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GOOD EVENING FLOWER MOUND. THE TIME IS NOW 6:00 P.M.

[A. CALL TO ORDER]

[00:00:03]

AND I'M CALLING THIS MEETING TO ORDER. THIS IS OUR MARCH 12TH TOWN COUNCIL WORK SESSION.

TONIGHT WE'RE GOING TO START OUT WITH OUR PUBLIC COMMENTS.

I DON'T THINK WE HAVE ANY PUBLIC COMMENT CARDS AT THIS TIME.

WOULD ANYBODY IN THE AUDIENCE LIKE TO MAKE ANY PUBLIC COMMENTS BEFORE WE GET STARTED? WE HAVE ONE PERSON OUT HERE. SHE SAYS NO. [LAUGHTER] SO WE'RE GOING TO GO AHEAD AND GO INTO OUR WORK SESSION.

SORRY, SORRY. OUR CONSENT ITEM, WE HAVE ONE CONSENT ITEM.

[C. CONSENT]

IT'S TO CONSIDER THE APPROVAL OF THE COMMUNITY DEVELOPMENT SOFTWARE UPGRADE AGREEMENT.

WOULD ANYBODY WISH TO MAKE ANY COMMENTS OR MAKE A MOTION TO APPROVE THAT? MOVE TO APPROVE CONSENT ITEM C.1 AS PRESENTED.

SECOND. WE HAVE A MOTION AND SECOND. COUNCIL MEMBER WERNER.

AYE. COUNCIL MEMBER TAYLOR. AYE. MAYOR PRO TEM MARTIN.

AYE. DEPUTY MAYOR PRO TEM SCHIESTEL. AYE. COUNCIL MEMBER DREW.

AYE. OKAY. THE CONSENT ITEM PASSES BY. UNANIMOUS VOTE.

WE'LL GO RIGHT INTO THE WORK SESSION. JOHN ZAGURSKI IS GOING TO PRESENT ON OUR ANNUAL COMPREHENSIVE FINANCIAL REPORT.

[D. WORK SESSION ITEM]

GOOD EVENING, MAYOR AND COUNCIL SO NORMALLY THERE WE GO. IT'S A LITTLE BETTER. THANK YOU, MAYOR AND COUNCIL FOR ALLOWING ME TO PRESENT TONIGHT. SO OUR AUDIT DOCUMENT NORMALLY GOES ON THE CONSENT AGENDA, BUT STAFF DECIDED IT WAS A VERY GOOD IDEA TO ACTUALLY PULL THIS OFF.

THERE'S TWO REASONS FOR THIS. ONE, WE CHANGED AUDITORS AND AUDIT FIRMS AND OUR AUDITORS WORK FOR YOU.

SO IT'S VERY GOOD TO SEE THE NEW AUDIT FIRM. AND TWO I WANT TO HIGHLIGHT HOW MUCH WORK THIS IS.

AND FOR OUR STAFF MEMBERS AND OUR AUDIT TEAM, THEY ALL SPENT A LOT OF TIME DOING THIS.

JUST HOW MUCH TIME IS PRETTY ASTOUNDING. SO OUR AUDITORS SPENT OVER 400 HOURS ENGAGING US ON THIS.

YOU CAN EXPECT THAT OUR TEAM SPENT ABOUT THREE TIMES THAT AMOUNT RESPONDING.

SO THE AUDIT REQUESTED OVER 111 DOCUMENT OR 111 REQUESTS FROM US.

THEY GENERATED OVER A THOUSAND DOCUMENTS. AND TO MEET THAT, THOSE THINGS INCLUDED THINGS LIKE CONFIRMATIONS, BANK STATEMENTS, PERMANENT FILE DOCUMENTS SUCH AS TOWN POLICIES AND PROCEDURES, CONTRACTS AND AGREEMENTS, PAYROLL FILES, PENSION FILES, OTHER POST-EMPLOYMENT BENEFIT FILES, COMPENSATED ABSENCES, DOCUMENTS FOR TESTING, DEBT SERVICE SCHEDULES AND AGREEMENTS, INFORMATION FOR THE FEDERAL AND STATE GOVERNMENT, SINGLE AUDITS, UTILITY BILLING REPORTS AND SCHEDULES, AND CAPITAL ASSET SCHEDULES.

THOSE ARE JUST A SMALL AMOUNT OF THE THINGS THEY PULLED.

AND SO THESE THINGS GENERATE A LOT OF DOCUMENTS AND A LOT OF HARD WORK GOES INTO IT.

I SPEAK IN FRONT OF YOU ON A REGULAR BASIS, AND I WOULDN'T BE ABLE TO DO THAT IF I DIDN'T HAVE SUCH A GOOD TEAM BEHIND ME.

