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GOOD AFTERNOON AND WELCOME

[00:00:01]

TO THE DECEMBER 17TH, 2021

[Audit Committee Meeting on December 13, 2021.]

MEETING THE GARLAND CITY COUNCILS AUDIT COMMITTEE.

UM, COUNCIL MEMBER, ROBERT SMITH, UH, SITTING IN FOR OUR CHAIRMAN.

WHO'S JUST ARRIVED.

SO I'LL SHUT UP NOW AND LET HIM GET, START THIS THING OVER.

WAIT A MINUTE AND A HALF MINUTES FOR EVERYONE ELSE WE'VE ALREADY STARTED.

SO FIRST TIME, FIRST ITEM IN THE AGENDA IS THE APPROVAL OF SEPTEMBER 21ST, 2021 MEETING MINUTES.

HAVE YOU ALL HAD INTERVIEWED THEM OF APPROVAL? ALL THOSE IN FAVOR, SAY AYE.

MR. APPROVED, I'LL SIGN THEM ACCORDINGLY.

UH, LET'S MOVE ON TO ITEM NUMBER TWO, THE BOND PROGRAM AUDIT GOOD AFTERNOON CHAIRMAN AND THE AUDIT COMMITTEE MEMBERS.

UH, THE OBJECTIVE OF THIS AUDIT, UH, IN THIS PROTECT TO VERIFY, UH, OR, OR, YOU KNOW, REVIEW CITY'S PROJECT MONITORING REGARDING THE ACCURACY AND APPROPRIATENESS OF PAY APPLICATION OR INVOICES THAT WE RECEIVED, UH, FOR THE SCOPE OF THE AUDIT, WE ACTUALLY SELECTED THREE, UH, THREE VENDORS, THREE DIFFERENT PROJECTS AND MORE SHELTER POLICE PROPERTY, AND EVIDENCE ROOM AND AUDUBON REC CENTER.

THE REASON WHY WE SELECTED THESE THREE AUDITS, I MEAN, TH THESE THREE PROJECTS WERE BECAUSE THEY WERE PERFORMED BY THREE DIFFERENT VENDORS AND TWO DIFFERENT CONTRACT TYPES.

AND AT THE TIME WHEN WE REVIEWED THE PROJECT STATUS REPORT, THESE THREE PROJECTS WERE IN CONSTRUCTION PHASES.

THAT'S THE REASON WHY WE PICK THESE THREE ARE THREE, THESE THREE PROJECTS I KEPT ON SEEING AUDITS.

THESE THREE PROJECTS, UH, PATRICIA ACTUALLY DID THIS AUDIT.

SO I'M GOING TO TURN IT OVER TO HER.

UH, SHE'S GOING TO GO OVER SOME DETAILS ABOUT THE PROJECT ITSELF AND SOME OF THE CONTRACTUAL REQUIREMENTS AS WELL, LESS WHAT WE FOUND.

SO, THANKS.

UH, OKAY.

SO TO GIVE SOME BACKGROUND IN MAY OF 2019, THE CITY PRESENTED A $423.7 MILLION GENERAL OBLIGATION FUND, A BOND PROGRAM TO THE VOTERS OF GARLAND.

UM, IT WAS SUCCESSFULLY PASSED.

UM, FOLLOWING THAT IN SEPTEMBER OF 2019, THE CITY ENTERED INTO A PROFESSIONAL SERVICES AGREEMENT WITH A PROGRAM MANAGER TO PROVIDE ADMINISTRATION PROGRAM MANAGEMENT, DESIGN, AND ENGINEERING MANAGEMENT, AND PROJECT AND CONSTRUCTION MANAGEMENT SERVICES WITH DEDICATED STAFF RESOURCES FOR A PERIOD OF FIVE YEARS AT A COST OF APPROXIMATELY $13 MILLION.

IN SEPTEMBER OF 2021, A CHANGE ORDER WAS APPROVED TO EXPAND DESIGN MANAGEMENT, TO INCLUDE REVIEWS.

IN ADDITION TO, TO STAFF EXTENSIONS, UH, FOR $948,000 MAKING THE TOTAL PROFESSIONAL SERVICES AGREEMENT NOW APPROXIMATELY 14 MILLION.

SO ONCE A PROJECT IS MOBILIZED CONSTRUCTION RELATED PAY APPS ARE SENT TO AND APPROVED BY A PROJECT ARCHITECT, AS WELL AS THREE MEMBERS OF THE PROGRAM MANAGER AND UPON THEIR REVIEW AND APPROVAL, THE PAPS ARE THEN SENT TO THE DIRECTOR OF THE CITY'S OFFICE OF PROJECT MANAGEMENT FOR FINAL REVIEW AND APPROVAL PRIOR TO BEING PROCESSED FOR PAYMENT WHEN UNFORESEEN COSTS ARISE OR WHEN CONTINGENCY FUNDS ARE NECESSARY, ADDITIONAL FORMS MUST BE FILLED OUT AND SENT THROUGH THE SAME APPROVAL PROCESS.

UM, IN ORDER TO USE CONTINGENCY ALLOWANCES, THEY ALSO MUST BE APPROVED BY THE CONSTRUCTION MANAGER OR THE CONTRACTOR OR CMR OR CONTRACTOR, OR THE PROGRAM MANAGER, THE ARCHITECT AND THE CITY'S OFFICE OF PROJECT MANAGEMENT.

SO THE TWO CONTRACT TYPES THAT WERE COVERED, UM, DURING THIS AUDIT WERE THE COST PLUS A FEE WITH A GUARANTEED MAXIMUM PRICE CONTRACT.

AND I STIPULATED SOME CONTRACT ANIMAL SERVICES AND POLICE PROPERTY AND EVIDENCE BUILDING WERE COST-PLUS IN THE, AN, UH, AUDUBON REC CENTER WAS A STIPULATED SUM CONTRACT.

AND ACCORDING TO THE AMERICAN INSTITUTE OF ARCHITECTS, THERE ARE FOUR COMMON TYPES OF CONTRACTS.

THIS REPORT WILL DISCUSS TERMS AND CONDITIONS OF TWO OF THOSE BEING THE COST OF WORK PLUS, AND THE LUMP SUM OR STIPULATED SUM.

AND TO GIVE A LITTLE BIT OF BACKGROUND ON THE TYPES OF CONTRACTS THAT COST PLUS CONTRACTS, UM, AN OWNER AGREES TO PAY THE COST OF THE WORK, INCLUDING ALL TRADES, SUBCONTRACTOR, WORK, LABOR MATERIALS, AND EQUIPMENT, PLUS AN AMOUNT FOR CONTRACTORS, OVERHEAD AND PROFIT.

SINCE THE CONTRACTORS ARE REIMBURSED ONLY FOR ACTUAL COSTS, PLUS A FEE FOR OVERHEAD AND PROFIT.

IF ACTUAL COSTS ARE LOWER THAN ESTIMATED, THE OWNER GETS TO KEEP THE SAVINGS ON A STIPULATED SUM CONTRACT.

THIS IS A LUMP SUM OR FIXED PRICE CONTRACT.

THE OWNER AGREES TO BE RESPONSIBLE FOR THE JOB EXECUTION AT A SET PRICE.

IF THE ACTUAL COSTS ARE HIGHER THAN ESTIMATED THAT CONTRACTORS PRI PROFIT WILL BE REDUCED.

AND IF THE ACTUAL COSTS ARE LOWER, THE CONTRACTOR'S PROFIT INCREASES.

SO FIRST WE LOOKED AT ANIMAL SHELTER AND ADOPTION

[00:05:01]

FACILITY THAT HAD AN APPROVED BUDGET OF 15.8 MILLION TOTAL BUDGET, BUT THE CMR CONTRACT AMOUNT WAS 12.4 MILLION.

IT DID NOT INCLUDE OTHER PROJECT RELATED COSTS.

AND AGAIN, THIS IS A COST PLUS A FEE WITH A GUARANTEED MAXIMUM PRICE.

UM, THE CONTRACT ALSO STATES THAT SUPPORTING DOCUMENTATION SUCH AS INVOICES, PAYROLL, AND CANCELED CHECKS SHOULD BE SUBMITTED WITH THE PAY APPS.

WE REVIEWED JANUARY OF 2021 TO SEPTEMBER, 2021 PAY APPS AND THE , WHICH IS THE AUTHORIZATION TO USE THE CONTINGENCY MONIES AS WELL AS SUPPORTING DOCUMENTATION THAT WAS PROVIDED ALL WERE APPROVED AND PROCESSED BY THE ARCHITECT, THE PROGRAM MANAGER AND THE OFFICE OF PROJECT MANAGEMENT.

BUT THERE WAS VERY LITTLE EVIDENCE TO SUPPORT THE PROJECT COSTS, APPROXIMATELY 3.2, 5% OF THE 8.2 MILLION INVOICED AND PAID HAD ADEQUATE DOCUMENTATION TO SUPPORT THE INVOICES, FOLLOWING AN ANALYSIS OF THE PAY APPS AND SUPPORTING DOCUMENTATION.

I OBSERVED THE FOLLOWING MATERIALS WERE DELIVERED IN STORED ONSITE IN PREPARATION FOR CONSTRUCTION.

THE CMR BUILD FOR THIS IN MAY OF 2021 IN THE AMOUNT OF 94,600, ONCE THE WORK WAS COMPLETED IN JULY, THE CMR BILLED AGAIN FOR THAT SAME AMOUNT AS WORK COMPLETED, RESULTING IN A DUPLICATE PAYMENT.

AND JUST WANT TO ADD A NOTE THAT ONCE INTERNAL AUDIT NOTIFIED, UH, THE PROGRAM MANAGER, THEY WORKED WITH THE CMR TO GET THAT CORRECTED.

UH, WE ALSO FOUND EQUIPMENT DOWNTIME OF 12,400 WAS CHARGED TO THE CITY WITHOUT PROPER EXPLANATIONS TO THE CAUSE OR THE RESPONSIBLE PARTY.

IN ADDITION, THAT INVOICE HAD A CALCULATION ERROR, SUBCONTRACTOR DEFAULT INSURANCE, WHICH IS SUBGUARD IS TO BE CHARGED AT 1.5% OF THE CUMULATIVE VALUE OF ALL SUBCONTRACTS, BUT WITHOUT SUPPORTING EVIDENCE, INTERNAL AUDIT IS UNABLE TO VERIFY THE ACCURACY OF THIS FEE, THE CMR OVERCHARGED, THE CITY, APPROXIMATELY $8,400 IN FOR LIABILITY INSURANCE ON THREE OCCASIONS, SUBCONTRACTORS BUILD THE CMR FOR MATERIAL STORED, BUT CMR BUILD THE CITY IS IF THE WORK WAS COMPLETED, THIS METHOD COULD AFFECT THE PERCENTAGE COMPLETE AND BILLING ACCURACY INVOICE IS SUBMITTED TO THE CMR BY THE SUBCONTRACTORS DID NOT ALWAYS MATCH THE AMOUNT, THE CMR INVOICE TO THE CITY.

IN ADDITION TO THE SCHEDULE OF VALUES ADJUSTED UP AND DOWN MULTIPLE TIMES, FOR REASONS THAT WERE NOT CONSISTENTLY DOCUMENTED IN THE MANAGEMENT SYSTEM SYSTEM, PERHAPS IN SUPPORTING DOCUMENTATION RETAINED IN THE CONSTRUCTION MANAGEMENT SYSTEM WERE DISORGANIZED AND CONFUSING.

