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Agenda Packet TC 03/22/2016 - Supplemental ItemsSupplemental Item March 22, 2016 AGENDA ITEM NO. 12 Consider and take appropriate action regarding the acceptance of the Audit for the Town of Trophy Club, Fiscal Year 2015. Town of Tro Club Town Council Meeting March 22, 2016 weaver,,,� Overview • Introduction weaver • Audit Process • Required Communications • Audit Results • Areas of Strength and Accomplishment • Financial Highlights • New Accounting Pronouncements • Questions 2 Introductions leaverViews The Firm of Texas weaver Assurance • Tax • Advisory Weaver is the largest independent accounting firm in Texas and the Southwest. We are consistently named a top firm in the state and nationally. #4 Largest Tarrant County Accounting Firms I Fort Worth Business Press #8 Largest North Texas Accounting Firms I Dallas Business Journal #7 Largest Austin Accounting Firms I Austin Business Journal #14 Largest Houston -Area Public Accounting Firms I Houston Business Journal #5 Largest San Antonio Accounting Firms I San Antonio Business Journal 2014 Top 50 Firms I INSIDE Public Accounting 2014 BEST of the BEST Firm I INSIDE Public Accounting IK3IDEPAW,-:'.iu„ting 4*BEST OF THE vBEST ■FIRMS 100 TODAY TOP 100 FIRMS Ranked Nc). 42 INSIDE M.”' nting a T0P� � 50 ■FIRMS 7 Texas 500+ 65+ Offices Employees Partners E Engagement Leadership We know your questions don't end when the audit does, so the team leadership remains available to you throughout the year. weaver Shawn Parker Partner, Assurance Services John rN=Rurro Senior Manager, Assurance Services 5 z4• Town of Trophy Club Shawn Parker, CPA Audit Partner Audit John DeBurro, CPA Audit Senior Manager Avery Mackey Audit Associate I Consulting Tom Winson, CPA Advisory Services -ACL Data Specialist :n[lii'JtiTiT ; 6kt4 Q te i'f� A pie "�, Engagement Timeline weaver Audit Process • The audit was performed in accordance with Generally Accepted Auditing Standards (GARS) and Generally Accepted Government Auditing Standards (GAGAS). • The audit process was a risk-based approach in which we identified potential areas of risk that could lead to material misstatement of the financial statements. We tailored our audit programs and resources to specifically address the following areas of risk: • Revenue recognition and related receivables • Capital projects, purchasing and compliance with bidding procedures • Payables, accrued liabilities, and expenditures weaver Assurance • Tax • Advisory Oml �llPIV_ Lq 0 Audit Process weaver Assurance • Tax • Advisory Interim fieldwork and risk assessment were performed in October 2015 pr�ced, gyres �n�lud�d: • Walkthrough of accounting controls over significant transaction cycles: • Purchasing and accounts payable - including p -cards • Payroll • Cash receipts - municipal court • Capital assets • Budget • Test of internal controls: • Cash disbursements • Payroll • Test of compliance: • Public Funds Investment Act • Bidding procedures • Test of construction -in -progress 10 Audit Process weaver ,-anal fieldwork- performed in January 2016 - prr%r-=rIures ino-whirlerl- Testing of significant account balances using a combination of vouching of material transactions, sampling transactions and applying analytical procedures. Auditor Comms ' for the year ended SeptemL WeaverVi*ews Required Communications to Those in Charge of Governance municatiory Aqrr- 6& is Auditor's responsibility under generally accepted auditing standards (GAAS) weaver>m-- 7 The financial statements are the responsibility of the Town. Our audit was designed in accordance with GAAS in the U.S. and provides for reasonable rather than absolute assurance that the financial statements are free of material misstatement. Our responsibility is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented , in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. The audit of the fiscal year 2015 financial statements has been completed and we have issued an unmodified opinion. 13 Required Communications to Those in Charge of Governance Weaver} " U=1 1 0 1 -1" -19 Auditor's Responsibility In addition to the GAAS responsibilities, we are required to issue a written report on our consideration of internal under Government controls and identify significant deficiencies, including Auditing Standards material weaknesses, if any. Our report does not provide assurance on internal controls. We design our audit to provide reasonable assurance of detecting material misstatements resulting from noncompliance with provisions of contracts or grant agreements that have a direct or material effect on the financial statements. We issue a written report on the results of these procedures; however, our report does not express an opinion on compliance. No findings noted. 