HomeMy WebLinkAboutOrdinance 19074-03-2010Ordinance No 19074-03-2010
AN ORDINANCE INCREASING THE ESTIMATED RECEIPTS AND APPROPRIATIONS
IN THE GRANTS FUND IN THE AMOUNT OF $716,196 00, FROM AVAILABLE FUNDS,
FOR THE RESOLUTION OF AUDIT FINDINGS FROM THE UNITED STATES
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, PROVIDING FOR A
SEVERABILITY CLAUSE, MAKING THIS ORDINANCE CUMULATIVE OF PRIOR
ORDINANCES AND REPEALING ALL PRIOR ORDINANCES IN CONFLICT HEREWITH,
AND PROVIDING AN EFFECTIVE DATE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS
SECTION 1
That in addition to those amounts allocated to the various City departments for Fiscal Year 2009-2010 in the
Budget of the City Manager, there shall also be increased estimated receipts and appropriations in the
Grants Fund in the amount of $716,196 00, from available funds, for the resolution of audit findings from the
United States Department of Housing and Urban Development.
SECTION 2
That should any portion, section or part of a section of this ordinance be declared invalid, inoperative or void
for any reason by a court of competent jurisdiction, such decision, opinion or judgment shall in no way
impair the remaining portions, sections, or parts of sections of this ordinance, which said remaining
provisions shall be and remain in full force and effect.
SECTION 3
That this ordinance shall be cumulative of Ordinance No 18809 and all other ordinances and appropriations
amending the same except in those instances where the provisions of this ordinance .are in direct conflict
with such other ordinances and appropriations, in which instance said conflicting provisions of said prior
ordinances and appropriations are hereby expressly repealed
SECTION 4
This ordinance shall take effect upon adoption
APPROVED AS TO FORM AND LEGALITY
S'
Assistant City Attorney
ADOPTED AND EFFECTIVE. March 9. 2010
City of Fort Worth, Texas
Mayor and Council Communication
DATE Tuesday, March 09, 2010
LOG NAME 17HEDHUDESCROW
REFERENCE NO G-16867
SUBJECT
Adopt Supplemental Appropriation Ordinance Increasing Appropriations in the Fiscal Year 2010 General
Fund by $1,258,270 00 and Decreasing the Unreserved, Undesignated General Fund Balance by the
Same Amount, Authorize Transfer of $716,196 00 from the General Fund to the Grants Fund, Authorize
Expenditures Related to Resolution of Audit Findings by the United States Department of Housing and
Urban Development, Confirm Payments Totaling $717,243 00 Previously Made ~($1, x75,169 00 ih Fiscal
Year 2009 and $542.074.00 T,o.Date_in_F._iscalYearx 102 0 for Audit Findings and Adopt Appropriation
Ordinances
RECOMMENDATION
It is recommended that the City Council authorize the City Manager to
1 Adopt the attached supplemental appropriation ordinance increasing appropriations in the Fiscal Year
2010 General Fund in the amount of $1,258,270 00 and decreasing the unreserved, undesignated
General Fund balance by the same amount;
2. Authorize the transfer of $716,196 00 from the General Fund to the Grants Fund,
3 Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the
Grants Fund in the amount of $716,196 00;
4 Authorize the use of an amount not to exceed $500,000 00 for a project or projects eligible for use of
Community Development Block Grant funds,
5 Authorize the use of an amount not to exceed $216,196 00 for acquiring property throughout the City for
dedication and use as parkland,
6 Adopt the attached supplemental appropriation ordinance increasing estimated receipts and
appropriations in the General Fund up to $5,000 00 from interest earned on the restricted funds in the
Wells Fargo Bank in a custodial account held for the resolution of audit findings by the United States
Department of Housing and Urban Development;
7 Authorize the use of an amount not to exceed $5,000 00 for payment to the United States Department
of Housing and Urban Development for audit findings, and
8 Confirm payments of $717,243 00 previously made ($175,169 00 in Fiscal Year 2009 and $5.42,074 00
to~date in Fiscal Year 20,10) to the United States Department of Housing and Urban Development for audit
findings.
