City of Canyon Commission Meetings

AGENDA NOTICE OF MEETING Notice is hereby given that the governing body of the City of Canyon will meet at 4:00 pm for a Work Session and the Regular Meeting of the City of Canyon Commission at 5:30 p.m. on the 7th day of May 2018, in the Commission Chambers of City Hall at 301 16th Street in the City of Canyon to discuss the following agenda items: 1. Call to Order. 2. City of Canyon Commission Work Session. (1) AMR Worksession Presentation. (2) Staff Update Regarding the Following Items. • Brown Road Wellfield • North Sewer Expansion Project • East Elevated Tank Coating Project • Dead Trees • WTAMU Sewer Deduct Request • Drought Contingency Plan • 15-minute Parking Signs on Square. • Meeting with Developers for new Hampton Inn Regular Meeting Items. 3. Invocation. 4. Pledge of Allegiance. 5. Approval of Minutes of the Meeting of April 16, 2018. 6. Public Comment – Comments from Interested Citizens. 7. Consider and Take Appropriate Action on Items Discussed in Work Session. 8. Consider and Take Appropriate Action on Audit Presentation for CEDC Year End September 30, 2017. 9. Consider and Take Appropriate Action on Bid Award for East Elevated Tank Drain Line. 10. Executive Session Pursuant to §551.071 Consultation with Attorney, and §551.074 Personnel Matters (City Manager’s Contract). 11. Consider and Take Appropriate Action on Items Discussed in Executive Session. 12. Adjourn. Randy Criswell, City Manager I certify that the above Notice of Meeting was posted on the bulletin board of the Civic Complex of the City of Canyon, Texas on the 4th day of May 2018. Gretchen Mercer, City Clerk City of Canyon City Commission Meeting April 16, 2018 The City Commission of the City of Canyon met in regular session at 5:30 p.m. in the City Commission Chambers of the Civic Complex. Mayor Gary Hinders presided over the meeting with the following Commissioners in attendance, Mayor Pro-Tem Justin Richardson, Cordell Jones, Roger Remlinger and Paul R. Lyons. Also present were the following City Staff: City Manager Randy Criswell, City Secretary Gretchen Mercer, Assistant City Manager for Special Projects Jon Behrens, Public Works Director Dan Reese, Fire Chief Mike Webb, Planning and Development Director Danny Cornelius, Parks Director Brian Noel, Safety Director Tony Lawson, and City Attorney Chuck Hester. Item 1. Call to Order. Mayor Hinders called the meeting to order at 5:32 p.m. Item 2. Invocation. Mayor Pro-Tem Richardson gave the invocation. Item 3. Pledge of Allegiance. The Pledge of Allegiance was led by Commissioner Lyons. Item 4. Approval of Minutes of the Dual Meeting of April 2, 2018 with the CEDC. Mayor Pro-Tem Richardson moved, duly seconded by Commissioner Jones, to approve the minutes of the dual meeting with the CEDC April 2, 2018 as presented. Motion carried unanimously. Item 5. Approval of Minutes of the Meeting of April 2, 2018. Mayor Pro-Tem Richardson moved, duly seconded by Commissioner Remlinger, to approve the minutes of April 2, 2018 as presented. Motion carried unanimously. Item 6. Public Comment – Comments From Interested Citizens. There was no comments made. Item 7. Update from Mayor Hinders on Arbor Day Efforts. Mayor Hinders gave a brief update on funds raised for planting trees in Canyon. Mayor Hinders commended the Canyon Noon Lions Club for their pledge of $3,000 and Mayor Pro-Tem Justin Richardson said Canyon Rotary Club would be pledging as well. Mayor Hinders stated with the City of Canyon’s 3-1 match approximately 40 trees would be planted in the City of Canyon. Mayor Hinders said he liked the structure WTAMU used for their Arbor Day activities and would look to it when structuring Canyon’s Arbor Day festivities. City Commission Meeting April 16, 2018 Page 2 of 4 Item 8. Conduct Public Hearing and Consider and Take Appropriate Action on Ordinance No. 1079 to Rezone the Proposed Canyon East Unit No. 6 to SF-S (Single-Family Suburban Residential District) from SF-A (Single-Family Agricultural Residential District). Planning and Development Director Danny Cornelius presented Ordinance No. 1079 for consideration. Mr. Cornelius stated Daryl Furman, representing Gary Kuhlman, submitted a plat for Canyon East Unit No. 6 with an application for a change in zoning. Mr. Cornelius stated the proposed use of the property is single-family dwellings and the proposed zoning is for Single- Family Suburban Residential District. Mr. Cornelius stated letters were sent to 16 property owners within 200 feet with one response received in favor of the request. Commissioner Lyons moved, duly seconded by Commissioner Jones to adopt Ordinance No. 1079 as presented. Mayor Hinders opened the public hearing. There being no comment, Mayor Hinders closed the public hearing. After further discussion, the motion to adopt Ordinance No. 1079 as presented was voted on. Motion carried unanimously. ORDINANCE NO. 1079 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF CANYON, TEXAS, REZONING CANYON EAST UNIT NO. 6, AN ADDITION TO THE CITY OF CANYON, RANDALL COUNTY, TEXAS, PROVIDING THAT THE ZONING CLASSIFICATION BE POSTED UPON THE ZONING DISTRICT MAPS OF THE CITY OF CANYON, PROVIDING THAT ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH ARE EXPRESSLY REPEALED, AND PROVIDING FOR AN EFFECTIVE DATE. Item 9. Consider and Take Appropriate Action on a Plat for Canyon East Unit No. 6. Planning and Development Director Danny Cornelius presented a plat submitted for Canyon East Unit No. 6. Mr. Cornelius stated the Canyon Planning and Zoning Commission voted unanimously to recommend approval of the plat to the City Commission. After discussion, Commissioner Remlinger moved, duly seconded by Commissioner Jones to approve the plat for Canyon East Unit No. 6 as presented. Motion carried unanimously. Item 10. Conduct Public Hearing and Consider and Take Appropriate Action on Ordinance No. 1080, Rezoning 31 Hunsley Road to RC-2 (Commercial District) from RC-1 (Retail District). City Commission Meeting April 16, 2018 Page 3 of 4 Planning and Development Director Danny Cornelius presented Ordinance No. 1080 for consideration. Mr. Cornelius stated Toot-n-Totum proposed to build a convenience store at this location that would include a car care center and car wash. Mr. Cornelius stated the car care center would not be allowed in the RC-1 district. Mr. Cornelius said 15 letters were sent to property owners within 200 feet with 6 responses received - 2 in support and 4 opposing. Mr. Cornelius stated the Planning and Zoning Commission considered the responses in opposition and felt the opposition was directed in general to a convenience store, which he noted, was allowed within the current zoning. The issue was the car care center, hence the request for rezoning. The Planning and Zoning Commission voted unanimously to recommend approval of the zoning request. Mr. Cornelius advised that since over 20 percent of the responses were opposed, a Super Majority Vote of the City Commission would be necessary to approve the zoning change. Commissioner Jones moved, duly seconded by Commissioner Remlinger to adopt Ordinance No. 1080 as presented. Mayor Hinders opened the public hearing. There being no comment, Mayor Hinders closed the public hearing. After further discussion, the motion to adopt Ordinance No. 1080 as presented was voted on. Motion carried unanimously. ORDINANCE NO. 1080 Rezoning 31 Hunsley Road AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF