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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