1. Audit of Capital Projects Administration: Planning & Design ABSTRACT
Inconsistencies in planning and review processes
have resulted in project delays in the past. These
_•-..ter :� — -
;: issues appear to be generally improving, however,
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documentation is limited. Developing, formalizing,
and implementing additional processes could
facilitate consistent management practices across
capital projects in the future.
City Auditor's Office
AUDIT OF CAPITAL
PROJECTS ADMINISTRATION
Planning & Design
JC01VTFYWMWWjJ
DENTON
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Table of Contents
ExecutiveSummary............................................................................................................................3
Introduction ..............................................................................................................................................6
ManagementResponsibility.....................................................................................................................6
Audit Objectives, Scope, and Methodology..............................................................................................6
Background...............................................................................................................................................7
WhatWorks Well.............................................................................................................................11
Funding of New Projects Appear to Have Been Better Planned.............................................................11
Debt Capacity Evaluation is Adequate....................................................................................................12
All Design Amendments were Appropriately Approved.........................................................................13
Opportunities for Improvement.......................................................................................................14
Project Planning Inconsistencies May Have Resulted in Additional Costs .............................................14
Design Quality Review and Assurance Processes Should Be Further Refined........................................17
Project Performance Monitoring & Evaluation Processes Can Be Further Improved............................19
Current CIP Design Procurement Method May Present Risks................................................................20
Appendix A: Management Response Summary.................................................................................23
Appendix B: Comparison of Debt Burden..........................................................................................25
Appendix C: Design Agreement Timeline&Summary........................................................................28
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Executive Summary
Honorable Mayor and members of the City Council,
The City Auditor's Office has completed a performance audit of the Capital Projects Administration
Planning& Design processes.The objective of this audit was to evaluate if the City's resources are
being used economically and efficiently, and adequate controls over capital project planning and
design processes.
Salient Findings:
• Projects we reviewed were generally initiated by previous Engineering Services management
and appear to have typically been underfunded causing delays in the schedule. This situation
led to the issuance of additional debt and the postponement of some previously proposed
projects. The current administration's improved budgeting practices have significantly
decreased these funding gaps in the past year.
• While amendments to a design contract may sometimes be necessary, they may also indicate
a possible lack of proper planning. For this reason, we reviewed each design agreement
amendment to determine the cause of the change:
o The majority of design amendment changes(about 65%of cost)were caused by issues
with the previous administration's planning processes, costing the City time and
money.
o About 19%of other amendment costs were to amend the design contracts to include
additional right of way acquisition services. Though originally unplanned, Engineering
Services felt these services were needed due to unanticipated staffing shortages in the
City's Real Estate Division.
o The remaining 1%of amendment costs were discussed as part of the Bonnie Brae and
Scripture Roundabout Investigation, which was presented to the City Council on
February 251h, 2020.
• Multiple design agreements were issued for three projects indicating that there were some
planning issues as follows:
o Plans were completed for the Hickory Creek II project, but construction was delayed
for about 10 years by the previous administration. This required the current
administration to revise the plans before completing construction. Revisions cost the
City about$200,000, which was avoidable if the construction had begun more timely.
o About $300,000 were spent on a design agreement to prepare up to the 30% design
plans for Bonnie Brae IV by the previous administration. Due to the previous
administration's lack of planning, a second agreement then had to be issued to
complete this design by the current administration. It is not clear how much of prior
work was useful in the final design.
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
o About $800,000 were spent on a Design-Build' contract executed by the previous
administration to develop 30% schematics for McKinney Street improvements from
Woodrow Lane to Grissom Road.A second Design-Bid-Build'agreement was issued by
the current administration to complete construction from Loop 288 to Grissom, which
is a subset of the previous scope. At this point, the City chose not to move forward
with the originally planned design-build method due to time restrictions on regional
funding that were not fully considered before the original contract was executed.
• For the Project Planning Phase, the Project Management Manual (Dec. 2017) requires
Engineering Services to develop a Project Charter and a Project Plan; including a
Communication Plan, Responsibility Plan, and Risk Management Plan; for each project. We
observed that this documentation was not complete during work accomplished by the previous
and the current administrations.
• For the Project Design Phase, the Manual requires Engineering Services to develop Plans
Specifications and Estimates (PS&E) to be used in the Bid Phase for each project. Denton's
Engineering Services, like many organizations, uses a 30-60-90%design process for its general
government capital improvement projects. This process is intended to provide the
stakeholders multiple opportunities to review the project's design while also focusing efforts
to ensure that the project's final plans, specifications, and estimates meet the stakeholder's
needs.
However, we found that only one project (Bonnie Brae Phase IV) had retained sets of plans at
all three design stages; additionally, two projects had plans up to their current design stage
(Bonnie Brae VI and Hickory Creek III).All other projects were missing at least one set of design
plans that should have been available for review—including those projects whose design begun
under the current administration. Without these plans it is difficult to tell when each stage of
design was complete.
• The Project Management Manual provides a list of the project manager's responsibilities
during the design phase. The Manual does require the project manager to perform design
quality assurance and quality control. The Project Manager is responsible for ensuring that
design is completed at each stage and the stakeholders' input from is received for making
improvements in the plans. We found that documentation of design review was missing for a
substantial number of projects in both administrations.
• The Project Management Manual requires Engineering Services' project managers to provide
Project Status Reports during the Construction Phase of the project. Feedback received from
City Manager's Office, City Attorney's Office and Purchasing Division was not documented,
which potentially resulted in this direction being lost or interpreted incorrectly.
• According to State law,the City may not select a provider of architectural, engineering, or land
surveying services on the bases of competitive bids. Instead the Texas Government Code§2254
(i.e. the Professional Services Procurement Act) requires governmental entities to use certain
'Under a Design-Build contract one firm is selected to design and build a project.The City's typical CIP procurement method is Design-Bid-
Build,under which different vendors are selected to design and build the project.
2 Under a Design-Bid-Build contract,a firm is hired to design the project and a separate firm is hired via the invitation to bid process for
construction.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
process when contracting for the professional services of architects, engineers, or surveyors.
The Engineering Services Department did not comply with these provisions when selecting
professional services listed above for some of the projects we reviewed.The City must comply
with State procurement laws and regulations as non-compliance may subject the Citytojudicial
challenge. Section 2254.005 of the Texas Government Code states that "a contract entered
into or an arrangement made in violation of[the Professional Services Procurement Act] is void
as against public policy." There may be a risk that the City could be left with little recourse if
such an agreement was entered into in violation of the Professional Services Procurement Act.