14 Required Communications to Those in Charge of Governance weaver>m-- I Unusual transactions and The significant accounting policies used by the Town are described in Note 1 to the basic financial the adoption of new statements. accounting principles As described in Note 14, the Town implemented GASB Statement No. 68, "Accounting and Financial Reporting for Pensions" and GASB Statement No. 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date" in 2015. In addition to the cumulative effect of the change in accounting principle on beginning net position, the Town recorded a net pension liability of $1,851,461, along with deferred outflows of resources of $810,588 and deferred inflows of resources of $37,460 in the governmental activities as of September 30, 2015. We noted no transactions entered into by the Town during the year for which there is a lack of authoritative guidance or consensus. 15 Required Communications to Those in Charge of Governance Fraud and illegal acts Material weakness in internal control Other information contained in documents containing audited financial statements Management judgments and accounting estimates weaver No fraud, irregularities, or illegal acts were noted. No material weaknesses noted. We provided an "in -relation to" opinion on supplementary information accompanying the financial statements. We performed limited procedures on the Management's Discussion and Analysis (MD&A) and Required Supplementary Information (RSI). We did not provide any assurance on this information. The Introductory and Statistical sections were both unaudited. Management's estimates of allowances for uncollectible receivables, estimated useful lives of capital assets and net pension liability were evaluated and determined to be reasonable in relation to the financial statements as a whole. Management representations We requested certain representations from management that were included in the management representation letter. 16 Required Communications to weaver in Those Charge of Governance Difficulties encountered No difficulties or disagreements arose during the course of our audit. Management We are not aware of management consulting with other consultations accountants for a second opinion. Auditor independence No independence issues noted. Audit adjustments Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. There were no significant adjustments posted as a result of our audit procedures. In addition, management has determined that the effects of the passed adjustments listed on page 18 are immaterial, individually, and in the aggregate, to the financial statements taken as a whole. Other material written Nothing to note. communications between Weaver and Tidwell, L.L.P., and the Town. 17 Required Communications to Those in Charge of Governance Passed audit adjustments: To record the cash reconciling items included in deposits in transit at year-end. 0161179999 Miscellaneous Expense 0100010200 Cash In Bank - First Financial Total 13,047.00 13,047.00 13,047.00 13,047.00 weaver Auditor Results WeaverV*iews Auditor Results weaver • We have issued the Independent Auditor's Report on the financial statements - Unmodified opinion • We have issued the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards — No material weakness noted 20 Areas of Strength and Accomplishment • Management knowledgeable in municipal finance • Full cooperation of Town staff weaver 21 �I�IN[!1■il[l1�11[! ;; rim RL KI Financial Highlights weaver4Assurance • Tax • AdvisoryN Comparison of Governmental Funds Expenditures by Fulin. FY 2015 FY 2014 General Fund 0% General Fund 2% 1% 8% 3% Debt Service Debt Service 240%. 14% Capital Projects Capital Projects 12% 62% M Grant Fund 750 ® Grant Fund Nonmajor Governmental Funds Nonmajor Governmental Funds Governmental Funds Expenditures for FY 2015 totaled S13.0 million, a S2.8 million or 27% increase • Capital outlay increased by $2.6 million due to construction of major capital projects funded with bonds issued in previous years. • General government expenditures increased $0.3 million due to increased personnel and other costs. 23 F inancial Highlights weaver Assurance - Tax. Advisory Comparison of Governmental Funds Expenditures $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 General Public safety Highway & Community Culture and Debt service Capital outlay government Streets Development recreation 2015 02014 (2 -year comparison - current year and prior year - in millions) 24 Financial Highlights weaver Comporknn of Governmeni I RPVPnues hv SnUrr Governmental Revenues for FY 2015 totaled $11.0 million, a $0.8 million or 8% increase. Increase is primarily attributable to the $0.8 million increase in ad valorem taxes. FY 2015 Revenues FY 2014 Revenues 1% General Fund I General Fund 2%\ 15% 14% 1," Debt Service Capital Projects 78% IN Grant Fund Nonmajor Governmental Funds 0% 6% 14% 80% Debt Service Capital Projects M Grant Fund Nonmajor Governmental Funds 25 Financial Highlights weaver Assurance • Tax • Advisory Comparison of Governmental