09-20 and 09-21-10 Special Called Regular Meeting of Fiscal Affairs Committee

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CITY OF LA PORTE, TEXAS Agreed Upon Procedures - Five Points Town Center Project (Continued) September 21, 2010 lOB. Finding During our review of the various transactions and support documentation we noted instances where there was no formal written documentation of the project as a whole and the reasons for and reasoning behind certain actions taken to bring the project to completion. lOB. Recommendation While not legally required, we recommend the EDC consider utilizing project development plans for future development projects. Such a document, updated as needed, would act as a way to clarify the project to stakeholders, act as a guide during the project to ensure it stays on task, serve to inspire analysis of changes to the original project, limit project creep, and act as a reference at the end of the project to evaluate whether the initial goals were met. In particular, projects or portions of projects that could be viewed as primarily benefitting private parties should be especially documented with respect to their public benefit. Documentation of the purpose of funds provided to private parties is required as of April I, 2009 under Sections 40(b) of the Economic Development Act and would serve to make the purpose of such transactions more transparent to the public. This detailed project development plan should address some or all of the following: · The public purpose or use that is to be served by the project . A detailed scope of the project · An analysis of the impacts, both positive and negative, on the City · Cost versus benefit analysis ofthe project in objective terms (jobs created, value added, capacity increased, etc.) · A description of the project steps from project planning through completion · Description of and reasons for significant changes to the project as originally conceived · If the individual project is part of a larger project or master plan, a description of how the former relates to the latter · Detailed costs for the project construction and anticipated maintenance and operating costs after completion · Contingency plans for nonperformance on the part of vendors, contractors, and partners involved · A [mal project report detailing wrap up ofthe project and critique of its execution 10C. Finding In the review of the promissory note and deed of trust for the loan to East A, it was noted that proof of insurance was not provided or retained and monthly interest payments were provided in a lump sum rather than monthly. lOCo Recommendation The City and EDC should ensure that policies and procedures are in place to monitor contracts between the City/EDC and contractors/vendors so that all requirements are met. 20