AND IN SOME INSTANCES THE SAME DOCUMENTS WERE ATTACHED TO SEVERAL PAPS, EVEN THOUGH THEY WERE NOT APPLICABLE TO THAT PARTICULAR PAYOUT, IAA REQUESTED ADDITIONAL SUPPORTING DOCUMENTATION.

AND THE CMR PROVIDED A JOB COST DETAIL REPORT, AND A REVIEW OF THIS DETAIL REPORT.

IT REVEALED A NUMBER OF ENTRIES THAT MAY NOT BE ELIGIBLE FOR BEING BILLED TO THE CITY EMPLOYER, EMPLOYEE AND SUBCONTRACTOR OVERTIME MAY BE INCLUDED IN BILLINGS AT A COST OF $5,624 PER THE CONTRACT OVERTIME IS AT CONTRACTOR'S EXPENSE UNLESS SPECIFICALLY EXCUSED BY THE CITY.

HOWEVER, INTERNAL AUDIT COULD NOT FIND ANY EVIDENCE OF THE CITY APPROVING THIS COST MEALS WERE CHARGED BY THE CMR AND BILLED TO THIS PROJECT IN THE AMOUNT OF $163 AND 98 CENTS.

THERE WERE MULTIPLE TRANSACTIONS FOR PURCHASES AT RETAIL TRADE STORES IN WHICH SALES TAX WAS PAID.

INTERNAL AUDIT ALSO REQUESTED CMR TO PROVIDE UNCONDITIONAL LIEN RELEASES FOR ALL SUBCONTRACTORS ON THE PROJECT.

BUT I HAS ONLY RECEIVED SIX LIEN RELEASES FOR ONE PAY APP TODAY IN CONCLUSION ON THAT PROJECT WITHOUT PROPER DOCUMENTATION, THE CONTRACT COMPLIANCE ACCURACY AND APPROPRIATENESS OF THE AMOUNTS ASSESSED IN ANY POTENTIAL COST SAVINGS CANNOT BE VALIDATED ON TWO POLICE PROPERTY AND EVIDENCE BUILDING.

THIS HAD AN APPROVED BUDGET OF 17.7 MILLION, ALSO A COST PLUS FEE WITH A GUARANTEED MAXIMUM PRICE.

THAT CONTRACT AMOUNT WAS 9.7 MILLION.

UM, AND JUST A REMINDER AGAIN, THAT, UH, PROJECT OVERRUN IS BORN BY THE CONSTRUCTION MANAGER, BUT IF IT'S LESS THE DIFFERENCES OF COST SAVINGS AND BELONGS TO THE CITY AGAIN, SUPPORTING DOCUMENTATION IS INVOICES, PAYROLL AND CANCELED CHECKS SHOULD BE SUBMITTED WITH THE PAY APPS.

I REVIEWED JANUARY, 2021 TO AUGUST, 2021 PAY APPS.

AND AS WELL AS SUPPORTING DOCUMENTATION, ALL PAY APPS WERE APPROVED AND PROCESSED BY THE ARCHITECT PROGRAM MANAGER AND OFFICE OF PROJECT MANAGEMENT.

BUT THERE WAS VERY LITTLE EVIDENCE FOR THE COSTS, APPROXIMATELY 0.2, 2% OF THE $4.3 MILLION INVOICE AND PAID HAD ADEQUATE DOCUMENTATION TO SUPPORT THE PAY OUT AT THE TIME OF THE AUDIT.

ONE OF THE SUBCONTRACTORS ON THIS PROJECT HAS FILED NOTICE WITH THE SURETY OF NON-PAYMENT BY THE CONTRACTOR, OR THE CONTRACTOR HAS BEEN PAID BY THE CITY

[00:10:02]

PAY AT NUMBER EIGHT, INCLUDED SUPPORTING DOCUMENTATION FOR ONE BUILT IN THE AMOUNT OF $9,503.

HOWEVER, THE SUPPORTING DOCUMENT INCLUDED SALES TAX IN THE AMOUNT OF $242 AND 69 CENTS WITHOUT PROPER DOCUMENTATION, THE CONTRACT COMPLIANCE ACCURACY AND APPROPRIATENESS OF THE AMOUNTS ASSESSED IN ANY POTENTIAL COST SAVINGS CANNOT BE VALIDATED, MOVING TO AUDUBON RECREATION CENTER.

THIS ONE IS A STIPULATED SUM CONTRACT.

THE APPROVED BUDGET WAS 6.1 MILLION.

THIS CONSTRUCTION CONTRACT AMOUNT IS 4.5 MILLION.

UM, JUST TO RECAP, STICKY STIPULATED SUM AS A LUMP SUM, IF THERE'S A COST OVERRUN, THE CONTRACTOR'S PROFIT IS REDUCED.

CONVERSELY, IF THE CONTRACTOR'S PROFIT IS INCREASED WITH BEST PRACTICES, THEY ARE NOT REQUIRED TO SUBMIT COST OF WORK DOCUMENTATION TO THE CITY, BUT IS REQUIRED TO OBTAIN COST INFORMATION FOR MATERIALS FROM, FROM SUBCONTRACTORS.

THE PURPOSES OF THAT, THE CITY CAN VERIFY THAT NO SALES TAX WERE PAID UPON PROCURING MATERIALS.

CONTRACTOR IS ALSO REQUIRED TO PROVIDE SUPPORTING DOCUMENTS RELATED TO USAGE OF CONTINGENCY AND ALLOWANCE FUNDS.

I REVIEWED SEPTEMBER, 2020 TO SEPTEMBER, 2021 PAY APPS AND CONTINGENCY ALLOWANCE.

AUTHORIZATIONS MAINTAINED IN THE SYSTEM ALL WERE APPROVED AND PROCESSED BY THE ARCHITECT PROGRAM MANAGER AND OFFICE OF PROJECT MANAGEMENT.

BUT THERE WAS VERY LITTLE EVIDENCE TO DETERMINE HOW MUCH SALES TAX WAS PAID AND THE PROPER USAGE OF CONTINGENCY AND ALLOWANCE FUNDS, APPROXIMATELY 20.4, 1% OF THE NEARLY 4.2 MILLION INVOICED AND PAID HAD ADEQUATE DOCUMENTATION TO SUPPORT THE INVOICES FOLLOWING IN ANALYSIS OF THE CONTRACTORS PAY APPS AND SUPPORTING DOCUMENTATION.

WE OBSERVED THAT WORK WAS PERFORMED BY SUBCONTRACTOR.

THAT APPEARED TO BE WITHOUT DESIGN APPROVAL AND NOT IN GOOD WORKMANSHIP AND AN APPROXIMATE AMOUNT OF $11,000.

THE ARCHITECT DEEMED THE WORK PERFORMED, NOT STRUCTURALLY SOUND AND REQUESTED CORRECTION IN ACCORDANCE WITH THE CONTRACT CORRECTIONS ARE TO BE PERFORMED AT CONTRACTOR OR SUBCONTRACTOR EXPENSE.

AND INSTEAD, THE PROGRAM MANAGER AGREED TO A 50% SPLIT OF THE COSTS.

SALES TAX WAS CHARGED ON ONE SUBCONTRACTOR INVOICE IN THE AMOUNT OF $368 CONTRACTOR HAS BEEN LATE PAYING SIX OF THE 10 BILLINGS RECEIVED FROM THE CITY FOR CITY PROVIDED SERVICES.

AND CURRENTLY HAS A PAST DUE BALANCE OF 1300 AT A NOTE THAT AT THE TIME THAT THIS WAS WRITTEN, THAT WAS ACCURATE.

IT HAS SINCE BEEN RESOLVED AT THE TIME OF THE AUDIT TO THE SUBCONTRACTORS ON THIS PROJECT HAVE FILED NOTICES WITH THE SURETY FOR NON-PAYMENT BY THE CONTRACTOR, OR THE CONTRACTOR HAS BEEN PAID BY THE CITY PAY APPS AND SUPPORTING DOCUMENTATION RETAINED IN THE CONSTRUCTION MANAGEMENT SYSTEM ARE DISORGANIZED AND CONFUSING, AND SOME DOCUMENTS WERE ATTACHED TO SEVERAL, PERHAPS EVEN THOUGH THEY WERE NOT APPLICABLE, ALTHOUGH THIS TYPE OF CONTRACT IS A FIXED PRICE OR LUMP SUM CONTRACT WE'RE IN THE AGREED UPON PRICE FOR THE PROJECT COMPLETION IS SET.

THE CONTRACTOR IS REQUIRED TO SUBMIT COST INFORMATION FOR MATERIALS FROM SUBCONTRACTORS SO THAT THE CITY CAN VERIFY THAT NO SALES TAX WAS PAID.

I DETERMINED THAT SALES TAX WAS PAID WITHOUT PROPER DOCUMENTATION.

THE CONTRACT COMPLIANCE ACCURACY AND APPROPRIATENESS OF THE AMOUNTS ASSESSED CANNOT BE VALIDATED.

I IS UNABLE TO VERIFY THE REASON THE CITY PAID A PORTION OF THE SUBCONTRACTORS CORRECTION OF POOR WORKMANSHIP OR WHETHER ADDITIONAL SALES TAX WAS CHARGED FOR MATERIALS PURCHASED COMMUNICATION BETWEEN DEPARTMENTS WHEN CONTRACTORS OR VENDORS ARE NOT TIMELY PAYING THE CITY FOR PR CITY PROVIDED SERVICES IS LACKING.

I RECOMMENDED, UH, THAT CITY MANAGEMENT SHOULD ENSURE THE CITY RECEIVES CREDIT FOR THE 94,000 THEY CONCURRED.

AND AS I PREVIOUSLY STATED, THAT HAS BEEN CORRECTED, UM, ALSO AT A MINIMUM OBTAIN AND REVIEW STATUTORY UNCONDITIONAL LIEN RELEASES FROM ALL SUBS BEFORE THE FINAL PAYMENT IS PROCESSED TO THE CMR MANAGEMENT CONCURRED, AS IT IS A REQUIREMENT OF ARTICLE NINE POINT 10.28201 GENERAL CONDITIONS.

WE ALSO RECOMMENDED AT A MINIMUM OBTAIN JOB COST DETAIL REPORTS FROM THE CMR AND REQUEST SUPPORTING DOCUMENTATION FOR A SAMPLE OF INDIRECT COSTS IN ORDER TO VERIFY BILLING, APPROPRIATENESS MANAGEMENT, CONCURRED, AND OPM OFFICE OF PROJECT MANAGEMENT AND PROGRAM MANAGER HAVE REQUESTED SUPPORTING DOCUMENTATION FOR ALL PAST PAY APPLICATIONS FOR ANIMAL SHELTER AND POLICE PROPERTY AND EVIDENCE BUILDING.

THEY ARE GOING TO WORK WITH FINANCE STAFF TO REVIEW AND VERIFY THE APPROPRIATENESS OF THOSE PAY APPLICATIONS AND SUPPORTING DOCUMENTATION THAT SHOULD HAPPEN BY JANUARY 30TH, 2022.

I ALSO RECOMMENDED THAT THE CITY SHOULD OBTAIN SUBCONTRACTOR, STATUTORY, UNCONDITIONAL LIEN WAIVERS FROM THE CONTRACTOR BEFORE THE FINAL PAYOUT PAID FINAL PAYMENT IS PROCESSED MANAGEMENT CONCURS.

THIS IS ON AUDUBON, UH, STIPULATED, SOME MANAGEMENT.

CONCUR'S ALSO AS A REQUIREMENT OF ARTICLE NINE POINT 10.2 OF THE 8 2 0 1 FOR ALL CURRENT AND FUTURE CONSTRUCTION RELATED CONTRACTS.

[00:15:01]

I RECOMMEND DEVELOPING AND IMPLEMENTING A PROCESS WITH CLEARLY DEFINED ROLES AND RESPONSIBILITIES FOR THE PROGRAM MANAGER OPM AND ALL CITY DEPARTMENTS INVOLVED WITH BOND PROGRAM MANAGEMENT, CONCURS AND STATES THAT ROLES AND RESPONSIBILITIES WITH REGARD TO MANAGEMENT AND OVERSIGHT OF THE BOND PROGRAM WILL BE DEFINED AND COMMUNICATED.

I RECOMMENDED CLEARLY COMMUNICATING AND WRITING THE CITY'S EXPECTATIONS OF ARCHITECTS, CMRS AND CONTRACTORS REGARDING SUPPORTING EVIDENCE MANAGEMENT, CONCURRED AND REQUIREMENTS FOR SUPPORTING DOCUMENTATIONS HAVE BEEN SENT OUT.

AND ALSO WE'LL REVIEW THE EXPECTATIONS WITH EACH A PRE-CONSTRUCTION PROJECT KICKOFF AND MONTHLY OAC MEETINGS.

I ALSO RECOMMENDED OBTAINING AND REVIEWING STATUTORY UNCONDITIONAL LIEN RELEASES FROM ALL SUBCONTRACTORS AND MANAGEMENT CONCURRED AS A REQUIREMENT OF ARTICLE NINE POINT 10.2 OF THE 8 2 0 1.

THIS HAS BEEN IMPLEMENTED AND WILL BE ONGOING FOR ALL FUTURE PROJECTS.

I RECOMMENDED OBTAINING AND REVIEWING, SUPPORTING DOCUMENTATION OF DIRECT AND INDIRECT COSTS AS OUTLINED IN THE CONTRACT ON A MONTHLY BASIS BEFORE PAYMENTS ARE PROCESSED MANAGEMENT CONCURRED AND STATED THAT STAFF SPECIFICALLY THE FINANCE DEPARTMENT IS IN THE PROCESS OF CREATING AND IMPLEMENTING A COMPLIANCE PROCESS THAT WILL INCLUDE A COMPLETE REVIEW OF PAY APPLICATION SUPPORTING DOCUMENTS FOR CAPITAL PROJECTS.

THIS PROCESS WILL TAKE PLACE FOLLOWING PAY APP REVIEW BY THE ARCHITECT AND PROGRAM MANAGER.

IT STAFF'S INTENTION TO WORK TO COMPLETE THIS REVIEW PRIOR TO THE ISSUANCE OF PAYMENT.

HOWEVER, CONTRACTUALLY THE CITY IS REQUIRED TO PAY EACH APPLICATION WITHIN 30 DAYS, SHOULD A DETAILED REVIEW NOT BE COMPLETED WITHIN THAT TIMEFRAME PAYMENT WILL BE MADE PER THE CONTRACT.

AND ANY DIFFERENCE DISCOVERED THROUGH THE COMPLIANCE PROCESS WILL BE RECONCILED ON THE NEXT PAY APP WHENEVER POSSIBLE TO BE IMPLEMENTED BY MARCH 1ST.

I ALSO RECOMMENDED VERIFY COMPLIANCE OF ALL TERMS AND CONDITIONS BEFORE PROVING PAYMENTS, SUCH AS USAGE OF CITY PROVIDED SERVICES AND SALES TAX, EXEMPTIONS MANAGEMENT, CONCURRED, AND STATED ESSENTIALLY THE SAME, UH, ANSWER THAT THEY WERE WORKING WITH THE FINANCE DEPARTMENT TO CREATE AND IMPLEMENT A COMPLIANCE PROCESS THAT WILL INCLUDE A REVIEW OF THE PAY APPLICATIONS.

AND WE'LL INCLUDE A VERIFICATION OF SALES TAX EXEMPTIONS ON THE PROJECT.

UH, NUMBER 10, UH, RECOMMENDED ENSURING THAT THE OFFICE OF PROJECT MANAGEMENT COORDINATE EFFORTS AND COMMUNICATION WITH REGARD TO CONTRACTORS RETAINED AND UTILIZATION AND PAYMENT OF CITY PROVIDED SERVICES IN THE EVENT, ANY, AND IT ENTITY IS DELINQUENT WORK WITH THE CITY ATTORNEY'S OFFICE ON A SOLUTION SUCH AS DELAYING PAYMENT UNTIL CD ACCOUNT IS CURRENT MANAGEMENT CONCURRED AND ARTICLE 9.5 OF THE 82 0 1 ADDRESSES NON-PAYMENT ISSUES TO SUBCONTRACTORS AND SUPPLIERS.

AND ON A QUARTERLY BASIS, OPM WILL PROVIDE SANITATION AND CUSTOMER SERVICE, A LIST OF CURRENTLY KNOWN CONTRACTORS WORKING ON CITY CONTRACT PROJECTS.

INSTRUCTIONS WILL BE GIVEN TO THOSE DEPARTMENTS AS TO HOW TO HANDLE A DELINQUENT ACCOUNT.

UM, AND SHOULD THE ACCOUNT REMAIN DELINQUENT, THE CORRESPONDING CMR OR CONTRACTOR SUBMITS A PAY APPLICATION TO THE MAY CHOOSE TO EXERCISE ITS RIGHT TO WITHHOLD PAYMENT.

MORE LIKELY WILL BE THAT THE CITY WILL EXERCISE ITS ABILITY TO REMEDY THE DELINQUENCY ON THE ACCOUNT THROUGH EXISTING PROCESSES IN CUSTOMER SERVICE AND SANITATION TO BELIEVE BE IMPLEMENTED JANUARY ONE.

DOES ANYBODY HAVE ANY QUESTIONS? OKAY.

THANKS.

THANKS MS. CHAIR.

UM, WOULD YOU GO BACK AGAIN TO YOUR DEFINITION OF A COST PLUS YOU GET IT ON ONE OF YOUR, ON THE SLIDES WAS EARLY IN ANY PRESENTATION IT'S ACTUALLY ON I'M SORRY.

I DID MY, I DIDN'T GET THE PACE.

YEAH, BITCH FIVE.

IT WAS ONE OF YOUR EARLIER, PROBABLY THE FIRST FULL THREE PAGES YET.

OKAY.

OKAY.

OKAY.

AND THIS DEFINITION IT SAYS, AND I'LL JUST PICK A PIECE IS USED WHEN THE SCOPE HAS NOT BEEN CLEAR DEFINED SUCH AS WHEN THE PROJECT SIGN IS STILL BEING FINALIZED AND AUTO WANTS TO BEGAN DIRECTION RIGHT NOW.

SAY AGAIN.

UM, CAUSE I WAS TRYING TO TAKE NOTES ON A POLICE PROPERTY BILLING COST-PLUS RIGHT.

YES.

OKAY.

AUDUBON AUDUBON IS ESCALATED SOME.

OKAY.

AND UM, THE OTHER PROJECT, UM, ANIMAL SHELTER, UH, ALSO COST PLUS COST PLUS.

SO WE HAD TWO COSTS PLUS, RIGHT? YES.

OKAY.

SO THAT FITS THE DEFINITION OF WHAT WE'RE LOOKING AT HERE.

YES.

OKAY.

[00:20:01]

ALL RIGHT.

UH, ON THE HEADSET THAT YOU'RE FINDING, SARAH, CAN YOU TALK ABOUT, YOU TALKED ABOUT THINGS AND I'M NOT GOING TO TRY TO GET INTO THE WEEDS, BUT LIKE THE EQUIPMENT DOWNTIME, UH, SOME OF THE EXPENDITURES WERE THERE WAS TEXAS RETAIL MERCHANTS, THOSE KINDS OF THINGS.

UM, WHAT ARE WE STILL IN THEIR PROCESS? WHAT EXPLANATION DOES TO SEE MORE PROVIDE FOR THOSE KINDS OF, UH, OCCURRENCES, PARTICULARLY, UM, UH, THE, THE, THE RETAIL STUFF.

AND I DON'T KNOW THAT THAT COULD BE MICRO.

I DON'T HAVE ANY IDEA, BUT JUST TO THAT'S IN YOUR REPORT.

SURE.

CAN YOU TALK ABOUT THAT JUT? HOW DO YOU, HOW DO YOU, MAYBE YOU HAVEN'T GOTTEN THIS FAR IN THE RECOMMENDATION, BUT I DIDN'T SEE EXACTLY HOW THAT KIND OF THING IS GOING TO BE ADDRESSED.

YES, COUNCILMAN, UH, WHEN WE DID THE AUDIT, WE WERE LOOKING AT WHAT DOCUMENTS THAT WE HAD INTERNALLY.

UM, AND SOME OF THOSE CAME FROM THE SUPPORTING EVIDENCE THAT WAS ATTACHED WITHIN THE, WITHIN THE DATABASE.

SO, UM, THERE IS, THERE'S NOT A, ANY KIND OF DEF, UH, AN EXPLANATION THAT WE RECEIVED IN REGARDS TO SALES STACKS, FOR EXAMPLE, UH, WHY WE WERE CHARGED FULL SALES TAX.

UH, BUT THAT'S WHY, UH, WE ARE RECOMMENDING THAT WE NEED TO OBTAIN FULL DOCUMENTATION TO IDENTIFY HOW MUCH THAT TOTALLY.

SO WE CAN MAKE AN ADJUSTMENT BEFORE WE MAKE A FINAL PAYMENT TO CMAR.

OKAY.

AND ON THE BILLING ON THE EQUIPMENT DOWNTOWN, WAS THAT ONE INSTANCE? SEVERAL, JUST ONE.

YEP.

KEEP IN MIND.

WE WERE ONLY ABLE TO LOOK AT AN VERY FEW, VERY 3% IN ANIMAL SHELTER, CASE SUPPORTING DOCUMENTS.

WE DON'T HAVE THE OTHER 97%.

OKAY.

BUT AS A PART OF THAT 3%, I UNDERSTAND YOU HAD A SMALL SAMPLING, RIGHT? WHAT'S THAT WAS THAT ONE INSTANCE, THE EQUIPMENT DOWNTIME CHARGE WAS THAT YES.

YES.

IT WAS ONE TIME.

AND PER THE CONTRACT, UH, IF, IF IT'S COST BY THE CITY, WE WILL PAY FOR IT.

BUT WE COULDN'T IDENTIFY IN THE SYSTEM, UH, WHO, WHO WAS AT FAULT, WAS IT BECAUSE OF US OUR FAULT OR WAS IT BECAUSE OF THE CONTRACTOR'S FAULT? SO THERE WAS NO DOCUMENTATION.

IN FACT, HE REACHED OUT, UM, TO HELEN WILKINSON TO IDENTIFY MORE DETAILS ON DOV.

AND WE HAVE NOT HEARD BACK FROM, UH, ANY, ANY, ANY FURTHER EXPLANATION ON THAT ONE AT THIS POINT.

OKAY.

IS THERE A TIMELINE FOR US HEARING BACK ON THOSE ISSUES? I KNOW SEAN IS TRYING HIS BEST TO OBTAIN THE, HE, HE ALREADY ASKED A FEW TIMES WITH HELEN WILKINSON, I BELIEVE ON THEIR SIDE, ON HELEN WILKINSON SIDE.

WHAT WE ARE HEARING IS THEY'RE ACCUMULATING ALL THE INFORMATION.