CANYON, TEXAS, REZONING 31 HUNSLEY ROAD, ALSO DESCRIBED AS LOTS 7 AND 8, BLOCK 7, MADISON PARK UNIT NO. 2, AN ADDITION TO THE CITY OF CANYON, RANDALL COUNTY, TEXAS, PROVIDING THAT THE ZONING CLASSIFICATION BE POSTED UPON THE ZONING DISTRICT MAPS OF THE CITY OF CANYON, PROVIDING THAT ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH ARE EXPRESSLY REPEALED, AND PROVIDING FOR AN EFFECTIVE DATE. Item 11. Consider and Take Appropriate Action on Ordinance No. 1081, An Ordinance for the Implementation of a Fire Hazard Mitigation Plan for the City of Canyon. Fire Chief Mike Webb presented Ordinance No. 1081 for consideration. Chief Webb stated the Ordinance would implement a Fire Hazard Mitigation Plan reducing the potential threat of wildfires to the city as discussed at the March 5, 2018 Commission meeting. Chief Webb stated prescribed burns and general brush cleanup would be conducted within the city limits and ETJ (Extraterritorial Jurisdiction) of the City of Canyon with land owner permission, to promote more successful control in the case of wildfires. Commissioner Lyons expressed appreciation of working with and respecting landowners. After discussion, Commissioner Jones moved, duly seconded by Mayor Pro-Tem Richardson to approve Ordinance No. 1081 as presented. Motion carried unanimously. City Commission Meeting April 16, 2018 Page 4 of 4 ORDINANCE NO. 1081 AN ORDINANCE OF THE CITY OF CANYON, TEXAS, ADDING A NEW SECTION 94.02 OF THE CODE OF ORDINANCES ADOPTING A FIRE HAZARD MITIGATION PLAN AND AUTHORIZING IMPLEMENTATION BY THE CANYON FIRE DEPARTMENT AND RELATED DEPARTMENTS; AMENDING SECTION 94.01, 307.1.1 OF THE CODE OF ORDINANCES; PROVIDING FOR SEVERABILITY AND AN EFFECTIVE DATE. Item 12. Consider and Take Appropriate Action on Quarterly Finance Report. City Manager Randy Criswell presented the Quarterly Finance Report for consideration. After discussion Mayor Pro-Tem Richardson moved, duly seconded by Commissioner Jones to approve the Quarterly Finance Report as presented. Motion carried unanimously. Item 13. Consider and Take Appropriate Action on Quarterly Investment Report. City Manager Randy Criswell presented the Quarterly Investment Report for consideration. After discussion Commissioner Remlinger moved, duly seconded by Commissioner Jones to approve the Quarterly Investment Report as presented. Motion carried unanimously. Item 14. Executive Session Pursuant to §551.072 Deliberation of Real Property and §551.074 Personnel Matters (City Manager Contract). Mayor Hinders indicated the Commission would adjourn into Executive Session at 6:01 p.m. Item 15. Consider and Take Appropriate Action on Items Discussed in Executive Session. Upon returning from Executive Session at 6:45 pm, the following action was taken. Mayor Pro-Tem Richardson Moved, duly Seconded by Commissioner Jones to authorize City Manager Randy Criswell to negotiate a contract with the JT Haynes Group not to exceed $665,000 for the purchase of groundwater rights. Motion carried unanimously. Item 16. Adjourn. There being no further business, Mayor Pro-Tem Richardson moved this meeting be adjourned. ______________________________ Gary Hinders, Mayor ATTEST: ________________________________ Gretchen Mercer, City Secretary REGARDING ITEM 2 AMR AGENDA Worksession To: Randy Criswell, City Manager From: Dan Reese, Public Works Director Date: May 2, 2018 Re: Update On Design and Cost Estimates for the Water Meter Replacement and Automated Meter Reading Project. Back in April, 2016, the previous City Commission instructed us to begin a “design” of the project needed to completely automate our water meter reading. We have gotten closer to having done so and figured that an update was in order, and to take an opportunity to brief the current Commission on the project. Since 1991, the City has been exploring options and technology required to upgrade our meter reading capability. Neptune, our current meter vendor, came on board at that time. Lack of service and quality of the previous equipment caused the switch to Neptune. Since then, we have attempted to keep up with the technology that was current at the time and Neptune has always helped us to do that. In 1995, we began with the first automated system with some “touch-pad” readers. The automated technology was initially earmarked for Hunsley Hills, where the lack of alleys made meter reading difficult. In 2000, the technology evolved into the first “radio-read” system as the first version of the R900 system. Since then, the R900 system has been continually upgraded as the technology improved. Currently, our “radio reads” can be read with both our current mobile devices and/or from fixed collectors. Currently, this accounts for about 2000 meters. So, this means that about 40% of our existing meter infrastructure is ready to go, to receive some final upgrades and switch to the fixed network. This is another (if not the most important) reason for continuing with the Neptune equipment. A fixed network uses technology where the meter reading can be continuous, automatic and the data collected and processed at one central (fixed) location. All of the meter replacements (new meter & register) will have the latest technology. This accounts for approximately the remaining 3000 meters in the system. We have always expected this project to be sold more on our increase in productivity, rather than an increase in revenue, from meter replacement. So, we have tried to quantify that productivity increase with some time and money savings. We have gone through the billing / work order system, as well as involved both field and office personnel to attempt to estimate these savings. Ultimately, we have estimated that a total of over 2100 man-hours (approx. 265 man-days) and over $60,000 (just in salaries / benefits) can be saved, annually. This is a lot of time spent meter reading that our operators can spend attending to the system. This will allow us to implement more preventative maintenance that is now overlooked or delayed by the time spent meter reading. We analyzed the last years’ worth of work orders dealing only with situations that require meter readings. We then estimated the time taken by both office and field personnel to complete these orders. This is a conservative estimate, as we know there will still be times when we have to dispatch someone to the field to handle certain issues. In the business office, the ladies spend a fair amount of time manipulating the meter reading data, working re-reads, answering customer questions / complaints, account City of Canyon  AGENDA transfers, and establishing new accounts. Automation will greatly reduce the time spent on these tasks. Meter re-reads caused by data entry errors, will be a thing of the past. Meter readings required for turn-offs and transfers will be handled automatically without a manual read being required. A lot of the “tickets” that we do will be eliminated. Our overall productivity can be greatly enhanced. Operator safety will be improved by automating. Manual meter reading is pretty tough work. Our men are walking the alleys, stooping over at each meter box, reaching in to flip the lid read the dial and entering the reading onto a handheld data collector. There’s an increased risk for injury, and bites from snakes and insects in the can. There is always some data entry error when humans read a number then are required to input that number into a device. Automation removes that error, too. Another