* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:02] UH, ENOUGH MEMBERS PRESENT. UH, LAUREN, WOULD YOU GO AHEAD AND CALL THE ROLL, PLEASE? SURE. I'LL COUNT US DOWN AND THEN THE CLERK CAN, OKAY, WE'LL COUNT DOWN. OKAY. I'LL COUNT DOWN FOR AV 5, 4, 3, 2, 1. GOOD MORNING, EVERYBODY. UH, THIS IS CITY COUNCILMAN JOHN COURAGE. WELCOME TO THE AUDIT AND ACCOUNTABILITY COMMITTEE MEETING OF TUESDAY, APRIL 20TH. UH, WE'LL BE CONDUCTING BUSINESS ON QUITE A FEW ITEMS TODAY, AND SO LET'S GO AHEAD AND BEGIN. I'LL ASK THE CLERK TO GO AHEAD AND READ THE ROLE. COUNCIL MEMBER SANDOVAL. COUNCIL MEMBER PERRY CITIZEN. MEMBER SOTO. PRESENT. DO I NEED TO SHOW MY CAMERA WHEN I SAY THAT, TINA? UH, NOT WHEN YOU'RE, UM, OKAY. ANNOUNCING YOURSELF AS PRESENT, BUT WHEN YOU DO VOTE, YES MA'AM, PLEASE. THANK YOU. AND CITIZEN MEMBER TREVINO, PRESENT CHAIR. COURAGE. PRESENT CHAIR. WE HAVE A QUORUM. OKAY. THANK YOU VERY MUCH. THANK YOU EVERYBODY FOR BEING HERE TODAY. UH, WE'LL GO AHEAD AND GET RIGHT INTO THE MEETING. HOPEFULLY OTHER COMMITTEE MEMBERS WILL BE ABLE TO JOIN US. THE FIRST [1. 21-2536 Approval of the minutes from the Audit and Accountability Committee meeting on March 16, 2021] ORDER OF, UH, ON OUR AGENDA IS THE APPROVAL OF THE MINUTES FROM THE AUDIT AND ACCOUNTABILITY COMMITTEE MEETING ON MARCH 16TH, BECAUSE WE'RE KIND OF SHORT ON MEMBERS, I WILL GO AHEAD AND MAKE THAT MOTION MYSELF. COULD I HAVE A SECOND? I'LL SECOND. THIS IS JUDY VINNO. THANK YOU, MR. TREVINO. OKAY, SO WE HAVE MOTION AND A SECOND FOR THE APPROVAL OF MINUTES OF MARCH 16TH. ALL IN FAVOR, PLEASE SAY, AYE. RAISE YOUR HAND. A AYE, AYE. OKAY. THANK YOU. UH, THAT'S THE THREE OF US, SO I DON'T BELIEVE ANYBODY WILL BE OPPOSED. SO THE MINUTES ARE APPROVED. UH, WE HAVE, UH, A PRETTY EXTENSIVE AGENDA TODAY, INCLUDING AN EX A CONSENT AGENDA, UH, THAT HAS ABOUT NINE OR 10 ITEMS ON IT. UH, AND SO BEFORE WE ACTUALLY GO THROUGH THE CONSENT AGENDA, WE DO HAVE [Public Comment] SOMEBODY WHO SIGNED UP WITH PUBLIC COMMENT. AND SO I BELIEVE THAT PERSON IS MR. STAN MITCHELL. SO, MR. MITCHELL, IF YOU'LL, UH, YEAH, GO AHEAD AND COME ON AND TELL US WHICH ITEM YOU'RE, UH, TALKING ON. AND YOU HAVE THREE MINUTES. WELL, THANK YOU. UM, I'M SPEAKING ON, UM, ITEM FIVE, THE, UH, BAR HOLD AUDIT. RIGHT. AND, UM, MY, MY REMARKS ARE THESE IF, UH, IF YOU'RE READY. SURE. CERTAINLY. GO AHEAD. OKAY. UH, MR. SEGOVIA HAS MISLED THE BART HOLD AUDIT. SEIA IGNORES PARAGRAPH H AT SECTION 32 OF ORDINANCE 75 6 86. THE CITY ATTORNEY SHALL BE THE CHIEF LEGAL ADVISOR OF THE SAS BOARD UNDER BARTELL'S REVIEW OF SEVE'S AUDIT RESPONSE EXCLUDES CITY FUNDS SPENT BY SAS ON THE NELSON ROSE LAW FIRM'S STRATEGIC LAWSUIT AGAINST PUBLIC PARTICIPATION ACRONYM US C P S AND SAS. PETITIONERS ON BEHALF OF THE CITY AND SAS BOARD OF TRUSTEES. BACKGROUND DETAILED IN OUR JANUARY 21ST LETTER TO CHAIRMAN COURAGE. WE ASK CITY CLERK FLORIST TO RECORD THAT LETTER BASED ON THIS PRESENTATION. OMITTING NORTON ROSE FULBRIGHT FROM BARTEL'S OUTSIDE LAW FIRM AUDIT IS A BIG DEAL. TITLE 18 OF THE US CODE SECTION 2 41, CONSPIRACY AGAINST WRIGHTS MAKES THEM LAWFUL FOR TWO OR MORE PERSONS TO REQUIRE TO INTIMIDATE. THAT'S THE PURPOSE OF THE SLAP ACTION. ANY PERSON INCLUDING OUR POWER PACK AND SAWS, ACT PACK PETITION, AND THE FREE EXERCISE OF ANY PRIVILEGE SECURED TO THEM BY THE CONSTITUTION. IN THIS CASE, THE FIRST AMENDMENT RIGHT TO PETITION GOVERNMENT FOR THE REDRESS OF GRIEVANCES. PUNISHMENT VARIES FROM A FINE OR IMPRISONED UP TO 10 YEARS OR BOTH. THIS MATTER IS DETAILED IN OUR JANUARY 29TH CHAIRMAN COURAGE LETTER, WHICH COPIED COUNCILMAN PERRY AND COUNCILWOMAN SAND. WE ASK CITY CLERK FLORES TO RECORD THIS LETTER AS WELL. BASED ON TODAY'S PRESENTATION, DOES SEGOVIA COMPREHEND [00:05:02] THE CRIMINAL ASPECT OF THE CIVIL RIGHTS VIOLATION? HE IS STONEWALLING. THIS CITY ALSO RECEIVED OUR MARCH TWO AND MARCH 25 LETTERS IDENTIFYING MAYOR BERG'S ACCOUNTABILITY FOR THIS NORTON ROSE FULBRIGHT FLAT VIOLATION OF OUR CIVIL RIGHTS. THANK YOU FOR THIS OPPORTUNITY TO SHARE. OKAY. THANK YOU MR. MITCHELL. UH, YOU ARE ADDRESSING ITEM FIVE, WHICH WAS FOLLOW UP CITY AUDIT ON OUTSIDE LEGAL COUNSEL. OKAY? YES. DO WE HAVE ANY OTHER CITIZENS TO BE HEARD? ANY OTHER COMMENTS? OKAY. HEARING NONE, WE'LL GO AHEAD. AGENDA. I'LL [CONSENT AGENDA] GO AHEAD AND READ OVER OUR CONSENT AGENDA. ALSO, LET ME GO AHEAD AND RECOGNIZE THE PRESENCE OF COUNCILMAN PERRY. THANK YOU, COUNCILMAN. I DON'T KNOW IF, UH, COUNCILWOMAN SANDOVAL HAS JOINED US YET. HOPEFULLY SHE WILL. OKAY. SO THE CONSENT AGENDA CONSISTS OF ITEM TWO, WHICH IS ANNUAL CONTRACT FOR ELEVATOR AND ESCALATOR PREVENTIVE MAINTENANCE. ITEM THREE, WHICH IS AN ON-CALL ENVI ENVIRONMENTAL ABATEMENT DISCUSSION ON SERVICES. UM, ITEM FOUR, OH, BY THE WAY, THOSE WERE PRES SOLICITATION ITEMS. ITEM FOUR IS A POSTS SOLICITATION ITEM ON ADOLESCENT BEHAVIOR HEALTH COUNSELING, UH, SERVICES. PROJECT ITEM NUMBER FIVE, WHICH IS AN INTERNAL AUDIT REPORT, IS ON THE CITY'S OFFICE OF OUTSIDE LEGAL COUNSEL BILLINGS. ITEM NUMBER SIX IS AN AUDIT OF CITY SIT CENTER, CITY DEVELOPMENT OFFICE CENTRAL. ITEM NUMBER SEVEN IS AN AUDIT OF NEIGHBORHOOD AND HOUSING SERVICES UNDER ONE ROOF PROGRAM ITEM. UH, OKAY. AND THOSE SEVEN ITEMS ARE ALL ON THE CONSENT AGENDA. SO I'D LIKE TO ASK ANY OF THE COUNCIL MEMBERS OR ANY OF THE COMMITTEE MEMBERS, EXCUSE ME, IF THEY WOULD LIKE TO PULL ANY ONE OF THOSE ITEMS FROM CONSENT FOR INDIVIDUAL CONSIDERATION. ANY ITEM ITEM TWO THROUGH SEVEN THAT ANYONE WOULD LIKE TO PULL? OKAY. HEARING NO REQUEST FOR ANY OF THAT, UH, I WOULD ENTERTAIN A MOTION TO APPROVE THE CONSENT AGENDA. UH, SO MOVED. OKAY. I THINK I, I SAW, UH, COMMITTEEWOMAN, UH, TREVINO RAISE HER HAND, I THINK IN ORDER TO GO AHEAD AND MAKE THE APPROVAL. COUNCILMAN, CAN I USE YOURS AS A SECOND? YES, SIR, YOU MAY. OKAY. SO WE HAVE A MOTION AND A SECOND TO ACCEPT THE CONSENT AGENDA. UH, ANY LAST MINUTE QUESTIONS OR CONCERNS? CO SEEING NONE. ALL IN FAVOR OF THE CONSENT AGENDA. PLEASE RAISE YOUR HAND AND SAY AYE. AYE. AYE. OKAY. ANY OPPOSED? OKAY. SEEING, HEARING, NO OPPOSITION, THE CONSENT AGENDA'S BEEN APPROVED. NOW WE'LL [8. 