[CALL TO ORDER]
[00:00:09]
FINALLY GOOD AFTERNOON. TODAY IS TUESDAY, FEBRUARY 21ST YEAR, 2023 WERE IN COUNCIL CHAMBERS AT 2 22 NORTH TENNESSEE STREET IN THE CITY OF MCKINNEY. IT IS 402 IN THE AFTERNOON. THIS IS OUR CITY COUNCIL WORK SESSION. I DO NOT SHARE THAT ANYONE HAS SIGNED UP FOR PUBLIC COMMENTS. WE WILL MOVE TO OUR WORK SESSION BEFORE WORK SESSION AND DISCUSS REGULAR MEETING AGENDA ITEMS IF ANYBODY HAS A QUESTION ON AN ITEM ON THE AGENDA THAT THEY WOULD LIKE TO DISCUSS WITH STAFF WHO IS SITTING HERE WITH BATED BREATH WAITING TO ENLIGHTEN US. OF COURSE, SEEING THAT MR QUINT IS NOT HERE. THAT MEANS THAT WE DON'T HAVE THE FULL 18 I SEE IS THAT WHOA! WE HAVE WE HAVE HALF THE 18. NOT THE FULL A TEAM. I SAID THE BEST PART BY FAR HAVE BY FAR HAVE THE GREATEST HALF OF THE A TEAM. YES. I WAS JUST TRYING TO GIVE HIM A NICE SHOUT OUT INSTEAD OF MY NORMAL, YOU KNOW? SO ANYBODY CHEAP SHOT ANY QUESTIONS FROM ANYBODY? NO. UM WE WILL THEN MOVE TO WORK
[Consider/Discuss the Annual Audit Results, and the Acceptance of the Annual Comprehensive Financial Report (ACFR) and the Federal/State Single Audit Reports for the Fiscal Year Ended September 30, 2022]
SESSION ITEM. 23 0104 CONSIDER DISCUSS THE ANNUAL AUDIT RESULTS FROM THE ACCEPTANCE OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT. AND THE FEDERAL STATE SINGLE AUDIT REPORTS FOR THE FISCAL YEAR AND IN SEPTEMBER 30TH 2022. GOOD. SO GOOD AFTERNOON CHANCE. MILLER ACCOUNTING MANAGER. THE CITY CHARTER REQUIRES US TO HAVE AN ANNUAL AUDIT BY AN EXTERNAL AUDITING FIRM ARE EXTERNAL AUDITING FIRM AS WEAVER. THIS PROCESS RESULTS IN US GETTING OUR ANNUAL COMPREHENSIVE FINANCIAL REPORT WE GET OUR FEDERAL SINGLE AUDIT REPORT AND OUR STATE SINGLE AUDIT REPORT. BRIEF OVERVIEW OF THOSE ARE ANNUAL COMPREHENSIVE FINANCIAL REPORT AS MCKINNEY'S 2022 FINANCIAL STATEMENTS THAT ARE PREPARED IN ACCORDANCE OF THE GATSBY, WHICH IS GOVERNMENTAL ACCOUNTING STANDARDS BOARD. SO THEY'RE PRESENTED A LITTLE BIT DIFFERENTLY, WHICH ALL THE OTHER CITIES AROUND HERE HAVE TO DO AND SCHOOL DISTRICTS AND THEN OUR FEDERAL SINGLE REPORT IS ALL THE GRANTS AND AWARDS. WE GET FROM THE FEDERAL AGENCIES THAT WE HAVE TO REPORT THAT WE HAVE TO REPORT OUR COMPLIANCE WITH THEIR RESPECTIVE PROGRAMS, UM AND THE SAY IN REGARDS TO THE STATE BUT JUST ON THE STATE SIDE OF IT. UM THIS WAS REVIEWED BY THE AUDIT COMMITTEE ON FEBRUARY 9TH. AND THIS WILL BE A FOR Y'ALL ON CONSENT AGENDA TONIGHT FOR THE ACCEPTANCE OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT THE SINGLE AUDIT REPORTS FOR FEDERAL AND STATE AGENCIES. I'D LIKE TO THANK ALL THE FINANCIAL STUFF. THIS IS A REALLY BUSY TIME FOR US. WE HAVE OUR NORMAL DAY TO DAY OPERATIONS. WE HAVE TO CLOSE OUT 2022. WE HAVE ER P IMPLEMENTATION GOING ON. AND UM I APPLAUD WHAT THEY DO ON A DAY TO DAY BASIS TO GET US TO WHERE WE NEED TO BE. UM I'D LIKE TO INTRODUCE CLAIRE, WHO IS THE