advantage of employing automated metering that has not been discussed is control of water loss and unaccounted for water. Leaks can be detected before they surface. Accurate, automated metering can really help when determining these losses for the annual water audit. Replacing meters that are inaccurate or worn out will also help increase water revenue. As a meter wears, it reads less that what actually passes through it. So, if the meter is counting less than it is flowing, you’re under billing for that water, hence a loss of revenue. We don’t expect huge increases in revenue, because our meters are relatively accurate, from most of the testing we’ve done over the years. The stories that you hear about the large revenue increases are from small systems that have really old, failing meters. That’s why we’re saying that we can see the benefit more from productivity than revenue generation. Another change to the original proposal related to how we handle and process the data from the system. Initially, a dedicated computer server was required to compile, store and manipulate the raw data from the field. Prior to the last presentation, an option became available where Neptune could “host” the data collection and management software online, in the cloud. This service would be provided via an annual subscription. No additional hardware or software would be required, we simply would use and manage the data via the internet. We have consulted our IT Department for their input and they confirmed that either method would be fine. Within the last couple of months, Neptune has informed us that they’re moving away from the local “hosting” (where we have the data onsite in our computer). They want everything moving to the cloud. These facts helped us to choose the online option. We see no reason to spend over $30,000 on hardware and software that, within a relatively short time could be unsupported. The last part of the project is what we call the “customer web portal”. It’s simply what the name implies. Customers will have the opportunity to be able to go online and look at their water usage. The automation software will be linked to another platform that will allow this. This helps both the customer and the City. We can now involve the customer to be a part of their water usage. This will help us explain high usage / bill complaints, quickly find leaks, help with drought contingency plan monitoring, and promote overall water conservation and management. It will help us educate the public on how they’re using water. They will be able to see their usage hour by hour. Customers will be able to set their own alarms so that they can be alerted when their usage reaches a certain threshold. This could also be used for leak alerts, such as water running at times when it’s not supposed to run, continuous use, etc. The customer portal is something that we could defer on for the time being and bring online at a City of Canyon  AGENDA later date. We would recommend that we move forward with it now, while we’re becoming automated. Now, let us clear up some confusion over the different cost estimates that have been presented, over the years, for this project. The original cost estimate of $900-950,000 was just that, an estimate. It was our best guess, first presented in our 2016 Budget Notes, based solely on a very rough estimate of the number of data collectors and meters to enhance / replace. We had not gone into the system to get exact numbers. We were looking at a number of collectors based on some possible locations and assuming that 3-4 collectors would be adequate. This initial estimate was made only as an attempt to feel out the desires of the Commission, if any, and give them a very preliminary, “ball park” estimate. The estimate presented in April 2016 ($1,260,000) was based on the original radio propagation study (an engineering model estimating the quality of the radio reception / collector coverage, etc.), performed in December 2014. The study indicated the collectors that were needed to achieve 99% coverage and were located by the study, i.e., they were placed where the study said that they needed to be, without regard for our existing facilities, except for the two elevated tanks. So, the bottom line is, the initial $ 900,000 estimate was unreasonably low, and the April 2016 figure was fairly accurate. Since the last presentation, we have worked hard to put together the best estimate that we can based on a more in-depth look at the system, the number of meters to replace, and using our current facilities to locate the collectors (namely our existing tornado siren poles and elevated tanks). Neptune has re-run the radio propagation analysis based on our facilities locations and heights and according to the most recent analysis, we can get good coverage with 5 collectors (located on two siren poles, the two tanks and one new monopole at Canyon East). Also, since that last report, Neptune has released a new, better performing radio / register that is higher powered. Rather than have a different mix of equipment, we’ve decided to replace all of the registers (on new and existing meters) to the “latest and greatest”. This means replacing all but about 50 registers on our existing meters. The meters that are to be replaced will have this new register. The last major piece to the design change was that we realized that some of the first automated meters are approaching 20 years old, or older. Upon Neptune’s recommendation, and further study, we didn’t see the reasoning in changing the dials on these aging meters now, and then have to come back later, possibly soon, and replace the meters when they begin to wear out. Some or possibly most of these meters, mainly in Hunsley Hills may need to be replaced. We’ve added about half of these meters to the estimate. We’ll need some more time to do some testing and investigating as to the actual number and location of these replacements. Both of these facts; about the new registers (being consistent with their replacement) and the replacement of some of the Hunsley Hills meters has also added to the cost of the project. Plus, our previous figures were two years old. Updated cost estimates have been obtained from Core & Main, our Neptune vendor that will supply this project. Since we first started the discussion, costs have increased some, plus we have looked closer into the system to get the best estimate possible. We will be continuing to tweak on the design and further refine the quantities. The best estimate we have at present for the entire system upgrade is approximately $ 1,700,000, with the customer web portal. City of Canyon  AGENDA The revised cost estimate looks like this: $ 1,614,000 Meters, Registers, Collectors, Installation $ 21,000 Neptune Web Hosting $ 28,000 Customer Web Portal TOTAL PROJECT $ 1,663,000 Also, there will be annual costs / subscriptions for maintenance of the collectors, online data hosting and customer web portal. These annual expenses would add up to approximately $40,000. We have invited experts from Neptune and Core & Main to come and present more information to the Commission and be prepared to answer any questions that you or they may have. No action is expected at this time. This is an information only agenda item. The Public Works Department would hope that after further consideration, the City Commission would approve this project and authorize us to proceed with the construction of the automated system. Our