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EVERYBODY WELCOME TO THE

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JUNE 14TH, 2022 MEETING OF THE CITY OF GARLAND, TEXAS AUDIT COMMITTEE.

MY NAME IS RICH ALBAN.

I'M THE CHAIR I HAVE WITH ME.

DEPUTY MAYOR PRO TEM, PJ WILLIAMS, UH, COUNCIL MEMBER, ROBERT JOHN SMITH IS NOT GOING TO BE ABLE TO JOIN US TODAY.

HAVE A HOST OF OTHER LUMINARIES HERE, BUT, UH, LET'S JUST GET STARTED.

UH, FIRST ITEM ON THE AGENDA IS THE APPROVAL OF THE MARCH 28TH, 2022 MEETING MINUTES MOVE FOR A POOL OF MS. CHAIR SECONDED AND BY ACCLAMATION I, I, UH, THOSE MEETINGS, UH, THOSE MINUTES ARE APPROVED.

UH, MOVING ON TO ITEM NUMBER TWO ON THE AGENDA, THE DOWNTOWN AUTOMOTIVE OVERLAY DISTRICT LAND USE CREDIT PROGRAM, AUDIT CHAIRMAN, UH, I'LL KICKSTART THIS AUDIT.

UM, FIRST OF ALL, I DO WANT TO THANK JAD, UH, WHO REQUESTED THIS AUDIT.

UH, SO REALLY DO APPRECIATE HIM FOR TRUSTING US IN PERFORMING THIS AUDIT.

UH, UH, SOME OF YOU MAY BE AWARE, BE AWARE, UM, BACK IN 2005, UH, AN ORDINANCE WAS ESTABLISHED, UH, TO DEVELOP THIS DOWNTOWN AUTOMOTIVE OVERLAY DISTRICT.

AND THE PURPOSE AT THAT TIME WAS TO, UM, MAINTAIN OR REDUCE THE NUMBER OF AUTOMOTIVE USE USE BUSINESSES IN DOWNTOWN GOTLAND.

AND SO WHEN JED REQUESTED THIS, WE HAD TWO OBJECTIVES, UH, DETERMINED THE EFFECTIVENESS OF THIS PROGRAM IN MAINTAINING AND OR REDUCING THE AMOUNT OF AUTOMOTIVE LAND USE BUSINESSES IN THE DAOD DISTRICT.

AND THE SECOND PART WAS TO EVALUATE THE EFFECTIVENESS OF PROGRAM ADMINISTRATION BY THE CITY STAFF.

UM, OUR SCOPE OF THIS AUDIT WENT BACK TO 2005.

UH, I'M NOT GOING TO GET INTO ALL THE DETAILS, BUT PATRICIA DID THIS AUDIT.

UH, SHE'S GOING TO PROVIDE YOU WITH ELABORATE FURTHER ON THE TERMS OF THIS ORDINANCE AND THE TIMELINE.

WHAT'S THE CURRENT STATUS.

UH, WHAT DID WE FIND AND SOME RECOMMENDATIONS.

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

SHE'S GOING TO WALK YOU THROUGH FROM THE BACKGROUND GOING FORWARD.

THANKS JEN.

SO IN APRIL OF 2005, ORDINANCE 58 94 ESTABLISHED THE DOWNTOWN AUTOMOTIVE OVERLAY DISTRICT, UM, CONSISTING OF TWO AREAS, AREA ONE AND AREA TWO, THE LARGER AND AS PART OF THE ORDINANCE, THE CITY CREATED THE LAND USE CREDIT PROGRAM WITH THE INTENT OF MAINTAINING OR REDUCING THE NUMBER OF AUTOMOTIVE USE BUSINESSES IN THE DAO DISTRICT.

THE PROGRAM ALLOWED THE TRANSFER OF CERTAIN DEVELOPMENT RIGHTS FOR AUTOMOTIVE USES TWO OTHER SITES WITHIN THE SAME OVERLAY DISTRICT.

UNDER CERTAIN CONDITIONS.

THE OWNERS OF THE THEN EXISTING AUTOMOTIVE USE PROPERTIES WERE TO BE ALLOCATED TRANSFERABLE CREDITS THAT WERE EQUIVALENT TO THEIR SQUARE FOOTAGE OF THE PROPERTY OCCUPIED OR USED INCLUSIVE OF PARKING AREAS, BUT IT'S EXCLUDING THE, UH, PUBLIC PROPERTY.

AND ACCORDING TO THE ORDINANCE, AUTOMOTIVE USES INCLUDED A RANGE OF THINGS, INCLUDING AUTOMOBILE SALES, REPAIR, CAR WASHES, WRECKER SERVICES, PARKING LOTS, AND SALVAGE YARDS.

SOME OF THE CRITERIA FOR THE ORDINANCE ARE, UH, A NEW AUTOMOTIVE BUSINESS MAY NOT OPERATE IN AN EXISTING AUTOMOTIVE BUSINESS, MAY NOT EXPAND WITHOUT OBTAINING TRANSFERABLE CREDITS FROM ANOTHER AUTOMOTIVE BUSINESS WITHIN THE DAO DISTRICT AND AUTOMOTIVE BUSINESS AT DISCONTINUES OPERATION CAN ONLY TRANSFER CREDITS DURING THE 60 CALENDAR DAYS AFTER CEASING OPERATIONS, AT WHICH POINTS AT WHICH POINT, THE CREDITS EXPIRE TERMINATION OF UTILITY SERVICES CONSIDERED CESSATION OF BUSINESS, THE TRANSFER, OR MUST BE THE OWNER AND CAN ONLY TRANSFER CREDITS TO A SINGLE TRANSFEREE AND THEY CAN TRANSFER LESS THAN THEIR TOTAL NUMBER OF CREDITS.

BUT THE REMAINING CREDITS ARE VOID.

IF SO, TRANSFERRED CREDITS MAY BE USED TO CREATE A NEW AUTOMOTIVE BUSINESS SITE OR ADDED TO AN EXISTING SITE TO EXPAND.

HOWEVER, EXPANSION CANNOT EXCEED 10,000 SQUARE FEET.