Logname 17HEDHUDESCROW Page 1 of 3
DISCUSSION
In 2004, the local field office of the United States Department of Housing and Urban Development (HUD)
conducted a financial management audit and review of the City's grant funded programs This audit and
review identified an estimated $1,452,675 00 in questioned costs that could not be immediately
resolved To move the process forward, it was agreed that the City would create a restricted custodial
account in the amount of the questioned costs and engage an outside auditor to review the questioned
costs in more detail Because funds in the restricted account were considered to be HUD's dollars, the
City would be required to pay HUD any interest earned on the account.
To the extent the outside auditor determined a questioned cost was in fact disallowed, a payment would
be made to HUD from the custodial account as reimbursement for the disallowed cost. HUD would then
add those payments back in to the City's HUD Line of Credit. Those funds would then be available for
new, eligible grant activities and projects.
On May 29, 2007, the City Council authorized the designation of $1,452,675 00 from General Fund
unreserved, undesignated fund balance to be used to resolve the open audit findings regarding the
questioned costs and authorized the creation of a custodial account with Wells Fargo Bank to hold these
funds (M&C G-15737) However, the designation of this $1,452,675 00 was not reported in the City's
Comprehensive Annual Financial Report (CAFR) or the Financial Management Reports.
The detailed review by the City's staff and outside auditor firm resulted in the final amount of disallowed
costs being substaintially less than the total of the initially questioned costs and payments made to HUD
as a result of the 2004 audit ultimately totaled only $273,627 00 However, because the City operates
multiple HUD-funded programs and several of those other programs were also in the process of
undergoing routine compliance audits, it was decided that the balance of the restricted custodial account
should be left in place to address any findings from other audits that might require repayment. On
December 16,2008, the City Council authorized the use of funds from the Custodial Account to resolve
any and all audit findings from HUD (M&C G-16403)
To date, $717,243 00 has been paid to HUD from the restricted custodial account. $175,169 00 was paid
during !Fiscal Year 2009 and $542,074 00 has been paid thus far in Fiscal Year 2010 One of the
purposes of this M&C is to confirm the previous payments totaling $717,243 00
In addition, staff recommends that an additional $716,196 00 be transferred from the General Fund to the
Grants Fund an appropriated for Fiscal Year 2010, which would bring the total for this Fiscal Year to
$1,258,270 00 This amount would then be paid to HUD and the majority would be added back to the
City's HUD Line of Credit to fund eligible Community Development Block Grant activities ($500,000,00), a
park land acquisition project ($216,196 00) and a payment to HUD of approximately $5,000 00 for interest
earned on the funds in the custodial account.
The park land acquisition project is CITYWIDE
FISCAL INFORMATION /CERTIFICATION
The Financial Management Services Director certifies that upon approval of the above recommendations
and adoption of the attached appropriation ordinance, funds will be available in the current operating
budget as appropriated, of the General Fund and Grants Fund
FUND CENTERS
TO Fund/Account/Centers
GG01 538070 0905500
GR76 472001 01720636000
Logname 17HEDHUDESCROW
FROM Fund/Account/Centers
$716,195.83 GG01 538070 0905500
$716,195.83 GG01 539120 0905500
$71.6.195.83
5 000.00
Page 2 of 3
GG01 539120 0905500
GG01 441012 0132000
GR76 539120 017206360010
GR76 539120 017206360020
GG01 539120 0905500
CERTIFICATIONS
5 000.00 GR76 539120 017206360010
5 000.00 GR76 539120 017206360020
$500,000.00
$216,195.83
$542, 073.92
Submitted for City Manager's Office bx Thomas Higgins (6192)
Originating Department Head. Jay Chapa (5804)
$500,000.00
$216,195.83
Dolores Garza (2639)
Additional Information Contact: Cynthia Garcia (8187)
Logname 17HEDHUDESCROW Page 3 of 3