goal would be to have a project underway within the next 9-12 months. City of Canyon REGARDING ITEM 2 Staff Update AGENDA To: Mayor and City Commission From: Randy Criswell, City Date: Manager May 7, 2018 Re: Work Session Item – City Manager’s Update on Ongoing Projects of Interest Brown Road Well Field All four wells are drilled, cased, and fenced. No pumps, piping, or power has been installed yet. We are waiting on interim approval from TCEQ. They have questioned whether or not our water meets corrosion standards (in spite of the fact it’s the same water we’ve been pumping for decades). We have provided them with all necessary documentation and are awaiting their response. Once we receive Interim Approval we will be able to design the plans for the piping, submit them to TCEQ for approval, and then bid the project for pumps and piping. We are anticipating a bid date in the Fall. Anticipated pumpage for the wells will be 265 gpm each due to water district restrictions. North Sewer Expansion Project The Lift Station is constructed and the forcemain is complete. The gravity line portions of the project are moving at a very slow pace. The contract completion date is August 26, 2018, but the contractor has submitted a schedule (after Dan insisted on a completion schedule) that shows a completion date in October. I am not satisfied with the progress of this project, and I hope we aren’t discussing Liquidated Damages in the future due to the lack of performance of this contractor. Just as a reminder, the contract for this project was signed in February 2017. East Elevated Tank Coating Project Painting is pretty much complete, with logos to be finished soon, if they aren’t already at the time of this memo. We are anticipating returning the tank to service next month. Dead Trees Ever since the harsh summer of 2014, staff has been concerned about the fact that old dead elm trees would become a hazard. I thought I had brought this to the City Commission but we can’t find any record of it, so I’m not really sure how the idea was “vetoed”. Regardless, my fear was that these trees would eventually be a threat, that eventually their roots would decay and strong winds would blow them over. My concerns were confirmed by two of our on-staff experts, Mr. Brian Noel and Mr. John Haun, both of whom even predicted that dependent on rainfall and moisture, this could begin to happen within three or four years. This past Sunday night (April 29), our concerns became reality. At least 4 dead elm trees blew over in the high winds we had, and even as recent as yesterday, I personally watched as an Xcel Energy truck removed a dead branch from power lines in the block north of City Hall. There were limbs that hit power lines and created sparks, but none caused fires of any concern. City of Canyon  AGENDA Staff still has the same concern, but even stronger now that we’re seeing the trees fall. The possible impacts of these dead trees are simple to see in my opinion: damage to property, injury or death to persons, and fire. If one of those trees sparks a fire that catches on with the wind blowing like it did Sunday night, I don’t think there’s enough fire equipment in the Texas Panhandle to save us from catastrophic damage to property and lives. I don’t want to waste our staff resources trying to bring you a proposal to deal with this issue and have it denied, so I am asking for your consideration of this matter. We don’t have the staff, expertise, or equipment to enter private property and cut down a 40’ tree, but there are companies out there who can remove the portions that would cause the threats. I feel this is worth more discussion at some point, especially in light of the recent experiences. WTAMU Sewer Deduct Request We’ve been having some discussions with WTAMU about their desire for a sewer pricing deduction due to the fact that a lot of their water is used for cooling towers and other equipment that result in the water being used in such a way that it doesn’t reach the sewer system. Currently our rates provide for their sewer to be charged at a 58% multiplier of the total water usage. Comparatively, if you applied that same multiplier to other commercial rates, it would result in a higher rate than we’re charging other commercial users today. Thus, it would seem a reasonable request. I’ve asked WTAMU to provide me with exactly what they propose and how it would work. I hope to have that information for this meeting, but it may be the second meeting in May. Drought Contingency Plan Just as a report, compliance with Stage 2 of the Drought Contingency Plan has been good overall. Our usage is steadily climbing but the average right now is just over 2.5 million gallons per day, which is a good number for this time of year. We’ve issued around 10 warnings and around 8 variances. Compared to 2012, the last time we implemented Stage 2, the temperatures are lower, and water usage almost directly parallels temperature. So we feel ok about it so far. I have had considerable expressions of support for the Even/Odd watering days, and even had one resident suggest that we make that a permanent restriction. So I’m proud of our citizens for trying to step up and comply. 15-Minute Parking Signs on Square Due to an initial request from Mandy Williams, owner of the Cake Company, we took a look at the parking around the square, and the businesses such as the Cake Company, Johnston’s Hardware, Modern Cleaners, TEXAS, etc., who might need a customer to just run in and out for a quick item. We felt it was a good idea, and installed some signage, but the wording on the signs caused confusion. We pulled the signs and are in the process of re-grouping and will start over with this project. Staff is looking for more appropriate poles and investigating the flexibility of sign design to see what might be a better overall thematic fit for the Square. No new signs will be installed until we’ve addressed all those issues and made a very concerted effort to communicate the need and intent for the signs to all business owners on the Square. City of Canyon  AGENDA Meeting with Developers for new Hampton Inn We met within the past few days with the developers who will build the new Hampton Inn. It was a very productive meeting, and we’re all excited about this new growth for Canyon. City of Canyon REGARDING ITEM 7 AGENDA To: Mayor and City Commission From: Randy Criswell, City Manager Date: May 7, 2018 Re: Consider and Take Appropriate Action on Items Discussed in Work Session. If it is the pleasure of the Commission to place any of the work session items on future Agendas, it is appropriate to inform staff of that now. City of Canyon REGARDING ITEM 8 AGENDA To: Randy Criswell, City Manager From: Evelyn Ecker, Executive Director Date: April 30, 2018 Re: Consider and Take Appropriate Action on Audit Presentation for CEDC Year End September 30, 2018. I would like to request that John Merriss from Doshier, Pickens, & Francis be placed on the May 7, 2018 agenda for the City Commission meeting. At this time he will present the Canyon Economic Development Corporation audit for year ending September 30, 2018. The audit was presented and accepted by the CEDC board of directors at their meeting April 12, 2018. Hard copies of the audit will be presented at the meeting. It is the recommendation that the 2016-2017 Audit be approved. City of Canyon  Canyon Economic Development Corporation A Component Unit of The City of Canyon, Texas For the Year Ended September 30, 2017  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS FOR YEAR ENDED SEPTEMBER 30, 2017 Table of Contents Page Independent Auditors’ Report ............................................................................................................................................. 