THE BUILDING INSPECTION DEPARTMENT WAS TASKED WITH OVERSEEING THE PROGRAM AND WORKED WITH THE PLANNING DEPARTMENT TO IDENTIFY THE AUTOMOTIVE USE ADDRESSES WITHIN THE DAO DISTRICT CORRESPONDENCE WAS SENT TO EACH OF THE ADDRESSES, EXPLAINING THE PROGRAM AND THE NUMBER OF AWARDED CREDITS BUILDING INSPECTION INITIALLY IDENTIFIED 66 ADDRESSES IN MAY OF 2015.

THE GARLAND DEVELOPMENT CODE WAS ADOPTED, WHICH INCORPORATED ALL THE PREVIOUS CITY ORDINANCES FOR PLANNING AND ZONING.

THE DAO DISTRICT ORDINANCE WAS INCLUDED WITH NO CHANGES TO THE PURPOSE GENERAL PROVISION DESCRIPTION OF RESTRICTIONS FROM THE 2005 ORDINANCE.

HOWEVER, THE BOUNDARY BOUNDARIES WERE EXPANDED TO INCLUDE THE GREEN HIGHLIGHTED STREETS INDICATED IN AREA TWO.

THE BUILDING INSPECTION DEPARTMENT HAS A 13 PAGE PACKET OF INFORMATION FOR AUTOMOTIVE BUSINESS

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APPLICANTS.

THAT INCLUDES SUBMITTAL REQUIREMENTS.

IF AN AUTOMOTIVE BUSINESS APPLIES FOR A CEO WITHIN THE DAO DISTRICT, BUILDING INSPECTION IS EXPECTED TO NOTATE THIS ON THE APPLICATION AND DETERMINES IF THE APPLICANT HAS RECEIVED TRANSFERABLE LAND CREDITS FROM THE PREVIOUS PROPERTY OWNER OR FROM AN OWNER THAT HAS CEASED OPERATION AT A DIFFERENT ADDRESS WITHIN THE DAO BUILDING INSPECTION SHOULD ALSO DETERMINE WHETHER UTILITIES HAVE BEEN DISCONNECTED FOR LESS THAN 60 DAYS.

IF ALL REQUIREMENTS ARE MET, THE APPLICANT COULD BE GRANTED AN AUTOMOTIVE USE CEO.

NOW SOME OF THE, UH, AUTOMOTIVE ADDRESSES ARE IN A PLAN TO DEVELOPMENT OR HAVE A SPECIFIC USE PROVISION.

SO PRIOR TO, OR AT THE TIME OF THE IMPLEMENTATION OF THE PROGRAM, THEY WERE GRANTED THESE PDS OR SUP'S AND CERTAIN ONES HAVE EXPIRATION DATES.

SOME DO NOT, UNLESS THE BUSINESS CEASES OPERATION FOR A PERIOD OF SIX MONTHS ADDRESSES WITH A PD OR SUP ARE STILL GRANTED THE CREDITS.

AND IF LANGUAGE MOSQUITO, UH, IN THE CAN CONFLICTS WITH LANGUAGE IN THE DAO PROGRAM, THE MORE RESTRICTIVE REGULATION WOULD APPLY.

A PLANNED DEVELOPMENT MAY ALLOW FLEXIBILITY IN DEVELOPMENT STANDARDS, SUCH AS THOSE THAT SPECIFIED BUILDING SIDING OR MIXTURE OF HOUSING TYPES AND LAND USES AN SUP AUTHORIZES A USE THAT MAY BE SUITABLE ONLY IN CERTAIN LOCATIONS IN A ZONING DISTRICT, OR THAT IS ALLOWED ONLY WHEN SUBJECT TO STANDARDS AND CONDITIONS THAT ASSURE COMPATIBILITY WITH ADJOINING USES THOSE DEFINITIONS CAME FROM THE GDC.

SO IN ORDER TO IDENTIFY THE POTENTIAL AUTOMOTIVE USE ADDRESSES IN THE DAO INITIALLY, UH, INTERNAL AUDIT OBTAINED GIS DATA FROM THE PLANNING DEPARTMENT, AND THERE WERE OVER 350 ADDRESSES.

SO WE RETRIEVED ADDITIONAL INFORMATION FROM THE D CAD WEBSITE, SUCH AS OWNERSHIP, BUSINESS DESCRIPTIONS, D TRANSFER TRANSACTIONS AND LAND AREA SQUARE FOOTAGES.

WE ANALYZE THE CONSOLIDATED DATA TO DETERMINE WHICH ADDRESSES MAY BE AUTOMOTIVE RELATED.

THIS INCLUDED SOME THAT WERE LABELED AS VACANT LAND OR PARKING LOT BY D CAD THAT RESULTED IN ABOUT 120 ADDRESSES.

WE CONDUCTED DRIVE-THROUGH VISUAL INSPECTIONS WITH CODE COMPLIANCE AND THEN CATEGORIZE THE ADDRESSES IN ACCORDANCE WITH THE AUTOMOTIVE USES DEFINED IN THE GDC.

AND UPON COMPLETION OF THE RESEARCH AND ANALYSIS, I IDENTIFIED 61 AUTOMOTIVE BUSINESSES.

FOUR OF THEM ARE CURRENTLY VACANT, BUT WE INCLUDED THEM IN THIS REPORT FOR PURPOSES OF THEM POTENTIALLY REOPENING AND OPERATING AGAIN AS AUTOMOTIVE USE BUSINESS.

SO THESE 61 AUTOMOTIVE BUSINESSES WERE USING 81 ADDRESSES NOW TO GO OVER THIS GRAPHIC THAT YOU'RE SEEING UP HERE, 61 WE'RE AUTOMOTIVE USE BUSINESSES, 50 OF WHICH WERE GIVEN CREDIT BY BUILDING INSPECTION.

INITIALLY BACK IN 2005, 11 WERE NEVER RECEIVED THE CREDITS OF THE 50 16.

