ABOVE HAS BEEN REVIEWED AND RECOMMENDATION FOR BILLING IS MADE BY THE UNDERSIGNED. I Purchasing Approval Reque ,sied By • � 4 Print Requestor's Name I A/P Check Off ' Director's Approval if Over$5,000 i Print Director's Name I r r �� -11 :lB � �i.l-IDtill z PO,Rny 51291,Denton,Texas 76206.040)349-8575 February 17,2017 Cheylon Brown Dear Business Leader. Chairperson Excitement is building as we approach the 46'b Anniversary of the City of Denton Juneteenth Willie Hudspeth CeIebrationl We have great things planned and are looking forward to your support..The Denton Vice-Chairperson Juneteenth Celebration Committee serves as a non-profit volunteer group whose mission is to actively preserve and promote the broad spectrum of African American heritage through educational and Sharetts Lee cultural activities that benefits the City of Denton community.The funds raised will be used for various Secretary events the Committee hosts throughout the year. Edward Patterson The events scheduled for the 2016-2017 fiscal year include an Essay Contest entitled"How has the Treasurer Emancipation Proclamation affected you?;'a Miss Juneteenth Pageant,a Leadership Conference, 3-on- Tammy Riggs 3 Basketball Tournament,Flag Football Tournament,Softball Tournament, Gospel Night,Parade, "A Assists at'Treasurer Better Way Enterprises"Hometown Heroes Reception,Children's Games,and Hip Hop Explosion.At the 2016 Celebration over 5000 people attended the 2-day event.We anticipate that the growth of the event will be phenomenal Your business has the opportunity to advertise through several media outlets including radio,internet, Entertainment/Gospel billboard,flyers/posters,and newspapers.We would like to see your business as our top sponsor.You Constance Pullam can choose to sponsor in the following areas: Naga`i` °hns0° LEVEL RECOGNTION Parade -Naming rights to the stage(I"check received) Sharetta Lee -Name/logo in verbal/written refer noes to event Beatrice Clay -Name/logo in press releases Platinum Partner-$3,500 -Printed name and logo on flyers/posters Athletics . -Namellogo on billboard Johnothan Smith -Full page ad in Souvenir Program Book Bobby Givens -Free booth space -Name and logo inclusion on website Vendors -Verbal acknowledgement at each activity Bobby Givens Naming rights to the CWldmn's Game Area Clark Coleman Gold Partner-$2 500 -Printed name and logo on flyers/posters -Name/logo on billboard Promotions/ -Full page ad in Souvenir Program Book Photography -Free booth space Anthony Caraway �~ -Name/logo inclusion on website -Verbal admowlEkement at each activity Advertising Design -Name/logo on billboard All Torres Silver Partner-$1,000 -Printed name/logo on flyers/posters -Hatfpage ad in Souvenir Program Book Childma's Games -Free booth space Michael Herron -Name/logo inclusion on website Belinda Tapper Biome 0 -1/4 page ad in Souvenir Program Book -Name/to o inclusion on website Pageant Friend of Denton Juneteenth-$100 -Name recognition on website Sharetta Lee Any and all contributions to this event are tax deductible, through sponsorship by the Denton Parks Constance Pullam Foundation. Contributions maybe mailed to: Volunteer Coordinator Denton Juneteenth Celebration Committee Edward Patterson P.O.Box 51291 Denton,TX 76206 Make checks payable to the Denton Parks Foundation Sincerely, C6 Cheylon Brown, Juneteenth Celebration Committee Chair "A refection of our past,a celebratioh of our FREEDOM!" www.juncteenthdcntontx.org 2016-2017 Denton Juneteenth Celebration PARTNERSHIP INFORMATION I t 4would like to partner with the Denton Juneteenth Celebration Committee at the b\ref )_2V( level. Enclosed you will find my $ \.OuO� contribution. Business/Company Name Address: V-oIF-R - ,=c-, Contact person's name: \ Phone: qLAD, 94q- nct email: 617 1�2 J�D •hell@ C�kL�off'�eOnv) . Cam_ Partnership Levels Platinum Partner-$3,500 Gold Partner-$2,500 -Naming rights to the stage (I"check received) -Naming rights to the Children's Game Area -Name/logo in verbaVwritten references to event -Printed name and logo on flyers/posters Name/logo in press releases -Name/logo on mobile billboard -Printed name and logo on flyers/posters -Full page ad in Souvenir Program Book -Name/logo on mobile billboard -Free booth space -Full page ad in Souvenir Program Book -Name/logo inclusion on website -Free booth space -Name and logo inclusion on website Silver Partner-$1,000 Bronze Partner-$500 -Name/logo on mobile billboard -1/4 page ad in Souvenir Program Book -Printed name/logo on flyers/posters -Name/logo inclusion on website -Half page ad in Souvenir Program Book -Free booth space -Name/logo inclusion on website Friend ofDenlon Juneteenth-$100 -Name recognition on website As a Partner, your business has the opportunity to market and advertise to millions of consumers through our successful event advertising and promotional support. We advertise and partner with DFW area radio stations, internet& websites, mobile billboard, flyers&posters,and local and area newspapers. ' Any in-kind donations of services, vouchers, etc. are kindly accepted and donors will be listed in the souvenir booklet as a supporter of the Denton Juneteenth Celebration. www.juncttcnthdcntontx.org EXHIBIT 2 DENTON PARKS FOUNDATION: PROGRAM RECEIPTS Denton Parks Foundation QuickBooks: Pra ram Receipts-October 1, 2012 through Se tember 30,2017 Class 2012 2013 2014 2015 2016 2017 Total Accessible Playground $0 $0 $0 $0 $0 $70,050 $70,050 Adaptive Rec Programs 0 0 0 0 27 20 47 _Aquatics 0 0 0 0 250 15,000 15,250 Athletic Scholarships 0 2,000 500 3,400 500 0 6,400 Bettye Myers Fund 0 87 8,113 0 0 0 8,200 Bill Terry Scholarship Fund 0 0 115 0 0 0 115 Cinco de Mayo 180 12,525 16,408 15,874 16,450 14,418 75,855 Cinco de Mayo Scholarship 0 725 0 0 0 0 725 Cool Beans Layer Run 0 0 0 0 0 1,050 1,050 CycloDla 0 0 0 0 0 950 950 DBL 0 0 0 0 0 7,626 7,626 Denia Rec Passes 0 100 100 120 110 0 430 Denia Special Projects 0 0 0 75 0 76 151 Dog Park 0 0 0 0 0 10 10 Duck Derby 0 2,000 0 0 0 0 2,000 Eureka-2 0 0 38 378,351 55,798 200 434,387 Foothills Foundation 0 0 0 102,500 0 0 102,500 _Friends 0 0 4,505 15,105 1,665 27,095 48,370 General Fund 0 1,633 1,001 6,206 6,556 500 15,895 IOOF Cemetery 0 50 0 0 0 0 50 Juneteenth 500 8,342 6,354 2,500 2,546 1,000 21,241 Legacy Forest 200 600 400 1,300 500 2,250 5,250 Liberty Run 0 2,150 1,450 3,900 4,700 3,100 15,300 Mayor's Mile 0 1,350 0 1,150 0 0 2,500 Memorials 0 0 0 0 360 0 360 MLK Center 0 0 0 0 875 1,125 2,000 Morale Fund 1,344 986 3,974 2,730 3,016 1,868 13,918` Nette Schulz Bench 0 0 0 0 1,500 1,500 3,000 North Lakes Rec Center 0 1,025 350 600 250 0 2,225 Pops Carter Sculpture 0 0 0 0 0 1,588 1,588 ppp 0 1,050 300 0 0 0 1,350 Quakertown Park 0 0 0 1,200 0 0 1,200 Reindeer Romp 3,796 1,450 2,460 2,800 3,550 0 14,056 Scholarships 7,958 3,611 717 87 450 25,425 38,248 Senior Center 11,451 51,450 28,791 50,700 64,161 0 206,552 Shade Structures 0 0 0 0 0 20,000 20,000 Skate Park 0 0 0 0 215 4,225 4,440 Splash Park 0 6,931 7,005 0 0 0 13,937 _Splash Radio 0 0 0 1,000 900 0 1,900 Target Grant 0 0 0 0 0 7,115 7,115 Vela Athletic Complex 1,000 0 0 0 0 0 1,000 Water Works Park 0 50 50 0 0 0 100 Youth Sports Enhancement 1,265 13,880 10,785 10,410 8,685 3,425 48,450 (blank) 0 (3,698) 6,920 0 0 0 3,222 TOTAL $27,693 $108,296 $100,336 $600,008 $173,063 $209,615 $1,2191012 EXHIBIT 3 DENTON PARKS FOUNDATION: PROGRAM EXPENSES Denton Parks Foundation QuickBooks* Pro ram Expenses-October 1,2012 through Sei3tember 30,2017 Class 2012 2013 2014 2015 2016 2017 Total Adaptive Rec Programs $0 $0 $0 $0 $0 $900 $900 Aquatic Scholarships 245 0 0 916 0 0 1,161 Athletic Scholarships 20 1,554 6,420 3,807 1,047 2,087 14,935_ Back to School 0 0 175 0 0 0 175 Bettye Myers Fund 0 0 3,496 3,200 0 0 6,696 _Cemetery Improvements 0 0 50 0 0 0 50 Cinco de Mayo 120 17,066 12,510 20,185 16,271 16,953 83,105 Cinco de Mayo Scholarship 0 0 0 0 1,525 0 1,525 CycloDia 0 0 0 0 0 950 950 DBL 0 0 0 0 0 7,626 7,626 Dania Fall Festival 286 0 0 0 0 0 286_ Dania Rec Passes 0 25 0 20 0 0 45 Denia Special Projects 0 0 0 0 78 76 154 Dog Park 1,241 0 0 0 0 0 1,241 Duck Derby 7,750 1,855 0 0 0 0 9,605 Eureka-2 0 0 250 360,151 31,208 1,014 392,623 Foothills Foundation 0 0 0 0 102,500 16,190 118,690 Friends 0 0 197 20 514 3,968 4,698 General Fund 0 77 1,088 83 197 190 1,636 Juneteenth 450 10,143 7,558 1,822 7,428 1,955 29,357 Legacy Forest 975 395 380 1,849 527 1,172 5,299 Liberty Run 0 0 0 6,416 3,000 0 9,416 Mayor's Mile 0 850 150 1,500 0 0 2,500 MLK Center 0 0 0 0 586 0 586 Morale Fund 2,185 1,630 2,820 2,426 4,718 854 14,633 Nette Schulz Bench 0 0 0 0 0 728 728 North takes Rec Center 0 0 0 874 110 0 984 PPP 0 2,561 1,635 75 0 0 4,271 Quakertown Park 0 0 0 1,200 0 0 1,200 Rec Passes _ 0 0 10 0 0 0 10 Reindeer Romp 27 2,176 2,850 2,500 0 0 7,553 _Rotary Fountain 0 2,465 59 0 0 0 2,524 Scholarships 7,186 0 11,290 0 12,948 17,454 48,877 Senior Center 8,248 48,857 29,880 59,937 58,818 0 205,741 Splash Radio 0 0 4,298 0 575 0 4,873 Target Grant 0 0 0 0 0 9,115 9,115 Water Works Park 0 27 10,390 0 0 0 10,417 Youth Sports Enhancement 3,036 8,074 7,033 25,368 11,165 0 54,675 Zach Tucker Memorial 25 0 723 253 0 0 1,000 (blank) 1,988 0 9,416 0 0 0 11,404 TOTAL $33,781 $97.755 $112,676 $492,602 $253,216 $81,232 $1,071,261 EXHIBIT 4 efile GRAPHIC rint- DO NOT PROCESS I As Filed Data - I DLN: Farm990 Return of Organization Exempt From Income Tax OMB No 1545-0047 Undersection 501(c),527,or 4947(a)(1)of the Internal Revenue Code(extern private 2014 f ounda t bits) De sarend"Trato ry ►Do not enter social security numbers on this form as it may be made public Open InerawpeeaxiSe im ►Infdrmahan about Form 990 and its instructions Is at w ww.I RS.cPv/form99O Inspection A For tha 2014ce rWar r or tax mr inni OL-01-2014 and endl 12-31-2014 a Cheri if applicable DENTON Name of organs aton D Employer Identification number DENTON PARKS FOUNDATION INC r Address change 75-2275201 r Name change Doing business as r Initial return E Telephone number Final i Number and street(''r P O box if mail is rot delivered to street address) Rmmfwne r return/terminated 601 E HICKORY (940)349-a272 r Amended return City or town,state nr province country,and ZIP or foreign postal code DENTON,TX 76205 0 Gross receipts s 166,008 r Application Pending F Name and address of pnncipal officer Wall Is this a group return for SIMONEANDERSON subordinates2 r Yes rNo 604 5£-M STREET DENTON,TX 76201 H(b) Are all subordinates r Yes r No included7 I Tax-exempt status r Sot(c)(T) r 5o1(c)( )44(insert no r 4947(a)(1)or r 527 If*No;attach a list (see instructions) 7 W ebsite:► N/A H(c) Group exemption number► K form at organization r Corporation r Trust r Asseaalcn r Other► ILYcatafformaticin 1996 114 State of iegel domole TX Summary 1 Briefly describe the organization's rrnsslon or most significant activities SUPPORT OF DENTON PARKS AND RECREATION ACTIVITIES a in is E 2 Check this box►r if the argan.zat,on discontinued its operations or disposed of more than 2 S%of Its net assets 0 `5 3 15 .6 3 Number of voting members of the governing body(Part VI,line 1a) y 4 Number of independent voting members ofthe governing body(PartV1,line lb) 4 15 5 Total numberof individuals employed in calendaryear 2014(Part V,line 20) . . . . . . 5 0 6 Total number of volunteers(estimate if necessary) . . . . . . . . . . . . . 6 18 7a Total unrelated bus ness revenue from Part V III,column(C),Irne 12 . . . . . . . 7a 0 b Net unrelated business taxable income from Form 990-T,line 34 7b Prior Year Current Year 8 Contnbutions and grants(Part VIII,Irne 1 h) . . . . . . . . . 10,700 2,796 9 Program service revenue(Part VIII,line 29) . . . . . . . . . 108,296 163,135 10 Investment income(Part VilI,column(A),Imes 3,4,and 7d) . . . . 90 87 11 Other revenue(Part VIll,column(A),lines 5,6d,8c,9c,10c,and Ile) 0 12 Total revenue—add lines 8 through 11(must equal Part V III,column(A),line 119,086 166,008 12) 13 Grants and similar amounts paid(Part IX,column(A),lines 1-3 j 0 14 Benefits paid to orformembers(Part IX,column(A),line 4) . 0 15 Salaries,other compensation,employee benefits(Part IX,column(A),lines 35,000 5-10) 16a Professional fundraising fees(Part IX,Column(A),line Ile) 0 tfi Is Total turidraning expenses(Part Ix,mkimn(D),line 25)0.0 17 Otherexpenses(Part IX,column(A),Imes 1In-lid,11f-24e) 98,530 106,762 la Total expenses Add lines 13-17(must equal Part IX,column(A),line 25) 98,530 141,762 19 Revenue less expenses Subtract line 18 tram line 12 20,556 24,246 Beginning of Current End of Year 9 Year 01 It- 20 Total assets(Part X,line 16) . . . . . . . . . . . . 230,993 235,221 e 21 Total liabilities(Part X,line 26) . . . . . . . . . . . . 0 2:66 22 Net assets or fund balances Subtract line 21 from line 20 210,993 235,221 Signature Bock Under penalties of per)ury,I declare that I have examined this return,including accompanying schedules and statements,and to the best of my knowledge and belief,It Is true,correct,and complete Declaration of preparer(other than officer)Is based on at Onrmation of which preparer has any knowledge 2015•ll ll Sign Signature of officer Date Here l SIMONE ROYSTER TREASURER I! Type or print name and tdle PmUType preparers name Preparers signature Date Check r it �r IOHN E tWNES CPA ]OMN E 9AINES CPA self-employed Paid Frnn's name 1]OHM E BAINES PC Frmi s EIN► Pre parer Pone no (940)565 9015 Use Only Fmm's address►604 S ELM ST DENTON,TX 762016903 May the IRS discuss this return vnth the preparer shown above?(see Instructions) rYes rNo For Paperwork Reduction Ad Notiao,see the separate Iratrudions. Cat No 11282Y Form 990(2014) Form 990 (2014) Page 2 • Statement of Program Service Accomplishments Check if Schedule 0 contains a response or note to any line in this Part III . .(- 1 Briefly describe the organizatlon's mission SUPPORT OF DENTON PARKS AND RECREATION ACTIVITIES 2 Did the organization undertake any significant program services during the year which were not listed on the prior Form 990 or 990-EZ? . Yes F No If"Yes," describe these new services on Schedule O 3 Did the organization cease conducting, or make significant changes in how it conducts, any program Yes F No services? . If"Yes," describe these changes on Schedule O 4 Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any,for each program service reported 4a (Code ) (Expenses$ 126,706 including grants of$ ) (Revenue$ 163,135 ) FUNDS WERE RAISED AND USED FOR DENTON PARKS AND RECREATION ACTIVITIES TO SERVE THE OVERALL DENTON POPULATION AND SURRONDING COUNTIES EVENTS SPOSORED WERE CINCO DE MAYO, ]UNETEENTH, LIBERTY RUN, SENIOR CENTER, AND MANY OTHER ACTIVITIES TO PROMOTE THE DENTON PARKS AND CREATE 4b (Code ) (Expenses$ including grants of$ ) (Revenue $ ) CONT EXPOSURE OF THE MANY ACITWITIES PROVIDED BY DENTON PARKS FOR THE COMMUNITY 4c (Code ) (Expenses$ including grants of$ ) (Revenue$ ) 4d Other program services (Describe in Schedule 0 ) (Expenses $ including grants of$ ) (Revenue $ ) 4e Total program service expenses► 126,706 Form 990 (2014) Form 990 (2014) Page 3 • Checklist of Required Schedules Yes No 1 Is the organization described in section 501(c)(3)or4947(a)(1)(otherthan a pnvate foundation)? If'Yes," rl Yes complete Schedule AS . . . . . . . . . . . . . . . . . . . . . . . 2 Is the organization required to complete ScheduleB,Scheduleof Contributors (see instructions)? . . . 2 No 3 Did the organization engage in direct or indirect political campaign activities an behalf of or m opposition to 3 No candidates for public offices if'Yes,"complete Schedule C,Part 1 . . . . . . . . . . 4 Section 501(c)(3)organizations.Did the organization engage in lobbying activities,or have a section 501(h) No election in effect during the tax year?If"Yes,"complete Schedule C,Part II . . . . . . . . 4 5 Is the organization a section 501(c)(4),SoI(c)(5),or 501(c)(6)organization that receives membership dues, assessments,or similar amounts as defined in Revenue Procedure 98-197 If"Yes,"complete Schedule C, 5 No Part III . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts?if'Yes,'complete No Schedule D,Part I . . . . . . . . . . . . . . . . . . . . . . . . 6 7 Did the organization receive or hold a conservation easement,including easements to preserve open space, No the environment,historic land areas,or historic structures? If'Yes,"complete Schedule D,Part II . . . 7 8 Did the organization maintain collections of works of art,historical treasures,or other similar assets?If"Yes," No complete Schedule D,Part Ill . . . . . . . . . . . . . . . . . . . . 8 9 Did the organization report an amount in Part X,line 21 for escrow or custodial account liability, serve as a custodian for amounts not listed in Part X, or provide credit counseling,debt management,credit repair,or debt No negotiation services?If"Yes,'cornplete Schedule D,Part IV . 9 10 Did the organization,directly or through a related organization,hold assets in temporarily restricted endowments, 10 No permanent endowments,or quasi-endowments? If'Yes,'complete Schedule D,Part V . . . . . . 11 Ifthe organization's answer to any ofthe following questions is "Yes,"then complete Schedule D,Parts VI,VII, VIII,IX,or X as applicable a Did the organization report an amount for land,buildings,and equipment in Part X,line 10 No If-yes,"complete Schedule D,Part VI. . . . . . . . . . . . . . . . . . . . lla b Did the organization report an amount for investments—other securities in Part X,line 12 that is 50/6 or more of No its total assets reported in Part X, line 16; If"Yes,"complete Schedule D,PartVll . . . . . . 11b e Did the organization report an amount for investments—program related in Part X,line 13 that is 5% or more of No its total assets reported in Part X,line 167 If'Yes,'complete schedule D,Part VIII . lle d Did the organization report an amount for other assets in Part X,line 15 that is 5%or more of its total assets No reported in Part X,line 167 If"Yes,"complete Schedule D,Part IX . . . lld e Did the organization report an amount for other liabilities in Part X,line 257 if'Yes,'completeScheduleD,PartX Ile No f Did the organization's separate orconsolidated financial statements for the tax year include a footnote that 11f No addresses the organization's liability for uncertain tax positions under FIN 48 (ASC 740)7 If"Yes,"complete Schedule D,Part X . . . . . . . . . . . . . . . . . . . . . . . . . 12a Did the organization obtain separate,independent audited financial statements for the tax year? If'Yes,'complete Schedule D,Parts XI and XII GN . . . . . . . . . . . . . . . . . 12a Yes b Was the organization included in consolidated,independent audited financial statements for the tax year?If 12b No "Yes,"and if the organization answered"No"to line 12a,then completing Schedule D,Parts XI and XII is optional 13 Is the organization a school described in section 170(b)(1)(A)(ii)? If"Yes,"complete Schedule 13 No 14a Did the organization maintain an office,employees,or agents outside of the United States'2 . . . . . 14a N o b Did the organization have aggregate revenues or expenses of more than$10,000 from grantmaking,fundraising, business, investment,and program service activities outside the United States,or aggregate foreign investments 14b No valued at S100,000 or morel If"Yes,"complete Schedule F,Parts I and IV . . . . . . . . . 15 Did the organization report on Part IX,column(A),line 3,more than$5,000 of grants or other assistance to or No for any foreign organization? If"Yes,"complete Schedule F,Parts 11 and IV 15 16 Did the organization report on Part IX,column(A),line 3,more than$5,000 of aggregate grants or other No assistance to or for foreign individuals?If"Yes,'complete Schedule F,Parts III and IV . . . 16 17 Did the organization report a total of more than$15,000 of expenses for professional fundraising services on Part 17 No IX, column (A),lines 6 and 11e? If"Yes,"complete ScheduleG,Part I(see instructions) 18 Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part No VIII,lines lc and Ba7 if"Yes,"complete ScheduleG,Part 11 . . . . . . . . . . . 18 19 Did the organization report more than$15,000 of gross income from gaming activities on Part VIII,line 9a7 If 19 No "Yes,"complete Schedule G,Part III . . . . . . . . . . . . . . . . . . . 20a Did the organization operate one or more hospital facilities?If'Yes,'complete Schedule k . . . . 20a No b If"Yes" to line 20a,did the organization attach a copy of its audited financial statements to this retum7 20b Form 990(2014) Form 990 (2014) Page 4 EMTIM Checklist of Required Schedules (continued) 21 Did the organization report more than$5,000 of grants or other assistance to any domestic organization or 21 No domestic government an Part 1X,column (A),line 1? If"Yes,'complete Schedule 1,Parts I and II . . 22 Did the organization report more than;5,000 of grants or other assistance to or for domestic individuals on Part 22 Yes IX,column (A),line 27 If"Yes,"complete Schedule 1,Parts I and III . . . . . . . . Is 23 Did the organization answer"Yes"to Part VII,Section A,line 3,4,or 5 about compensation of the organization's No current and former officers,directors,trustees,key employees,and highest compensated employees?If"Yes," 23 complete Schedule I . . . . . . . . . . . . . . . . . . . . . . . 24a Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than;100,000 as of the last day of the year,that was issued after December 31,20 D27 If"Yes,'answer lines 24b through 24d No and complete Schedule K. If"No,"go to line 25a . . . . . . . . . . . . . . . . 24a b Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception? . 24b c Did the organization maintain an escrow account other than a refunding escrow at anytime during the year to defease any tax-exempt bonds? . . . . . . . . . . . . . . . . . . . . . 24c d Did the organization act as an"on behalf of" issuer for bonds outstanding at any time during the year? . . 24d 25a Section 5O1(c)(3),501(c)(4),and 501(c)(29)organizations.Did the organization engage in an excess benefit transaction with a disqualified person during the year?if'Yes,"complete Schedule L,Part . . . 25a No b Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year,and that the transaction has not been reported on any of the organization's prior Forms 990 or 990-EZ7 If 25b No "Yes,"complete Schedule L,Part I . . . . . . . . . . . . . . . . . . . 26 Did the organization report any amount on Part X,line 5,6,or 22 for receivables from or payables to any current or former officers,directors,trustees,key employees,highest compensated employees,or disqualified persons? 26 No If'Yes,"complete Schedule L,Part 11 . . . . . . . . . . . . . . . . 27 Did the organization provide a grant or other assistance to an officer,director,trustee,key employee,substantial contributor or employee thereof,a grant selection committee member,or to a 35% controlled entity or family 27 No member of any of these persons?If"Yes,"complete Schedule L,Part III . . . . . . . . . 28 Was the organization a party to a business transaction with one of the following parties (see Schedule L,Part IV instructions for applicable filing thresholds,conditions,and exceptions) a A current or former officer,director,trustee, or key employee?If"Yes,"complete Schedule L,Part IV . 28a No b A family member of a current orformer officer,director,trustee,or key employee?If"Yes," No complete Schedule L,Part IV . . . . . . . . . . . . . . . . . . . . . 28b e An entity of which a current or former officer,director,trustee,or key employee(or a family member thereof)was No an officer,director,trustee,or direct or indirect owner?If'Yes,'complete Schedule 1,Part IV . . 28e 29 Did the organization receive more than$25,000 in non-cash contributions?If'yes,'complete Schedule M 29 No 30 Did the organization receive contnbutions of art,historical treasures,or other similar assets,or qualified No conservation cantributians? if'Yes,"complete Schedule M 30 31 Did the organization liquidate,terminate,ordissoIve and cease operations?If'Yes,"complete ScheduleN, No Part I . . . 31 32 Did the organization sell,exchange,dispose of,or transfer more than 2 5% of its net assets?If'Yes,"complete No Schedule N,Part 11 . . . . . 32 33 Did the organization own 100% of an entity disregarded as separate from the organization under Regulations No sections 301 7701-2 and 301 7701-37 If Wes,'complete Schedule R,Part I . . . . . . . . 33 34 Was the organization related to any tax-exempt or taxable entity? If'yes,'complete Schedule R,Part ll,III,orlV, 34 No and Part V,line I . . . . . . . . . . . . . . . . . . . . . . . . 35a Did the organization have a controlled entity within the meaning of section 512(b)(13)7 35a No b If'Yes'to line 35a.did the organization receive any payment from or engage in any transaction tenth a controlled 351b No entity within the meaning of section 512(b)(13)? If"Yes,"complete Schedule R,Part V,line . . . 36 Section 501(c)(3)organizations.Did the organization make any transfers to an exempt non-charitable related organization?if'Yes,'complete Schedule R,Part V,line 2 . . . . . . . . . . . . . 36 37 Did the organization conduct more than 51/6 of its activities through an entity that is not a related organization No and that is treated as a partnership for federal income tax purposes?If"Yes,'complete Schedule R,Part VI 37 38 Did the organization complete Schedule 0 and provide explanations in Schedule 0 for Part VI,lines Ilb and 197 Yes Note.All Form 990 filers are required to complete Schedule O 38 Form 990(2014) Form 99D (2014) Page 5 Statements Regarding Other IRS Filings and Tax Compliance Check if Schedule O contains a response or note to any line in this Part V Yes No la Enterthe number reported in Box 3 of Farm 1096 Enter-0- if not applicable la I 1 b Enterthe number of Forms W-2G included in line la Enter-0- if not applicable lb 1 0 c Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming(gambling)winnings to prize=nners7 . is Yes 2a Enterthe number of employees reported on Form W-3,Transmittal Df Wage and Tax Statements,filed for the calendar yearending with or within the year covered by this return . 2e L 0 b If at least one is reported on line 2a,did the organization file all required federal employment tax returns' 2b Note.Ifthe sum of lines la and 2a is greater than 250,you may be required to a-file(see instructions) 3a Did the organization have unrelated business gross income of$1,000 or more during the year? . 3a No b If"Yes,"has it filed a Form 990-T forthis year?If"No'to line 3b,provide an explanation in ScheduleO . . 3b 4a At any time dunng the calendar year,did the organization have an interest in,or a signature or other authonty over,a financial account in a foreign country(such as a bank account,securities account,or other financial account)? . . . . . . . . . . . . . . . . . . . . No b If"Yes," enter the name of the foreign country I,- See instructions for filing requirements for FinCEN Form 114,Report of Foreign Bank and Financial Accounts (FBA R) Sa Was the organization a party to a prohibited tax shelter transaction at any time dunng the tax year? Sa No b Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction? Sb No c if"Yes,"to line 5a or Sb,did the organization file Form 8886-T? . . . . . . . . . . . Sc 6a Does the organization have annual gross receipts that are normally greater than$100,000,and did the 6a Yes organization solicit any contributions that were not tax deductible as charitable contnbutions7 . . . b If"Yes,'did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible') . . . . . . . . . . 6b Yes 7 organizations that may receive deductible contributions undersection 170(c). a Did the organization receive a payment in excess of$75 made partly as a contnbution and partly for goods and 7a No services provided to the payor7 . . . . . . . . . . . b If"Yes,"did the organization notify the donor of the value of the goods or services provided? . . . . . 7b c Did the organization sell,exchange,orotherwise dispose of tangible personal property for which it was required to file Form 8282? . . . . . . . . . . . . . . . . . . 7c No d If"Yes," indicate the number of Forms 8 28 2 filed dunng the year . . . 7d e Did the organization receive any funds,directly or indirectly,to pay premiums on a personal benefit contract? . . . . . . . . . . . . . . . . . . . . . . 7e No If Did the organization,dunng the year,pay premiums,directly or indirectly,on a personal benefit contract? 7f No g Ifthe organization received a contribution of qualified intellectual property,did the organization file Form 8899 as required? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7g h If the organization received a contribution of cars,boats,airplanes,or other vehicles,did the organization file a Form 1098-C7 . . . . . . . . . . . . . . . . . . . . 7h 8 Sponsoring organizations maintaining donoradvised funds. Did a donor advised fund maintained by the sponsoring organization have excess business holdings at any time dunng the year? . . . . . . . . . . . . g No 9a Did the sponsoring organization make any taxable distributions under section 49667 . . . 9a No b Did the sponsonng organization make a distribution to a donor,donor advisor,or related person? . . . 9b No 10 Section 501(c)(7)organizations.Enter a Initiation fees and capital contnbutions included on Part VIII,line 12 10a b Gross receipts,included on Form 990,Part VIII,line 12,for public use of club lob facilities it Section 501(c)(12)organizations.Enter a Gross income from members or shareholders . Ila b Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them) . lib 12a Section4947(a)(1)non-exempt charitable trusts.Is the organization filing Form 990 in lieu of Form 10417 12a b If-Yes," enter the amount of tax-exempt interest received oraccrued during the 12b year 13 Section 501(c)(29)qualified nonprofit health Insurance issuers. a Is the organization licensed to issue qualified health plans in more than one state? 13a Note.See the instructions for additional information the organization must report on Schedule 0 b Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans . . . . 13b c Enterthe amount ofreserves on hand . . . . . . . . . . . . 13c Me Did the organization receive any payments for indoor tanntng services during the tax year? 14a No b If"Yes," has it filed a Form 720 to report these payments)If ft"provldean explanation in Schedule 14b Form 990(2014) Form 990 (2014) Page 6 Governance, Management, and Disclosure For each "Yes"response to lines 2 through 7b below, and for a "No"response to lines 8a, 8b, or IOb below, describe the circumstances, processes, or changes in Schedule O. See instructions. Check if Schedule O contains a response or note to any line in this Part VI Section A. Governing Body and Management Yes No la Enter the number of voting members of the goveming body at the end of the tax la 15 year . . . . If there are material differences in voting nghts among members of the governing body,or if the goveming body delegated broad authority to an executive committee or similar committee,explain in Schedule O b Enter the number of voting members included in line la,above,who are independent . . . . . . . . . . . . . . . . . . lb 15 2 Did any officer,director,trustee,or key employee have a family relationship or a business relationship vnth any other officer,director,trustee,or key employee? . . . . . . . . . . . . . . . . . 2 No 3 Did the organization delegate control over management duties customarily performed by or under the direct 3 No supervision of officers,directors or trustees,or key employees to a management company or other person? 4 Did the organization make any significant changes to its goveming documents since the pnor Form 990 was filed? . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 No 5 Did the organization became aware during the year of a significant diversion of the organization's assets? 5 No 6 Did the organization have members or stockholders? . . . . . . . . . . . . . . . . 6 No 7a Did the organization have members,stockholders,or other persons who had the power to elect or appoint one or more members ofthe goveming body? . . . . . . . . . . . . . . . . . . . . 7a No b Are any governance decisions of the organization reserved to (or subject to approval by)members,stockholders, 7b No or persons other than the governing body? . . . . . . . . . . . . . . . . . . . 8 Did the organization contemporaneously document the meetings held or wntten actions undertaken dunng the year by the following a The governing body? . . . 8a Yes b Each committee with authority to act on behalf of the governing body? . . . . . . . . . . . . 8b Yes 9 Is there any officer, director,trustee,or key employee listed in Part VII,Section A,who cannot be reached at the organization's mailing address7lf'Yes,"provide the names and addresses in Schedule . . 9 No Section B. Policies This Section B requests information about policies not required by the Internal Revenue Code. Yes No 10a Did the organization have local chapters,branches,or affiliates? . . . . . . . . . . . . 10a No b If"Yes,"did the organization have written policies and procedures governing the activities of such chapters, affiliates,and branches to ensure their operations are consistent with the organization's exempt purposes7 lob lla Has the organization provided a complete copy ofthis Form 99D to all members ofits goveming body before filing ila Yes the form? . b Describe in Schedule 0 the process,if any,used by the organization to review this Form 990 . . . . . 12a Did the organization have a wntten conflict of interest policy?If"No,"go to line I3 . . . . . . . 12A No b Were officers,directors,or trustees,and key employees required to disclose annually interests that could give rise to conflicts? . . . 12b e Did the organization regularly and consistently monitor and enforce compliance with the policy? If"Yes,"descnbe in Schedule O how this was done . . . . . 12e 13 Did the organization have a wntten whistleblower policy? . . . . . . . . . . . . . . . 13 No 14 Did the organization have a written document retention and destruction policy? . . . . . . . . . 14 No 15 Did the process for determining compensation of the following persons include a review and approval by independent persons,comparability data,and contemporaneous substantiation of the deliberation and decision? a The organization's CEO,Executive Director,or top management official . 15a No b Other officers or key employees of the organization . . . . . . . . . . . . . . . . 15b No If"Yes'to line 15a or 15b,describe the process in Schedule O (see instructions) 16a Did the organization invest in,contribute assets to,or participate in a joint venture or similar arrangement with a taxable entity during the year? . . . . . . . . . . . . . . . . . . . . . . 160 No b If"Yes," did the organization follow a wntten policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law,and take steps to safeguard the organization's exempt status with respect to such arrangements? 16b Section C. Disclosure 17 Listthe States with which a copy ofthis Form 990 is required to be filed►TX 1S Section 6104 requires an organization to make its Form 1023 (or 1024 if applicable),990,and 990-T (501(c) (3)s only)available for public inspection Indicate how you made these available Check all that apply {—Own website r-Another's website r Upon request r Other(explain in Schedule 0) 19 Describe in Schedule 0 whether(and if so,how)the organization made its goveming documents,conflict of interest policy,and financial statements available to the public during the tax year 20 State the name,address,and telephone number of the person who possesses the organization's books and records ►SIMONE ROYSTER 604 S ELM STREET DENTON,TX 76201 (940)565-9015 Form 990(2014) Farm 990 (2014) Page 7 Compensation of Officers, Directors,Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors Check if Schedule 0 contains a response or note to any line in this Part VII . . . . . . . . . . . . . Section A. Officers, Directors,Trustees, Key Employees, and Highest Compensated Employees la Complete this table for all persons required to be listed Report compensation for the calendar year ending with or within the organization's tax year •List all of the organization's current officers,directors,trustees (whether individuals or organizations),regardless of amount of compensation Enter-0- in columns (D),(E),and(F)if no compensation was paid •List all of the organization's current key employees,if any See instructions for definition of"key employee" •List the organization's five current highest compensated employees(other than an officer,director,trustee or key employee) who received reportable compensation(Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC)of more than$100,000 from the organization and any related organizations •List all of the organization's former officers,key employees,or highest compensated employees who received more than$100,000 of reportable compensation from the organization and any related organizations •List all of the organization's tomxr directors or trustees that received,in the capacity as a former director or trustee of the organization,more than$10,000 of reportable compensation from the organization and any related organizations List persons in the following order individual trustees or directors,institutional trustees, officers, key employees,highest compensated employees, and former such persons r C heck this box if neither the organization nor any related organization compensated any current officer,director,or trustee (a) (B) (C) (D) (E) (F) Name and Title Average Position(do not check Reportable Reportable Estimated hours per more than one box,unless compensation compensation amount of week (list person is both an officer from the from related other any hours and a director/trustee) organization organizations compensation for related = T (W- 2/1099- (W- 2/1099- from the organizations 2 E 2a MISC) M[SC) organization below 4 s a S in w 3 and related dotted line) o organizations o fD (D as c S1 u m � C (1)TIM CROUCH 100 ..................................................... X x ................ .. . PRESIDENT.. (2)SIMONE ROYSTER 200 TREASURER (3)DON EDWARDS 100 ..................................................... X X .................. .. SECRETARY (4)MARC CULP too VICE-PRESIDENT (5)MARY ANN MCDUFF 100 ................................................ .................... X BOARD MEMBER (6) PRMTLLA SANDERS too ............ .. BOARD MEMBER (7)BETTYE MYERS 100 ........ ...... ...................«»............. X ... ..... .. . BOARD MEMBER (S) LINNIE MCADAMS 100 ............. .. . BOARD MEMBER (9)SHELLY RENFRO 100 . ............. .. BOARD MEMBER (10) MARK HUFF 1 00 ................................................ X ..................... .. BOARD MEMBER (11)JEAN KELLER 100 BOARD MEMBER (12)AMANDA CROCKER 100 ..................... X ...................... .. . BOARD MEMBER (13) WKE GOHLKE 100 ................................................ X ....................... .. . BOARD MEMBER (14)MATT STARR 100 ........... . .. BOARD MEMBER Form 990(2014) Form 990 (2014) Page 8 Section A. Officers, Directors,Trustees, Key Employees, and Highest Compensated Employees(continued) (A) (B) (C) (D) (E) (F) Name and Title Average Position (do not check Reportable Reportable Estimated hours per more than one box,unless compensation compensation amount of other week(list person is both an officer from the from related compensation any hours and a director/trustee) organization organizations from the for related ro S T (W- 2/1099- (W- 2/1099- organization organizations a 2 a � �o � MISC) M15C) and related below s i ro 4* organizations dotted line) S o m c Qr L d ro c (15)VICKI BYRD t ............................................... ....................... % ........................ OOARD MEMBER (16)MOLLY TAMPKE 40 DIRECTOR lb Sub-Total . . . . . . . . . . . . . . . . ► c Total from continuation sheets to Part VII,Section A ► d Total(add lines lb and 1c) . ► 31,o,0 2 Total number of individuals(including but not limited to those listed above)who received more than $100,000 of reportable compensation from the organization► Yes No 3 Did the organization list any former officer,director or trustee,key employee,or highest compensated employee on line 1a7 if"Yes,"complete Schedule J for such indmidual . . . . . . . . . . . . . 3 No 4 For any individual listed on line la,is the sum of reportable compensation and other compensation from the organization and related organizations greater than$150,0007If"Yes,"complete Schedule)forsuch individual . . . . . . . . . . 4 No 5 Did any person listed on fine la receive or accrue compensation from any unrelated organization or individual for services rendered to the organization?If"Yes,"comp/eteSchedule]forsuch person . . . . . . . 5 No Section S. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than$100,000 of compensation from the organization Report compensation for the calendar year ending with or within the organization's tax year (A) (a) (C) Name and business address Desorption of services Compensation 2 Total number of independent contractors (including but not limited to those listed above)who received more than $100,000 of compensation from the organization Y Form 990(2014) Form 990 (2014) Page 9 Statement of Revenue Check if Schedule 0 contains a response ornate to env h a in this PartVIII (A) (0) (C) (o) Total revenue Related or Unrelated Revenue exempt business excluded from function revenue tax under revenue sections 512-514 In Federated campaigns is b Membershtpdues 1b 0 E c Fundralsrng events . . . . is Q d Related organizations . . . id IJ — E a Government grants(mntnbutons) le C O f NI other contributions,gets,grains,and if 2,786 y sxnitar amounts rot included above a � fJ fioncash contributions included m lines .~i la-If f h Total.Add lines la-If . 2,7afi A ► Business Code w 2a w b a c ca F d e C m If All other program service revenue 163,135 & g Total.Add lines 2a-2f . ► 163,135 3 Investment Income(including dividends,Interest, B7 and other similar amounts) . . . . . . . 4 Income from Investment of tax-exempt bond proceeds , , ► 5 Royalties . ► (1)Real (II)Persona I 6a Gross rents b less rental expenses e Rental Income or(loss) d Net rental Income or(toss) . . . . . . . 0- (L)Securities (u)Other 7a Gross amount from sales of assets other than inventory b less cost or other basis and sales expenses c Gam or(loss) d Net gain or(loss) . . . . . . . .► So Gross income from fundraising tb events(not Including of contributions reported on line lc) I>r See Part IV,line IS . . a m b Less direct expenses . b s O c Net income or(lass)from fundraising events ► 9a Gross income from gaming activities See Part IV,line 19 . . . a b Less direct expenses . . b e Net Income or(loss)from gaming activities ► la Gross sales of Inventory,less returns and allowances e b Less cost of goods sold b e Net income or(loss)from sales of Inventory ► Miscellaneous Revenue Business Code 17e b d All other revenue a Total.Add lines lla-lld . . . . . . ► 12 Total revenue-See Instructions . 166,0081 163,222 Fa rtn 990(2 014) Form 990 (2014) Page 10 Statement of Functional Expenses Section 501 c 3 and 501 c 4 organizations must com fete all columns All other organizations must cam lete column(A) Check if Schedule O contains a response or note to any line in this Part]X ._ Do not include amounts reported on lines 6b, (A) m service Managemm( (D) Total expenses Program ent and Fundraising 7b,8b,9b,and lob of Part VIII. expenses general expenses expenses 1 Grants and other assistance to domestic organizations and domestic governments See Part IV,line 21 . . . . 2 Grants and other assistance to domestic individuals See Part IV,line 22 3 Grants and other assistance to foreign organizations,foreign governments,and foreign individuals See Part IV,lines 15 and 16 . . . . . . . . . . . . 4 Benefits paid to or for members . . . . 5 Compensation of current officers,directors,trustees,and 35,000 28,000 7,004 0 key employees 6 Compensation not included above,to disqualified persons (as defined under section 4958(f)(1))and persons described in section 4958(c)(3)(S) . . . 7 Other salaries and wages B Pension plan accruals and contributions (include section 401(k) and 403(b)employer contnbutions) . . . . 9 Other employee benefits . . . . . . . 10 Payroll taxes . . . . . . . . . . . 11 Fees for services (non-employees) a Management . . . . . . b Legal . . . . . . . . . c Accounting . 3,700 0 3,700 d Lobbying . . . . . . . . . . . e Professional fundraising services See Part IV,line 17 f Investment management fees . . . . . . q Other(If line llg amount exceeds 10% of line 25,column(A) amount,list line llg expenses on Schedule 0) . . . . 12 Advertising and promotion . . . . 13 Office expenses . . . . . . . 2,000 0 2,000 0 14 Information technology . . . . . . 15 Royalties 16 Occupancy . . . . . . . . . . . 17 Travel . . . . . . . . . . . . 18 Payments of travel or entertainment expenses for any federal, state,or local public officials . . . . . . 19 Conferences,conventions,and meetings . . . . 20 Interest . . . . 21 Payments to affiliates . . . . . . . 22 Depreciation,depletion,and amortization 23 Insurance . 770 0 770 0 24 Other expenses Itemize expenses not covered above (List miscellaneous expenses in line 24e If line 24e amount exceeds 100/a of line 25,column(A)amount,list line 24 a expenses on Schedule O ) a PROGRAM TRANSFER SERVICES 98,216 98,216 0 0 b MEMBERSHIPS 972 0 972 0 c COMMUNITY EVENTS 700 490 210 0 d POSTAGE &PRINTING 404 0 404 0 e Allotherexpenses 25 Total functional expenses.Add Imes 1 through 24e 141,762 126,706 15,056 0 26 Joint costs.Complete this line only if the organization reported in column(B))oint costs from a combined educational campaign and fundraising solicitation Check here► r if following SOP 96-2 (ASC 958-720) Form 990(2014) Form 990 (2014) Page 11 Balance Sheet Check it Schedule O contains a response or note to any line in this Part X . . (A) (g) Beginning of year End ofyear 1 Cash-non-interest-beanng . . . . . . . . . . . . . 210.993 1 235,040 2 Savings and temporary cash investments . . . . . . . . . 2 3 Pledges and grants receivable,net . . . . . . . . . . . 3 4 Accounts receivable,net . 4 5 Loans and other receivables from current and former officers,directors,trustees,key employees,and highest compensated employees Complete Part II of Schedule L . . . . . . 5 6 Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)),persons described in section 4958(c)(3)(B),and contributing employers and sponsonng organizations of section 501(c)(9)voluntary employees' N beneficiary organizations (see instructions)Complete Part I1 of Schedule L 7 Notes and loans receivable,net . . . 7 Q a Inventories for sale or use . . . . . . . . . . . . a 9 Prepaid expenses and deferred charges . 9 181 30a Land,buildings,and equipment cost or other basis Complete Part VI of Schedule D lea b Less accumulated depreciation . lob 10c 11 Investments—publicly traded securities . . . . . . . . . . 11 12 Investments—other securities See Part IV,line 11 . . . . . 12 13 Investments—program-related See Part IV,line 11 . 13 14 Intangible assets . . . . . . . . . 14 i5 Other assets See Part IV,line 11 . 15 16 Total assets.Add lines 1 through 15 (must equal line 34) 210 993 16 235 221 17 Accounts payable and accrued expenses . . . . . . . . . 17 18 Grants payable . . . . . . . . . . . . . . . . . i5 19 Deferred revenue . . . . . . . . . . . . . . . . 19 20 Tax-exempt bond liabilities . . . . . . . . . . . . . 20 v, 21 Escrow or custodial account liability Complete Part IV of Schedule D . . 21 22 Loans and other payables to current and former officers,directors,trustees, key employees,highest compensated employees,and disqualified persons Complete Part II of Schedule L . . . . 22 23 23 Secured mortgages and notes payable to unrelated third parties 24 Unsecured notes and loans payable to unrelated third parties 24 25 Other liabilities(including federal income tax,payables to related third parties, and other liabilities not included on lines 17-24) Complete Part X of Schedule 25 D . . . . . . . . . . . . . . . . . . . . 26 Total liabilities.Add lines 17 through 25 0 26 0 organizations that follow SFAS 117(ASC 958),check here► r and complete CD fines 27 through 29,and lines 33 and 34.27 Unrestricted net assets . 8068 27 3585 ri 28 Temporarily restricted net assets 202 927 28 231 SW IM 29 Permanently restricted net assets . . . . . . . . . . 29 Organizations that do not follow SFAS 117(ASC 958),check here► r and .. complete lines 30 through 34. G 30 ,r 30 Capital stock or trust principal,or current funds . . . . . . . . 31 Paid-in or capital surplus,or land,building or equipment fund . . . . . 31 d 32 Retained earnings,endowment,accumulated income, or other funds 32 qi 33 Total net assets or fund balances 2109M 33 235221 34 Total liabilities and net assets/fund balances 210,993 34 1 235.721 Form 990(2014) Form 990 (2014) Page 12 • Reconcilliation of Net Assets Check if Schedule O contains a response or note to any line in this Part X1 . . . . . . . . . . .r 1 Total revenue (must equal PartVIII,column (A), line 12) . . . 1 166,008 2 Total expenses (must equal Part IX,column (A),line 25) . . 2 141,762 3 Revenue less expenses Subtract line 2 from line 1 . . . 3 24,246 4 Net assets or fund balances at beginning of year(must equal Part X, line 33,column (A)) . 4 210,993 5 Net unrealized gains (losses) on investments . . . . . . . . . . . . . . 5 6 Donated services and use of facilities . . . . . . . . . . . . . . . . 6 7 Investment expenses . . . . . . . . . . . 7 8 P nor penod ad]ustments . . . . . . . . . . . . . . . . . . . . S 152 9 Other changes in net assets or fund balances (explain in Schedule O) . . . . . . . 9 10 Net assets or fund balances at end of year Combine lines 3 through 9 (must equal Part X, line 33, 10 235,221 column (B)) Financial Statements and Reporting Check if Schedule O contains a response or note to any line in this Part XII . . . . . . . r Yes No 1 Accounting method used to prepare the Form 990 r Cash r Accrual rOther If the organization changed its method of accounting from a prior year or checked"Other," explain in Schedule O 2a Were the organization's financial statements compiled or reviewed by an independent accountant? 2a Yes If`Yes,'check a box belowto indicate whetherthe financial statements forthe yearwere compiled or reviewed on a separate basis,consolidated basis,or both r Separate basis r Consolidated basis r Both consolidated and separate basis b Were the organization's financial statements audited by an independent accountant? 2b Yes ]f'Yes,'check a box below to indicate whether the financial statements for the yearwere audited on a separate basis,consolidated basis,or both F Separate basis r Consolidated basis r Both consolidated and separate basis c If"Yes, to line 2a or 2b,does the organization have a committee that assumes responsibility for oversight of the audit,review,orcompilation of its financial statements and selection of an independent accountant? 