Without adequate documentation there is little assurance that the current procurement
practices comply with procurement laws.
We appreciate Engineering Services staff for their co-operation. We made seven recommendations in this
report. Engineering Services has concurred or partially concurred with all recommendations.
Sincerely,
Umesh Dalal, City Auditor
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Introduction
The City Auditor is responsible for providing: (a) an independent appraisa13 of City operations to
ensure policies and procedures are in place and complied with, inclusive of purchasing and
contracting; (b) information that is accurate and reliable; (c) assurance that assets are properly
recorded and safeguarded; (d) assurance that risks are identified and minimized; and (e) assurance
that resources are used economically and efficiently and that the City's objectives are being
achieved.
The City Auditor's Office has completed a performance audit of the Capital Projects Administration
Planning & Design processes. We conducted this performance audit in accordance with generally
accepted government auditing standards. Those standards require that we plan and perform the
audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit objectives.
Management Responsibility
City management is responsible for ensuring that resources are managed properly and used in
compliance with laws and regulations; programs are achieving their objectives; and services are
being provided efficiently, effectively, and economically.
Audit Objectives, Scope, and Methodology
This report is intended to provide assurance that the City's resources are being used economically
and efficiently by evaluating the existence and adequacy of controls over capital project planning
and design processes.
Audit fieldwork was conducted during September and October of 2019.The scope of review varied
depending on the procedure being performed. The following list summarizes major procedures
performed during this time:
• Reviewed documentation to develop criteria including industry standards, best practices,
policies, and procedures;
• Developed a process narrative to identify current control activities, which was certified by
the Deputy City Engineer;
• Reviewed a targeted sample of capital projects to determine if all controls activities were
documented and functioning;
• Verified procurement law compliance for a selection of design agreements executed as
part of the general government capital projects delivery process;
• Interviewed City staff to better understand the history of targeted capital projects
including the planning, design, and funding processes; Q0
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3 The City of Denton Internal Auditor's Office is considered structurally independent as defined by generally accepted government auditing
standard 3.56.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
• Examined minutes and meeting materials from the Special Citizens Bond Advisory
Committee from May 2019 through August 2019.
Background
As of December 2017, The City of Denton's Engineering Services had established and
formalized general project management and delivery procedures in the Project Management
Manual, which is based on the Project Management Institute's Project Management Body of
Knowledge (PMBOK). This Manual generally divides the capital improvement project (CIP)
management process into six phases as shown below.
1. Initiation 4. Bid
2. Planning 5. Construction
3. Design 6. Close out
This audit report generally covers Engineering Services' processes and controls in the first three
project phases.4 This being said, the report also reviews the management of debt as it relates to
funding capital projects, which is the responsibility of the Finance Department, and the
procurement of project design services, which is primarily the responsibility of the Purchasing
Division.
In this context, the report focuses on the administration of four major general government CIP
programs. Most projects reviewed were initiated by the prior administration — prior to December
2017—unless specifically identified as follows:
• Bonnie Brae Street roadway improvements;
o Phases I, II, and III comprises improvements to Bonnie Brae from Vintage Boulevard to
Interstate 35E, including improvements on Vintage from Fort Worth Drive (US 377) to
Interstate 35W;
o Phases IV and V comprises improvements from 1-35E to University Drive (US 380); and
o Phases VI and VII comprises improvements from University Drive to Loop 288 —
initiated after December 2017.
Picture 1: Bonnie Brae Blvd CIP
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• Hickory Creek Road roadway improvements and realignment;
4 The Bid,Construction,and Close Out phases will be covered in a separate audit report.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
o Phases I comprises improvements from Barrel Strap to Teasley Lane;
o Phase II comprises improvements from Teasley Lane to Riverpass Drive;
o Phase III comprises the improvement and realignment of Hickory Creek from Riverpass
straight to Country Club Road (FM 1830) —initiated after December 2017; and
o Phase IV comprised of improvements from Country Club to Fort Worth Drive—initiated
after December 2017.5
Picture 2: Hickory Creek Rd. CIP
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• Mayhill Road roadway improvements from University Drive to Colorado Boulevard; and
Picture 3: Mayhill Rd. CIP
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• McKinney Street roadway improvements from Loop 288 to Grissom Road.
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5 As of December 2019,Hickory Creek Road Phase IV appears to have been put on hold.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Picture 4: McKinney Street CIP
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At the City of Denton, major capital improvement projects are generally funded through the
issuance of debt such as general obligation (GO) bonds and certificates of obligation (CO), which
are backed by the full faith and credit of the issuing jurisdiction,' or revenue bonds, which are
secured by a specific revenue stream. In addition, the City may receive additional monies from
regional partners such as Denton County, Denton Independent School District, the Texas
Department of Transportation, and the North Central Texas Council of Governments (NCTCOG)for
certain transportation projects. The budgeted funds for each of the four selected capital
improvement programs in our scope as of February 2020 are broken out by source in Figure 1:
Figure 1: Select CIP Budgeted Funding Source As of February 2020 (In Millions)
$90 ■Regional Partners ■GO Bonds Cos Other
o $80
$70
$60
$50
$40
$30
$20
$ 0$ .
0
Bonnie Brae Hickory Creek Mayhill McKinney
The four major CIP programs under review in our audit are typically broken into multiple phases
resulting in 16 unique projects.Table 1 shows the status of each of these projects and expected
completion date as of February 2020:
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6 While both types are backed by the full faith and credit of the issuing jurisdiction,GO Bonds require voter approval before issuance whereas
Cos do not.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Table 1: Select CIP Schedule Summary
Project Phase Design Agmt. Executed Exp.Completion
Bonnie Brae I Construction Oct. 2010 Jun. 2020
Bonnie Brae II Construction Oct. 2010 May 2021
Bonnie Brae III 90% Design Oct. 2010 Sep. 2022
Bonnie Brae IVA Construction Mar. 2018 Mar. 2020
Bonnie Brae IVB 100% Design Jan. 2017 Oct. 2022
Bonnie Brae V 60% Design Aug. 2013 Aug. 2022
Bonnie Brae A 30% Design Sep. 2018 Aug. 2022
Bonnie Brae AI Initiation TBD TBD
Hickory Creek I Bid May. 2018 May 2021
Hickory Creek II Construction Apr. 2001 Apr. 2021
Hickory Creek III 60% Design Feb. 2019 Apr. 2022
Hickory Creek IV On Hold NA NA
Mayhill Road I Construction Oct. 2010 Apr. 2020
Mayhill Road 11 (DCTA Bridge) 30% Design Apr. 2019 Dec. 2022
McKinney I Construction Oct. 2018 Mar. 2020
McKinney 11 Construction Oct. 2019 Mar. 2022
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
What Works Well
Funding of New Projects Appear to Have Been Better Planned
The Project Management Manual identifies several key deliverables based on the Project
Management Institute's PMBOK best practices; for the Project Initiation Phase, the Manual
requires Engineering Services to develop high-level objectives, scope, and constraints, including
schedule and budget, for each project. The auditors found the following:
• The identification of general government CIP is primarily driven by the general obligation bond
program process. This process involves a committee of citizens vetting the reasoning and
funding of each staff-proposed project and providing a recommendation to the City Council.