WE'RE USING ADDITIONAL PARKING LOTS, UH, TO EXPAND THEIR BUSINESS OPERATIONS OF THE 11 THAT DIDN'T HAVE CREDITS THEY WERE USING FOR MORE PARKING LOTS FOR THEIR EXPANSION.

NOW WE DID NOT TALK TO ANY OWNERS.

A LOT OF ASSUMPTIONS WERE MADE HERE BASED ON WHAT WE COULD SEE IN THE DATA THAT WE HAVE FROM THE VARIOUS, UH, SOURCES.

SO USING THE GDC CRITERIA, WE CATEGORIZE THE 50 ADDRESSES THAT RECEIVED THE CREDITS AND ARE STILL OPERATING THE 11 ADDITIONAL AUTOMOTIVE BUSINESSES AND THE 20 ADJACENT PARKING LOT IN THE GRAPH THAT YOU SEE, UH, ABOVE FOR A TOTAL OF 81 COMPLETE ADDRESSES TO ANALYZE THE, UH, BUSINESS USE AND COMPLIANCE WITH THE PROGRAM.

I OBTAINED AND VERIFIED INFORMATION FROM SEVERAL OTHER SOURCES TO FURTHER ANALYZE, INCLUDING THE CUSTOMER SERVICE UTILITY SYSTEM, THE BUILDING INSPECTION SYSTEM, THE CITY'S ELECTRONIC DOCUMENT FOR POSITORY BIS CREDIT LIST, SOCIAL MEDIA SITES AND SEARCH ENGINES WITH, UH, THE ADDITIONAL SOURCES, THE 50 BUSINESSES THAT HAD CREDITS 11 APPEARED TO BE USING 16 ADJACENT ADDRESSES WITHOUT HAVING CREDITS TO SUPPLEMENT THEIR PARKING AND STORAGE NEEDS.

THREE WERE LISTED AS HAVING LOST THEIR CREDITS ON BIS ORIGINAL LIST, BUT ARE STILL OPERATING AS AUTOMOTIVE BUSINESSES, SEVEN HALF CREDITS THAT DO NOT MATCH THE SQUARE FOOTAGE LISTED IN THE D CAD RECORDS.

21 HAD OWNERSHIP CHANGES, AND SOME PROPERTIES WERE SOLD MORE THAN ONCE WITHOUT EVIDENCE THAT THE PROGRAM CREDITS WERE EVER TRANSFERRED, EIGHT OF THE 50 ADDRESSES HAVE A PD OR SUP IN PLACE FIVE OF WHICH WILL EXPIRE IN 2025, THE REMAINING THREE WILL NOT EXPIRE UNLESS BUSINESS OPERATIONS CEASES

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FOR A PERIOD OF SIX MONTHS.

ONE OF THE FIVE PDS UPS WITH AN EXPIRATION DATE APPEARS TO BE VACANT.

WE DO NOT KNOW HOW LONG THEY'VE BEEN VACANT.

ONE OF THE THREE PDS UPS THAT WILL EXPIRE IF BUSINESS OPERATIONS CEASES WAS GRANTED AN AUTO SALES USE AND A PORTION OF THE BUILDING IS NOW BEING USED FOR NON AUTO-RELATED BUSINESS.

AND THE REMAINDER OF THE BUILDING APPEARS TO BE VACANT.

ONE OF THE THREE PDS UPS MAY NOT BE OPERATING IN ACCORDANCE WITH ITS GRANTED USE.

SO FOR THE 11 BUSINESSES, WITHOUT CREDITS, FOR APPEAR TO BE USING FOR ADDITIONAL ADDRESSES TO SUPPLEMENT THEIR PARKING AND STORAGE NEEDS 10 APPEAR TO HAVE BEEN IN EXISTENCE AS AUTOMOTIVE BUSINESSES SINCE AT LEAST 2005.

WE'RE NOT SURE WHY THEY WEREN'T GIVEN CREDITS EIGHT OF THE BUSINESS ADDRESSES WITHOUT CREDITS ARE LOCATED IN THE EXPANDED AREA, WHICH WE'LL TALK ABOUT A LITTLE BIT MORE IN A MINUTE, SEVEN HAVEN'T PD, SUP IN PLACE WITH NO EXPIRATION, UNLESS BUSINESS OPERATIONS CEASES FOR A PERIOD OF SIX MONTHS.

AND ONE OF THOSE CEASED OPERATIONS FOR A PERIOD OF 530 DAYS PER THE UTILITY RECORDS.

SO UNDER ADDITIONAL OBSERVATIONS.

SO ANY QUESTIONS ABOUT ANY OF THAT SO FAR? UH, DO YOU HAVE ANY, OKAY.

YEAH.

NOPE, NO QUESTIONS.

IT'S UH, YEAH, IT'S FASCINATING THOUGH.

GOOD JOB ON TANGLING.

THE A BOWL OF NOODLES WE SHALL SEE, WELL, AT LEAST PARTIALLY UNTANGLING IT.

OKAY.

SO, UH, THE 2005 DAO DISTRICT MAP SHOWING AREA TO WHAT YOU SEE UP HERE IS THE ORANGE MAP.

UH, AND I CHECKED THE BOUNDARIES IN ACCORDANCE WITH THE LANGUAGE THAT WAS IN THE ORDINANCE AND THAT MATCHED THE EXPANDED MAP THAT WAS ADOPTED WITH THE GDC.

IT'S REALLY HARD TO SEE, BUT IF YOU LOOK, YEAH, IF YOU CAN, THE BLUE OUTLINE IS WHAT YOU'D BE LOOKING AT, AND IT'S DIFFICULT TO TELL, BUT THE BLUE OUTLINE EXTENDS DOWN TO HERE, WHEREAS IT STOPPED UP THERE BEFORE.

SO WHAT I DID WAS TO SHOW IT A LITTLE BIT BETTER.

YOU CAN SCROLL UP NOW, I MEAN, DOWN.

SO I HIGHLIGHTED KEEP GOING.

THE GREEN AREA IS WHAT IS THE EXPANDED AREA AS OF 2015? SO THAT'S WHERE THE EIGHT, THERE ARE EIGHT ADDRESSES THAT WE LOCATED WE'RE IN THAT EXPANDED AREA.