MANAGER AT WEAVER AND LEADS THE AUDIT ON THEIR SIDE. AND SHE HAS A SHORT PRESENTATION FOR YOU. ALL. THANK YOU. ALL RIGHT. HELLO FROM THE OUTSIDE FIRM. YES MY NAME IS CLAIRE. WOULDN'T I'M, A SENIOR MANAGER WITH WEBER.ALRIGHT PARTNER ON THE AUDIT. JENNIFER COULDN'T BE HERE THIS AFTERNOON. BUT SHE HAS BEEN ON THIS AUDIT THIS GO AROUND FOR THE LAST. UH THIS IS OUR THIRD YEAR ON THIS ROTATION AS WELL AS I HAVE TOGETHER. AS A AS A BIG SCRATCH SNAPSHOT OF OUR AUDIT. WE HAVE ISSUED AN UNMODIFIED REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS. WE NOTED NO MATERIAL WEAKNESSES, NO SIGNIFICANT DEFICIENCIES. AND THEN WE NOTED NO NONCOMPLIANCE THAT WERE REQUIRED TO REPORT TO YOU. WHAT IS A WEAKNESS? INTERNAL CONTROL WEAKNESS WOULD BE, UM, IF THERE IS JUST A LACK OF INTERNAL CONTROLS THAT COULD ALLOW A MISSTATEMENT TO FLY UNDER THE RADAR AND SOMETHING NOT GET POSTED. THAT SHOULD OR MAYBE SOMETHING THAT WOULD ALLOW LIKE SOME FRAUDULENT TRANSACTIONS TO HAPPEN. JUST WERE CHECKS AND BALANCES ARE NOT HAPPENING. SO THERE WERE NO ISSUES LIKE THAT, SO NOT CONSIDERING SOMEONE LIKE OUR FINANCE FAN, MR HOLLOWAY THAT WOULDN'T HE WOULD NOT BE A MATERIAL WEAKNESS, FOR EXAMPLE, CORRECT, MAN, AND THEN WE ALSO DO AN AUDIT OVER YOUR FEDERAL AND STATE AWARDS. AND THAT WAS THE TWO AUDITS THAT CHANCE WAS TALKING ABOUT YOUR FEDERAL AND STATE SINGLE AUDIT REPORT. WE HAVE ISSUED REPORTS OVER BOTH OF THOSE UNMODIFIED YOU AS AN ODDITY WERE CONSIDERED LOW RISK, SO THAT MEANS YOU GET BOTH THE STATE AND FEDERAL SINGLE AUDIT EVERY YEAR WITHIN. WE HAVE TO JUST LOOK IN THE LAST TWO YEARS, BUT YOU HAVE ONE EVERY YEAR. THERE ARE NO MATERIAL WEAKNESSES THAT WOULD CAUSE US TO BE CONCERNED. CONSIDERED A LOW RISK ODDITY, WHICH JUST TO ASK MEANS THAT WE HAVE TO TEST A CERTAIN PERSONAGE OF YOUR OF YOUR FEDERAL AND STATE FINANCIAL ASSISTANCE. WE UNDER YOUR THE INTERNAL CONTROLS OVER THOSE MAJOR PROGRAMS THAT WE TESTED, WHICH INCLUDED THE FEDERAL TRANSIT CLUSTER, WHICH IS THAT THE MONEY FROM, UH THAT'S REALLY THAT YOU GIVE TO DART THAT MONEY
[00:05:08]
. WE'VE TESTED THE COVID 19 THE EMERGENCY RENTAL ASSISTANCE PROGRAM, SO WE WRAP AND THEN ON THE STATE SIDE, IT'S THE AIRPORT PROGRAM. THE EXTEND RUNWAY. WE TESTED THOSE THREE PROGRAMS, AND WE NOTED NO MATERIAL WEAKNESSES NO SIGNIFICANT DIVISIONS SEES AND THEN NO OTHER COMPLIANCE FINDINGS THAT WERE REQUIRED TO REPORT. OTHER MATTERS THAT WE WANT TO BRING TO YOUR ATTENTION, AND YOU'LL NOTE IN OUR AUDIT OPINION THAT WE HAVE AN EMPHASIS OF MATTER. PARAGRAPH ABOUT IS THE IMPLEMENTATION OF GAZ B 87. THIS IS VERY SIMILAR TO THE SENIOR THAT'S BEING IMPLEMENTED RIGHT NOW FOR YOUR FOR PROFIT COMPANIES. ITS UH FAST B 42 ON THE ON THE FOR PROFIT SIDE.THEY'RE IMPLEMENTING IT RIGHT NOW AS WELL. BUT THIS PUTS ALL OF YOUR WHAT PREVIOUSLY WAS DETERMINED TO BE OPERATING LEASES IN CAPITAL LEASES. THOSE NOW ARE JUST CONSIDERED LEASES.