UM, SEAN CORRECT ME IF I'M WRONG, BUT UM, THEY WANT TO PROVIDE ALL THE INFORMATION TOWARDS THE END OF THE PROJECT.

OKAY.

BUT MY, MY QUESTION IS, IS THERE A TIMELINE FOR THEM TO PROVIDE THE INFORMATION? THAT'S MY QUESTION.

YEAH.

WELL, UH, I, I HOPE WE WOULDN'T PAY BEFORE WE GET ALL THE INFORMATION AND WE WOULDN'T PAY THE FINAL PAYMENT OR RELEASE THE RETAINAGE UNTIL WE GET ALL THE INFORMATION.

SO THE TIMELINE SHOULD BE COMING SOON.

OKAY.

SO THE CONDITION IS WE WON'T WRITE THE CUT THE FINAL CHECK UNTIL WE HAVE THE ANSWERS.

THAT IS OUR RECOMMENDATION.

THAT RE YES, BUT THERE'S NO TIMELINE.

I UNDERSTAND THE FINAL CHECK, BUT THERE'S NO TIMELINE FOR THEM TO PROVIDE THE INFORMATION.

WE JUST GOING TO HOLD, WE'RE GOING TO HOLD THE CHECK UNTIL THEY DO IT.

BUT DO THEY HAVE SIX MONTHS TO DO IT? OR HOW LONG? HOW LONG? WHAT IS OUR WAIT TIME? I'M TRYING TO GET SOME IDEA.

W HOW LONG, HOW LONG ARE WE WILLING TO WAIT? UH, HOW LONG ARE WE GOING TO WAIT? OR HOW LONG HAVE WE HYSTERICAL? I'M JUST TRYING TO GET SOME PERSPECTIVE HERE.

WHAT, YOU KNOW, I, I UNDERSTAND WE'RE GOING TO WAIT.

WE'RE NOT GOING TO PAY FINAL, BUT ARE WE LOOKING AT, DO WE HAVE A TARGET SCOPE? ARE WE JUST GOING TO WAIT UNTIL THEY SAY, WELL, GIVE US TIME TO GET THE INFORMATION TOGETHER AND THEN WE'LL GET IT TO YOU.

AND WE'LL TAKE CARE OF TIME.

I'M JUST TRYING TO GET A HANDLE ON WHAT, WHAT WE HAVE WE HAVE.

ARE WE GOING TO PICK, ARE WE JUST GOING TO PLAY DEFENSE ON THIS AND HOLD THE CHECK AND LET THEM PLAY OFFENSE AT, I THINK THIS INFORMATION WAS REQUESTED AND A NUMBER OF MONTHS AGO, UH, AND, UH, WE WERE HOPING THAT WE WOULD GET THE INFORMATION BY NOW, BUT WE DIDN'T.

UM, SO WHY, WHY WHAT'S THEIR RESPONSE AS TO WHY WE HAVE NOT GOTTEN THE INFORMATION FROM SEAN

[00:25:01]

OR RICK? YOU CAN HELP ME ON THIS ONE, IF YOU MAY.

HMM.

SO THIS, UH, EFFORT TO, UH, AUDIT, UH, THE CMR CONTRACTS HERE, BOTH OF THOSE CMRS HAVE DONE QUITE A BIT BETTER WORK FOR THE CITY OF GARLAND.

THERE DOESN'T MEAN THEY SHOULDN'T DO IT.

THEIR COMPLAINT IS THIS IS REALLY LATE IN THE BALL GAME.

WE'RE LIKE 10 MONTHS INTO A 12 MONTH CONSTRUCTION PROJECT WHERE THEY HAVEN'T HISTORICALLY BEEN PROVIDING THAT BACKUP INFORMATION WITH THEIR INVOICES.

THEY BOTH INDICATED THEY'RE WILLING TO DO IT.

UH, AFTER THE INITIAL REQUEST I SENT SAYING, HEY, PLEASE PROVIDE THIS INFORMATION OR GIVE ME A SCHEDULE WHEN YOU'RE GONNA PROVIDE THAT, PROVIDE THIS INFORMATION.

UM, THEY RESPONDED WITH A SUMMARY, A JOB COST DETAIL REPORT THAT OUTLINES ALL THOSE COSTS, BUT DOESN'T PROVIDE, GO TO THE F PROVIDING ALL THOSE, UH, RECEIPTS AND OTHER INVOICE PROOF, PROOF OF PAYMENT.

UM, THEY'RE GATHERING IT NOW BOTH, UH, CORE AND HEAL WILL CONCERN FOR BOTH OF THOSE PROJECTS HAVE INCENTIVE TO COMPLETE THAT GATHERING OF INFORMATION AND GET IT TRANSMITTED TO US BECAUSE IT'S AT A TIME WHERE THEY CAN ACTUALLY GET PAID FOR THAT EXTRA WORK OF GATHERING.

THE INFORMATION THEY'D NORMALLY WOULD HAVE BEEN MOVING FORWARD.

THEY WILL BE GATHERING THOSE DOCUMENTS AND SUBMITTING IT WITH EACH INVOICE, AND WE'LL BE PAYING FOR THEM TO DO THAT DOCUMENT GATHERING AT THIS POINT IN TIME WITH BOTH OF THOSE PROJECTS REACHING NEAR, NEAR THE PROBABLY THE FIRST QUARTER OF NEXT YEAR BEING COMPLETE THAT'S, THAT'S KIND OF THE BACK END.

I SPOKE TO ONE OF THE, UH, PROJECT MANAGERS TODAY FOR THEM.

AND THAT'S WHERE THE BACK END OF THE LATEST THEY CAN BE.

UM, AGAIN, THEY'RE, THEY'RE NOT TRYING TO MAKE AN EXCUSE FOR THEM, BUT THEY'RE TRYING TO GATHER ALL THE INFORMATION WHILE THEY'RE FINISHING ALL THE FINISHING THE PROJECTS, AND IT'S JUST TIMELY TIME-CONSUMING FOR THEM.

SO NOT A GREAT ANSWER.

UH, THEY'RE BOTH.

THEY BOTH KNOW THEY DIDN'T NEED TO BE WORKING ON THAT, UM, INFORMATION IN TERMS OF THE, UH, EQUIPMENT DOWNTIME, THAT EQUIPMENT DOWNTIME WAS CAUSED BY AN UNKNOWN CONDITION WITH THE SUB-SURFACE WITH THE SOIL, UH, PARDON ME.

AND SO THAT UNKNOWN CONDITION BECOMES AN OWNER.

THE OWNER OWNS THAT PROBLEM BECAUSE THE OWNER OWNS THE PROPERTY.

SO WHILE WAITING FOR RESOLUTION WITH THE GEO-TECH TECHNICAL ENGINEER, THE ARCHITECT, THE STRUCTURAL ENGINEER AND THE CONTRACTOR AND SUBCONTRACTORS, THAT EQUIPMENT ENDS UP, ENDS UP SITTING IDLE.

AND I HAVE TO ASK STEVE OR BRIAN TO CORRECT ME IF I'M WRONG, BUT, UH, THAT ENDS UP BEING A COST THAT IS ELIGIBLE TO REIMBURSED TO, TO THE CMR FIRM.

THAT'S NOT SOMETHING THAT THE OWNER SAYS, OH, NOT MY FAULT.

WELL, BECAUSE THE OWNER OWNS THE LAND.

THE OWNER OWNS THE PROBLEM OF THE POOR SOIL CONDITIONS.

AND THEREFORE THE OWNER NEEDS TO RE PARDON ME, REIMBURSE THE CMR FOR THOSE COSTS IN TERMS OF SALES TAX, WE WILL NEED TO RECOVER THAT FROM THEM, EITHER ON AN INTERIM PAY AT THAT COMES UP SOON OR AN IN A FINANCIAL PARDON ME, FINANCIAL RECONCILIATION AT THE END OF THE PROJECT.

SO THOSE WILL BE RECOVERED TO THE EXTENT WE CAN OUTLINE WHAT THOSE, UH, SALES TAX THAT WE'RE PAID ACTUALLY ARE I LAST TWO QUESTIONS YET? ONE.

OKAY.

GIVEN, GIVEN THAT, THANK YOU FOR THE ANSWER, GIVEN THAT, UM, SO CORRECT ME IF I'M WRONG INITIALLY, WHEN WE WERE VETTING THEM FOR THE PROJECT, FOR THE ON-TRACK THE THINGS THAT YOU FOUND IN DISCUSSED, THOSE ARE ITEMS THAT WERE NOT A PART OF THE INITIAL SCOPE OF THE CONTRACT OR THE DISCUSSIONS, IS THAT CORRECT? I'M NOT SURE I UNDERSTAND THE QUESTION, WHAT YOU'VE JUST EXPLAINED.

THOSE WERE NOT WHEN, DURING THE INITIAL VETTING PROCESS AND MEETING WITH THE CONTRACTORS, THOSE THINGS THAT THE, UM, THE, THE FINDINGS IN THE AUDIT REPORT.

OKAY.

TH THINGS LIKE EQUIPMENT DOWNTIME, THINGS LIKE RETAIL PURCHASES, THAT THOSE KINDS OF THINGS ARE THOSE THINGS GENERALLY A PART OF THEIR INITIAL DISCUSSION WITH, WITH CONTRACTORS.

DO THEY KNOW, LET ME BREAK THEM INTO CATEGORIES.

DO THEY KNOW WHAT'S ALLOWABLE GENERALLY, AND WHAT'S NOT ALLOWABLE ON THE CONTRACT.

AND HOW IS BRIEFLY TELL ME, HOW DOES, HOW IS THAT COMMUNICATED TO A CONTRACTOR WHAT'S ALLOWABLE? WHAT'S, IT'S KIND OF LIKE AN INSURANCE POLICY.

YOU GET THE FINE PRINT, YOU KNOW, TELL YOU WHAT YOU CAN FILE.

SO DOES THE CONTRACT TO KNOW UPFRONT WHAT TO GENERALLY UNDERSTAND EXCEPTIONS AND THINGS FOR YOU, BUT DO THEY KNOW GENERALLY IS THAT COVERED WITH THEM? WHAT'S GENERALLY ALLOWABLE AND WHAT IS NOT? CAUSE IT SOUNDS LIKE WHAT YOU'RE SAYING.

THEY DIDN'T KNOW SOME STUFF.

WELL, SALES TAX SALES TAX IS CLEAR.

I THINK, UH, WHICHEVER PROJECT THAT WAS THAT CMR FIRM WOULD ABSOLUTELY SAY RIGHT UP FRONT.

YEP.

WE SHOULDN'T CHARGE SALES TAX.

I EXPECT THAT TO BE THE RESPONSE.

UH, CAUSE IT'S PRETTY, IT'S PRETTY CLEAR HISTORICALLY THEY'VE DONE WORK FOR CITY, THE CITY AND OTHER MUNICIPALITIES.

THEY KNOW THEY SHOULDN'T PAY SALES TAX.

UH, AND SO THERE, MY ASSUMPTION IS THEY'RE GOING TO COME BACK AND SAY, YEAH, WE, WE SHOULDN'T HAVE, WE SHOULDN'T HAVE PAID THAT.

WE NEED TO FIND A WAY TO REIMBURSE THE CITY FOR THOSE COSTS.

UM, AND, AND JUST IN GENERAL, YEAH.

THOSE THINGS THAT COME UP ON A PROJECT ARE COVERED PRETTY WELL.