SO THE NUMBER OF CREDITS ISSUED TO ADDRESSES IN 2005 WAS APPROXIMATELY 716,000 BASED ON THE SQUARE FOOTAGE FROM THE LIST OF 50 BUSINESS ADDRESS IS STILL OPERATING THERE'S APPROXIMATELY 611,000 CREDITS.

IF YOU ADD THE ADDITIONAL 11 BUSINESS ADDRESSES, PLUS THE ADJACENT 20 PARKING LOTS, THE TOTAL WOULD BE APPROXIMATELY 845,000.

THERE WERE TWO ADDRESSES THAT RECEIVED CREDIT IN 2005, BUT DID NOT MEET THE GDC CRITERIA.

THEY WERE AUTOMOTIVE PAINT, RETAIL STORES.

UM, SO THEY WERE NOT INCLUDED IN ANY OF THE CATEGORIES THAT WE ANALYZED.

SO WE LOOKED AT THE DEPARTMENT PROCESSES, UH, AND SO AT A HIGH LEVEL, THE PROGRAM CREDITS AND USAGE RECORDS HAVE NOT BEEN UPDATED SINCE 2013.

THERE WAS NO INDICATION IN THE BUILDING INSPECTION SYSTEM OR ON PERMIT APPLICATIONS REVIEWED.

THE EVIDENCE OF HAVING CREDITS IS BEING REVIEWED, VERIFIED, AND RETAINED.

AND THERE WAS NO EVIDENCE THAT WE COULD FIND IN THE BUILDING INSPECTION SYSTEM OR ON PERMIT APPLICATIONS REVIEWED THAT UTILITY CONNECTION DISCONNECTION DATA IS REVIEWED, VERIFIED AND DOCUMENTED.

SO WE MADE SOME RECOMMENDATIONS, UH, AND SAID THAT PERHAPS THIS CITY OF GARLAND SHOULD EVALUATE WHETHER TO GRANT LAND USE CREDITS TO THE OWNERS THAT DID NOT EVER RECEIVE A CREDITS THAT EXPANDED TO ADJACENT PARKING LOTS AND HAD UTILITY LAPSES GREATER THAN 60 DAYS OR SIX MONTHS, IF IT WAS A PD SUP UM, WE ALSO RECOMMENDED THAT THEY UPDATE OR AMEND THE ORDINANCE TO REFLECT THE CITY'S DECISION IN REGARDS TO GRANTING THE LAND USE CREDITS DESCRIBED, CLARIFY THE DAO DISTRICT BOUNDARIES AND DETERMINED MEASURES TO TAKE WHEN PD SUP NONCOMPLIANCE OCCURS.

ANOTHER RECOMMENDATION IS TO FURTHER VALIDATE THE EXISTENCE OF ALL AUTOMOTIVE BUSINESSES WITHIN THE DAO DISTRICT AND OTHER RELEVANT DATA SUCH AS OWNERSHIP AND SQUARE FOOTAGE CONSIDER DEVELOPING AND IMPLEMENTING WRITTEN POLICIES AND PROCEDURES THAT OUTLINE ROLES AND RESPONSIBILITIES DATA REQUIREMENTS IN THE BI SYSTEM.

THE AUTOMOTIVE USE PERMIT APPLICATION PROCESS VERIFICATION OF UTILITY DATA AND TRANSFERABLE CREDITS MANAGEMENT REVIEW AND REPORTING REQUIREMENTS DEVELOP PERFORMANCE MEASURES TO INCLUDE CONTINUOUS MONITORING AND REPORTING REQUIREMENTS TO VERIFY PROGRAM USAGE AND TO DETERMINE IF THE NUMBER OF AUTOMOTIVE BUSINESSES HAS BEEN MAINTAINED OR REDUCED, THE DEPARTMENT SHOULD ALSO AMEND ITS APPLICATION TO INCLUDE PROPERTY OWNER INFORMATION.

SO MANAGEMENT'S RESPONSE WAS THAT THEY CONCURRED AND THE MANAGEMENT ACTION PLAN IS THAT CITY MANAGEMENT REQUESTED THIS AUDIT IN ORDER TO BETTER UNDERSTAND THE EFFECTIVENESS OF THE PROGRAM

[00:15:01]

MANAGEMENT CONCURS WITH THE FINDINGS AND RECOMMENDATIONS AND ACKNOWLEDGES THAT IT COULD HAVE BEEN MORE EFFECTIVELY IMPLEMENTED AND ADMINISTERED AS THE OVERALL ISSUE REMAINS MEANING AND PREVALENCE OF AUTOMOTIVE LAND USES IN LIEU OF HIGHER AND BETTER USES MANAGEMENT DESIRES TO FIND THE MOST EFFECTIVE TOOL AND METHODS TO ACCOMPLISH THIS GOAL.

AS A RESULT OF THE FINDINGS I POLICY DISCUSSION IS NEEDED WITH THE CITY COUNCIL IN ORDER TO DETERMINE THE BEST PATH FORWARD, THE DISCUSSION SHOULD BE INFORMED BY THE FINDINGS OF THIS AUDIT ADDITIONAL CONTEXT FROM CONTEXT FROM STAFF AND LEGAL CONSIDERATIONS FROM THE CITY ATTORNEY'S OFFICE MANAGEMENT WOULD REQUEST THAT THE AUDIT COMMITTEE AND PERHAPS THE FULL CITY COUNCIL REFER THIS ITEM TO THE APPROPRIATE VENUE, WHETHER THAT BE THE DEVELOPMENT SERVICES COMMITTEE OR THE FULL COUNCIL STAFF WILL BE PREPARED TO DISCUSS THIS ISSUE AND PRESENT OPTIONS TO THE COUNCIL BY AUGUST 1ST, 2022, AND FURTHER OF RECOMMENDATIONS RECOMMENDATIONS ONE, TWO AND THREE ABOVE.