This recommendation is then reviewed by the City Council who may call a bond election to
acquire citizens approval for the proposed debt issuance.'
o Projects in our scope were generally initiated by previous Engineering Services
management and appear to have typically been underfunded (see Figure 2) causing
delays in the schedule, resulting in the issuance of more debt, and the postponement
of some previously proposed projects. The current administration's improved
budgeting practices have significantly decreased these funding gaps in the past year.
Figure 2: Select CIP Funding Gap (Millions)
$140
■Nov.2018 Budget ■Feb.2020 Budget Est.at Completion
o $120
$100
$80
$60
$40
$20
$0 � ■ ■ ■
Bonne Brae Hickory Creek Mayhill McKinney
o Based on our review of the most recent Citizen Bond Advisory Committee's meetings
(i.e. 2019 Bond Program), staff presented the required high-level information for
several potential road CIP projects. These are summarized in Table 2:
Table 2: 2019 Bond Election Proposed Road CIP Projects
Project
Total Cost City Funding of Total Expected Finish Lane Miles
Est.Cost(Millions)
Bonnie Brae(V,VI,VII) $111.5 $27.0 May 2022 3.00
Hickory Creek(III & IV) $160.0 $34.0 March 2025 5.75 rl
Ryan Road $4.0 $4.0 March 2024 2.00 rl
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'Though there is an expectation that the projects vetted by the citizens committee will be completed with debt approved to be issued by the
bond election,bond funds may be used to complete other projects allowed under the bond proposition language.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
• The most recent bond improvement program's cost estimates include the following:
o Construction and right of way acquisition costs, which are estimated based on historic
costs of previous projects and predicted right of way needs;
o Incentives and disincentives budget to motivate the construction contractor to finish
the project ahead of schedule; and
o All other costs are based on the construction and right of way acquisition cost
estimates including: design and construction consultant services costs, City staff's
design and construction labor costs, expected inflation (about 1% a month), and
contingency funds.
Debt Capacity Evaluation is Adequate
The Government Finance Officers Association (GFOA) capital planning best practices recommend
that the full extent of CIP be considered when developing a multi-year capital plan.As debt is often
the City's primary funding source for CIP, the City's debt capacity and debt affordability are critical
to understanding these financial impacts.The GFOA recommends considering the following factors
when evaluating debt capacity:
➢ Statutory or constitutional limitations affecting the debt that can be issued;
➢ Other legal limitations, such as coverage requirements or additional bonds tests imposed
by bond covenants;
➢ Measures of the tax and revenue base;
➢ Evaluation of trends relating to the government's financial performance;
➢ Debt service obligations;
➢ Measures of debt burden on the community; and
➢ Tax-exempt market factors affecting interest costs.
Similarly, the GFOA recommends benchmarking to peer cities to determine an "affordable" level
of debt; however, this is largely a judgement of management and the City Council. While the
management of debt significantly impacts Engineering Services, the evaluation of debt capacity
and affordability are the responsibility of the Finance Department. The auditors found the
following:
• The City of Denton has a comprehensive debt management policy that requires staff to present
a comprehensive analysis of debt capacity to the City Council prior to issuing bonds; this
analysis includes all factors recommended by the GFOA.
o The City's debt affordability analysis for the potential impacts of the 2019 Bond
Program meets these requirements and was generally conservative when forecasting
revenues that will pay for expected debt.
• The City of Denton appears to have a relatively higher debt burden than its peer cities;
however, the City has unique infrastructure (e.g. the Denton Energy Center, municipal-owned N
Sanitation,Water,and Electric, etc.)that may in part require a higher debt burden.This subject r—I
is further explored in Appendix B.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
All Design Amendments were Appropriately Approved
The City of Denton's Materials Management and Payment Procedures Manual (updated in May
2018) establishes the following purchasing thresholds:
➢ The City Council has extended a $100,000 authority to the City Manager to approve
purchases for general expenditures,s which includes: fees, professional services, personal
services, and other categories exempted from the bid process by the Texas Local
Government Code Chapter 252.022; and
➢ The City Manager has extended authority to the Purchasing Manager to approve purchases
and change orders up to$50,000;
➢ Individual expenditures and contracts in excess of $100,000 must be approved by City
Council.
While the procurement function significantly impacts and is initiated by Engineering Services,
compliance with procurement laws and regulations is the primary responsibility of the Purchasing
Division. The auditors found the following:
• All eleven design agreements reviewed were appropriately approved by the City Council via
ordinance.
• Eighteen design agreement amendments (for additional details refer Table 12 in Appendix C)
were executed for the selected CIP during the audit period as follows:
Table 3: Summary of Design Agreement Amendment Approvals
Approval Amendments Value
By City Council 8 $3,851,568
By the City Manager 5 $278,197
By Purchasing 5 $46,700
Total: 18 $4,176,465
o Based on the Materials Management and Payment Procedures Manual, all
amendments were approved according to the delegated authority limits for the City
Council, City Manager, and the Purchasing Division.
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8 Capital improvement project design agreements are not subject to Chapters 252 or 271 of the Texas Local Government Code.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Opportunities for Improvement
Project Planning Inconsistencies May Have Resulted in Additional Costs
In total, the 11 professional services agreements reviewed had 18 amendments, which are
summarized in Table 4 below. A timeline of design agreements and associated amendments is
presented in Table 11 in Appendix C. While amendments to a design contract may sometimes be
necessary, they may also indicate a possibility of a lack of proper planning. For this reason, we
reviewed each design agreement amendment to determine the cause of the change.