UM, IN TERMS OF WHAT'S ALLOWED TO BE REIMBURSED

[00:30:01]

AND WHAT'S NOT, NOT ALLOWED TO BE REIMBURSED IN THE CONTRACT.

I DON'T KNOW THAT THERE'S ANY SUGGESTED CHANGES TO THAT, THAT WE WOULD HAVE.

OKAY.

OKAY.

AND MY LAST QUESTION IS ON THE TWO CATEGORIES OF CONTRACTS THAT YOU'RE TALKING ABOUT, WHICH ONE GENERALLY, BASED ON THIS, YOU GOT TWO THAT ARE COST PLUS ONE.

WHAT'S NOT OKAY.

UM, HOW DO I ASK THIS QUESTION? WHICH OF THOSE CATEGORIES ARE MORE, I WANT TO USE THE TERM USER FRIENDLY, UM, WAS DIRECTOR.

WHAT DO YOU, BASED ON YOUR, YOUR, YOUR FINDINGS, I'M TRYING TO GET TO THE HOW TO, SO WHICH OF THOSE, CAUSE I'M S I'M SEEING IN HERE IN SOME THINGS COST PLUS THINGS THAT I'M NOT HEARING AND SEEING IN THE OTHER CATEGORY.

SO YOU ASKING ME, OR DID I AUTOMATICALLY ANSWER THE QUESTION? I JUST, I'M TRYING TO GET JUST AN UNDERSTANDING OF WHICH IS BETTER OR NOT BETTER MAY NOT BE DOESN'T MEAN CHEAPER.

I DON'T MEAN THAT, BUT WHICH, WHAT DOES THE TWO TYPES YOU'VE LOOKED AT 2 0 1 AND ONE OF THE, OF, OF ANOTHER KIND.

SO WHAT I'M ASKING IS YOU FOUND SOME, SOME CONCERNS ON ONE THAT SO FAR WHEN I READ TO YOU THAT YOU DIDN'T FIND WITH THE OTHER, RIGHT.

WELL, IF I MAY, SO I'M NOT ASKING THE QUESTION, RIGHT, JED, BUT I THINK I UNDERSTAND WHAT I'M SAYING.

I'M, I'M, WE'RE LOOKING AT TWO DIFFERENT TYPES OF CONTRACTS FROM A BILLING PERSPECTIVE.

MY BILLING STANDPOINT, ENDPOINT GUARANTEED MAXIMUM PRICE CONTRACT HAS MORE REQUIREMENTS.

OKAY.

THE FIXED PRICE.

THIS IS HOW MUCH WE ARE GOING TO PAY YOU.

RIGHT.

YOU MAKE A PROFIT GOOD FOR YOU.

IF YOU DON'T MAKE A PROFIT THAT'S, THAT'S ON YOU.

THE RISK IS ON THE CONTRACTOR.

THE MAIN CONCERN ON THAT ONE IS SALES TAX, RIGHT? SO FROM A BILLING PERSPECTIVE, NOT FROM MY CONSTRUCTION PERSPECTIVE, I CANNOT SPEAK ON THAT.

I'M NOT AN ARCHITECT OR A CONTRACTOR OR AN ENGINEER, BUT FROM A BILLING PERSPECTIVE, THE GUARANTEED MAXIMUM PRICE HAS MORE REQUIREMENTS ON THE CONTRACTOR SIDE.

AND ON THE CITY SIDE, YES, WE WOULDN'T WANT THE INFORMATION TO VERIFY THE COST BECAUSE THE WAY IT WORKS, IF I MAY STEP BACK A LITTLE BIT ON GUARANTEED MAXIMUM PRICE, THAT MAINLY TWO CATEGORIES, THEY CAN BILL US ON EVERYTHING, UM, THAT THEY INCURRED.

SO IF THEY HAD TO HIRE A PAINTER FOR A HUNDRED THOUSAND DOLLARS, THEY WOULD TURN AROUND AND BILL US $400,000 AND THAT'S WHAT WE WOULD PAY.

UH, BUT NOW THEY HAVE TO SUBMIT ALL THAT INFORMATION TO US, FOR US TO VERIFY THAT WAS THE ACTUAL COST, UH, ON, UH, THEN THEY WILL MAKE A PROFIT.

A PERCENTAGE USUALLY IS HOW THAT WORKS ON A FIXED PRICE CONTRACT.

UH, WE AGREED, WE'RE GOING TO GIVE YOU $5 MILLION FOR DOING THIS FOR SO, SO THERE'S NOT A LOT OF REQUIREMENTS FOR THEM TO SUMMIT FROM MY BILLING PROCESS.

WOULD YOU SAY, CAUSE PLUS IT'S MORE FLUID THOUGH.

CAN IT INCLUDE MORE? IS IT MORE FLUID THAN, WELL, I THINK MORE CORRECT.

MAKE SURE ON IF I'M WRONG, THE RIGOR, THE PROJECT IS USUALLY YOU WOULD USE COST.

I MEAN, GUARANTEED MAXIMUM PRICE IS THAT THERE'S A GOOD DEBATE AND WE'VE HAD GOOD DISCUSSIONS WITH STAFF OVER, WHICH IS THE APPROPRIATE METHOD FOR EACH ONE.

I DON'T KNOW.

ONCE YOU GET INTO CONSTRUCTION, UH, APPROVAL OF SOME OF THE USE OF THOSE ALLOWANCES IS A VERY SIMILAR, UH, PROCESS.

SO I DON'T KNOW THAT THERE'S A, A BETTER ONE OR MORE EFFICIENT, BUT, BUT JUDGE WRITES CERTAINLY THE, THE BILLING REQUIREMENTS, UH, ARE MUCH MORE STRENUOUS ON THE COST PLUS BECAUSE THEY'RE SUPPOSED TO PROVE UP WHAT THOSE COSTS ACTUALLY ARE THAT THEY'RE ASKED TO BE REIMBURSED FOR AND THEN GET A PROFIT ON TOP OF THAT.

OKAY.

ALL RIGHT.

THANK YOU.

THANK YOU FOR YOUR ANSWER.

SO YEAH.

THANKS FOR YOUR ANSWER, UH, FOR THAT JET.

AND I'D LIKE TO JUST SHARE THAT, THAT THIS COMMITTEE IS KEPT INFORMED ON AS WE MOVE FORWARD TO GETTING THE INFORMATION FROM THE VENDORS, UM, ON THIS, UH, I'D LIKE TO BE KEPT INFORMED ON, ON, UH, ON HOW, HOW THAT IS PROGRESSING.

I HAVE TO GIVE CREDIT TO THE ADMINISTRATION CITY MANAGER'S OFFICE BECAUSE THEY'RE ACTUALLY PUTTING A COMPLIANCE PROGRAM WITHIN THE FINANCE DEPARTMENT.

SO A PERSON WILL BE WORKING, UH, EFFECTIVE SOON.

I KNOW MATT COULDN'T BE HERE TODAY.

HE WANTED TO BE HERE, BUT HE COULDN'T BE HERE TODAY.

SO THE, SO THEY WILL HAVE A PERSON WHO IS ACTUALLY WHO WILL BE LOOKING AT EVERY PAIR, EVERY DETAILS.

AND SO, UM, THANKS TO A CITY MANAGER AND HIS STAFF.

OKAY.

THAT'S KIND OF THING I'M TALKING ABOUT NOW.

I WAS NOT AWARE OF THAT ARRANGERS.

THANK YOU SO MUCH.

THANK YOU, MR. CHAIR, WE'RE WORKING ON FIXING THESE THREE PROJECTS.

WHAT ABOUT THE OTHER 14? WELL, THE RECOMMENDATION IS WE SHOULD IMPLEMENT THE EXACT SAME RECOMMENDATIONS IN ALL PROJECTS.

THAT IS WHAT WE, THE RECOMMENDATIONS WE JUST SAMPLED

[00:35:01]

THREE.

AND, UM, IN THE PRIVATE SECTOR, I WOULDN'T BE PAID FOR AN EXPENSE WITHOUT A RECEIPT.

AND I'M VERY DISTURBED BY THE NEED FOR THE IIA RECOMMENDATION AND THE STAFF PLAN FOR OUR FINANCE DEPARTMENT TO GO THROUGH AND BUILD THESE SETS OF CONTROLS BECAUSE THAT'S PART OF WHAT I THOUGHT WE WERE GETTING WITH THE AGREEMENT WITH E-COM NOW I'VE I REQUESTED A COPY OF THE CONTRACT AND I'VE JUST HAD 20 MINUTES TO SKIM IT BEFORE THIS MEETING AND SECTION FOUR H OF THE CONTRACT STATES THAT THE CONSTRUCTION MANAGERS HAVE PRIMARY RESPONSIBILITY TO REVIEW, EVALUATE MARIE, MAKE RECOMMENDATIONS TO COG ON ALL INVOICES AND PAY APPS.

THEY'RE SUPPOSED TO ASSIGN JOB ACCOUNTING CODES AND TRACK ALL TRANSACTIONS.

AND TO ME IT FEELS LIKE THAT'S NOT BEEN DONE BY A E-COM AND THAT WE HAVEN'T ENFORCED IT ON OUR SIDE.

AND, AND THIS, THIS IS THE BASICS, BASIC ACCOUNTING CONTROLS.

AND SO I DON'T KNOW IF THERE'S A QUESTION IN THERE FOR AUDIT BECAUSE YOU GUYS HAVE DISCOVERED IT, HE BROUGHT IT TO LIGHT.

YOU BROUGHT IT TO CITY MANAGEMENT.

AND IF I WANDER TOO FAR OFF THE TOPIC, MR. CHAIRMAN, I APOLOGIZE.

UM, BUT I HAVE TO ASK THE QUESTION, WHY IS CITY MANAGEMENT HAVING TO DO THE JOB THAT WE HAVE CONTRACTUALLY AGREED WITH THE E-COMM THAT THEY ARE SUPPOSED TO BE DOING FOR US? COUNCILMAN, I THINK, UH, AS WE HAVE WRESTLED WITH THIS, UM, IT TOOK TO GET TO THE BOTTOM LINE.

I THINK WE HAVE A DIFFERENT INTERPRETATION OF FOUR H THAN A E-COM.

UM, THEY, UH, A, A COMMS, UM, BILLING IS BASED ON A DIFFERENT DEFINITION THAN THE DEFINITION YOU JUST STATED IN THE DEFINITION THAT I WAS OPERATING FROM.

I WILL TELL YOU GOING FORWARD, UM, THAT IF IT MEANS ADJUSTING THE AMOUNT WE HAVE TO PAY A CALM, I'D MUCH RATHER DO THIS IN HOUSE.

I CAN DO IT CHEAPER IN HOUSE, AND WE HAVE THE INCENTIVE, UH, IF THERE'S COST SAVINGS TO BE FOUND AND CAPTURED THAT INCENTIVE REST WITH US, UH, SINCE WE'RE THE ONES WHO BENEFIT FROM THAT.

SO, UM, NO DOUBT WE HAVE, WE HAVE, UH, UH, THANKS TO JED AND HIS TEAM.

WE'VE JUST A MISSING PIECE AND YOU'RE ABSOLUTELY RIGHT.

THIS IS PART OF THE BASICS.

AND, UM, UH, IT IS EMBARRASSING TO BE THIS FAR ALONG AND TO DISCOVER THAT THAT WHAT WE THOUGHT WE HAD IS NOT WHAT WE HAVE, UH, BUT GOING WHAT GOING FORWARD.