THIS WILL PROVIDE TIME FOR ADDITIONAL RESEARCH VERIFICATION OF EXISTING AUTOMOTIVE USES AND THE DRAFTING OF POLICY OPTIONS FOR CONSIDERATION.

ONCE CITY COUNCIL HAS PROVIDED A POLICY DIRECTION, MOST LIKELY THROUGH A NEW OR AMENDED ORDINANCE STAFF ANTICIPATES, IT WILL TAKE SOME TIME TO SET UP THE APPROPRIATE PROCESSES, SYSTEMS AND PROCEDURES NEEDED TO IMPLEMENT NEW POLICY WHILE IT IS DIFFICULT TO ESTABLISH A SPECIFIC TIMELINE TO ADDRESS RECOMMENDATIONS FOR FIVE AND SIX DUE TO THE UNKNOWN POLICY SOLUTION STAFF ESTIMATES BETWEEN TWO AND FOUR MONTHS FOLLOWING ADOPTION OF A NEW POLICY IMPLEMENTATION DATE TO PREPARE FOR CITY COUNCIL POLICY DISCUSSION AUGUST 1ST AND IMPLEMENTATION OF THE NEW POLICY TWO TO FOUR MONTHS LATER, ANY QUESTIONS IT WAS.

AND CAN YOU SO MUCH, I DON'T PROFESS TO HAVE ABSORBED ALL OF THIS, UH, JUST A GUESS SOME, SOME, UH, AREA QUESTIONS FROM, FROM 30 TO 2000 FEET, AH, I'M NOT READY YET TO GET INTO WEIGHT TO, UH, JUST TWO THINGS ON THE 81, YOU SAID IT WAS 81 AND OF THOSE 81, CORRECT ME.

YOU SAID 51 BUSINESSES FOR USING OTHER ADDRESSES, RIGHT? CAN YOU OTHER ADDRESSES WHERE THEY WERE USING IT TO EXPAND THEIR BUSINESSES? CORRECT.

YOU WANT ME TO EXPLAIN THAT A LITTLE BIT? EXPLAIN THAT A LITTLE BIT.

SO THERE ARE A COUPLE OF EXAMPLES, UH, WHERE WE LOCATED A, AN AUTOMOTIVE USE BUSINESS, BUT IT TOOK THE ENTIRE BLOCK.

NOW WHAT WAS USED TO GIVE THEM CREDITS WAS THERE, WHAT I WOULD CONSIDER TO BE THEIR MAILING ADDRESS, BUT THEY TOOK FOUR ADDRESSES.

THEY HAD PARKING LOTS EXPANDED THAT THOSE PARKING LOTS ACTUALLY HAVE ADDITIONAL ADDRESSES PER D CAD.

SO THERE WAS ONE THAT WHILE THEY WERE GIVEN SIX OR 7,000 CREDITS, THEY WERE ACTUALLY TAKING UP 23, 23, 23, 20 4,000 SQUARE FEET, AND SHOULD HAVE HAD THAT MANY CREDITS PER THE SIZE OF THEIR LOT.

UM, THERE'S ANOTHER ONE ON MAIN STREET THAT THEIR UTILITIES ARE CONNECTED, BUT THEIR D CAD PHYSICAL ADDRESS IS ANOTHER ADDRESS ENTIRELY.

AND WE HAD TO USE A LOT OF THE SOURCES AND PUT IT ALL TOGETHER TO TRY TO FIGURE OUT, UM, HOW MUCH LAND SQUARE FOOTAGE THEY WERE USING.

THERE ARE A NUMBER OF EXAMPLES LIKE THAT.

OKAY.

SO WITH THAT EXAMPLE, UM, AND LOOKING AT THE RECOMMENDATIONS.

SO THESE FOLKS WERE ESSENTIALLY BASED ON WHAT THEY WERE ACTUALLY USING.

THEY WERE SHORT OF CREDITS.

IS THAT WHAT I'M HEARING YOU SAY? OH, LET ME MAKE CLEAR THEN COUNCILMAN, WE DON'T KNOW FOR SURE.

OKAY.

BECAUSE MAYBE BACK IN 2005 THAT WERE USING ONLY SIX OR 7,000 SQUARE FOOTAGE, MAYBE THEY EXPANDED AFTER THAT.

IF THEY WERE GIVEN 7,000 CREDIT BACK, THEN THIS SHOULDN'T BE EXPANDING, BUT WE DON'T KNOW FOR SURE EXACTLY WHAT HAPPENED.

UM, SO THAT'S THE, THERE'S A LOT OF UNKNOWNS.

DID THEY EXPAND, DO WE MISCALCULATE THE ACTUAL SQUARE FOOTAGE BACK IN 2005 OR DID THEY EXPAND AFTER THE FACT? SO THAT'S, THAT'S WHERE, UH, UNFORTUNATELY, UM, A LOT OF PEOPLE WHO ARE INVOLVED, UH, PUTTING THIS PROGRAM TOGETHER IN 2005 IS NO LONGER WITH THE CITY.

WE TRY TO BLAME BRITA FOR EVERYTHING.

OKAY.

OKAY.

ALL RIGHT.

OKAY.

OKAY.

SO AT THIS POINT WE DON'T REALLY KNOW, UH, I USED THE TERM, IF THERE ARE SOME FOLKS WHO NEED TO BE GRANDFATHERED ARGUMENTS IN A TERM, RETRO HAVE CREDITS

[00:20:01]

RETRO.

WE DON'T, WE DON'T KNOW THAT.

SO I'M LEAVING FORWARD.

YOU TALK ABOUT THE POLICY PIECE AND IT COME INTO COUNCIL AND, AND, AND AUGUST AND SARAH GAN, WHAT'S, WHAT'S SORT OF THE VISION ARE YOU LOOKING AT BETWEEN NOW AND THAT AUGUST 1ST? CAN YOU HELP ME UNDERSTAND WHAT, WHAT ARE YOU LOOKING AT? AND I'M NOT ASKING YOU WHAT YOU'RE PROPOSING, BECAUSE AT THAT I KNOW IT'S WORK TO BE DONE, BUT WHAT I'M TRYING TO, I'M TRYING TO GO FROM WHAT YOU FOUND AND TO THE RECOMMENDATION ABOUT, THERE'S GOTTA BE SOME POLICY SWEATS BETWEEN WHAT YOU FOUND AND THE POLICY PROPOSAL.