Revenues by Source $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 �a �a �a �a e�� e� ��� � e \o�e� a�e' she a �'r � ��a� o`�� �e�a e��o �e O a� �a 2015 2014 (2 -year comparison - current year and prior year - in millions) 26 Financial Highlights Fund Balances Governmental Funds' Fund Balances weaver As of September 30, 2015, the Town's governmental funds reported a combined ending fund balance of $6.2 million as follows: • General Fund $3,691,189 • Debt Service 118,542 • Capital Projects 1,694,546 • Grant Fund (6,327) • Other Funds 725,633 $6,223,583 ■ Overall, fund balance of the Governmental Funds decreased by $1.9 million, primarily the result of a $2.8 million decrease in the Capital Projects Fund, the result of ongoing construction of major projects. ■ Fund Balance in the General Fund, $3,691,189, represents 46% of fiscal year 2015 General Fund expenditures, while unassigned fund balance, $3,261,235, represents 41 % of this figure. 27 Financial Highlights weaver Ot, r��iory Hinhli hts - General Fund The Town had a favorable budget variance of $790K (net change in fund balance): • Actual revenues were $31 K more than budgeted. • Ad valorem taxes were $39K more than budgeted. • Sales and mixed beverage taxes were $53K more than budgeted. • Miscellaneous revenue was $30K less than budgeted. • Actual expenditures were $375K less than budgeted. Financial Highlights weaver Assurance • Tax • Advisory Comparison of Proprietary Funds Operating Revenues and Expenses - FY 2015 and FY2014 (in thousands) $700 - $600 $500 $400 2015 $300 2014 $200 -� $100 Operating Revenues Operating Expenses ■ Proprietary Funds net position increased by $121 K during fiscal year 2015, the net result of a $175K increase in Storm Drainage and a $54K decrease in Trophy Club Park. ■ Operating revenues decreased $92K primarily due to a $73K decrease in Trophy Club Park revenues. ■ Operating expenses increased $88K primarily due to increases in supplies and materials and and other operating expenses in the Storm Water Utility Fund. 29 Standards Required to be weaver} Implemented in FY2016 Assurance . Tax. Advisory Effective for the year ended Senha-mhta-r 30, 2016 GASB 72 -Fair Value Measurement • Objective: to improve accounting and financial reporting by state and local governmental entities related to fair value measurements. • Effect: GASB 72 will require the Town to review its current methods for measuring assets and liabilities that are subject to fair value reporting. GASB 76 - The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments • Objective: to identify the hierarchy of generally accepted accounting principles (GAAP) . • Effect: GASB 76 will not have a significant effect on the Town's financial reporting. 30 We appreciate the opportunity to work with Town of Trophy Club and look forward to our continued relationship, weaver Assurance . Tax • Advisory Questions? t� F ,f A" a - Contact Us Shawnarker, CPA I Engagement Partner 972.448.69351 shawn.parker@weaver.com John DeBurro, CPA I Senior Manager 972.448.6970 1 john.deburro@weaver.com Supplemental Item March 22, 2016 AGENDA ITEM NO. 13 Consider and take appropriate action regarding Trophy Club Drive at Marshall Creek for road improvements and bridge; receive a presentation from Teague Nall & Perkins; discussion of same. 1�tnp 41w teague nail & perkins C TOWN OF TROPHY CLUB TROPHY CLUB DRIVE at Marshall Creek TOWN COUNCIL MEETING MARCH 22, 2016 Trophy Club Drive Bridge @ Marshall Creek (Existin pp, PN A* March 2016 0 100 200 ^- tnp Teague nail & parkins Trophy Club Storm Water Master Plan. Legend Structures Removed From FNI 100Yr FP �l Stream I Extents of Grading Centerline Cross f V Sections Proposed - 1Oft Contours Proposed 2ft Contours Proposed Excavation FNI Proposed 100Yr FP Existing C3MFNI 100Yr FP FEMA DFIRM Effective 100Yr FP -Roadway Improvements f Town Limits AN I iJ f. I l 1 - wll� upnre m of .RlYaO Dal �l I Extents of Grading •. ��. cc, .. _ 7 ,. sem. � 'a ;-� �•,�. Extents of Roadway Improvements 46tnp A teague nail & perkins RT. K\ i Q Q S ^ L �+ a > IL V • ' (� CL rrrr „p 'ffffffl � � �& h ? LL o`(D L s J2 3 U U CL L H O L. D 15D 300 Typluls.— 9 Doans�ream H WJo �gLL� Figure eoD 7A . Feet Trophy Club Drive Bridge @Marshall Creek (Qioo r" 0 p mill IL JI(a: A March 2016 .. �,qv. -*%t 4% ZQPHY CLUB; DR md6jr=1111� It — - ,00 200 A tnp - teague nail & perkins Trophy Club Drive Bridge @. Marshall Creek (Q25 rl. o C A 8-12'x1`0 BOX CULVERTS TROPHY CLUB` III DR `U w �. a y _iw 0 100 200 tnp A teague nail & perkins March 2016 Sample Photos ^A I�tnp 01w teaque nail & perkins 'I 6"m eg . rIL "!' �4.�� -s BMs, !% Ate,• •'� OR •=c +i r"- t7 � � � 1 • 1 � .:�, ,.� ., h��rt-ter..; s -: ,. t• � . , �� t . - - + SIS14W AOL e � V � _�_ ��I ��p IIDIlIIlIIIIII'1111111 IIII11711111111111111'I �111��1 - -� '`t Questions ^A I�tnp 01w teaque nail & perkins C TOWN OF TROPHY CLUB A I�tnp 41w teague nail & perkins