AUDIT/FINANCE COMMITTEE  July 18, 2016 Minutes  After determining that a quorum is present, the Audit/Finance Committee of the City of Denton, Texas, met in a regular meeting on July 18, 2016, at 8:44 a.m., in the Finance Conference Room, at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items were considered:  PRESENT: ABSENT: STAFF PRESENT:  Mayor, Chris Watts; Council Member, Sara Bagheri  Council Member, Joey Hawkins  Howard Martin, Interim City Manager; Bryan Langley, Assistant City Manager; Chuck Springer, Director of Finance; Tony Puente, Assistant Director of Finance; Harvey Jarvis, Controller; and Kristy Odom,  Recording Secretary.  OTHERS PRESENT: David Medanich with First Southwest  The following items were considered:  OPEN MEETING:  1. Hold a discussion and appoint a Chairperson for the Audit/Finance Committee.  Mayor Chris Watts made a motion to appoint Joey Hawkins as Chairperson. Council Member Sara Bagheri seconded the motion. Motion carried unanimously.  2. Consider approval of Audit/ Finance Committee Minutes of February 23, 2016 and  March 1, 2016.  Mayor Chris Watts made ai motion to approve the minutes. Motion carried unanimously.  3. Receive a report, hold a discussion, and give staff direction regarding proposals for  external audit services (RFP #6118).  Chuck Springer, Director of Finance, discussed responses to RFP #6118 for external audit services. The City received responses from the following six firms: Pattillo, Brown & Hill, BKD, Weaver and Tidwell, Moss Adams, Crowe Horwath, and Whitley Penn. Interviews were held with the four lowest cost firms. Staff held a second interview with the highest evaluated firm of Pattillo, Brown & Hill and is recommending award to Council member, Sara Bagheri asked if the audit was a requirement, and the comparison  Pattillo, Brown & Hill.  ofthis year's bid to the previous years.  1    Springer, explained the responsibilities of the Auditors. The auditors will issue an opinion to the validity (presented fairly in all material respects) of the financial statements that are prepared by the City. For internal controls they will go out and do actual reviews with the staff that does the work to verify the internal controls are inj place. The proposed cost the audit is $93,225 for the first year, compared to a fee of$142,500 Council Member Sara Bagheri made ai motion to recommend Pattillo, Brown & Hill with athree year contract with two optional one year extensions as the external auditor services to council. Mayor Watts seconded the motion. Motion carried unanimously.  for the most recently completed audit.  4. Receive a report, hold a discussion, and give staff direction regarding the upcoming  issuance of General Obligation Refunding Bonds.  Springer discussed that outstanding utility revenue bonds that could be refunded by General Obligation Debt. About $46.1 million of utility revenue bonds are currently callable on December 1, 2016. If these revenue bonds are refunded, the remaining outstanding revenue bonds are approximately $6.99 million. Iti is being proposed to make acash contribution to refund the $6.99 from existing utility funds that are restricted due to revenue. bond covenants, This transaction will not onlyresult. in savings due to. lower interest rates, but will also free up and additional funds of $5.9 million for Electric, $7.5 million for water, and $4.4 million for Wastewater, that are currently restricted due to Assistant City Manager, Bryan Langley responded to a question on the use oft the released utility funds by stating that an informal staff report explaining the planned use of these Council Member Sara Bagheri made a motion to recommend approval to forward the issuance of General Obligation Refunding Bonds to council for consideration. Mayor  revenue bond covenants.  utility funds will bej prepared and distributed to City Council.  Watts seconded the motion. Motion carried unanimously.  5. Under Section 551.042 of the Texas Open Meeting Act, respond to inquiries from the Audit/Finance Committee or the public with specific factual information or recitation of policy, or accept a proposal toj place the matter on the agenda for an upcoming meeting Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks congratulations or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an  AND  2    announcement involving an imminent threat to the public health and safety of people in the With no additional business to be addressed, the Committee adjourned at 9:14 a.m.  municipality that has arisen after the posting oft the agenda.  JOEY HAWKINS COMMITTEE CHAIR CITY OFI DENTON, TEXAS  KRISTY ODOM RECORDING SECRETARY CITY OFI DENTON,TEXAS  -  H  3