21-2846 Second and final extension of external independent audit services contract [Ben Gorzell, Chief Financial Officer; Troy Elliott, Deputy Chief Financial Officer]] MOVE ON TO ITEMS FOR INDIVIDUAL CONSIDERATION. THE FIRST ITEM FOR INDIVIDUAL CONSIDERATION IS A SECOND AND FINAL EXTENSION OF OUR EXTERNAL INDEPENDENT AUDIT SERVICES CONTRACT. AS YOU MAY KNOW, WE'VE HAD, UH, A CONTRACT WITH, UH, UH, A VERY EFFECTIVE, UM, ORGANIZATION THAT'S DONE OUR AUDITS FOR THE LAST, I BELIEVE, FOUR YEARS. AND NOW WE'RE GONNA EXTEND THAT, UH, ONE MORE YEAR AND WE'LL BE HEARING A PRESENTATION, I THINK FROM TROY, ELLIOT OR POSSIBLY BEN. SO GENTLEMEN, EITHER OF YOU HAVE THE FLOOR. NOW, COUNCILMAN CHAIR, I'LL INTRODUCE THE ITEM AND I'LL ACTUALLY TURN IT OVER TO MELANIE KEATON. BUT AS YOU SAID, UM, LAST MONTH, WE BROUGHT FORWARD THE RESULTS OF OUR FISCAL YEAR 2020 AUDIT. THAT WAS THE FOURTH YEAR OF OUR AUDIT CONTRACT. OUR AUDIT CONTRACT, UM, HAS ONE REMAINING EXTENSION ON IT, AND WE BRING THAT THROUGH TO THIS COMMITTEE FOR Y'ALL'S CONSIDERATION. AND THEN IT WILL ALSO GO FROM THIS COMMITTEE BASED ON Y'ALL, UM, BASED ON Y'ALL'S REVIEW AND, AND MOTION TO MOVE IT FORWARD TO THE FULL COUNSEL FOR THEIR CONSIDERATION. UH, MELANIE KEATON IS OUR ASSISTANT FINANCE DIRECTOR OVER ACCOUNTING, AND SHE'LL BE BRIEFING YOU THROUGH THE, UM, TERMS AND CONDITIONS OF THIS LAST EXTENSION. MELANIE? THANK YOU TROY. UH, GOOD MORNING CHAIRMAN AND OTHER COMMITTEE MEMBERS. AS TROY INDICATED, MY NAME'S MELANIE KEATON AND I'M THE ASSISTANT FINANCE DIRECTOR OVER ACCOUNTING. NEXT SLIDE. A QUICK REMINDER THAT AN EXTERNAL AUDIT IS REQUIRED BY THE CITY CHARTER STATE, [00:10:01] AND FOR GRANT FUNDING PURPOSES FOR THE LAW, THE EXTERNAL AUDITOR IS INDEPENDENT TO THE CITY AND ITS RELATED ENTITIES OR COMPONENT UNITS. THE AUDIT'S GOAL IS TO ENSURE THAT THE CITY'S RECORDS OF PROPERLY MAINTAINED FREE FROM MATERIAL MISSTATEMENT AND COMPLY WITH THE ACCOUNTING PRINCIPLES AND REGULATORY STANDARDS. THE AUDIT PROVIDES A TRUE AND FAIR VIEW OF THE CITY'S FINANCIAL STATEMENTS. NEXT SLIDE. THE DELIVERABLES FROM THE AUDIT, WHICH WE PRESENTED TO YOU LAST MONTH FOR FISCAL YEAR 2020, INCLUDE THE COMPREHENSIVE ANNUAL FINANCIAL REPORT, SINGLE AUDIT REPORTS FOR STATE AND FEDERAL GRANTS, THE PASSENGER FACILITY CHARGE PROGRAM REPORT. THE T C E Q AGREED UPON PROCEDURES AND WHERE APPLICABLE THE MANAGEMENT LETTER ON INTERNAL CONTROLS. NEXT SLIDE. IN 2017, THE CITY ENTERED INTO A FOUR AND A HALF MILLION DOLLAR CONTRACT WITH GRANT THORNTON AS THE PRIME FOR A THREE YEAR CONTRACT WITH TWO ONE YEAR EXTENSIONS. IN 2020, GRANT THORNTON ASSIGNED ITS RIGHTS TITLE AND INTEREST IN PUBLIC SECTOR CLIENTS TO B K D COUNCIL APPROVED THE FIRST ONE YEAR EXTENSION AND ASSIGNMENT TO B K D IN JUNE, 2020. PART OF STAFF'S RECOMMENDATION TO EXTEND THE CONTRACT WAS DUE TO B K D, ACQUIRING THE FORMER PARTNER AND MANAGER ON THE CITY'S ENGAGEMENT FROM GRANT THORNTON, AS WELL AS RETAINING THE SUBCONTRACTORS ORIGINALLY INCLUDED IN THE CONTRACT. WE ARE COMING BEFORE YOU NOW FOR THE SECOND AND FINAL EXTENSION ON THIS CONTRACT. NEXT SLIDE. THE FIVE YEAR CONTRACT PRICE WAS FOR $4,485,000 WITH FISCAL YEAR 2020 ONES AUDIT SET AT A BASE FEE OF $970,000. NEXT SLIDE. THAT BASE FEE INCLUDES EIGHT SINGLE AUDIT PROGRAMS. GIVEN THE NUMBER OF C OVID 19 GRANTS THE CITY HAS RECEIVED IN FISCAL YEAR 2020 AND 2021, WE ARE ANTICIPATING AN INCREASE IN THE NUMBER OF SINGLE AUDIT PROGRAMS THAT WILL BE REQUIRED TO BE TESTED THIS FISCAL YEAR. LIKE WHAT WE SAW IN FISCAL YEARS 2010 AND 2011, WHEN WE TESTED OVER 20 PROGRAMS EACH YEAR, PRIMARILY BECAUSE OF THE AMERICAN RECOVERY AND REINVESTMENT ACT, WE ARE ESTIMATING AN INCREASE TO THIS YEAR'S AUDIT OF 12 ADDITIONAL PROGRAMS FOR A TOTAL NOT TO EXCEED 20. THE CONTRACT INDICATES THAT EACH MAJOR PROGRAM ABOVE THE EIGHT INCLUDED IN THE BASE FEE, WILL BE AT A RATE OF $12,000 PER PROGRAM RESULTING IN AN ESTIMATED INCREASED FEE FOR THIS YEAR'S CONTRACT, NOT TO EXCEED $1,114,000. NEXT SLIDE. THE CONTRACT INCLUDES FOUR SUBCONTRACTORS TOTALING 48% OF THE CONTRACTS TOTAL VALUE, ROBERT WILLIAMS, BRITTS AND ASSOCIATES, SHRIVER, CARMONA AND COMPANY ARMSTRONG BOND AND ASSOCIATES. THESE ARE THE SAME FOUR SUBS THAT HAVE BEEN IN PLACE FOR THE PAST FOUR YEARS AS A RESULT OF A SHIFT IN WORK. ASSIGNMENT B K D IN WORKING WITH THEIR SUBS HAS SUBMITTED A SHIFT IN PERCENT ALLOCATION FOR THIS FINAL CONTRACT YEAR. THE 2% SHIFT WOULD REDUCE ROBERT WILLIAMS' WORK AND INCREASE THE WORK BEING DONE BY BRITTS AND ASSOCIATES. THIS SHIFT IN ASSIGNMENT WILL KEEP THE A A B E COMMITTED PERCENT UNCHANGED AT 25 FOR FISCAL YEAR 21 WHILE INCREASING THE W B E PERCENT BY 2%. THE CITY IS RECOMMENDING ACCEPTANCE OF THIS CHANGE IN WORK ASSIGNMENT AND PERCENT ALLOCATION. NEXT SLIDE. NEXT STEPS REGARDING THE EXTERNAL AUDIT CONTRACT INCLUDES THE CONTINUATION OF THE FISCAL 2021 AUDIT WITH US COMING BACK TO THIS COMMITTEE IN OCTOBER FOR THE ANNUAL REQUIRED COMMUNICATION FROM THE EXTERNAL AUDITOR AND IN MARCH, 2021 WITH THE FISCAL YEAR 2021 EXTERNAL AUDIT RESULTS. SIMULTANEOUSLY, WE WILL BEGIN WORKING ON THE PRES SOLICITATION FOR THE NEXT FIVE YEAR EXTERNAL AUDIT CONTRACT, WHICH WILL BE BROUGHT BEFORE THE COMMITTEE LATER THIS FALL. NEXT SLIDE. TO CONCLUDE THIS PRESENTATION, WE ARE RECOMMENDING THE SECOND AND FINAL CONTRACT EXTENSION WITH B K D FOR FISCAL YEAR 2020 ONES AUDIT IN AN AMENDED AMOUNT NOT TO EXCEED $1,114,000. AND WITH THAT, I'M AVAILABLE FOR ANY QUESTIONS. OKAY. THANK YOU VERY MUCH, MELANIE. UM, I NOTED IN THE EARLIER PART OF THE PRESENTATION THAT MOST OF THE ORIGINAL CONTRACT TALKED ABOUT, UH, A BASE FEE, BUT THERE WAS ALWAYS ANTICIPATION THAT THERE COULD BE A NEED FOR ADDITIONAL FUNDING FOR ANY ADDITIONAL KINDS OF AUDITS THAT WEREN'T INCLUDED IN, UH, THE BASE YEAR. IS THAT, IS THAT PRETTY ACCURATE? YES, SIR. SO WHAT WE'RE SAYING IS BECAUSE OF ALL OF THE FEDERAL PROGRAMMING THAT WE'VE RECEIVED FUNDING [00:15:01] FROM, UH, THERE'S A NEED TO AUDIT, UH, SIGNIFICANTLY ADD LARGE NUMBER OF ADDITIONAL PROGRAMS. IS THAT RIGHT? CORRECT. AND SO THAT'S WHY WE'RE RECOMMENDING THE ADDITIONAL CHARGE? YES, SIR. AND THIS WAS ACTUALLY A CHANGE WE DID IN THE CONTRACT TWO CONTRACTS AGO BECAUSE WE HAD A BASE FEE THAT DIDN'T HAVE A SET DOLLAR AMOUNT, AND WHEN WE HAD INCREASED IN FEES, WE GOT HIT WITH THE, WITH THE FEE INCREASE, BUT WE DIDN'T, DIDN'T GET TO TAKE THE SAVINGS WHEN WE HAD PROGRAMS UNDER. RIGHT. AND THE LAST TWO CONTRACTS YEARS WE'VE BEEN ABLE TO TAKE SAVINGS, SO. OKAY, VERY GOOD. UH, I WILL SAY I'VE BEEN, UH, VERY SATISFIED WITH THE WORK THAT, UH, THE GROUP THAT WAS WORKING ON THIS HAS BEEN DOING. I UNDERSTAND CHANGING COMPANIES SOMETIMES MAKES A BIT OF A DIFFERENCE, BUT I THINK, UH, THE RESULTS OF THIS, UH, LAST FINANCIAL AUDIT WAS VERY GOOD. SO, UH, I CERTAINLY DON'T HAVE ANY DISAGREEMENT WITH YOUR RECOMMENDATION. UH, I'D LIKE TO ASK ANY OF THE OTHER COMMITTEE MEMBERS IF THEY HAVE ANY QUESTIONS OR CONCERNS. UH, IF YOU'LL JUST RAISE YOUR HAND OR SPEAK UP. OKAY. WELL, I THINK THAT WE'RE, UH, LOOKS LIKE THAT WE'RE IN, UM, SOMEWHAT OF AN AGREEMENT THAT THIS LOOKS LIKE THE RIGHT WAY TO MOVE ON THIS. SO AT THIS TIME, IF THERE'S NO FURTHER DISCUSSION, I WOULD ASK FOR A MOTION TO GO AHEAD AND APPROVE, UH, THIS ITEM, UH, ITEM NUMBER TWO ON EXTENDING THE NEW, THE CONTRACT FOR OUR ANNUAL AUDIT FOR AN ADDITIONAL YEAR, UH, EXTENDED FOR ANOTHER YEAR. OKAY. I SEE, UH, LOOKS LIKE COUNCILWOMAN SOTO, WAS IT, OR TREVINO, I'M SORRY. COUNCILMAN TREVINO, UH, IS MAKING THAT RECOMMENDATION. IS THERE A SECOND? YES, I WILL. SECOND. OKAY. SO MOTIONS BEEN MADE AND SECONDED TO CONTINUE THE ADDITIONAL YEAR ON THAT CONTRACT. ANY OTHER QUESTIONS? HEARING NONE. OKAY, LET'S VOTE ALL IN FAVOR, PLEASE SAY AYE. AYE. AYE. ALL HANDS UP. OKAY. I THINK THAT'S EVERYBODY WHO'S ON. SO THE MOTION PASSES. THANK YOU VERY MUCH AND, AND WE WISH THE COMPANY A GREAT SUCCESS AND LET US KNOW IF YOU FIND ANYTHING WRONG. THANK YOU VERY MUCH. OKAY, [9. 21-3002 Municipal Commercial Garbage Collection, Disposal and Recycling Services [Ben Gorzell, Chief Financial Officer; Troy Elliott, Deputy Chief Financial Officer, Finance]] NOW WE'LL MOVE ON TO, UH, LET'S SEE, ITEM NUMBER NINE, WHICH IS, UH, MUNICIPAL COMMERCIAL GARBAGE COLLECTION. THIS IS A POSTS SOLICITATION BRIEFING. AND SO, UH, TROY, WILL WE HEAR FROM YOU ON THIS ITEM NUMBER NINE? I, UH, YES, SIR. I'LL BE DOING, AND AND THIS IS A, UM, THIS IS ACTUALLY A PRES SOLICITATION. UM, OH, I'M SORRY. I MISREAD IT. PRES SOLICITATION WE'LL BE SEEKING. YES, SIR. SO WE'LL BE SEEKING Y'ALL'S INPUT AS A COMMITTEE, UM, PRIOR TO RELEASING THIS. THIS ITEM IS, AS YOU MENTIONED, IT'S A PRES SOLICITATION BRIEFING FOR MUNICIPAL COMMERCIAL GARBAGE COLLECTION DISPOSAL, AND RECYCLED RECYCLING SERVICES. NEXT SLIDE, LAUREN. THIS WILL DIFFER FROM WHAT THE SERVICES THAT SOLID WASTE PROVIDES. SOLID, SOLID WASTE HAS A FOCUS ON RESIDENTIAL SERVICES. THIS IS ACTUALLY COMMERCIAL SERVICES, UM, TO PROVIDE REFUGE COLLECTION, DISPOSAL, RECYCLING, COLLECTION, AND PROCESSING A LOT OF OUR, UM, CITY FACILITIES. WE ALSO HAVE THE ABILITY UNDER THIS R F P IF THE NEED PRESENTS ITSELF TO ADD ADDITIONAL LOCATIONS DURING THE TERM OF THIS CONTRACT. THIS IS A REQUEST FOR PROPOSAL. IT IS A PROPOSED WITH A TWO YEAR TERM WITH TWO ONE-YEAR RENEWALS, HAS AN ESTIMATED VALUE OVER THE CONTRACT TERM OF 3.6 MILLION. AND OUR CURRENT CONTRACT, UM, IS CURRENTLY WITH REPUBLIC, EXPIRES IN NOVEMBER 30TH, 2021. NEXT SLIDE. I WANTED TO PROVIDE YOU A LITTLE BIT OF BACKGROUND ON CURRENT CONTRACT FOR THE CURRENT CONTRACT AND THE SERVICES THAT ARE PROVIDED UNDER THIS CONTRACT. WE'LL SET THE FOUNDATION FOR THE SCOPE OF THE NEW CONTRACT. UM, UNDER THE CONTRACT, THE CONTRACTOR IS RESPONSIBLE FOR FURNISHING ALL THE FRONT LOADED AND OPEN TOP CONTAINERS. AND THESE ARE YOUR BIG, UH, CUBIC YARD CONTAINERS. THEY'RE NOT YOUR SMALL RESIDENTIAL, SO THEY'RE FAIRLY LARGE TO BE ABLE TO ACCOMMODATE THE LARGE QUANTITIES COMING FROM OUR FACILITIES LIKE THE ALMO DOME CONVENTION CENTER AND PARKS ON THE COMMERCIAL GARBAGE COLLECTION SIDE, WE HAVE CURRENTLY IN SERVICE 119 FRONT LOAD CONTAINERS AND THE CITY FACILITIES. OUR CITY DEPARTMENTS CAN ACTUALLY, UM, UTILIZE THESE SERVICES ALL THE WAY FROM ONE TIME A WEEK UP TO SIX TIMES A WORK. UH, WEEK, MONDAY THROUGH SATURDAY, WE HAVE 21, UH, OPEN TOP CONTAINERS CURRENTLY IN SERVICE. UM, THEY CAN BE DONE ON SET SERVICE DAYS OR ON ON-CALL BASIS AS THEY FILL UP. UM, AND AS FAR AS COMMERCIAL GARBAGE, ONCE THEY COLLECT IT, THE CONTRACTOR'S RESPONSIBLE FOR THE LEGAL DISPOSAL OF NON RECYCLABLE WASTE AT A STATE APPROVED [00:20:01] FACILITY OR LANDFILL. NEXT SLIDE. ON THE RECYCLING COLLECTION AND PROCESSING SIDE, WE CURRENTLY HAVE 25 RECYCLING CONTAINERS IN PLACE, UM, THROUGH A VARIETY OF DEPARTMENTS WHO PARK PRE-K, LATA, MARKET SQUARE, ALMA DOME CONVENTION CENTER, AVIATION, MUNI COURTS, AND FIRE DEPARTMENTS, OF WHICH, UM, THE ALMA DOME AND THE CONVENTION CENTER IN AVIATION ARE GONNA BE THE LARGEST AND HEAVIEST USERS OF THE RECYCLING. WE HAVE, UH, SIX CUBIC YARD FRONT LOAD CONTAINERS, UM, AND WE HAVE 18 EIGHT CUBIC YARD FRONT LOAD CONTAINERS. THESE ARE ON COMMERCIAL ROUTES, AND SO WE ARE JUST, UM, ONE CUSTOMER ON A LONG LINE OF OTHER COMMERCIAL ROUTES. SO WHEN IT COMES TO RECYCLING, IT'S VERY DIFFICULT TO, UM, TO ASCERTAIN OR, UM, OBTAIN WHAT OUR RECYCLING VOLUMES ARE SPECIFIC TO THE CITY OF SAN ANTONIO. UM, BECAUSE WE'RE ON THAT COMMERCIAL ROUTE. THE OTHER CONTAINERS, WE DO HAVE SOME ABILITY TO DO THAT BECAUSE THEY'RE SO, WE ARE THE ONLY CUSTOMER ON THAT ROUTE. AND THIS IS GONNA BE 20 CUBIC YARD CONTAINERS ARE ABOVE OF WHICH WE HAVE 42 CUBIC YARD CONTAINERS IN PLACE. AND WE CURRENTLY HAVE ABOUT 427 TONS OF RECYCLABLES THAT ARE, THAT ARE COLLECTED ANNUALLY FROM THOSE CONTAINERS. UH, MAJORITY OF OUR RECYCLABLES FROM OUR FACILITIES ARE GONNA BE MIXED PAPER AND OLD CORRUGATED CONTAINERS. UM, COLLECTED CONTRACTORS REQUIRED TO DELIVER ALL MATERIALS TO A PERMITTED RECYCLING PROCESSOR. NEXT SLIDE. OUR, UM, OUR RECYCLABLES MIRROR WHAT IS COLLECTED ON THE RESIDENTIAL SIDE BY DAVID NEWMAN AND HIS CREW. SO WE HAVE A VARIETY OF PAPER PRODUCTS. WE ACCEPT GLASS CANS AND RIGID PLASTIC CONTAINERS. UNDER THIS CURRENT CONTRACT, THE CITY IS ELIGIBLE TO RECEIVE REVENUE FROM RECYCLABLE MATERIALS BASED ON A REVENUE SHARE. UM, AS I MENTIONED, THE ONLY PLACE THAT WE CAN REALLY MONITOR THAT IS ON THE CONTAINERS THAT ARE 20 CUBIC YARDS OR LARGER, UM, BECAUSE THE OTHER CONTAINERS ARE INTERMINGLED WITH OTHER CUS CUSTOMERS ON THE COMMERCIAL ROUTE. UM, UNFORTUNATELY, BASED ON THE REVENUE AND BASED ON WHERE WE'RE SEEING RECYCLABLE COMMODITIES TODAY, WE HAVE NOT COLLECTED ANY REVENUE UNDER THIS CONTRACT OR HAS NOT RECOGNIZED ANY REVENUE TODAY. AND BECAUSE OF THIS ON THIS R F P THAT'S GOING OUT, I'LL BE RECOMMENDING A CHANGE FROM THE CURRENT REVENUE STRUCTURE TO BASICALLY SHIFT IT FROM A REVENUE CONTRACT TO AN EXPENDITURE CONTRACT, ALLOWING THE CONTRACTORS TO PROPOSE A FEE FOR THE RENTAL OF THE CONTAINERS, AND ALSO TO HAUL OR PICK UP OUR CONTAINERS AND HAVE THEM EMBED ANY, ANY REVENUE THAT THEY RECEIVE FROM RECYCLABLES IN THAT EXPENDITURE OR THAT PRICE. SO I'M RECOMMENDING THAT WE MOVE AWAY FROM A REVENUE SHARE BECAUSE OF WHERE THE PRICE OF RECYCLABLE COMMODITIES ARE TODAY. WE HAVEN'T RECEIVED ANY REVENUE. THERE'S A LARGE ADMINISTRATIVE CON, UM, COM, UM, ON TOP OF THAT THAT WE AS THE CITY HAVE TO DO UNDER THIS CONTRACT. AND THIS WOULD STREAMLINE STREAMLINED THIS CONTRACT AND MAKE IT MORE EFFICIENT, ALLOWING THEM TO JUST PROPOSE A PRICE. AND, UM, ANY REVENUE THEY CLICK FOR RECYCLABLES WOULD BE WE EMBEDDED IN THAT PRICE IN THE EVENT THAT, UM, WE DO SEE A SPIKE IN COMMODITY PRICES FOR RECYCLABLES. THIS IS A TWO YEAR CONTRACT, AS I MENTIONED. WE HAVE THE OPPORTUNITY AS WE WATCH THOSE COMMODITY PRICINGS. AT THE END OF THAT TWO YEARS, WE COULD GO OUT AGAIN, OUR, UM, RENEGOTIATE THIS CONTRACT. NEXT, UM, SLIDE. AS FAR AS OUR OUTREACH, UM, THE N I G P CODES ARE ON THE LEFT SIDE OF, UM, FOR OUR VENDORS THAT HAVE REGISTERED ON THE, UM, THE, UH, VENDOR REGISTRATION SITE. WE ARE GOING TO NOTIFY A NUMBER OF VENDORS ABOUT 77 IN OUR CURRENT REGISTRY BASED ON THOSE N I G P CODES ABOVE THERE WAS ONE REGISTERED WITH THE SMALL BUSINESS ADMINISTRATION OR THE, UM, UM, AND ALSO DO TARGET VENDOR OUTREACH OF THREE FOR VENDORS THAT ARE CURRENTLY DOING BUSINESS HERE IN SAN ANTONIO. OUR NORMAL ADVERTISING ON THE EVALUATION VOTING MEMBERS, IT'S A PRETTY DIVERSE GROUP AS FAR AS REPRESENTATION, SINCE THIS IS AN ANNUAL CONTRACT, THERE'S A NUMBER OF DEPARTMENTS THAT UTILIZE THE SERVICES UNDER THIS CONTRACT. DAVID ERY WOULD BE THE A C M THAT WOULD BE LEADING THIS. UH, PATRICIA MUCA, WHO'S ONE OF OUR LARGEST USERS AS OUR, UM, EXECUTIVE DIRECTOR FOR CSA VALENCIA, WHO'S NOW OUR DEPUTY DIRECTOR OF SOLID WASTE MANAGER. AND THEN WE ALSO HAVE OTHER REPRESENTATIVES FROM CONVENTION CENTER FACILITIES AND AVIATION, UM, WHO ARE ALSO HEAVY USERS UNDER THIS CONTRACT. NEXT SLIDE. AS FAR AS THE EVALUATION CRITERIA ON EXPERIENCE, BACKGROUND QUALIFICATION, WE'RE PROPOSING 30 POINTS, 35 POINTS FOR PROPOSED PLAN, 20 FOR PRICING, 10 FOR LOCAL PREFERENCE, AND FIVE FOR VETERANS. UM, UNDER THE SEDATED PROGRAM, DUE TO AVAILABILITY, THE WAIVER WAS APPROVED. SINCE THERE RULE IS NOT ANY AVAILABILITY FROM SMALL MINORITY BUSINESSES ON THIS, UM, IN OUR SAMHSA AUDITED FINANCIAL STATEMENTS, WE'RE NOT REQUIRING THEM. AND THEN BELOW YOU CAN SEE THE EVALUATION COMMITTEE FROM A GOAL SETTING PERSPECTIVE THAT, UM, ANALYZE THIS [00:25:02] NEXT SLIDE AS FAR AS THE TIMEFRAME, OF COURSE, WE'RE HERE TODAY BRIEFING YOU ON THE PRES SOLICITATION, UH, PLAN ON COMING BACK TO THIS COMMITTEE AS FAR AS A POST SOLICITATION BRIEFING IN AUGUST, LOOKING, UH, VERY SHORTLY THEREAFTER, MOVING TO THE CITY COUNCIL FOR CONSIDERATION IN SEPTEMBER WITH A CONTRACT START DATE DECEMBER 1ST. AND THIS CONTRACT WOULD BE OUT ON THE STREETS FOR 45 DAYS, UM, TO, UH, TO ALLOW RESPONDENTS TO PROVIDE A PROPOSAL ON THIS CONTRACT. NEXT SLIDE. OKAY. THAT'S IT. YES, SIR. I THINK, I THINK THAT, UH, COMPLETES OUR PRESENTATION CHAIR. IF Y'ALL HAVE ANY QUESTIONS, WE'D BE HAPPY TO ANSWER. WE HAVE A NUMBER OF PEOPLE ON THE PHONE WHO CAN ASSIST ME WITH QUESTIONS IN THE EVENT. THERE ARE A