Table 4: Design Agreement Summary
Total Design Design Estimate at
Project(s) Value Amendments' Completionlo
Bonnie Brae I, II,& III $5,444,253 $0 $60,529,000
Bonnie Brae IVA& IVB $1,569,982 $1,277,406 $17,700,000
Bonnie Brae V $1,103,010 $271,813 $9,376,040
Bonnie Brae VI $2,429,240 $397,760 $27,800,000
Hickory Creek Road 1 $296,884 $56,884 $3,000,000
Hickory Creek Road II $441,250 $225,550 $6,600,000
Hickory Creek Road III & IV $3,342,509 $0 $43,000,000
McKinney I & II $3,382,100 $2,023,800 $16,683,000
Mayhill Road I & II (DCTA Bridge) $7,059,738 $2,558,208 $84,794,999
Total Design Agreement Value: $25,068,965 $6,811,421 $269,483,039
What We Found?
• The majority of design amendment changes (about 65%) were caused by issues with the
previous administration's planning processes—costing the City time and money(see Figure 3):
Figure 3: Explanation of Design Amendment Costs
Unavoidable Outside ROW
Changes Acquisition
15% Services
19%
Cur.Admin.
Unplanned Costs
20%
Project Redesign
1%
o Unavoidable changes include amendment costs (about 15%) incurred in order to
responded to external forces. For example, certain regulations changes or the
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9 Amendment Values include the cost of secondary design agreements(i.e.those entered into after an original agreement had been executed).
10 Estimates at completion are based on Engineering Services CIP Reporting Dashboard as of 2/21/20.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
construction of facilities by non-City organizations necessitated the redesign of some
projects.
o About 19% of amendment costs were to amend the design contracts to include
additional right of way acquisition services. Though originally unplanned, Engineering
Services felt these services were needed due to unanticipated staffing shortages in the
City's Real Estate Division. Engineering Services staff has begun including these as
optional services in all design agreements to supplement Real Estate's capacity for CIP
workload, which must also manage other departments land acquisition requests.
The final 1% of amendment costs ($45,000) were due to a breakdown in department
communication during the Bonnie Brae IVA project.11 This resulted in design changes
being necessary after the construction contract was awarded to reincorporate
waterlines that had been removed from the project's scope. In addition, the City was
unable to acquire two parcels of land before construction began—resulting in a scope
reduction of 0.81 lane miles.These redesigns in part delayed construction by about 1
week.
• In addition, multiple design agreements were issued for three projects indicating that there
were some planning issues as described below:
1) Plans were completed for Hickory Creek II, but construction was delayed for about 10
years bythe previous administration.This required the current administration to revise
the plans before completing construction. It is possible that construction was put on
hold because of insufficient funding to complete construction or other planning issues.
Revisions to these plans cost the City about $200,000, which may have been avoided
if the previous administration had begun construction soon after design was complete.
2) About $300,000 were spent on a design agreement to prepare up to the 30% design
plans for Bonnie Brae IV by the previous administration. Due to the previous
administration's lack of planning, a second agreement then had to be issued to
complete this design by the current administration.We were unable to determine how
much of the work conducted during the previous design agreement was used as part
of the second design agreement.
3) About $800,000 were spent on a Design-Build12 contract executed by the previous
administration to develop 30% schematics for McKinney Street improvements from
Woodrow Lane to Grissom Road. A second Design-Bid-Build13 agreement was issued
by the current administration to complete construction from Loop 288 to Grissom,
which is a subset of the previous scope. At this point, the City chose not to move
forward with the originally planned design-build method due to time restrictions on
regional funding that were not fully considered before the original contract was Ln
executed. Conceivably, a part of the original spending may have been wasted due to
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11 Additional issues identified as part of the Bonnie Brae IVA project were investigated by the City Auditor's Office and are further detailed in a
separate report.This report was presented to the City Council on February 2511,2020.
12 Under a Design-Build contract one firm is selected to design and build a project.The City's typical CIP procurement method is Design-Bid-
Build,under which different vendors are selected to design and build the project.
13 Under a Design-Bid-Build contract,a firm is hired to design the project and a separate firm is hired via the invitation to bid process for
construction.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
the reduction in scope, however, the major objective of the original contract (i.e. 30%
design) was completed.
• For the Project Planning Phase, the Manual requires Engineering Services to develop a Project
Charter and a Project Plan — including a Communication Plan, Responsibility Plan, and Risk
Management Plan—for each project.Table 5 below shows the results of our review:
Table 5: Planning Documentation Review Summary
Documentation Previous Admin. Current Admin.
Projects %Available Projects14 %Available
Project Charter 12 0% 2 100%
Communication Plan 12 42% 2 50%
Responsibility Plan 12 8% 2 0%
Risk Management Plan 12 8% 2 0%
Why Does It Matter?
The project charter and project plan provide the structure for a project. Successfully implementing
the approved project planning techniques should create a roadmap, facilitating the completion of
the project. There does appear to have been some improvement in planning processes in recent
years, however, some key planning documents are missing from projects initiated under the
current administration (see Table 5). Without creating and utilizing proper planning, sub-processes
and procedures may be performed inconsistently leading to inefficiencies in the project life cycle,
especially if these phases are rushed.These types of planning issues may have resulted in waste in
the past.
Based on discussions with Engineering Services Management, procedures in the Project
Management Manual were not followed for projects initiated by the previous administration due
to pressure to complete the projects that the City had previously proposed but not delivered yet.
This pressure created a sense of urgency in the Department that may have caused some planning
procedures to be performed superficially or skipped entirely. In addition, Engineering Services' CIP
Delivery team has not always possessed the necessary project management experience; however,
all project managers and program managers have complete one week of PMBOK training within
the last year. In addition, one project manager is a certified Project Management Professional.
Finally, Engineering Services'CIP Delivery function has undergone several organization restructures
since fiscal year 2017, including the addition of 6 new positions in the Engineering Division.
Additionally, the Director of Capital Projects has changed twice, and the direct supervisor of the
Capital Projects Delivery Function has changed three times. Such turnover in essential supervisory
positions may have hindered the enforcement of policies and procedures in the past.
Recommendations:
1. Require Project Managers to follow procedures established in the Project Management Q0
Manual including documenting applicable project plans. rl
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14 Projects initiated under the current administration include Bonnie Brae VI and Hickory Creek Road III.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Engineering Comments: Project Mangers were directed to upload all available documentation
including project plans to the project folders prior to the initiation of the Audit. The Program
Managers are required to check and confirm this on a regular basis. Majority of the projects or
their phases were old projects that were not well electronically documented which resulted in
the findings of this Audit report.
2. Continue to develop and implement project manager training to ensure that the Project
Management Manual is implemented.
Engineering Comments: The Project and Program Managers have attended the Project
Management Body of Knowledge (PMBOK) training session (40 hrs) in the last 18 months.
Additionally, staff is encouraged to attend additional PMBOK training this year and secure the
PMP(Project Management Professional)certification.
Design Quality Review and Assurance Processes Should Be Further Refined
For the Project Design Phase, the Manual requires Engineering Services to develop Plans
Specifications and Estimates (PS&E) to be used in the Bid Phase for each project. Denton's
Engineering Services, like many organizations, uses a 30-60-90% design process for its general
government capital improvement projects. This process is intended to provide the stakeholders
multiple opportunities to review the project's design while also focusing efforts to ensure that the
project's final plans, specifications, and estimates meet the stakeholder's needs.
What We Found?
• All projects had a corresponding professional services agreementforthe project's design which
generally require the design consultant to provide 30-60-90% plans. In addition, all projects
that had reached the Bid phase had 100%design plans, specifications, and estimates.
o However, we found that only one project (Bonnie Brae Phase IV) had retained sets of
plans at all three design stages; additionally,two projects had plans up to their current
design stage (Bonnie Brae VI and Hickory Creek III). All other projects were missing at
least one set of design plans that should have been available for review — including
those projects whose design begun under the current administration. Without these
plans it is difficult to tell when each stage of design was complete.
• The Project Management Manual provides a list of the project manager's responsibilities
during the design phase; however, it only requires one deliverable—the final PS&E.
o The Manual does require the project manager to perform design quality assurance and
quality control. However, the Manual does not require documentation to ensure this
task is being performed adequately.
o According to discussion with Engineering Services management, review comments for
each plan set are prepared as part of the design quality control process; however,only
one project (Bonnie Brae VI) had review comments documented for all submitted
plans.The Project Manager is responsible for ensuring that design is completed at each
stage and the stakeholders' input from is received for making improvements in the
plans. Based on these records, we do not have assurance that these events occurred.
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Table 6 shows the percentage of each type of documentation that was available for
our review by the administration that started the design process:
Table 6: Design Documentation Review Summary
Documentation Previous Admin. Current Admin.
Projects %Available Projects15 %Available
30%Schematics 7 29% 6 83%
30%Review Comments 7 14% 6 17%
60%Plans 7 29% 5 60%
60%Review Comments 6 0% 4 50%
90%Plans 6 50% 4 50%
90%Review Comments 6 0% 4 50%
Why Does It Matter?
Stakeholder reviews are essential to ensuring that the product meets the needs of users and that
the construction process runs smoothly. In addition, if proper documentation is not retained, it is
very difficult to determine if all comments have been addressed appropriately and could ultimately
affect the quality of the product or efficiency of the project. Finally, without a formalized design
review and quality assurance process, the PS&E may not include the necessary details to provide
for a fair and smooth bidding process.
Recommendation:
3. Develop a formalized design review and quality assurance procedure. Consider developing a
quality assurance checklist to ensure all necessary stakeholder reviews and actions have
occurred at the 30%,60%,and 90%design stages.Such a checklist would also help to formalize
the identification and involvement of stakeholders. Maintaining review comments provides a
reference for design changes to be made,facilitating the quality control process.
Engineering Comments: A design review and quality assurance procedure has been
implemented and staff is currently working on preparing the documentation and the Standard
Operating Procedure(SOP)for this procedure.
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is Design start dates are based on the date the design agreement was execute;design agreements executed under the current administration
include Bonnie Brae VI,Hickory Creek I and 11,and McKinney I and 11.Mayhill at DCTA Bridge and Bonnie Brae IVA were also considered projects
designed under the current administration as there was a clear design agreement amendment that began the design of those projects.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Project Performance Monitoring & Evaluation Processes Can Be Further Improved
The Project Management Manual requires Engineering Services' project managers to provide
Project Status Reports during the Construction Phase of the project. According to the Project
Management Institute's PMBOK best practices, monitoring and controlling processes should occur
during the entire project and require tracking, reviewing, and regulating the progress and
performance of the project.
What We Found?
• Each quarter Accounting and CIP department leadership discuss the status of each project with
the CIP Committee, which includes the City Manager's Office, the City Attorney's Office, and
the Purchasing Division. This Committee provides feedback and direction on these projects;
however, these meetings are not always documented, potentially resulting in this direction
being lost or interpreted incorrectly.
• Though the Manual requires project status reports, it does not specify how often these should
be prepared and only requires them during the Construction Phase of the project. This being
said, Engineering Services' Program Management Office (PMO) requires Engineering Services'
Project Managers to submit project status reports weekly in order to update the Capital
Improvement Reporting Dashboard, which includes pertinent information.
• The Project Management Manual does not detail any procedures for evaluating the
performance of a project; however, PMO has developed a Risk Report that is presented to
Engineering Services' staff each month. These Reports compare each project's current costs
(based on information from the City's financial system)to the estimate at completion and the
project's progress (based on weekly Project Manager reports)to the baseline schedule.
This being said,true performance reporting has not been possible for the projects we reviewed
because estimates at completion and baseline schedules have not been solidified and so
changes to these baseline metrics have been frequent. PMO has developed automated
processes to notify Engineering Services management of changes to estimates at completion;
however, these processes have been implemented too recently to adequately judge their
effectiveness at this time.
Why Does It Matter?
Formalizing reporting requirements and expectations in the Project Management Manual
facilitates consistency and obligates employees to follow these procedures. Similarly, consistently
documenting direction received at the quarterly CIP Committee meetings will facilitate assurance
that City management's direction is understood and followed through with by department
leadership.
Finally, reporting and monitoring project performance is integral to improving the CIP delivery
function. Establishing baseline expectations for key metrics during the Planning Phase of future
projects should allow Engineering Services management to more effectively understand and
manage CIP resources.This change may also enable the Department to demonstrate performance
improvement over time and so the monitoring and reporting improvements implemented by PMO rl
should continue to be supported.
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
In addition, the Project Management Institute's best practices recognize four key project
performance metrics — cost, schedule, quality, and user satisfaction. While PMO has developed
processes for cost and schedule, consideration should be given to monitoring and reporting on
project quality and stakeholder satisfaction in the future.
Recommendations:
4. Formalize Project Status Report requirements and expectations during the entire project (the
Planning, Design, Bid, and Construction phases) in the Project Management Manual.
Engineering Comments: The 'Project Status Report' section (5.3) in the Project Management
Manual will be updated to include specific requirements and expectations for Capital Projects
at every phase of the project.