1 Basic Financial Statements: Statement of Net Position ............................................................................................................................................. 3 Statement of Revenues, Expenditures and Changes in Net Position ............................................................................ 4 Statement of Cash Flows .............................................................................................................................................. 5 Notes to Basic Financial Statements ................................................................................................................................... 6 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Audit Standards .................................. 15  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS BOARD OF DIRECTORS SEPTEMBER 30, 2017 Don Lee President Bridget Johnson Vice President Jim Bryan Treasurer Jill Shelton Secretary Randy Croslin Board Member Cory Bruce Board Member James Irlbeck Board Member MANAGEMENT Evelyn Ecker Executive Director Board of Directors Canyon Economic Development Corporation Canyon, Texas INDEPENDENT AUDITORS’ REPORT We have audited the accompanying financial statements of the business-type activities of the Canyon Economic Development Corporation (Corporation), a component unit of the City of Canyon, Texas, as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the Canyon Economic Development Corporation’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Corporation’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities of the Canyon Economic Development Corporation as of September 30, 2017, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. -1- Canyon Economic Development Corporation Page 2 Required Supplementary Information The Corporation has omitted the Management’s Discussion and Analysis (MD&A) that accounting principles generally accepted in the United States of America require to be presented by the Government Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. The independent auditors’ opinion is not affected by the omission of the MD&A. Other Matters In accordance with Government Auditing Standards, we have also issued our report dated March 15, 2018, on our consideration of Canyon Economic Development Corporation’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Audit Standards and should be considered in assessing the results of our audit. DOSHIER, PICKENS & FRANCIS, LLC March 15, 2018 -2- This page left blank intentionally BASIC FINANCIAL STATEMENTS  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2017 ASSETS Current Assets: Cash and cash equivalents $ 363,496 Investments 435,286 Due from primary government (sales tax) 131,610 Prepaid insurance 2,579 Total current assets 932,971 Noncurrent Assets: Capital assets, net 204,329 Security deposit 1,007 Total noncurrent assets 205,336 Total assets 1,138,307 LIABILITIES Current Liabilities: Due to primary government 11,295 Current portion of long-term debt 65,777 Total current liabilities 77,072 Non-current Liabilities: Non-current portion of long-term debt 94,662 Total liabilities 171,734 NET POSITION Net investment in capital assets 154,329 Unrestricted 812,244 Total net position $ 966,573 The notes to the financial statements are an integral part of this statement. -3-  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2017 OPERATING REVENUES: Sales tax $ 709,120 Miscellaneous 30,688 Total operating revenues 739,808 OPERATING EXPENSES: Economic development projects 96,233 Salaries and benefits 135,095 Depreciation 13,330 Advertising 59,648 Office Expense 15,079 Property taxes 1,325 Travel 3,996 Office supplies 2,621 Rent 14,915 Professional fees 11,455 Repairs and maintenance 2,326 Utilities 3,860 Insurance 2,723 Miscellaneous 520 Total operating expenses 363,126 OPERATING INCOME 376,682 NON-OPERATING REVENUES AND EXPENSES: Investment earnings 862 Total non-operating revenues and expenses 862 CHANGE IN NET POSTION 377,544 NET POSITION - BEGINNING 589,029 NET POSITION - ENDING $ 966,573 The notes to the financial statements are an integral part of this statement. -4-  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2017 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from sales taxes $ 698,952 Receipts from other operating revenues 30,688 Payments to suppliers and service providers (118,561) Payments to employees for salaries and benefits (135,095) Payments for economic development projects (96,233) Net cash provided by operating activities 379,751 CASH FLOWS FROM CAPTIAL AND RELATED FINANCING ACTIVITIES Purchase of capital assets (48,000) Payments on long term debt (65,777) Net cash used by noncapital financing activities (113,777) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 862 Purchase of investments (241,932) Proceeds from investments (686) Net cash used by investing activities (241,756) NET INCREASE IN CASH 24,218 CASH AND CASH EQUIVALENTS, BEGINNING 339,278 CASH AND CASH EQUIVALENTS, ENDING $ 363,496 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income $ 376,682 Adjustments to reconcile operating income to net cash flows provided for operating activities: Depreciation 13,330 (Increase) decrease in operating assets: Due from primary government (sales tax) (10,168) Prepaid insurance (167) Increase (decrease) in operating liabilities: Accounts payable 74 Net cash provided by operating activities $ 379,751 The notes to the financial statements are an integral part of this statement. -5-  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. The Financial Reporting Entity The Canyon Economic Development Corporation (EDC) is a quasi-governmental organization created in 2004 under provisions of the Industrial Development Corporation Act of the State of Texas. The EDC is financed by the proceeds of a ½ percent economic development sales tax provided by state statute subject to local option, which was approved by the citizens of the City of Canyon (City). The purpose of the EDC is to promote and develop industrial, manufacturing and other economic enterprises in order to eliminate unemployment and to enhance the public welfare of, for, and on behalf of citizens of the City. The EDC is governed by a seven-member Board of Directors appointed by the City Council, and the City serves as fiscal agent for the EDC, providing such services as investment and management information services. The EDC’s annual operating budget, as well as projects undertaken by it are subject to approval by the City Council. Because of this oversight responsibility, the EDC is considered to be a component unit of the City, and in accordance with Governmental Accounting Standards Board (GASB) Section 2100 of the Codification of Governmental Accounting and Financial Reporting Standards, its financial statements are included in the City’s annual financial report as a discretely-presented component unit. B. Basic Financial Statements The basic financial statements include the statement of net position, statement of activities, and statement of cash flows. The EDC accounts for all of its operations in one proprietary