OKAY. THANK YOU, TROY. I GUESS TWO QUESTIONS COME TO MY MIND BECAUSE WE'RE LOOKING AT, UH, RECOMMENDING A, A DIFFERENT TYPE OF A CONTRACT, SO TO SPEAK. UH, WE'RE NOT GONNA BE ASKING FOR SHARED REVENUE AND EVERYTHING. UH, I HOPE THAT WHAT WE'RE LOOKING AT IS, UH, NUMBER ONE, EFFICIENCY AND NUMBER TWO COST TO THE CITY. AND TELL ME WHAT YOU'RE, WHAT YOU EXPECT TO MEET BETTER EFFICIENCY OR BETTER COST TO THE CITY IN WHAT YOU'RE PROPOSING. YEAH. AS FAR AS THE EFFICIENCY, THERE'S A NUMBER OF THINGS IN THE CURRENT CONTRACT THAT WE AS, UM, CITY DEPARTMENTS HAVE TO MONITOR. THERE IS AN AUDIT REQUIREMENT THAT WE HAVE TO ACTUALLY VIS VISIBLY GO OUT UNDER THE CURRENT CONTRACT AND HAVE THE RECYCLABLES DUMPED. AND WE GO THROUGH THOSE TO DETERMINE HOW MUCH OF THAT IS PAPER GLASS. AND THAT SETS THE KIND OF THE BASE FOR DETERMINING THE REVENUE SHARE, DETERMINING THE REVENUE SHARE THROUGHOUT THE COURSE OF THAT YEAR. WE ALSO ANNUALLY HAVE TO REPEAT THAT PROCESS. UM, WHEN WE GET OUR BILLINGS, WE HAVE TO MONITOR THAT AND, AND FROM A COMPLIANCE STAND STANDPOINT, HAVE TO HAVE THAT OVERSIGHT AND COMPLIANCE TO MAKE SURE THAT WE ARE RECEIVING OUR FAIR REVENUE SHARE. AND THERE HASN'T BEEN ANY, SO WE'RE PUTTING A LOT OF EFFORT INTO THIS CONTRACT FOR NO REVENUE COMING BACK TO THE CITY. AS FAR AS THE PRICING. AND WE SEE THIS UNDER OUR CURRENT CONTRACT AS WELL. UH, YOU'LL USUALLY SEE A KIND OF A SPLIT PRICING FOR GARBAGE COLLECTION VERSUS RECYCLABLE. SO WHAT I WOULD EXPECT TO SEE, AND WHAT WE ACTUALLY SEE UNDER THE CURRENT CROP THAT'S CONTRACT, IS WHEN WE SEE THAT PRICING FOR DISPOSAL OF GARBAGE PROBABLY HAVE A MUCH HIGHER PRICE FOR COLLECTION VERSUS THE RECYCLABLE, I WOULD EXPECT TO SEE A REDUCED PRICE BECAUSE THEY'RE GONNA BE, UM, KEEPING ANY REVENUE ASSOCIATED WITH THOSE RECYCLABLE. AND THAT'S WHAT WE SEE UNDER TODAY'S CONTRACT. AND I WOULD EXPECT TO SEE THAT ON THE FUTURE CONTRACT AS WELL. SO WOULD YOU SAY IT'S GONNA BE ABOUT A BREAK EVEN FOR WHAT WE'VE BEEN DOING? UM, I, I WOULD THINK SO. IT'D BE A BREAK EVEN, EXCEPT WITH THE ONE EXCEPTION IS THAT IT WOULD BE, THERE WOULD BE AN EFFICIENCY ON THE CITY SIDE AS FAR AS WHAT WE NEED TO DO FROM A COMPLIANCE AND A MONITORING. OKAY. THANK YOU. THAT'S ALL MY QUESTIONS. ANY COMMITTEE MEMBER HAVE A QUESTION? COUNCILMAN PERRY? THANK YOU, SIR. UH, TROY, I DON'T UNDERSTAND THAT. CAN YOU PUT IT IN SIMPLER TERMS, I, IS IT GONNA COST US MORE MONEY OR ARE WE GONNA MAKE ANY MONEY? OR WHO'S GONNA MAKE MONEY ON, ON THIS DEAL ABOUT SELLING THE RECYCLABLES? I, I ALL OF THAT IS, UM, NOT IN LAYMAN'S TERMS UNDER, IN SIMPLER TERMS, I, I'LL YOU'RE ASKING AN ACCOUNTANT, BUT I'LL TRY. UM, UNDER THE CURRENT CONTRACT, WE'RE NOT SEEING ANY REVENUE COMING IN FROM RECYCLABLES. UM, I WOULD EXPECT THE PRICE FOR GARBAGE COLLECTION AND RECYCLABLE COLLECTION TO BE ABOUT THE SAME BETWEEN THE TWO CONTRACTS. UM, IF YOU LOOK AT TODAY'S COLLECTIONS, AND THIS IS JUST, I, I HAVE 'EM IN FRONT OF ME, BUT I'M JUST GONNA USE A COUPLE ROUTES. SO FOR, FOR EXAMPLE, ON, UM, COLLECTION OF OUR GARBAGE CONTAINERS AT, AT ONE OF OUR LOCATIONS, YOU'RE GONNA SEE ABOUT A $350 PICKUP FEE ON RECYCLING, YOU'LL SEE ABOUT $150 PICKUP FEE. SO THEY'RE ALREADY PRICING IN ANY REVENUE FROM RECYCLABLES IN THAT FEE. I WOULD EXPECT TO SEE THAT, UM, ON THE RESPONSES THAT WE GET BACK UNDER THE R C. SO IT IS THE COST OF RECYCLING GONNA COST US MONEY OR ARE WE GOING TO LOSE MONEY ON RECYCLING? I DON'T THINK IT'S GONNA, I DON'T THINK IT'S GONNA CHANGE EITHER WAY. I EXPECT TO SEE THE SAME RESULTS WHERE THE GAIN FOR US IS ON THE CITY STAFF SIDE AS FAR AS WHAT WE ARE, THE EFFORT THAT WE'RE EXPENDING TO MONITOR THE CURRENT CONTRACT, THAT THAT WILL BE, UM, REDUCED UNDER THE, UNDER THIS APPROACH, UNDER THE NEW CONTRACT. AND WHY WOULD THAT BE REDUCED? BECAUSE WE'RE NOT DOING THE AUDIT, THE RECYCLABLE, WE'RE NOT DOING THE MONITORING OF RECYCLABLES UNDER THE CONTRACT. UM, ALL THAT COMPLIANCE REALLY KIND OF GETS MINIMIZED UNDER THE MOVING FROM A REVENUE CONTRACT SHARE TO EXPENDITURE CONTRACT WHERE THEY'RE JUST, WE'RE [00:30:01] PAYING FOR THE SERVICES. OKAY, I UNDERSTAND THAT. AND WHAT IS THE TOTAL COST OF THAT THAT WE'RE GONNA BE FOREGOING ON, ON THIS PROPOSAL? UM, AS FAR AS, AS FAR AS, UH, RECYCLABLE REVENUES UNDER THE CURRENT CONTRACT, WE HAVEN'T RECEIVED ANY REVENUE. SO WE'RE REALLY NOT FORGOING, I I'M TALKING ABOUT YOU, YOU'RE SAYING WE'RE GONNA SAVE ON CITY STAFF THE QUALITY, THE, THE MONITORING AND ALL THAT. WHAT, WHAT ARE WE TALKING ABOUT THAT, WHAT ARE WE SAVING? I DON'T HAVE A NUMBER FOR YOU. UM, BASICALLY IT'S GONNA SAVE US FROM DOING THE ANNUAL AUDITS, THE UPFRONT AUDITS, THE, UM, WHEN WE GET THE BILLING, IF THERE'S ANY REVENUE SHARE, HAVING TO MONITOR THAT. UM, I DON'T EVEN HAVE A WELL, I'D SURE LIKE TO KNOW THAT. I'D SURE LIKE TO KNOW THAT. WHAT ARE, I MEAN, WHAT ARE WE TALKING ABOUT? ARE WE TALKING ABOUT A THOUSAND DOLLARS? WE TALKING ABOUT A MILLION DOLLARS? WHAT IS IT GONNA SAVE US IN GOING TO THIS CONTRACT? I'D SAY IT'S PROBABLY MORE IN THE, THE 10 TO $50,000 RANGE. OKAY, SO NOT A LOT. NO, SIR, NOT A LOT. IT'S JUST SAVING THE STAFF TIME ASSOCIATED WITH THIS CONTRACT. IT MAKES IT MORE EFFICIENT. OKAY. I, I GET, YOU KNOW, IF, IF YOU'RE TALKING ABOUT, ARE WE TALKING ABOUT ONE PERSON OR TWO PEOPLE? I, I'M, I JUST WISH THAT WOULD'VE BEEN CALCULATED OUT TO SHOW US WHAT THE SAVINGS WOULD BE TO THE CITY BY GOING, I'M SORRY. UH, AS FAR AS THE, UM, THE AUDIT, IT'S PROBABLY GONNA, IT'S GONNA BE ONE OR TWO PEOPLE GOING TO, UM, MONITOR THE AUDIT. BUT SINCE THIS IS AN ANNUAL CONTRACT AND YOU HAVE MULTIPLE DEPARTMENTS THAT I MENTIONED EARLIER THAT ARE TAKING ADVANTAGE OF THIS, EACH ONE OF THOSE DEPARTMENTS WILL HAVE TO MONITOR THEIR, UM, THEIR BILLINGS, ANY REVENUE THAT WAS RECEIVED AND ANY EXPENDITURES. SO YOU'RE TALKING ABOUT MULTIPLE DEPARTMENTS HAVING TO SPEND EFFORT AND TIME ON THIS. PREDOMINANTLY IT WOULD IMPACT THE LARGE USERS LIKE CONVENTION CENTER, ALMA, DOM, AND AVIATION. OKAY. WELL, IT STILL REALLY DOESN'T ANSWER MY QUESTION, BUT, UM, OKAY. UM, IF IT'S GONNA SAVE THE CITY MONEY, I'M, I'M ALL FOR IT. UM, YEAH, I, I JUST WISH I HAD SOME KIND OF A SCOPE ON WHAT WE'RE TALKING ABOUT HERE, UH, ON THE, ON THE MARKET OF RECYCLABLES. ARE WE, UM, WHAT, WHAT IS THE CURRENT MARKET RIGHT NOW? IS ANYBODY BUYING THIS STUFF OR IS IT JUST BEING STORED UP SOMEWHERE, UH, IN THE US OR WHAT, WHAT IS THE MARKET FOR RECYCLABLES RIGHT NOW? 