HomeMy WebLinkAboutPR 12995:ADD'L AUDIT FUNDS Memorandum
City of Port Arthur, Texas
Finance Department
To:
From:
Date:
Subject:
Steve Fitzgibbons, City Manl~l~e~ % ~]'X
Rebecca UnderhilL Director o~t~ce ,o
January 10, 2004 x--
Proposed Resolution 12995
BACKGROUND
Resolution 04-199 authorized a contract with Gayle W. Botley and Associates, CPA's to perform the
annual audit of the financial statements of the City of Port Arthur, including the Port Arthur Economic
Development Corporation. This contract had a not to exceed fee of $65,000. The City Council has
authorized Mr. Botley to perform additional services related to EDC contracts and provide an interim
report to the Council. The estimated cost of these services was $15,000, and funding was approved on
August 31, 2004 with Council Resolution 04-284, bringing the total authorized amount to $80,000. On
October 12, 2004, Council approved an additional $15,000 with resolution 04-336. This increase was to
address the legal issues that has arisen related to the EDC contracts. Attached is a letter from Mr. Botley
stating that an additional $10,000 is estimated to be required to complete the audit due to the continued
legal problems.
RECOMMENDATION
In Exhibit A to PR 12995, Mr. Botley requests an additional $10,000 to address the legal issues that have
arisen in the review of these contracts.
BUDGETARY/FISCAL EFFECT
These additional audit costs, $40,000 to date, were not budgeted in the Finance Department budget. Also,
on the agenda, Proposed Ordinance 5489 amends the budget by $40,000 to fund the total increase in audit
costs.
P. R. NO. 12995
jja: 1/10/05
RESOLUTION NO.
A RESOLUTION APPROVING ADDITIONAL FUNDING
FOR THE INDEPENDENT AUDIT BEING PERFORMED BY
GAYLE W. BOTLEY & ASSOCIATES AS APPROVED BY
CITY COUNCIL RESOLUTION 04-199
WHEREAS, the City and Gayle W. Botley & Associates entered into a Professional Services
Contract for an audit, signed on July 13, 2004 and approved per Resolution No. 04-199,
WHEREAS, the contract states: "The compensation for the Professional shall not exceed the
estimated cost of $65,000 without further authorization of the City Council; and
WHEREAS, the City Council approved Resolution 04-284 which increased the authorized cost to
$80,000; and
WHEREAS, the City Council approved Resolution 04-336 which increased the authorized cost to
$95,000; and
WHEREAS, the estimated cost is now expected to exceed $105,000 due to additional unexpected
circumstances as denoted in Mr. Botley's letter attached as Exhibit "A".
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PORT ARTHUR:
Section 1. That the facts and opinions in the preamble arc true and correct.
.Section 2. That the authorized cost is hereby increased $10,000 to $105,000 before returning to
Council for additional authorization if needed.
Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the City
Council.
READ, ADOPTED, AND APPROVED, this day of January, 2005, AD, at a Regular
Meeting of the City Council of the City of Port Arthur, Texas by the following vote:
AYES: Mayor:
Councilmembers:
NOES:
ATTEST:
Mayor
Van Green, City Secretary
APPROVED AS TO FORM:
SEE CONFIDENTIAL MEMO
Mark Sokolow, City Attorney
APPROVED FOR ADMINISTRATION:
Steve Fitzgibbons. City Manager
APPROVED AS TO THE AVAILABILITY OF FUNDS:
Rebecca Underhill, Finance Director
Z:j cnny/o ffi ce,/resolutionffau dit amendment
EXHIBIT "A"
Gay W. Bot y Asso&ates
Cenified Pub~ Accountants Member o[ AICPA
'Supporting Your F~nanciaI Growc6 '
January 10, 2005
To The Honorable Mayor and City Council of Port Arthur
Port Arthur, TX 77640
Re: Request Additional Funds for Legal Impact on PAEDC's Portion of Audit for FYE
September 30, 2004.
Due to the substantial amount of time my firm used in the first week of January, 2005 on the
legal issues I am requesting a 510.000 increase in the audit fee. We did not anticipate our time
required by your City Attorney to complete the inquiries, nor the District Attorney requesting us
to meet with him again after our initial two-hour meeting.
My legal counsel has been and will be involved in all the legal matters, through consultations or
evaluations. His costs have been considered and are included.
I believe this should allow us to complete the audit and issue our report on or before
January 31, 2005, unless some unforeseen discovery or request happens.
As always, please contact me if you have any questions.
Sincerely,
cc. City Manager
Director of Finance
4749 Twin E~ty Hwy, Suite 280
Port Arthur, Dr 77642
gbodoyC~6amttic~ntt
(409} 962-I040
fax (409 J 962 x668
(800) 416-8757