2c Yes If the organization changed either its oversight process or selection process dunng the tax year,explain in Schedule 0 3a As a result of a federal award,was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB CircularA-1337 . . . . . . . . . . . . . . . . . 3a No b If"Yes," did the organization undergo the required audit or audits? If the organization did not undergo the 3b required audit or audits,explain why in Schedule O and describe any steps taken to undergo such audits Form 990(2014) efile GRAPHIC print- DO NOT PROCESS I As Filed Data - DLN: 93493317►037815 OMB No 1545-0047 SCHEDULE A Public Charity Status and Public Support 2014 (Form 990 or 990F1) Complete if the organization is a section 501(c)(3)organization OF a section 4947(a)(1) nonexempt charitable trust. Department of the 10,Attach to Forth 990 or Form 990-E7. Open , Public Treasury ►Information about Schedule A(Form 990 or 990-EZ)and its Instructions Is at Inspection I Intemal Revenue Service www.frs.00v/form990. Name of the organization Employer identification number DENTON PARKS FOUNDATION INC 175-2275201 Reason for Public Charity Status All organizations must Complete this art. See instructions. The organization is not a pnvate foundation because it is (For lines 1 through 11,check only one box ) 1 r A church,convention of churches,or association of churches described in section 170(b)(1)(A)(0. 2 r A school described in section 170(b)(1)(A)(11).(Attach Schedule E ) 3 r A hospital or a cooperative hospital service organization descnbed in section 170(b)(1)(A)(iii). 4 r A medical research organization operated in conjunction with a hospital descnbed in section 170(b)(1)(A)(iii).Enter the hospital's name,city,and state 5 r An organization operated for the benefit of a college or university owned or operated by a governmental unit described in section 170(b)(1)(A)(iv).(Complete Part II ) 6 F_ A federal,state,or local government or governmental unit descnbed in section 170(b)(1)(A)(v). 7 r A n organization that normally receives a substantial part of its support from a govemmental unit or from the general public descnbed in section 170(b)(1)(A)(vi).(Complete Part 11 ) 8 r A community trust descnbed in section 170(b)(1)(A)(vi) (Complete Part II ) 9 r An organization that normally receives (1)more than 331/3% of its support from contnbutions,membership fees,and gross receipts from activities related to its exempt functions—subject to certain exceptions,and(2)no more than 331/3% of its support from gross investment income and unrelated business taxable income(less section 511 tax)from businesses acquired by the organization after June 30,1975 See section 509(a)(2).(Complete Part III ) 10 r An organization organized and operated exclusively to test for public safety See section 509(a)(4). 11 r An organization organized and operated exclusively forthe benefit of,to perform the functions of,or to carry out the purposes of one or more publicly supported organizations described in section 509(a)(1)or section 509(a)(2) See section 509(a)(3).Check the box in lines 11a through 11d that describes the type of supporting organization and complete lines Ile,IIf,and I Ig a F Type 1.A supporting organization operated,supervised,or controlled by its supported organization(s),typically by giving the supported organization(s)the power to regularly appoint or elect a majonty of the directors or trustees of the supporting organization You must complete Part IV,Sections and B. b r Type II.A supporting organization supervised or controlled in connection with its supported organization(s),by having control or management of the supporting organization vested in the same persons that control or manage the supported organization(s) You must complete Part IV,Sections A and C. c r TypeIII functionally integrated.A supporting organization operated in connection with,and functionally integrated with,its supported organization(s)(see instructions) You must complete Part IV,Sections A,D,and E. d r Type III non-functionally integrated.A supporting organization operated in connection with its supported organization(s)that is not functionally integrated The organization generally must satisfy a distnbution requirement and an attentiveness requirement (see instructions) You must complete Part IV,Sections and D,and Part V. e r Check this box if the organization received a written determination from the IRS that it is a Type I,Type 11,Type 1II functionally integrated,or Type III non-functionally integrated supporting organization f Enterthe number of supported organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g Provide the following information about the supported organization(s) (i)Name of supported (B) EIN (III)Type of (Iv)Is the organization (v)Amount of (vi)Amount of organization organization listed in your governing monetary support other support(see (descnbed on lines document? (see instructions) instructions) 1-9 above or IRC section (see instructions)) Yes No Total For Paperwork Reduction Act Notice,see the Instructions for Form 990 or 990EZ. Cat No 11285F ScheduleAForm 990or 990FZ1201/ Schedule A (Form 990 or 990-EZ)2014 Page 2 Support Schedule for Organizations Described in Sections 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi) (Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.) Section A. Public Support Calendar year(or fiscal year beginning (a)2010 (b)2011 (c)2012 (d) 2013 (e)2014 (f)Total In)IN, 1 Gifts,grants,contributions,and membership fees received (Do not include any"unusual grants ') 2 Tax revenues levied for the organization's benefit and either paid to or expended on its behalf 3 The value of services or facilities furnished by a governmental unit to the organization vnthout charge 4 Total.Add lines 1 through 3 5 The portion of total contributions by each person(otherthan a governmental unit or publicly supported organization)included on line 1 that exceeds 2% of the amount shown on line 11,column (f) 6 Public support.Subtract line 5 from 0 line 4 Section B. Total Supiport Calendaryear(orfiscal yearbeginning (a)2010 (b)2011 (c)2012 (d)2013 (e) 2014 (f)Total In)► 7 Amounts from line 4 8 Gross income from interest, dividends,payments received on securities loans,rents,royalties and income from similar sources 9 Net income from unrelated business activities,whether or not the business is regularly tamed on 10 Other income Do not include gain or loss from the sale of capital assets(Explain in Part VI ) 11 Total support Add lines 7 through 10 12 Gross receipts from related activities,etc (see instructions) 12 33 First five years.if the Form 990 is for the organization's first,second,third,fourth,or fifth tax year as a section S01(c)(3) J•r organization,check this box and stophere Section C. Computation of Public Support Percentage 14 Public support percentage for 2014 (line 6,column(f)divided by line 11,column(f)) 15 Public support percentage for 2013 Schedule A,Part 1I,line 14 15 16a 33 1/3%support test-2014.If the organization did not check the box on line 13,and line 14 is 33 1/3%or more,check this box►r and stop here.The organization qualifies as a publicly supported organization b 33 1/3%support test-2013.If the organization did not check a box on line 13 or 16a,and line 15 is 33 1/3% or more,check this box and stop here.The organization qualifies as a publicly supported organization 17a 100/w-facts-and-circumstances test-2014.If the organization did not check a box on line 13,16a,or 16b,and line 14 is 10% or more,and if the organization meets the "facts-and-circumstances" test,check this box and stop here.Explain in Part VI how the organization meets the"facts-and-circumstances"test The organization qualifies as a publicly supported ►r organization b 10%-fads-and-drwmstanaes test-2013.If the organization did not check a box on line 13,16a,16b,or 17a,and line 15 is 10% or more,and if the organization meets the "facts-and-circumstances"test,check this box and stop here. Explain in Part VI how the organization meets the 'facts-and-circumstances"test The organization qualifies as a publicly 11101F supported organization 18 Private foundation.If the organization did not check a box on line 13,16a,16b,17a,or 17b,check this box and see ►r instructions Schedule A(Form 990 or 990-EZ)2014 Schedule A (Form 990 or 990-EZ)2014 Page 3 Support Schedule for Organizations Described in Section 509(a)(2) (Complete only if you checked the box on line 9 of Part I or if the organization failed to qualify under Part II. If the organization fails to Qualify under the tests listed below, lease complete Part II. Section A. Public Support Calendar year(or fiscal year beginning (a)2010 (b)2011 (c)2012 (d)2013 (e)2014 (f)Total in)IN, i Gifts,grants,contributions,and membership fees received (Do not 112,011 135,533 119,11e 118,997 165,921 651,590 include any"unusual grants ") 2 Gross receipts from admissions, merchandise sold or services performed,or facilities furnished in any activity that is related to the organization's tax-exempt purpose 3 Gross receipts from activities that are not an unrelated trade or business under section 513 4 Tax revenues levied for the organization's benefit and either paid to or expended on its behalf 5 The value of services or Fatuities furnished by a governmental unit to the organization without charge 6 Total.Add lines 1 through 5 112,011 135,533 119,318 118,997 165,921 651,580 7a Amounts included on lines 1,2, and 3 received from disqualified persors b Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of$5,000 or 1 1�. of the amount on line 13 for the year c Add lines 7a and 7b 8 Public support(Subtract line 7c 651,Seo from tine 6 Section B. Total Su ort Calendaryear(or fisenl year beginning (a)2010 (b)2011 (e)2012 (d)2013 (e) 2014 (f)Total In)► 9 Amounts from line 6 112,011 135,533 119,118 118,997 165,921 651,580 loa Gross income from interest, dividends,payments received on securities loans,rents,royalties 294 279 192 90 87 942 and income from similar sources b Unrelated business taxable income(less section 511 taxes) from businesses acquired after June 30,1975 c Add lines 10a and lob 294 279 192 90 97 942 li Net income from unrelated business activities not included in line lob,whether or not the business is regularly tamed on 12 Other income Do not include gain or loss from the sale of capital assets(Explain in Part VI ) 13 Total support.(Add Imes 9,10c, 652,522 11,and 12 ) 14 First five years.If the Form 990 is forthe organization's first,second,third,fourth,or fifth tax year as a section 501(c)(3)organization, check this box and stophere Section C. Computation of Public Support Percents e 15 Public support percentage for 2014 (line 8,column(f)divided by line 13,column if)) 15 99 860 16 P ublic support percentage from 2013 Schedule A,Part 111,line 15 16 99 650 Section D. Computation of investment Income Percentage 17 Investment income percentage for 2014(line loc,column(f)divided by line 13,column(f)) 17 0 140 18 Investment income percentage from 2013 Schedule A,Part III,line 17 i8 0 350% 19a 33 113%support tests-2014.If the organization did not check the box on line 14,and line 15 is more than 33 1/3%,and line 17 is not more than 33 1/3%,check this box and stop here.The organization qualifies as a publicly supported organization ►r b 33 1/30h support tests-2013.Ifthe organization did not check a box on line 14 or line 19a,and line 16 is more than 33 1/30/6 and line 18 is not more than 33 1/3%,check this box and stop here.The organization qualifies as a publicly supported organization ►r 20 Private foundation.If the organization did not check a box on line 14, 19a,or 19br check this box and see instructions ►r Schedule A (Form 990 or 990-EZ)2014 Schedule A (Form 990 or 990-EZ)2014 Page 4 Supporting Organizations (Complete only if you checked a box on line 11 of Part I If you checked l la of Part I,complete Sections A and B If you checked lib Df Part 1,complete Sections A and C If you checked I is of Part I,complete Sections A,D,and E If you checked lid of Part I,complete Sections A and D,and complete Part V ) Section A. All SupportinQ Or anizations Yes No 1 Are all afthe organization's supported organizations listed by name in the organization's governing documents? If"No,"describe in Part VI haw the supported organizations are designated.If designated by class or purpose, describe the designation.If historic and continuing relationship,explain. 1 2 Did the organization have any supported organization that does not have an IRS determination of status under section 509(a)(1)or(2)7 If"Yes,"explain in Part VI how the organization determined that the supported organization was described in section 509(a)(I)or(2). 2 3a Did the organization have a supported organization described in section 501(c)(4), (5),or(6)7If'Yes,"answer 3a (b)and(c)below. b Did the organization confirm that each supported organization qualified under section 501(c)(4),(5),or(6)and satisfied the public support tests under section 509(a)(2)?If"Yes,"descnbein PartVI when and how the 3b organization made the determination. e Did the organization ensure that all support to such organizations was used exclusively for section 170(c)(2)(B) 3c purposes? If"Yes,"explain in Part VI what controls the organization put in place to ensure such use. 4a Was any supported organization not organized in the United States ("foreign supported organization")7 If"Yes" and if you checked I la or I lb in Part I,ens wer(b)and(c)below. b Did the organization have ultimate control and discretion in deciding whether to make grants to the foreign supported organization? If"Yes,"describe in Part VI how the organization had such control and discretion despite 4b being controlled orsupervised by orin connection with its supported organizations. . . . e Did the organization support any foreign supported organization that does not have an IRS determination under sections 501(c)(3)and 509(a)(1)or(2)7If"Yes,"explain in Part Vi what controls the organization used to ensure 4c that all support to the foreign supported organization was used exclusively for section I70(c)(2)(B)purposes. Sa Did the organization add,substitute,or remove any supported organizations during the tax year?If"Yes,"answer (b)and(c)below(if applicable).Also,provide detail in Part V1, including(i)the names and EIN numbers of the supported organizations added,substituted,or removed,(it)the reasons for each such action,(tit)the authority under the organizations organizing document authorizing such action,and(rv)how the action was accomplished(such as by r'a amendment to the organizing document), b Type I or Type II only.Was any added or substituted supported organization part of a class already designated in Sb the organization's organizing document? c Substituttoneonly.Was the substitution the result of an event beyond the organization's control? 51c 6 Did the organization provide support(whether in the form of grants or the provision of services or facilities)to anyone other than(a)its supported organizations, (b)individuals that are part of the chantable class benefited by one or more of its supported organizations, or(c)other supporting organizations that also support or benefit one or more of the filing organization's supported organizations?If"Yes,'Provide detail in Part VI. 6 7 Did the organization provide a grant,loan,compensation,or other similar payment to a substantial contributor (defined in IRC 4958(c)(3)(C)),a family member ofa substantial contributor,or 35-percent controlled entity with regard to a substantial contributor?If"Yes,"complete Part 1 of Schedule L(Form 990). 7 8 Did the organization make a loan to a disqualified person(as defined in section 4958)not described in line 77 If "Yes,"complete Part 11 of Schedule L(Form 990). 8 9a Was the organization controlled directly or indirectly at any time during the tax year by one or more disqualified persons as defined in section 4946 (other than foundation managers and organizations described in section 509 (a)(i)or(2))7 If"Yes,"provide detail in Part VI. 9a b Did one or more disqualified persons (as defined in line 9(a))hold a controlling interest in any entity in which the supporting organization had an interest?If"Yes,'provide detail in Part VI. 9b in Did a disqualified person (as defined in line 9(a))have an ownership interest in,or derive any personal benefit from,assets in which the supporting organization also had an interest?If"Yes,"provide detail in PartV1. 9e 10a Was the organization sub)ect to the excess business holdings rules of IRC 4943 because of IRC 4943(f) (regarding certain Type II supporting organizations,and all Type III non-functionally integrated supporting organizations)7 If"Yes,'answerb below. loa b Did the organization have any excess business holdings in the tax year? (Use ScheduleC, Form 4720, to determine whether the organization had excess business holdings), lob 11 Has the organization accepted a gift or contribution from any of the following persons? a A person who directly or indirectly controls,either alone or together with persons described in (b)and (c)below, the governing body of a supported organization? 110 b A family member of a person described in (a)above? 11b c A 35% controlled entity of a person described in (a)or(b)above?If"Yes"toa,b,or c,provide detail in Part VI. 11c Schedule A(Form 990 or 990-EZ)2014 Schedule A (Form 990 or 990-EZ)2014 Page S IgMg= Supporting Organizations (continued) Section B. Type I Supporting Organizations Yes No i Did the directors,trustees,or membership of one or more supported organizations have the power to regularly appoint or elect at least a majority ofthe organization's directors or trustees at all times during the tax year?If "No,"descnbe in Part VI how thesupported organ rzation(s)effectively operated,supervised,orcontrolled the organizations;activities.If the organization had more than one supported organization,describe how the powers to appoint and/or remove directors or trustees were allocated among the supported organizations and what conditions or restrictions,if any,applied to such powers dunng the tax year. i 2 Did the organization operate for the benefit of any supported organization other than the supported organization(s that operated,supervised,or controlled the supporting organization) If"Yes,'explain in Part VI how providing such benefit carried out the purposes of the supported crganization(s)that operated,supervised or controlled the 2 supporting organization. Section C. Type II Supporting Organizations Yes No 1 Were a majority of the organization's directors or trustees during the tax year also a majority of the directors or trustees of each of the organization's supported organizations)) If"No,"descnbiin Part VI how control or management of the supporting organization was vested in the same persons that controlled or managed the supported organization(s). E Section D.All Type III Supporting Organizations Yes No 1 Did the organization provide to each of its supported organizations,by the last day of the fifth month of the organization's tax year,(1)a written notice describing the type and amount of support provided dunng the prior tax year,(2)a copy of the Form 990 that was most recently filed as of the date of notification,and(3)copies of the organization's governing documents in effect on the date of notification,to the extent not previously provided? 1 2 Were any of the organization's officers,directors,or trustees either(i)appointed or elected by the supported organization(s)or(n)serving on the goveming body of a supported organization) If No,"explarn in Part VI how the organization maintained a close and continuous working relationship with the supported arganization(s). 2 3 By reason of the relationship described in (2),did the organization's supported organizations have a significant voice in the organization's investment policies and in directing the use of the organization's income or assets at all times dunng the tax yearl) If"Yes,"describe in Part VI the role the organization's supported organizations played in this regard. 3 _Section E. Type III Function a Illy-Inten rated Supporting Organizations i Check the box next to the method that the organization used to satisfy the integral Part Test during the year(see Instructions) a r The organization satisfied the Activities Test Complete line 2 below b r The organization is the parent of each of its supported organizations Complete fine 3 below c The organization supported a governmental entity Describe in Part VI how you supported a government entity (see instructions) 2 Activities Test Answer(a)and(b)below. Yes No a Did substantially all of the organization's activities dunng the tax year directly further the exempt purposes of the supported organization(s)to which the organization was responsive? If'Yes,'then in Part VI Identify those supported organizations and explain how these actrvitres directly furthered theirexempt purposes,how the organization was responsive to those supported organizations,and how the organization determined that these activities constituted substantially all of its activities. 2a b Did the activities described in(a)constitute activities that,but for the organization's involvement,one or more of the organization's supported organization(s)would have been engaged in?If"Yes,"explain in Part VI the reasons for the organization's position that its supported organizations)would have engaged in these activities but for the organization's involvement. 2b 3 P arent of Supported O r anizations Answer(a)and(b) below. a Did the organization have the pourer to regularly appoint or elect a majority of the officers,directors,or trustees o each of the supported organizations? Provide details in PartVl. b Did the organization exercise a substantial degree of direction over the policies,programs and activities of each 3b of its supported organizations? If"Yes,'describe in Part VI the role played by the organization in this regard. Schedule A (Form 990 or 99D-EZ)2014 Schedule A (Form 990 or 990-EZ)2014 Page 6 Part V—Type III Non-Functionally Integrated 509(a)(3) Supporting Organizations 1 r Check here if the organization satisfied the Integral Part Test as a qualifying trust on Nov 20,1970 See instructions.All other Type III non-functionally integrated supporting organizations must coin lete Sections A through E Section A- Adjusted Net Income (A)prior Year (B)aptireonaq Year 1 Net short-term capital gain 1 2 Recoveries of pnor-year distributions 2 3 Other gross income (see instructions) 3 4 Add lines I through 3 4 5 Depreciation and depletion 5 Portion of operating expenses paid or incurred for production or collection of 6 gross income orfor management,conservation,or maintenance of property held for production of income (see instructions) 6 7 Other expenses(see instructions) 7 a Adjusted Net Income(subtract Imes 5,6 and 7 from line 4) 8 Section B- Minimum Asset Amount (A)Prior Year (B)Current Year (optional) 1 Aggregate fair market value of all non-exempt-use assets (see instructions for short tax year or assets held for part of year) 1 a Average monthly value of securities la b Average monthly cash balances 1b c Fair market value of other non-exempt-use assets is d Total(add lines la,lb,and 1c) id e Discount claimed for blockage or other factors (explain in detail in Part VI) 2 Acquisition indebtedness applicable to non-exempt use assets 2 3 Subtract line 2 from line ld 3 4 Cash deemed held for exempt use Enter 1-1/2% of line 3 (for greater amount,see instructions) 4 5 Net value of non-exempt-use assets (subtract line 4 from line 3) 5 6 Multiply line 5 by 035 6 7 Recoveries of pnor-year distributions 7 a MlnimumAsmt Amount (add line 7 to line 6) e Section C- Distributable Amount current Year 1 Adjusted net income far prior year(from Section A,line 8,Column A) 1 2 Enter 85% of line 1 2 3 Minimum asset amount for prior year(from Section B,line 8,Column A) 3 4 Enter greater of line 2 or line 3 4 5 Income tax imposed in prior year 5 6 Distributable Amount.Subtract line 5 from line 4,unless subject to emergency temporary reduction(see instructions) 6 7 r Check here if the current year is the organization's first as a non-functionally-integrated Type III supporting organization(see instructions) Schedule A(Form 990 or 990-EZ)2014 Schedule A (Form 990 or 990-EZ)2014 Page 7 Section D- Distributions Current Year 1 Amounts paid to supported organizations to accomplish exempt purposes 2 Amounts paid to perform activity that directly furthers exempt purposes of supported organizations,in excess of income from activity 3 Administrative expenses paid to accomplish exempt purposes of supported organizations 4 Amounts paid to acquire exempt-use assets 5 Qualified set-aside amounts(pnorIRS approval required) 6 Other distributions(describe in Part VI) See instructions 7 Total annual distributions.Add Imes 1 through 6 8 Distributions to attentive supported organizations to which the organization is responsive (provide details in Part VI) See instructions 9 Distributable amount for 2014 from Section C,line 6 10 Line S amount divided by Line 9 amount Section E- Distribution Allocations (see (i) Underdistiri but Ions Distributable instructions) Excess Distributions Pre-2014 Amount for 2014 1 Orstributable amount for 2014 from Section C,line 6 2 Underdistnbutions,if any,for years prior to 2014 (reasonable cause required--see instructions) 3 Excess distributions carryover,if any,to 2014 a From 2009. b From 20 10. c From 2011. d From 2012. e From 2013. If Total of Imes 3a through e g Applied to underdistnbutions of prior years h Applied to 2014 distributable amount I Carryover from 2009 not applied(see instructions) j Remainder Subtract lines 3g,3h,and 31 from 3f 4 Distributions for 2014 from Section D,line 7 S a Applied to underdistnbutions of prior years b Applied to 2014 distnbutable amount c Remainder Subtract lines 4a and 4b from 4 5 Remaining underdistributrons for years pnorto 2014,if any Subtract lines 3g and 4a from line 2 (if amount greater than zero,see instructions) 6 Remaining underdistributions for 2014 Subtract lines 3h and 4b from line 1 (if amount greaterthan zero,see instructions) 7 Excess distributions carryover to 2015.Add lines 31 and 4c 8 Breakdown of line 7 a From 2010. b From 2011. c From 2012. d From 2013. e From 2014. Schedule A(Form 990 or 990-EZ) (2014) Schedule A (Form 990 or 990-EZ) 2014 Page 8 • Supplemental Information. Provide the explanations required by Part II, line 10; Part II, line 17a or 17b; Part III, line 12; Part IV, Section A, lines 1, 2, 3b, 3c, 4b, 4c, 5a, 6, 9a, 9b, 9c, Ila, 11b, and 11c; Part IV, Section B, lines 1 and 2; Part IV, Section C, line 1; Part IV, Section D, lines 2 and 3; Part IV, Section E, lines 1c, 2a, 2b, 3a and 3b; Part V, line 1; Part V, Section B, line le; Part V Section D, lines 5, 6, and 8; and Part V, Section E, lines 2, 5, and 6 Also complete this part for any additional information. (See instructions). Facts And Circumstances Test Return Reference Explanation Schedule A (Form 990 or 990-EZ) 2014 efile GRAPHIC print- DO NOT PROCESS I As Filed Data - DLN: OMBNo 1545-0047 SCHEDULE D Supplemental Financial Statements (Form M) 0- 99 2014 Complete if the organization answered"Yes,"to Form 0, Part IV,line 6,7,8,9,10,ila,11b, lie,lid, Ile,llf,12a,or 12b. Depwrren of the Treasury ►Attach to Forth 990. ' menial ReverueService Information about Schedule D(Form 990)and Its instructions is at wwwdrs. ov lorm990. .