HomeMy WebLinkAboutIR 10197 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10197
To the Mayor and Members of the City Council October 30, 2018
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*a SUBJECT: UPCOMING CHANGES TO PUBLIC IMPROVEMENT DISTRICT
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MANAGEMENT CONTRACTS
The purpose of this informal report is to update the Mayor and City Council on proposed changes
associated with the FY19 Public Improvement Districts (hereinafter referred to as "PID" or "PIDs")
management contracts. The changes will standardize the financial management practices of all
PIDs and increase the oversight, accountability, and responsibility of each of the external PID
management companies. The changes reflect that PIDs are not separate entities from the City.
Staff identified several operational challenges since the Department of Financial Management
Services (hereinafter referred to as "FMS") assumed the role of PID administration in October of
2017. Further, the Internal Audit Department identified substantial deficiencies and provided
recommendations for improvement through the completion of audit engagements conducted this
year. FMS requested an additional staff position in the FY19 budget to assist with the efforts in
making improvements which was denied in favor of requiring additional oversight, accountability,
and responsibility from the management companies. The proposed PID management contract
renewals formalize the new requirement.
The management contract changes expand the level of service currently being provided by the
management companies. Staff anticipates management companies will increase fees. Under
currently policy, administrative costs for PID management services cannot exceed 20% of the
current year's budgeted assessment. Staff estimates the new expenses will exceed the 20% cap
and an amendment to the FY19 Service and Assessment Plans will be required.
Management Contract Change Summary
• Management companies shall be accountable for deliverables under the existing contracts
with the City, including:
• Compliance with the City's Purchasing rules & regulation
• Management companies shall not hold cash funds on the City's behalf.
• The contract will be expanded to include:
• Additional substantiation documentation on expenditures (to ensure compliance
with the Service and Assessment Plan, state law, and the City's PID Policy and
Purchasing Regulations)
• Completion of an annual budget with detailed plans for programs
• Development of a funding plan for capital related activities, including maintenance
of facilities / amenities
• Verification of the billing process on assessed properties
• Communication enhancements to include a requirement to provide:
• A dedicated PID website
• Quarterly property owner meetings
• Newsletters
• Customer service staff to respond to inquiries
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10197
To the Mayor and Members of the City Council October 30, 2018
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*a SUBJECT: UPCOMING CHANGES TO PUBLIC IMPROVEMENT DISTRICT
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MANAGEMENT CONTRACTS
• Completion of an annual external audit by the City's auditor to include:
• Financial statement opinion (income statement and balance sheets) and
compliance with generally accepted government accounting principles
• Opinion of management company's delivery of the improvements and Services
outlined within the Budget and Service Plan
• Confirmation annual expenditures are compliant with the Service and Assessment
plan, budget, state laws, and City PID Policy and Purchasing Regulations
• Confirmation the PID management company completed the required procurement
process
• Opinion on management company's compliance with City contract and the City's
PID policy
• All costs for the audit will be included in the annual budget of the PID
Next Steps to Implement
• Finalize management contracts
• Meet with existing management companies and discuss changes
• Review revised costs for expanded services
• Execute agreements
• Present a revised policy to the City Council to reflect an increased cap for
administrative costs and revise contracts accordingly
• Complete a competitive procurement process and issue a Request for Proposal during
fiscal year 2019 to ensure costs are reasonable based upon services being provided
• Execute engagement letters with City's external auditor for auditing services
If you have any questions concerning this information, please contact Angela Estrada, Sr.
Contract Compliance Specialist/PID Administrator at 817-392-8511 or Kevin Gunn, acting Chief
Financial Officer at 817-392-2015.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS