[00:00:02]
OKAY, EVERYONE, THE TIME IS NOW 10:02 AM ON TUESDAY, SEPTEMBER 12TH, 2023, AND THE MEETING OF THE AUDIT COMMITTEE IS NOW CALLED TO ORDER.
MADAM CLERK, CAN YOU CALL THE ROLE COUNCIL MEMBER? COURAGE PRESENT.
COUNCIL MEMBER, WHITE CITIZEN MEMBER TREVINO.
WE HAVE A LENGTHY AGENDA TODAY, SO I'LL BE ALLOWING THE MEMBER SPEAKERS TWO ROUNDS OF COMMENTS PER ITEM WITH, UM, FIVE MINUTES THE FIRST ROUND AND THREE MINUTES THE SECOND ROUND.
[Approval of Minutes ]
THE AGENDA IS APPROVAL OF THE MINUTES.CAN I GET A MOTION AND A SECOND TO APPROVE THE MINUTES? SO MOVED.
UH, THERE IS A MOTION AND A SECOND TO APPROVE THE MINUTES.
IS THERE ANY DISCUSSION? WE HAVE A MOTION AND A SECOND TO MOVE THE MINUTES.
OH, MADAM CLERK, DO WE HAVE ANY PUBLIC COMMENT? WE HAVE NO MEMBERS OF THE PUBLIC SIGNED UP TO SPEAK TODAY.
[CONSENT AGENDA ]
FOUR ITEMS ON THE CONSENT, CONSENT AGENDA.CAN I GO GET A MOTION AND A SECOND TO ACCEPT THE AUDIT LIST AUDITS LISTED AS ITEM 2, 3, 4, AND FIVE ON THE CONSENT AGENDA.
WE APPROVE THE CONSENT AGENDA ITEMS 2, 3, 4, AND FIVE.
DO I HAVE A SECOND? I'LL SECOND.
I HAVE A MOTION AND A SECOND TO APPROVE THE CONSENT AGENDA.
IS THERE ANY DISCUSSION THERE BEING NO FURTHER DISCUSSION? WE HAVE A MOTION AND A SECOND TO APPROVE THE ITEMS. ALL IN FAVOR SAY AYE.
AND LET IT SHOW FOR THE RECORD THAT COUNCIL MEMBER MARK WHITE HAS ARRIVED AND IS IN ATTENDANCE.
SO WE HAVE OUR INDIVIDUAL ITEMS AND WE HAVE QUITE A FEW AGAIN THIS MORNING.
[Pre-Solicitation High Profile Briefings ]
TWO PRES SOLICITATION HIGH PROFILE BRIEFINGS FOR THE IN FOR INDIVIDUAL CONSIDERATION.MADAM CLERK, PLEASE READ THE CAPTION FOR ITEM SIX.
ITEM SIX IS A BRIEFING ON THE RELEASE OF A SOLICITATION TO PROVIDE THE NEIGHBORHOOD AND HOUSING SERVICES DEPARTMENT WITH AN ESTI ESTIMATED NINE, AFFORDABLE SINGLE FAMILY, HOME OWNERSHIP, HOUSING DEVELOPMENT, AND AFFORDABLE MULTIFAMILY RENTAL HOUSING DEVELOPMENT PROJECTS IN NEED OF GAP FUNDING WITH ESTIMATED AVAILABLE HOME AND C D B G FUNDING OF AT LEAST $8,214,218.
IS THERE A STAFF PRESENTATION? YES.
GOOD MORNING COUNCIL MEMBERS, MADAM CHAIR VERONICA GARCIA.
I'M THE DIRECTOR OF OUR NEIGHBORHOOD AND HOUSING SERVICES DEPARTMENT.
THIS MORNING WE HAVE OUR PRES SOLICITATION BRIEFING FOR PARTNERING WITH OTHER ENTITIES TO BUILD NEW AFFORDABLE HOUSING IN OUR COMMUNITY OF HOUSING.
AFFORDABILITY WAS ONE OF THE TOP ITEMS BY CITIZENS IN OUR COMMUNITY BUDGET SURVEY, AND WE WORK WITH OTHER DEVELOPERS TO BUILD AFFORDABLE HOUSING AND REALLY INCREASE THAT AFFORDABLE HOUSING STOCK IN SAN ANTONIO.
EVERY YEAR SAN ANTONIO RECEIVES ENTITLEMENT FUNDS FROM HOUSING AND URBAN DEVELOPMENT, AND WE UTILIZE THOSE FUNDS TO PROVIDE DECENT, SAFE AND AFFORDABLE HOUSING IN OUR COMMUNITY.
TODAY'S ITEM IS IN ALIGNMENT WITH THE 2024 ANNUAL ACTION PLAN THAT COUNCIL MEMBERS APPROVED LAST MONTH FOR THIS FUNDING.
AND WE ARE UTILIZING SPECIFICALLY HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS AND COMMUNITY DEVELOPMENT BLOCK GRANT, C D B G FUNDS TO PROVIDE GAP FINANCING FOR ENTITIES TO PROVIDE MORE AFFORDABLE HOUSING, MULTI DEVELOPMENTS AND SINGLE FAMILY DEVELOPMENTS IN SAN ANTONIO.
TODAY'S ITEM IS TO ISSUE TWO REQUESTS FOR PROPOSALS FROM BOTH NON-PROFIT AND FOR-PROFIT DEVELOPERS.
AND WE CAN UTILIZE HUD ALLOWS US TO USE THIS FUNDING TO SERVE FAMILIES UP TO 80% OF THE AREA MEDIAN INCOME.
HOWEVER, CITY STAFF IS RECOMMENDING THAT WE ALIGN THESE RFPS WITH OUR STRATEGIC HOUSING IMPLEMENTATION PLAN, WHICH MEANS THAT WE WOULD UTILIZE THE FUNDING TO SERVE HOUSEHOLDS UP TO 60% OF THE AED INCOME WITH A PRIORITY FOR PROJECTS THAT SERVE FAMILIES UP TO 30% A M I.
SO FOR THIS, UH, RENTAL HOUSING SOLICITATION, WE WOULD BE REQUIRING PROJECTS TO INCLUDE
[00:05:01]
AT LEAST 10% OF THEIR UNITS OF THE DEVELOPMENT FOR FAMILIES EARNING UP TO 30% OF THE AED INCOME, WHICH FOR OUR CITY IS JUST BELOW $24,000.SO THAT WILL BE A REQUIREMENT FOR THE FULL MULTIFAMILY SOLICITATION.
FOR THE SINGLE FAMILY SOLICITATION, WE'LL BE SERVING HOUSEHOLDS WITH HOME OWNERSHIP OPPORTUNITIES FOR HOUSEHOLDS UP TO 80% OF THE AREA MEDIAN INCOME.
SO AS AN OVERVIEW, BOTH SOLICITATIONS WILL BE ISSUED AS REQUEST FOR PROPOSALS, AND THE TERM OF EACH CONTRACT WILL BE BASED ON THE DEVELOPMENT.
SO WE WOULD BE PRIORITIZING PROJECTS THAT ARE AS SHOVEL READY AS POSSIBLE, SO THEY COULD HAVE COMMITMENTS.
COMMENCEMENT STATES RANGING FROM IMMEDIATELY AFTER COUNCIL APPROVAL UP TO ONE YEAR AFTER AWARD.
THE ESTIMATED VALUE FOR THE RENTAL R F P IS $4.2 MILLION.
AND FOR THE HOME OWNERSHIP R F P, WE HAVE ALSO $4.2 MILLION AVAILABLE.
I'LL ALSO NOTE THAT ANY PROGRAM SAVINGS OR NEW PROGRAM INCOME THAT WE HAVE UP UNTIL THE TIME PROPOSALS ARE EVALUATED COULD BE CONSIDERED AND ADDED WHEN WE BRING THE PROJECT RECOMMENDATIONS TO COUNCIL TO ENSURE THAT ALL RESPE PROSPECTIVE RESPONDENTS ARE NOTIFIED OF THE RFPS, PROCUREMENT WILL ASSIST WITH ELECTRONICALLY NOTIFYING ABOUT 650 POTENTIAL VENDORS.
THIS WILL BE DONE VIA TV, THE EXPRESS NEWS AND EMAIL TO OUR LOCAL HOUSING PARTNERS.
AND THE EVALUATION PANEL CONSISTS OF MEMBERS FROM THE CITY MANAGER'S OFFICE.
OUR NEIGHBORHOOD HOUSING SERVICES DEPARTMENT WILL HAVE A PANEL MEMBER FROM VIA TRANSIT AND A VOTING MEMBER FROM OFFICE OF SUSTAINABILITY.
THE PANEL WILL ALSO BE SUPPORTED WITH ADVISORY MEMBERS FROM OUR ATTORNEY'S OFFICE DEVELOPMENT SERVICES DEPARTMENT, AND MEMBERS OF OUR GRANTS MANAGEMENT TEAM.
THE SCORING PROCESS FOR BOTH RFPS WILL BE EVALUATED OUT OF A POSSIBLE 100 POINTS.
THEIR CRITERIA FOLLOWS THE SAME METHODOLOGY THAT WAS APPROVED LAST YEAR BY COUNCIL MEMBERS FOR OUR HOUSING BOND AND FEDERAL DOLLARS R F P PROCESS.
THIS TARGETS AFFORDABILITY, SUSTAINABILITY, EQUITY, AND WE'RE PRIORITIZING PROJECTS PROPOSED BY NON-PROFIT ORGANIZATIONS AT 30 POSSIBLE POINTS.
THE LARGEST CRITERIA FOR POTENTIAL RESPONDENTS IS THE AFFORDABILITY OF THE PROJECT.
SO HOW MANY UNITS ARE THOSE FOR? THOSE IN THE DEEPEST NEED IN OUR COMMUNITY DEVELOPMENT EXPERIENCE IS WORTH 15 POINTS AND ENSURES DEVELOPERS HAVE PRIOR SUCCESS IN BUILDING AFFORDABLE HOUSING.
HERE IN SAN ANTONIO, WE HAVE, UH, FOR PROJECT GAP READINESS AND UNDERWRITING ARE WORTH 15 POINTS.
THIS CRITERIA ENSURES THAT THE LIMITED FUNDS WE HAVE WILL RESULT IN PROJECTS THAT ARE FINANCIALLY VIABLE, THAT ARE LEVERAGING OTHER FUNDING SUCH AS MAYBE LOW INCOME HOUSING TAX CREDITS, AND HAVE SECURED THEIR OTHER FINANCING ALREADY SO THAT THE PROJECTS CAN START CONSTRUCTION AS QUICKLY AS POSSIBLE.
ALSO WORTH A COLLECTIVE 15 POINTS ARE THE PROJECT'S, UNIT SPECIFICATIONS, THE PROJECT'S, CONSTRUCTION PRIORITIES, THE PROPOSED LOCATION, SITE PLAN, AND SUSTAINABILITY.
SO FOR THIS CRITERIA, WE ARE LOOKING FOR PROJECTS THAT ACHIEVE UNIVERSAL DESIGN, THAT HAVE SUSTAINABILITY FEATURES THAT GO BEYOND OUR TYPICAL CODE, WHICH CAN INCLUDE HIGHER ENERGY EFFICIENCY FEATURES, WATER REDUCTION MEASURES, AND ENHANCED WEATHERIZATION.
WE'RE ALSO LOOKING FOR PROJECTS THAT HAVE ACCESS TO OUR PUBLIC TRANSIT LINES, AND THAT'S WHY VIA IS HELPING US EVALUATE ALL THE PROPOSALS AND WE'RE, UH, WOULD BE PRIORITIZING PROJECTS THAT ARE IN TARGETED AREAS SUCH AS REGIONAL CENTERS.
ALL OF THIS IS IN ALIGNMENT WITH OUR CITY'S STRATEGIC HOUSING IMPLEMENTATION GOALS.
NEXT PROJECTS CAN EARN UP TO 10 POINTS FOR THEIR COMMITMENT TO RESIDENT PRODUCTIONS AS WELL AS THE AMENITIES AND RESIDENT SERVICES THAT THEY OFFER ONSITE.
THIS WILL ENSURE THAT PROJECTS DO NOT RESULT IN DISPLACEMENT AND THAT RESIDENTS OF THE FUTURE HOUSING PROJECTS HAVE THE RESOURCES THEY NEED TO BE SUCCESSFUL.
PROJECTS THAT ARE OWNED BY A NONPROFIT ENTITY OR THAT ARE PARTNERING WITH ONE OF OUR NONPROFIT ENTITIES CAN BE AWARDED UP TO 10 POINTS.
AND LASTLY, VETERAN-OWNED BUSINESSES CAN EARN UP TO FIVE POINTS.
I'LL ALSO MENTION THAT FEDERAL REGULATIONS DO NOT ALLOW US TO APPLY LOCAL PREFERENCE TO OUR SOLICITATIONS.
THEREFORE, SPE A AND THE LOCAL PREFERENCE PROGRAM DO NOT APPLY TO THESE RFPS.
SO AFTER TODAY'S PRES SOLICITATION BRIEFING, WE WILL ALSO BE BRIEFING THE HOUSING COMMISSION AND OUR PLANNING COMMUNITY DEVELOPMENT COMMITTEE LATER THIS MONTH.
WE PLAN TO RELEASE BOTH RFPS ON SEPTEMBER 29TH.
UH, THEY WILL BE OPEN FOR JUST OVER SIX WEEKS WITH PROPOSALS DUE ON NOVEMBER 14TH.
AND THEN WE WILL COME BACK TO THIS COMMITTEE IN EARLY JANUARY TO BRIEF YOU ON THE RECOMMENDED PROJECTS AND THEN HOPING FOR COUNCIL CONSIDERATION ON FEBRUARY 1ST.
SO THAT CONCLUDES MY PRESENTATION.
HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE.
[00:10:01]
UH, START WITH, UH, COUNCIL MEMBERS DISCUSSIONS AND WE'LL START WITH COUNCILMAN AND COMMITTEE MEMBERS DISCUSSIONS.WE'LL START WITH COUNCILMAN COURAGE.
I JUST WANT TO, UH, KIND OF MAKE SURE OF A FEW THINGS.
YOU MENTIONED, PARTICULARLY THIS IS OPEN TO NOT JUST NON-PROFITS, BUT FOR-PROFIT DEVELOPERS AND BUILDERS.
ANYONE, ANY BUILDERS, DEVELOPERS CAN APPLY, UM, THEY DO GET EXTRA POINTS IF THEY PARTNER WITH A NONPROFIT.
SO EVEN IF THE PRIMARY DEVELOPER IS NOT A NONPROFIT, THEY CAN PARTNER WITH ONE.
SO, UH, HOW OFTEN DOES THAT HAPPEN? IN OUR EXPERIENCE, UH, I THINK PRETTY MUCH EVERY SINGLE R F P SOLICITATION PROPOSAL THAT WE RECEIVED LAST YEAR THROUGH ALL OF THE HOUSING BOND HAD A NONPROFIT PARTNER AS PART OF THEIR PROPOSAL.
BUT THEY WERE ALL PRIVATE DEVELOPERS? MOST OF 'EM, NO, SOME OF THEM WERE, UM, THE SOLE DEVELOPER WAS LIKE OPPORTUNITY HOMES.
SOMETIMES THEY DO THEIR OWN PROJECTS.
WE ALSO HAD SOME OF OUR COMMUNITY HOUSING DEVELOPMENT ORGANIZATIONS, OUR CHODOS, AND THEY'VE BEEN SUCCESSFUL IN RESPONDING TO THESE PARTICULAR RFPS IN THE PAST.
SO THEY'RE NON-PROFITS AND THEY DON'T HAVE ANY FOR-PROFIT PARTNERS.
UM, BUT WE HAVE SEEN MANY INSTANCES WHERE IT'S A FOR-PROFIT.
WELL, UM, I JUST WANNA MAKE SURE THAT, UH, THIS IS OPEN TO ANY BUSINESS THAT WANTS TO DEVELOP AFFORDABLE HOUSING FOR US.
SO I THINK YOU'RE SAYING THAT THAT IS YES.
AND THAT WE'VE HAD THOSE KINDS OF PARTNERSHIPS DEVELOP.
WILL MOST OF THESE PROJECTS GO THROUGH, UH, LOW INCOME HOUSING TAX CREDIT OR FINANCING THROUGH THE STATE? IT'S NOT A REQUIREMENT, BUT WE ARE LOOKING AT HOW THEY ARE LEVERAGING THE CITY FUNDING REQUEST WITH OTHER SOURCES.
AND FOR THE AFFORDABILITY CRITERIA THAT WE ARE SEEKING WITH THESE SOLICITATIONS, MOST OF THEM DO USE THE LOW INCOME HOUSING TAX CREDITS AS PART OF THEIR LAYERING OF FINANCING.
ANY QUESTIONS? COUNCIL MEMBER? WHITE.
YEAH, JUST, JUST SO I UNDERSTAND, THE LOCAL PREFERENCE PROGRAM IS NOT APPLICABLE HERE, RIGHT? CORRECT.
BECAUSE WE ARE, THIS IS ALL FEDERAL FUNDING AND IT'S NOT REQUIRED.
I JUST WANNA ECHO WHAT COUNCILMAN COURAGE SAID IN TERMS OF MAKING SURE WE GET THIS PRES SOLICITATION AND THESE PRE-SUBMIT CONFERENCE.
THAT INFORMATION OUT THERE, I THINK WE'RE SEEING, UM, A LOT OF, UM, DEVELOPERS AND BUSINESSES LOOK INTO AFFORDABLE, AFFORDABLE HOUSING AND HOW THEY, THE OPPORTUNITIES THAT ARE THERE.
SO I WANNA MAKE SURE THAT THEY GET THEIR QUE QUESTIONS ANSWERED.
THE OTHER THING IS, I KNOW WE HAVE, UH, PEOPLE FROM OUTSIDE OF SAN ANTONIO AND OUTSIDE OF THE STATE OF TEXAS LOOKING AT SAN ANTONIO AS, UM, AS SOMEWHERE TO BUILD OR TO EXPAND TO.
SO LET'S JUST MAKE SURE WE GET THAT INFORMATION OUT.
THIS ITEM SIX WAS FOR BRIEFING ONLY.
UH, MADAM CLERK, PLEASE READ THE CAPTION FOR ITEM SEVEN.
COULD I MAKE A COUPLE OF COMMENTS RELATED TO THE NEXT TWO ITEMS? SO ITEM SEVEN
[Post-Solicitation High Profile Briefings ]
AND EIGHT ARE, ARE BOTH RELATED TO OUR SS A P UPGRADE PROGRAM.AND SO OUR THOUGHT WOULD BE THAT, UH, CRAIG HOPKINS, OUR CHIEF INFORMATION OFFICER, WILL COVER BOTH OF THOSE ITEMS ONCE PRES SOLICITATIONS WILL BE ASKING FOR YOUR INPUT ON A SYSTEM INTEGRATOR FOR OUR SUCCESS FACTORS FOR HUMAN RESOURCES, THE OTHER'S A POST SOLICITATION FOR OUR INDEPENDENT, UH, VERIFICATION AND VALIDATION SERVICES.
BUT IT MAY MAKE SENSE FOR CRAIG TO COVER BOTH OF THOSE, UH, ITEMS WITH HIS PRESENTATION SINCE THEY'RE INTERRELATED.
AND THEN, AND THEN WE CAN CERTAINLY ANSWER QUESTIONS AFTER THAT.
SO YOU'LL BE PRESENTING ON ITEMS SEVEN N EIGHT, CORRECT? CORRECT.
UH, MADAM CLERK, CAN YOU READ THE CAPTIONS FOR ITEM SEVEN AND EIGHT? ITEM A NUMBER SEVEN IS A BRIEFING ON THE RELEASE OF A SOLICITATION FOR ONE CONTRACT TO PROVIDE THE INFORMATION TECHNOLOGY SERVICES DEPARTMENT WITH A SYSTEM INTEGRATOR FOR THE HUMAN RESOURCES SUCCESS FACTORS PORTION OF THE OVERALL S A P UPGRADE PROGRAM FOR AN ESTIMATED VALUE OF 3,500,000 THROUGH THE PROJECT COMPLETION.
ITEM NUMBER EIGHT IS APPROVAL TO PROCEED WITH SCHEDULING OF ONE CONTRACT FOR CITY COUNCIL CONSIDERATION TO PROVIDE THE INFORMATION TECHNOLOGY SERVICES DEPARTMENT WITH INDEPENDENT VERIFICATION AND VALIDATION SERVICES FOR AN ESTIMATED VALUE OF 6,000,800 $800,000 FOR A THREE YEAR TERM WITH TWO ONE YEAR RENEWAL OPTIONS.
GREG, GO AHEAD AND GIVE US YOUR PRESENTATION.
I'M THE CHIEF INFORMATION OFFICER HERE FOR THE CITY.
UM, THE, UH, SS A P SYSTEM UPGRADE IS A PROGRAM OF MULTIPLE EFFORTS, AND THAT'S WHY WE'RE KIND OF BUNDLING SOME OF THESE TOGETHER.
SO I HAVE A PRES SOLICITATION AND A POSTS SOLICITATION THAT WE'RE GONNA WALK THROUGH.
BUT BEFORE I GO THERE, I, I'D LIKE TO GIVE YOU JUST A QUICK SUMMARY
[00:15:01]
OF OUR SITUATION AND OUR SCOPE AND OUR PRO OUR PLATFORM APPROACH, WHY WE'RE DOING THIS, AND HOW WE'RE PUTTING THIS ALL TOGETHER IN ONE TIMELINE.AND THEN I WILL TAKE YOU THROUGH A VARIETY OF PRES SOLICITATIONS THAT ARE COMING OVER THE NEXT SEVERAL MONTHS GOING FORWARD, SO YOU HAVE CONTEXT TO THIS WHOLE WORK.
SO OUR SITUATION IS, UM, WE ARE AN SS A P, UH, ENTERPRISE RESOURCE MANAGEMENT PROGRAM SHOP.
WE ALL OUR FINANCIALS, ALL OUR HR, ALL OUR CORE INFRASTRUCTURE IS ON OUR SS A P PLATFORM.
UH, WE'VE BEEN ON THIS, UH, FOR YEARS AND WE'RE COMING UP FOR END OF LIFE ON OUR CURRENT PLATFORM HERE IN 2027.
UH, YOU DON'T JUST FLIP A SWITCH WHEN YOUR S A P SYSTEM COMES DUE.
IT TAKES YEARS OF PLANNING TO WORK THROUGH.
SO WE'RE PREPARING FOR THIS, UH, AS WE GO FORWARD INTO A, WE, YOU'LL HEAR IT CALLED THE SS FOUR HANA UPGRADE AS WE GO FORWARD.
IT'S A BIG PLATFORM CONVERSION, BUT AS WE'RE GOING THROUGH THIS, WE ALSO WANT TO INCREASE EFFICIENCY, IMPROVE PERFORMANCE, IMPROVE OUR USER EXPERIENCE, AND CREATE SCALE BOTH IN SECURITY, OUR DATA MODEL.
AND WE'RE MOVING TO A CLOUD ENVIRONMENT, UH, LIKE WE ARE IN MOST OF OUR PLATFORMS ACROSS THE CITY AS WE GO FORWARD.
SO IT'S RATHER LARGE AND COMPLEX.
IT ALSO COVERS SIX WORK STREAMS OF WORK.
UM, WE CALL THESE ON THE RIGHT, OUR WORK STREAMS, BUDGET TO REPORT, HIRE TO RETIRE, SOURCE TO PAY, ORDER TO CASH ACQUIRE, TO RETAIN, MANAGE IT.
THESE ARE ACTUALLY THE WORK STREAMS THAT WE DO ACROSS HR, O M B, FINANCE, PROCUREMENT, AND IT ALL PART OF OUR E R P SYSTEM.
SO OUR INTENT IS TO UPGRADE 18 MONTHS OF PLANNING.
WE'VE ALREADY HAD 14 DETAILED DISCOVERY CAPABILITY SESSIONS.
YOU SEE THE STAKEHOLDERS THERE THAT ARE PART OF THIS.
WE'RE WORKING AS A SUITE, NOT AS INDIVIDUAL, UM, UH, FUNCTIONS.
UH, WE MADE THE UPGRADE DECISION ABOUT 18 MONTHS AGO AS WE WENT THROUGH THIS PLANNING PROCESS.
NOT TO GO TO SOMETHING ELSE, BUT TO STAY WITH THE VENDOR WE HAVE AND TO, UH, EVOLVE THIS SUITE AS WE GO FORWARD.
IT ALLOWS US REALLY TO HAVE THE LOWEST IMPLEMENTATION AND OPERATIONAL COSTS.
'CAUSE WE'RE NOT CHANGING THINGS OUT SHORTEST TIME TO VALUE.
HOW DO WE GET THE UPGRADE IN PLACE AS FAST AS POSSIBLE AND MINIMIZE THE RISK TO OUR EMPLOYEES, NOT, WE DON'T WANNA GIVE THEM SOMETHING TOTALLY NEW TO HAVE TO LEARN AS WE GO FORWARD.
SO THIS PLATFORM APPROACH IS CALLED AN UPGRADE IN WHAT WE GO FORWARD.
HERE'S A HIGH LEVEL TIMELINE AND AN OVERALL PROGRAM, UH, COST.
AND THE REASON I WANT YOU TO SEE THIS IS WE'RE EACH OF THESE ARROWS, WE COME BACK IN FRONT OF YOU.
WE'RE TREATING THEM AS INDEPENDENT, UH, SYSTEM INTEGRATOR, UM, UH, CONTRACTS.
SO INDEPENDENT VERIFICATION, VALIDATION ON THE TOP.
I WILL GET TO THAT IN THE SECOND HALF OF MY PRESENTATION.
WE'VE OUR, WE'RE AT POST, UH, FOR THAT.
UH, ASSIGN THAT CONTRACT SUCCESS FACTORS, WHICH IS THE SECOND ARROW DOWN, IS OUR HR SYSTEMS, IS WHAT I'M ABOUT TO PRESENT TO YOU FOR PRE THAT WE'RE GETTING READY TO PUT OUT.
AND THEN ARIBA, THE S FOUR HANA ARROWS AT THE BOTTOM WILL BE COMING TO YOU IN THE FUTURE.
WHEN YOU ADD ALL THOSE UP TOGETHER.
THERE'S ABOUT $26 MILLION OF SERVICES WE CALL THESE INTEGRATOR SERVICES THAT WE'RE GOING OUT PUTTING OUT FOR BID.
BUT IF YOU GO DOWN TO THE BOTTOM OF THIS CHART, YOU'LL SEE WE'RE ALSO SPENDING ABOUT $16 MILLION JUST IN SOFTWARE LICENSES WITH SS A P, THE $26 MILLION IN SERVICES AND ANOTHER $12 MILLION IN CONTRACTORS AND STAFFING.
THIS IS OUR $55 MILLION SS A P PROGRAM THAT WE'VE TALKED ABOUT SEVERAL TIMES.
SO THE PRES SOLICITATION FOR SUCCESS FACTORS.
THIS IS FOR A SYSTEM INTEGRATOR.
YOU'LL HEAR ME SAY THAT TERM QUITE, UH, QUITE A BIT.
WE WANT TO COMPETITIVELY BID FOR PEOPLE WHO ARE EXPERTS IN SS A P SUCCESS FACTORS AS A MODULE, A PART OF WHAT WE'RE DOING GOING FORWARD.
THIS IS TYPICALLY NOT ANY, UM, NO, UM, THIS IS TYPICALLY A BIG INTEGRATOR THAT KNOWS THIS SS A P PLATFORM.
YOU TYPICALLY DON'T FIND A LOT OF JUST GENERAL TECHNOLOGY FIRMS THAT KNOW HOW TO DO THIS.
THESE ARE SPECIALISTS THAT KNOW HOW TO DO THESE SPECIFIC, UH, MODULES.
THOSE MODULES AROUND EMPLOYEE MANAGEMENT, EMPLOYEE BENEFITS, EMPLOYEE SELF-SERVICE MANAGER, SELF-SERVICE, ORGANIZATIONAL MANAGEMENT, LEARNING MANAGEMENT.
THIS IS AN R F P THAT WE'LL BE PUTTING OUT ABOUT THREE AND A HALF MILLION DOLLARS NEW CONTRACT.
WE HAVEN'T DONE THIS BEFORE AS AN INTEGRATOR, AND WELL, IN A LONG WHILE, WE HAVEN'T DONE THIS.
OUR OVERVIEW, UM, YOU CAN SEE THE N I G P CODES THAT THIS RELATES TO.
THESE ARE VERY SIMILAR ACROSS THE ENTIRE PROGRAM AS WE GO THROUGH, UH, OUR ADVERTISING AND, UM, WE HAVE A LARGE NUMBER OF VENDORS TO NOTIFY.
I I WOULD EXPECT THAT WE'LL HAVE A FEW SPECIALISTS THAT WILL COME OUT OF THIS AS WE GO THROUGH IT.
OUR VOTING MEMBERS ARE THE, BASICALLY THE PROGRAM, UH, STEERING COMMITTEE TEAM.
MYSELF, KEVIN GOODWIN, THE CHIEF TECHNOLOGY OFFICER, TROY, WHO'S OUR FINANCE LEAD, RENEE WHO AND THE HR JUSTINA FROM O M B, AND THEN MELANIE FROM FINANCE AND TED FROM HR AS WELL ROUND OUT THAT THAT IS THE CORE TEAM
[00:20:01]
ACROSS ALL OF OUR SYSTEM INTEGRATORS.WE'RE SHARING AS WE GO FORWARD.
45 POINTS FOR EXPERIENCE AND BACKGROUND, 20 POINTS FOR PROPOSED PLAN, 10 FOR PRICING, UH, FIVE FOR, UH, PRO, UM, M W B PRIME AND E S B PRIME.
AND THERE'S A 10 POINTS FOR LOCAL PREFERENCE PROGRAM, UH, AS WELL.
FIVE FOR VETERAN OWNED OH S BETA SUBCONTRACTOR REQUIREMENTS.
YOU SEE THE FIVE AND 2% AT THE BOTTOM.
GOAL SETTING COMMITTEE, UH, MYSELF, UH, NIKKI RAMOS, ANGELA MAAM, MICHAEL SINDEN, AND FRANK MUNOZ.
UM, WE ARE APPLYING THE SUB BETA 10 POINTS, UH, WE, WE JUST TALKED ABOUT.
I THINK THAT'S ALL I WANTED TO DO ON THIS ONE.
SO YOU SAW THIS, UH, WORKING OFF THE MASTER UPGRADE TIMELINE.
UH, WE ARE GETTING READY TO RELEASE IN, UH, EARLY OCTOBER FOR THE SYSTEM INTEGRATOR.
WE WILL GO THROUGH OUR SOLICITATION PROCESS WITH OUR INTENT OF BRINGING THIS TO COUNCIL CONSIDERATION, UH, BACK HERE, UH, FOR POSTS SOLICITATION IN MARCH, AND THEN COUNCIL CONSIDERATION IN MARCH SO WE CAN KICK OFF THIS PHASE OF THE PROJECT IN THE MARCH TIME TIMELINE.
OH, FORGOT WHY I PUT THIS HERE.
UM, THIS IS JUST A PRE FOR THE NEXT ONES THAT WILL BE COMING.
UH, BUDGET DEVELOPMENT WILL HAVE A VERY SI SIMILAR SYSTEM INTEGRATOR.
THIS IS NOT READY TO COME TO THIS COMMITTEE YET, BUT WILL BE COMING SOON.
ANOTHER, UH, SYSTEM INTEGRATOR SPECIFICALLY FOR THE BUDGET DEVELOPMENT FUNCTION, WHICH IS BUDGET PLANNING, PERSONNEL COST PLANNING, AND DECISION PACKING MANAGEMENT.
AGAIN, A CONTRACT VALUE OF ABOUT THREE AND A HALF MILLION DOLLARS.
AND THE FINAL ONE WE WOULD BE BRINGING LATER, UH, IN THE YEAR, MAYBE EARLY IN, UH, AFTER THE FIRST OF THE YEAR IS THE LARGEST OF THE SYSTEM INTEGRATOR PACKAGES, WHICH IS FOR THE PROCUREMENT AND THE FINANCIAL COMPONENT OF THE UPGRADE AS WELL.
YOU CAN SEE THERE'S, WE CALL ARIBA, WHICH IS OUR PROCUREMENT COMPONENT, SUPPLIER MANAGEMENT, STRATEGIC SOURCING, PROCUREMENT PROCESSING, AND FINANCIAL SUPPLY CHAIN.
AND THE SS FOUR HANA, WHICH IS THE CORE FINANCIALS, FUNDS, AND GRANTS.
THIS IS THE LARGEST OF OUR SYSTEM INTEGRATOR PACKAGES AT A CONTRACT VALUE OF ABOUT $9.7 MILLION.
AGAIN, THOSE TWO WILL COME PRES SOLICITATION LATER IN THE YEAR.
SO THAT CONCLUDES MY PRES SOLICITATION FOR, UH, HR SUCCESS FACTORS.
SHOULD I JUST GO INTO THE POSTS SOLICITATION FOR INDEPENDENT VERIFICATION AND VALIDATION? I, THIS SOLICITATION WAS PUT ON THE STREET AND, AND AGAIN, LET ME STOP FOR A SECOND.
INDEPENDENT VAL VERIFICATION VALIDATION IS CON CONFUSING TO SOME FOLKS.
IT'S A THIRD PARTY INDEPENDENT PROVIDER WHO HELPS US DO QUALITY ANALYSIS, RISK ANALYSIS ACROSS THE ENTIRE PROGRAM.
SO THIS PROVIDER, IT'S USUALLY ABOUT 10% OF THE COST, 10 OR 12% OF THE COST OF YOUR PROGRAM.
THEY'LL COME IN AS A THIRD PARTY AND HELP YOU MANAGE PROCUREMENT, HELP YOU DO QUALITY HELP, YOU DO OPERATIONAL DELIVERABLES, THEIR, THEIR EYES AND EARS FOR US ACROSS ALL OF OUR VENDORS THAT WE'RE WORKING THROUGH IN A PROGRAM LIKE THIS.
SO WE PUT THE SOLICITATION OUT SPECIFICALLY FOR THOSE WHO UNDERSTOOD THE S A P SUITE, WHICH INCLUDED THE SUCCESS FACTORS, THE ARIBA, THE HANA, ALL THE THINGS I TALKED ABOUT EARLIER.
AND IT HAD, UM, KNOWLEDGE OF BOTH FINANCE, BUDGET, HUMAN RESOURCES AND PROCUREMENT.
AND SPECIFICALLY SSS A P UPGRADES.
IT'S A THREE YEAR TERM WITH TWO ONE, UH, YEAR OPTIONS.
AND IT'S ABOUT A $6.8 MILLION CONTRACT, WHICH AGAIN IS ABOUT 12% OF OUR $55 MILLION.
HERE'S OUR TWO VENDORS THAT WE EVALUATED.
THE LEFT FINAL EVALUATION WAS COMPLETED ON JULY 7TH.
UH, DUE DILIGENCE, WE NOTIFIED 326 VENDORS IN THIS SPACE.
21, UM, RESPONDED TO PRE-SUBMIT, ONLY TWO SUBMITTED FINAL RESPONSES.
THIS IS, AGAIN, VERY LARGE, VERY TECHNICAL SPECIFIC REQUIREMENT.
OH, AND THAT CONCLUDES MY PRESENTATION.
UH, WE'LL START WITH OUR, UH, COUNSEL COMMENTS.
WE HAVE TWO ITEMS. ONE IS ITEM SEVEN, WHICH IS FOR BRIEFING ONLY, AND THAT'S WHERE THEY WANT OUR INPUT ON THAT.
AND THE OTHER IS ITEM EIGHT, WHICH WE NEED TO, TO MAKE A MOTION ON.
UH, DOES ANYONE WANNA GO FIRST? COUNCILMAN K.
UM, SO THE ULTIMATE DECISION IS TO STAY WITH SS A P.
NOW, I, I THINK I'VE HEARD SOME OF OUR PARTNERS SAWS AND C P S ARE LOOKING ELSEWHERE FOR UPGRADES FOR
[00:25:01]
THEIR PRODUCTS.SO, AND, AND WHAT THEY NEED BEHIND THE SCENES.
WILL WE BE ABLE TO CONTINUE TO WORK WHATEVER S SYSTEM THEY HAVE? IS THERE ANY KIND OF INTEGRATION FACTOR THAT WE MAY BE LOSING IF, UH, C P S GOES WITH ANOTHER TYPE OF PROVISION OR ANYTHING? THE, UM, THE, THE ANSWER IS THAT'S ALWAYS A DESIGN CONSIDERATION WE HAVE TO TAKE INTO EFFECT.
EVEN IF THEY'RE ON A DIFFERENT, UH, SETUP OF S A P, WE HAVE TO FIGURE OUT HOW TO INTEGRATE THE TWO TOGETHER.
IF THEY GO TO ANOTHER E R P SYSTEM, WE WILL HAVE TO FIGURE OUT HOW TO INTEGRATE THEM TOGETHER.
THAT WILL BE THE CASE EITHER WAY.
UH, COULD WE GO BACK TO THE EVALUATION OF THE TWO TEAMS? UM, I SEE THE, THE TOTAL SCORES ARE PRETTY LOW OUT OF, OUT OF A HUNDRED.
UH, AND THAT'S KIND OF SURPRISING.
UH, IS IS THERE A REASON WHY ONE OF THESE COMPANIES DIDN'T SCORE IN THE SEVENTIES OR THE EIGHTIES? OR WAS THERE FACTORS MISSING OR SOMETHING? SO COUNCILMAN, I THINK, UM, IF YOU LOOK AT THE MATRIX, UH, TOTALS, UH, SUBTOTAL A AND B, WHICH EXPERIENCE, BACKGROUND AND QUALIFICATIONS PROPOSED PLAN, THERE WERE 60 POINTS THERE.
THE VENDOR WE'RE RECOMMENDING GOT 54 OF THOSE.
UM, AND THEN YOU HAD PRICE THERE.
THE, THERE'S A LOT OF POINTS, 25, UH, POINTS THAT ARE TIED UP IN OUR S BETA AND OTHERS.
SO THAT ACTUALLY PULLED THE SCORE DOWN, BUT YOU CAN SEE THE ONE THAT WE'RE RECOMMENDING WHEN WE TALK ABOUT EXPERIENCE, BACKGROUND, AND QUALIFICATIONS, PROPOSED PLAN SCORED WELL, UM, IN THAT FIRST 60 POINTS.
IT'S STILL SURPRISING OUT OF 21 THAT EXPRESSED AN INTEREST ONLY TWO, UM, BID.
DO WE DO ANY FOLLOW UP AFTER AND FIND OUT WHY MORE HADN'T SUBMITTED? UH, SO THAT WE HAVE A, A BROADER UNDERSTANDING OF WHAT THAT MARKET IS LIKE BECAUSE WE'RE TALKING ABOUT CONTINUING ON WITH ANOTHER PHASE LATER IN, IN THIS INSTANCE, WE DID NOT DO ANY FOLLOW UP, UM, PRIOR TO ACTUALLY ISSUING THE SOLICITATION.
WE DID DO A LOT OF, UM, RESEARCH AS FAR AS WHO PARTICIPATES IN THIS SPACE TO MAKE SURE THAT WE HAD OUR TARGET VENDORS ACTUALLY ACCURATELY IDENTIFIED.
BUT ULTIMATELY AT THE END OF THE DAY, WE ONLY GOT TWO.
WE COULD REACH OUT, UM, TO THAT TARGET VENDORS, BUT WE DID NOT DO THAT IN THIS CASE.
I REALIZE THIS IS A REALLY, REALLY MAJOR UPGRADE IN WHAT WE'RE DOING.
UM, AND ARE WE GONNA BE INTO A LONG-TERM AGREEMENT WITH S A P WHERE THEY WILL CONSTANTLY DO UPGRADES AND THEY WILL UPGRADE OUR SYSTEM AS THEY DO THOSE KINDS OF UPGRADES? THAT'S PART OF OUR LONG-TERM CONTRACT.
THAT'S ACTUALLY, UM, THEY DO THAT FOR US TODAY.
AS WE'RE MOVING TO THE CLOUD AND TO A HYBRID ENVIRONMENT, THEY WILL CONTINUE TO DO THAT FOR US AS PART OF OUR LICENSING AGREEMENTS.
SO ON THIS SAME PAGE, JUST SO THAT I'M CLEAR ON THE PRICING YOU HAVE FOR VENDOR B, UM, 15 POINTS AND VENDOR A 4.5.
SO I AM TO, I AM ASSUMING THAT VENDOR B GAVE US A BETTER PRICING SINCE THEY GOT THE 15 POINTS.
BUT WE'RE GOING THE VENDOR THAT'S A LITTLE MORE EXPENSIVE ONLY BECAUSE WE FEEL THAT THEIR EXPERIENCE, BACKGROUND, AND PROPOSED PLAN WAS BETTER THAN VENDOR P.
AND THEN, UM, FOR CLARIFICATION ON NUMBER SEVEN, ITEM NUMBER SEVEN, THE HUMAN RESOURCES.
SO WE'RE, WHAT WE'RE PUTTING OUT IS REALLY MORE THE CONSULTANTS COMING IN TO HELP US IMPLEMENT THE SYSTEM.
BECAUSE WE'RE ALREADY SELECTED THE SYSTEM WE'RE GOING WITH, THIS IS MORE OF THE CONSULTANT COMING IN TO HELP US.
AND THEN NUMBER EIGHT IS THE COMPANY THAT'S COMING IN TO VERIFY THAT AS WE'RE DOING THAT, UM, MIGRATION FROM ONE SYSTEM TO ANOTHER, THEY'RE CHECKING THAT EVERYTHING IS RUNNING SMOOTHLY.
IF THERE'S AN ISSUE, THINGS AREN'T MATCHING, ET CETERA.
SO I WENT BACK TO THIS JUST TO SUMMARIZE THAT BACK.
THAT ARROW ON THE TOP IS YOUR QUALITY OVERSIGHT ACROSS THE ENTIRE PROGRAM.
THAT'S WHAT WE JUST ASKED FOR HERE IN POST.
AND THEN YOUR THREE ARROWS BELOW ARE SYSTEM INTEGRATORS OR CONSULTANTS WHO ARE COMING IN TO ACTUALLY DO THE HANDS-ON WORK TO PUT THOSE MODULES IN PLACE OF WHICH THE TOP HOUR WILL HELP US PROVIDE OVERSIGHT.
AND THE BOTTOM THREE, WERE NOT NECESSARILY THE SAME VENDOR AND DEFINITELY NOT THE SAME AS THE FIRST ONE BECAUSE THEY'RE INDEPENDENT.
AND BUT IT COULD BE THE POSSIBILITY.
THOSE LAST THREE, THE BOTTOM THREE ARE THE SAME VENDOR.
IN FACT, UM, BY RULE, THE TOP VENDOR CANNOT BE ONE OF THE THREE BOTTOM VENDORS.
WHICH I DO THINK IS WHY WE HAD JUST A FEW PEOPLE RESPOND WHO WANTED TO PLAY IN THE QUALITY SPACE, NOT IN THE INTEGRATOR SPACE.
AND WE BELIEVE THE SUCCESS FACTORS THAT FACTORS VENDOR, WE'LL FIND OUT AS WE PUT IT OUT.
WE THINK THE TWO ON THE BOTTOM COULD BE THE SAME VENDOR AS WELL.
WE'LL SEE AS WE GO THROUGH THE PROCESS.
JUST QUICKLY, SO WE'RE STICKING WITH S A P,
[00:30:01]
I'M NO PRO IN THIS AREA, BUT I'VE READ A LITTLE BIT ABOUT IT AND THERE'S A LOT OUT THERE SAYING THIS STUFF'S OUTDATED AND, YOU KNOW, BIG COMPANIES MOVE INTO MORE CLOUD-BASED SOLUTIONS.DID DID WE LOOK AT THAT? SS A P IS A, THE S FOUR HANA UPGRADE IS A CLOUD-BASED SOLUTION.
AND SO WE, WE THINK IT'S GONNA HAVE ALL THE, THE FLEXIBILITY AND, AND, UH, YOU KNOW, CAPABILITIES OF OF, OF SOME OF THE OTHERS.
WE CAN TALK ABOUT THE PROS AND CONS OF CLOUD-BASED SOLUTIONS IF YOU WOULD LIKE, I ALWAYS LIKE TO MAKE SURE WE EVER KNOW THAT JUST 'CAUSE IT'S CLOUD DOESN'T MEAN EVERYTHING'S GREAT, BUT IT IS THE SAME FLEXIBILITY OF ALL THE OTHER SOLUTIONS THAT ARE CLOUD-BASED SOLUTIONS AS WELL.
LIKE I KNOW ORACLE HAS ONE, DON'T THEY? THAT IS IS PRETTY POPULAR.
AND YOU COULD ALSO BUY ONE-OFF SOLUTIONS FOR PROCUREMENT, FOR HR, FOR FINANCE THAT DON'T TALK TO EACH OTHER.
YOU COULD BUY THEM INDIVIDUALLY IF YOU WANTED AND FIGURE OUT HOW TO MELD THEM TOGETHER.
WE WENT THROUGH ALL THAT ANALYSIS 18 MONTHS AGO AND AGREED TO STAY WITH AN, UH, THE S A P SUITE IN A HYBRID CLOUD ENVIRONMENT.
I THINK FOR THE ITEM NUMBER SEVEN, UM, BECAUSE THIS IS FOR OUR EMPLOYEE MANAGEMENT AND OUR EMPLOYEE BENEFITS, I, I, I REALLY FEEL LIKE IT'S IMPORTANT THAT WE, UM, TAKE INTO CONSIDERATION THE TIME IT WOULD TAKE FOR, FOR THEM TO GET USED TO THIS NEW SYSTEM.
UH, WE REALLY WANT TO MAKE SURE IT'S CLEAR ALSO BECAUSE WHAT WE DON'T WANT THEM TO COME BACK AND SAY IS, WELL, I THOUGHT I HAD THIS, OR I THOUGHT I DID THIS AND, AND THIS ISN'T WHAT WE, UH, HAD.
THE OTHER QUESTION I HAVE, WELL, THIS INCLUDE THEIR RETIREMENT, THE, THE RETIREMENT BENEFIT INFORMATION, OR ARE THEY GONNA HAVE TO GO TO THE OTHER LINK FOR T UM, T M R S OR THAT, THAT HAS NOT ALL BEEN DESIGNED YET.
BUT BENEFITS IS A MODULE THAT IS INCLUDED HERE.
WE'LL HAVE TO DECIDE WHAT CONNECTIONS OUT AND WHAT DO WE DO IN HOUSE AS WE DESIGN IT.
AND I, I THINK THAT'S, THAT'S WHAT I'D LIKE TO SEE.
AND I'M GLAD RENEE'S ON THE COMMITTEE IS JUST 'CAUSE I KNOW, UM, AS THEY PLAN FOR RETIREMENT AND AS WE WANT OUR EMPLOYEES TO THINK ABOUT RETIREMENT AND TO THINK WHERE THEY'RE INVESTING.
IF, IF IT COULD, IF IT COULD HELP WITH THAT, UH, THAT WOULD BE GREAT.
UM, I THINK THE BIGGEST CONCERN FOR ME IS, IS THAT SECURITY ASPECT.
UM, AND THE FACT THAT WHEN THEY'RE DOING THE, THE VERIFYING AND THE VAL VALIDATION IS IF THERE WAS A HUMAN ERROR, BECAUSE MOST ERRORS ARE HUMAN ERRORS IN THIS, IN THIS WORLD.
UM, HOW LONG, HOW CAN IT IMPACT, UM, THE SYSTEM AND, AND HOW, HOW MUCH WILL THIS SLOW DOWN, UM, WHAT WE DO HERE IN THIS CITY? YEAH, IT'S A, UM, IT'S A MULTI-YEAR PROGRAM.
OF WHICH WE'RE COMMITTING TO HERE, MULTIPLE PHASES, MULTIPLE MODULES AS WE GO.
THE I V AND V VENDOR ALLOWS US ON A MONTHLY BASIS TO GET INTO A TEMPO TO IDENTIFY THOSE RISKS AND SOLVE FOR THEM EARLY, NOT LATER AT IMPLEMENTATION.
SO THAT'S MORE OF A TEMPO WE HAVE TO BUILD WITH THEM.
BEN CHARLES IS GONNA MAKE, UH, JUST CLARIFY TO MAKE SURE, SO THIS IV V VENDORS THERE WHILE WE'RE DESIGNING AND PUTTING THE NEW SYSTEM IN PLACE.
SO THEY'RE THERE TO HELP US, UM, OVERSEE THAT, UM, BEFORE WE GO LIVE.
SO ONCE WE'RE LIVE, YOU KNOW, HOPEFULLY WE'VE TAKEN CARE OF ALL THOSE ISSUES DESIGNED AND WE DON'T HAVE THOSE ISSUES.
SO THIS IS REALLY MORE DURING THE MULTI-YEAR PROCESS WE'RE GONNA GO THROUGH TO PUT THE SYSTEM IN PLACE BECAUSE THEY HELP US DO THREE THINGS, PROCURE, DESIGN, AND THEN MANAGE THE IMPLEMENTATION AS IT GOES.
AND I HOPE THEY'RE LEARNING AS WE GO ALONG.
'CAUSE YOU KNOW, I'M, I'M WATCHING THE NEWS FOR THE, THE TEXAS, THE, THE TEXAS DEPARTMENT OF PUBLIC SAFETY, AND I'M LIKE, OH MY GOSH.
UM, THAT, THAT'S JUST A, A BAD SITUATION.
AND THAT'S WHAT HAPPENS WHEN YOU SECURITY IS A VERY HIGH PRIORITY.
UM, ALRIGHT, SO ITEM SEVEN WAS BRIEFING.
YOU HAVE OUR, OUR INFORMATION ITEM EIGHT.
I NEED A MOTION, UM, TO APPROVE.
I'LL MAKE THE MOTION TO APPROVE.
DO I HAVE A SECOND? I'LL SECOND IT.
IS THERE ANY FURTHER DISCUSSION? ALL IN FAVOR SAY AYE.
WE HAVE ANOTHER POST, POST SOLICITATION, HIGH PROFILE BRIEFING FOR INDIVIDUAL CONSIDERATION.
MADAME CLERK, CAN YOU PLEASE READ THE CAPTION? ITEM NUMBER NINE IS AN APPROVAL
[00:35:01]
TO PROCEED WITH SCHEDULING ONE CONTRACT FOR CITY COUNCIL CONSIDERATION TO PROVIDE THE OFFICE OF SUSTAINABILITY WITH AN ONSITE MUNICIPAL SOLAR PROVIDER WITH AN ESTIMATED INITIAL VALUE OF $30 MILLION FOR A 25 YEAR TERM.GOOD MORNING, UH, MADAM CHAIR COMMITTEE MEMBERS, DOUG MELNICK, CHIEF SUSTAINABILITY OFFICER.
THANK YOU SO MUCH FOR THE OPPORTUNITY PRES TO PRESENT.
UM, BEFORE I PASS IT OVER TO OUR ENERGY MANAGER, GOLDA O BENZO, WHO'S BEEN, UH, THE LEAD ON THIS, I JUST WANTED TO PROVIDE SOME VERY HIGH LEVEL CONTEXT, UM, ABOUT WHY THIS IS REALLY A BIG DEAL.
UM, FIRST I WANNA THANK TROY AND BEN AND THE PUBLIC UTILITIES TEAM.
UH, A LOT OF WORK WENT ON BEHIND THE SCENES EVALUATING, UM, THESE PROPOSALS.
UM, AND, UH, JUST AGAIN, WANNA THANK YOU GUYS FOR, FOR GETTING US TO WHERE WE ARE TODAY.
UM, THE GOAL OF THIS, THIS PROPOSAL WAS REALLY TO SORT OF SEE WHAT WE COULD DO WITH OUR ASSETS, OUR BUILDINGS, OUR PARKING LOTS.
UM, THE REAL GAME CHANGER, UH, WAS OUR, OUR, UM, OUR TIMING.
UH, THE, UM, THE, UH, INFLATION REDUCTION ACT HAS REALLY PROVIDED A BIG ECONOMIC BOOST TO THIS PROPOSAL.
UM, TRADITIONALLY, ENTITIES THAT DON'T PAY TAXES, UH, CAN'T BENEFIT FROM SOLAR TAX INCENTIVES.
UM, THE I R A HAD SOMETHING CALLED THE, UM, BASICALLY IT'S DIRECT PAY OPTION.
SO WE'RE ABLE TO CAPTURE THOSE SAVINGS AND THAT'S REALLY SORT OF, UM, CREATED AN OPPORTUNITY TO, TO HAVE A PROJECT THAT NOT ONLY BREAKS EVEN, BUT ACTUALLY, YOU KNOW, CAN, CAN, UM, PRODUCE SAVINGS.
THE OTHER THING I JUST WANTED TO HIGHLIGHT REALLY QUICKLY IS, UM, GOING THROUGH THIS SUMMER, UM, AND, UH, WORRYING ABOUT, UM, ENERGY AVAILABILITY AND HITTING THAT TIPPING POINT, UM, THE PROPOSAL THAT, THAT WE HAVE, UM, ONCE FULLY BUILT OUT ALL OF THE SOLAR AMOUNTS TO JUST UNDER 20% OF THE CITY'S, UM, TOTAL ELECTRICAL LOAD, COSTUS ELECTRICAL LOAD THAT'S GONNA ADD TO GRID RESILIENCE.
SO I JUST WANTED TO HIGHLIGHT THOSE TWO, TWO THINGS THAT, UM, UH, THERE'S, THERE'S A LOT OF BENEFIT TO THIS, UM, NOT ONLY FOR COSA, BUT ALSO FOR THE COMMUNITY AND ACTUALLY ERCOT AS AS WELL.
SO I'M GONNA PASS IT OVER TO, TO, UM, MS. OZU WHO'S GONNA WALK THROUGH THE, UM, POST SOLICITATION BRIEFING.
GOOD MORNING COUNCIL MEMBERS AND MADAM CHAIR.
UH, AGAIN, MY NAME IS GOLDA OZU.
I SIT IN THE OFFICE OF SUSTAINABILITY AS THE ENERGY MANAGER AND RESPONSIBLE FOR REDUCING THE ASSETS ON THE CITY FACILITIES.
THIS MORNING, I WILL BE GOING OVER, UM, THE POST SOLICITATION FOR THIS R F P.
UM, THE OFFICE OF SUSTAINABILITY, UH, RELEASED A SOLICITATION ON AUGUST 27TH, 2022, TO SOLICIT A QUALIFIED SOLAR PHOTOVOLTAIC PV PROVIDER TO DESIGN, ENGINEER, BUILD, OPERATE, MAINTAIN, AND DECOMMISSION A TURNKEY INSTALLATION OF MULTIPLE ROOFTOP AND PARKING CANOPY SOLAR PV SYSTEM AT SELECT SELECTED, UH, MUNICIPAL SITES.
UM, THE SOLICITATION TYPE WAS AN R F P.
THE PROPOSED TERM IS 25 YEARS.
THE ESTIMATED VALUE IS 30 MILLION INITIALLY.
AND THE CURRENT CONTRACT, THIS WILL BE A NEW CONTRACT FOR THE CITY.
THIS R F P, WHEN WE RELEASED IT, WE HAD FOUR MAIN OBJECTIVES.
UM, THE FIRST TO ADVANCE THE CITY'S SA CLIMATE READY PLAN.
BY INVESTING IN VISIBLE LOCAL SOLAR PROJECTS ON CITY FACILITIES.
THERE ARE APPROXIMATELY 42 SITES BEING PROPOSED.
THE NEXT OBJECTIVE IS TO SEEK MARKET DRIVEN RESPONSES TO DRIVE OPTIMAL PROJECT SIZE TERMS AND PRICE WITH A PREFERENCE FOR PROJECTS YIELDING COST SAVINGS, OR COST NEUTRALITY COMPARED TO EXPECTED COSA ELECTRICITY BILL.
UM, THIS ASPECT WAS VERY IMPORTANT WHEN ISSUING THIS R F P BECAUSE WE WANTED THE BEST OVERALL VALUE FOR THE CITY.
THE THIRD OBJECT IS TO ACHIEVE ECONOMIES OF SCALE AND STREAMLINE PROCUREMENT THROUGH AN AGGREGATED LIST OF VIABLE FACILITIES.
FAR MORE TIME AND COST, UM, EFFICIENT THAN EACH DEPARTMENT ACT IN ALONE.
AND THE FINAL OBJECTIVE WAS TO SELECT A THIRD PARTY, UH, TO DEVELOP PROJECTS WHERE NEITHER C P S ENERGY NOR THE CITY WOULD BE RESPONSIBLE FOR CONSTRUCTION OPERATION AND MAINTENANCE OF THE SOLAR PROJECTS.
NOW, BEFORE I GO INTO THE SITE EVALUATION PROCESS AND THE FINAL SITE SELECTION, I WOULD LIKE TO TAKE A MOMENT TO JUST BRIEFLY PROVIDE SOME BACKGROUND ON ONSITE SOLAR.
SO WHAT IS ONSITE SOLAR? IT IS CAPTURING SOLAR ENERGY WITH PHOTOVOLTAIC PV PANELS
[00:40:01]
ONSITE OR AT YOUR FACILITY.THE PV PANELS AND ASSOCIATED ELECTRICAL EQUIPMENT GENERATES ELECTRICITY BY CONVERTING THE SUN'S ENERGY FROM DIRECT CURRENT DC TO ALTERNATING CURRENT AC TO BE USED BY THE FACILITY.
THE GRAPHIC SHOWN HERE IS A SIMPLE LAYOUT OF ONSITE SOLAR.
IT CAN BE EITHER ROOFTOP OR A PARKING CARPORT OR A COMBINATION.
IN THIS CASE, UH, WE PROPOSE IT'S GONNA BE BEHIND THE METER, UH, OF THE FACILITY ON ONSITE SOLAR GENERATES CLEAN ENERGY TO BE USED DIRECTLY BY THE FACILITY.
THE SYSTEM DIRECTLY REDUCED THE FACILITY'S NEED TO PURCHASE ELECTRICITY FROM THE C P S ENERGY, ELECTRIC, ELECTRIC ELECTRICAL GRID.
AND WHEN THE SUN IS NOT SHINING, THE, THE FACILITY WILL BUY POWER FROM C P SS TO ENSURE THE PROCESS OR THE SUCCESS OF THIS PROCESS.
UM, AND THIS IS A UNIQUE R F P, IT WAS CRITICAL TO PROPERLY SELECT THE MUNICIPAL SITES AND TO PROPERLY SELECT THE SITES.
WE ENGAGE VARIOUS CITY DEPARTMENTS TO HELP WITH THE SELECTION.
UH, WE REQUESTED INPUT FROM CITY DEPARTMENTS ON POTENTIAL SITES.
THE POTENTIAL SITES MUST MEET INITIAL MINIMUM CRITERIA OF MINIMUM FACILITY FOOTPRINT OR SIZE OF APPROXIMATELY 15,000 SQUARE FEET OR 1400 METERS SQUARED TO TRANSLATE TO THE BASE ASSUMPTION OF APPROXIMATELY 25 KILOWATTS KW OR A LARGER, UM, SIZE PER FACILITY.
THE SITES WERE EVALUATED BY THE OFFICE OF SUSTAINABILITY AND ROCKY MOUNTAIN IN INSTITUTE, OUR CONSULTANT ON THIS, UH, R F P USING GOOGLE PROJECT SUNROOF TO ASSESS SHADING AND THE NATIONAL RENEWABLE ENERGY LABORATORY AND RAILS SOLAR PV MODEL SOFTWARE, PV WATTS TO ESTIMATE SYSTEM SIZE.
WE ALSO DID AN INITIAL EVALUATION OF ROOF CONDITIONS OR OTHER SIDE CONSTRAINTS AND, AND EVALUATED THE BUILDING ELECTRICAL LOAD TO MATCH POTENTIAL SYSTEM SIZE.
WE WANTED TO IDENTIFY POTENTIAL PLANS FOR FUTURE SITES TO AVOID FUTURE DISRUPTIONS.
AND WE WERE VIEWED OVER A HUNDRED OF THE MUNICIPAL SITES, WHICH INCLUDED OFFICE COMMUNITY CENTERS, LIBRARIES, ANIMAL CARE FACILITIES, SERVICE CENTERS, AND ENTERTAINMENT CONVENTION VENUES, PUBLIC SAFETY FACILITIES, PARKING GARAGES, AND PARKING LOTS.
AND SO HERE ARE THE FINAL SITE EVALUATION RESULTS.
WE IDENTIFIED 42 SITES ACROSS EIGHT CITY DEPARTMENTS.
THE CHART ON THE RIGHT SHOWS A BREAKDOWN OF THE SITES BY DEPARTMENTS.
THE ESTIMATED TOTAL CAPACITY OR THE ANNUAL ELECTRICAL, UH, BEING PRODUCED IS APPROXIMATELY 12.5 MEGAWATTS MW.
THIS CAPACITY WILL OFFSET APPROXIMATELY 42% OF THE TOTAL ELECTRICITY LOAD OF THE SITE SELECTED.
I KNOW DOUG DID MENTION THIS WOULD ON THE CITY'S TOTAL SITE OR TOTAL PORTFOLIO, IT'S APPROXIMATELY 20 SOMETHING PERCENT, BUT 42 FOR THE, THE 42 SITES SELECTED.
AND NOW, UH, THE NEXT THREE SLIDES THAT I WILL GO OVER, UM, I WILL DISCUSS THE EVALUATION PROCESS AND RESULTS WITH THE RECOMMENDED AWARD FROM THE EVALUATION COMMITTEE.
THIS R F P WAS A TWO PHASE PROCESS AND HERE ARE THE FINAL SCORES FROM PHASE ONE.
THE EVALUATION COMMITTEE SCORED THE RESPONDENTS BASED ON THEIR EXPERIENCE, BACKGROUND, AND QUALIFICATIONS.
UH, VENDOR A FINAL SCORE WAS 83.28, VENDOR B 75.5, VENDOR C 58.5, AND VENDOR D 38.5.
THE EVALUATION COMMITTEE SELECTED VENDORS A, B, AND C TO MOVE TO THE SECOND OR THE FINAL PHASE.
A BEST AND FINAL OFFER BAFFLE WAS ISSUED TO THESE THREE RESPONDENTS.
UM, BEFORE I MOVE TO THE RECOMMENDED AWARD, I WOULD LIKE TO POINT OUT THAT VENDOR A PROPOSED A LEASE OPTION, BUT THIS IS NOT RECOMMENDED BY THE EVALUATION COMMITTEE SINCE THE PURPOSE OF THIS R F P IS TO PROVIDE THE BEST VALUE FOR THE CITY, THE BEST VALUE FOR THE CITY IS THE PER PURCHASE OPTION.
THIS IS THE RECOMMENDED AWARD BY THE EVALUATION COMMITTEE.
AND HERE ARE THE FINAL SCORES.
VENDOR A AT 86.06, VENDOR B AT 63.41.
VENDOR B ALSO HAD HAD AN OPTION TWO AT 62.27.
THE DIFFERENCE BETWEEN VENDOR B TWO'S OPTION, UM, WERE THE NUMBER OF SITES PROPOSED.
AND AS YOU MAY NOTICE, VENDOR C RESULTS ARE NOT SHOWN BECAUSE THEY WERE DISQUALIFIED DUE TO POLITICAL CONTRIBUTIONS MADE DURING THE PROHIBITED BLACKOUT PERIOD.
THIS IS BASED ON THE DUE DILIGENCE REPORT BY THE AUDIT DEPARTMENT.
WHICH NOW LEADS ME TO MY FINAL SLIDE.
[00:45:01]
THE DUE DILIGENCE REPORT FROM THE FINANCE AND AUDIT DEPARTMENT.NUMBER OF VENDORS NOTIFIED 42 NUMBER OF VENDORS AT THE PRE-SUBMIT A CONFERENCE FOR NUMBER OF RESPONSES RECEIVED.
FIVE AND ONE RESPONDENT WAS AGAIN, DISQUALIFIED DUE TO THE POLITICAL CONTRIBUTIONS MADE DURING THE PROHIBITED BLACKOUT PERIOD.
RESULTS OF MINIMUM REQUIREMENTS REVIEW, NO MATERIAL FINDINGS AND RESULTS OF DUE DILIGENCE REVIEW, NO MATERIAL FINDINGS.
UM, COUNCIL MEMBERS AND MADAM CHAIR, THIS CONCLUDES MY PRESENTATION FOR THE POLL SOLICITATION BRIEFING OF THE ONSITE MUNICIPAL SOLAR R F P.
AND WE ARE HERE TO ANSWER ANY QUESTIONS.
UH, I THINK THE, WHAT I'M REALLY EXCITED ABOUT THIS 'CAUSE WE'VE TALKED ABOUT THIS IN CHECK COMMITTEE, I FEEL LIKE WHAT WAS A VERY LONG TIME.
SO TO BE HERE TODAY, UH, IS VERY EXCITING.
BUT I DO LOOK FORWARD TO ANY QUESTIONS MY COMMITTEE MEMBERS MIGHT HAVE.
SO, ON THE NOT RECOMMENDED, THE LEASE OPTION VENDOR A, THAT'S SEPARATE FROM THE ORIGINAL PROPOSAL.
WHEN YOU HAD IN THE PREVIOUS SLIDE, VENDOR A, THEY SUBMITTED, UM, WITH THE RESPONSES THAT WE RECEIVED, THEY DID SUBMIT BOTH OF THOSE PROPOSAL.
SO ONE LEASE OPTION AND ONE NON-LEASE OPTION? CORRECT.
AND THEN YOU HAVE VENDOR A AND B, RIGHT? THE FIRST ONE THAT YOU HAD ON PAGE SEVEN, BUT THEN YOU, DID YOU RESCORE THEM ON PAGE NINE? WERE THEY RESCORED? I, I WAS A LITTLE CONFUSED THERE.
YEAH, LET, LEMME KIND OF WALK THROUGH THE PROCESS WITH THIS, UM, PROCUREMENT.
THE FIRST PHASE WAS, UM, A PHASE TO BASICALLY QUALIFY THE VENDORS.
SO WE WANTED TO LOOK AT THEIR EXPERIENCE, BACKGROUND AND QUALIFICATIONS.
AND AFTER THAT, ONCE WE QUALIFIED THEM WORKING WITH THE, WORKING WITH, UM, OFFICE SUSTAINABILITY AND EVALUATION TEAM, WE MOVED THEM TO A SECOND PHASE.
AND WE ASKED FOR A PROPOSAL FROM THEM.
SO TWO SEPARATE SCORINGS, TWO SEPARATE MATRICES WHEN THEY, UM, PROPOSED UNDER THE SECOND PHASE, THERE'S A LEASE OPTION AND A PROCUREMENT OPTION.
AND THAT'S WHY YOU'RE GONNA SEE MULTIPLE MATRICES, UM, IN THE SECOND PHASE.
SO YOU'RE GONNA HAVE TWO EVALUATIONS, TWO SCORE, TWO SETS OF SCORES, ONE FOR QUALIFYING THEM AND ONE BASED ON THEIR R F P IN THE SECOND PHASE.
SO WHEN THE QUALIFYING, LIKE FOR VENDOR B, THEY GOT 75 POINTS, BUT THEN ONCE THEY RE THEY SUBMITTED THEIR PROPOSAL, THEN THEIR SCORE DROPPED BASED ON THEIR PROPOSAL.
'CAUSE THEIR PROPOSAL'S ACTUALLY GONNA BE LOOKING AT THE ACTUAL SITES AND LOOKING AT, UM, THEIR PLANS AND PUTTING, UM, SOLAR IN ON TOP OF THOSE BUILDINGS AND CARPORTS MM-HMM.
AND THEN ALSO BASED ON THOSE DESIGNS, WE'RE ALSO LOOKING AT THEIR, UH, NET PRESENT VALUE OF THEIR FINANCIAL SAVINGS AS WELL.
SO THE, THEY COULD HAVE CHANGED SUBSTANTIALLY BETWEEN PHASE ONE AND PHASE TWO.
UH, COUNCIL MEMBER WHITE, ANY QUESTIONS? COUNCILMAN BROOKE? COURAGE.
UH, I HOPE, I'M EXCITED TO FIND OUT THAT MY NEW DISTRICT NINE SENIOR CENTER IS ONE OF THOSE PLACES THAT WAS SELECTED BECAUSE DURING THE PROCESS OF BUILDING THAT, WE HAD ASKED SEVERAL TIMES, CAN WE PUT SOLAR ON THIS? AND IT ENDED UP MAYBE BEING MORE, UH, EXPENSIVE IN THE WHOLE PROCESS OF BUILDING THAT SENIOR CENTER.
BUT I ALSO KNOW DISTRICT 10 SENIOR CENTERS IN A GREAT LOCATION, NOT MANY TREES AROUND IT TO, UH, ABSORB SOLAR ENERGY.
SO I HOPE BOTH OF US KIND OF, UH, WORK THAT OUT.
UH, IF I CAN THAT REALLY QUICKLY, COUNCILMAN, ONE OF THE THINGS THAT WE'RE ALSO DOING AS A PART OF THE CONTRACT NEGOTIATIONS, WE WANT TO BUILD SOME FLEXIBILITY INTO THIS, RIGHT? UM, THERE'S LOTS OF BOND PROJECTS COMING.
SO, UM, YEAH, WE WANNA MAXIMIZE THIS OPPORTUNITY SO WE CAN GO BACK AND TAKE A LOOK AT THOSE SITES SPECIFICALLY.
RIGHT NOW, ARE, ARE THESE SITES ALL EXISTING OR ARE SOME OF THEM PROPOSED IN THE BOND PROJECT? CURRENTLY WHAT WE PUT OUT WE'RE JUST OUR CURRENT ASSETS.
UM, AT THE SAME TIME WE'VE BEEN DOING SOME, HAVING SOME PRELIMINARY DISCUSSIONS WITH OTHER DEPARTMENTS FOR UPCOMING BOND PROJECTS.
SO WE'RE GONNA BE, I THINK WHAT WE WANT TO DO IS MAKE SURE THAT WE'RE BUILDING THAT OPTION INTO THE CONTRACT SO WE CAN START WORKING WITH THOSE FUTURE, UM, SITES TO MAKE SURE WE CAN INCORPORATE IT WHERE WE CAN FOR THE IMPLEMENTATION.
HOW MANY YEARS DURING THIS WHOLE PROCESS DO WE THINK IT'LL TAKE TO PUT THE SYSTEMS UP AND GET 'EM RUNNING? CAN WE LOOK AT WASN'T A TWO YEAR? UM, I BELIEVE, I BELIEVE IT'S ABOUT A TWO YEAR, UM, BUILD OUT PROCESS.
UM, NOW I SEE YOU HAVE CARPORTS, FOR EXAMPLE.
ARE THOSE EXISTING OR WOULD CARPORTS BE BUILT TO INCLUDE SOLAR ON TOP? THOSE WOULD BE NEW CONSTRUCTION.
SO I COULD SAY WE GOT A GREAT PARKING LOT, LEX, MY D NINE SENIOR SENATOR THAT'S ALWAYS FULL OF SUN AND HUNDREDS OF CARS EVERY DAY.
THE KEY, THE ONE THING I'LL, UM, MENTION THE COMMITTEE MEMBERS, ONE OF THE DRIVING FORCES OF THIS IS, UM, FACILITY DEMAND, RIGHT? SO, UM, THERE
[00:50:01]
ARE LOTS OF FACILITIES AROUND THE CITY THAT HAD TOO LOW OF A DEMAND THAT THE ECONOMICS WEREN'T, WEREN'T THERE.I JUST WANTED TO GO AHEAD AND BRING THOSE.
WE'LL GET YOU WHAT YOU CAN COUNCILOR, BRING THOSE FACTORS UP.
UH, IS THERE ANY OTHER DISCUSSION? CAN I GET A MOTION AND A SECOND TO APPROVE? I MOVE TO APPROVE.
I HAVE A MOTION AND A SECOND THERE BEING NO FURTHER DISCUSSION.
[Final Internal Audit Report ]
THREE FINAL AUDIT REPORTS FOR APPROVAL.UH, MME. KIRK, CLERK, CAN YOU PLEASE READ THE CAPTION ITEM? ITEM NUMBER 10 IS ACCEPTANCE OF THE OFFICE OF THE CITY AUDITOR REPORT AAU 21 DASH 0 1 3, AUDIT OF FINANCE, ACCOUNTS RECEIVABLE AND C COMMITTEE MEMBERS.
IF I COULD SEND YOU, WE'VE GOT THREE AUDIT REPORTS TO, UH, TO PRESENT.
AS YOU MENTIONED, THE FIRST TOUR ARE FINANCE THAT THE OTHER ONE THAT IS INNOVATION AND I T S D.
UH, FOR THIS FIRST ONE, AUDIT OF ACCOUNTS RECEIVABLE WITHIN THE FINANCE DEPARTMENT.
AND BUDDY VARGAS WILL GO AHEAD AND WALK US THROUGH THIS, THIS AUDIT PROJECT.
THE AUDIT OBJECTIVE, WHICH TO DETERMINE IF ACCOUNTS RECEIVABLE ARE PROPERLY REPORTED AND MANAGED.
OUR OVERALL CONCLUSION WITH THE WITH FOR THIS AUDIT IS ACCOUNTS RECEIVABLES ARE NOT PROPERLY MANAGED.
COUPLE OF POSITIVE RESULTS OF THE JOURNAL ENTRIES ARE, UH, EFFECTIVE.
WE ALSO, UH, LOOKED AT REFUNDS AND THEY'RE PROPERLY SUPPORTED AND THEY WERE PROPERLY AUTHORIZED AREAS IN NEED OF IMPROVEMENT.
THE CUSTOMER MASTER FILE, THERE WAS LACK OF DOCUMENTATION FOR THE CREATION AND MODIFICATION OF ACCOUNTS, PAST DUE ACCOUNTS.
THE COLLECTION EFFORTS WERE NOT TIMELY.
AND ALSO THERE WAS A LACK OF DOCUMENTATION ALLOWANCE FOR DAAL ACCOUNTS.
THERE WERE INCONSISTENCIES IN THE CALCULATION FOR THAT.
AND ALSO THE POLICIES ARE OUTDATED.
AND FINALLY, USER ACCESS WAS EXCESSIVE.
UH, MANAGEMENT AGREED WITH THESE RECOMMENDATIONS AND CREATED POSITIVE CORRECTIVE ACTION PLANS.
THERE IS ONE MANAGEMENT RESPONSE THAT THE ESTIMATED COMPLETION DATE IS JANUARY OF 2024.
SO THAT'S WHEN WE'LL BE BACK IN THERE FOLLOWING UP TO SEE IF THESE, UH, RECOMMENDATIONS HAVE BEEN IMPLEMENTED.
AND THAT CONCLUDES MY PRESENTATION.
UM, MANAGEMENT IS HERE TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE.
DO WE HAVE ANY QUESTIONS? UH, YES.
UH, I FIND THIS DISCONCERTING THAT WE HAD THIS MANY PROBLEMS. UH, WHEN WE TALK ABOUT, UH, WHAT WAS THE, UH, ORGANIZATION THAT, THAT WAS EXAMINED FOR THIS, THE, THIS IS A CITYWIDE.
OKAY, SO CITYWIDE, UH, I KNOW ONE OF THE THINGS WE'VE DONE IS MOVED AWAY FROM, UH, ACCEPTING CASH, UH, AND NOW IT'S ALMOST ALL CREDIT CARDS, ET ET CETERA.
UM, AND I WOULD'VE THOUGHT THAT IT WOULD'VE MADE IT A LOT EASIER TO KEEP TRACK OF ALL THIS DATA, UH, THAN IT, THAN IT'S BEEN IN THE PAST.
SO, UH, DID WE HAVE ANY EXPLANATION OF WHY THEY WERE HAVING THESE, THESE PROCESS? SO COUNCILMAN MAYBE, UM, I CAN ASK TROY TO SUMMARIZE SOME OF WHAT OCCURRED HERE.
UM, SOME OF THIS HAS TO DO WITH HOW THE DOCUMENTATION IS KEPT WITHIN THE DEPARTMENTS AND HOW WE SET THOSE STANDARDS.
SO, FOR EXAMPLE, WHEN KEVIN'S DOING AN AUDIT IS EXPECTING WHEN THEY'RE PULLING SAMPLES THAT WE CAN TURN THAT AROUND PRETTY QUICKLY.
UM, BUT WE DID GO BACK IN ALL THE DOCUMENTS THAT THEY WERE LOOKING FOR.
WE IDENTIFIED THOSE, WE PULLED THEM.
BUT IT'S REALLY THE, IT'S REALLY ABOUT THE, THE SYSTEM BEHIND THAT, THAT WE NEED TO MAKE SURE, AND I SAY SYSTEM REALLY THE PROCESSES BEHIND THAT THAT NEED TO BE IMPROVED SO THAT IT'S MORE STANDARD ACROSS THE CITY.
BUT IF I COULD JUST HAVE TROY TAKE A COUPLE OF MINUTES TO TOUCH ON THE FINDINGS, WHAT THEY REALLY MEAN, AND THEN HOW WE'RE ADDRESSING THOSE GOING FORWARD, I WOULD LIKE TO HEAR THAT.
AND IF I MAY, JUST, JUST TO DRAW A DISTINCTION, YOU MENTIONED THE COUNTS RECEIVABLE, WHICH THIS IS ON THE CASH.
UH, THOSE ARE TWO DISTINCT, UH, PROCESSES.
AND THE NEXT AUDIT WE'RE GONNA PRESENT IS THE CASH HANDLING CITYWIDE, WHICH IS VERY GOOD RESULTS.
SO AGAIN, THIS IS MORE THE BEHIND THE SCENES FOR THE RECEIVABLES, KIND OF AS BEN MENTIONED, AND TROY WILL GO OVER.
YEAH, I THINK, I THINK BEN, UM, KIND OF SUMMARIZED IT PRETTY, UH, FAIRLY WELL, AND I'LL KIND OF GO INTO SOME MORE OF THE DETAILS.
BUT ONE OF THE THINGS WHEN KEVIN WAS DOING HIS AUDIT, UM, WE HAVE MULTIPLE SECTIONS, MULTIPLE DEPARTMENTS, MANAGING ACCOUNTS, RECEIVABLES AND MANAGING MASTER DATA.
ONE OF THE CHALLENGES THAT WE HAD WAS LOCATING THE SUPPORTING DOCUMENTATION.
UM, AFTER HE INCLUDED HIS AUDIT AND ACTUALLY DURING HIS AUDIT, UM, I SAT DOWN WITH MY TEAM, I SAID, LET'S GO THROUGH AND REEXAMINE THESE.
WE WENT BACK AND WE DID FIND THE SUPPORTING
[00:55:01]
DOCUMENTATION.ONE OF THE CHALLENGES WE HAVE AND WE NEED TO DO A BETTER JOB OF IS NOW PUTTING PROCESSES AND PROCEDURES TO MAKE SURE WHEN, FOR EXAMPLE, UM, EITHER KEVIN OR OUR EXTERNAL AUDITORS OR REQUESTING THAT DOCUMENTATION, WE HAVE A PROCESS WHERE IT'S ORGANIZED TO WHERE WE CAN ACTUALLY PULL THAT.
SO WHEN IT CAME TO THE SUPPORTING DOCUMENTATION, WE HAD IT AVAILABLE.
WE, UM, JUST DID NOT HAVE IT ORGANIZED AND TO WHERE WE COULD ACTUALLY GET TO IT VERY, VERY QUICKLY.
BUT AFTER THAT RESEARCH, WE FOUND IT.
THE OTHER ITEM THAT, UM, THAT KEVIN AND HIS TEAM TALKED ABOUT WERE THE ALLOWANCE FOR DOWNFLOW ACCOUNTS.
THAT IS, UM, IT HAS NOT BEEN UPDATED IN PRACTICE.
I BELIEVE WE'RE DOING IT CORRECTLY.
BUT WHAT HAPPENED IS, AND WE TALKED ABOUT SS A P, WHEN WE ORIGINALLY PUT SS A P IN PLACE, WE DID NOT HAVE ANY HISTORICAL DATA TO BASE OUR ESTIMATES FOR OUR ALLOWANCE AT OUTFLOW ACCOUNTS.
SO WE CAME UP WITH A METHODOLOGY, UM, UM, OF HOW WE WERE ESTIMATING THE, THE, THE AMOUNT THAT WE WOULD NOT COLLECT.
NOW THAT WE HAVE SS A P IN PLACE, WE'VE HAD IT IN PLACE FOR A NUMBER OF YEARS.
WE NOW HAVE SOME HISTORY THAT WE CAN BASE HISTORICALLY WHAT THOSE ESTIMATES SHOULD LOOK LIKE.
AND SO WE MIGRATED FROM OUR ACCEPTED POLICIES TO USING HISTORICAL ESTIMATES.
WHAT WE NEED TO DO NOW IS TO RIGHTSIZE AND, UM, TO ADJUST OUR ACCOUNTING POLICIES, OUR ADMINISTRATIVE DIRECTIVES TO REFLECT OUR ACTUAL PRACTICE.
UM, WHEN IT IT COMES TO THE USER.
UM, USER TESTING WE DID THAT HAS BEEN CORRECTED.
UM, WE ARE PROBABLY, JUST TO BE HONEST AND CANDID ON OUR ADMINISTRATIVE POLICIES, AS FAR AS UPDATING THAT WE ARE, WE ARE OPERATING CORRECTLY, WE'RE RUNNING A LITTLE BIT BEHIND.
WE'RE EXAMINING NOT ONLY THIS POLICY BUT ALL POLICIES IN FINANCE.
AND WE'RE GONNA BE HAVING THOSE UPDATED, NOT JUST FOR ACCOUNTS RECEIVABLE, FOR ALL THOSE IN THE MARCH TIMEFRAME.
SO WE'RE TAKING A BROADER LOOK ACROSS THE ORGANIZATION, ACROSS OUR POLICIES TO MAKE SURE THAT WE'RE NOT JUST PIECEMEALING THINGS.
SO AT THE END OF THE DAY, UM, A LITTLE BIT OF WORK TO DO ALL THE SUPPORTING DOCUMENTATION IS THERE OR POLICIES NEED TO BE UPDATED.
BUT I'M COMFORTABLE WHEN IT COMES TO, FROM AN ACCOUNTING STANDPOINT, FOR OUR ALLOWANCE ESTIMATES, FOR OUR ALLOWANCE FOR DOUBTFUL ACCOUNTS ARE BEING DONE CORRECTLY.
WE JUST NEED TO MODIFY OUR ADMINISTRATIVE DIRECTORS TO REFLECT OUR PRACTICE.
I KNOW I DON'T HAVE MUCH TIME, I JUST WANT TO COMMENT THAT IT SEEMS TO ME WE'VE ALWAYS HAD POLICIES AND PROCEDURES IN EFFECT.
AND NOW WE'RE SAYING WE NEED TO DEVELOP NEW ONES.
UH, NEW ONES MAY NOT SOLVE A PROBLEM IF THERE ARE DEPARTMENTAL ISSUES WHERE THEY'RE NOT FOLLOWING THE POLICIES AND PROCEDURES THAT HAVE BEEN IN EFFECT.
SO I'D BE INTERESTED IN FINDING OUT WHICH DEPARTMENTS, UH, WERE HAVING THE GREATEST PROBLEMS AND, UH, HOW THEY ARE GOING TO GO AHEAD AND CORRECT THE PROBLEMS THEY WERE HAVING IN THEIR DEPARTMENTS.
AND, AND WE'LL CERTAINLY DO THAT AS PART OF THIS PROCESS.
I MEAN, WE'RE GOING TO, AND IT'S NOT DEVELOPING NEW POLICIES AND PROCEDURES.
I THINK IT'S UPDATING OUR CURRENT POLICIES TO REFLECT WHAT WE'RE DOING TODAY.
AND THEN AS PART OF THAT, WE'RE GOING TO TRAIN ALL OF THE STAFF TO MAKE SURE THAT THEY'RE ADHERING TO THE NEW POLICIES.
AND CHAIR, I CAN JUST ADD ONE PIECE TO THAT.
SO WHEN WE TALK ABOUT THE ADMINISTRATIVE DIRECTORS AND THE POLICIES, AGAIN, AS TROY MENTIONED, WE TALK ABOUT ALLOWANCE FOR DOUBTFUL ACCOUNTS.
REALLY WE'RE TRYING TO ESTIMATE FOR AUDIT PURPOSES WHAT WE THINK WE'RE NOT GONNA BE ABLE TO COLLECT.
WE DIDN'T HAVE A LOT OF DATA TO SUPPORT THAT EARLY ON.
WE'RE TALKING ABOUT THE S A P IMPLEMENTATION HAPPENED 20 YEARS, 20 SOMETHING YEARS AGO.
UM, AS WE MIGRATED FROM AN OLD MAINFRAME BASE BASE SYSTEM TO THAT NEW SYSTEM, WE DIDN'T HAVE A LOT OF THAT.
AS WE BUILT THE DATA, THE PRACTICE WITHIN FINANCE MIGRATED TO USING THAT DATA TO CALCULATING IT.
AND AS YOU CAN IMAGINE, OUR EXTERNAL AUDITORS, THEY'RE GONNA FOCUS ON THAT AREA.
SO WHEN TROY TALKS ABOUT IT BEING DONE CORRECTLY, THEY'RE LOOKING AT IT, WHAT KEVIN IDENTIFIED WAS, HEY, YOU GUYS NEVER WENT BACK AND UPDATED THIS ADMINISTRATIVE DIRECTIVE TO MATCH WHAT YOU'RE DOING IN PRACTICE AND WHAT YOU'RE DOING WITH YOUR EXTERNAL AUDITORS.
THE DEPARTMENTAL PIECE, IT, THE DOCUMENTATION IS THERE, IT'S JUST NOT ORGANIZED WELL.
AND PART OF WHAT TROY'S TALKING ABOUT, REVISING THAT AD TO MAKE IT REALLY CLEAR ABOUT WHERE WE WANT IT STORED, WHAT FORMAT WE WANT IT IN SO THAT WE CAN PULL IT QUICKLY.
THERE'S CERTAINLY WORK HERE TO DO.
UM, I WANNA THANK KEVIN AND, AND BUDDY 'CAUSE I THINK THEY DID A GREAT JOB IN TERMS OF IDENTIFYING ISSUES HERE.
THAT'S BEEN OUR GOAL, RIGHT? AS, AS WE DO THESE THINGS, WE WANT TO BE ABLE TO IMPROVE IF WE HAVE ISSUES AND, AND WE'VE GOT SOME, WE GOT A LITTLE BIT OF WORK TO DO HERE.
BUT FROM A PRACTICAL STANDPOINT, AND, AND KEVIN CAN JUMP IN HERE, I THINK IT'S A, IT'S MORE ABOUT PROCESSES, DOCUMENTATION.
IT WASN'T IDENTIFIED THAT THERE'S A, THERE'S A FINANCIAL DISCREPANCY OF SOME KIND OF SIGNIFICANT ISSUE HERE.
IT'S, WE JUST NEED TO GET BETTER ABOUT HOW WE'RE COLLECTING OUR DOCUMENTATION.
AND, AND I'LL AGREE WITH, WITH THAT STATEMENT, IT WAS, IT WAS SLOPPINESS IN THE DOCUMENTATION AND MAINTENANCE OF, OF, UH, THE ACCOUNTS RECEIVABLE PROCESS WHEN IT COMES TO COLLECTIONS, WHEN IT COMES TO THE ALLOWANCE, UH, FOR DOUBTFUL ACCOUNT SET UP.
AND SO THAT'S WHAT THEY'RE WORKING ON.
THANK YOU, UH, JUDY, ANY QUESTIONS? SO WILL THE NEW SYSTEM HELP YOU WITH SOME OF THAT? I MEAN, 'CAUSE USUALLY YOU
[01:00:01]
CAN SET THE SYSTEM UP TO, TO CALCULATE THAT, YOU KNOW, THAT CALCULATION ON THE ALLOWANCE FOR UM, DOUBTFUL ACCOUNTS, AND THEN ALSO FOR THE DOCUMENTATION, RIGHT? SOME OF THE SYSTEMS NOW YOU CAN ACTUALLY SCAN THINGS IN AND HAVE IT THERE AS BACKUP WHERE YOU DON'T HAVE TO PULL IT FROM A FILE.IS THAT WHAT YOU'RE LOOKING AT? YEAH, CERTAINLY.
AND WHEN IT COMES TO MASTER DATA, AND, AND THERE ARE OTHER THINGS THAT WE'RE LOOKING AT AS WELL, BUT CERTAINLY THE NEW SYSTEM CAN SCAN AS WE DESIGNED IT.
AS, UM, CRAIG MENTIONED, THAT'LL BE SOMETHING THAT WE CAN LOOK FROM A DESIGN FEATURE TO ACTUALLY EMBED IN.
SO FROM A CALCULATION STANDPOINT, WE HAVE THE HISTORY AVAILABLE TO CALCULATE THOSE ALLOWANCES.
BUT CERTAINLY IF THERE ARE METHODOLOGIES THAT WE CAN EMBED INTO THE NEW SYSTEM FROM A DESIGN STANDPOINT, WE CAN DO THAT AS WELL.
WHEN IT COMES TO MASTER DATA, I WILL ALSO MENTION THAT WE ARE ACTUALLY LOOKING AT WORKING WITH I T S D, WE HAVE, UM, PUT ADDITIONAL PROCESSES IN PLACE.
AND THEN WE ARE LOOKING FOR A THIRD PARTY TO HELP HELP WITH THAT AS WELL.
AND THEN WE WILL EMBED THAT INTO THE NEW SYSTEM.
YOU KNOW, UH, REALLY APPRECIATE THAT COMMENT.
I SHOULD HAVE PROBABLY SAID THIS ON THE SS A P ITEM.
OUR GOAL IS NOT TO TAKE WHAT WE DO TODAY AND PUT IT INTO A NEW SYSTEM.
OUR GOAL IS TO LOOK AT EVERYTHING THAT WE'RE DOING IN THOSE ELEMENTS THAT CRAIG COVERED AND TALK ABOUT HOW CAN WE USE THE SYSTEM TO HELP US DO ALL OF THIS BETTER, EASIER, FASTER, AND MORE EFFICIENT.
SO THOSE ARE ALL THE DESIGN ELEMENTS, UM, THAT WE'RE GONNA BE LOOKING AT.
SO THANK YOU FOR, FOR BRINGING THAT UP.
BUT YEAH, THAT'S, THAT'S OUR GOAL WITHIN NEW SYSTEM AS WELL.
COUNCIL MEMBER WHITE, NO OTHER QUESTIONS.
AND, AND I THINK THIS IS WHAT WE HAVE AUDIT FOR, IS TO IDENTIFY WHERE WE NEED TO IMPROVE.
AND I THINK THE, UH, WHOLE CONVERSATION ABOUT ADMINISTRA, UH, ADMINISTRATIVE DE DIRECTIVES, I THINK WE'RE GONNA SEE THAT COME UP QUITE A BIT IN YOUR AUDITS IN DIFFERENT DEPARTMENTS.
UH, BECAUSE SOMETIMES WE, SOMETIMES THE CITY AND AS A FORMER CITY EMPLOYEE, WAITS A LITTLE TOO LONG BEFORE THEY ADDRESS ADMINISTRATIVE DIRECTIVES.
SO I LOOK FORWARD TO, UH, GETTING THE UPDATE, UH, IN JANUARY OF THE, THE IMPROVEMENTS IN PROGRESS WE'VE MADE.
I HAVE A MOTION TO, TO ACCEPT.
WE HAVE A MOTION AND A SECOND.
THAT'S YOU, UH, CITYWIDE CASH, UM, HANDLING AUDIT BUDDY WILL ALSO WALK US THROUGH, UH, THIS, UH, AUDIT REPORT.
I'LL START OFF WITH THE AUDIT OBJECTIVE.
IT WAS TO DETERMINE IF CASH RECEIPTS ARE ADEQUATELY CONTROLLED AND COMPLIANCE WITH CITY POLICIES.
AGAIN, THIS WAS ALSO A CITYWIDE AUDIT.
UH, AND AGAIN, AS KEVIN MENTIONED, THIS IS A, A ALL POSITIVE RESULTS.
OUR CONCLUSION WITH CITYWIDE CASH RECEIPTS ARE CONTROLLED AND IN COMPLIANCE WITH CITY POLICIES.
UH, CURRENTLY THERE'S APPROXIMATELY 50 LOCATIONS THAT ACTUALLY HANDLE CASH.
UH, THE LARGER COLLECTIONS ARE, UH, UP THERE AS YOU CAN SEE, BID'S, BRUSH, DEVELOPMENTAL SERVICES, MUNICIPAL COURT, METRO HEALTH, AND ALSO THE ALAMO DO BOX OFFICE.
UH, AND HISTORICALLY, YES, THERE ARE IS A, UH, A GOAL TO REDUCE THE AMOUNT OF CASH THAT WE'RE HOLDING.
AND ALSO THERE'S INITIATIVE CURRENTLY TO, UH, ACTUALLY ELIMINATE PETTY CASH FUNDS TO LIMIT OUR EXPOSURE.
AGAIN, OVERALL POSITIVE RESULTS.
WE LOOKED AT NINE DEPARTMENTS, UH, WHICH INCLUDED 10 DIFFERENT, UH, CASH HANDLING LOCATIONS.
UH, THE POLICY AND PROCEDURES FOR EACH ONE OF THOSE DEPARTMENTS ALIGNED WITH FINANCE DIRECTIVES.
IN ADDITION, THERE WERE PROCEDURES AND COMPREHENSIVE POLICIES THAT ADDRESSED OPENING AND CLOSING, UH, RECEIPTS, RECONCILING TO DEPOSITS, END OF DAY SYSTEM PROCESSING.
IN ADDITION, WE LOOKED AT THE PHYSICAL ACCESS AND SYSTEM ACCESS, AND EACH ONE OF THOSE AREAS WERE APPROPRIATE.
AND FINALLY, THE STAFF TRAINING WAS CURRENT.
UH, AND AGAIN, UH, WE HAD NO FINDINGS.
UH, THUS WE DON'T HAVE ANY RECOMMENDATIONS.
UH, SO THAT ACTUALLY CONCLUDES MY PRESENTATION FOR THIS AUDIT.
DO I HAVE ANY QUESTIONS FROM THE COMMITTEE MEMBERS REGARDING THIS AUDIT? ALL RIGHT.
CAN I GET A MOTION AND A SECOND TO APPROVE? I'LL MAKE THE MOTION TO APPROVE.
ITEM 12 IS ANOTHER, A THIRD AUDIT REPORT TO PRESENT TODAY.
THIS IS AN AUDIT OF, UH, BOTH THE IT AND THE INNOVATION DEPARTMENT, SPECIFICALLY THE CONNECTED BEYOND THE CLASSROOM INITIATIVE THAT WAS PERFORMED.
AND OUR OBJECTIVE WAS TO DETERMINE IF THE CONTRACT SUPPORTING THIS INITIATIVE.
OUR MONITOR INCLUDED DELIVERABLES AND PROJECT MANAGEMENT.
AND OVERALL, OUR CONCLUSION WAS
[01:05:01]
THAT I T S D, UH, DID A VERY GOOD JOB.IT WAS A WELL-MANAGED, UH, PROJECT, UH, THAT INCLUDES THINGS SUCH AS THE FINANCES.
UH, EVERYTHING WAS DELIVERED ON TIME.
UH, THE EXPENDITURES ARE PROPERLY SUPPORTED AND APPROVED, AND THE FUTURE MAINTENANCE AND SUPPORT CONTRACTS ARE IN PLACE FOR THIS PROGRAM.
SO, FROM THE CITY'S PERSPECTIVE, UH, VERY GOOD AUDIT, VERY GOOD PROCESS.
HOWEVER, WHEN WE TAKE A STEP BACK AND LOOK AT THE ENTIRE PROJECT, THE CITY'S ROLE HERE WAS TO PROVIDE THE INFRASTRUCTURE AND WORKING WITH THREE SCHOOL DISTRICTS.
AND SO WE'RE GONNA PROVIDE THE INFRASTRUCTURES UP TO THE SCHOOL DISTRICTS TO THEN ROLL THE PROGRAM OUT.
AND SPECIFICALLY THAT ENTAILED GETTING THE HARDWARE INTO THE STUDENTS' HOMES FOR THIS.
AND AS THIS CHART SHOWS THAT THE DISTRICTS DID NOT EFFECTIVELY IMPLEMENT THE PROGRAM AND THE C P E DISTRIBUTION, BASICALLY THINK OF THAT AS A ROUTER, SOMETHING IN THE STUDENT'S HOME TO CONNECT THEM TO THIS NETWORK.
UH, THE DISTRIBUTION WAS VERY LIMITED, AS YOU CAN SEE THERE.
WITH THE THREE SCHOOL DISTRICTS THAT WE WORKED WITH, HARLANDALE, SAN ANTONIO, AND EDGEWOOD.
UH, THEY RECEIVED A TOTAL OF 3,500 CPES, UH, FROM THE CITY, EDGEWOOD WITH THE MOST OF 1600.
THE SECOND COLUMN THEN SAYS HOW MANY THEY ACTUALLY DISTRIBUTED.
AND THEN THE THIRD COLUMN, WE LOOKED AT THE AVERAGE CPS THAT WERE CONNECTED TO THE NETWORK, UH, ON A MONTHLY BASIS FROM JANUARY THROUGH JUNE THE FIRST HALF OF THIS YEAR.
AND FOUND THAT ONLY 31, UH, WERE CONNECTED.
UH, YOU CAN SEE EDGEWOOD DISTRIBUTED ZERO.
UH, SO AGAIN, WHILE THE CITY, AND I THINK IT HAD A GOOD BEGINNING AND A GOOD IDEAL CITY DID THEIR PART, GETTING THE NETWORK INFRASTRUCTURE IMPLEMENTED.
BUT THE OVERALL PROGRAM, UH, IS NOT, IS BASICALLY NOT IMPLEMENTED.
SO THAT IS OUR, MY REPORT ON THIS ONE.
UH, I, AND VERY DISAPPOINTED WITH THE, UH, SCHOOL DISTRICT ROLLOUT OF THE EQUIPMENT.
I THINK THIS, UM, MERITS A LARGER CONVERSATION COMMUNITY-WIDE ABOUT HOW WE WORK TOGETHER AND HOW WE ADDRESS THE DIGITAL DIVIDE.
BUT I'M, I'M INTERESTED TO HEAR WHAT MY COUNCIL COLLEAGUES HAVE TO SAY.
UH, WE'LL START WITH COUNCILMAN COURAGE.
MY FIRST, UH, THOUGHT IS, WELL, WE OUGHT TO JUST CANCEL THIS PROGRAM.
OBVIOUSLY THE SCHOOLS DON'T FEEL LIKE THEY NEED IT 'CAUSE THEY'RE NOT PARTNERING WITH US VERY EFFECTIVELY.
BUT, YOU KNOW, MAYBE THAT'S NOT THE BEST TAKE.
UH, WHAT IS THE, THE FINANCIAL ASPECT OF THIS THAT THE CITY'S, UH, COMMITTED TO DO? WE KNOW? $17 MILLION.
AND IS IT SUPPOSED TO BE EXPENDED OVER A CERTAIN PERIOD OF TIME? THAT IS THE AMOUNT THAT I BELIEVE HAS BEEN EXPENDED ALREADY.
BRIAN, I'LL CLARIFY THAT THAT 17 MILLION INCLUDED THE INFRASTRUCTURE ON THE BACK END.
SO ALL THE MONOPOLES THAT WE INSTALLED OVER THE LAST THREE YEARS, THAT WAS PART OF THAT 17, 17 MILLION.
A SMALLER PART OF THAT IS THE DEVICES THAT YOU SEE HERE, THOSE C P E ROUTER UNITS THAT GO INTO THE HOMES OF THE STUDENTS.
AND SO THESE ARE JUST ROUTERS.
THEY'RE NOT COMPUTERS, THEY'RE NOT CORRECT.
THEY'RE, THEY'RE JUST ROUTERS.
BECAUSE THE DISTRICTS ALSO HAVE THEIR OWN ONE-ON-ONE PROGRAMS WHEN IT COMES TO COMPUTERS.
SO WE HAVE A BUNCH SITTING IN A WAREHOUSE THAT HAVEN'T BEEN INSTALLED, RIGHT? NO, SIR.
THEY ARE ACTUALLY, WE DISTRIBUTED THOSE TWO YEARS AGO TO THE, TO THE SCHOOL DISTRICT.
SO, SO THE SCHOOLS HAVE 'EM SITTING AROUND THAT? THAT'S CORRECT.
AND WE ARE CONVENING WITH, WITH THEIR SUPERINTENDENTS ON THE 18TH.
SO NEXT WEEK WE'LL BE CONVENING WITH THEM TO HAVE A COME TO, COME TO SERIOUS MOMENT.
HOW, HOW OLD ARE THOSE ROUTERS? UH, ABOUT TWO YEARS OLD.
THEY'RE, THEY, WE HAVE A FIVE YEAR, FIVE MORE YEARS ON THEM.
UH, SO WE ALSO HAVE S SUBSCRIBER LICENSES FOR THEM AND EVERYTHING, SO, OKAY.
SO WE'RE WORKING TO GET 'EM OUT WITH THEM.
WE HAD LIKE A SEVEN YEAR LICENSE, SO TO SPEAK, CORRECT? YEAH.
TWO YEARS, WELL, FIVE YEAR LICENSES AND YEAH.
BUT THAT WOULD BE AT OUR COST.
THAT WOULD BE ON THE ISDS AT THAT POINT.
SO I, I THINK THAT, UH, THIS IS SOMETHING THE COUNCIL SHOULD HEAR MORE ABOUT BASED ON YOUR MEETING WITH THE OTHER, UH, SCHOOL DISTRICTS.
AND THEY NEED TO MAKE A COMMITMENT ON THAT BECAUSE THERE'S SEVERAL OTHER SCHOOL DISTRICTS IN THE CITY THAT WE COULD PROBABLY TURN AROUND AND WORK WITH IF THESE THREE AREN'T, AREN'T REALLY GONNA COMMIT THEMSELVES.
COURAGE COUN, UH, COMMITTEE MEMBER VINNO, COUNCIL MEMBER WHITE.
MAYBE I MISSED THE DETAILS HERE.
THE CITY SPENT, HOW MUCH ON THIS PROGRAM? SO, 17 MILLION.
AND SO 3,585 CPS THEY RECEIVED.
AND SO BRIAN OR CRAIG, CAN YOU JUST MAYBE, 'CAUSE I I UNDERSTAND YOUR QUESTION.
THIS EQUIPMENT IS A SMALLER PIECE OF THAT.
THERE WAS A LOT OF INFRASTRUCTURE BUILT OUT INTO THESE NEIGHBORHOODS.
AND SO CRAIG, MAYBE DESCRIBE THAT A LITTLE BIT.
QUICK BACK SUMMARY, QUICK BACK SUMMARY.
SO, UM, EARLY COVID, HOW COULD WE HELP SCHOOL DISTRICTS KEEP THEIR STUDENTS CONNECTED TO THEIR SCHOOLS? YEP.
[01:10:01]
WE WENT TO ALL THE SCHOOL DISTRICTS WHEN WE FIRST STARTED OUT AND SAID, WHO NEEDS HELP? HOW CAN WE HELP YOU? THESE ARE THE THREE SCHOOL DISTRICTS EARLY ON THAT SAID, YOU COULD HELP US THE MOST.NOW COUNCILMAN COURAGE KNOWS THIS AS WELL.
THERE WAS A LOT OF FUNDS COMING FROM OTHER PLACES AS WELL THROUGH THE WHOLE PANDEMIC.
WE WERE JUST EARLY TO SAY, WHAT COULD WE DO TO HELP? WE, AS THE CITY CANNOT CREATE, CANNOT CREATE THE INTERNET CONNECTION.
I WANNA BE REALLY CLEAR ABOUT THAT.
WE DID NOT CREATE THE INTERNET CONNECTION.
WHAT WE DID WAS EXTENDED THE SCHOOL'S NETWORK FROM THE SCHOOL INTO THE NEIGHBORHOOD.
AND SO YOUR EXPERIENCE AS A STUDENT SITTING IN THE LIBRARY ON YOUR SCHOOL COMPUTER, WOULD BE EXACTLY THE SAME EXPERIENCE YOU WOULD HAVE IN YOUR HOME CONNECTED TO THE SCHOOL'S NETWORK.
SO WHAT WE HAD TO DO WAS PUT INFRASTRUCTURE IN PLACE, POLES, UM, UH, EQUIPMENT TO SPREAD THE NET, THE THE SCHOOL'S NETWORK INTO THE NEIGHBORHOOD.
AND THEN THE LAST POINT OF THAT WAS THE ROUTER THAT WE WOULD THEN IN, UH, INSTALL IN THE HOME.
SO IT WOULD SPRAY THE SIGNAL SO THEN THEY COULD CONNECT TO THE COMPUTER.
SO AT THE END OF THE DAY, MOST OF THAT, UH, 17 MILLION WAS INFRASTRUCTURE JUST TO SUPPORT THE SCHOOL NETWORKS.
THAT WAS THE FIRST SET OF ROUTERS THAT WE PURCHASED.
AND WE HAVEN'T PURCHASED ANYMORE, OBVIOUSLY, SINCE THEY'RE NOT BEING USED.
I'M GONNA HAVE YOU THAT SUMMARY.
SO THE INFRASTRUCTURE WAS PUT IN PLACE, BUT, BUT DOES IT MATTER IF THESE THINGS AREN'T USED? RIGHT.
SO FROM AN INFRASTRUCTURE PERSPECTIVE, CALL THAT A SUNK COST.
RIGHT? THAT'S WHAT IT TAKES TO STAND IT UP AND TO RUN IT EVERY DAY.
IF SOMEBODY SAYS THEY DON'T WANT IT ANYMORE, WE COULD TURN OFF THE INFRASTRUCTURE, BUT YOU STILL HAVE ALL THE STUFF OUT THERE IF YOU WANT THAT.
BUT THE MORE WHETHER YOU HAVE ONE OR A, OR A HUNDRED THOUSAND DEVICES RUNNING ON IT, IT DOESN'T MATTER.
THAT'S A VARIABLE COST DRIVEN BY USAGE OF THE SCHOOL SYSTEMS. I MEAN, YEAH.
I DON'T KNOW WHAT MORE THERE IS TO SAY OTHER THAN I SHARE THE, THE DISAPPOINTMENT AND, UM, I FEEL LIKE, YOU KNOW, I FEEL LIKE I'M SAYING THIS ALL THE TIME NOW, BUT WE PUT THIS MONEY OUT FOR VARIOUS PROGRAMS AND THINGS, AND HOW DO WE KNOW IT'S ACTUALLY GETTING USED THE WAY IT SHOULD? AND THIS, I GUESS IS ANOTHER EXAMPLE WHERE, UM, YOU KNOW, NOT GREAT USE RIGHT NOW.
WELL, UH, WELL, I, WE STILL NEED A MOTION AND A SECOND TO APPROVE.
CAN I GET A SECOND? I'LL SECOND THE AUDIT REPORT.
IT'S JUST FOR THE AUDIT REPORT.
UH, SO, UH, THERE BEING NO FURTHER DISCUSSION.
WE HAVE A MOTION AND IT AND, UH, SECOND TO APPROVE THE AUDIT REPORT FOR BEYOND THE CLASSROOM.
WE CHAIR ON THAT ITEM, I THINK, UM, YES, YOU APPROVED AND ACCEPTED THE AUDIT REPORT.
BRIAN MENTIONED THE FACT THAT THEY'RE GONNA BE MEETING WITH THOSE SCHOOL DISTRICTS, I BELIEVE IN THE NEXT COUPLE OF WEEKS, I BELIEVE.
SO WE'LL FIND THE APPROPRIATE FORUM TO CIRCLE BACK WITH THE COUNCIL TO TALK ABOUT WHAT THE PLAN IS GOING FORWARD.
SO YEAH, WE'LL, WE'LL EITHER BRING IT BACK HERE OR POSSIBLY TO A B SESSION.
WE'LL, WE'LL HAVE THAT CONVERSATION.
ALRIGHT, SO WE HAVE A STAFF BREEDING BRIEFING, UH, STATUS.
[Staff Briefing ]
WE HAVE TWO STAFF BRIEFINGS.KEVIN, IS THERE A STAFF PRESENTATION FOR ITEM 13? YES, MA'AM.
IT'LL BE A, A BRIEF ONE, BUT, UH, SOMETHING THAT WE'VE STARTED, OH, IT'S BEEN OVER A YEAR AGO, UH, IS BRINGING BACK TO THIS COMMITTEE THE RESULTS AND THE, OF OUR MANAGEMENT RECOMMENDATIONS THAT WE MAKE AND THE MANAGEMENT RESPONSES THAT WE GET.
SO THIS IS SOMETHING THAT WE TRY TO BRING TO THE COMMITTEE EVERY QUARTER, FOUR TO FIVE MONTHS IS WHAT IT'S BEEN TURNING OUT TO BE.
BUT, UM, WHENEVER WE ISSUE THESE AUDIT REPORTS, AND THERE'S ALWAYS, OR USUALLY MANAGEMENT OR AUDIT RECOMMENDATIONS AND MANAGEMENT RESPONSES, AND THEY MAY HAVE A PLAN OF WHAT THEY'RE GONNA DO TO ADDRESS THE ISSUE, WE GO BACK AND WE LOOK AT ALL OF THOSE RECOMMENDATIONS AND ACTION PLANS TO MAKE SURE THAT THEY'VE BEEN EFFECTIVELY IMPLEMENTED.
AND WE CAN DO THAT, UH, INDIVIDUALLY AFTER THEY SAY THAT THEY'VE COMPLETED IT.
OR WE COULD DO A FULL RE-AUDIT IF IT'S SOMETHING VERY SIGNIFICANT.
A LOT OF FINDINGS WE'RE GONNA GO BACK AND JUST AUDIT THE ENTIRE PROCESS AGAIN.
'CAUSE WHAT I'M TALKING ABOUT TODAY IS THAT FIRST BULLET THERE WHERE WE LOOK AT 'EM AFTER THE TARGET DATES.
AND SO THE PROCESS THAT WE GO THROUGH, UH, AFTER THE TARGET DATE IS PASSED, WE'RE GONNA GO TALK TO MANAGEMENT AND THEY'RE GONNA TELL US WE, THEY'VE EITHER COMPLETED THE AUDIT OR THE, THE, UH, ACTION PLAN.
THEY ARE ON SCHEDULE BECAUSE IT'S STILL A FUTURE DATE, TARGET DATE, OR THEY'RE BEHIND SCHEDULE.
THAT IS WHAT THEY WILL TELL US.
WE WILL THEN GO AND VERIFY THAT PROCESS.
AND IF THEY SAID THAT THEY'VE COMPLETED IT, WE'RE GONNA GO IN AND SAY, OKAY, IT'S GONNA BE VERIFIED WITHOUT EXCEPTION, MEANING, YEP, EVERYTHING'S GOING GOOD, VERIFIED WITH EXCEPTION, WE FOUND SOMETHING THAT'S JUST NOT QUITE RIGHT.
THERE'S MORE WORK NEEDING TO BE DONE.
OR THE THIRD CATEGORY VERIFICATION PENDING.
AND THAT'S JUST FROM THE TABLE THAT WE HAVE THAT WE JUST HAVEN'T GOT TO IT YET
[01:15:01]
FOR WHATEVER REASON, SCHEDULING, ET CETERA, ET CETERA.THIS, UH, REPORT, BASICALLY WE WERE LOOKING AT 49 RECOMMENDATIONS OF THOSE MANAGEMENT HAS ASSERTED THAT THEY'VE COMPLETED 36 OF 'EM, EIGHT ARE ON SCHEDULE TO BE COMPLETED, AND THERE'S FIVE THAT ARE BEHIND SCHEDULE.
WHEN WE GO AND LOOK AT THOSE VERIFIED ONES WITH THE COMPLETED ONES, WHICH IS THE 36, WE HAVE, UH, VERIFIED 33 OF THOSE WITHOUT EXCEPTION, MEANING THEY'VE BEEN EFFECTIVELY IMPLEMENTED.
AND THEN THERE'S JUST THREE OF THEM.
THAT VERIFICATION IS PENDING, MEANING, UH, WE STILL HAVE NOT COMPLETED OUR VERIFICATION PROCESS.
THIS CHART HERE MAY LOOK BETTER IN YOUR PACKET IN FRONT OF YOU, BUT THIS IS BASICALLY THE SUMMARY OF THAT.
UH, BASICALLY IF IT'S GREEN OR BLUE, THAT'S GOOD.
IF IT'S YELLOW OR RED, THAT'S BAD.
THERE IS NO RED IN THIS, UH, PARTICULAR REPORT.
AND REALLY, AS WE COMPARE THIS TO PRESENTATIONS I'VE DONE IN THE PAST, THIS IS PRETTY GOOD.
UH, AS FAR AS, YOU KNOW, KEEPING UP WITH THEM, THOSE THAT ARE ON BEHIND SCHEDULE, WE STILL CONTINUE TO FOLLOW UP WITH THEM, UH, TO MAKE SURE THAT THERE IS PROGRESS BEING MADE, UH, ON THOSE PROCESSES.
SO THAT'S, UM, MY REPORT ON THIS.
AND, UH, AGAIN, OVERALL I THINK THESE ARE GOOD RESULTS.
SO IF YOU HAVE ANY QUESTIONS, I CAN ADDRESS THOSE.
THANK YOU FOR THIS PRESENTATION.
I, I KNOW FOR ME, I MIGHT TAKE A LOOK AT THE I ON BEHIND AND EITHER, UH, THE BEHIND SCHEDULE AND EITHER HAVE YOU COME TALK TO US AGAIN AS A COMMITTEE OR POSSIBLY JUST GET A BRIEFING FROM YOU.
UH, I, I ENCOURAGE MY COUNCIL MEMBERS TOO TO LOOK AT THE DIFFERENT, UM, SHOULD, UH, MY COUNCIL AND COMMITTEE MEMBERS TO LOOK AT THE REPORT.
AND IF THERE'S ANYTHING THAT WE NEED FOLLOW UP ON, UM, PLEASE LET ME KNOW.
SO WE CAN EITHER BRING THAT TO THE COMMITTEE OR, OR HAVE A, HAVE A BRIEFING ON THAT.
ARE THERE ANY OTHER, LEMME LEMME JUST ASK YOU ON THESE THAT ARE, THAT ARE, UH, BEHIND SCHEDULE OR VERIFICATION PENDING, THEY WILL CONTINUE TO BE ON THIS REPORT THAT I BRING TO THE AUDIT COMMITTEE ON A QUARTERLY BASIS.
YOU KNOW, ONCE YOU SEE ONE OF THESE WHERE IT'S ALL BLUE, MEANING EVERYTHING'S COMPLETED, EVERYTHING'S VERIFIED, IT'S GONNA FALL OFF THE REPORT AS FAR AS THE PRESENTATION.
BUT THOSE THAT ARE BEHIND NEXT TIME WHEN I COME, HOPEFULLY THEY WILL BE, UH, HAVE BEEN ADDRESSED AND ADDRESSED APPROPRIATELY, BUT THEY WON'T JUST FALL OFF THE LIST FROM OUR PERSPECTIVE.
UH, DO I HAVE ANY COMMENTS FROM THE COMMITTEE MEMBERS? COUNCILMAN KIRCH? YEAH, MY COMMENT WOULD BE, I CAN UNDERSTAND SOME MIGHT BE BEHIND SCHEDULE.
UH, AND I WOULD ALWAYS BE A LITTLE LEERY ABOUT ANYONE WHO'S WAY BEHIND SCHEDULE.
I'D BE EVEN MORE CONCERNED ABOUT ANYBODY WHO IS BEHIND SCHEDULE WHEN THEY HAD BEEN PREVIOUSLY REVIEWED AND WE SAID, YOU'VE GOTTA MAKE CORRECTIONS.
AND THEY STILL HAVEN'T MADE THOSE CORRECTIONS AND THEY'RE STILL BEHIND SCHEDULE.
SO I THINK THAT WE NEED TO UNDERSTAND THAT, UH, YOU KNOW, THERE'S, THERE'S THE GOOD FAITH EFFORT BEING UNDERTAKEN AND THAT PEOPLE AREN'T TAKING SOME OF THESE FOR GRANTED AND JUST NOT GETTING IT DONE.
UH, AND YOU CAN, YOU CAN PUT THAT OPINION TOGETHER BASED ON YOUR INTERACTION WITH THESE DEPARTMENTS.
AND I, THERE IS, THERE IS A GOOD FAITH EFFORT AND MOST OF THESE THAT ARE BEHIND SCHEDULE, IT'S NORMALLY BECAUSE SOMETHING THAT THEY DID NOT ANTICIPATE CAME UP IN THAT PROCESS.
THERE ARE ALSO SOME OF THOSE GENERALLY THAT HAVE, THEY'RE MORE COMPLEX IN THE LONGER TERM TO GET SOMETHING DONE.
UH, FOR EXAMPLE, IF THERE'S, UH, PROCESSES THAT THEY HAVE TO GO CITYWIDE AND MAKE CHANGES, WELL, MAYBE IT WOULD BE GOOD IF THEY COULD JUST ASK THE, THIS COMMITTEE FOR AN EXTENSION OF TIME TO COMPLETE THAT OR SUBMIT SOMETHING IN WRITING TO YOUR DEPARTMENT.
THEY NEED AN EXTENSION OF TIME TO MEET THOSE.
I DON'T PRESENT THAT HERE, BUT NORMALLY WHENEVER THEY'RE BEHIND, WE ASK FOR, OKAY, WHAT'S YOUR NEW TARGET DATE? WE DON'T PRESENT THAT.
WE COULD START, UH, DOING THAT AT THIS POINT.
I HOLD THEM ACCOUNTABLE TO THEIR FIRST TARGET DATE OKAY.
AND WHAT THEY PUT IN THE REPORT.
IF I MAY, I WOULD SUGGEST IF THERE'S ADDITIONAL FOLLOW THAT BE DONE THROUGH THE CITY AUDITOR'S OFFICE, IF THAT'S THE WAY WE, THEY REPORT IT BACK.
ANY OTHER MEMBERS? ANY COMMENTS? OR THIS IS FOR BRIEFING ONLY.
BEN, IS THERE A STAFF PRESENTATION? UH, THANK YOU.
UM, THIS, THIS NEXT ITEM IS A STAFF BRIEFING.
THIS IS FOR, THIS IS RELATED TO OUR INDEPENDENT EXTERNAL AUDIT.
AS WE START TO WRAP UP OUR FISCAL YEAR 2023, OUR EXTERNAL AUDITORS ARE GONNA BE, THEY HAVE BEEN IN AND ARE, UM, STARTING THEIR AUDIT.
WE WILL COME TO THIS GROUP TWICE A YEAR.
UM, THIS MEETING BEING ONE FOR, UM, REQUIRED COMMUNICATIONS TO THIS, TO THIS COMMITTEE.
WE'LL BE BACK TO YOU AGAIN IN MARCH.
UM, UH, THAT TIMEFRAME TO ACTUALLY PRESENT THE RESULTS OF THE EXTERNAL AUDIT.
UH, THIS MORNING WE'LL KICK THIS ITEM OFF WITH MELANIE KEATON, WHO'S OUR ASSISTANT FINANCE DIRECTOR, AND THEN TURN IT OVER TO FOUR VISTA, OUR EXTERNAL AUDITORS TO GO THROUGH THE REQUIRED COMMUNICATIONS.
UH, GOOD MORNING CHAIR COMMITTEE MEMBERS.
UH, SO THIS MORNING AS TROY INTRODUCED, WE'RE GONNA GO
[01:20:01]
AHEAD AND GO THROUGH THE EXTERNAL AUDIT REQUIRED COMMUNICATIONS.I'M GONNA SPEND JUST A FEW QUICK MINUTES, UH, DISCUSSING SOME OF THE DIFFERENCE BETWEEN THE INTERNAL AND EXTERNAL AUDITS.
AND THEN I'LL PRE, UH, HAND IT OVER TO MY CO-PRESENTER.
UH, OBVIOUSLY YOU'VE HEARD QUITE A FEW PRESENTATIONS BY KEVIN AND THE INTERNAL AUDIT.
AND SO THOSE AUDITS TYPICALLY ARE PERFORMED FOR FINANCIAL, FISCAL COMPLIANCE AND OTHER AUDITS THAT ARE DIRECTED BY THIS COMMITTEE.
AND THEY TEND TO BE MORE PROGRAMMATIC OR SPECIFIC IN NATURE, LOOKING AT CONTROLS AND VERY SPECIFIC CONTRACTS, ET CETERA.
IT'S REQUIRED UNDER THE CITY CHARTER AND THE, UH, THE INTERNAL AUDITOR REPORTS, OBVIOUSLY TO THIS COMMITTEE.
UH, EXTERNAL AUDIT IS BASICALLY TO ENSURE THAT THE CITY'S RECORDS ARE PROPERLY MAINTAINED FREE FROM MATERIAL MISSTATEMENTS AND COMPLY WITH ESTABLISHED CONCEPTS, PRINCIPLES, AND ACCOUNTING STANDARDS.
IT'S TO PROVIDE A TRUE AND FAIR VIEW OF THE CITY'S FINANCIAL STATEMENTS TO THE CITY.
IT IS REQUIRED BY THE CITY CHARTER, ALSO STATE STATUTE.
AND BECAUSE OF FEDERAL GRANTS THAT WE GET, IT'S REQUIRED BY, UM, O M B FEDERAL RULES AS WELL.
SO SOME OF THE CITY'S RESPONSIBILITIES IN RELATION TO THE EXTERNAL AUDIT IS TO DEVELOP, REVIEW, AND REVISE INTERNAL CONTROLS AND FISCAL POLICIES AND PROCEDURES.
WE ALSO INTERPRET AND IMPLEMENT NEW G A S B REGULATIONS.
G A S B IS OUR REGULATORY ENTITY FOR GOVERNMENTAL ACCOUNTING STANDARDS.
WE PREPARE AND CONSOLIDATE THE ANNUAL FINANCIAL STATEMENTS.
IT'S A 500 PAGE DOCUMENT THAT'S ONLINE AND AVAILABLE TO ALL THE STAKEHOLDERS.
UH, WE DEVELOP DISCLOSURE NOTES, TRANSMITTAL LETTERS, M D N A OR MANAGEMENT DISCUSSION AND ANALYSIS AND STATISTICAL SECTIONS.
AND THEN WE ALSO REVIEW, ADJUST AND CONSOLIDATE COMPONENT UNIT FINANCIALS.
WE HAVE 27 COMPONENT UNITS OR OTHER ENTITIES THAT BASICALLY ARE OWNED BY THE CITY, AND WE CONSOLIDATE THEIR FINANCIALS INTO THE CITY'S, UH, FINANCIAL STATEMENTS FOR A COMPREHENSIVE FINANCIAL, UH, PICTURE OF THE CITY.
WE ALSO PREPARE THIS AIRPORT'S PASSENGER FACILITY CHARGE AUDIT, A REPORT.
WE CREATE THE FEDERAL AND STATE GRANT EXPENDITURE SCHEDULES AND REPORTS.
THAT IS THE, UH, KNOWN AS THE SINGLE AUDIT REPORTS REQUIRED BY STATE AND FEDERAL STATUTES BECAUSE OF THE GRANTS THAT WE GET.
WE IN FINANCE WORK WITH DEPARTMENTS ON RESPONSES TO ANY FINDINGS WHEN NEEDED.
WE ENTER THE FEDERAL EXPENDITURES INTO THE FEDERAL DATA COLLECTION FORM DATABASE THAT IS SO THAT THE GRANTING AGENCIES CAN SEE THE CITY'S, UH, EXPENDITURES AND ANY FINDINGS IF WE HAVE 'EM.
WE ALSO CREATE SUPPORTING SCHEDULES AND WORK, UH, IN DOCUMENTS WHICH, UH, AS NEEDED BY THE EXTERNAL AUDITORS AND COORDINATE WITH DEPARTMENTS TO ANSWER ANY AUDIT FOLLOW-UP QUESTIONS.
SO WE'RE BASICALLY THE CENTRAL POINT OF CONTACT FOR THE EXTERNAL AUDIT.
THE AUDIT CONTRACT, UH, IS WITH FOUR OF US.
WE, THIS IS THEIR SECOND YEAR OF THE CONTRACT.
IT IS A FIVE THREE YEAR WITH TWO ONE YEAR EXTENSIONS FOR A POTENTIAL TOTAL OF 5.2 MILLION.
I WILL TELL YOU THAT THIS CONTRACT INCLUDES A 48% SUBCONTRACTOR PARTICIPATION LEVEL AT ABOUT TWO AND A HALF MILLION DOLLARS.
AND, UH, MY CO-PRESENTER WILL PRESENT THOSE, UH, SUB THE SUBCONTRACTORS IN JUST A MINUTE.
SO WITH THAT, I'M GONNA ACTUALLY HAND IT OVER TO AMANDA EVES, THE MANAGER OR PARTNER, EXCUSE ME, WITH FORBIS.
AND FIRST OF ALL, I JUST WANNA SAY THANK YOU TO THE CITY, UM, AND TO THE AUDIT AND ACCOUNTA ABOUT ACCOUNTABILITY COMMITTEE.
WE TRULY APPRECIATE THE OPPORTUNITY TO WORK WITH THE CITY AGAIN THIS YEAR.
UM, AS YOU CAN SEE FROM MELANIE'S PRESENTATION, THE CITY IS, UH, VERY INVOLVED THE CITY FINANCE DEPARTMENT IN PROVIDING US WITH A TREMENDOUS AMOUNT OF INFORMATION.
AND SO WE APPRECIATE THEIR ASSISTANCE THROUGH THE AUDIT AS WELL.
SO WE'RE REALLY HERE TODAY TO TALK WITH YOU ABOUT OUR AUDIT PLAN.
UM, WE HAVE BEGAN OUR AUDIT PLANNING FOR THE CITY.
AND SO WE'RE HERE TODAY TO PRESENT OUR AUDIT PLAN TO YOU.
UM, I ALSO HAVE WITH ME ERICA BROWN.
SHE IS A SENIOR MANAGER WITH FOUR OF US.
UH, SHE IS THE MANAGER FOR THE CITY'S AUDIT.
AND THEN WE ALSO HAVE OUR TEAMING PARTNERS THAT MELANIE MENTIONED EARLIER.