IT DOESN'T MATTER WHETHER THEY'RE OPERATING OR CAPITAL AND IT GETS THE YET ALL PUT ON YOUR BALANCE SHEET AND THEN SAME. WE HAVE TO LOOK AT THE LESS SORE SIDE, SO US A LESS SORE UM, AND THOSE BEING LIKE, UM, WHERE YOU'RE LEASING? UH SPORTS COMPLEX CELL TOWER SITES, AND THEN FOR YOUR AIRPORT, YOUR LAND AND HUNGER OFFICE SPACE. YOU HAVE TO PUT THAT ALSO ON YOUR BALANCE SHEET AS A RECEIVABLE. SO LOOKING OUT AT THE TERM OF THE LEASE. HOW MUCH ARE YOU GOING TO BE RECEIVING? AND THEN? SAME ON THE LESSEE SIDE? HOW MUCH ARE YOU GOING TO BE PAYING? AND THEN THAT AS A FUTURE LIABILITY GETS PUT ON THE BALANCE SHEET. SO THAT IS THE BIG AS BE THAT GOT IMPLEMENTED THIS YEAR. AND THAT'S ALL I HAVE FOR YOU. DO YOU ALL HAVE ANY QUESTIONS? QUESTIONS. DID YOU EVER. JUST CURIOSITY, AND WE TALKED ABOUT THE THREE PROGRAMS THAT YOU TESTED WERE THOSE JUST RANDOMLY SELECTED. BY BY THE FIRM BY YOUR FIRM HAVE A CERTAIN THERE'S DIFFERENT CHECKLIST THAT WE HAVE TO GO THROUGH AND HOW WE AUDIT THEM. I'LL PULL THOSE BACK UP. THERE THEY ARE. SO IF THEY HAVEN'T IF THEY'RE LARGE ENOUGH, THEY MEET A CERTAIN THRESHOLD, WHICH WE CALL THE TYPE A TYPE A THRESHOLD, WHICH IS OVER $750,000. SO THERE'S THAT THRESHOLD, BUT THEN ALSO IF THEY HAVE NOT BEEN AUDITED BY US WITHIN THE LAST TWO FISCAL YEARS , THEY ALSO BECOME HIGH RISK AGAIN. SO THESE LARGE PROGRAMS THAT ARE OVER 750. WE'RE AUDITING AT LEAST ONCE EVERY THREE YEARS AND ALSO THE COVID 19 EMERGENCY RENTAL ASSISTANCE.
ANY COVID 19 MONEY HAS ALSO BEEN DETERMINED BY, UM AH BY THE MB FEDERAL GOVERNMENT TO BE CONSIDERED HIGH RISK. SO EVEN THOUGH WE AUDITED THE EMERGENCY RENTAL ASSISTANCE PROGRAM LAST YEAR, WE HAD TO AUDIT AGAIN THIS YEAR BECAUSE IT'S CONSIDERED HIGH RISK BY THE FEDERAL GOVERNMENT. SO THERE'S CERTAIN THINGS THAT WE HAVE TO LOOK AT TO MAKE SURE WHAT PROGRAMS WERE AUDITING. BUT THERE IS A LITTLE BIT OF AUDITORS JUDGMENT. MR MAYOR. I WANT TO MAKE A REMARK THAT ON BEHALF OF THE AUDIT COMMITTEE WHEN WE SAT THERE THE MEETINGS A LITTLE BIT LONGER PRESENTATION WILL BE LONGER, BUT I THINK WE ALL FELT JUST ENORMOUS PRIDE IN THE WORK THAT OUR FINANCIAL DEPARTMENT DOES, AND WE'RE SO GRATEFUL FOR THEM TO HAVE SUCH AN ABSOLUTELY STELLAR RECORD ON THIS THING, AND SO IT WAS. IT WAS REALLY HEARTENING TO BE IN THAT MEETING AND CLARE. WE APPRECIATE YOU AND JENNIFER AND ALL THE WORK YOU DID, TOO. THANK YOU. THANK YOU.
THANK YOU VERY MUCH. SHARE IT. COUNCIL THE COUNCIL LIAISON UPDATES REGARDING ANY CITY
[EXECUTIVE SESSION]
BOARDS, COMMISSIONS, EVERYONE HAS ANYTHING. IF NOT, WE WILL MOVE INTO EXECUTIVE SESSION IN ACCORDANCE WITH TEXAS GOVERNMENT CODE SECTION 55171 CONSULTATIONS WITH A TURNING ON ANY WORK SESSION. SPECIAL SESSION REGULAR SESSION AGENDA ITEM. REQUIRING CONFIDENTIAL ATTORNEY CLIENT ADVICE AND NECESSITATED BY THE DELIBERATION OR DISCUSSION OF SAID ITEMS SECTION 55172 DELIBERATIONS ABOUT REAL PROPERTY, MUNICIPAL FACILITIES AND 55187 DELIBERATION REGARDING ECONOMIC DEVELOPMENT MATTERS, PROJECT 2009 TUBS, BREWERY AND ENTERTAINMENT DESTINATION WILL BE NO ACTION. FROM THE START.* This transcript was compiled from uncorrected Closed Captioning.