5. Document direction given to department leadership during quarterly CIP Committee meetings
to facilitate monitoring of staff performance.
Engineering Comments: Based on the input/direction received during the previous CIP
Committee meetings,staff has completely updated the tracking and reporting of all CIP projects
which has resulted in the CIP dashboard. The projects are now tracked on a weekly basis with a
monthly risk report that tracks the performance of the Project managers. The meeting minutes
for all CIP Committee meetings will be formally documented.
6. Continue developing formalized processes for evaluating project performance that compare
expectations of cost,schedule, and quality as expected at the planning stage to project results.
Include processes for officially adopting new expectations if the scope of a project significantly
changes.
Engineering Comments: Currently, CIP projects are tracked through all phases (design, Right-
of-Way, Construction) on a weekly basis. As the current projects go through a complete cycle
(planning through acceptance), staff will develop and fine tune a formalized process for
evaluating project performances as they relate to cost, schedule and quality.
Current CIP Design Procurement Method May Present Risks
According to State law,16 the City may not select a provider of architectural, engineering, or land
surveying services on the bases of competitive bids. Instead the Texas Government Code §2254
(i.e.the Professional Services Procurement Act) requires governmental entities to use the following
process17 when contracting for the professional services of architects, engineers, or surveyors:
1. Select the most highly qualified provider of those services on the basis of demonstrated
competence and qualifications;
2. Attempt to negotiate with that provider a contract at a fair and reasonable price. O
3. If a satisfactory contract cannot be negotiated with the most highly qualified provider,the N
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entity shall formally end negotiations with that provider;
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16 Government Code Chapter 2254 Professional and Consulting Services(i.e.the Professional Services Procurement Act).
17 The City Auditor's Office obtained a legal opinion from the City Attorney's Office to verify our understanding of the law.This opinion has also
been provided in a separate report to the City Council.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
4. Select the next most highly qualified provider and attempt to negotiate a contract with
that provider at a fair and reasonable price.
5. This process then continues until a contract is executed.
What We Found?
• In March 2018, the City of Denton issued a Request for Qualifications (RFQ) for seven
categories of professional CIP services, including:
➢ Project Management ➢ Development Review
➢ Design of Roads, Bridges,& Intersections ➢ Design of Traffic Signals&Street Lights
➢ Design of Storm Water Infrastructure ➢ Design of Water Infrastructure
➢ Design of Wastewater Infrastructure
Based on this RFQ a "short list" of consultants were evaluated, ranked, and approved to be
eligible to receive professional services agreements for three years.
• As of October 2019, this RFQ has been used to enter into more than 50 professional services
agreements for CIP;four of these agreements were reviewed as part of our scope.
o Multiple providers were selected based on the same RFQ evaluation for similar CIP
(see Table 7). There was no documentation of negotiation with the highest ranked
providers for the same project or documentation of why a highest ranked provider was
not considered the most highly qualified for each project. No documented explanation
was available for why a significantly lower ranked provider was selected without
negotiating with higher ranked providers.
Table 7: RFQ Evaluation Ranks by Design Agreement
Agreement RFQ Evaluation Ranks
Storm Water Wastewater Water Roads Signals
6590-011 7 17th 9th 12th 7 t h
6590-032 NA 3rd 13th 1st NA
6590-040 NA 12th 8th 16th NA
6590-049 NA NA NA 7th 2nd
o According to Engineering Services staff, design consultants identified through this RFQ
process are reevaluated to determine which consultant is the most highly qualified for
each capital improvement project based on its unique specifications; however, the
results of these reevaluations were not documented.
Why Does It Matter?
The City must comply with State procurement laws and regulations as non-compliance may subject
the City to judicial challenge. Section 2254.005 of the Texas Government Code states that "a
contract entered into or an arrangement made in violation of [the Professional Services
Procurement Act] is void as against public policy." There may be a risk that the City could be left
with little recourse if such an agreement was entered into in violation of the Professional Services
Procurement Act. Without adequate documentation there is little assurance that the current N
procurement practices comply with procurement laws.
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Recommendation:
7. Follow the Professional Services Procurement Act for qualification and selection of providers
for the design of each capital improvement project to minimize associated procurement risk.
Engineering Services management should work with the City Attorney's Office and
Procurement to develop a process to adequately document the selection of the most highly
qualified provider.
Procurement Comments:Prior to March 2018, the City selected engineering services without a
competitive process as allowed by Texas Government Code 2254. While this approach is
allowed by State procurement law, it creates operational risk of contracting with a small
number of highly qualified vendors for multiple projects and not extending work to a wider
variety of vendors. In an effort to increase transparency, create more competition, and use
resources more efficiently, the City changed its engineering services selection process for
horizontal capital projects in 2018 to a "qualified list"approach. The City issued a Request for
Qualifications for seven categories of professional engineering services to create a "short list"
of qualified vendors to design horizontal capital projects as needed. The approach was intended
to create a pool of design firms to choose from for each individual project, allowing for the City
to engage with multiple design firms on a variety of projects. Each vendor on the "qualified list"
is highly qualified and may be uniquely suited for a specific project based on their firm's
experience,project team expertise, and previous experience with similar projects. When the City
issues a new RFQ to replace RFQ 6590 for professional engineering services, Procurement and
Capital Projects staff will coordinate with the City Attorney's Office before issuing a solicitation.
Until a new RFQ is created and approved by Council, Capital Projects will evaluate each firm
based on the criteria for the project, rank the firms based on criteria, and select the most highly
qualified firm based on the project requirements. Procurement will assist Capital Projects with
documenting the evaluation and selection process for each project.
Engineering Comments: The City follow Government Code 2254 when soliciting professional
engineering services. Capital Projects has been following the City Attorney's guidance since
2018 for selection of professional engineering services using a 'eligible list' approach for all
design projects. Capital Projects issued an RFQ for engineering services which developed an
eligible list of consultants (short list of most qualified firms) to use when selecting design
consultants for engineering projects. Consistent with legal guidance, staff reviews the short-
listed firms and selects the most qualified firm for a particular project. In the past, during the
selection of the 'most qualified'firm, staff had minimal documentation of the process. Moving
forward,staff will ensure that evaluation and selection of firms for individual projects is formally
documented.
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Appendix A: Management Response Summary
The following summarizes the recommendations issued throughout this report. The auditors found that
staff and the Department were receptive and willing to make improvements to controls where needed.
Management has provided their response to each recommendation.