UH, AGAIN, SEAN, UH, UH, YOU, YOU MAY WANT TO CHIME ON, ON THIS, BUT MY, MY UNDERSTANDING IS, IS IF THEY'RE, IF WE'RE GOING TO COME TO A RECONCILIATION, UH, OF THE CONTRACT LANGUAGE, BASED ON WHAT WE EXPECTED, WE CAN EXPECT A SUBSTANTIAL CHANGE ORDER FROM A CALL.

SO THIS, THIS ALL COMES DOWN TO MISUNDERSTANDINGS, RIGHT? THE, WHAT DOES REVIEW AND INPUT IS PART OF THE PAP PROCESSING PROCESS BEING VERSUS AN AUDIT? UM, WHEN I TALKED TO, UH, WELL, THE CITY ASSISTANT CITY MANAGER TODAY, WHEN OUR CONTRACT WAS SIGNED, DELIVERY METHODS WERE NOT ESTABLISHED FOR BETWEEN CSP AND CMR. SO CERTAINLY CMR PROJECTS REQUIRE A LOT MORE INTENSIVE REVIEW, BUT AT THE TIME WE DIDN'T KNOW WHAT THE DELIVERY METHOD FOR PROJECTS WAS GOING TO BE.

IF THE EXPECTATION WAS AN AUDIT OF EACH PAY UP GOING FORWARD, THE TEAM THAT I WOULD HAVE HAD TO BRING TO THE TABLE WOULD HAVE BEEN MUCH LARGER THAN THE PRICE WOULD HAVE MUCH HIGHER.

UM, SO THAT'S, AGAIN, ALL PART OF PET MISUNDERSTANDINGS OR ASSUMPTIONS THAT WERE MADE THAT GOT US HERE TODAY.

UH, BUT CERTAINLY THERE WOULD BE INCREASE IN WHETHER IT'S CITY STAFF OR E-COMM STAFF, UH, THE EFFORT REQUIRED TO PROVIDE THAT, UH, AUDIT, UM, OF, OF EACH OF THOSE PAY APPS.

SO IF YOU LOOK AT, UH, THE CERTIFICATE FOR PAYMENT ISSUED BY THE ARCHITECT, YOU KNOW, IT SAYS CERTIFICATE OF PAYMENT, THEY ARE NOT CERTIFYING TO ANYTHING, THEIR LANGUAGE IN THEIR CONTRACT REFERENCES, UH, SPECIFICALLY NOT AN EXHAUSTIVE REVIEW OF, YOU KNOW, VARIOUS THINGS BECAUSE THEY DON'T WANT, THEY DON'T WANT TO GO THROUGH THAT EFFORT OF REVIEWING EVERY LINE ON EVERY PAY APP.

WELL, ONE OF THE, UH, WHEN, UH, ONE OF THE REASONS WE CONTRACTED THIS, THIS WHOLE THING OUT, UH, IS WE WERE LOOKING FOR A GROUP THAT, THAT HAD THE EXPERIENCE TO KNOW WHERE ALL THE DIFFERENT GOTCHAS WERE.

AND THAT I BELIEVE IS WHAT I THOUGHT WE

[00:40:01]

WERE GETTING WHEN WE APPROVED THE CONTRACT.

THAT'S OUTSIDE THE SCOPE OF THE DISCUSSION IN SOME WAYS, UM, THAT THAT'S, THAT'S TO FIND A PAIR OF SPLITTING FOR MY TASTE.

AND WE MAY JUST HAVE TO AGREE TO DISAGREE, BUT I FEEL LIKE IF WE'RE HAVING TO, YOU KNOW, WHERE WE'RE ARGUING HERE IS WHETHER A IT'S A BASIC FUNDAMENTAL PIECE OF CONSTRUCTION MANAGEMENT THAT YOU'RE HANGING ONTO YOUR RECEIPTS.

AND I WOULD SAY THAT THAT'S SOMETHING THAT, UH, THAT HAS NOT BEEN DELIVERED AND IS CERTAINLY, UH, IN MY EYES, AT LEAST AS MEN OF FAILURE, UM, THE ACR INCIDENT WITH THE COST SPLIT, UH, CAN ANYBODY, IT SEEMS LIKE SOMEBODY BUILT SOMETHING THAT WASN'T IN THE DESIGN, AND THEN WE PAID HALF THE COST TO GO THROUGH AND HAVE THEM REDO IT.

UH, CAN ANYBODY GIVE ME MORE DETAILS ON THAT PARTICULAR INCIDENT? I SURE DON'T, I'D HAVE TO CHECK INTO MIKE, MY CASES, THERE'S SOME IN-BETWEEN SETTLEMENT THERE WHERE IT WASN'T JUST AS EASY AS THIS WORK IS SCREWED UP.

YOU MUST, YOU MUST REPAIR IT AT YOUR COST.

SO OFF THE, WELL, I MEAN, ON, ON SUCH A BIG PROJECT, I, I USUALLY DON'T WORRY ABOUT SOMETHING THAT SMALL, UH, THAT'S SOMETHING THAT WE WANT TO INVEST OR INVEST OUR, OUR PROJECT MANAGERS WITH THE ABILITY TO JUST MAKE A DECISION AND GET IT DONE WHEN THE COST OF DELAY, UM, MIGHT BE GREATER THAN THE COST OF, YOU KNOW, JUST SWELLING, A LITTLE BIT OF OUR PRIDE AND GETTING IT DONE, BUT WOULD LIKE SOME DETAILS ON THAT LATER ON, YOU ANSWERED ONE OF MY QUESTIONS, WHICH IS WE'LL SEE SALES TAX REFUNDS POTENTIALLY THROUGH RECONCILING IT WITH THE FINAL PAYMENT.

AND THAT'S GOOD.

UM, AS FAR AS OUR LIABILITY GOES WITH THE SUBCONTRACTOR LIENS, CAN YOU KIND OF EXPLAIN THE FRAMEWORK OF, OF, UH, WHAT OUR RESPONSIBILITY IS AS A, AS A CITY, BECAUSE I DON'T KNOW THE LAW IN THAT AREA, AND I'M NOT SURE IF THAT'S SOMETHING WE'RE REQUIRED TO DO, UH, AS WE WORK WITH THE SURETY OR HOW THAT THERE'S A LOT OF PARTIES THERE, AND I WANT TO MAKE SURE I UNDERSTAND IT CORRECTLY.

COUNCILMAN, UM, THE, THE SHORT ANSWER IS WE DON'T HAVE LIABILITY.

UM, EVERY ONE OF THESE, THEY PROVIDE A PAYMENT BOND FOR THE FULL AMOUNT OF THE PROJECT.

THE PURPOSE OF THE PAYMENT BOND IS TO PAY SUBCONTRACTOR CLAIMS. UM, THEY HAVE TO GO THROUGH A VERY COMPLICATED NOTICE REQUIREMENTS FOR THE SURETY.

UM, BUT IF THEY GET THAT AND THE SURETY DETERMINES, YEAH, YOU SHOULD HAVE GOTTEN PAID, THEN THEY'LL PAY IT.

IF, IF THEY DON'T MEET THE NOTICE REQUIREMENTS, THEY'RE OUT OF LUCK BECAUSE THEY CAN'T PUT A LIEN ON, ON CITY PROPERTY.

IN SOME RARE INSTANCES, IF WE'RE AWARE THAT THEY ARE NOT GETTING PAID AND WE CONTINUE SENDING MONEY, UH, TO THE CONTRACTOR FOR THEIR WORK THAT POTENTIALLY COULD, COULD COST SOME LIABILITY ON OUR PART.

BUT AGAIN, IT WOULD BE VERY, VERY, UH, CIRCUMSTANCE, UH, INTENSIVE.

AND IT'S NOT SOMETHING YOU, YOU COULD CALL OUT IT, YOU KNOW, FROM, FROM 20,000 FEET, YOU, YOU REALLY HAVE TO HAVE A LOT MORE DETAILS ABOUT WHAT'S GOING ON, WHAT HAPPENED.

OKAY.

AND I KNOW WE, WE HAVE A REPUTATIONAL ISSUE AT STAKE AS WELL, WHERE WE WANT TO MAKE SURE THAT THE PEOPLE WHO DO WORK FOR US ARE GETTING PAID.

AND, UH, BUT I APPRECIATE THAT WE HAVE NO LEGAL LIABILITY.

WE JUST KIND OF HAVE THAT REPUTATIONAL AND MORAL IMPERATIVE TO DO ABSOLUTELY, UH, COUNCILMAN MY BACKGROUND BEFORE I CAME TO THE CITY, UM, MY IMMEDIATE PAST FIRM WAS REPRESENTING TRADE SUBCONTRACTORS.

SO I'M VERY WELL AWARE OF SOME OF THE DIFFICULTIES THEY CAN FACE.

AND, UM, TO THE EXTENT THAT I'VE BEEN ABLE TO, WHEN WE GET NOTICES THAT COME TO OUR OFFICE, I, I MAKE IT A POINT TO RESPOND IMMEDIATELY TO LET THEM KNOW THIS IS WHAT YOU GUYS NEED TO DO.

YOU DON'T SEND IT TO US AND TO THE SURETY BECAUSE I WANT TO PROTECT THE PEOPLE THAT ARE DOING THE, UH, THE HARD WORK TO BUILD, UM, OUR VARIOUS PRODUCTS.

UH, APPRECIATE YOU LOOKING OUT FOR THE LITTLE GUY.

SO THANK YOU, MR. CHAIRMAN.

THAT'S ALL I'VE GOT.

THANK YOU, SIR.

THANK YOU.

UM, I'LL JUST ADD A FEW, UH, I THANK YOU GUYS VERY MUCH FOR THIS AUDIT AND I, I THINK IT'S A CLEAR EXAMPLE OF WHY IT'S SO IMPORTANT, UM, THAT THE CITY HAVE A RIGOROUS AUDIT FUNCTION, UM, TRANSPARENCY AND ACCOUNTABILITY.

NONE OF THIS, NONE OF THIS IS OUR MONEY.

THIS IS MONEY THAT IS LARGELY, THAT HAS COME FROM WELL, THE MONEY COMES FROM THE BONDS, BUT FROM THE BANKS, BUT EVENTUALLY PAID OFF WITH, WITH TAXPAYER FUNDS.

UM,

[00:45:02]

AND THAT PUTS US AT, I THINK, A VERY HIGH OBLIGATION TO BE ABLE TO BE TRANSPARENT AND TO BE ABLE TO SHOW PEOPLE THAT THEY'RE NOT GETTING THE NOBODY'S GETTING FLEECED.

UM, IT, AND THAT'S NOT TO SUGGEST THAT THERE'S, YOU KNOW, MISTAKES HAPPEN AND PEOPLE MISS THINGS AND THINGS LIKE THAT.

AND THAT'S NOT WHAT THIS IS REALLY ABOUT.

THIS IS MORE ABOUT MAKING SURE THAT WE HAVE THE PROCESSES IN PLACE SO THAT IF SOMEBODY WANTS TO KNOW, YOU KNOW, WHAT, WHAT DID YOU ACTUALLY PAY FOR THAT ANIMAL SHELTER AND WHY? SO WE CAN ANSWER THOSE QUESTIONS CAUSE PEOPLE ARE ENTITLED TO KNOW.

UM, AND SO I'M VERY TROUBLED, VERY TROUBLED THAT WE GOT TO THIS PLACE WHERE WE ARE VERY GLAD THAT THAT WE'RE, THAT WE'RE DOING THESE AUDITS AND THAT YOU FOUND THEM.