- Name of the organization Employer identification number DENTON PARKS FOUNDATION INC 75-2275201 Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" to Form 990 Part IV line 6. (a) Donor advised funds (b) Funds and other accounts 1 Total number at end of year 2 Aggregate value of contnbutions to (during year) 3 Aggregate value of grants from(during year) 4 Aggregate value at end of year 5 Did the organization inform all donors and donor advisors in wnting that the assets held in donor advised funds are the organization's property,subject to the organization's exclusive legal control? r Yes r No 6 Did the organization inform all grantees,donors,and donor advisors in writing that grant funds can be used only for chartable purposes and not for the benefit of the donor or donor advisor,or for any other purpose F No conferring impermissible pnvate benefit? r Yes . Conservation Easements. Complete if the organization answered "Yes" to Form 990 Part IV line 7. 1 Purpose(s)of conservation easements held by the organization(check all that apply) r Preservation of land for public use(e g ,recreation or education) r Preservation of an historically important land area r Protection of natural habitat (— Preservation of a certified historic structure r Preservation of open space 2 Complete lines 2a through 2d if the organization held a qualified conservation contribution in the farm of a conservation easement on the last day of the tax year Held at the End of the Year a Total number of conservation easements 2a b Total acreage restricted by conservation easements 2b c Number of conservation easements on a certified historic structure included in(a) 2e d Number of conservation easements included in (c)acquired after 8/17/06,and not on a 2d historic structure listed in the National Register 3 Number of conservation easements modified,transferred,released,extinguished,or terminated by the organization during the tax year► 4 Number of states where property subject to conservation easement is located► 5 Does the organization have a wntten policy regarding the periodic monitoring,inspection,handling of violations,and enforcement of the conservation easements it holds? Yes No 6 Staff and volunteer hours devoted to monitoring,inspecting,and enforcing conservation easements during the year lb- 7 A mount of expenses incurred in monitoring,inspecting,and enforcing conservation easements during the year ►S e Does each conservation easement reported on line 2(d)above satisfy the requirements of section 170(h)(4)(B)(i) and section 170(h)(4)(B)(n)7 ryes No 9 In Part XIII,describe haw the organization reports conservation easements in its revenue and expense statement,and balance sheet,and include,if applicable,the text of the footnote to the organization's financial statements that describes the organization's accounting for conservation easements Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets. Complete If the organization answered "Yes" to Form 990 Part IV line 8. la If the organization elected,as permitted under SFAS 116 (ASC 958),not to report in its revenue statement and balance sheet works of art,historical treasures,or other similar assets held for public exhibition,education,or research in furtherance of public service,provide,in Part XIII,the text of the footnote to its financial statements that describes these items b If the organization elected,as permitted under SFAS 116 (ASC 958),to report in its revenue statement and balance sheet works of art,historical treasures,or other similar assets held for public exhibition,education,or research in furtherance of public service,provide the following amounts relating to these items (1) Revenue included in Form 990,Part VIII,line 1 ►s tii)Assets included in Form 990,Part X ►$ 2 If the organization received or held works of art, historical treasures,or other similar assets for financial gain,provide the following amounts required to be reported under SFAS 116 (ASC 958)relating to these items a Revenue included in Form 990,Part VIII,line 1 ►� b Assets included in Form 990,Part X ►$ For Paperwork Reduction Act Notice,see the Instructions for Forth 990. Cat No 5 2283 D Schedule D(Form 990)2014 Schedule D(Form 990)2014 Page 2 Organizations Maintainina Collections of Art, Historical Treasures or Other Similar Assets (continued) 3 Using the organizations acquisition,accession,and other records,check any of the following that are a signet cant use of its collection items (check all that apply) a r Public exhibition d r Loan or exchange programs b r Scholarly research a Other c (Preservation for future generations 4 Provide a description of the organization's collections and explain how they further the organization's exempt purpose in P art XIII 5 During the year,did the organization solicit or receive donations of art,historical treasures or other similar assets to be sold to raise funds rather than to be maintained as part of the organization's collectlon7 r Yes r No Escrow and Custodial Arrangements. Complete if the organization answered "Yes"to Form 990, Part IV, line 9, or reported an amount on Form 990 Part X line 21. la Is the organization an agent,trustee,custodian or other intermediary for contributions or other assets not included on Form 990,Part Xz r Yes r No b If"Yes,-explain the arrangement in P art XIl I and complete the following table Amount e Beginning balance 1c d Additions during the year id e Distributions during the year le f Ending balance if 2a Did the organization include an amount on Form 990,Part X,line 21,for escrow or custodial account liabilityz r Yes I—No b if"Yes," explain the arrangement in Part XIII Check here if the explanation has been provided in Part XIII r Endowment Funds. Complete if the or anization answered "Yes" to Form 990 Part IV line 10. (a)Current year (b)Pnor year b (c)Two years hack (d)Three years back (e}r ur yea,bo-k is Beginning of year balance b Contributions . . . . e Net investment earnings,gains,and losses d Grants or scholarships . . . . . e Other expenditures for facilities and programs . . f Administrative expenses . . . . g End of year balance . . . . . . 2 Provide the estimated percentage of the current year and balance(line 19,column (a))held as a Board designated or quasi-endowment► b Permanent endowment c Temporarily restricted endowment► The percentages in lines 2a,2b,and 2c should equal 100% 3a Are there endowment funds not in the possession of the organization that are held and administered for the organization by Yes No (1)unrelated organizations . . . . . . . . 3a(i) (11)related organizations . . . . . . . . . . . . . . . . . . . . . . . . 3a(ii) b If"Yes'to 3a(n),are the related organizations listed as required on Schedule R'2 . . . . . . . . . 3b 4 Describe in Part XIII the intended uses of the organization's endowment funds MrITMAJ Land, Buildings, and Equipment. Complete If the organization answered 'Yes' to Form 990, Part IV, line 11a. See Form 990 Part X line 10. Description of property (a)Cost or other (b)Cost or other (c)Accumulated (d)Book value basis(investment) basis(other) depreciation is Land . . . . b Buildings . . . . . . . . . . . . . . . . c Leasehold improvements . . . . . . . . . . . . dEquipment . . . . . . . . . . . . . . . . e Other Total.Add lines 1 a through le.(Column(d)must equal Fo'm 990,Part X,column(B),line 10(c).) . Schedule D(Form 990)2014 Schedule D(Form 990)2014 Page 3 Investments—Other Securities,Complete if the organization answered'Yes'to Form 990,Part IV,line lib. See Form 990 Part X.line 12. (a)Description of security or category (b)Baok value (c)Method of valuation (including name of security) Cost or and•af-year market value (1)Finn nci al derivatives (2)Closely-held equity interests Other Total.(Column(b)must eawl Farm 990,Part X.to/(a)kv 12) Investments—Program Related.Complete If the organization answered'Yes'to Form 990,Part IV,line 11C. See Form 996 Part X line 13. (a)Descnption of investment (b)Book value (e)Method of valuation Cost or end-of-year market value Total.(CoArmn(b)moor egiraf Farm 990,Part Z ml(!7)M'ie 7J) � Other Assets.Com late if the organization answered'Y es'to Form 990 Part IV line I Id See form 990 Pert% line 15 (•)Description (b)Book value Total.(Cdumn(b)must aquaf Form 990,Part X.rd.(B)bne ls.) . 01 Other Liabilities.Complete if the organization answered'Yes'to Form 990,Part IV,line Ile or llf.See Forth 990 Part X line 25. 1 (a)Description of liability (b)Book value Federal income taxes Total.(Column(b)Misr equal ram 99a Pan K cal(a)eae 2s) Pi L Liability for uncertain tax positions In Part XIII,provide the test ofthe footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48(ASC 740)Check here if the text of the footnote has been provided in Part XIII r Schedule D(Form ago)2014 Schedule D (Form 990)2014 Page 4 Reconciliation of Revenue per Audited Financial Statements With Revenue per Return Complete if the organization answered 'Yes' to Form 990 Part IV line 12a. 1 Total revenue,gams,and other support per audited financial statements . . . . . . 1 2 Amounts included on line 1 but not on Form 990,Part VIII,line 12 a Net unrealized gains (losses)on investments . 2a b Donated services and use of facilities . . . . . . . . . 2b c Recoveries of prior year grants . 2c d Other(Describe in Part XII1 ) . . . . . . . . . . . 2d e Add lines 2a through 2d . . . . . . . . . . . . . . . . . . . . . 2e 3 Subtract line 2e from line 1 . 3 4 Amounts included on Form 990,Part VIII,line 12,but not on line 1 a Investment expenses not included on Form 990,Part VIII,line 7b 4a b Other(Describe in Part XII1 ) . 4b c Add lines 4a and 4b . . . . . . . . . . . . . . . . . . . 4c 5 Total revenue Add lines 3 and 4c.(This must equal Form 990,Part I,line 12 ) . 5 • Reconciliation of Expenses per Audited Financial Statements With Expenses per Return. Complete if the organization answered 'Yes' to Form 990 Part IV line 12a. 1 Total expenses and losses per audited financial statements . 1 2 A mounts included on line 1 but not on Form 990,Part IX,line 25 a Donated services and use of facilities . . . . . . . . 2a b Prior year adjustments . . . . . . . . . . . . . 2b c Other losses . . . . . . . . . . . . . . . . 2c d Other(Describe in Part XI II ) . . . . . . . . . . . 2d e Add Imes 2a through 2d . . . . . . . . . . . . . . . . . . . . . . 2e 3 Subtract line 2e from line 1 . . . . . . . . . . . . . . . . . . . . . 3 4 Amounts included on Form 990,Part IX,line 25,but not on line 1: a Investment expenses not included on Form 990,Part VIII,line 7b 4a b Other(Describe in Part XIII ) . 4b c Add lines 4a and 4b . . . . . . . . . . . . . . . . . . . . . . . 4c 5 Total expenses Add lines 3 and 4c.(This must equal Form 990,Part f,line 18 ) 5 • Su IementalInformation Provide the descriptions required for Part 1I,lines 3, 5,and 9, Part III,lines la and 4, Part IV, lines 1b and 2b, PartV, line 4, Part X,line 2, Part XI, lines 2d and 4b, and Part XII,lines 2d and 4b Also complete this part to provide any additional information Return Reference Explanation Schedule D(Form 990) 2014 Schedule D (Form 990) 2013 Page 5 • Su IementalInformation continued Return Reference Explanation Schedule O(Farm 990) 2014 efile GRAPHIC print- DO NOT PROCESS I As Filed Data - DLN: OMB No 1545-0047 Schedule I Grants and Other Assistance to Organizations, (Form 990) Governments and Individuals in the United States 2014 Complete if the organization answered"Yes,"to Forrn 99o,Part IV,line 21 or 22. open to Public Department of the wrea ► Attach to Form 990. [ntemal Revenue Service ►information about Schedule I(Form 990)and its instructions is at w w.i tInspection Employer Identification number Name of the organization DENTON PARKS FOUNDATION INC 175-2275201 • General Information on Grants and Assistance 1 Does the organization maintain records to substantiate the amount of the grants or assistance,the grantees' eligibility for the grants or assistance,and . . . r Yes r the selection cntena used to award the grants or assistance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Descnbe in Part 1V the organization's procedures for monitoring the use of grant funds in the U nited States Grants and Other Assistance to Domestic Organizations and Domestic Governments. Complete if the organization answered "Yes" to Form 990, Part IV, line 21, for any recipient that received more than $5,000. Part II can be duplicated if additional space is needed. (a) Name and address of (b) EIN (c)1RC section (d)Amount of cash (e)Amount of non- (f)Method of (g)Description of (h)Purpose of grant organization if applicable grant cash valuation non-cash assistance or assistance orgovernment assistance (book,FMV, appraisal, other 2 Enter total number of section 501(c)(3)and government organizations listed in the line 1 table . PO. 3 E nter total number of other organizations listed in the line 1 table . . . . . . . . . ► For Paperwork Reduction Act Notice,see the Instructions for Form 990. Gat No 50055P Schedule I(Corm 990)2014 Page 2 Schedule I (Form 990)2014 Grants and other Assistance to Domestic Individuals. Complete if the organization answered "Yes" to Form 990, Part IV, line 22. Part III can be duplicated if additional space is needed. (a)Type ofgrant or assistance (b)Numberof (c)Amount of (d)Amount of (e)Method of valuation (f)IDescription of non-cash assistance recipients cash grant non-cash assistance (book, FMV,appraisal,other) • Supplemental Information. Provide the information required in Part I line 2 Part III column b and any other additional information. Return Reference I Explanation Schedule I(Form 990) 2014 efile GRAPHIC print - DO NOT PROCESS I As Filed Data - I DLN: OMB No 1545-0047 SCHEDULE 0 Supplemental Information to Form 990 or 990-EZ Form 990 or 990-EZ) 2014 Complete to provide information for responses to specific questions on Departrneni d the Treasury • • Imemal Revenue Service Form 990 or 990-EZ or to provide any additions! information. Inspection 1►Attach to Form 990 or 990-EZ. 10-Information about Schedule O (Form 990 or 990-EZ) and its instructions is at www.irs.gov/f orm990. Name of the organization Employer identification number DENTON PARKS FOUNDATION INC 75-2275201 990 Schedule O, Supplemental information Return Reference Explanation Pt VI, Line 11b Copies of the form 990 are made available for review by board members Pt V1, Line 19 Copies are available for review in the Foundation's office Form 990EZ, Part I, Line 16 OFFICE EXPENSE INSURANCE APPENDIX 1 BKO 10601 Reunton Place,Suite 400 1 San Antonio,TX 78216.4137 CPAs&Advisors 270 341,9400 1 Fax 210 341.9434 1 bkd.com October 20,2017 Mr. Charles Springer, Director of Finance City of Denton,Texas 215 E. McKinney Street Denton,TX 76201 We are pleased to confirm the arrangements of our engagement and the nature of the services we will provide to the City of Denton, Texas. OUR SERVICES AND RESPONSIBILITIES We will provide fraud investigation services for the City of Denton, Texas in connection with concerns raised from a tip received from the City's anonymous hotline and investigated by the City's internal auditor about the relationship between the City of Denton Parks Department and the Denton Parks foundation.. Our proposed scope of services for Phase I of this engagement includes an assessment of the City of Denton internal auditor's working papers and files (i.e. City Auditor); interviews of the City of Denton, Texas management; and an evaluation of potential procedures to perform in additional phases of our investigation. Should this engagement require additional phases of services, we will provide you with an addendum to this engagement letter for those additional phases. There can be no assurance that such procedures will identify fraud that may exist. Therefore, at the conclusion of our engagement, we will request representation from you that the procedures performed are sufficient for your purposes. At the conclusion of our work, we will present our findings either orally or through a written report, We have been retained to provide fraud investigation services only; however, we understand and accept that we may be requested to furnish testimony at trial and will prepare accordingly. We will not update our report for or disclose any event or circumstances after the date of our report. If for any reason we are not able to complete our fraud investigation, we may decline to issue a report as a result of this engagement. Todd Burchett will be the lead service provider for this engagement. Praxity. M/MII/ Mr. Charles Springer, Director of Finance City of Denton,Texas October 20, 2017 Page 2 ENGAGEMENT FEES Based upon the information you have provided, we have initially estimated our fees will be $11,000 based on 40 hours of work. This is an estimate only and not a cap or guaranteed maximum. In addition, you will be billed travel costs, if any, as well as an administrative fee of 4% to cover items such as copies, postage and other delivery charges, supplies, technology- related costs such as computer processing, software licensing, research and library databases and similar expense items. This fee estimate assumes that all information will be provided to us completely and expeditiously and that no unusual or unanticipated circumstances arise in our engagement. If unusual or unanticipated circumstances require us to expand the scope of our engagement, we will discuss this with you before beginning the additional work. For purposes of this agreement, it is assumed that expanding the scope of our engagement, including upon your request, will increase our anticipated fees. Throughout this engagement, we will monitor the time spent and notify you if and when it becomes apparent to us that our total fees may exceed our estimated fee or hours. We will not proceed without proper authorization from you. Our pricing for this engagement and our fee structure are based upon the expectation that our invoices will be paid promptly. We will issue progress billings during the course of our engagement, and payment of our invoices is due upon receipt. Interest will be charged on any unpaid balance after 30 days at the rate of 10%per annum. All outstanding invoices for services shall be paid prior to the delivery of any written report, any depositions of BKD personnel in connection with this engagement and trial testimony by BKD personnel. We reserve the right to withdraw from the engagement if our fees are not paid. Our hourly rates are subject to at least annual adjustments, Because we do not know how long our services may be required, you will be responsible for fees at the hourly rates in effect at the time work is performed. If testimony or deposition is required because of any subpoena, you shall be responsible for any additional time, fees and charges regardless of the issuing party. In the event of a question or dispute about any invoice you receive, you agree to contact your BKD professional within 10 days of your receipt of the invoice. We will work with you to answer questions and address disputed issues as quickly as possible. For this engagement, the person to contact with respect to any such billing questions and issues is Todd Burchett. Mr. Charles Springer, Director of Finance City of Denton, Texas October 20, 2017 Page 3 OTHER ENGAGEMENT MATTERS AND LIMITATIONS During the course of our engagement, it may be necessary for us to prepare written reports that support our conclusions. These reports are not to be published or used in any other manner other than noted above without the written consent of BKD. As of the date of this letter, we are not aware of any conflicts of interest with any party. If we determine that a potential conflict of interest has arisen,we will immediately advise you so that a determination may be made by both of us as to whether we should continue to be engaged. If services are terminated as a result of a conflict of interest, or for any other reason, you agree to pay us for time expended to date. In addition, you will be billed travel costs, if any, as well as an administrative fee of 4% to cover items such as copies, postage and other delivery charges, supplies, technology-related costs such as computer processing, software licensing, research and library databases and similar expense items. We will use and rely on information furnished by you and on information available from generally recognized public sources. Our workpapers and documentation retained in any form of media for this engagement are the property of BKD. We can be compelled to provide information under legal process. In addition, we may be requested by regulatory or enforcement bodies to make certain workpapers available to them pursuant to authority granted by law or regulation. You agree that we have no legal responsibility to you in the event we provide such documents or information pursuant to legal process. To the extent allowed by Texas law, you agree to indemnify and hold harmless BKD and its personnel from any claims, liabilities, costs and expenses relating to our services under this agreement, except to the extent determined to have resulted from the intentional or deliberate misconduct of BKD personnel. Any liability of BKD and its personnel to you is limited to the amount of the fee you paid for this engagement as liquidated damages. You agree that any dispute regarding this engagement will, prior to resorting to litigation, be submitted to mediation upon written request by either party. Both parties agree to try in good faith to settle the dispute in mediation. The American Arbitration Association will administer any such mediation in accordance with its Commercial Mediation Rules. The results of the mediation proceeding shall be binding only if each of us agrees to be bound. We will share any costs of mediation proceedings equally. Mr. Charles Springer, Director of Finance City of Denton, Texas October 20, 2017 Page 4 Either of us may terminate these services at any time. Both of us must agree, in writing, to any future modifications or extensions. If services are terminated, you agree to pay us for time expended to date. In addition, you will be billed travel costs, if any, as well as an administrative fee of 4% to cover items such as copies, postage and other delivery charges, supplies, technology-related costs such as computer processing, software licensing, research and library databases and similar expense items. If any provision of this agreement is declared invalid or unenforceable, no other provision of this agreement is affected and all other provisions remain in full force and effect. This engagement letter represents the entire agreement regarding the services described herein and supersedes all prior negotiations, proposals, representations or agreements, written or oral, regarding these services. It shall be binding on heirs,successors and assigns of you and BKD. We may from time to time utilize third-party service providers, e.g., domestic software processors or legal counsel, or disclose confidential information about you to third-party service providers in serving your account. We remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures and safeguards to protect the confidentiality of your information. In addition, we will secure confidentiality agreements with all service providers to maintain the confidentiality of your information. In the event we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. We will, at our discretion or upon your