Require Project Managers to follow procedures established in Expected
1 the Project Management Manual including documenting Concur Completion:
applicable project plans. Completed
Engineering Comments: Project Managers were directed to upload all available Responsibility:
documentation including project plans to the project folders prior to the initiation of Deputy City
the Audit.The Program Managers are required to check and confirm this on a regular Engineer
basis. Majority of the projects or their phases were old projects that were not well
electronically documented which resulted in the findings of this Audit report.
Continue to develop and implement project manager training Expected
2 to ensure that the Project Management Manual is Concur Completion:
implemented. Completed
Engineering Comments:The Project and Program Managers have attended the Project Responsibility:
Management Body of Knowledge (PMBOK) training session (40 hrs) in the last 18 Deputy City
months.Additionally, staff is encouraged to attend additional PMBOK training this year Engineer
and secure the PMP (Project Management Professional) certification.
Develop a formalized design review and quality assurance Expected
3 procedure. Concur Completion:
Six months
Engineering Comments: A design review and quality assurance procedure has been Responsibility:
implemented and staff is currently working on preparing the documentation and the Deputy City
Standard Operating Procedure (SOP) for this procedure. Engineer
Formalize Project Status Report requirements and Expected
4 expectations during the entire project, (the Planning, Design, Concur Completion:
Bid, and Construction phases)in the Project Management Six months
Manual.
Engineering Comments:The 'Project Status Report' section (5.3) in the Project Responsibility:
Management Manual will be updated to include specific requirements and expectations Deputy City
for Capital Projects at every phase of the project. Engineer
Document direction given to department leadership during Expected
5 quarterly CIP Committee meetings to facilitate monitoring of Concur Completion:
staff performance. Completed
Engineering Comments: Based on the input/direction received during the previous CIP Responsibility:
Committee meetings, staff has completely updated the tracking and reporting of all CIP Deputy City
projects which has resulted in the CIP dashboard.The projects are now tracked on a Engineer
weekly basis with a monthly risk report that tracks the performance of the Project
Managers.The meeting minutes for all CIP committee meetings will be formally
documented.
6 Continue developing formalized processes for evaluating Concur Expected (`n
project performance that compare expectations of cost, Completion: N
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
schedule, and quality as expected at the planning stage to Six to Nine
project results. Months
Engineering Comments: Currently, CIP projects are tracked through all phases (design, Responsibility:
Right-of-Way, Construction) on a weekly basis.As the current projects go through a Deputy City
complete cycle (planning through acceptance), staff will develop and fine tune a Engineer
formalized process for evaluating project performances as they relate to cost, schedule
and quality.
Follow the Professional Services Procurement Act for Expected
qualification and selection of providers for the design of each Completion:
capital improvement project to minimize associated Partially Concur April 2020
procurement risk.
Procurement Comments: Prior to March 2018,the City selected engineering services Responsibility:
without a competitive process as allowed by Texas Government Code 2254. While this Deputy City
approach is allowed by State procurement law, it creates operational risk of contracting Engineer
with a small number of highly qualified vendors for multiple projects and not extending
work to a wider variety of vendors. In an effort to increase transparency, create more
competition, and use resources more efficiently,the City changed its engineering
services selection process for horizontal capital projects in 2018 to a "qualified list"
approach.The City issued a Request for Qualifications for seven categories of
professional engineering services to create a "short list" of qualified vendors to design
horizontal capital projects as needed.The approach was intended to create a pool of
design firms to choose from for each individual project, allowing for the City to engage
with multiple design firms on a variety of projects. Each vendor on the "qualified list" is
highly qualified and may be uniquely suited for a specific project based on their firm's
experience, project team expertise, and previous experience with similar projects.
When the City issues a new RFQ to replace RFQ 6590 for professional engineering
services, Procurement and Capital Projects staff will coordinate with the City Attorney's
Office before issuing a solicitation. Until a new RFQ is created and approved by Council,
Capital Projects will evaluate each firm based on the criteria for the project, rank the
firms based on criteria, and select the most highly qualified firm based on the project
requirements. Procurement will assist Capital Projects with documenting the evaluation
and selection process for each project.
Engineering Comments:The City follow Government Code 2254 when soliciting
professional engineering services. Capital Projects has been following the City
Attorney's guidance since 2018 for selection of professional engineering services using
a 'eligible list' approach for all design projects. Capital Projects issued an RFQ for
engineering services which developed an eligible list of consultants (short list of most
qualified firms)to use when selecting design consultants for engineering projects.
Consistent with legal guidance, staff reviews the short-listed firms and selects the most
qualified firm for a particular project. In the past, during the selection of the 'most
qualified'firm,staff had minimal documentation of the process. Moving forward, staff
will ensure that evaluation and selection of firms for individual projects is formally
documented.
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Appendix B: Comparison of Debt Burden
According to the GFOA, "there is no measure or fiscal indicator that evaluates the wisdom or necessity of
capital expenditures that are associated with bonded debt.That is largely the judgement of management,
other participants in the budget process,and the elected officials." It is then potentially relevant to compare
the City of Denton's current debt burden with peer municipalities.
Based on an evaluation of population, population growth, income per capita, and estimated college
enrollment, our office selected nine18 peer cities to be included as part of a debt burden benchmarking
exercise.These cities and their associated metrics are shown in Table 8:
Table 8: Peer City Outstanding Debt Summary
City Population Income/Capita Prop.Tax Value Millions Est. University
(2018) (2017) (2018) Enrollment
Killeen 149,103 $21,751 $5,750.7 2,500
McAllen 143,433 $21,683 $9,311.9 28,500
Mesquite 142,816 $22,088 $8,973.6 12,000
Midland 142,344 $39,499 $12,241.8 0
Denton 138,541 $26,165 $10,936.1 53,500
Waco 138,183 $21,444 $9,204.8 17,200
Richardson 120,981 $38,149 $14,084.6 28,800
Odessa 120,568 $29,607 $7,418.1 5,800
College Station 116,218 $24,640 $7,906.1 63,700
Lewisville 106,586 $29,197 $9,352.3 0
Average 131,877 $27,422 $9,518.0 21,200
It should be noted that while all the municipalities included in the peer group issue debt for general
government activities such as roadways, facility, and fleet improvements, not all peer municipalities have
the same utility structure.19 For instance,the City of Denton owns and operates its own power plant,which
is unique compared to all other cities in the peer group. Similarly,some of the municipalities are "Power to
Choose" cities, meaning that they do not operate an electric utility. In addition, some of the municipalities
do not operate their own solid waste collection or may have an independent public utility board.