'CAUSE WE'RE, WE'RE BASICALLY GIVING UP OUR REVENUE STREAM ON THAT. WHAT, UH, AND IT'S BEEN PRETTY, AS I UNDERSTAND, IT'S BEEN FLAT OVER HOW LONG? A YEAR, TWO YEARS, THREE YEARS. WHAT, WHAT I'LL ACTUALLY ASK MAYBE, UM, HELP ME WITH THAT QUESTION. SO RECYCLABLES HAS BEEN ON A DOWNWARD TREND TREND SINCE ABOUT 2017. IN THE FIRST QUARTER OF THIS YEAR, WE'RE EXPECTING, UH, WE HAVE SEEN A SLIGHTLY UPTICK THE RECYCLING COMMODITIES, JUST LIKE THE STOCK MARKET, NO ONE REALLY PREDICT ACCURATELY, BUT THE BEST GUESS IS FROM, FROM FOLKS WHO WORK IN THE FIELD, IS THAT RECYCLING IS GOING TO, UM, INCREASE SLIGHTLY, THE COMMODITIES ARE GONNA INCREASE SLIGHTLY, PROBABLY THROUGH THE FALL AND THEN DROP AGAIN AND LEVEL OFF. SO TO YOUR, TO YOUR QUESTION, YES, PEOPLE ARE BUYING THE RECYCLABLES, THEY'RE JUST NOT BUYING THEM AT A HIGHER DOLLAR VALUE THAN THEY HAVE IN, IN PAST YEARS. OKAY. AND WHAT I, I'M JUST TRYING TO UNDERSTAND HOW, WHEN DID WE STOP GETTING REVENUE FROM THE RECYCLABLES? I MEAN, WHEN IT, WHEN IT, WHEN WE WEREN'T MAKING ANY MONEY ON IT LAST YEAR, TWO YEARS, THREE YEARS, UH, UNDER THIS CONTRACT, THERE HAS, THERE'S BEEN MINIMAL TO NO REVENUE UNDER THIS CONTRACT. THE WAY THIS CONTRACT WORKS IS YOU HAVE TO REACH CERTAIN THRESHOLDS BEFORE A REVENUE SHARE IS EVEN, UM, CONTEMPLATED. AND THERE'S BEEN NO REVENUE UNDER THIS CONTRACT. AND THAT'S ONE OF THE REASONS WE'RE RECOMMENDING MOVING TO EXPENDITURE AND A PRICING CONTRACT. OKAY. ALL RIGHT. I UNDERSTAND. OKAY. UH, THE OTHER QUESTION IS THAT WE GOT THIS AS A TWO YEAR BASE WITH, UH, I GUESS TWO OPTION YEARS. UH, WHY DID WE PICK TWO YEARS AND NOT THREE YEARS WITH AN OPTION OF ONE YEAR EXTENSION? UM, BASICALLY JUST FOR FLEXIBILITY. I MEAN, WE CAN, WE CAN EXTEND THE CONTRACT TERM IF THE COMMITTEE WANTS US TO. UM, THIS KIND OF MIRRORS THE EXISTING CONTRACT AND WE KEPT IN, IN KIND OF THAT, UM, IN THE SAME FASHION AS THE OLD CONTRACT. OKAY. I, I'M ALWAYS FOR , YOU KNOW, MAKING AS LONG A PERIOD ON THE BASE CONTRACT BECAUSE, [00:35:01] YOU KNOW, THEY, THEY BASE THEIR PRICING ON WHAT THEY'RE GONNA BE IN FOR THE BASE. 'CAUSE YOU NEVER KNOW IF YOU'RE GONNA GET AN EXTENSION OR NOT. SO, UM, UH, I'D, I'D REALLY LIKE TO SEE A LITTLE BIT LONGER BASE CONTRACT WITH A SHORTER OPTION YEARS. UH, WE, WE HAVE IT AT FOUR YEARS. IS THERE SOME REASON THAT WE DIDN'T MAKE IT FIVE YEARS? NO, SIR. I MEAN, WE CAN MAKE IT THREE YEAR BASE WITH THE, WITH AN EXTENSION OF FOR TWO YEARS. UH, I WOULD RECOMMEND, MAY I COMMEND MAY SOMETHING IN THERE, THE IT, THIS CONTRACT IN THE GRAND SCHEME OF THING IN FROM THE COMPANIES THAT WILL LIKELY BE BIDDING ON IT IS A VERY SMALL CONTRACT. IT'S BIG FOR US, BUT IT'S A VERY SMALL CONTRACT FOR THEM. SO FROM AN INVESTMENT, FROM AN INVESTMENT STANDPOINT, I'M NOT EXPECTING ANY OF THE FIRMS TO BID ON THIS, TO BE HAVING TO MAKE A NEW INVESTMENT IN THEIR EQUIPMENT. SO I UNDERSTAND CONTRACTS ARE VERY ATTRACTIVE FOR FOLKS WHO ARE TRYING TO, WHO MAKE LARGE INVESTMENTS IN EQUIPMENT FOR CAPITAL RECOVERY. BUT I DON'T BELIEVE THAT'S TO BE THE CASE IN THIS. I WILL ALSO ADD THAT SOLID WASTE COMMERCIAL CONTRACTS TEND TO BE VERY SHORT AND, UH, MOST CONTRACTORS PREFER TO BE A SHORTER LENGTH IN TIME BECAUSE ONE OF THE BIGGEST DRIVING FACTORS FOR THEIR COST IS FUEL. AND THEY CAN'T REALLY PREDICT WHAT THE PRICE OF FUEL IS GOING TO BE UP. SO I THINK IF YOU WOULD ASK A A COMMERCIAL HAUL, THEY WOULD ACTUALLY PREFER A SHORTER TERM CONTRACT. OKAY. UM, I, I HEAR YOU. THOSE ARE SOME GOOD POINTS, BUT, YOU KNOW, WE GOTTA LOOK OUT FOR OUR INTEREST ALSO. YOU KNOW, AND IT'S LIKE ANY OTHER INDUSTRY THAT CONTRACTS FOR FUEL, LIKE THE AIR AIRLINES FOR EXAMPLE, THEY CONTRACT OUT FOR SEVERAL YEARS AND SOMETIMES THE FUEL COMPANIES TAKE IT IN THE SHORTS AND SOMETIMES THE AIRLINES TAKE IT IN THE SHORTS. SO I, I, YOU KNOW, I, I WOULD LIKE TO SEE A FIVE YEAR CONTRACT AT AND, UH, THREE AND TWO, UH, BECAUSE IT TAKES THE PRESSURE OFF CITY STAFF ALSO, YOU KNOW, FOUR YEARS GOES BY PRETTY FAST. I MEAN, FIVE YEARS GOES BY PRETTY FAST. AND INSTEAD OF PUTTING US IN A POSITION OF, UH, REDOING THIS MORE OFTEN, I, I DON'T SEE A PROBLEM WITH GOING TO A LITTLE BIT LONGER, WITH A LITTLE BIT LONGER BASE AND, AND LOCK IN SOME OF THOSE PRICES THAT, UM, WE'RE GETTING GOOD PRICING RIGHT NOW. SO THAT'S MY RECOMMENDATION THAT, UM, YOU KNOW, I, THAT'S, THAT'S WHAT I WOULD PREFER TO SEE. COUNCILMAN, THIS IS BEN. JUST IF I CAN ADD JUST ONE POINT, UM, I THINK TROY AND JOSEPHINE DID A REALLY GOOD JOB OF EXPLAINING WHY WE'RE TRYING TO SHIFT FROM A REVENUE CONTRACT TO AN EXPENDITURE CONTRACT. SO YOU MENTIONED KIND OF LOOKING OUT FOR THE CITY. I THINK, UH, TROY, ONE OF THE REASONS WE WANTED TO GO TO A SHORTER TERM, UH, BASE TERM WAS THAT IN THE EVENT COMMODITY PRICING ON RECYCLABLES DID