request, deliver financial or other confidential information to you electronically via email or other mechanism. You recognize and accept the risk involved, particularly in email delivery as the Internet is not necessarily a secure medium of communication as messages can be intercepted and read by those determined to do so. You agree you will not modify these documents for internal use or for distribution to third parties. You also understand that we may on occasion send you documents marked as draft and understand that those are for your review purpose only, should not be distributed in any way and should be destroyed as soon as possible. Any time you intend to reference our ftrm name in any manner in any published materials, including on an electronic site, you agree to provide us with draft materials for our review and approval before publishing or posting such information unless publishing or posting such information is required by the rules of civil procedure or court order. Mr. Charles Springer, Director of Finance City of Denton, Texas October 20, 2017 Page 5 BKD is a registered limited liability partnership under Missouri law. Under applicable professional standards, partners of BKD, LLP have the same responsibilities as do partners in a general accounting and consulting partnership with respect to conformance by themselves and other professionals in BKD with their professional and ethical obligations. However, unlike the partners in a general partnership, the partners in a registered limited liability partnership do not have individual civil liability, directly or indirectly, including by way of indemnification, contribution, assessment or otherwise, for any debts, obligations or liabilities of or chargeable to the registered limited liability partnership or each other, whether arising in tort, contract or otherwise. We are an independent accounting firm allowed to use the name "Praxity" in relation to our practice. We are not connected by ownership with any other firm using the name "Praxity," and we will be solely responsible for all work carried out by us on your behalf. In deciding to engage us, you acknowledge that we have not represented to you that any other firm using the name "Praxity" will in any way be responsible for the work that we do. We will be pleased to discuss this letter with you and look forward to the opportunity of serving you. If the above arrangements are acceptable to you, please sign the enclosed copy of this letter and return it to us. If the signed copy you return to us is in electronic form, you agree that such copy shall be legally treated as a "duplicate original" of this agreement. BKD, LLP 0?Kj? Lup of The services and arrangements described in this letter are in accordance with our understanding and are acceptable to us. CITY OF DENTON,TEXAS BY �J Charles Springer, Dir ctor of Nance DATE O Z .ZV (�O ll KN1173160 s*pia our dmummtslordmarress117%pmaway-btd ordinan"door ORDINANCE NO. 2017-368 AN ORDINANCE AUTHORIZING THE ENGAGEMENT OF THE LAW FIRM OF LYNN, ROSS AND GANNAWAY, LLP, AND THE BKD, LLP ACCOUNTING FIRM, TO COMPLETE A PREVIOUSLY INITIATED AUDIT AND INVESTIGATION, PURSUANT TO THE TERMS OF THE ATTACHED CONTRACT FOR PROFESSIONAL SERVICES; AND FURTHER AUTHORIZING THE EXPENDITURE OF BUDGETED FUNDS FOR THE ENGAGEMENT, IN AN AMOUNT NOT TO EXCEED $50,000, WITHOUT SUBSEQUENT AMENDMENT OF THE APPROVED CONTRACT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Council of the City of Denton, Texas understands that the contracted services are exempted from ordinary bidding and procurement requirements by the Professional Services Procurement Act,and case law interpretations of same. See,Tex.Gov't Code§2254.001, et seq.; and WHEREAS,the Council of the City of Denton,Texas finds that the contracted services are necessary and appropriate, due to the departure of the City's Internal Auditor after initiating this investigation,as well as the consequent needs to take prompt remedial actions(if any should prove necessary), and to reach a timely, unbiased, and definitive resolution of any public controversy which might arise out of this pending and unresolved investigation and audit; and WHEREAS, with due deference to the language and intent of Section 6.04 of Denton's Charter,the Council of the City of Denton,Texas finds that during the vacancy of the City Auditor position, this pending and unresolved investigation and audit should proceed at the hands of outside legal and auditing professionals reporting directly to the City Council; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The above recitals are fully adopted and incorporated herein for all purposes. SECTION 2. The Mayor is hereby authorized to execute the engagement arrangement by and between the City and the law firm of Lynn, Ross and Gannaway, LLP, and the BKD, LLP accounting firm for professional services, as stated substantially in the terms of said Agreement, attached hereto as Exhibit"A",incorporated herein by reference. SECTION 3. The award of this Agreement by the City is on the basis of the demonstrated competence,knowledge, and qualifications of the Finns and the demonstrated ability of the firms, and their demonstrated ability to timely perform the services needed by the City, for fair and reasonable fees. SECTION 4. The expenditure of funds as provided in the attached Agreement is hereby limited to an amount not to exceed Fifty Thousand Dollars($50,000),unless later amended. SECTION 5. This Ordinance shall become effective immediately upon its passage and approval. OlepAm doc= mbrdi mmes1174nvuway-bkd or6um do= PASSED AND APPROVED this the_ f! T``day of dayj Jq { JZ 2017, UWA CHRIS WATTS,MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APP VED AS TO LEGAL FORM: AARON LEAL,CITY ATTORNEY BY: JeMLEJD-rakc. Jr. Page 2 3a6l/d!yl 13f:0?•11fWA1'A1'I tv`IJIr MELlt 1V N ROSS FI IRS Wolz I f i,Tj XA5 7bf[)q B17.33!-8509 NIA1h 3;;/H1; 2.` 9,18 FAX ®® GANNAWAY, LLP CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE November 7,2017 Mayor Chris Watts and Denton City Council City of Denton 215 E.McKinney St. Denson,TX 76201 Rc: Retention of Legal Counsel to work with Forensic Accounting Firm Investigation Relationship between City of Denton and Denton Parks Foundation October I, 2012— September 30, 2017 Dear Mayor and Council: We appreciate being asked to assist the City of Denton {"City") in conducting this confidential investigation. In this role, we will be engaged in the dual functions of fact-finding and legal analysis. It is our understanding the City of Denton intends to establish a relationship with our firm that would establish not only an attorneyrclient privilege with regard to verbal and written communications, but also would cloak our investigation notes and other documents with the attorney work product privilege. To facilitate a thorough investigation,we have been authorized to retain BKD,LLP's Forensics&Valuation Services team, ("BKD"). I have attached a copy of BKD's engagement letter as Exhibit A, which is incorporated by reference into this Engagement. Anticipated Fecs Based on the information that has been made available to both BKD and my firm, we initially estimate that BKD's fees will be$30,000.I estimate that my fees should not exceed$20,000,as I bill at $250.00 per hour.This estimate assumes all information will be provided to us completely and expeditiously. Throughout this engagement, we will monitor the time spent and notify you if and/or when it becomes apparent to us that our total fees may exceed our estimated fee. We will commence our duties as Special Legal Counsel and begin the investigation upon your execution of a copy of this engagement letter.Travel time is considered time worked and is billed accordingly. EXHIBIT A to Ordinance ®® Eatdblt A to CmWnce-Page 1 of 7 Mayor and Council November 7,2017 Page 2 Other Charges The City will be responsible for all expenses which are incurred during the investigation including travel costs and an administrative fee of 4% assessed by BKD, to cover items such as postage, supplies, technology-related costs such as computcr processing, software licensing and research and library databases. Billing Cycle Our billing rates are based on the assumption of prompt payment. Consequently, unless other arrangements are made,fees for services and other charges will be billed monthly and are payable within thirty(30)days of receipt. Our billing cycle ends on the 201 of each month. If the foregoing correctly reflects the City's understanding of the terms and conditions of our engagement,please so indicate by executing this letter in the space provided below and return it to the undersigned. Please contact me if you have any questions. We are pleased to have this opportunity to be of service and to work with you. Very truly yours, Is/Julia Gannaway Julia Gannaway Gannawpy a Loborcounsel.net Writer's Direct Dial:(817) 332.8512 ACCEPTED AND AGREED TO THIS_r� DAY OF NOVEMBER,2017. czhreilsa ,Mayor APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY:/ E. Drake,Jr E�tgbft A to Ordfnaftee-Page 2 of 7 BKO 10001 Reunion Place,Suite 400 I San Ansonia,TX 711216-4137 t+� 7 10.341 94001 Fax 210.341.94341 bkd com November 3,2017 Ms.Julia Gannaway Lynn,Ross&Gannaway,LLP 306 West Broadway Avenue Fort Worth, TX 76104 We are pleased to confirm the arrangements of our engagement and the nature of the services we will provide to Lynn,Ross&Gannaway,LLP. OUR SERVICES AND RESPQNSIBI-ITIES We will provide forensic accounting investigation services for Lynn,Ross & Gannaway, LLP in connection with your client, City of Denton,Texas,and concerns raised from a tip received from the City of Denton, Texas' anonymous hotline and initially investigated by the City's Fraud, Waste, and Abuse committee about the relationship between the City of Denton and the Denton Parks Foundation. We will work with you to develop the scope and nature of specific procedures to be performed. There can be no assurance that such procedures will identify fraud that may exist. Therefore, at the conclusion of our engagement, we will request representation from you that the procedures performed are sufficient for your purposes. At the conclusion of our work,we will present our findings either orally or through a written report. We have been retained to provide forensic accounting investigation services only; however, we understand and accept that we may be requested to furnish testimony at trial and will prepare accordingly. We will not update our report for or disclose any event or circumstances after the date of our report. If for any reason we are not able to complete our fraud investigation, we may decline to issue a report as a result of this engagement. Mr.Todd Burchett will be the lead service provider for this engagement. EXHIBIT A to Exhlbit A Praxity YfYY Eddhlt A to Ordinance-Pape 3 of 7 Ms.Julia Gannaway Lynn,Ross&Gannaway, LLP November 3,2017 Page 2 ENGAGEMENT FEES Due to the nature of the services requested,it is not possible to provide an accurate estimate of the total time or fees required to complete the tasks assigned. The ultimate fees depend on a variety of factors including, but not limited to, the extent and nature of the documents and information provided and positions taken by the parties, the adequacy and condition of the records, the developments that may occur as work progresses, the amount of time required working with you and your client, requests by you during the course of the work, the extent of the cooperation obtained from you and others and various other related factors. Therefore,our fees will be based on time expended. In addition,you will be billed travel costs,if any, as well as an administrative fee of 4 percent to cover items such as copies, postage and other delivery charges, supplies, technology-related costs such as computer processing, software licensing,research and library databases and similar expense items. As agreed by you and the City of Denton,Texas, all statements will be addressed to and payable by the City of Denton,Texas. Our pricing for this engagement and our fee structure are based upon the expectation that our invoices will be paid promptly. We will issue progress billings during the course of our engagement, and payment of our invoices is due upon receipt. Interest will be charged on any unpaid balance after 30 days at the rate of 10 percent per annum. All outstanding invoices for services shall be paid prior to the delivery of any written report, any depositions ofBKD personnel in connection with this engagement and trial testimony by BKD personnel. We reserve the right to withdraw from the engagement if our fees are not paid. Our hourly rates arc subject to at least annual adjustments. Because we do not know how long our services may be required,you will be responsible for fees at the hourly rates in effect at the time work is performed. If testimony or deposition is required because of any subpoena, you shall be responsible for any additional time,fees and charges regardless of the issuing party. In the event of a question or dispute about any invoice you receive,you agree to contact your BKD professional within 10 days of your receipt of the invoice. We will work with you to answer questions and address disputed issues as quickly as possible. For this engagement, the person to contact with respect to any such billing questions and issues is Mr.Todd Burchett. ExNbil A to Ordnance-Page 4 of 7 Ms.Julia Gannaway Lynn, Ross&Gannaway,LLP November 3,2017 Page 3 OTHER ENGAGEMENT MATTERS AND LIMITATIONS During the course of our engagement, it may be necessary for us to prepare written reports that support our conclusions. These reports are not to be published or used in any other manner other than noted above without the written consent of BKD. As of the date of this letter, we are not aware of any conflicts of interest with any party. If we determine that a potential conflict of interest has arisen,we will immediately advise you so that a determination may be made by both of us as to whether we should continue to be engaged. If services are terminated as a result of a conflict of interest,or for any other reason,you agree to pay us for time expended to date. In addition, you will be billed travel costs, if any, as well as an administrative fee of 4 percent to cover items such as copies, postage and other delivery charges, supplies, technology-related costs such as computer processing, software licensing, research and library databases and similar expense items. We will use and rely on information furnished by you and on information available from generally recognized public sources. Our workpapers and documentation retained in any form of media for this engagement are the property of BKD. We can be compelled to provide information under legal process. In addition, we may be requested by regulatory or enforcement bodies to make certain workpapers available to them pursuant to authority granted by law or regulation. You agree that we have no legal responsibility to you in the event we provide such documents or information pursuant to legal process. To the extent allowed by Texas law, you agree to indemnify and hold harmless BKD and its personnel from any claims, liabilities, costs and expenses relating to our services under this agreement, except to the extent determined to have resulted from the intentional or deliberate misconduct of BKD personnel. Any liability of BKD and its personnel to you is limited to the amount of the fee you paid for this engagement as liquidated damages. You agree that any dispute regarding this engagement will, prior to resorting to litigation, be submitted to mediation upon written request by either party. Both parties agree to try in good faith to settle the dispute in mediation. The American Arbitration Association will administer any such mediation in accordance with its Commercial Mediation Rules. The results of the mediation proceeding shall be binding only if each of us agrees to be bound. We will share any costs of mediation proceedings equally. ExUbd A to Ordinance-Pape 5 of 7 Ms.Julia Gannaway Lynn,Ross &Gannaway,LLP November 3,2017 Page 4 Either of us may terminate these services at any time. Both of us must agree, in writing, to any future modifications or extensions. If services are terminated, you agree to pay us for time expended to date. In addition, you will be billed travel costs, if any, as well as an administrative fee of 4 percent to cover items such as copies, postage and other delivery charges, supplies, technology-related costs such as computer processing, software licensing, research and library databases and similar expense items. If any provision of this agreement is declared invalid or unenforceable, no other provision of this agreement is affected and all other provisions remain in full force and effect. This engagement letter represents the entire agreement regarding the services described herein and supersedes all prior negotiations, proposals, representations or agreements, written or oral, regarding these services. It shall be binding on heirs,successors and assigns of you and BKD. We may from time to time utilize third-party service providers,e.g.,domestic software processors or legal counsel, or disclose confidential information about you to third-party service providers in serving your account. We remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures and safeguards to protect the confidentiality of your information. In addition, we will secure confidentiality agreements with all service providers to maintain the confidentiality of your information. In the event we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider. We will,at our discretion or upon your request,deliver financial or other confidential information to you electronically via email or other mechanism. You recognize and accept the risk involved, particularly in email delivery,as the Internet is not necessarily a secure medium of communication as messages can be intercepted and read by those determined to do so. You agree you will not modify these documents for internal use or for distribution to third parties. You also understand that we may on occasion send you documents marked as draft and understand that those are for your review purpose only, should not be distributed in any way and should be destroyed as soon as possible. Any time you intend to reference our firm name in any manner in any published materials, including on an electronic site, you agree to provide us with draft materials for our review and approval before publishing or posting such information unless publishing or posting such information is required by the rules of civil procedure or court order. Eft A to orftanee-Page 8 or 7 Ms.Julia Gannaway Lynn,Ross&Gannaway,LLP November 3,2017 Page S BKD is a registered limited liability partnership under Missouri law. Under applicable professional standards, partners of BKD, LLP have the same responsibilities as do partners in a general accounting and consulting partnership with respect to conformance by themselves and other professionals in BKD with their professional and ethical obligations. However, unlike the partners in a general partnership, the partners in a registered limited liability partnership do not have individual civil liability, directly or indirectly, including by way of indemnification, contribution, assessment or otherwise, for any debts,obligations or liabilities of or chargeable to the registered limited liability partnership or each other, whether arising in tort, contract or otherwise. We are an independent accounting firm allowed to use the name "Praxity" in relation to our practice. We are not connected by ownership with any other firm using the name "Praxity,"and we will be solely responsible for all work carried out by us on your behalf. In deciding to engage us, you acknowledge that we have not represented to you that any other firm using the name "Praxity"will in any way be responsible for the work that we do. We will be pleased to discuss this letter with you and look forward to the opportunity of serving you. If the above ammgcments are acceptable to you, please sign the enclosed copy of this letter and return it to us. If the signed copy you return to us is in electronic form,you agree that such copy shall be legally treated as a"duplicate original" of this agreement. BKD, LLP t,up The services and arrangements described in this letter are in accordance with our understanding and are acceptable to us. LYNN,ROSS&GANNAWAY,LLP CITY OF DE ON,TEXAS BY /s/Julia Gannaway Julia Gannaway,Attorney Chris Watts,Mayor DATE November 8, 2017 KN 1173160 Exhi6il A to ordinance•Page 7 of 7 Inrw LOu M 10001 Reunlon Plxe.Suite 4001 San Arjanla,TX 7821&-4137 Ct?As 8 Adv16t1rs 210.341.74001 Fax 210.341.94341 bkd.com November 3,2017 Ms.Julia Gannaway Lynn,Ross& Gannaway,LLP 306 West Broadway Avenue Fort Worth,TX 76104 The purpose of this document is to provide a detailed scope for our work with your client,City of Denton,Texas. This scoping document is meant to supplement our previous discussions. These processes are based on information gathered to date. The work performed as outlined below shall be limited to the scope period of October 1, 2012 through September 30, 2017 ("Scope Period"), unless otherwise noted. All documentation should be provided in electronic form,where applicable. 1. Conduct interviews of the City of Denton (COD) and Denton Parks Foundation (DPF) and their representatives, as necessary, to develop an understanding of the relationship and interactions between COD and DPF. 2. Obtain an electronic copy of COD's employee master file, vendor master file and other necessary reports to adequately assess and document the interaction between COD and DPF. 3. Obtain an electronic version of the QuickBooks accounting software for DPF (and associated username and passwords, if applicable), including employee master file and vendor master file and perform procedures such as: a. Assessment of the audit log, if enabled; b. Obtain general ledger detail reports and identify entries that appear unusual based on amount, nature, timing or manner of recording. We will request supporting documentation for entries that appear unusual; c. Analyze for conflicts of interest and related party transactions between the DPF and COD; and d. Prepare a listing of all identified payments directly to a COD employee from DPF. 4. Obtain and read a copy of the policies and procedures of the COD that were active during the Scope Period. Obtain and read a copy of the contract between the COD and DPF existing during the Scope Period. Praxity_ Ms.Julia Gannaway Lynn,Ross& Gannaway,LLP November 3,2017 Page 2 5. Obtain copies of COD City Council minutes for all matters related to the interaction between the COD and DPF, including but not limited to cash payments to DPF from the COD,approval of the use of COD assets on DPF projects,etc. b. Where necessary, follow-up on any leads that were discovered by the Fraud, Waste & Abuse Committee during its investigation into the relationship between the COD and DPF. 7. Obtain and analyze COD and DPF bank statements and check images, and monthly account reconciliations during the scope period. 8. Obtain and analyze COD and DPF check register for all bank accounts during the scope period. 9. Analyze books and records for the following: a. For indications of amounts received by DPF from advertising revenue on COD property and quantify the amounts received; b. Annual cash receipts from pledges and trace uses of those funds received related to annual donation pledges made to DPF; c. All other sources of revenues. The results of the listed procedures may uncover information that would necessitate further investigation. Additional procedures may be suggested, if appropriate. At the conclusion of all of our procedures, we will prepare a written report. Based upon the information you have provided, we have initially estimated our fees for these procedures will be$30,000, This is an estimate only and not a cap or guaranteed maximum. In addition, you will be billed travel costs, if any, as well as an administrative fee of 4 percent to cover items such as copies, postage and other delivery charges, supplies, technology-related costs such as computer processing, software licensing, research and library databases and similar expense items. This fee estimate assumes that all information will be provided to us completely and expeditiously and that no unusual or unanticipated circumstances arise in our engagement. If unusual or unanticipated circumstances require us to expand the scope of our engagement,we will discuss this with you before beginning the additional work. For purposes of this agreement, it is assumed that expanding the scope of our engagement, including upon your request, will increase our anticipated fees. Throughout this engagement, we will monitor the time spent and notify you if and when it becomes apparent to us that our total fees may exceed our estimated fee, Ms.Julia Gannaway Lynn, Ross&Gannaway, LLP November 3,2017 Page 3 Following acceptance of this document by you, we will begin planning and executing on the procedures as soon as possible. BKD, LLP The services and arrangements described in this letter are in accordance with our understanding and arc acceptable to us. LYNN,ROSS& GANNAWAY, LLP BY lia annaway,Attorney DATE KNI173160 BKO 10001 Reunion Place.Suite 4001 San Antonio.TX 78216.4137 CPIs&AdvlsorS 210.341.94001 Fax 210.341.9434 1 bkd.com February 9,2018 Ms. Julia Gannaway Lynn,Ross& Gannaway, LLP 306 West Broadway Avenue Fort Worth,TX 76104 The purpose of this document is to amend our previous letter dated November 3, 2017,to provide a detailed scope for our work with your client, City of Denton, Texas. This scoping document is meant to supplement our previous discussions. These processes are based on information gathered to date. The work performed as outlined below shall be limited to the scope period of October 1, 2012, through September 30, 2017, (Scope Period) unless otherwise noted. All documentation should be provided in electronic form, where applicable. 