fund. The activities of the EDC are supported mainly by sales tax revenues. C. Measurement Focus and Basis of Accounting The proprietary fund is reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Revenues are classified as operating revenues and non-operating revenues. Operating revenues include sales tax income. Non-operating revenues include investment earnings. D. Cash, Cash Equivalents and Investments The EDC’s cash and cash equivalents are considered to be cash on hand, demand deposits and deposits within public fund investment pools. Statutes authorize the EDC to keep funds in demand deposits, time deposits, or securities of the United States. The EDC’s custodial banks are required to pledge for the purpose of securing EDC funds, securities of the following kind, in an amount equal to the amount of such EDC funds: bonds and notes of the United States, securities of indebtedness of the United States, bonds of the State of Texas, or of any county, city, or independent school district, and various other bonds as described in Texas Statutes. The EDC is required by Government Code Chapter 2256, The Public Funds Investment Act (“Act”), to adopt, and publicize an investment policy. That policy must be written, primarily emphasize safety of principal and liquidity, address investment diversification, yield, and maturity and the quality and capability of investment management, and include a list of the types authorized investments in which the investing entity’s funds may be invested, and the maximum allowable stated maturity of any individual investment owned by the entity. Continued -6-  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continuation E. Receivables and Payables Receivables consist of sales tax collections due from the State, through the City of Canyon, interest earned on investments and other revenues earned at year end. There is no allowance for uncollectible amounts as all receivables are deemed collectible. Payables consist of vendor obligations for goods and services as well as funds payable to others when the criteria for their release have been met. F. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. G. Capital Assets Capital assets including buildings, leasehold improvements, furniture and equipment, and website designs; are reported in the statement of net position. According to the EDC’s capitalization policy, capital assets are defined as individual assets (or systems of assets) having a cost of more than $500 and an estimated useful life in excess of two years. Capital assets are recorded at historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated lives: Buildings 39 years Leashold improvements 5 years Furniture and equipment 3 - 10 years Website development 3 years H. Net Position In the proprietary fund financial statements, equity is classified as net position and displayed in three categories. Net Investment in Capital Assets – This amount consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvements of those assets, and adding back unspent proceeds. Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments, enabling legislation, or constitutional provisions. Unrestricted Net Position – This amount includes all net positions that do not meet the definition of “net investment in capital assets” or “restricted net position.” Continued -7-  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continuation I. Use of Estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Information: The EDC follows these procedures in establishing the budgetary data reflected in the financial statements: 1. The proposed budget is prepared by the Executive Director and presented to the Board. 2. The Board will approve the budget and provide it to the City Commissioners prior to August 1. 3. The budget is adopted after approval of the City Commissioners. NOTE 3 – DEPOSITS AND INVESTMENTS Following is a reconciliation of the EDC’s deposit and investment balances as of September 30, 2017: Deposit balances consist of: Cost and Fair Value Bank deposits $ 363,497 Investments consist of: Weighted Cost and Average Fair Value Maturity (Days) Certificates of deposit (interest rates at 0.25 - 0.35%) $ 175,460 121 Amarillo Area Foundation, custodian for Canyon Community Fund; marketable securities (fair market value) 15,894 Real estate, purchased for project development (cost) 243,932 $ 435,286 Continued -8-  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 3 – DEPOSITS AND INVESTMENTS – Continuation Custodial credit risk – deposits. As of September 30, 2017 the carrying amount of the EDC’s deposits (cash, interest bearing accounts and certificates of deposit) with financial institutions were collateralized through the City of Canyon’s depository contract with the financial institution and with FDIC coverage. Custodial credit risk – investments. As of September 30, 2017 the carrying amount of the EDC’s deposits (cash, interest bearing accounts and certificates of deposit) with financial institutions were collateralized through the City of Canyon’s depository contract with the financial institution and with FDIC coverage. The depository makes no distinction between the EDC and the City of Canyon when pledging securities. Interest rate risk is the risk that adverse changes in interest rates will result in an adverse effect on the fair value of an investment. The EDC manages its exposure to interest rate risk by limiting the weighted average maturity of its investment portfolio to three years or less. Credit risk is the risk that an insurer or other counterparty to an investment will not fulfill its obligations. State law and City of Canyon policy limit investments in local government pools to those rated to no lower than AAA or an equivalent rating by at least on nationally recognized rating service. Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. As of September 30, 2017, 100% of the EDC’s carrying value of cash and investments were deposited with the depository bank of the City of Canyon and therefore were included in the City’s collateralized as described above. Investment Accounting Policy The EDC’s general policy is to report money market investments and short-term participating interest-earning investment contracts using a cost-based measure. However, if the fair value of an investment is significantly affected by the impairment of the credit standing of the issuer or by the other factors, it is reported at fair value. The term “short-term” refers to investments which have a remaining term of one year or less at time of purchase. The term “nonparticipating” means that the investments value does not vary with market interest rate changes. Nonnegotiable certificates of deposit are examples of nonparticipating interest-earning investment contracts. The EDC’s only investments outside of the Amarillo Area Foundation are certificates of deposit which are carried as part of deposits. NOTE 4 - EMPLOYEE BENEFITS The EDC has two employees who were hired by the EDC’s Board of Directors but under the direct supervision of the City Manager with City Council approval. Because the City serves as fiscal agent for the EDC and because the EDC is a component unit of the City, the EDC’s employees are provided the same benefits as are available to the City’s employees. Following is a summary of disclosures related to employee benefits: A. Compensated Absences Full-time City employees are entitled to certain compensated absences based on their length of