CHANGE SIGNIFICANTLY. WE WOULD HAVE THE FLEXIBILITY TO GO BACK OUT, POTENTIALLY GOING BACK TO A REVENUE TYPE SHARING CONTRACT IF IT MADE SENSE FOR US TO DO THAT, TO, EXCUSE ME. A LOT OF THIS WAS BASED AROUND MAINTAINING FLEXIBILITY FOR US AS WELL. UM, SO JUST WANTED TO PUT THAT OUT THERE AS Y'ALL CONTEMPLATE THE TERM. YEAH, AND YOU CAN SAY THAT ABOUT ANY, UH, KIND OF LONG-TERM CONTRACT, BEN. IT'S WHERE YOU, WHERE YOU WANNA EXERCISE YOUR, YOUR OPTIONS IF YOU DO OR DON'T WANT TO. AND THERE'S ALWAYS A CLAUSE IN THESE CONTRACTS THAT YOU COULD ALWAYS, UH, UH, CANCEL A CONTRACT TO THE CONVENIENCE OF THE GOVERNMENT AND THAT THAT'S IN CONTRACTS. SO YOU COULD DO THAT ANYTIME IF, IF THE, UM, ECONOMY AND THE, AND THE CIRCUMSTANCES CHANGE THAT MUCH, THAT WOULD CAUSE US TO, UM, GET ADDITIONAL REVENUE. AND LOOKING AT THE HISTORY OF THIS CONTRACT, WE HAVEN'T GOTTEN ANY REVENUE, SO I DON'T EXPECT THAT TO CHANGE ANYTIME SOON EITHER. SO, UM, YEAH, THAT, THAT'S MY INPUT. I, I'D LIKE TO SEE A LITTLE BIT LONGER TERM AND BASE TERM WITH THE OPTION YEARS WITH THAT ALSO. THAT'S MY COMMENTS. OKAY. THANK YOU. COUNCILMAN, ARE YOU MAKING, UH, A MOTION THAT WE ASK THE STAFF TO, UH, READDRESS THIS SOLICITATION TO INCLUDE A THREE YEAR BASE YEAR AND TWO ONE YEAR OPTIONS? SURE. I'LL GO AHEAD AND MAKE THAT MOTION. OKAY. I'LL ASK ANY OF THE OTHER COMMITTEE MEMBERS. IS THERE A SECOND? SURE. IF I, I'LL SECOND CHAIR. PRIMATE. UH, I THOUGHT I HEARD A SECOND. HOLD ON. WHO WAS THAT PLEASE? JUDY TINO. OKAY. CHAIR COUNCIL MEMBER TREVINO. OKAY, GO AHEAD, BEN. UH, CHAIR. I WAS JUST GONNA MENTION THAT THIS, THIS IS A PRES SOLICITATION, SO WE DON'T TYPICALLY ASK THE COMMITTEE TO VOTE ON IT. UM, OKAY. IT, IT'D BE A LITTLE BIT MORE LIKE B SESSION. IF YOU ALL WANT TO GIVE US DIRECTION TO MOVE, UH, AND CHANGE THE TERM, WE CAN CERTAINLY DO THAT. I, I THINK WHAT I HEARD WAS, UH, [00:40:01] GOING TO A THREE YEAR BASE WITH TWO ONE YEAR EXTENSIONS. IF THERE'S NO OBJECTIONS FROM OTHER COMMITTEE MEMBERS OR FURTHER DISCUSSION, WE CAN TAKE THAT A STAFF DIRECTION. WE'LL MAKE THAT CHANGE. ALRIGHT. UH, IS THAT SUITABLE TO YOU, COUNCILMAN PERRY AND, UH, MEMBER TREVINO? YES. YES, ABSOLUTELY. ALRIGHT. YES, WE'LL JUST RELY ON THE STAFF TO, UH, RECONFIGURE THAT, THAT PRES SOLICITATION THAT WAY. OKAY. THANK YOU VERY MUCH. UH, THE [10. 21-2947 Financial Advisor Services [Ben Gorzell, Chief Financial Officer; Troy Elliott, Deputy Chief Financial Officer]] NEXT ITEM ON OUR AGENDA IS A POSTS SOLICITATION FOR, UH, FINANCIAL ADVISOR SERVICES. AGAIN, UH, WILL THIS BE TROY TELLING US ABOUT THIS? YES, SIR. IT WILL. YOU'RE STUCK WITH ME FOR ANOTHER ONE. OKAY. ITEM NUMBER 10, UM, CHAIR AS YOU, AS YOU, UM, INTRODUCE, THIS IS A POST LIST PATIENT BRIEFING FOR OUR FINANCIAL ADVISOR SERVICES. WE WENT OUT WITH AN R F P AND RECEIVED, UM, RESPONSES BACK AND WE'LL BE BRIEFING YOU ON THOSE THIS MORNING. NEXT SLIDE. MORE. AS I MENTIONED, THIS WAS A REQUEST PROPOSAL. WE RELEASED IT SEEKING PROPOSALS FROM FIRMS TO PROVIDE FINANCIAL ADVISOR SERVICES. TYPICALLY, THESE FINANCIAL ADVISOR SERVICES WILL PROVIDE THE CITY WITH ADVICE AND ASSISTANCE WHEN WE, UM, STRUCTURE OUR DEBT PROGRAMS OR OUR, UM, AVALOR DEBT PROGRAMS, OUR AVIATION DEBT PROGRAMS. UM, THEY ALSO HELP US OR ASSIST US IN STRUCTURING OUR TRANSACTIONS AND OUR DEBT ISSUANCES. TYPICALLY WHAT YOU'RE GONNA SEE IS ISSUANCE OF GENERAL OBLIGATION BONDS, UH, CERTIFICATES, TAX, TAX NOTES, AND OTHER FINANCIAL INSTRUMENTS THAT, UM, MAY BE NEEDED AS WE, UM, SUPPORT THE CITY. THE ESTIMATED VALUE OF THIS CONTRACT IS OVER THE TERM OF THE CONTRACT, WHICH IS A FIVE YEAR CONTRACT AT $2.5 MILLION. THAT ESTIMATED VALUE WILL BE LARGELY CONTINGENT UPON THE TYPE OF ISSUANCE AND THE AMOUNT OF THE ISSUANCE. SO THAT WILL CHANGE, UM, BASED ON THE SIZE OF OUR BOND ISSUANCES. OVER THE PAST, IT'S UM, BEEN ABOUT 2.5 MILLION OVER THE FIVE YEAR TERM. AS FAR AS THE PROPOSED TERM, WE WERE RECOMMENDING A THREE YEAR WITH ONE TWO YEAR OPTIONS TO RENEW. NEXT SLIDE. UH, WHAT I'M GONNA SHOW YOU NOW IS THE, UM, THE INITIAL EVALUATION SCORING THAT WAS DONE BY THE EVALUATION COMMITTEE. UM, BASED ON THE WRITTEN PROPOSALS. BASED ON THOSE WRITTEN PROPOSALS, WE RECEIVED SIX UH, RESPONSES. THE COMMITTEE EVALUATED THOSE BASED ON THE, UM, CRITERIA THAT YOU SEE ON THE LEFT FROM EXPERIENCE, BACKGROUND, QUALIFICATION, PROPOSED PLAN, ALL THE WAY THROUGH PRICE, AND, UM, OUR PREFERENCE PROGRAMS AS WELL. THERE WERE THREE VENDORS, UH, BASED ON THEIR OVERALL SCORE FROM A 70.62 63.89, AND 61.84. AS A COMMITTEE, WE DISCUSSED AND WE THOUGHT THERE WAS A FAIRLY SIGNIFICANT BREAK BETWEEN THE VENDOR C AND VENDOR D. SO WE, UM, RECOMMENDED THREE VENDORS TO BE SHORTLISTED FOR INTERVIEWS. NEXT SLIDE. WE INVITED THE THREE VENDORS IN TO PRESENT TO THE EVALUATION COMMITTEE. UM, ONCE WE ACTUALLY REVIEWED THOSE EVALUATIONS, THE TWO TOP RATED VENDORS THAT YOU SAW ON THE PRIOR SLIDE STOOD OUT. UH, THE, THE SCORING WAS TWEAKED SLIGHTLY. SO VENDOR A RECEIVED A TOTAL, TOTAL OVERALL SOURCE, 71.45. AND VENDOR B A TOTAL OVERALL SCORE OF 66.2. WE ARE RECOMMENDING THE TWO VENDORS, UM, TO BE OUR FINANCIAL ADVISORS AND BE AWARDED THE CONTRACT FOR THE NEXT FIVE YEARS. HISTORICALLY, AS A CITY, WE HAVE FOUND THAT A MIX OF TWO, UH, FINANCIAL ADVISORS HAS SERVED US WELL BASED ON THE VOLUME OF THE TRANSACTIONS THAT WE AS A CITY CONDUCT. IT ALSO GETS US, PROVIDES US WITH A DUAL PERSPECTIVE BETWEEN THE TWO VENDORS WHEN WE ARE GETTING ADVICE, UM, AND ASSISTANCE FROM THE FINANCIAL ADVISORS. SO WE'LL BE RECOMMENDING TWO VENDORS, UM, AS A RESULT OF THOSE INTERVIEWS, UM, AS THE SCORE YOU