1. Conduct interviews of the City of Denton (COD) and Denton Parks Foundation(DPF) and their representatives,as necessary,to develop an understanding of the relationship and interactions between COD and DPF. These interviews took place in 2017 on December 14, 15 and 21, requiring additional preparation and travel. 2. Obtain an electronic copy of COD's employee master file, vendor master file and other necessary reports to adequately assess and document the interaction between COD and DPF. 3. Obtain an electronic version of the QuickBooks accounting software for DPF (and associated username and passwords, if applicable), including employee master file and vendor master file and perform procedures such as: a. Assessment of the audit log, if enabled b. Obtain general ledger detail reports and identify entries that appear unusual based on amount, nature, timing or manner of recording. We will request supporting documentation for entries that appear unusual c. Analyze for conflicts of interest and related party transactions between die DPF and COD d. Prepare a listing of all identified payments directly to a COD employee from DPF. 4. Obtain and read a copy of the policies and procedures of the COD that were active during the Scope Period. Obtain and read a copy of the contract between the COD and DPF existing during the Scope Period. ENBff A. Pra" City of Denton,Texas February 9,2018 Page 2 5. Obtain copies of the COD City Council minutes for all matters related to the interaction between the COD and DPF, including but not limited to cash payments to DPF from the COD, approval of the use of COD assets on DPF projects, etc. 6. Assess the findings of the Fraud, Waste &Abuse Committee from its investigation into the relationship between the COD and DPF and consider whether additional follow up should be performed. 7. Obtain and analyze COD and DPF bank statements, check images and monthly account reconciliations during the scope period. 8. Obtain and analyze COD and DPF check register for all bank accounts during the scope period. 9. Analyze books and records for the following: a. Indications of amounts received by DPF from advertising revenue on COD property and quantify the amounts received b. Annual cash receipts from pledges and trace uses of those funds received related to annual donation pledges made to DPF c. All other sources of revenues 10. Prepare a written report for City Council to read. 11. Prepare and present to City Council an January 16,2018, February 6, 2018, and on February 13,2018, in closed sessions in cooperation with and pursuant to privileged attorney-client discussions to present preliminary findings, answer questions and determine if further work is warranted or requested. Make edits to report draft, as deemed necessary by BKD. 12. Present an additional open session to be determined at a later date. The results of the listed procedures may uncover information that would necessitate further investigation. Additional procedures may be suggested, if appropriate. At the conclusion of all of our procedures, we will prepare a written report. Based upon the information you have provided, we have estimated our fees for these procedures will be an additional $66,000. This amount is in addition to the $30,000 estimate provided in the November 3, 2017, letter. This is an estimate only and not a cap or guaranteed maximum. The above fees estimates include our estimate of travel costs, if any, as well as an administrative fee of 4 percent to cover items such as copies; postage and other delivery charges; supplies; City of Denton,Texas February 9,2018 Page 3 technology-related costs such as computer processing,software licensing, research and library databases; and similar expense items. This fee estimate assumes that all information will be provided to us completely and expeditiously and that no unusual or unanticipated circumstances arise in our engagement. If unusual or unanticipated circumstances require us to expand the scope of our engagement, we will discuss this with you before beginning the additional work. For purposes of this agreement, it is understood that expanding the scope of our engagement, including upon your request, has increased our anticipated fees. Throughout this engagement, we will monitor the time spent and notify you if and when it becomes apparent to us that our total fees may exceed our estimated fee. Following acceptance of this document by you, we will begin planning and executing on the procedures as soon as possible, BKD, LLP FPO, 1,L.-P The services and arrangements described in this letter are in accordance with our understanding and are acceptable to us. LYNN,ROSS & GANNAWAY,LLP By: dua�_ Julia Gannaway, Attorney „j DPr7YJ%SSiO/1 Date: /'�_ol g KN1173160 APPENDIX 2 ORDINANCE NO. 2017 3 AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE A CONTRACT WITH THE DENTON PARKS FOUNDATION FOR ADMINISTRATIVE AND FUND RAISING SUPPORT OF DENTON PARKS AND RECREATION PROJECTS AND PROGRAMS WHICH IS AVAILABLE FROM ONLY ONE SOURCE AND IN ACCORDANCE WITH CHAPTER 252.022 OF THE TEXAS LOCAL GOVERNMENT CODE, SUCH PURCHASES ARE EXEMPT FROM REQUIREMENTS OF COMPETITIVE BIDDING; AND PROVIDING AN EFFECTIVE DATE(FILE 6348-AWARDED TO DENTON PARKS FOUNDATION IN THE AMOUNT OF $77,000). WHEREAS, Section 252.022 of the Local Government Code provides that procurement of items that are only available from one source, including; items that are only available from one source because of patents,copyrights, secret processes or natural monopolies; films, manuscripts or books; electricity, gas, water and other utility purchases; captive replacement parts or components for equipment; and library materials for a public library that are available only from the persons holding exclusive distribution rights to the materials; and need not be submitted to competitive bids; and WHEREAS, the City Council wishes to procure one or more of the items mentioned in the above paragraph;NOW,THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The following purchase of materials, equipment or supplies, as described in the "File' listed hereon, and on file in the office of the Purchasing Agent, and the license terms attached are hereby approved: FILE NUMBER VENDOR AMOUNT 6348 Denton Parks Foundation $77,000 SECTION 2. The City Council hereby finds that this bid, and the award thereof, constitutes a procurement of items that are available from only one source, including, items that are only available from one source because of patents, copyrights, secret processes or natural monopolies; films, manuscripts or books; electricity, gas, water and other utility purchases; captive replacement parts or components for equipment; and library materials for a public library that are available only from the persons holding exclusive distribution rights to the materials; and need not be submitted to competitive bids. SECTION 3. The acceptance and approval of the above items shall not constitute a contract between the City and the person submitting the quotation for such items until such person shall comply with all requirements specified by the Purchasing Department. SECTION 4. The City Manager is hereby authorized to execute any contracts relating to the items specified in Section 1 and the expenditure of funds pursuant to said contracts is hereby authorized. SECTION S. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under File 6348 to the City Manager of the City of Denton,Texas, or his designee. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of -kLe , 2017. CHRIS WATTS, MAYOR ATTEST: JENNiFER WALTERS, CITY SECRETARY BY: �f APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: ` + ORIGINAL SERVICE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND DENTON PARKS FOUNDATION This Agreement is hereby entered into by and between the City of Denton.Texas. a home rule municipal corporation, hereinafter referred to as "City", and Denton Parks Foundation. a not for profit corporation, hereinafter referred to as "Foundation". WHEREAS, City has determined that the contribution to the Park Foundation can provide needed services to citizens of City and has provided funds in its budget for the purpose of funding the Executive Director's salary, administrative support, and office supplies. WHEREAS, this Agreement serves a valid municipal and public purpose and is in the public interest; NOW,THEREFORE, the parties hereto mutually agree as follows: 1. SCOPE OF SERVICES Foundation shall, in a satisfactory and proper manner, perform the following tasks, for which the monies provided by City may be used: the funds being provided will be used for the salary of the Executive Director,Administrative Support,and office supplies. 11. OBLIQATIONS OF FOUNDATION In consideration of the receipt of funds from City, Foundation agrees to the following terms and conditions: A. Seventy Seven Thousand Dollars and No Cents $77,000.00 shall be paid to Foundation by City to be utilized for the purposes set forth in Article I. B. Foundation will maintain adequate records to establish that the City funds are used for the purposes authorized by this Agreement. C. Foundation will permit authorized officials of City to review its books at any time. D. Upon request, Foundation will provide to City its By Laws and any of its rules and regulations that may be relevant to this Agreement. E. Foundation will not enter into any contracts that would encumber City funds for a period that would extend beyond the term of this Agreement. Page I F. Foundation will appoint a representative who will be available to meet with City officials when requested. 111. TIME OF PERFORMANCE The services funded by City shall be undertaken and completed by Foundation within the following time frame: The term of this Agreement shall commence on the effective date and terminate September 30, 2017, unless the contract is sooner terminated under Section VIl "Suspension or Termination". IV. PAYMENTS A. PAYMENTS TO FOUNDATION. City shall pay to Foundation the sum specified in Article 11 after the effective date of this Agreement. B. EXCESS PAYMENT. Foundation shall refund to City within ten (10) working days of City's request, any sum of money which has been paid by City and which City at any time thereafter determines: 1) has resulted in overpayment to Foundation; or 2) has not been spent strictly in accordance with the terms of this Agreement:or 3) is not supported by adequate documentation to fully justify the expenditure. V. EVALUATION Foundation agrees to participate in an implementation and maintenance system whereby the services can be continuously monitored. Foundation agrees to make available its bank statements for review by City at City's discretion. In addition, Foundation agrees to provide City the following data and reports, or copies thereof: A. An explanation of Return on Investment B. To comply with this section, Foundation agrees to maintain records that will provide accurate, current, separate, and complete disclosure of the status of funds received and the services performed under this Agreement. Foundation's record system shall contain sufficient documentation to provide in detail full support and justification for each expenditure. Foundation agrees to retain all books, records, documents, reports, and written accounting procedures pertaining to the services provided and expenditure of funds under this Agreement for five years. C. Nothing in the above subsections shall be construed to relieve Foundation of responsibility for retaining accurate and current records that clearly reflect the level and benefit of services provided under this Agreement. Page 2 V1.MEETINGS Minutes of all meetings of Foundation's governing body shall be available to City within ten (10) working days of approval. VFL TERMINATION The City may terminate this Agreement for cause if Foundation violates any covenants. agreements, or guarantees of this Agreement, the Foundation's insolvency or filing of bankruptcy, dissolution, or receivership, or the Foundation's violation of any law or regulation to which it is bound under the terms of this Agreement. The City may terminate this Agreement for other reasons not specifically enumerated in this paragraph. V1I1. r,-QIJAL OPPURTUNITY AND COMPLIANCE WTI I LAWS A. Foundation shall comply with all applicable equal employment opportunity and affirmative action laws or regulations. B. Foundation will furnish all information and reports requested by City,and will permit access to its books, records, and accounts for purposes of investigation to ascertain compliance with local, State and Federal rules and regulations. C. in the event of Foundation's noncompliance with the nondiscrimination requirements, the Agreement may be canceled, terminated, or suspended in whole or in part, and Foundation may be barred from further contracts with City. IX.WARRANTIE$ Foundation represents and warrants that: A. All information, reports and data heretofore or hereafter requested by City and Furnished to City, are complete and accurate as of the date shown on the information, data, or report, and, since that date, have not undergone any significant change without written notice to City. B. Any supporting bank statements heretofore requested by City and furnished to City, are complete, accurate and fairly retlect the financial conditions of Foundation on the date shown on said report, and the results of the operation for the period covered by the report, and that since said data, there has been no material change, adverse or otherwise, in the financial condition of Foundation. C. No litigation or legal proceedings are presently pending or threatened against Foundation. Page 3 D. None of the provisions herein contravenes or is in conflict with the authority under which Foundation is doing business or with the provisions of any existing indenture or agreement of Foundation. E. Foundation has the power to enter into this Agreement and accept payments hereunder, and has taken all necessary action to authorize such acceptance under the terms and conditions of this Agreement. F. None of the assets of Foundation are subject to any lien or encumbrance of any character, except for current taxes not delinquent, except as shown in the bank statements furnished by Foundation to City. G. Each of these representations and warranties shall be continuing and shall be deemed to have been repeated by the submission of each request for payment. X. CHANGES AND AMENDMENTS A. Any alterations, additions, or deletions to the terms of this Agreement shall be by written amendment executed by both parties, except when the terms of this Agreement expressly provide that another method shall be used. B. It is understood and agreed by the parties hereto that changes in the State, Federal or local laws or regulations pursuant hereto may occur during the term of this Agreement. Any such modifications are to be automatically incorporated into this Agreement without written amendment hereto, and shall become a part of the Agreement on the effective date specified by the law or regulation. C. Foundation shall notify City of any changes in personnel or governing board composition. XL INDEMNIFICATION To the extent authorized by law, the Foundation agrees to indemnify, hold harmless, and defend the City, its officers, agents, and employees from and against any and all claims or suits for injuries, damage, loss, or liability of whatever kind or character, arising out of or in connection with the performance by the Foundation or those services contemplated by this Agreement, including all such claims or causes of action based upon common, constitutional or statutory law, or based, in whole or in part, upon allegations of negligent or intentional acts of Foundation, its officers, employees, agents, subcontractors, licensees and invitees. XI1.CONFLICT OF l TERE T A. Foundation covenants that neither it nor any member of its governing body presently has any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. Foundation further Page 4 covenants that in the performance of this Agreement, no person having such interest shall be employed or appointed as a member of its governing body. B. Foundation further covenants that no member of its governing body or its subcontractors or employees shall possess any interest in or use his/her position for a purpose that is or gives the appearance of being motivated by desire for private gain for himself/herself, or others; particularly those with which he/she has family, business, or other ties. C. No officer, member, or employee of City and no member of its governing body who exercises any function or responsibilities in the review or approval of the undertaking or carrying out of this Agreement shall participate in any decision relating to the Agreement which affects his personal interest or the interest in any corporation, partnership, or Foundation in which he has direct or indirect interest. X111.NOTICE Any notice or other written instrument required or permitted to be delivered under the terms of this Agreement shall be deemed to have been delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, registered or certified, return receipt requested, or via hand-delivery or facsimile, addressed to Foundation or City, as the case may be, at the following addresses: CITY FOUNDATION City of Denton, Texas Molly Tampke, Executive Attn: City Manager Director Denton Parks 215 E. McKinney Foundation Denton,TX 76201 601 E. Hickory, Suite B Denton, TX 76205 Either party may change its mailing address by sending notice of change of address to the other at the above address by certified mail, return receipt requested. XIV.MISCELLANEOUS A. Foundation shall not transfer, pledge or otherwise assign this Agreement or any interest therein, or any claim arising thereunder to any party or parties, bank, trust company or other financial institution without the prior written approval of City. B, If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall remain in full force and effect and continue to conform to the original intent of both parties hereto. C. In no event shall any payment to Foundation hereunder, or any other act or failure of City to insist in any one or more instances upon the terms and conditions of this Agreement consti- Page 5 or be construed in any way to be a waiver by City of any breach of covenant or default which may then or subsequently be committed by Foundation. Neither shall such payment, act, or omission in any manner impair or prejudice any right, power,privilege,or remedy available to City to enforce its rights hereunder, which rights, powers, privileges, or remedies are always specifically preserved. No representative or agent of City may waive the effect of this provision. D. This Agreement, together with referenced exhibits and attachments, constitutes the entire agreement between the parties hereto, and any prior agreement, assertion, statement, understanding, or other commitment occurring during the term of this Agreement or subsequent thereto, have any legal force or effect whatsoever, unless properly executed in writing, and if appropriate, recorded as an amendment of this Agreement. E. This Agreement shall be interpreted in accordance with the laws of the State of Texas and venue of any litigation concerning this Agreement shall be in a court of competent jurisdiction sitting in Denton County, Texas. IN WITNESS WHEREOF, the parties do hereby affix their signatures and enter into this Agreement as of the day of V '�V-tkaJu-�., ,20-1�: _ CITY OF DENTON TODD HILEMAN CITYMANAGER ATTEST d 6M ems. C JENNIFI 1 WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY DENTON PARKS FOUNDATION BY: 1, ) MOLLY T PKG 1:XCCU'fl : DIRECTOR Page 6 APPENDIX 3 City of Denton Gry"nI' �16 E McKinney bl. Denton,Taxes 76201 wwewwnd tchyol'de n10 n.com DENTON Meeting Agenda City Council Tuesday,February 3,2016 1:00 PM Work 5esslon Room&Council Chambers After determining that a quorum is present, the City Council of the City of Denton, Texas will convene in a Work Session on Tuesday, February 3, 20I5 at 1:00 p.m in the Council Work Session Room at City Hall,215 E.McKinney Street,Denton,Texas at which the following items will be considered: I Cornmcnt5 2n Consent Agenga Items This section of the agenda allows citizens to speak on Consent Agenda Items only. Each speaker will be given a total of three (3) minutes to address any items he/she wishes that are listed on the Consent Agenda. A Request to Speak Card should be completed and returned to the City Secretary before Council considers this item. 2. Reauests for clarification of aeeadn itt m3 fisted on the agenda for Fpbruaay ,Z015. 3. Rork A. ID 15-018 Receive an update from the Denton Parks Foundation regarding the status of several projects including the Eureka Playground rcplacemeot and the City's first spray ground. B. II) 15-109 Receive a report, hold a discussion, and give staff direction regarding the Cole Ranch development. Aliclrmrots: Exhibit 1-Cote Ranch Presenlatton C. CA11-0004e Receive a report, bold a discussion, and give staff direction regarding the update to the City of Denton's Comprehensive Plan. Attachments, Exhibit 1 Staff.Planning and Zoning Commieslon.and City CoUadl Conditiong D. 1D 15-082 Receive a report, hold a discussion, and give staff direction regarding a City sponsorship in an amount not to exceed S 142,000 of in-kind services and resources for the Denton Arts and Jazz Festival to be held in Quakertown Park on April 24- 26,2015. A/tachments: Exhibit 12014 vs 2013 In-kind Coble Exh IbL 2 Running Total of Reavesled_Supporl Exhlbit 3 Letter of Rgggeal Following the completion of the Work Session, the City Council will convene in a Closed Meeting to consider specific items when these items are listed below under the Closed Meeting section of this agenda. The City Council reserves the right to adjourn into a Cluscd Meeting on any item on its Open Meeting agenda consistent with Cbapter 551 of the Texas Government Code, as amended, or as otherwise allowed by law. 1. Closed Meeting: V&Df sAran Parr! Martian I/Mals Cityof Denton city HAII 215 E.McKinney St Denton,Texas 76201 � www.cityofdanton.com DENTON Legislation Text File#: ID 15-018, Version: 1 AGENDA INFORMATION SHEET AGENDA DATE: February 3,2015 DEPARTMENT: Parks and Recreation Department ACM: John C. Cabrales,Jr. SUBJE an update from the Denton Parks Foundation regarding the status of several projects including the Eureka Playground replacement and the City's first spray ground. BACKGROUND During the 2013-2014 Budget process, the City Council approved funding in the amount of$35,000 annually for each of three consecutive years to fund a part-time Executive Director position with the Denton Park Foundation. As a condition of that funding, the Park Foundation took on the task of organizing and funding the replacement of Eureka playground. Molly Tampke was hired to fill the Executive Director position in January of 2014 and she has diligently worked towards shared goals since The President of the Park Foundation, Tim Crouch, and Molly Tampke will present a brief update of projects the Foundation is currently working on and share news of their fundraising efforts to date, RECOMMENDATION None made at this time. WHIBIT -esentation 11` Respectfully submitted: i Emerson Vorel,Director tton Pape 1 of 1 Printed on 1/2W2015 CITY OF DENTON CITY COUNCIL MINUTES February 3,2015 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, February 3,2015 at 1:00 p.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Pro Tern.Engelbrecht, Council Member Gregory, Council Member Hawkins, Council Member Johnson, Council Member Roden, Council Member Ryan, and Mayor Watts. ABSENT: None. 1. Citizen Comments on Consent Agenda Items There were no citizen comments submitted for Consent Agenda Items. 