CAN YOU GIVE ME A ARIEL VIEW OF, UH, SOMEBODY GIVE ME AN AREA VIEW OF WHAT'S WHAT'S IN THAT OPEN SPACE BETWEEN THAT? I GUESS THAT'S WHAT I'M, I'M ASKING.

I'M NOT ASKING FOR WHAT ARE RECOMMENDATIONS.

I'M NOT ASKING FOR THAT TO TABLE.

JEFF, CAN YOU HELP ME BETWEEN WHAT WHAT'S THE FINDING AND THE, WHATEVER THE EXPECTED POLICY PIECE IS? CAN YOU PAINT A PICTURE BETWEEN THAT AND AN AUGUST ONE OR WHATEVER THE DATE IT IS? CAN YOU, UM, GREAT QUESTION.

AND THERE'S REALLY TWO PATHS I THINK THAT WE COULD TAKE, UM, ONE IS THAT WE, UH, WE TAKE THE GREAT WORK THAT'S BEEN DONE SO FAR, ALL THE DATA THAT'S BEEN PULLED FROM VARIOUS PLACES, UM, AND KEEP CHASING THAT PATH AND TRY TO GET, ANSWER THE QUESTIONS THAT YOU'RE GETTING TOWARD, WHICH ARE, YOU KNOW, HOW MANY SQUARE FEET HERE, THERE, AND WHEN, AND, AND REALLY KIND OF CHASE OUR TAILS ON THAT ROUTE.

THE OTHER WOULD BE TO TREAT THIS AS A, AS A POLICY ITEM AND LOOK FOR DIRECTION FROM COUNCIL CAUSE THE, THE, THE ISSUE REMAINS, RIGHT.

THERE'S STILL A LOT OF AUTO BUSINESSES OUT THERE.

AND, AND JUST FOR CONTEXT, UM, OUR ECONOMIC DEVELOPMENT CONSULTANT, AS THEY'VE BEEN WORKING ON THE STRATEGIC PLAN FOR ECONOMIC DEVELOPMENT, UM, TOOK ALL OF LOOKED ACROSS THE CITY AND LOOKED AT ALL THE AUTO BUSINESSES IN GARLAND.

AND THE TOTAL ACREAGE OF THOSE IS ABOUT A THOUSAND ACRES.

WE HAVE ABOUT A THOUSAND ACRES OUT THERE OF AUTO USES.

UM, THIS JUST IN THIS AREA, WHAT WAS IDENTIFIED THE 845,000 SQUARE FEET, THAT'S 20 ACRES.

AND SO YOU'RE TALKING ABOUT 50 TIMES JUST THE NUMBER OF BUSINESSES IN THIS AREA ACROSS GARLAND.

AND SO THE ISSUE IS STILL THERE.

IT'S, UH, YOU KNOW, THE POLICY QUESTION IS HOW, HOW DO WE, HOW DO WE GO DOWN THE PATH? HOW DO WE REGULATE THOSE? IF WE DO WANT TO, UH, TRY TO MINIMIZE THEM FIND HIGHER AND BETTER USES FOR THAT LAND, HOW DO WE BEST DO THAT? I THINK WHAT WE HAVE ON THE BOOKS IS A VERY, UH, ADMINISTRATIVELY ONEROUS PROCESS.

AND, AND TO, TO AUDIT'S CREDIT, THEY'VE SHOWN US, IT'S VERY DIFFICULT TO TRACK.

UM, THERE'S PROBABLY OTHER TOOLS TO REGULATE.

UM, AUTO USES SUP'S, UM, JUST FLAT OUT, YOU KNOW, NOT ALLOWING THEM IN ZONING.

THERE'S LOTS OF OPTIONS THERE.

AND SO WHAT I WOULD SEE HAPPEN IF, IF, IF THE COMMITTEE AND COUNCIL WANTS TO GO DOWN THAT TRAIL, THE SECOND TRAIL IS LET'S TALK ABOUT THOSE OPTIONS BEFORE WE START CHASING DOWN MORE DATA TO SEE WHAT'S OUT THERE.

SO, UM, YOU KNOW, MAYBE A GOOD ITEM FOR DEVELOPMENT SERVICES COMMITTEE OR THE FULL COUNCIL, YOU KNOW, REALLY IN, IN YOUR COURT.

OKAY.

ALL RIGHT.

THANKS JET MS. CHAIR.

NO, I WAS JUST GOING TO SAY THAT, YOU KNOW, MAYBE LET A MAYOR PRO TEM HEDRICK KNOW THAT THIS IS GOING TO BE SENT OVER TO DEVELOPMENT SERVICES, UH, BEFORE, BEFORE COUNCIL PUTS IN FOR IT'S A COMMITTEE ASSIGNMENTS FOR NEXT YEAR, HE MAY DECIDE TO, HE MAY DECIDE TO HIGHTAIL IT OUT OF DEVELOPMENT SERVICES.

I MEAN, I, I MEAN, THIS REALLY, I GUESS, COMES TO THE QUESTION OF LIKE, IF AN ORDINANCE FALLS IN THE WOODS AND NOBODY ENFORCES IT FOR 20 YEARS, YOU KNOW, IS IT STILL AN ORDINANCE IT'S STILL WORTHWHILE, UM, GREAT JOB TAKING THIS AS FAR TO GROUND AS YOU COULD SO FAR.

AND I THINK IT'S, YOU KNOW, AT SOME POINT THE GAME IS NOT WORTH THE CANDLE FOR LIKE, YOU KNOW, DO YOU GO AND VISIT EVERYBODY? AND WHAT OTHER EVIDENCE DO YOU HAVE AND ALL THIS OTHER STUFF.

I MEAN, WE COULD SPEND ON EACH ONE OF THESE, YOU COULD PROBABLY SPEND MONTHS AND MONTHS CHASING YOUR TAIL EITHER, EITHER AT THE AUDIT LEVEL OR, YOU KNOW, OR LEGAL HAVING TO DO IT.