AND IT GIVES ME GREAT CONCERN THAT, THAT WE DON'T HAVE, AND SOME OF THAT FALLS ON, AND I'M NOT TRYING TO ASCRIBE ANY PARTICULAR BLAME TO ANY ONE GROUP BECAUSE THAT FALLS ON ALL OF US THAT FALLS ON COUNCIL, BECAUSE WE ARE ULTIMATELY AT THE POLICY AND PROCESS LEVEL.

AND IF WE HAVE NOT MADE CLEAR, UM, DOWNSTREAM THAT, THAT, THAT WE NEED TO HAVE THIS ACCOUNTING OF ACCOUNTABILITIES AND THAT'S A LITTLE BIT ON US AS WELL.

SO WE ALL SHARE SOME PORTION OF THE BLAME.

UM, IT, AND I CERTAINLY UNDERSTAND WHAT SEAN WAS SAYING EARLIER ABOUT, YOU KNOW, THE DIFFERENT LEVELS OF DETAIL ASSOCIATED WITH DIFFERENT TYPES OF PROJECTS AND NOT KNOWING WHAT THAT WAS GOING TO BE AT THE OUTSET.

BUT AT SOME POINT THE BALL GETS DROPPED BECAUSE IT SHOULD HAVE BEEN PART OF THIS.

IT SHOULD HAVE BEEN SOMEBODY AT SOME POINT, IT SHOULD HAVE BEEN PART OF IT BECAUSE IT'S NEVER THE ANSWER.

IT'S NEVER THE ANSWER TO SAY.

I MEAN, THE CITY DID THE CITY, YOU KNOW, COUNCIL MEMBER SMITH MENTIONED HAVING THE OPPORTUNITY.

YOU KNOW, IF YOU SUBMIT EXPENSES TO YOUR EMPLOYER, YOU'VE GOT TO ACTUALLY HAVE THE BACKUP.

AND IT'S THE SAME THING AT THE CITY.

I MEAN, WE'VE ALL, WE ALL GO THROUGH THAT WITHOUT HAVING TO HAVE BACKUP.

AND WE'VE HAD POLICY DISCUSSIONS ABOUT TO WHAT DEGREE DO WE DO PER DIEM OR DO WE DO BACK? AND WE DECIDED AS A POLICY MATTER THAT WE NEED TO CONTINUE TO PROVIDE EXPENSES AND NOT JUST TO APPEAR BEER PER DIEM, UM, BECAUSE OF THE IMPORTANCE OF TRANSPARENCY, EVEN IF IT COSTS US A LITTLE MORE.

UM, AND IT'S SO, UH, BUT THROUGH ALL OF THAT, YOU TAKE ALL THAT.

AND I RE I REMAIN MYSTIFIED.

WHEN YOU LOOK AT ALL THE SIGN-OFFS THAT ARE REQUIRED FOR AN APP TO GET PAID, THAT IT DOESN'T OCCUR TO ANYONE AT THE E-COM SIDE OR INTERNALLY AT THE GARLAND SIDE TO SAY, HEY, WHERE'S THE, WHERE'S THE BACKUP OR A LITTLE BIT OF THE BA, I MEAN, WE'RE NOT TALKING ABOUT, WE GOT 80% AND YOU KNOW, ANOTHER 20% ARE RECEIPTS THAT ARE CRUMBLED UP IN SOMEBODY'S, YOU KNOW, GENES THAT WENT THROUGH THE WASH.

WE'RE TALKING ABOUT, WE'VE GOT LIKE 2% OF THE BACKUP AND THAT'S, I MEAN, YOU KNOW, IT, IT FEELS TO ME LIKE, THAT'S JUST, THAT'S JUST, IT'S UNBELIEVABLE TO ME, IT'S PURELY, UH, I DON'T KNOW HOW WE GET TO THAT POINT.

I DON'T KNOW HOW WE GET TO THAT POINT.

CAUSE IT FEELS PURELY NEGLIGENT AND, AND IT, IT FEELS LIKE WE'RE NOT BEING GOOD STEWARDS OF, UM, OF THE FUNDS THAT WE'RE ENTRUSTED WITH BY OUR CITIZENS AND OUR RESIDENTS.

AND, AND SO I'M REALLY TROUBLED BY IT.

AND, UM, AND, AND SO THE THOUGHT THAT WE NOW HAVE TO GO THROUGH AND CREATE A NEW PROCESS AND I PRESUME HIRE SOMEBODY OR RETASK SOMEBODY IN FINANCE OR SOMETHING TO DO SOMETHING THAT SHOULD HAVE BEEN DONE ALL ALONG.

I'M SURPRISED TO HEAR.

AND I, AND I GET IT.

AND, AND PART OF THIS, I GET RIGHT.

WE HAVE PUSHED AS A COUNCIL, AS A CITY, WE ARE PUSHING TO GET THESE PROJECTS PULLED OUT OF THE GROUND AS FAST AS POSSIBLE.

AND, AND CANDIDLY TO STAFF Y'ALL ARE DOING IT.

I MEAN, IT IS TO STAFF AT AECOM.

WE ARE PULLING PROJECTS OUT OF THE GROUND.

WE WERE OVER AT THE ANIMAL SHELTER TODAY, AND IT IS IMPRESSIVE HOW QUICKLY IT HAS COME TOGETHER.

THE SKATE PARK IS EFFECTIVELY FINISHED, ALTHOUGH WON'T OPEN FOR A WHILE.

STUFF IS COMING OUT OF THE GROUND.

AND I APPRECIATE THAT.

WE ARE MOVING WITH REALLY BEYOND DELIBERATE SPEED.

WE'RE, WE'RE PULLING THESE PROJECTS OUT OF THE GROUND, BUT AT THE SAME TIME, IF, IF WE HAVE TO SLOW DOWN OR WHATEVER, I MEAN, IT'S JUST SHOCKING TO ME THAT THAT CONTRACTORS WOULD BE LIKE, OH, YOU WANT THE RECEIPT? WELL, THAT'S GOING TO COST YOU EXTRA IF YOU WANT THE RECEIPTS.

I MEAN, THAT FEELS LIKE A SHAKEDOWN OR SOMETHING.

I MEAN, THAT'S RIGHT.

IT'S LIKE, YOU KNOW, SO THERE'S PART OF ME AND I'LL LEAVE THAT TO,

[00:50:01]

TO, TO LEGAL AND TO STAFF TO FIGURE OUT, YOU KNOW, IF THEY'RE CONTRACTUALLY OBLIGATED TO BE PROVIDING US RECEIPTS, THEN THEY'RE GOING TO PROVIDE US THE RECEIPTS IF WE HAVE TO PAY OR THIS OR THAT, I GUESS WE CAN FIGURE THAT OUT.

BUT I CANNOT BELIEVE THAT SOMEBODY IS GOING TO COME TO ME AND SAY, OH, YOU WANT ME TO, YOU WANT ME TO JUSTIFY THE EXPENSES THAT I'VE CHARGED TO YOU? I MEAN, THAT'S JUST, THAT'S THE KIND OF STUFF THAT, THAT CAUSES PEOPLE TO HAVE QUESTIONS ABOUT THEIR GOVERNMENT, ABOUT THE COMPETENCE OF THEIR GOVERNMENT AND ABOUT WHETHER, I MEAN, THAT'S THE, YOU KNOW, $800 TOILET SEAT KIND OF THING.

AND THEY'RE LIKE, YOU KNOW, WHAT ARE THESE PEOPLE DOING? AND IT'S ALREADY BAD ENOUGH.

PEOPLE HAVE ENOUGH DISTRUST OF GOVERNMENT AS IT IS.

THEY THINK WE'RE ALL DOWN HERE, SCROOGE MCDUCK ING IT, THAT WE'VE GOT PILES OF BULLION DOWN HERE IN THE BASEMENT AND WE'RE JUST GOOFING AROUND WITH IT.

AND THAT'S WHY IT'S SO IMPORTANT THAT WE DO THIS AUDIT FUNCTION AND, AND, AND THAT WE UNCOVER THIS STUFF, BUT NOW WE'VE GOT TO FIX IT AND WE'VE GOT TO, WE'VE GOT TO FIX IT.

PLUS I DON'T EVER WANT A SITUATION WHERE A RESIDENT OR TAXPAYER OF ANY TYPE IS GOING TO IS GOING TO COME AND ASK US A QUESTION.

AND WE'RE JUST LIKE, WELL, I DON'T KNOW.

I MEAN, YOU KNOW HOW MUCH I'M NOT TRYING TO NICKEL AND DIME, BUT YOU KNOW, WE HAVE $90,000 OVERPAYMENTS AND THIS AND THAT.

AND I KNOW A LOT OF THAT STUFF COMES OUT IN THE WASH.

WE ALL FIGURE IT OUT EVENTUALLY, BUT WE'VE GOT TO, WE'VE GOT TO DO BETTER.

AND, AND THIS IS I FIND, I FIND THIS WHOLE AUDIT IN MY NEARLY SIX YEARS OF BEING ON THE AUDIT COMMITTEE.

THIS IS ONE OF THE MOST CONCERNING AND UPSETTING ONES THAT, THAT WE'VE HAD.

SO I WILL NOW GET OFF MY SOAP BOX.

UH, IF ANYONE ELSE HAS ANY THING TO ADD ANYONE, ANYONE, I JUST LAST THING, IF I WERE CHURCH, I'D SAY, MAN, I'M CHAIRMAN, BUT I JUST WANT, THAT'S WHY I WANT TO GO THAT, THAT I TRY TO BE A PROCESS PERSON.

AND THAT'S WHY I THINK TIMING IS IT'S IMPORTANT.

AND I REDUCED IT TO, I CALL IT THE DOLLAR GENERAL CONCEPT.

I PUSHED THE PACKAGE OF PENCILS, BLUE ONES, AND I PICK UP GREEN ONES, BUT I WANT TO TAKE THE, TAKE THEM BACK AFTER RECEIPT, RSI.

I CAN'T, I CAN MAKE THIS CHANGE.

SO CONCEPTUALLY, THAT'S WHERE I'M GOING.

THAT'S WHY I WAS PRESSING ON THE TIMELINE.

AND I DON'T, YOU KNOW, AND I KNOW THE CONTRACTOR, WELL, THEY'VE DONE EXCELLENT WORK AND ALL THAT.

SO THEN I CAN'T BELIEVE THAT DON'T WELL, YOU KNOW, IT'S, IT'S GONNA TAKE US INTO 20, 22 TO, I DON'T ACCEPT THAT.

AND SO, YOU KNOW, I'M, I'M KIND OF LIKE, UH, YOU KNOW, THE, THE BUCKS I, I, I, EVERY NOW AND THEN I CAN PLAY OFFENSE AND I JUST DON'T WANT TO FORCE US TO LAY BACK, EVEN THOUGH, SINCE WE'VE GOT THE SOUNDCHECK, I KNOW I WANT TO SEE SOME MINOR OFFENSE ON THIS.

AND I CAN'T BELIEVE THAT THAT, UM, YOU KNOW, UH, OUR CONTRACT IS NOT NEW TO THE GAME AND I JUST IN GARLAND, THEY ALL OVER ALL OVER THE, NOT THE WORLD.

SO IT'S NOT LIKE THAT THIS IS NOT THEIR FIRST RODEO.

SO AGAIN, TO JUST, MY AMEN STATED A JET THING IS, IS THAT CRITICAL.

AND THEN WE PUT PROCESSES IN PLACE.

SO WHOEVER'S ON COUNCIL TWO YEARS, THAT'S SITTING HERE HAVING THE SAME DISCUSSION OR STAFF, YOU KNOW, AS LEARN, LEARN AS YOU GO.