2. Requests for clarification of agenda items listed on the agenda for February 3,2015. Council Member Ryan asked about Consent Agenda Item B dealing with electronic signatures and questioned what it involved. Chuck Springer, Director of Finance, stated that initially it would be used for bids in Purchasing for contracts and for city contacts. It could be expanded into other areas in the future such as Customer Service. Council Member Gregory asked about the background of the agencies listed in Consent Agenda Item C. Danielle Shaw, Human Services Coordinator, stated that the grant was awarded through the State. The agencies submitted an application and the agencies were formulated from the applications. There were four different areas of concentration - street outreach, emergency shelters,homeless prevention, and rapid rehousing. Mayor Watts asked for a clarification on the purpose and benefits for Consent Agenda I dealing with an amendment with Jagoe Public. Elton Brock, Purchasing Manager,stated that contract was 5 years in length and the change order provided more breathing room to complete projects for city. 3. Work Session Reports A. ID 15-018 Receive an update from the Denton Parks Foundation regarding the status of several projects including the Eureka Playground replacement and the City's first spray ground. Emerson Vorel, Director of Parks and Recreation, introduced Tim Crouch and Molly Tampke, members of the Parks Foundation,who would be presenting the item. Tim Crouch stated that the Foundation was formed in 1987 and was a pass through for funding but did not really have a sense of mission. It started raising money for scholarships for children City of Denton City Council Minutes February 3,2015 Page 2 who might not be able to participate in park programs and then went to the next level by hiring an executive director to assist citizens with quality of life. Molly Tampke stated that one of the major goals for the Foundation was to lead the fund raising efforts on the remake of Eureka Playground. The execute director position was to raise money for the removal and rebuilding of Eureka Playground. February 12 would be Design Day in the elementary schools to see what their dream playground would be. Ideas would be given to the playground consultant who would incorporate as many ideas as possible. The proposed design would be unveiled at a community meeting. The goal was to raise was $1.5 million based on the consultant's calculation of the size of the playground. The Foundation also purchased three cabanas at Water Works Park which could be rented. Total scholarship money provided by the Foundation last year was$229,000. The Foundation also served as a repository for the funds for the future Spray Park. The Parks Foundation was making a difference helping with the CIP programs for the City. B. ID 15-109 Receive a report, hold a discussion, and give staff direction regarding the Cole Ranch development. Bryan Langley, Assistant City Manager, introduced Oeie Vest who would be making the Cale Ranch presentation. Ocie Vest, Cole Ranch, stated that they had been working for years on the Cole Ranch property. The Ranch consisted of 3200 acres which they had worked hard to make surest was a high quality development. They felt the time was right to bring this project forward. He reviewed the master plan which consisted of residential, commercial, industrial properties and open space. It was a little bit different from the zoning plan but showed in more detail the layout of the concept. Master amenities included 14 miles of trails that would connect schools, open space, lakes and shopping.It would contain 3 large lakes and over 600 acres of open space. Council Member Gregory asked about gas well sites on the property. Vest stated that there were 14 well sites all of whicb had been drilled. They eventually would be closed and become green space. Council Member Roden asked if there was any interest in reopening the well sites. Vest stated that the pad sites would not be in residential areas and would have open access rather than going through the residential areas. Mayor Watts asked if there had been discussions how close to have the residential properties to the gas wells. Vest stated that as all of the gas pads already existed; it was known where they were. There would not be any new pads coming close to the residential sites. City of Denton City Council Minutes February 3,2015 Page 3 Mayor Watts asked if there had been discussions for the distance new houses would be to the pad sites. Vest stated that they had established 300 feet. Builders had a difference of opinion if that distance was adequate. Mayor Pro Tern Engelbrecht felt that the reworking of wells and a 300 foot distance was not adequate. Council Member Johnson stated that the proposed ordinance was a 300 foot setback and depending on who a person was talking with there was a wide range of opinion on whether that was adequate or not for the setback distance. Vest stated that the concept of the development was to encourage the development of the arts. Single family homes would have joint frontages with the residential property developing into three 1000 acres setting. He reviewed the criteria for design guidelines. Prior to or with each application for a modification to the Development Plan Map related to the design and permitting of each new residential neighborhood, a set of Design Guidelines specific to that new neighborhood would include a specific set of specifications. The public benefits to the City included regional transportation improvements, regional water improvements, regional wastewater improvements, regional drainage improvements, park land and regional trail system, and school sites. A hurdle to development was the large amount of infrastructure needed to support the development in the southwest quadrant of Denton. The southwest quadrant of the city had Robson Ranch, Hunter Ranch and Cole Ranch developing there.Infrastructure costs were estimated at S 147 million and exceeded any one property owner's ability to fund Financing mechanisms were needed to help provide the necessary public infrastructure. The solution was a public/private partnership in the form of a PIDrFIRZ to help finance major infrastructures. In terms of a PID, (1)only landowners in the area defined by the PID paid a PID assessment, (2) it promoted economic growth by creating a means for constructing and improving infrastructure in a defined area, (3) it allowed the City or County to levy and collect special assessments on properties within the defined area, (4) there was no funding or ongoing administrative costs required from the CitylCounty while providing ultimate control to the City/County, and (5) bonds could be issued to fund or to reimburse infrastructure construction costs after certain financial Boas were met per the PID agreement. Bridging the Gap - a PID alone did not provide enough revenue to fund infrastructure costs. Supplemental funding could be accessed through Tax Increment Financing(TIF). A TIF allowed for the incremental property tax created by the project to be used for the reimbursement of infrastructure costs. He presented the projected public improvements funding by source. The TIRZ reimbursement would only be used for the gap between the actual eligible costs less the PID reimbursement Council Member Roden questioned what was being asked for in terms of financial help. Vest stated this as the major infrastructure and not the residential sites. City of Denton City Council Minutes February 3,2015 Page 4 Mayor Watts stated that he was not opposed to the concept but the numbers would be important and that from his perspective this would be very numbers driven_ Vest stated that oversizing of the lines was built into the$147 million as they were proposing the ultimate lines in the area and were built into the numbers. Council discussed the roadway components, who would be maintaining the trails and lakes, and infrastructure improvements. Vest reviewed the phasing plan for the development with the first phase in the southern portion of the property.The infrastructure and costs for the southern phase were reviewed. He noted that the T1FZ reimbursement was only used to fill the gap between the actual eligible costs less the PID reimbursement. Council Member Roden asked if there had been discussions on the major infrastructure costs. Vest replied not down to subdivision level, but many of the costs included those types of projects. He noted that the roadways served Cole Ranch but were also connected to neighboring properties. They were oversized to connect surrounding communities. Mayor Watts stated that he was not convinced that all of the proposed costs should be covered by the City in terms of the road oversizing. Some of those roads might not provide regional connectivity but rather be collector or arterial roads. Vest stated that an oversize analysis would show those amounts. Council Member Johnson stated that the PID was between the developer and homeowner However, $48 million was being asked for in the TIRZ The PID dollars did not cost the city anything. Rick Rosenberg, DPFG, stated that the costs for the PID would be paid by the PID with no costs to the city. Mayor Watts stated that the PID only paid for public improvements. Rosenberg replied correct for major infrastructure improvements Council Member Johnson stated that the money that was going to be spent for the TIRZ reimbursement that was outside the boundaries of the project and that was over and above what the City would have to do for the project It was hard to differentiate the different figures presented. Council Member Hawkins questioned if the oversizing up front was beneficial to the City. Vest stated that the normal process was that the City built the water line needed.The Master Plan would then be looked at and the City tell the developer that the line needed to be oversized with the City doing that oversizing. In this case, the cost for the oversizing would be put in the PID and done upfront. The Cole Ranch South potential housing assessed values, Cole Ranch South City of Denton City Council Minutes February 3, 2015 Page 5 TIRZ tax contribution, and Cole Ranch South PID assessment allocation was reviewed. The same analysis for the Artist Colony was also reviewed. Next steps- in February Stratford would submit the Term Sheets to Council and staff for review and approval in terms of the development agreement, PID and TIRZ. In March Stratford would incorporate City comments into the Term Sheets and submit final documents for review and approval for the development agreement, PID and TiRZ. Mayor Pro Tem Engelbrecht questioned the public improvements in terms of Loop 288 and the frontage roads. He questioned if TOOT would have to purchase all or part of the property for Loop 288 access road. Vest stated that they only had preliminary discussions regarding that roadway. Just the main lane section could be sold to TOOT and the frontage roads would be city streets or TOOT take it all. Mayor Pro Tern Engelbrecht stated that the issue was to put those funds in the PID or TIRZ and was concerned about how that went forward. He didn't want the residents paying for it if TxDOT was going to pay for it. He asked if floodplain reclamation would be part of the development in any way or was that above and beyond. Vest stated that they were going above and beyond by accommodating the entire watershed. Council Member Johnson stated that he would like more expensive homes in Denton and questioned the strategy for demand of housing prices. Vest sated that they would forecast residential and housing trends for housing in this area. Council Member Roden stated that the problem with forecasting was that it could not go very far out. He asked if Cole Ranch South and the Artist phase were overlapped. Vest stated that at some time all three areas would be under development. Council Member Roden asked if there was any value taking chunks in a particular phase of years rather than forecasting so far out. Pacing it out instead of going so far out with an agreement for that. Vest stated that the PID worked through phases with the ability to make adjustments as each individual phase was done. Rosenberg stated that they were forming the FED at this time with no commitments at this time. Every time the developer had a bond issue it would be a separate decision by the Council. The development phase would determine what could be done. The PID statute needed maximum numbers up front. Council Member Hawkins questioned the ramifications if the County did not participate. Vest felt that they could make it work with or without the County. City of Denton City Council Minutes February 3,2015 Page 6 Mayor Watts stated that he would like to get the oversizing analysis. The consensus of Council was to provide the term sheets in terms of cost to the city, TIRZ reduction in tax revenue, police, fire etc. to service that spot and the terms of cost of city services Mayor Pro Tern Engelbrecht stated that he would like a work session with staff for their insights into the project. C. CA]1-0004e Receive a report,hold a discussion, and give staff direction regarding the update to the City of Denton's Comprehensive Plan. Ron Menguita, Development Review Committee Administrator, stated that the Work Session discussion would center on the conditions that were proposed to the Plan. The conditions were actions that would be incorporated into the plan. Conditions #1 through #37 were amendments that were being proposed by staff for clarification purposes. They were considered minor and did not conflict with any proposed goal or policy outlined in the draft Plan. Conditions #38 through #46 were based on discussion held during multiple Planning and Zoning Commission workshops and work sessions. These conditions were what the Planning and Zoning Commission would like changed to the draft Plan and what they would like to see accomplished as part of the implementation. He reviewed Conditions#38-445 with the related action items Discussion on Condition #46 -- Council comments were that it would be good to have the Technical Advisory Committee(staff members)review the Plan with the annual report. Discussion on Condition #47 - make more positive wording for that section instead of focusing on the perception that it was difficult to do business in Denton. A suggestion was made to take that condition out of the plan all together. Consensus of the Council was to strike Condition#47. Discussion on Condition 456 - Bicycle Friendly community - provide more information on what that involved. Mayor Watts suggested an Informal Staff Report on a Bicycle Friendly Community. Council Member Ryan suggested that with Condition 44 to be sure to keep (s) for all of the different Chambers. He noted that Condition 920 had not been vetted by Council and there needed to be a discussion on whether to have a rental inspection program. Mayor Pro Tern Engelbrecht stated that he had mixed feelings about a rental inspection program but knew of some very poor living conditions in some rental homes. He was concerned on how to find a way to monitor those circumstances as he felt there were all kinds of rental units that were not up to code and proper standards. Council Member Ryan stated that he would be in favor of a tenant education system. Mayor Pro Tern Engelbrecht suggested a hot line on where to call when someone encountered substandard housing problems. City of Denton City Council Minutes February 3,2015 Page 7 Council Member Roden stated that this issue had not been addressed since he was on Council. He felt that there continued to be problems and they continued to be unaddressed. Council Member Gregory suggested that rather than a having that as a goal for the development to change the wording to"explore" the development of such a program. Mayor Watts stated that he refereed those kinds of complaints to Community Improvement Services. John Cabrales, Assistant City Manager, stated that the problem was that many of those issues were on the inside of the building. Building Inspections needed to have permission from the tenant or property owner to go inside the building and that was not always granted. Community Improvement Services worked on the outside of properties. Consensus of the Council was to change the wording to "explore Mayor Pro Tern Engelbrecht felt that a specific statement regarding parking in the downtown and residential neighborhoods around the universities was needed. Menguita stated that the Downtown parking was addressed in the Master Plan and the DTIP to cover those areas. He would reference it to a section of the parking area. Mayor Pro Tern Engelbrecht questioned private utilities on public utilities system. He felt nothing was moved from the old poles to new poles or underground and there needed to be a statement about private utility infrastructure in conjunction with public utility infrastructure. Council Member Ryan asked about Condition #34 regarding dumpster screens and questioned if that was not already part of the Code. Council Member Gregory stated that the Code was not clear enough regarding screening requirements for dumpster and for recycling. Because it was not clear enough, those types of screens were not getting installed. Council Member Ryan asked about Condition 450 dealing with a green building ordinance which mandated green building. He suggested a change in wording to "strongly encourages" rather than mandates. Council Member Roden questioned if it was related to a City mandate or to non-city projects. Menguita stated that it would apply to both city projects and private development. Mayor Pro Tern. Engelbrecht stated that part of that was mandated through the International Building Code and questioned if Council wanted to do something above that. Council Member Gregory stated that the City was continually upgrading the building codes for energy efficiency. He felt it was about green building standards above and beyond what the city would be doing. City of Denton City Council Minutes February 3,2015 Page 8 Menguita stated that the purpose was to create the green building and then would mandate the requirements for that type of building. After discussion, the consensus of Council was to use the wording "explore the possibility" instead of mandate. D. 1D 15-082 Receive a report, hold a discussion, and give staff direction regarding a City sponsorship in an amount not to exceed S 142,000 of in-kind services and resources for the Denton Arts and Jazz Festival to be held in Quakertown Park on April 24-26,2015_ Emerson Vorel, Director of Parks and Recreation, stated that staff frequently brought requests for city sponsorship to Council for consideration_ Last year the sponsorship to the Arts and Jazzfest went up to $123,000 and when in-kind services were captured the cost was about $140,000. He felt it was important to bring that figure to Council with the increased cost due to improved record keeping tracking the costs and the moving of the main stage which required more maintenance in cleaning after the event. Staff would be coming back to Council on February 17`h for authorization up to$142,000 of in-kind sponsorship Council Member Roden asked if financial statements from the entities were ever requested when there were expenditures of this size. He felt that when the City looked at giving that much public service there needed to be a sense of what was the real need Vorel stated that typically was not asked for from the larger events. However, it was in the agreement. Council Member Roden stated that when HOT funds were used he felt there should be some sort of financials. He wanted to make sure there was capacity for new ideas to help those types of functions. He suggested a trigger point of dollar amount to get financial disclosure. Council Member Hawkins felt that was a good idea and that the HOT Committee would want to know what the funding was being used for. Vorel stated that the financial would be included in the sponsorship letter. Mayor Pro Tem Engelbrecht felt that Downtown businesses should participate in a survey on whether there was an increase in their business during a festival. Mayor Watts stated that he was not opposed to these types of questions as it represented good stewardship of City tax money. He stated that he would also like to see the financials such as income and expenses but not in too much detail for all events. Council Member Gregory suggested only top 3-5 on the list. Council Member Roden felt that this year was ok but as a matter of policy to have that added and as new requests come forward add to the request. Consensus of the Council was to start requesting that information next year. City of Denton City Council Minutes February 3,2015 Page 9 Following the completion of the Work Session, the City Council convened in a Closed Meeting to consider the speck items listed below under the Closed Meeting section of this agenda. 1. Closed Meeting: A. ID 15-072 Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Discuss, deliberate, receive information from staff and provide staff with direction pertaining to the acquisition of real property interests in the in the Alexander Hill Survey, Abstract No. 623, City of Denton, Denton County, Texas, generally located in the 1200 block of S. Locust St. Consultation with the City's attorneys regarding legal issues associated with the acquisition or condemnation of the real property interests referenced above where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City's legal position in any administrative proceedings or potential litigation. (DME)[File ID 15-071] B. LD 15-103 Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Discuss, deliberate, and receive information from staff and provide staff with direction pertaining to the potential conveyance of certain real property interests located in the Hiram Sisco Survey, Abstract No. 1184, City of Denton, Denton County,Texas, and generally located at 600 East Hickory Street. Consultation with the City's attorneys regarding legal issues associated with the potential conveyance of the real property described above where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City's legal position in any administrative proceeding or potential litigation. (Denton Transit Center-DCTA Project) [ID 15-104] C. ID 15-092 Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff,discuss,deliberate, and provide staff with direction regarding the potential acquisition of real property interests generally located in Denton, Denton County, Texas, in (1) the 800 block of Bernard Street (Lonestar Townhome Addition, Denton, Denton County, Texas); (2) the 800 block of S. Welch Street (Double 3 Addition, Denton, Denton County, Texas); (3) the 900 block of S. Avenue B. (Bridges Addition, Denton, Denton County, Texas); and, (4) the 900 block of W. Collins St. (Hillside Addition, Denton, Denton County, Texas). Consultation with the City's attorneys regarding legal issues associated with the leasing of the real property interests described above where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City's legal City of Denton City Council Minutes February 3,2015 Page 10 position in any administrative proceeding or potential litigation. [LENT substation-No action item assoc.] D. ID 15-098 Consultation with Attorneys - Under Texas Government Code Section 551.071, Deliberations regarding Economic Development Negotiations- Under Texas Government Code Section 551.087. Receive a report and hold a discussion regarding legal and economic development issues regarding an incentive agreement with PACCAR, Inc. This discussion shall include commercial and financial information the City Council has received from PACCAR, Inc. which the City Council seeks to have locate, stay, or expand in or near the territory of the city, and with which the City Council is conducting economic development negotiations; including the offer of financial or other incentive where the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the provisions of the Texas Open Meetings Act, Chapter 551 of the Texas Government Code. E. ID 15-052 Certain Public Power Utilities: Competitive Matters - Under Texas Government Code Section 551.086; and Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive a further briefing and presentation from Denton Municipal Electric("DME") staff regarding certain public power competitive, financial and commercial information relating to issues regarding a proposed term sheet pertaining to a high voltage direct current (HVDC) interconnection that would provide DME the opportunity to acquire additional renewable energy and other electric power products for its energy portfolio.Consultation with the City's attorneys regarding legal issues associated with the proposed term sheet and the implementation of the HVDC interconnection where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City's legal position in any administrative proceeding or potential litigation. Discuss,deliberate, provide staff with direction and consider a final recommendation regarding the term sheet- F. ID 15-053 Certain Public Power Utilities: Competitive Matters - Under Texas Government Code, Section 551.086. Receive a presentation from Denton Municipal Electric ("DME") staff regarding certain public power competitive, financial and commercial information relating to issues regarding purchased power pricing and other public power information that is contained in that certain "Power Purchase Agreement" by and between DME and the Texas Woman's University. Discuss, deliberate, consider, and take final action regarding an ordinance approving said "Power Purchase Agreement In accordance with the provisions of§551.086 of the Texas Government Code, after due public notice being given,the City Council, a"Public Power Utility Governing Body"under Senate Bill 7, discussed, deliberated, and considered the Transaction, the subject of this ordinance, in a Closed Meeting of the City Council on the Yd day of February, 2015, after being advised by its legal counsel, that the consideration of the Transaction which is the subject of this ordinance, is City of Denton City Council Minutes February 3,2015 Page 11 related to competitive electric matters, including business and commercial information,which