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
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Overview
• Introduction
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• Audit Process
• Required Communications
• Audit Results
• Areas of Strength and Accomplishment
• Financial Highlights
• New Accounting Pronouncements
• Questions
2
Introductions
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The Firm of Texas
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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
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■FIRMS
7 Texas 500+ 65+
Offices Employees Partners
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Engagement Leadership
We know your
questions don't
end when the
audit does, so the
team leadership
remains available
to you throughout
the year.
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Shawn Parker
Partner, Assurance
Services
John rN=Rurro
Senior Manager,
Assurance Services
5
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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
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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
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Assurance • Tax • Advisory
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Audit Process
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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
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,-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
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Required Communications to
Those in Charge of Governance
municatiory
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Auditor's responsibility under
generally accepted auditing
standards (GAAS)
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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
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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
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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
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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
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Auditor Results
WeaverV*iews
Auditor Results
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• 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
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21
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Financial Highlights
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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
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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
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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
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2015
2014
(2 -year comparison - current year and prior year - in millions)
26
Financial Highlights
Fund Balances
Governmental Funds' Fund Balances
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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
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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,
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Assurance . Tax • Advisory
Questions? t�
F
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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.
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TOWN COUNCIL MEETING
MARCH 22, 2016
Trophy Club Drive Bridge @ Marshall Creek (Existin
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