SEE ON THIS PAGE. NEXT SLIDE. AS FAR AS THEIR DUE DILIGENCE, WE ACTUALLY RECEIVED SEVEN RESPONSES. THERE WAS ONE RESPONSE AS KEVIN AND HIS TEAM DID THEIR DUE DILIGENCE ON, UM, PROHIBITED CAMPAIGN CONTRIBUTIONS. THERE WERE SOME CAN CAMPAIGN CONTRIBUTIONS THAT WERE IDENTIFIED. UM, AS A RESULT, THAT FIRM WAS DEEMED NONRESPONSIVE AND WE WERE LEFT WITH THE SIX PROPOSALS THAT YOU SAW ON THE INITIAL EVALUATION SLIDE A LITTLE PREVIOUSLY. AS FAR AS OUR DUE DILIGENCE, WE DIDN'T SEE ANY MATERIAL FINDINGS THAT WE THOUGHT WOULD BE OUTSIDE OF THIS INDUSTRY. NEXT SLIDE. I BELIEVE THAT IS A, UM, A QUICK SUMMARY OF THE, UM, THE POST SOLICITATION, UH, CHAIR, IF YOU HAVE ANY QUESTIONS, UH, WE'RE AVAILABLE TO ANSWER ANY QUESTIONS YOU MAY HAVE, UH, HAVE EITHER OF THE FINAL TWO THAT HAVE RISEN TO THE TOP, [00:45:01] PROVIDED THIS SERVICE FOR THE CITY PREVIOUSLY. UH, YES SIR, THEY HAVE. OKAY. NOW, WHEN WE TALK ABOUT THEM PROVIDING THIS INVESTMENT SERVICES, UH, WILL THAT BE INCLUDING ANY UH, 2022 CITYWIDE BOND PROGRAM THAT COULD BE, YOU KNOW, $800 MILLION OR SOMETHING? WOULD THEY BE THE ONES THAT PROVIDE THE SERVICES FOR INVESTING THOSE BONDS? UM, NOT NECESSARILY INVESTING THE BONDS, BUT THEY WILL PROVIDE THE SERVICES FOR THE 2022 PROGRAM TO ACTUALLY HOW WE STRUCTURE, UM, TO MAKE THAT, UM, APPEALING TO THE INVESTOR SO THAT WE GET THE BEST PRICE ISSUANCE PRICE ON THOSE BONDS. RIGHT. WOULD THAT MEAN ANY KIND OF AN INCREASE IN THAT SET? 2.5 MILLION YOU HAVE LAID OUT? UH, DON'T ANTICIPATE TO BE ANY IN ANY INCREASE. UM, FROM WHAT WE'VE SEEN, THE PRICING IS IN LINE WITH THE PRI CURRENT PRICING THAT WE HAVE, UM, TODAY UNDER OUR CURRENT CONTRACT. OKAY. AGAIN, IT WILL DEPEND, THERE WILL DEPEND ON THE AMOUNT OF THE ISSUANCE. 'CAUSE THOSE FEES ARE ACTUALLY PREDICATED BASED ON THE TOTAL PAR VALUE OF THE ISSUANCE. SO THAT WOULD BE THE ONLY REASON IT GOES UP. OKAY. ALRIGHT. UH, I'LL ASK ANY OTHER COMMITTEE MEMBERS IF YOU HAVE ANY QUESTIONS. OKAY. HEARING NONE, IT SOUNDS LIKE YOU'VE DONE A GOOD JOB AND, UH, YOU'RE GONNA MAKE A COUPLE OF GOOD RECOMMENDATIONS. SO, UH, NOW THIS IS A POST SOLICITATION, SO WE WOULD MAKE A RECOMMENDATION TO CITY COUNCIL FOR ACCEPTANCE AND APPROVAL OF THESE. IS THAT CORRECT? THAT'S CORRECT. OKAY. WELL, I'VE ASKED IF THERE ARE ANY OTHER COMMENTS OR QUESTIONS. HEARING NONE, I'D ENTERTAIN A MOTION FOR THIS COMMITTEE TO RECOMMEND THE, UH, ACCEPTANCE OF THESE TWO, UH, COMPANIES TO THE FULL CITY COUNCIL. SO MOVED. OKAY. SO MOVED BY COUNCILMAN PERRY. IS THERE A SECOND? SECOND. OKAY. SECOND BY COUNCILWOMAN TREVINO. OKAY. ANY OTHER QUESTIONS OR CONCERNS? OKAY, HEARING NONE. ALL IN FAVOR SAY AYE. AYE. AYE. AYE. ANY OPPOSED? OKAY, MR. TRAVINA, DID I JUST, DID I JUST PROMOTE YOU? OKAY. SHE DID MAYBE, MAYBE ANOTHER DAY. I'M SORRY. OKAY. IT'S OKAY. SO THE MOTION'S APPROVED. THIS WILL BE RECOMMENDED TO COUNCIL FOR THEIR APPROVAL. THAT WAS ITEM NUMBER 10. UH, NOW WE GO ON TO, WE HAVE, UH, [Executive Session] TWO OTHER ITEMS, ITEMS NUMBER 11 AND 12. AND WE WILL BE, UH, LOOKING AT THESE ITEMS THROUGH EXECUTIVE SESSION. SO LET ME GO AHEAD AND, AND, UH, READ THE ACTIONS WE'RE GONNA BE TAKING. UH, THE TIME IS NOW 10:53 AM ON THE 20TH OF APRIL, 2021. THE AUDIT AND ACCOUNTABILITY COMMITTEE OF THE CITY OF SAN ANTONIO COUNCIL WILL NOW RECESS INTO EXECUTIVE SESSION TO DELIBERATE ON THE INFORMATION TECHNOLOGY SERVICES DEPARTMENT SECURITY AUDIT PURSUANT TO TEXAS GOVERNMENT CODE SECTION 5 5 1 0.076, WHICH REGARD DELIBERATIONS REGARDING SECURITY DEVICES OR SECURITY AUDITS, AND TO DELIBERATE ON THE APPOINTMENT EVALUATION AND DUTIES OF THE CITY AUDITOR PURSUANT TO TEXAS GOVERNMENT CODE SECTION 5 5 1 0.074 PERSONNEL MATTERS. AND WE'LL DISCUSS LEGAL ISSUES PURSUANT TO THE TEXAS GOVERNMENT CODE SECTION 5 5 1 0.071 CONSULTATION WITH ATTORNEY. SO WE WILL NOW MOVE INTO EXECUTIVE SESSION. ALL OF OUR COUNCIL MEMBERS, PLEASE STAY WHERE YOU ARE AND WE WILL BE MOVING OTHERS OUT OF THE MEETING. OKAY, WE'RE RETURNING FROM EXECUTIVE SESSION. THE TIME IS NOW, UH, 11:31 AM ON THE 20TH DAY OF APRIL, 2021, AND THE AUDIT AND ACCOUNTABILITY COMMITTEE OF THE CITY OF SAN ANTONIO CITY COUNCIL WILL NOW RECONVENE AN OPEN SESSION. NO OFFICIAL ACTION WAS TAKEN DURING THE EXECUTIVE SESSION. AT THIS TIME, WE'RE GOING TO GO AHEAD AND I'LL ASK THE COMMITTEE TO, UH, APPROVE AND RECOMMEND TO THE CITY COUNCIL OR TO ACCEPT, EXCUSE ME, UH, THE AUDIT, UH, ON THE INFORMATION TECHNOLOGY SERVICES DEPARTMENT SECURITY AUDIT. AND SO, UH, THE, UH, IF, IF THERE'S A, A MOTION TO ACCEPT THAT AUDIT, I'LL MOVE TO ACCEPT THE AUDIT. OKAY. AND A SECOND PLEASE. YEAH, I'LL SECOND IF I CHAIRMAN IF I COULD REMIND EVERYONE WHO'S [00:50:01] VOTING SHOULD HAVE THEIR CAMERA ON. OKAY. SO WE HAVE A, A MOTION AND A SECOND TO ACCEPT THE AUDIT, UH, I T S D DEPARTMENT ON SECURITY. SO ALL THOSE IN FAVOR SAY AYE. AYE. ANY OPPOSED? HEARING NONE. THAT AUDIT IS ACCEPTED. UH, THE LAST THING WE DISCUSSED WAS, UH, THE DELIBERATION OF APPOINTMENT AND EVALUATION OF THE CITY AUDITOR. AND THAT WILL BE AN ONGOING FUNCTION AND WILL BE REPORTED TO CITY COUNCIL. SO I THINK THAT, UH, CONCLUDES EVERYTHING ON OUR AGENDA. COUNCILORS, IS THERE ANYTHING OVERLOOKED? NO. CHAIRMAN, YOU DIDN'T OVERLOOK ANYTHING? NOT AT LEAST FROM OUR PERSPECTIVE. OKAY. THANK YOU. ANY OTHER COMMITTEE MEMBERS HAVE ANY ISSUE THEY WANTED TO BRING FORWARD FOR YOUR MEETING? IF YOU DON'T HAVE ANYTHING TO MENTION TODAY, PLEASE FEEL FREE TO BRING IT UP TO ME OR BEN OR KEVIN. OTHERWISE, I'D SAY, UH, THE MEETING IS CONCLUDED, WE ARE ADJOURNED. THANK YOU EVERYBODY. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.