SO THAT WAS, YOU KNOW, LIKE SEE SOME TIMELINES, WHATEVER THAT, WHATEVER WE COME UP WITH THAT PROCESS, I'D LIKE TO SEE SOME TIMELINES.

AND I'D LIKE TO SEE THOSE TIMELINES COMMUNICATED UPFRONT AS PART OF THE VETTING PROCESS, SO THAT SOMEBODY TO MEET YOU IN TERM OF MISUNDERSTANDINGS COMMUNICATION, SOMEBODY SAID THAT, SO WE WE'VE MINIMIZED, YOU KNOW, THAT THE LANGUAGE BARRIER THAT WE'RE TALKING, BECAUSE THAT'S HOW YOU KNOW.

AND IF YOU PUT IT IN WRITING, THEY'VE ACCEPTED, THEY ADULT AM.

I MET HIM.

UH, AM I I'M LOOKING AT YOU CAUSE I'M WAITING FOR YOU TO TELL ME, I'M NOT ASKING YOU TO EVALUATE WHAT I'M SAYING.

I'M JUST, I'M JUST WANT YOU TO CHIME IN, AM I, AM I ON THE RIGHT PLANET? I BELIEVE YOU ARE.

OKAY.

OKAY.

ALL RIGHT.

THANK YOU, MS. SHARON, THANK YOU SO MUCH.

I DIDN'T MEAN TO PUT YOU ON THE SPOT, BUT YOU'RE WORKING NOW.

WOULD IT BE SHIT LIKE MY CHAIR? I'M NOT ON A DIFFERENT PLANET THAN, THAN WE WERE.

THANK YOU, MR. CHAIR.

I'M DONE CHAIRMAN IF I MAY.

YES, PLEASE.

ONE THING.

UM, JUST TO CLARIFY THAT AND OUR JETTIES NOW HERE, HE WANTED TO BE HERE, BUT HE WROTE THESE RESPONSES IN HERE AND HE INDICATED THAT HE WILL COMMUNICATE.

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WE'LL COME UP WITH ROLES AND RESPONSIBILITIES, UH, ON ALL PARTIES, OUR PROGRAM MANAGER, OPM, AND OTHER CITY DEPARTMENTS.

AND IT WILL BE COMMUNICATED IN DIFFERENT PHASES OF CONSTRUCTION.

SO IN HERE IT STATED THAT PRE-CONSTRUCTION PROJECT KICKOFF AND MONTHLY OWNER ARCHITECT, CONTRACTOR MEETINGS.

SO, UH, THAT'S, THAT'S WHAT FINANCE, JARED AND MATT, UH, WITH THE BLESSING OF THE CITY MANAGER IS PLANNING ON DOING AND, UH, CHAIRMAN CITY MANAGER.

AND I HAD A DISCUSSION AND, UH, HE WAS VERY SUPPORTIVE WHEN I SUGGESTED THAT WE SHOULD CONDUCT THIS AUDIT ON AN ANNUAL BASIS GOING FORWARD AND CHAIRMAN AND I HAD THE SAME MEETING AS WELL AS, UH, AND THAT'S MY HOPE, UH, PLAN ON AND CONTINUE THIS AUDIT, UM, THROUGHOUT THE BOND PROJECT.

SO HOPEFULLY NEXT TIME AROUND WE'LL HAVE BETTER.

OKAY.

WELL HOPEFULLY, UM, NO, AND I, AND I RECOGNIZE THAT THE DIFFICULTY, THE REASON WHY YOU SAVE THOSE, ALL OF THOSE RECEIPTS AND ALL OF THOSE MATERIALS NOW IS THAT IN THE, IN THE MAELSTROM OF BUILDING THESE PROJECTS, IT'S CALLED TO COME BACK LATER AND SAY, OKAY, YOU KNOW, WHOSE FAULT WAS THAT CHANGE? THAT WAS FOUR MONTHS AGO.

AND WHY EXACTLY DID I BUY, YOU KNOW, $160 OF PIZZA FROM PIZZA HUT OR WHATEVER IT IS.

I MEAN, THAT'S JUST, IT'S NOT SPECIFIC TO CONSTRUCT IT'S SPECIFIC TO ANYTHING, YOU KNOW, I MEAN, THERE'S A LAWYER'S PRACTICE FOR A LONG TIME FILLING YOUR, I MEAN, RECONSTRUCTING YOUR TIME.

YOU KNOW, THE DAY AFTER IT WAS BUILT IS NEAR IMPOSSIBLE.

IT'S JUST SO DIFFICULT AND IT'S MUCH EASIER TO DO ALL OF THESE THINGS AS YOU GO.

SO HOPEFULLY WE'LL DO THAT.

AND SO I RE I DO RECOGNIZE, I WANT EVERYONE TO UNDERSTAND THAT I RECOGNIZE THE DIFFICULT TASKS THAT WE'RE ASKING IN TERMS OF SAYING, YOU KNOW, PLEASE GO BACK AND FIND ALL THIS STUFF THAT YOU DON'T HAVE PRECISELY BECAUSE A LOT OF THE RIO, THEY SEND SOMEONE OUT TO HOME DEPOT TO GET A HAMMER OR SOMETHING.

AND YEAH, WE ENDED UP, WE ENDED UP GETTING BILLED FOR IT, BUT GOD FORBID ANY, WE ACTUALLY SAVE THAT RECEIPT.

SO I EASIER TO DO IT, GO FOR IT.

BUT I APPRECIATE ALL OF THE WORK.

I, YOU KNOW, THIS REMINDS ME OF W USED TO SAY IN LITIGATION ABOUT GOING TO MEDIATION, THE PERFECT MEDIATION IS WHEN EVERYONE COMES OUT A LITTLE BIT UNHAPPY.

AND SO, UH, AND I KNOW WE HAVE SOME PEOPLE WHO WERE PROBABLY A LOT UNHAPPY, BUT, UH, BUT, BUT I THINK THERE'S, THERE'S AMPLE AMOUNTS OF UNHAPPINESS TO SPREAD AMONGST ALL OF US ON THIS.

AND, UM, WE CAN ALL DO BETTER.

AND, AND, BUT THE ONE THING I DO KNOW ABOUT THE STAFF YOU'RE IN GARLAND AND THE FOLKS THAT WE EMPLOY, LIKE A COM IS THAT IS IT, WE'LL GET IT RIGHT.

WE'LL FIX THIS AND WE'LL GET IT RIGHT.

AND WE WILL DO BETTER.

AND SO I REALLY APPRECIATE THAT.

I KNOW THAT WE WILL GET, UH, I WOULD LIKE TO HEAR BACK ON MAYBE A SUPPLEMENTAL REPORT ON PROGRESS BY OUR SECOND MEETING.

NEXT YEAR, SECOND QUARTERLY MEETING.

THE REASON IS, IS OUR CONTRACT RENEWAL COMES UP IN SEPTEMBER AND ALEKS SOME LEAD TIME JUST TO MAKE SURE WE'RE HEADED IN THE RIGHT DIRECTION.

AND I DON'T KNOW IF THAT WAS GOING STRAIGHT TO COUNCIL OR THROUGH THIS BODY, BUT EITHER WAY WE CAN BRING THEM BACK HERE WILL BE MY LAST HURRAH, 160 WORTH OF PIZZA OR SOMETHING.

WELL, WE HAVE A BUNCH OF PIZZA.

WE'LL BE REAL SHIN.

UH, IF, IF I COULD ASK FOR A LITTLE BIT OF DIRECTION, DATE, DO YOU WANT THAT? DO YOU WANT THAT AS, AS A FOLLOWUP AUDIT, SO TO SPEAK FROM, FROM JOT, OR DO YOU WANT US TO GIVE A STATUS REPORT? WHATEVER VEHICLE YOU FEEL WOULD BE THE MOST APPROPRIATE IS FUN.

UH, NO PREFERENCE.

UH, WE CAN DO IT THROUGH AUDIT.

WE AS A FOLLOW-UP, WE CAN DO IT STRAIGHT TO COUNCIL AS A STAFF REPORT.

I'M OPEN.

I THINK IT WOULD PROBABLY, I THINK IT'S FINE TO BRING IT BACK THROUGH THE AUDIT COMMITTEE AS, BUT NOT NECESSARILY WITH AUDIT, HAVING TO, I WOULD PUT IT THIS WAY MORE LIKE A SUPPLEMENTAL RESPONSE FOR MANAGEMENT TO THIS AUDIT.

OKAY.

UM, NOT SOMETHING WHERE I NECESSARILY WANT YOU ALL TO GO BACK THROUGH AND DO A FOLLOW-UP AUDIT, BUT WHY DON'T WE BRING IT THROUGH THIS COMMITTEE AND THEN WE'LL REPORT IT OUT TO THE COUNCIL.

ALL RIGHT.

GOOD.

OKAY.

THANK YOU, MR. REFEREE.

ANYONE ELSE? REAL GOOD.

OKAY.

THANK YOU BOTH.

THANK YOU VERY MUCH.

GREAT JOB.

UM, LET'S MOVE NOW TO ITEM NUMBER THREE, WHICH IS THE INVENTORY MANAGEMENT CITY WAREHOUSE AUDIT CHAIRMAN.

THE, UH, 2 0 2 MAIN OBJECTIVES THAT WE HAD ON THIS AUDIT WERE VERIFIED IF INVENTORIES ARE PROPERLY ACCOUNTED FOR IN THE CITY'S FINANCE FINANCIAL SYSTEM, BY THE WAY, THIS IS THE CITY WAREHOUSE INVENTORY AUDIT.

UH, PART TWO WAS TO DETERMINE THE EFFECTIVENESS

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OF INVENTORY CONTROLS FOR ORDERING, RECEIVING ISSUING RETURNS AND OBSOLESCENCE.

THE SCOPE OF THE AUDIT WAS FROM OCTOBER 1ST, 2019 THROUGH AUGUST 26TH, 2021, UH, A LITTLE BACKGROUND ABOUT THE INVENTORY MAINTAINED AT THE WAREHOUSE.

THEY MAINTAIN APPROXIMATELY 1800 VARIOUS ITEMS FOR GPL, WATER, UH, TRAFFIC PARKS, AND OTHER DEPARTMENT.

UH, THE VALUE IS APPROXIMATELY $6 MILLION.

UM, IN ADDITION TO, UH, INVENTORY CONTROLS, WE ALSO LOOKED INTO, UH, UH, CITYWIDE, PHYSICAL ACCESS CONTROLS, UH, TED DMITRI AND ALEX WORKED ON THIS AUDIT LED IT.

I'M GOING TO TURN IT OVER TO TED, AND WHO'S GOING TO GO THROUGH THE DETAILS.

SO ARE THEY, THERE ARE EIGHT ITEMS FOR DISCUSSION, UH, FROM THIS AUDIT OR FOR PRESENTATION ON THIS.

OUR FIRST ONE IS INVENTORY CONTROL, AND THAT HAS TWO COMPONENTS TO IT.

UH, THE FIRST ONE IS THAT WE DID A SURPRISE INVENTORY AUDIT AND, UH, TOOK A STATISTICAL SAMPLE OF 91 ITEMS. AND 38 OF THOSE ITEMS HAD A DIFFERENT QUANTITY THAN WHAT THE SYSTEM HAD.

UH, THE, UH, QUANTITIES WERE HIGH, BUT THE, BUT THE VOLUME, I MEAN, BUT THE DOLLAR VALUE WAS ONLY, IT WAS LESS THAN $2,000.

AND AS A RESULT