SO, MARY, JULIE, I'D LIKE YOU GUYS TO STAND UP.

COME ON, SIT UP REAL QUICK. THESE TWO ARE THE LADIES THAT GET IT DONE, AND THEIR AND THEIR TEAM ARE THE ONES THAT HELP ME DO ALL THIS, AND I CANNOT THANK THEM ENOUGH FOR ALL THEIR HARD WORK.

ALL RIGHT, NOW I'M DONE WITH ALL THIS. I'D LIKE TO INTRODUCE OUR AUDITOR.

OH, RACHEL ORMSBY, SHE'S WITH FORVIS MAZARS, AND THIS IS OUR NEW AUDIT FIRM.

AGAIN, REMEMBER, THE AUDIT FIRM WORKS FOR YOU WHILE WE WORK WITH THEM AND PROVIDE THEM A LOT OF INFORMATION.

IF YOU HAVE ANY CONCERNS OR ANYTHING, THESE ARE THE PEOPLE THAT GO IN AND TEST US TO TELL US, YOU CAN BELIEVE WHAT WE TELL YOU.

AND SO THEY SPEND A LOT OF TIME DOING THAT, AND I'M EXCITED FOR THEM TO PRESENT TO YOU.

THANK YOU JOHN. GOOD EVENING, MAYOR, COUNCIL.

THANK YOU ALL FOR ALLOWING US TO BE HERE THIS EVENING.

SO AS JOHN MENTIONED, I'M RACHEL ORMSBY, AND I'M YOUR AUDIT PARTNER THAT OVERSEES THE TOWN'S AUDIT.

WE ARE NEW TO THE TOWN, BUT WE'RE NOT NEW TO THE DFW METROPLEX.

WE'VE BEEN AROUND FOR A VERY LONG TIME PREVIOUSLY.

BKD, THEN FORVIS, NOW FORVIS MAZARS. IT'S VERY COMMON IN OUR INDUSTRY FOR MERGERS AND ACQUISITIONS AND THINGS OF THAT NATURE TO OCCUR.

BUT I HAVE BEEN WITH THE FIRM FOR OVER 15 YEARS.

I'VE BEEN DOING THIS A VERY LONG TIME, AND SO I'M SUPER EXCITED TO BE HERE TONIGHT TO PRESENT THE RESULTS.

AND SO I HAVE A COUPLE OF HIGHLIGHTS THAT I DO WANT TO WANT TO SHARE WITH YOU ALL. SO THE DOCUMENT I THINK IS IN FRONT OF YOU AT YOUR STANDS HERE.

AND SO AS JOHN MENTIONED, A LOT OF WORK WENT INTO PUTTING THIS DOCUMENT TOGETHER.

IT IS ALMOST 200 PAGES. AND THERE'S A COUPLE OF THINGS THAT I WANT TO POINT OUT.

SO IN THIS DOCUMENT, YOU ACTUALLY ONLY RECEIVED A COUPLE OF PAGES FROM US AND THAT'S OUR AUDIT OPINIONS.

SO YOUR STAFF BEHIND ME ACTUALLY PUT THIS ENTIRE DOCUMENT TOGETHER, WHICH IS NO SMALL FEAT.

COUNTLESS HOURS WENT INTO PREPARING THIS DOCUMENT.

AND SO I'M PLEASED TO LET YOU ALL KNOW THAT THE TOWN DID RECEIVE CLEAN, UNMODIFIED OPINIONS.

SO THAT IS THE HIGHEST LEVEL OF ASSURANCE THAT A GOVERNMENT OR GOVERNMENTAL ENTITY CAN ACHIEVE.

AND WE ACTUALLY GAVE YOU A COUPLE OF OPINIONS.

SO YOU GOT A CLEAN OPINION ON YOUR FINANCIAL STATEMENTS AS A WHOLE.

YOU GOT A CLEAN OPINION ON YOUR INTERNAL CONTROLS OVER FINANCIAL REPORTING.

[00:05:03]

AND THEN BECAUSE THE TOWN DOES SPEND AND RECEIVE MORE THAN $1 MILLION IN FEDERAL AND THIS YEAR'S STATE FUNDING, YOU WERE REQUIRED TO HAVE THAT SEPARATE COMPLIANCE AUDIT.

AND SO WE DID AUDIT TWO PROGRAMS, ONE FEDERAL, WHICH WAS THE WIND DOWN OF THE CORONAVIRUS, STATE AND LOCAL FISCAL RECOVERY FUNDS. AND THEN WE ALSO DID AUDIT THE SEPARATE STATE GRANT FROM THE TEXAS COMMISSION ON THE ARTS.