For instance, about 73% of the City of Denton's tax backed debt is for these "business-type" activities (i.e.
utility activities), which is a much higher percentage than the peer group average of 29%. This may imply
that much of the City of Denton's tax backed debt may actually be paid with revenues from utility fees
despite being backed by the "full faith and credit" of the issuing municipality. Still, a municipality's debt
burden ultimately rests with the taxpayers whose property taxes, sales taxes, and utility fees fund these
capital improvements.
Compared to these peer cities, the City of Denton appears to have a relatively higher debt burden in all Lr)
debt categories. Figure 4 illustrates this by showing the general obligation outstanding debt-or Tax Backed N
Debt-per$100 of taxable property value for each peer city; the dashed line represents the peer group -
bz
including the City of Denton-average ($3.16). a
18 The City of Carrollton was originally included in our peer cities;however,relevant debt burden measures could not be calculated because
they had recently experienced a cyber-attack.
19 The City of Denton operates Solid Waste,Water,Wastewater,and Electric utilities as well as an airport.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Figure 4:Tax Backed Debt per$100 of Taxable Property Value Comparison
$8.00
$ .00 '
■Business Activities ■General Government Activities
$6.00
$5.00 .
$4.00
$3.00
$2.00
$0.00 —
0 0 0 t �e a a o �e
a`ayo Sao �\\ee 5'�a�\o z QJ. oaey5 a�a� Pie
Co
Figure 5 illustrates the tax backed debt burden per capita for each peer city, which adds an affordability
element to the analysis. The City currently has the largest tax backed debt burden per capita than other
peer cities with about$5,500 of debt per capita —about 21% of the City's income per capita.
Figure 5:Tax Backed Debt Burden per Capita
$6,000.00 $45,000.00
$5,000.00 $40,000.00
ro $35,000.00
v $4,000.00 $30,000.00 0
a $3,000.00 $25,000.00
$20,000.00
'C $2,000.00 $15,000.00
~ $1,000.00 $10,000.00 v
$0.00 $0.00
o�ratayoo �a`oe�a-\o, 4�\\ee��`a\a�a Oaeyyae�\y,��e�`P\e�
Lo
Business Activites General Government Activities Income per Capita
According to the GFOA, "if one considers that [these] debt outstanding indicators are relative measures
reflecting the impact of outstanding debt on the tax base,then a further analysis of that base is warranted."
For at least the past five years, Denton's tax base has been growing: assessed property values grew by
about 57%from 2014 to 2018 and population has grown by about 19%from 2010 to 2018. Still, Figure 6
on the next page shows that the City's indebtedness has increased by about 4%— indicating that the City
has been issuing new debt about as fast as this tax base growth. Q0
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Figure 6: Outstanding City of Denton Debt Over Time
N $1,200,000 $12.00 _
N $1,000,000 $10.00 s
0 DD
0 (
p $800,000 $8.00
fD
o N
$600,000 $6.00 rrDD -a
�a r*
} $400,000 $4.00 v
_ o
O ■ c o
$200,000 . ' ' $2.00 fD o
v
$0 $0.00 v
2018
GO Bond �Revenue Bonds Cos Indebtedness
As mentioned in the body of the report, the City appears to be analyzing debt affordability appropriately
before issuing any new debt. Still, it is helpful to understand how the City of Denton's debt burden
compares to other peer municipalities.
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The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Appendix C: Design Agreement Timeline & Summary
Table 11 below illustrates the timeline of design agreements and associated.
Table 11: Design Agreement Timeline
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Bonnie
Brae I,11, Exe. Amd. 1 Amd. 2 Amd.3
III Exe.
Bonnie Agmt. Agmt.2
Amd. 1 Amd. 2
Brae IV Exe. Exe.
Bonnie Agmt. Amd. 1
Brae V Exe.
Bonnie Agmt. Amd. 1
Brae VI Exe.
Hickory Agmt.
Creek I Exe. &
Amd. 1
Hickory Agmt. 2 Amd.3&
Creek 1120 Exe. & Amd. 2 4
Amd. 1
Hickory
Creek III Exe.
&IV Exe.
Mayhill AE et. Amd. 1& Amd.3 Amd.4 Amd. 5
Agmt.
Agmt. 2
McKinney Exe. &
Exe. Amd. 1
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20 The original Hickory Creek 11 design agreement was executed in 2001.
The City of Denton Internal Audit Report May 2020
Audit of Capital Projects Administration: Planning& Design
Table 12 summarizes the approvals and values of each design agreement and its associated amendments.
Table 12: Design Agreement Summary
Agreement Project Approval Value
2670 Hickory Creek II Ord 2001-157 $215,700.00
4511 Mayhill Ord 2010-269 $4,501,530.00
Amendment 1 CMO Jan. 2013 $50,377.00
Amendment 2 Ord 2013-203 $488,835.00
Amendment 3 Ord 2017-013 $602,590.00
Amendment 4 CMO Feb. 2018 $52,196.00
Amendment 5 Ord 19-753 $1,364,210.00
4520 Bonnie Brae I, II, III Ord 2010-268 $5,444,253.00
Amendment 1 None $0.00
Amendment 2 Purch Sep.2016 $0.00
Amendment 3 Purch Jan. 2018 $0.00
5329 Bonnie Brae IV Ord 2013-200 $292,575.68
5330 Bonnie Brae V Ord 2013-201 $831,196.50
Amendment 1 Ord 18-413 $271,813.08
6285 Bonnie Brae IV Ord 2017-010 $900,256.25
Amendment 1 Ord 18-413 $303,960.25
Amendment 2 CIVIC)Jul. 2019 $73,189.75
6401 McKinney Ord 2017-320 $1,358,300.00
6427 Hickory Creek II CIVIC)Apr.2017 $93,500.00
Amendment 1 Ord 2017-194 $39,800.00
Amendment 2 Purch Feb.2018 $40,400.00
Amendment 3 Purch Oct.2018 $6,300.00
Amendment 4 CIVIC) Dec.2018 $45,550.00
6590-011 Hickory Creek I Ord 18-830 $240,000.00
Amendment 1 CMO Oct. 2018 $56,884.00
6590-032 Bonnie Brae VI Ord 18-1429 $2,031,479.50
Amendment 1 Ord 19-602 $397,760.00
6590-040 McKinney Ord 18-1660 $1,641,200.00
Amendment 1 Ord 19-526 382,600.00
6590-049 Hickory Creek III & IV Ord 19-351 $3,342,509.00
Total: $25,068,965.01
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