if disclosed,would give advantage to its competitors or prospective competitors. The following ordinance was considered: Ordinance No.2015-030 An ordinance of the City Council of the City of Denton, Texas providing for, authorizing, and approving the execution by the City Manager of a power purchase agreement by and between the City of Denton,Texas and the Texas Woman's University; approving the execution of such other and further related documents, including, without limitation, certificates, assignments, licenses, directions, instruments, instructions, confirmations and statements by the City Manager or his designee, which are incident or related thereto, as shall be reasonably determined by the City Attorney or her designee; confirming and ratifying that the City of Denton, Texas, its Mayor, its City Council members, its City Manager, and its City Attorney or her designee shall be authorized and empowered to perform such acts and obligations as are reasonably required to consummate this transaction; ratifying all prior actions taken by the City Council in furtherance of the foregoing transaction; and determining that the power purchase agreement and other said documents pertain to a "competitive electric matter" as set forth under the provisions of §§551.086 and 552,133 of the Texas Government Code, as amended; finding and determining that Texas Government Code §252.022(a)(15) applies to said agreement; adopting significant recitations, findings and conclusions, as are set forth in the preamble of this ordinance; that the sale of energy, and other related arrangements made by the city under the terms of this power purchase agreement are in the public welfare; authorizing the expenditure of funds therefor, providing for retroactive ratification, confirmation and approval thereof, providing for an effective date. Council Member Gregory motioned,Council Member Hawkins seconded to adopt the ordinance. On roll call vote, Mayor Pro Tem Engelbrecht "aye", Council Member Gregory "aye", Council Member Hawkins "aye", Council Member Johnson "aye", Council Member Roden "aye", Council Member Ryan "aye", and Mayor Watts "aye". Motion carried unanimously. G. ID 15-108 Deliberations regarding Real Property - Under Texas Government Code, Section 551.072; Deliberations regarding Consultation with the City Attorney-Under Texas Government Code, Section 551.071; Deliberations regarding Economic Development Negotiations - Under Texas Government Code, Section 551.087. Receive a report and hold a discussion regarding legal and economic development issues regarding economic development incentives for a business prospective in the Cole Ranch Development. This discussion shall include commercial and financial information the City Council may receive from the business owners which the City seeks to have locate, stay, or expand in or near the territory of the City, and with which the City Council is conducting economic development negotiations, including the offer of financial or other incentives. Also deliberate the purchase, exchange, lease, or value of real property where deliberation in an open meeting would have a detrimental effect on the position of the City in negotiations with a third party. Also hold a discussion with the City's attorneys on the referenced topic where the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the provisions of City of Denton City Council Minutes February 3,2015 Page 12 the Texas Open Meetings Act,Chapter 551 of the Texas Government Code. H. ID 15-106 Certain Public Power Utilities: Competitive Matters - Under Texas Government Code Section 551.86; Consultation with Attorneys - Under Texas Government Code, Section 551.071. Receive a presentation regarding provisions contained in Denton Municipal Electric Purchase Power Agreements; discuss, deliberate and provide staff with direction. I. ID 15-107 Consultation with Attorneys - Under Texas Government Code, Section 551.071. Consult with and provide direction to City's attorneys regarding legal issues and strategies associated with the current Gas Well Ordinance, and proposed Gas Well Ordinance amendment,regulation of gas well drilling and production within the City Limits and the extraterritorial jurisdiction, including: Constitutional limitations, statutory limitations upon municipal regulatory authority; statutory preemption and vested rights; impacts of federal and state law and regulations; impacts of gas well drilling upon protected uses and vice-versa; current and proposed extension to, moratorium on drilling and production; other concerns about municipal regulatory authority or matters relating to enforcement of the Gas Well Ordinance, both current and proposed; settlement matters concerning gas well drilling in the City; surface development issues involving surface and mineral estates; and legal matters associated with a citizen's initiative ordinance and pending litigation styled Jerry Patterson, Commissioner, Texas General Land Office v. City of Denton Texas,Cause No. D-1-GN-14-004628 currently pending in the 53rd District Court of Travis County and Texas Oil and Gas Association v. City of Denton, Cause No. 14-04833-431 currently pending in the 431st District Court of Denton County regarding hydraulic fracturing where a public discussion of these legal matters would conflict with the duty of the City's attorneys under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. J. ID 15-124 Consultation with Attorneys - Under Texas Government Code §551.071. Consult with the City's Attorneys on the status, strategy, and potential resolution of litigation styled, Bishop v. City of Denton, Texas and Darius M. Porter, Cause No. 4:14-CV-608, currently pending in the US District Court for the Eastern District of Texas, Sherman Division. Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at City Hall,215 E. McKinney Street, Denton,Texas. 1. PLEDGE OF ALLEGIANCE The Council and members of the audience recited the Pledge of Allegiance to the U. S. and Texas flags. 2. PROCLAMATIONS/PRESENTATIONS A. ID 15-060 National Wear Red Day Proclamation City of Denton City Council Minutes February 3,2015 Page 13 Mayor Watts presented the proclamation for National Wear Red Day proclamation. B. ID 15-112 Susan Frank Day Proclamation Mayor Watts presented the proclamation for Susan Frank Day. 3. CITIZEN REPORTS A. ID 15-055 Christopher Klabunde regarding visitation policy change for Denton County jail. Mr.Klabunde was not present at the meeting. 4. CONSENT AGENDA Council Member Hawkins motioned, Mayor Pro Tern Engelbrecht seconded to adopt the Consent Agenda and accompanying ordinances and resolutions. On roll call vote, Mayor Pro Tern Engelbrecht "aye", Council Member Gregory "aye", Council Member Hawkins "aye", Council Member Johnson "aye", Council Member Roden "aye", Council Member Ryan "aye", and Mayor Watts"aye". Motion carried unanimously. ARoroved the minutes-listed below. A. ID 15-026 Consider approval of the minutes of December 1, December 2, December 9,and December 16,2014. Resolution N2. R2015-002 B. ID 15-034 Consider approval of a resolution adopting Texas Business Code, Subtitle B, Chapter 322, "The Uniform Electronic Transactions Act" to permit electronic signatures on certain documents entered into by and between the City and other parties as a city policy, a resolution adopting the provisions of Texas Local Government Code, Section 252.0415, establishing a city policy regarding procedures for the receipt of electronic bids and proposals; providing that all bonds and negotiable instruments tendered to the City, or by the City in satisfaction of or as evidence of obligations shall bear original signatures; and providing that the City Council in its sound discretion, may require original signatures on certain other documents in the best interests of the City; providing for the later modification of the policies by the City Manager as deemed necessary; and declaring an effective date. Ordinance No. 2015-014 C. ID 15-051 Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager to make an application with the Texas Department of Housing and Community Affairs (TDHCA) Emergency Solutions Grant (ESG) and take all other actions necessary to obtain and implement the program; and providing for an effective date. City of Denton City Council Minutes February 3,2015 Page 14 Ordinngg No 2015-015 ID 15-071 Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager, or his designee, to accept a counteroffer from Richard Woods for the purchase by the City of a 2.112 acre tract of land being generally situated in the Alexander Hill Survey, Abstract No. 623, City of Denton, Denton County, Texas, generally located in the 1200 block of S. Locust St., for the public use of expansion, construction, operation, maintenance, augmentation, and improvement of electric transmission and distribution lines, facilities, structures, And substations for the price of Five Hundred Seventy Five Thousand Dollars and 00/100 cents ($575,000);authorizing the expenditure of funds; and providing an effective date. Resolution No.R2015-003 E. ID 15-079 Consider approval of a resolution creating a special five (5) member Oversight Committee to monitor, evaluate, and report on progress of the six year Capital Improvement Program approved by the voters at the bond election on November 4,2014,appointing committee members, and providing an effective date. Ordinance No. 2015-016 F. ID 15-085 Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a contract through the Buy Board Cooperative Purchasing Network for the acquisition of one(1)haul truck and one(1) ejecto bed chassis for the City of Denton Street Department; and providing an effective date (File 5736-awarded to Rush Truck Center, Crane in the amount of $250,334). Qrdinance No. 20 55-017 G. ID 15-086 Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a contract through the National Intergovernmental Purchasing Alliance (National IPA) for the purchase of gasoline and diesel fuels for the City of Denton as awarded by City of Fort Worth Contract# 14-0121; and providing an effective date (File 5750-Purchase of Gasoline and Diesel Fuels awarded to Martin Eagle Oil Company, Inc. in the three (3) year estimated amount of$12,500,000). Ordinance No.2015-018 H. ID 15-087 Consider adoption of an ordinance authorizing the City Manager to execute an Interlocal Agreement with Denton County under Section 791.001 of the State of Texas Government Code, to authorize Denton County to purchase pavement marking services from the City of Denton at a cost of Thirteen Thousand Eight Hundred Seventy Five and 0/100 Dollars ($13,875.00); authorizing the expenditure of funds therefor; and declaring an effective date (File 5740-Interlocal Agreement with Denton County for Pavement Marking Services). Ordinance No_ 2015-019 I. ID 15-088 Consider adoption of an ordinance of the City of Denton, Texas authorizing the approval of a First Amendment to a contract with Jagoe-Public City of Denton City Council Minutes February 3, 2015 Page 15 Company for asphalt and concrete street sections and repair services; providing for the expenditure of funds therefor; and providing an effective date (Bid 4974- providing for an additional expenditure amount of$1,875,000 with the total contract amount not-to-exceed $9,375,000). Ordinance No, 2015-020 7, ID 15-089 Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager to execute a Professional Services Agreement for engineering services in support of developing a Manual for the Control, Operation, and Maintenance of Zebra Mussels within waterways serving the City of Denton, Texas; providing for the expenditure of funds therefor; and providing an effective date (File 5643-awarded to ARCADIS-US, Inc. in the not-to-exceed amount of S 148,623).The Public Utilities Board recommends approval (5-0). Ordinance No.2015-021 K. ID 15-090 Consider adoption of an ordinance authorizing the City Manager to execute Change Order Number One to the contract between the City of Denton and Quality Excavation, LTD; providing for the expenditure of funds therefor; and providing an effective date (Bid 5515- Change Order Number One in the amount of $53,004 for a total contract award of $970,529.50). The Public Utilities Board recommends approval (5-0). _Ordinance No. 2015-022 L. 1D 15-091 Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a contract through the State of Texas Smart Buy Program for the purchase of one (1) Ford F650 chassis with a Knapheide utility body for the City of Denton Water Treatment Department as awarded by the State of Texas Contract 071-072-AT 2014; and providing an effective date (File 5722- awarded to Sam Pack's Five Star Ford in the amount of S112,640.45). The Public Utilities Board recommends approval (5-0). Ordinance No. 2015-023 M.ID 15-104 Consider adoption of an ordinance of the City of Denton,Texas,approving the Real Property conveyance of the Downtown Denton Transit Center from the City to the Denton County Transportation Authority (DCTA) in accordance with the terms of the Interlocal Cooperation Agreement between the City and DCTA(Ordinance No. 200M98); and providing an effective date. Ordinance No. 2015-024 N. ID 15-105 Consider adoption of an ordinance authorizing the City Manager or his designee to execute a Contract of Sale, by and between the City of Denton, Texas ("CITY"), as Buyer, and Linda Maria Casias Roth (the "OWNER"), as Seller, to acquire fee simple to a 0.2714 acre tract situated in the Robert Beaumont Survey, Abstract No. 31, located in the City of Denton, Denton County, Texas, and being generally located at 1224 North Bonnie Brae Street; for the purchase price of one hundred thirty seven thousand five hundred dollars and no cents ($137,500.00), and City of Denton City Council Minutes February 3,2015 Page 16 other consideration, as prescribed in the Contract of Sale (the "AGREEMENT"), as attached hereto and made a part hereof as Exhibit"A"; authorizing the expenditure of funds therefor; and providing an effective date. (Future Hickory to U.S. 380 Transmission Line Upgrade Project). Ordinance No, 2015-025 O. ID 15-114 Consider adoption of an ordinance of the City of Denton, Texas, appointing Gregory L. Bertrand as Assistant Judge for the City of Denton Municipal Court of Record; appointing Dennis Engler as Assistant Judge for the City of Denton Municipal Court of Record; appointing Alison J. Grant as Assistant Judge for the City of Denton Municipal Court of Record;appointing Brian S. Holman as Assistant Judge for the City of Denton Municipal Court of Record appointing James Horton as Assistant Judge for the City of Denton Municipal Court of Record;establishing terms of office for municipal judges in accordance with applicable state statutes; providing for renewal and extension of terms absent specific action by Council; authorizing the Mayor to execute a contract for term of office; ratifying terms of contract; and declaring an effective date. 5. ITEMS FOR INDMDUAL CONSIDEBATION Ordinance No. 2015-026 A. CAII-OOD4f Consider adoption of an ordinance of the City of Denton, Texas, adopting the update to the City of Denton's Comprehensive Plan; and providing an effective date. (CAII-0004) The Planning and Zoning Commission recommends approval of this request with conditions (5-2). This item was continued from the January 6,2015 meeting. Ron Menguita, Development Review Coordinator, reviewed the background of the project schedule. He had presented information on the proposed conditions during the City Council Work Session. Condition 447 - consensus was that currently there was language already in the Plan and this condition would have no action. Condition 959-was added for a Walk Friendly Community Condition. Condition #60 — language was revised to address the Downtown area and was revised under neighborhood/university compatibility area. Condition 461 — was revised to indicate the need to maintain utility infrastructure when necessary. Condition 44 — wording was revised to work with the various Chambers of Commerce and the Convention and Visitors Bureau. Condition 420 — wording was revised to "explore" rental housing and multi-family inspection and inspection programs. City of Denton City Council Minutes February 3,2015 Page 17 Condition 950—wording was revised to "explore"green building standards. A comment Card was submitted by Michele Lynn, 1401 Egan, Denton, in favor of the proposal. Council Member Gregory motioned,Council Member Hawkins seconded to adopt the ordinance. On roll call vote, Mayor Pro Tern Engelbrecht "aye", Council Member Gregory "aye", Council Member Hawkins "aye", Council Member Johnson "aye", Council Member Roden "aye", Council Member Ryan "aye",and Mayor Watts "aye". Motion carried unanimously. 6. PUBLIC HEARINGS Ordinance No.20IS-027 A. HL14-0011 Hold a public hearing and consider an ordinance of the City of Denton, Texas, designating the property located at 801 West Oak Street, legally known as Lot 8 (PT) of the McKennon Addition, as a historic Iandmark under Section 35.7.6 of the Denton Development Code; providing for a penalty in the maximum amount of 52,000.00 for violations thereof, severability and an effective date. The Planning and Zoning Commission recommends approval 7-0.(HL14-0011) Brian Lockley, Director of Planning and Development, presented the details of the request_ He indicated that this was a request for a historic landmark designation at 801 W. Oak Street. He presented the location map, site photos, criteria for approval which the proposal met, and notification map. The Historic Landmark Commission and the Planning and Zoning Commission recommended approval. The Mayor opened the public hearing. He noted that a Comment Card had been submitted by John and Donna Moms, 918 W. Oak,Denton, in support of the designation. Greg and Jane Naugher, 801 W Oak, Denton, 76201 -spoke in support. Council Member Roden asked how the application process worked for them. Naugher stated that they had help with the process and help on what needed to be included in the application which was very helpful.He did not have any specific suggestions. Randy Hunt, 722 West Oak,Denton,76201 - spoke in favor. Michelle Lynn, 1401 Egan,Denton, 76201 -spoke in favor. Lynde Dodd,612 Pearl,Denton,76201 —spoke in favor. The Mayor closed the public hearing. Council discussed the placing of the historic marker on the home and who paid for that cost. The homeowner who was seeking the designation paid for the marker Council Member Johnson suggested that the City purchase the plaque for the buildings. Mayor Watts indicated that could be a part of the motion to approve the ordinance. City of Denton City Council Minutes February 3,2015 Page 18 Council Member Roden motioned, Council Member Hawkins seconded to adopt the ordinance and to have the City provide the historical marker at the City's expense. On roll call vote,Mayor Pro Tern Engelbrecht "aye", Council Member Gregory "aye", Council Member Hawkins "aye", Council Member Johnson "aye", Council Member Roden "aye", Council Member Ryan "aye", and Mayor Watts"aye". Motion tamed unanimously. Ordinance No. 2015-028 B. HL14-0014 Hold a public hearing and consider an ordinance of the City of Denton, Texas, designating the property located at 912 West Oak Street, legally known as Lot 1 (E 41% Block 1, Mounts Addition, as a historic landmark under Section 35.7.6 of the Denton Development Code; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date. The Planning and Zoning Commission recommends approval 7-0.(HL14-0014) Brian Lockley, Director of Planning and Development, stated that this was a request for a historic landmark designation for the property at 912 W. Oak. He presented the location map, site photos, criteria for approval which the proposal met, and the notification map. The Historic Landmark Commission and the Planning and Zoning Commission recommended approval. The Mayor opened the public hearing. He noted that a Comment Card in support of the designation had been submitted by John and Donna Morris, 918 W.Oak, Denton. John Wright, 912 W. Oak,Denton—property owner, spoke in support. The Mayor closed the public hearing. Council Member Johnson motioned, Council Member Gregory seconded to adopt the ordinance and to have the City provide the historical marker at the City's expense. On roll call vote,Mayor Pro Tern Engelbrecht "aye", Council Member Gregory "aye", Council Member Hawkins "aye", Council Member Johnson "aye", Council Member Roden "aye", Council Member Ryan "aye", and Mayor Watts "aye". Motion carried unanimously. Ordinance No. 2015-029 C. HL 14-0015 Hold a public hearing and consider an ordinance of the City of Denton, Texas, designating the property located at 924 West Oak Street, legally known as Lot 2 (E65% Block 1, Mounts Addition, as a historic landmark under Section 35.7.6 of the Denton Development Code; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date. The Planning and Zoning Commission recommends approval 7-0. (HI I4-0015) Brian Lockley, Director of Planning and Development, presented details for the request for a historical landmark designation for 924 W. Oak. He presented the location map, site photos, criteria for approval which the proposal met, and notification map. The Historic Landmark Commission and the Planning and Zoning Commission recommended approval. The Mayor opened the public hearing. He noted that a Comment Card in support of the designation had been submitted by John and Donna Moms,918 W.Oak,Denton. City of Denton City Council Minutes February 3, 2015 Page 19 Mary Anderson,924 W. Oak,Denton—spoke in favor. Randy Hunt, 722 West Oak,Denton, 76201 -spoke in favor. The Mayor closed the public hearing. Mayor Pro Tem. Engelbrecht motioned, Council Member Ryan seconded to adopt the ordinance and to have the City provide the historical marker at the City's expense. On roll call vote, Mayor Pro Tem Engelbrecht "aye", Council Member Gregory "aye", Councii Member Hawkins "aye", Council Member Johnson "aye", Council Member Roden "aye", Council Member Ryan "aye", and Mayor Watts"aye". Motion carried unanimously. 7. CONCLUDINQ ITEMS A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting 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. Mayor Watts requested a Work Session with the new Bike Coordinator regarding bicycle safety regulations. Mayor Watts requested an Informal Staff Report regarding the conveyance of plats. Mayor Watts requested an Informal Staff Report regarding outside entities that did not moved their lines to new city power poles. B. Possible Continuation of Closed Meeting under Sections 551.071-551.096 of the Texas Open Meetings Act. Mayor Watts announced that the Council would be returning to the Closed Meeting at 7:40 p.m. to consider Item 1.1. from the Closed Meeting items. The Council returned to Open Session and with no further business, the meeting was adjourned at 9:15 p.m. City of Denton City Council Minutes February 3,2015 Page 20 CHRIS WATTS MAYOR CITY OF DEMON,TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON,TEXAS APPENDIX 4 Date-June 17,2016 Report No. 2016-047 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: This report summarizes the Return on Investment during 2014-2016 from The Denton Parks Foundation, a 501(c)(3) non-profit organization. BACKGROUND: On April 26, 2016, the Parks and Recreation Department presented their Annual Report to City Council. In conjunction with this presentation, City Council members requested Parks and Recreation provide supplemental information by way of an Informal Staff' Report to detail the Return on Investment (ROI) produced by the City's three-year contribution of$35,000 annually, for the Denton Parks Foundation Executive Director's salary. The intent behind the initial investment was to grow the Foundation and support aggressive fundraising to sponsor projects that would typically compete for City Capital Improvement Program funds. From 2011 through 2013, prior to the funding of the Executive Director position, the Denton Parks Foundation raised approximately$144,000. DISCUSSION: During the three year period of 2014-2016, the Denton Parks Foundation has increased fundraising efforts which directly contributed to the completion of the Eureka 2 playground, and other Parks and Recreation projects. • In 2014, the Denton Parks Foundation raised $106,867 which produced a return on investment of$3.05 for every dollar invested by the City of Denton. • In 2015, the Denton Parks Foundation raised $552,183 which produced a return on investment of$15.78 for every dollar invested by the City of Denton. • In 2016, the Denton Parks Foundation is projected to raise$148,700 which will produce a return on investment of$4.25 for every dollar invested by the City of Denton. • In 2017, the Denton Parks Foundation is requesting an increase of the City's Investment from $35,000 to $77,000, for salary and administrative support. The Denton Parks Foundation is proposing to raise $235,000 which would produce a return on investment of$3.05 for every dollar invested ATTACHMENT(S): Return on Investment Spreadsheet STAFF CONTACT: Emerson Vorel Director of Parks and Recreation City of Denton CITY OF DENTON RETURN ON INVESTMENT DENTON PARKS FOUNDATION EXECUTIVE DIRECTOR 0 City investment OTotal$Raised 600,000.00 $15.70, $552,183 500,000.00 400.000.00 300,000.011 S3.05, S235,000 200,000.00 S4.25, S148,700 S3.05, S106,067 S7'7,000 100,000 uu - $35,000 $35,000 J13 .O- 7 2014 LU1, 2016 2017