WE HAVE CHRIS CARMONA, BOB WILLIAMS, TERRY BRITTS, AND ALSO DEBBIE FRAZIER.
SO WE APPRECIATE, TRULY APPRECIATE THEIR HELP THROUGHOUT THE AUDIT.
THEY ARE AN INTEGRAL PART OF THE AUDIT TEAM.
UM, AND, AND, YOU KNOW, INVOLVED FROM PLANNING THROUGH REPORT ISSUANCE.
SO THE SLIDE YOU HAVE IN FRONT OF YOU HERE, JUST AN INTRODUCTORY SLIDE.
UM, WE DO HAVE REQUIRED AUDIT COMMUNICATIONS THAT WE'RE REQUIRED TO MAKE TO THE CITY.
UM, THOSE COMMUNICATIONS ARE REQUIRED TO BE PRESENTED TO THOSE CHARGED WITH GOVERNANCE.
WE'VE IDENTIFIED THE INDIVIDUALS THAT WE'RE RESPONSIBLE TO COMMUNICATE WITH HERE.
UM, THE FIRST HERE IS COUNCILMAN VIA RON, UH, THE AUDIT AUDIT ACCOUNT ACCOUNTABILITY
[01:25:01]
COMMITTEE CHAIR, AND ALSO, UH, BEN GOLE, YOUR C F O.AND THEN MY CONTACT INFORMATION IS AT THE BOTTOM.
SO OUR RESPONSIBILITIES ARE TO CONDUCT AN AUDIT OF THE CITY'S ANNUAL FINANCIAL REPORTER.
YOUR FINANCIAL STATEMENTS WE'RE ALSO AUDITING COMPLIANCE, UH, FOR YOUR FEDERAL AND STATE SINGLE AUDIT.
UH, THOSE AUDITS ARE CONDUCTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS.
UM, ALSO UNIFORM GUIDANCE, WHICH IS THE GUIDANCE RELATED TO YOUR FEDERAL AWARD PROGRAMS. AND THEN STATE OF TEXAS GRANT MANAGEMENT STANDARDS, WHICH IS THE, UM, REGULATORY BODY SET OVER YOUR STATE GRANT FUNDING.
AND IN EACH OF THESE AUDITS, UM, OUR, OUR RESPONSIBILITY IS TO OBTAIN REASONABLE RATHER THAN ABSOLUTE ASSURANCE ABOUT YOUR FINANCIAL STATEMENTS AND ABOUT COMPLIANCE, UM, THAT THEY ARE FREE OF MATERIAL MISSTATEMENT, AND THAT'S WHETHER CAUSED BY ERROR OR FRAUD.
SO THE DELIVERABLES THAT YOU WILL SEE, UM, FROM US NEXT YEAR, UM, AFTER COMPLETION OF THE AUDIT, ARE AGAIN, UH, THE CITY'S ANNUAL COMPREHENSIVE FINANCIAL REPORT THAT WILL HAVE OUR OPINION INCLUDED WITHIN IT, THE SINGLE AUDIT UNDER STATE AND FEDERAL REQUIREMENTS.
UM, WE WILL ALSO ISSUE A REPORT ON THE PASSENGER CHARGE FACILITY REPORT, UH, THAT MELANIE MENTIONED EARLIER.
UM, ALSO A T C E Q AGREED UPON PROCEDURES REPORT.
AND THEN WE ALSO ISSUE A SEPARATE AUDIT REPORT ON THE MUNICIPAL AIDS CORPORATION OR THE L G C FINANCIAL STATEMENTS.
SO AS YOU CAN SEE, WE HAVE BEGAN OUR AUDIT.
UH, WE'VE DONE OUR INITIAL AUDIT PLANNING AND RISK ASSESSMENT, SOME INTERIM TESTING ON YOUR FEDERAL AND SINGLE AUDIT.
UM, WE'RE MEETING WITH YOU NOW.
AND THEN NOVEMBER, WE'LL BE BACK OUT TO START OUR YEAR END AUDIT WORK, UM, WITH A TENTATIVE REPORT ISSUANCE IN FEBRUARY, AND THEN COMING BACK TO YOU IN MARCH TO PRESENT THE FINAL RESULTS OF THE AUDIT.
AND I DO WANNA SAY ALSO, YOU KNOW, WE HAVE DONE OUR AUDIT PLANNING AND RISK ASSESSMENT, BUT ONE THING TO NOTE IS THAT REALLY KIND OF CONTINUES ALSO AS WE GO THROUGH THE AUDIT.
SO, UM, ONCE WE PUT OUR PLAN INTO PLACE, IN OTHER WORDS, IF THINGS, YOU KNOW, ARISE AS WE'RE CONTINUING THROUGH THE AUDIT, WE'RE ALWAYS CONSIDERING WHETHER WE NEED TO REVISIT ANYTHING THERE.
SO YOU HEARD MELANIE SAY, AND YOU HEARD ME MENTION THE WORD MATERIALITY.
SO JUST THINK IT'S IMPORTANT TO TALK ABOUT WHAT THAT MEANS, CONSIDERED MATERIAL IF IT WOULD AFFECT THE, UH, OR IF IT WOULD INFLUENCE THE, A DECISION MADE BY A FINANCIAL STATEMENT USER.
UM, SO THAT WOULD INFLUENCE SOME, A REASONABLE PERSON'S JUDGMENT, BASICALLY.
AND SO, JUST A LITTLE, UM, INFORMATION ON HOW WE DETERMINE MATERIALITY IN OUR AUDITS.
SO FOR FINANCIAL STATEMENT, UH, MATERIALITY, WE LOOK AT DIFFERENT BENCHMARKS DEPENDING ON THE FUND OR THE OPINION UNIT THAT WE'RE LOOKING AT.
UM, SO THIS WOULD BE BASED ON TOTAL ASSETS OR TOTAL REVENUES, COULD BE EXPENDITURES, AND THEN ALSO FOR SINGLE AUDIT.
UM, THAT WOULD BE BASED ON TOTAL EXPENDITURES FOR THAT INDIVIDUAL GRANT PROGRAM.
AND SO THE ITEMS THAT WE WOULD BE FOCUSED ON INITIALLY, OR THE ITEMS WOULD BE FOCUSED ON, WOULD BE THOSE THAT ARE MATERIAL, UM, OVER CERTAIN DOLLAR AMOUNT.
BUT NOT ONLY THOSE ITEMS. THERE COULD BE ITEMS THAT WOULD BE SMALLER WHERE THEY HAVE DIFFERENT RISK FACTORS THAT ARE ALSO IMPORTANT.
AND SO WE MAY FOCUS ON THOSE ITEMS AS WELL.
SO SOME ACCOUNTING AND AUDITING MATTERS.
JUST TO HIGHLIGHT, UM, NUMBER ONE, UM, I KNOW WE'VE, WE'VE TALKED A LOT TODAY, UH, ABOUT INTERNAL CONTROLS.
SO THE CITY'S IMPLEMENTATION OF INTERNAL CONTROL OVER FINANCIAL REPORTING AND THAT GRANT COMPLIANCE, GRANT COMPLIANCE IS CRITICAL, UM, TO THE PREPARATION OF THE CITY'S FINANCIAL STATEMENTS.
AND SO WE DO WALK THROUGH AND OBTAIN AN UNDERSTANDING OF THOSE CONTROLS DURING THE AUDIT.
UH, WE'VE ALSO PROVIDED YOU IN THE APPENDIX A LIST OF UPCOMING ACCOUNTING PRO PRONOUNCEMENTS.
G A SS B IS REGULARLY ISSU ISSUING THOSE.
UM, THERE ARE A HANDFUL THAT WILL BE IMPLEMENTED THIS YEAR.
AND THEN WE'VE ALSO PROVIDED YOU WITH A LISTING OF THOSE THAT ARE EFFECTIVE IN THE NEXT COUPLE OF YEARS.
AND THEN SIGNIFICANT ESTIMATES, UM, YOUR ALLOWANCE FOR DOUBTFUL ACCOUNTS, YOUR PENSION LIABILITIES, OPE LIABILITIES, UM, AND DEPRECIABLE LIVES OF CAPITAL ASSETS ARE SIGNIFICANT ESTIMATES THAT WE ALSO LOOK AT DURING THE AUDIT.
AND THEN OF COURSE, AGAIN, TESTING THE MAJOR PROGRAMS, UH, FEDERAL AND STATE FOR COMPLIANCE ARE CRITICAL AREAS.
SO THE CITY DOES HAVE, UH, MANY MOVING PARTS, AS YOU KNOW.
[01:30:01]
A SLIDE SHOWING THE DIFFERENT COMPONENT UNITS THAT THE CITY HAS, THE TOTAL NUMBER ON THE TOP LINE.AND THEN THE BOTTOM LINE SHOWS THE NUMBER OF THOSE COMPONENT UNITS THAT ARE AUDITED BY OTHER AUDITORS AND NOT BY FOUR OF US.
SO THESE ARE OUR SIGNIFICANT, UH, RISK AREAS THAT WE'VE DETERMINED IN, IN PLANNING.
UM, SO REVENUE RECOGNITION AND RISK OF FRAUD RELATED TO REVENUE ACCOUNTS IS ALWAYS A CRITICAL AREA.
AND YOU'LL SEE OUR AUDIT APPROACH, UM, LAID OUT THERE, MANAGEMENT OVERRIDE OF CONTROLS.
SO AS YOU KNOW, YOU COULD HAVE ALL THE CONTROLS IN THE WORLD, BUT IF THERE'S MANAGEMENT OVERRIDE, THEN THOSE CONTROLS MAY NOT BE, UM, IMPLEMENTED OR EFFECTIVE.
SO WE DO SOME WORK IN THAT AREA AS WELL.
AND THEN AGAIN, BACK TO PROGRAM COMPLIANCE.
SO TESTING COMPLIANCE WITH THOSE FEDERAL AND STATE PROGRAMS. AND SO EARLIER I ALSO SAID, UM, THINGS WILL CHANGE AS WE PROGRESS THROUGH THE AUDITS.
SO WE HAVE DETERMINED THE INITIAL MAJOR PROGRAMS FOR FEDERAL AND STATE SINGLE AUDIT.
UM, THESE ARE BASED ON PRELIMINARY NUMBERS BECAUSE OBVIOUSLY THE CITY HASN'T CLOSED OUT THE BOOKS FOR THE YEAR.
UM, BUT AS OF NOW YOU HAVE FIVE MAJOR FEDERAL PROGRAMS AND THOSE ARE LISTED ON THE SLIDE HERE.
AND THEN WE HAVE ONE, OR YOU HAVE ONE MAJOR STATE PROGRAM.
SO WE'VE BEGAN TESTING ON ALL OF THESE PROGRAMS. UM, BUT THERE COULD BE ADDITIONAL PROGRAMS DETERMINED AFTER THE, THE YEAR END IS CLOSED.
SO ONE OF THE QUESTIONS WE DO GET ASKED, WE'RE NOT DOING A FORENSIC AUDIT, UM, OR ISSUING ANY TYPE OF OPINION ON, ON RELATED TO FRAUD, BUT WE DO CONSIDER THE RISK OF ERROR, UM, DUE TO, OR FRAUD DURING THE AUDIT.
AND SO THE THINGS THAT WE DO ARE ENGAGEMENT TEAM BRAINSTORMING.
SO WE GET OUR TEAM TOGETHER AND IT ALWAYS INCLUDES SOME NEW TEAM MEMBERS, UM, EACH YEAR.
AND WE REALLY TALK ABOUT, OKAY, WHERE COULD FRAUD OCCUR WITHIN THE CITY? WHERE IS THE RISK? DO WE NEED TO LOOK AT ANYTHING CLOSER? HOW DOES THAT AFFECT OUR AUDIT PLAN? UH, WE ALSO DO INQUIRIES OF MANAGEMENT.
SO WE HAVE INTERVIEWS SET UP WITH MANAGEMENT AND OTHERS WITHIN THE CITY TO, UM, ASK THEM IF THEY'RE AWARE OF ANYTHING OR ANYTHING WE NEED TO CONSIDER ADDING TO THE AUDIT PLAN.
UM, LOOKING AT THOSE ACCOUNTING ESTIMATES FOR ANY BIAS, LOOKING AT SIGNIFICANT UNUSUAL TRANSACTIONS AND WHAT THE BUSINESS RATIONALE IS BEHIND THOSE.
AND THEN ALSO, UM, WE INCORPORATE, UM, PREDICTABILITY INTO THE AUDIT EACH YEAR.
SO WE'LL ADD SOMETHING TO THE AUDIT PLAN EACH YEAR THAT WE DIDN'T DO IN THE PRIOR YEAR, JUST TO BE, YOU KNOW, PROVIDES FOR SOME UNPREDICTABILITY THERE.
SO THESE ARE, UM, ITEMS THAT WE WOULD, UM, APPRECIATE ANY INPUT FROM THE COMMITTEE AS WE'RE, UH, GOING THROUGH OUR AUDIT.
AND, AND SO WE'VE LISTED THEM ALL OUT HERE.
AND REALLY WHAT WE'RE ASKING FOR, FOR HERE IS A FOLLOW-UP CONVERSATION TO GO OVER ANYTHING THAT THE COMMITTEE, UM, HAS GATHERED AND COMMUNICATED THROUGH THE CHAIR OF THIS COMMITTEE.
UM, AND SO IF ANYTHING COMES UP THAT YOU KNOW WE NEED TO DISCUSS, THEN CERTAINLY I WOULD, UH, EXPECT THE CHAIR TO REACH OUT TO US AND WE'RE ALWAYS AVAILABLE.
MY CONTACT INFORMATION IS HERE TO TALK ABOUT ANY MATTERS THAT THE COMMITTEE MAY WANNA SHARE.
AND THEN, UH, THIS IS OUR APPENDIX.
SO THIS SHOWS OUR TEAMING PARTNERS THAT I INTRODUCED EARLIER, WHICH AGAIN, ARE, ARE CRITICAL, UM, TEAM MEMBERS TO THE AUDIT.
THESE ARE THE COMPONENT UNITS THAT I MENTIONED EARLIER.
UM, THESE ARE THE G A SS B PRONOUNCEMENTS THAT ARE EFFECTIVE FOR FISCAL YEAR 23.
UM, PROBABLY THE MORE SIGNIFICANT OF THOSE WOULD BE G A SS B 96.
SO YOU'LL BE HEARING, UM, MORE ABOUT THAT AND PROBABLY HAVE ALREADY HEARD QUITE A BIT ABOUT THAT.
BUT AS WE, AS WE CONTINUE THROUGH THE AUDIT, UM, THESE ARE THE ONES THAT ARE CURRENTLY ISSUED AND EFFECTIVE FOR 24 AND 25.
SO ALWAYS SOMETHING FOR THE FINANCE TEAM TO LOOK FORWARD TO.
UM, AND WITH THAT, I WOULD BE HAPPY TO ANSWER ANY QUESTIONS ANYONE HAS.
UM, WELL I AM, I THINK THIS IS SO IMPORTANT.
UH, I'M EXCITED ABOUT THIS COMMITTEE.
SO I THINK WE WILL HAVE SOME INPUT FOR YOU REGARDING SOME OF THE CONCERNS AND QUESTIONS.
AND AS YOU KNOW, I MENTIONED BEFORE, YOU'LL PROBABLY GET A LIST FOR ME IN TERMS OF CYBERSECURITY AND SCAMS AND, AND THINGS LIKE THAT, THAT, THAT MIGHT BE COMING, UH, TOWARDS THE CITY BECAUSE IT, IT JUST, PEOPLE LOOK AT THE CITY AND AND THINK OPPORTUNITY OR SOME CRIMINALS DO.
SO I, I LOOK, I LOOK FORWARD TO, TO WORKING WITH YOU ON THAT AND I'LL GO AROUND AND SEE IF MY COMMITTEE MEMBERS HAVE ANY QUESTIONS.
[01:35:01]
COUNCILMAN KIRCH.AND, AND I'LL ASK, UH, BEN AND TROY, UH, I THINK FOR US, WERE PARTNERED WITH A PREVIOUS, UH, COMPANY THAT WE HAD THAT WAS DOING OUR, UH, OUR WORK BEFORE, RIGHT? AND SO THERE'S A HISTORY OF, OF YOUR COMPANY THROUGH, ITS, ITS MERGER WITH THE PRIOR COMPANY, UH, WORKING WITH, UH, OUR AUDIT.
AND I'M WONDERING IF ANY OF YOUR TEAM MEMBERS HAVE YEARS OF EXPERIENCE WITH THE SAN ANTONIO CITY AUDIT, UH, THAT'S KIND OF HELPING THEM DO THIS KIND OF WORK.
SO, UM, ERICA BROWN, THE SENIOR MANAGER ON THE AUDIT HAS BEEN HOW MANY YEARS? ERICA? THREE SIX.
AND THEN, AND THERE'S ALSO CONSISTENCY WITH OUR, YOU KNOW, TEAMING PARTNERS AS WELL.
UM, SO WE, THERE IS CONSISTENCY, YOU KNOW, FOR US TO BUILD FROM AND USE, BUT ALSO SOME NEW, NEW PEOPLE AS WELL.
YEAH, NO, I THINK IT'S GOOD THAT WE HAVE SOMEBODY WHO KNOWS WHAT, WHAT'S GONE ON IN THE PAST AND, AND CAN USE THAT AS A GUIDELINE GOING FORWARD.
SO I'M, I'M JUST GLAD TO HEAR THAT.
ANY OTHER COMMITTEE MEMBERS CHAIR IF I MAY? YES.
A QUICK, UH, UH, PIECE OF UH, OR ACTUALLY A REQUEST.
I MEAN THEY DID ASK IF THERE'S ANY COMMITTEE MEMBERS THAT HAD ISSUES RELATING TO FRAUD OR NON-COMPLIANCE WITH LAW OR REGULATION.
I JUST ASK IF YOU DO THAT, INCLUDE US IN THE DISCUSSION SINCE THEY MAY INCLUDE THE RENDERING OF LEGAL ADVICE.
AND YOU KNOW, OF COURSE I WAS GONNA INCLUDE YOU IN ALL THOSE CONVERSATIONS.
THANK YOU SO MUCH FOR THE PRESENTATION.
ALRIGHT, THE TIME IS 1139 AND UM, THE MEETING IS NOW ADJOURNED.