AND SO BOTH OF THOSE GRANTS WERE SUBJECT TO TESTING, AND WE DID NOT IDENTIFY ANY COMPLIANCE ISSUES.

WE PERFORMED OUR TEST, AND WE BELIEVE THAT ALL THE FUNDS WERE SPENT IN ACCORDANCE WITH THE REQUIREMENTS.

A COUPLE OF OTHER THINGS THAT I ALSO WANT TO POINT OUT REALLY QUICKLY IN TERMS OF AUDIT FINDINGS, WE DID NOT HAVE ANY AUDIT FINDINGS AND WE ALSO DID NOT HAVE ANY AUDIT ADJUSTMENTS.

SO FOR YOU AS A COUNCIL, WHAT THAT TELLS YOU IS THAT THE INTERIM REPORTS THAT YOU'RE RECEIVING THROUGHOUT THE FISCAL YEAR, YOU CAN HAVE CONFIDENCE AND RELIANCE THAT THOSE NUMBERS ARE COMPLETE AND ACCURATE.

BASED ON THE FACT THAT WE CAME IN AT YEAR END AND DID NOT HAVE AUDIT ADJUSTMENTS, WHICH I THINK IS KEY AND EXCELLENT THERE.

SOMETHING ELSE I WANT TO POINT OUT AND IT OFTENTIMES GETS OVERLOOKED.

AND SO THE TOWN HAS RECEIVED THE PRESTIGIOUS GOVERNMENT FINANCE OFFICERS AWARD FOR CERTIFICATE OF ACHIEVEMENT AND EXCELLENCE IN FINANCIAL REPORTING FOR 37 CONSECUTIVE YEARS. SO I DO A LOT OF THESE PRESENTATIONS.

I HAVE A LOT OF CLIENTS ACROSS THE DFW METROPLEX, AND THIS IS ONE OF THE LONGEST STANDING TRENDS THAT I HAVE SEEN.

AND WE FULLY BELIEVE THAT THIS REPORT THAT'S IN FRONT OF YOU TONIGHT WILL GET SUBMITTED TO GFOA AND QUALIFY FOR THAT AWARD AGAIN.

AND SO FOR YOU ALL, THAT'S JUST A TESTAMENT TO YOUR COMMITMENT AND EXCELLENCE IN FINANCIAL REPORTING WITH YOUR TEAM HERE BEHIND ME.

AND THEN A COUPLE OTHER THINGS THAT I ALSO DID WANT TO POINT OUT.

AND SO GASB. SO THAT'S THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD.

THAT IS THE STANDARD SETTING BOARD THAT YOU ALL HAVE TO FOLLOW AS A GOVERNMENTAL ENTITY.

THEY HAVE BEEN EXTREMELY BUSY OVER THE LAST SEVERAL YEARS, ISSUING ACCOUNTING PRONOUNCEMENTS THAT YOUR TEAM HAS TO READ, ANALYZE, AND THEN FURTHER ADOPT AND DETERMINE IF IT'S GOING TO BE MATERIAL TO THE TOWN.

SO THERE WERE TWO PRONOUNCEMENTS THAT THE TOWN DID EVALUATE AND IMPLEMENT DURING THIS FISCAL YEAR.

NONE, NEITHER OF WHICH HAD A MATERIAL IMPACT ON THE TOWN.

BUT WHAT THAT MEANS FOR YOU ALL IS YOU'RE UP TO DATE ON ALL GASB PRONOUNCEMENTS THAT HAVE BEEN ISSUED THUS FAR, WHICH IS VERY IMPORTANT. AND IN ORDER FOR YOU TO ACHIEVE CLEAN OPINIONS, YOU HAVE TO BE IN COMPLIANCE WITH THE STANDARDS.

AND THEN THE LAST THING THAT I JUST WANT TO MENTION, YOU KNOW, JOHN ALLUDED TO ALL THE COUNTLESS HOURS, THE LATE NIGHTS, THE EARLY MORNINGS THAT WENT INTO PREPARING FOR THE AUDIT.

AND SO I JUST KIND OF WANT TO STEP BACK REALLY QUICK. WE WERE ENGAGED OR WE WERE HIRED BY THE TOWN IN JULY OR AUGUST TO BE YOUR NEW AUDITORS.

AND WE HIT THE GROUND RUNNING. SO THIS HAS REALLY BEEN A SIX MONTH PROCESS.

SO IT'S REALLY BEEN A MARATHON, IF YOU WILL. IT'S NOT BEEN A SPRINT.