I MEAN, BECAUSE WE RAN INTO THIS ISSUE SORT OF RECENTLY ON COUNCIL WITH THE GENTLEMEN WHOSE SUP HAD EXPIRED AND WAS GOING THROUGH THAT, AND YOU RUN INTO ALL THESE QUESTIONS OF WHAT'S EQUITABLE AND FAIR, AND WHO KNEW WHAT AND WHEN, AND, UM, IT, AND SO IT'S LIKE, I HAVE A BUNCH OF QUESTIONS, BUT I'M NOT EVEN SURE THEY MATTER REGARDING THE AUDIT ITSELF.

LIKE, DO WE KNOW HOW THE EXPANSION HAPPENED? AND

[00:25:01]

I MEAN, THAT'S LIKE, CAUSE TO ME THAT'S ONE OF THE MOST CURIOUS THINGS ABOUT IT.

IT'S LIKE, LIKE MAGIC.

WE JUST EXPAND THE AREA WHEN WE APPROVE SOMETHING ELSE AND WHETHER IT WAS INTENTIONAL OR UNINTENTIONAL, AND WHETHER WE TOLD ANYBODY YEAH.

THE, YOU KNOW, ALL WE COULD FIND IS THAT IT HAPPENED WITH THE ADOPTION OF THE GDC.

WE TALKED TO FORMER EMPLOYEES, WE TALKED TO EVERYBODY WHO'S STILL HERE AND NOBODY SEEMED TO KNOW IT'S AMAZING HOW MUCH INFORMATION CAN BE LOST IN A RELATIVELY SHORT PERIOD OF TIME.

I MEAN, YOU LOOK AT, YOU KNOW, PLANO, WHICH ISN'T EVEN SURE WHICH CHARTER THEY HAVE IS ACCURATE.

AND YOU'RE LIKE, REALLY? HOW DO YOU NOT KNOW THAT? AND THEN YOU COME TO ONE OF OUR MEETINGS AND YOU'RE LIKE, WHOA.

UM, CAUSE I MEAN, IT KIND OF FEELS LIKE, YOU KNOW, WAS IT, DID WE EVER, IT SOUNDS LIKE WE STOPPED EVEN TRYING TO ENFORCE IT BACK IN LIKE 2013, WE JUST PUNTED AND FOR WHATEVER REASON, STAFF JUST PUNTED ON IT.

AND I THINK ALL OF THOSE THINGS ARE, ARE ACTUALLY REALLY GOOD.

UM, YOU KNOW, W POLICY ISSUES TO DISCUSS IS, IS, IS, YOU KNOW, IT SOUNDS LIKE IT'S A VERY INTENSIVE PROGRAM TO ADMINISTER, TO DEAL WITH HOW MANY 20 ACRES TO DEAL WITH ROUGHLY 20 ACRES.

I MEAN, BASICALLY, YOU KNOW, THE SIZE OF THE HYPERMARKET SITE AND WE'RE GOING TO SUE, YOU KNOW, ARE WE REALLY GOING TO EXPEND THAT MUCH ADMINISTRATIVE TIME JUST TO MANAGE THAT AMOUNT? NOT, NOT THAT THE IDEA OF MANAGING ISN'T A BAD IDEA, BUT I MEAN, I THINK THERE ARE A LOT OF OTHER POLICY OPTIONS.

I MEAN, WE COULD JUST TELL ME IF I'M WRONG ABOUT THIS, MR. ENGLAND, BUT WE, WE COULD JUST SAY, IT'S JUST, WE COULD JUST ZONE IT OUT AND YOU, YOU CONTINUE ON AS A NON-CONFORMING USE ANY OF YOUR NON-CONFORMING USE.

IT'S LIKE YOU'VE GOT SIX MONTHS OR SOMETHING.

YOU COULD ZONE IT OUT COMPLETELY.

AND THEN IF THEY CLOSE SHOP AND GO CLOSED FOR SIX MONTHS, THEN, UM, THEN NO OTHER USE LOCK THAT CAN GO IN AND THEY CAN CONTINUE THE NON-CONFORMING USE IF THEY SELL IT.

AND THEY, UM, UH, THE NEW OWNER REMAINS OPEN OR OPENS IT WITHIN SIX MONTHS.

UM, BUT YOU COULD DO THAT.

YOU COULD ZONE IT OUT.

YOU COULD DO AN SUP, UH, TO WHERE, UM, EACH AUTOMOBILE USE, UM, UH, HAS TO COME BEFORE COUNCIL AND, UM, RECEIVED PERMISSION FROM COUNCIL AND COUNCIL TO DETERMINE ON A CASE BY CASE BASIS, WHETHER IT'S APPROPRIATE LAND USE FOR THAT LOCATION.

SO EITHER ONE OF THOSE OPTIONS WOULD BE LOT LESS INTENSIVE AS FAR AS ADMINISTRATIVE WORK GOES.

UH, I MEAN MORE STRAIGHTFORWARD TO WHAT WE DO WITH THE REST OF THE CITY.

OKAY.

SO YOU COULD CHANGE THE ZONING AND THEN IF SOMEBODY WANTED TO COME BACK AND CREATE A PD AND HAVE THE RIGHT TO DO IT THERE, OR WHATEVER, YOU COULD DO IT THAT WAY TOO, THERE WERE A LOT OF OPTIONS THAT JUST SEEM A LOT LESS COMPLICATED THAN, UH, MANAGING ALL THESE CREDITS.

AND I MEAN, INNOVATIVE WAY, UH, YOU KNOW, I DON'T KNOW WHY, YOU KNOW, OBVIOUSLY NOT HERE WHEN THEY MADE THAT DECISION, BUT VERY INNOVATIVE, BUT, UH, I, I THINK PROBABLY THE RIGHT THING IS, YOU KNOW, WE'LL HAVE A DISCUSSION ABOUT THIS AT COUNCIL.

IT'S BRINGING IT TO COUNCIL AND THEN I SUSPECT THE, THE GOAL WILL BE TO REFER IT.