employment. Employees must complete their six month orientation period prior to taking any leave. Vacation days are earned at a rate of 10 days per year for one to five years of service, 12 days for six to ten years of service, 15 days for eleven to twenty years of service, and 20 days for more than twenty years of service. Compensated absences for EDC employees are accounted for with the City of Canyon. Continued -9-  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 4 - EMPLOYEE BENEFITS - Continuation A. Compensated Absences – Continuation Compensated absences for sick leave accrue at a rate of eight hours per month and may be accumulated for a maximum of ninety days. Employees who begin a year of service with ninety days of accumulated sick leave are allowed to receive reimbursement for unused sick leave at their regular rate on a specific payout schedule. Employees with at least eight years of service are eligible to receive sick leave termination pay for one third of their total accumulated sick leave up to thirty days. Sick leave for EDC employees are accounted for with the City of Canyon. B. Pension Plan The City provides pension benefits for all its full time employees through a non-traditional, joint contributory, defined contribution plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple-employer public employee retirement system. It is the opinion of the TMRS management that the plans in TMRS are substantially defined contribution plans. Members can retire at ages 60 and above with 10 or more years of service or with 20 years of service regardless of age. The plan also provides death and disability benefits. A member is vested after 5 years, but the member is not entitled to the employer-financed monetary credits, even if the member was vested. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. The contribution rate for employees is 7%, and the employer matching percent is currently 14%, both as adopted by the governing body of the City. Pension costs are billed to the EDC each month. - 10 -  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 5 – CAPITAL ASSETS Capital assets activity for the year ended September 30, 2017, was as follows: Beginning Ending Balances Increases Decreases Balances Business-type activities: Capital assets being depreciated: Buildings $ 150,245 $ 48,000 $ - $ 198,245 Building improvements 3,941 - - 3,941 Furniture and equipment 39,576 - - 39,576 Website 13,631 - - 13,631 Total capital assets, being depreciated 207,393 48,000 - 255,393 Less accumulated depreciation for: Buildings (642) (5,083) - (5,725) Building improvements (2,036) (788) - (2,824) Furniture and equipment (27,861) (2,915) - (30,776) Website (7,195) (4,544) - (11,739) Total accumulated depreciation (37,734) (13,330) - (51,064) Total capital assets being depreciated, net 169,659 34,670 - 204,329 Business-type activities capital assets, net $ 169,659 $ 34,670 $ - $ 204,329 The only function of the EDC is economic development and all depreciation was charged to that function. - 11 -  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 6 - LEASES The EDC is obligated under a lease with CCK Properties for office space. Under the terms of the lease, the EDC has agreed to pay a monthly rate of $1,159. For the year, rental expense is reported on the Statement of Revenues, Expenses, and Changes in Net Position in the amount of $13,907. The lease terminates in September 2019. The minimum future lease payments are: Year Ended September 30, 2018 $ 13,907 2019 13,907 $ 27,814 NOTE 7 – LONG-TERM LIABILITIES During the year ended September 30, 2015, the EDC obtained a real estate lien note from the City of Canyon, Texas in the amount of $157,770 with 0% interest per annum and a maturity date of March 2, 2025. The principal amount is payable in ten equal annual installments of $15,777. During the year ended September 30, 2016, the EDC obtained a real estate lien note from the Paul E. Read Revocable Living Trust of $100,000 with 0% interest per annum and a maturity date of January 17, 2018. The principal amount is payable in two equal annual installments of $50,000. Beginning Ending Due Within Balance Additions Reductions Balance One Year Business-type activities: Note Payable $ 126,216 $ - $ (15,777) $ 110,439 $ 15,777 Note Payable 100,000 - (50,000) 50,000 50,000 Business-type activity long-term liabilities 226,216 - (65,777) 160,439 65,777 Continued - 12 -  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 7 – LONG-TERM LIABILITIES – Continuation The annual debt service requirement on long-term liabilities outstanding as of September 30, 2017 is as follows: Year Ending Notes Payable September 30 Total Highway 60 502 15th 2018 $ 65,777 $ 15,777 $ 50,000 2019 15,777 15,777 - 2020 15,777 15,777 - 2021 15,777 15,777 - 2022 15,777 15,777 - 2023 - 2027 31,554 31,554 - $ 160,439 $ 110,439 $ 50,000 NOTE 8 - ECONOMIC DEVELOPMENT PROJECTS Economic Development Project expenses are as follows: 2015 Blush Boutique $ 1,683 2016 Panhandle Taproom 23,000 2016 Kessler Properties 2,850 2017 Canyon Area Library (Tocker Room) 16,000 2017 Ruthette's Bridal Shop 2,700 2017 Joe Taco Canyon Project 50,000 Total Economic Development Projects $ 96,233 NOTE 9 - RISK MANAGEMENT The City is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees and natural disasters. For the past several years the EDC has obtained coverage from the Texas Municipal League Intergovernmental Risk Pool through policies issued to the City of Canyon. Participation in the Risk Pool serves to insure against the risk of loss thereby transferring that risk to the Risk Pool. There were no significant reductions in insurance coverage from coverage in the prior year. Settlement amounts have not exceeded coverage for the current year or the past three fiscal years. Continued - 13 -  CANYON ECONOMIC DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF CANYON, TEXAS NOTES TO THE BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2017 NOTE 9 - RISK MANAGEMENT – Continuation Each fund (Workers’ Compensation and Property-Liability) of the Risk Pool consists of an unincorporated association of political subdivisions of the State of Texas (hereinafter called Employer Members), which are authorized under Chapter 504, Labor Code, and Chapter 791, Government Code, to be self-insurers and enter into interlocal agreements with other political subdivisions to extend workers’ compensation benefits and liability protection for themselves, their officers and employees while acting in their official capacities, as well as municipal property coverage. Each Employer Member of each Fund shall adopt rules, regulations and bylaws promulgated by the Board of Trustees for each Fund. The funds are not intended to operate as an insurance company, but rather are intended to be the contracting mechanism by which each Employer Member provides self-insurance extending workers’ compensation benefits to its employees, provides liability coverage for itself and its employees in their official capacities under the limitations provided by law, and provides municipal property coverage. Each of the Employer Members is required to pay each Fund the contributions as provided by the contract between the funds and the Employer Members. All contributions from the Employer Members are combined for the payment of claims, purchases of reinsurance, and administrative expenses of the Fund. Employer Members are not subject to any additional contribution