AND WE JUST REALLY APPRECIATE, YOU KNOW, CHANGING FIRMS AND COMING IN AND GOING THROUGH AN AUDIT AND IMPLEMENTING STANDARDS IS NO SMALL UNDERTAKING.

AND SO WE REALLY APPRECIATE THE WORKING RELATIONSHIP THAT WE'VE DEVELOPED WITH THE TOWN AND THE STAFF OVER THE LAST SEVERAL MONTHS.

AND, YOU KNOW, ALL THE DEPARTMENTS NEED TO BE COMMENDED BECAUSE IT'S NOT JUST FINANCE.

IT'S VERY MUCH A GROUP WIDE, TOWN WIDE EFFORT.

SO PLEASED TO LET YOU KNOW THESE WERE THE RESULTS.

WE ARE DONE. STAFF WILL MOVE FORWARD WITH ALL THE FILINGS THAT HAVE TO BE DONE WELL BEFORE THE MARCH 27TH REQUIRED DEADLINE AND JUST WANT TO MAKE ONE PLUG. WE ARE A DAY EARLIER THAN WHERE THE TOWN WAS LAST YEAR, EVEN CHANGING FIRMS AND, AND IMPLEMENTING NEW STANDARDS. SO AGAIN, JUST SUPER PROUD OF THE RESULTS.

AND ALSO MY TEAM HERE, TIFFANY AND KELSEY. SO MANAGER AND IN CHARGE ON THE AUDIT.

THEY ALSO PUT IN JUST AS MUCH WORK. AND SO JUST SUPER PROUD OF THE, THE RESULTS AND WHERE WE ARE.

SO WITH THAT, I'M HAPPY TO ANSWER ANY QUESTIONS THAT ANYONE MAY HAVE AT THIS TIME.

OKAY, SO THERE WAS A NEWS STORY LAST NIGHT ABOUT POINT, TEXAS.

AND ACCORDING TO THIS NEWS STORY, THEY HAD TO FIRE THEIR ENTIRE POLICE DEPARTMENT BECAUSE THEY ARE IN SUCH BAD FINANCIAL SHAPE AND THERE'S MISSING MONEY AND THEY DIDN'T PAY THEIR TAXES.

SO MY QUESTION IS, BASED ON YOUR OPINION AND OUR PRACTICES AND THE STANDARDS THAT WE HAVE, AND I KNOW THE PEOPLE WE HAVE ARE GREAT. BUT IF SOMETHING LIKE THIS, COULD THAT HAPPEN IN FLOWER MOUND? IS THAT EVEN POSSIBLE WITH THE STANDARDS THAT WE HAVE? I FEEL LIKE YOU HAVE VERY GOOD INTERNAL CONTROLS IN PLACE.

SO WHILE SOMETHING YOU KNOW, PEOPLE ARE HUMAN AND THERE'S GOING TO BE THINGS THAT MAY, PEOPLE MAY CIRCUMVENT THE SYSTEM, DO NOT BELIEVE THAT'S GOING TO HAPPEN HERE. YOU HAVE VERY GOOD INTERNAL CONTROLS IN PLACE TO PREVENT AND ALSO DETECT ANY TYPE OF A MATERIAL

[00:10:06]

ERROR, IN MY OPINION. OKAY, VERY GOOD. THANK YOU.

THAT'S WHAT I WANTED TO KNOW. YES. APPRECIATE IT. AGAIN DOES ANYONE HAVE ANY OTHER QUESTIONS? NO QUESTIONS.

BUT AGAIN, JUST WANT TO EXPRESS MY APPRECIATION FOR WHAT YOU GUYS HAVE DONE AND FOR JOHN, YOU AND YOUR DEPARTMENT AND EVERYONE TOWN STAFF FOR DOING SUCH A GOOD JOB KEEPING OUR BOOKS CLEAN, MAKING SURE THAT OUR FINANCIAL REPORTING, OUR CONTROLS ARE WHERE THEY NEED TO BE.

AS PART OF THE PROCESS, WHEN YOU COME IN AND YOU DO THE AUDIT, DO YOU, IF YOU SEE SOMETHING LIKE AN OPPORTUNITY FOR IMPROVEMENT OR EVEN IF WE'RE DOING A GREAT JOB, DO YOU SHARE AND GIVE THAT FEEDBACK BACK TO THE TEAM? IF YOU SEE THINGS IS MY FIRST PART OF THE QUESTION.

AND THE SECOND THING IS, IT SOUNDS LIKE WE'RE DOING A GREAT JOB.

IS THAT COMMON ACROSS MUNICIPALITIES IN TEXAS, OR IS THIS REALLY SOMETHING THAT WE SHOULD BE PROUD OF? OKAY, FIRST QUESTION. FIRST ANSWER TO THE FIRST QUESTION. YES. SO WE DID MEET REGULARLY THROUGHOUT THE AUDIT.

WE DID THROUGHOUT THE REVIEW PROCESS, YOU KNOW, HELP WITH JUST, YOU KNOW, BEST PRACTICES AND HELPING MAKE THIS DOCUMENT A REALLY GOOD DOCUMENT THAT WE BELIEVE WILL CONTINUE FOR THE TOWN TO RECEIVE THE AWARD.

SO YES, AS WE'RE GOING THROUGH THINGS, WE TRY TO POINT OUT, HERE'S BEST PRACTICES OR RECOMMENDATIONS.

AND IT'S VERY MUCH A, I FEEL LIKE A GOOD WORKING AND COLLABORATIVE RELATIONSHIP.

I DID MEET WITH THE MAYOR AS PART OF OUR AUDIT KICKOFF AS WELL, AND OF COURSE, CITY MANAGEMENT.

AND SO YES ANY CHANCE WE CAN, WE DEFINITELY TRY TO SHARE BEST PRACTICES AND RECOMMENDATIONS.

EXCELLENT THERE ARE CITIES ALL ACROSS THE METROPLEX THAT ARE SHORT STAFFED THAT ARE FACING YOU KNOW, TURNOVER IN THEIR ORGANIZATIONS OR PEOPLE RESIGNING.

AND THERE IS JUST A VERY MUCH A TALENT SHORTAGE OF PEOPLE IN GOVERNMENTAL ACCOUNTING AND FINANCE.

AND SO TO BE ABLE TO HAVE A TEAM THAT NOT ONLY, YOU KNOW, CLOSES THE YEAR END IN A TIMELY MANNER WITH NO AUDIT ADJUSTMENTS, BUT ALSO PRODUCES THIS DOCUMENT IS EXCEPTIONAL.

I WILL TELL YOU, WE ONLY HAVE ABOUT 10% OF OUR CLIENTS THAT PREPARE THIS DOCUMENT BY THEMSELVES.

SO THIS IS THE EXCEPTION AND NOT THE RULE. EXCELLENT, THAT'S GREAT TO HEAR.

AND AGAIN GOOD JOB. AND I LIKE HEARING EXCEPTIONAL.

THAT'S AWESOME. THANK YOU ALL. I THINK IT'S NICE WE ALL KNOW UP HERE THAT WE HAVE AN EXCEPTIONAL FINANCE DEPARTMENT HERE AND OUR STAFF IS AMAZING.

BUT YOU JUST PUT TRANSPARENCY TO ALL OF THAT, TO OUR COMMUNITY TO LET THEM KNOW THAT IT'S JUST SOLID.

SO THANK YOU SO MUCH. I ENJOYED MEETING WITH YOU ALL SEVERAL MONTHS BACK, SO IT'S GOOD TO SEE YOU AGAIN.

YES. THANK YOU. ANY OTHER QUESTIONS THAT I CAN HELP ANSWER? OH, OKAY, THAT'S GOOD. THANK YOU.

WITH THAT DO. IF YOU DON'T HAVE ANY OTHER COMMENTS THEN WE CAN GO AHEAD AND MAKE A MOTION.

MAYOR I'LL MOVE APPROVAL OF THE 2025 ACFR. SECOND.

WE HAVE A MOTION AND A SECOND. COUNCIL MEMBER DREW.

AYE. DEPUTY MAYOR PRO TEM SCHIESTEL. AYE. MAYOR PRO TEM MARTIN.

AYE. COUNCIL MEMBER TAYLOR. AYE. COUNCIL MEMBER WERNER.

AYE. OKAY. OUR ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDING SEPTEMBER 30TH, 2025 PASSES BY UNANIMOUS VOTE. ALL RIGHT. THANK YOU ALL FOR BEING HERE.

THE TIME IS NOW 6:14. THE TOWN COUNCIL IS CONVENING INTO CLOSED SESSION PURSUANT TO TEXAS GOVERNMENT CODE,

[E. CLOSED MEETING]

CHAPTER 551, SECTION 071, 072, 074 AND 087. WE'LL BE BACK.

OKAY GOOD EVENING. WE ARE NOW RECONVENING AT 7:24 INTO AN OPEN SESSION.

THERE'S NO ACTION TO BE TAKEN AS A RESULT OF THE CLOSED SESSION.

SO AT THIS TIME, THIS MEETING IS ADJOURNED. GOOD NIGHT FLOWER MOUND.

* This transcript was compiled from uncorrected Closed Captioning.