assessments above their required annual contributions. For the proper protection of the Funds, each Employer Member shall be required to implement such reasonable loss control recommendations and take such safety precautions as may be required by the Fund representative. NOTE 10 - COMMITMENTS During the fiscal year ended September 30, 2015 the Canyon Economic Development Corporation committed to Lone Star Milk Producers funding an amount not to exceed $850,000 for job incentives to be paid in ten annual installments of $85,000. This funding is based on meeting a minimum employment threshold. As of September 30, 2017 none of this commitment has been funded. During the fiscal year ended September 30, 2015 the Canyon Economic Development Corporation committed to Furman Family Partnership, LLP (Depot Project) funding an amount not to exceed $250,000 for the construction of 7,600 square feet of leasable retail space, to be paid in five annual installments of $50,000. As of September 30, 2017 none of this commitment has been funded. During the fiscal year ended September 30, 2016, the Canyon Economic Development Corporation committed an amount not to exceed $46,000 to Panhandle Taproom, LLC to provide a partial lease reimbursement for three years. Under the agreement the first twelve months will be reimbursed at 50%, or an amount not to exceed $23,000, year two will be reimbursed at 30%, or an amount not to exceed $13,800, and year three will be reimbursed at 20%, or an amount not to exceed $9,200. As of September 30, 2017, the remaining commitment is $23,000. During the fiscal year ended September 30, 2017 the Canyon Economic Development Corporation committed an amount not to exceed $21,600 to Ruthette’s Bridal Shop to provide a partial lease reimbursement for three years. Under the agreement the first twelve months will be reimbursed at 50%, or an amount not to exceed $10,800, year two will be reimbursed at 30%, or an amount not to exceed $6,480, and year three will be reimbursed at 20%, or an amount not to exceed $4,320. As of September 30, 2017, the remaining commitment is $18,900. During the fiscal year ended September 30, 2017 the Canyon Economic Development Corporation committed an amount not to exceed $220,000 to Joe Taco Canyon, LLC to provide cash incentives to assist in the opening of a business. Under the agreement $50,000 will be remitted upon issuance of construction permits, $50,000 upon issuance of the certificate of occupancy, $50,000 on the first anniversary of opening to the public, and $70,000 on the second anniversary of opening to the public. As of September 30, 2017, the remaining commitment is $170,000. - 14 - This page left blank intentionally COMPLIANCE AND INTERNAL CONTROL  REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors Canyon Economic Development Corporation We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the business-type activities of the Canyon Economic Development Corporation, as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the Canyon Economic Development Corporation’s basic financial statements and have issued our report thereon dated March 15, 2018. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Canyon Economic Development Corporation’s internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Canyon Economic Development Corporation’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Canyon Economic Development Corporation’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in the internal control that might be deficiencies, significant deficiencies, or material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Canyon Economic Development Corporation’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. - 15 - Canyon Economic Development Corporation Page 2 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. DOSHIER, PICKENS & FRANCIS, LLC March 15, 2018 - 16 - REGARDING ITEM 9 AGENDA To: Randy Criswell, City Manager From: Dan Reese, Public Works Director Date: May 1, 2018 Re: Consider and Take Appropriate Action on Bids Received for: Off Site Tank Drain Line – East Elevated Water Storage Tank. For years, we’ve had issues dealing with the runoff from when the east elevated tank accidentally overflows. The main issue that we had was the street and potential house flooding on the east side of Valley View when the tank overflowed. Also, the original overflow piping was undersized and during the tank rehab, this was corrected. The new overflow pipe, being correctly sized, will create a more concentrated flow during overflow events. To help mitigate the increased runoff, a storm sewer was designed to capture the overflow and distribute it off site, southeast of the tank. A sketch of the project is attached. Bids were received and opened on Thursday, April 19, 2018. We received four bids that ranged in total amounts from approximately $ 123,000 to $ 170,000. The low bid was submitted by Amarillo Utility Contractors in the amount of $123,328.00 and 90 calendar days. An award recommendation letter and bid tabulation from the engineer, is attached. With the tank painting project coming in under our estimates, there’s enough budgeted funds available to cover the cost of this project. The public works department concurs with the Engineer in recommending that the bid be awarded to Amarillo Utility Contractors for this project in the amount of $ 123,328.00. City of Canyon  BID TABULATION SHEET Off Site Tank Drain Line East Elevated Water Storage Tank Canyon, Texas April 19, 2018 2:00 p.m. Base Bid Item Base Bid Item Est. Amarillo Utility Contractors Scott Wampler Construction West Texas Utility Contractors LA Fuller & Sons Number Items Description Quantity Unit Unit Price Ext. Amount Unit Price Ext. Amount Unit Price Ext. Amount Unit Price Ext. Amount 1 Mobilization 1 LS $ 6,000.00 $ 6,000.00 $ 7,500.00 $ 7,500.00 $ 13,000.00 $ 13,000.00 $ 9,822.80 $ 9,822.80 2 15-inch PVC Storm Sewer 990 LF $ 45.00 $ 44,550.00 $ 55.00 $ 54,450.00 $ 62.00 $ 61,380.00 $ 76.00 $ 75,240.00 3 14-Inch AWWA C900 PVC Storm Sewer 80 LF $ 50.00 $ 4,000.00 $ 45.00 $ 3,600.00 $ 124.00 $ 9,920.00 $ 84.00 $ 6,720.00 4 14-Inch AWWA C900 Restrained Joint PVC Storm Sewer 160 LF $ 85.00 $ 13,600.00 $ 45.00 $ 7,200.00 $ 71.00 $ 11,360.00 $ 75.00 $ 12,000.00 5 48-Inch Diameter Manhole 0'-4' Depth 4 EA $ 3,600.00 $ 14,400.00 $ 3,750.00 $ 15,000.00 $ 3,574.50 $ 14,298.00 $ 4,124.00 $ 16,496.00 6 Extra depth over 4' in 48-Inch Manhole 25.8 LF $ 210.00 $ 5,418.00 $ 175.00 $ 4,515.00 $ 150.00 $ 3,870.00 $ 354.00 $ 9,133.20 7 Inlet Structure 1 LS $ 10,000.00 $ 10,000.00 $ 8,500.00 $ 8,500.00 $ 5,596.00 $ 5,596.00 $ 9,602.00 $ 9,602.00 8 Headwall including grading 1 LS $ 6,000.00 $ 6,000.00 $ 7,500.00 $ 7,500.00 $ 4,337.00 $ 4,337.00 $ 3,110.00 $ 3,110.00 9 15" Check Valve Assembly 1 LS $ 3,200.00 $ 3,200.00 $ 2,500.00 $ 2,500.00 $ 1,482.00 $ 1,482.00 $ 1,582.00 $ 1,582.00 10 Bore For 14-inch Line 153 LF $ 90.00 $ 13,770.00 $ 125.00 $ 19,125.00 $ 77.00 $ 11,781.00 $ 125.00 $ 19,125.00 11 Trench Safety 1,090 LF $ 1.00 $ 1,090.00 $ 1.00 $ 1,090.00 $ 3.00 $ 3,270.00 $ 1.60 $ 1,744.00 12 Erosion Controls 1 LS $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 600.00 $ 600.00 $ 4,678.00 $ 4,678.00 13 Traffic Controls 1 LS $ 800.00 $ 800.00 $ 1,500.00 $ 1,500.00 $ 3,500.00 $ 3,500.00 $ 532.00 $ 532.00 Base Bid Total $ 123,328.00 $ 132,980.00 $ 144,394.00 * $ 169,785.00 Number of calendar days to complete the project 90 90 120 120 * Lead time on pipe is 60 days