IT'S REALLY GOING TO GO.

THIS IS GOING TO HAVE TO GO THROUGH COMMITTEE TO KIND OF IRON OUT ALL THE, UH, ISSUES OF IT.

THERE'S NO, IT DOESN'T SEEM TO ME THAT THERE'S ANY WAY OF SAVING THIS.

IT'S JUST A TOTAL LEGAL MORASS.

I MEAN, GOOD LUCK FIGURING OUT WHO OWNED, WHAT, WHEN AND WHO EXPANDED, WHAT WENT? I, I THINK IT DOES BEG, UH, UH, A BIGGER QUESTION.

YOU KNOW, I, I THINK ONE OF THE CHALLENGES FOR, FOR BUILDING INSPECTION GOOD LUCK IS, IS, IS WHEN THINGS IS, WE'RE ALSO, UH, FROM A MANAGER PERSPECTIVE, WE DO NEED TO HAVE SOME ABILITY TO DETERMINE WHEN A BUSINESS CLOSES, WHEN IT OPENS, WHEN, CAUSE I GET THIS ALL THE TIME.

I HAVE A, UH, ONE OF MY VERY DEDICATED RESIDENTS WHO KEEPS AN EYE ON SIGNS AND IS VERY MUCH ON, YOU ALL KNOW WHO I'M TALKING ABOUT.

UM, WHO'S VERY MUCH LIKE WHY DO THESE PEOPLE STILL HAVE A SIGN UP? THAT BUSINESS HAS BEEN CLOSED AND HOW LONG HAS IT BEEN CLOSED FOR AND STUFF LIKE THAT.

BUT THAT'S DIFFICULT TO, I DON'T EVEN KNOW HOW WE INVENTORY OR KEEP TRACK OF ALL, ALL THAT.

I MEAN, THAT'S, I MEAN MAYBE BY HIRING UP OR NOT HIRING, HAVING A VOLUNTEER CORPS OF RETIRED FOLKS WHO ARE HAPPY TO DO IT ANYWAY SERIOUSLY.

UM, YEAH, I GUESS, I MEAN, I HAVE A FEW MORE THINGS, BUT I DON'T EVEN THINK REALLY IT'S WORTH IT ASKING HIM, UM, I REALLY GREAT WORK.

I MEAN, THAT'S A LOT TO FAIR IT OUT AND THERE ARE SO MANY DIFFERENT SOURCES OF INFORMATION AND JUST SITTING HERE, I'M LIKE, WELL, I SUPPOSE WE COULD ALSO LOOK AT THIS OR LOOK AT THAT.

I MEAN, I

[00:30:01]

DON'T THINK THERE'S YELLOW PAGES ANYMORE, BUT, UM, BUT YOU KNOW, I DIDN'T HAVE TO TELL ME TO QUIT A FEW TIMES TO STOP AT SOME POINT.

RIGHT.

CAUSE I MEAN, YOU COULD LITERALLY SPEND A LOT OF TIME TRYING TO FIGURE OUT WHERE ALL THIS DID SO SERIOUSLY, THE REALLY, REALLY APPRECIATE THE WORK ON IT.

AND, AND THANK YOU ALSO TO, UM, TO STAFF FOR SUGGESTING FOR MANAGEMENT, FOR SUGGESTING THE AUDIT.

UM, I THINK IT'S, UH, IT'S UH, YEAH, IT'S, IT'S BEEN A WORTHWHILE ENDEAVOR TO FIGURE IT OUT AND I TOOK OFF SOME LESSONS LEARNED, BUT DEFINITELY SENDS IT OFF TO, UH, WHOEVER'S GOING TO BE DEVELOPMENT SERVICES NEXT.

ANY OTHER QUESTIONS OR COMMENTS? ANYONE? UM, I, I AGREE WITH YOU.

I, I, I'M LOOKING FORWARD TO, LIKE I SAID, UH, WHOEVER'S GOING TO TEXT, SO THE MAYOR PRO TEM BEFORE IT'S MEETINGS OVER TIME, THIS IS COMING, HE MAY RESIGN FROM THAT COMMITTEE WHEN HE'S ON TODAY.

BUT I THINK IT'S RIGHT.

UM, CONCERN HERE FOR ME IS INSTEAD OF A COST BENEFIT ANALYSIS.

I MEAN, IT'S LIKE YOU SAID, WHEN YOU MENTIONED THE WORD DICKHEAD, YOU HAVING TO DIG AND THAT BY ITSELF, IT'S A LOT OF FUN.

I KNOW YOU HAD FUN DOING THAT.

YEAH.

SO I JUST, I JUST SEE THIS AS, UM, YOU KNOW, WHAT'S THE COST OF BENEFITS OF THIS, THIS WHOLE PROGRAM.

AND THEN, UH, NOT TO EVEN MENTION THE, UH, UH, THE VENDORS, THE OWNERS OF THE DAVIS FOLKS WHO OWN THESE PLACES OR USED TO OWN THEM OR ON THE PARKING LOT NEXT TO WHERE THE BUILDING IS, AND THOSE CAN BE DIFFERENT PEOPLE.

I JUST, I CAN JUST SEE THIS JUST UNRAVELING, JUST, YOU KNOW, I'M GLAD YOU HAD TOLD YOU TO STOP, YOU KNOW, TO PAUSE, BUT YEAH, I AGREE WITH, WITH, UH, WITH MS. SHARE, UM, BUT IN COMMITTEE AND, UH, LET'S SEE IF, BUT LIKE I SAID, THANK YOU FOR, UH, CAUSE THIS IS A LOT OF WORK YOU'VE DONE HERE, UH, FOR IT.

SO WHAT W WHAT, WHATEVER COMES DOWN THE PIPE WE'LL, WE'LL WE'LL TO SEE WHAT HAPPENS.

SO THANK YOU.

THANK YOU FOR SHARING.

UM, WELL, I GUESS ONE LAST QUESTION OR THE, THE OVERLAY DISTRICTS, I DIDN'T GET A GOOD LOOK AT THE MAP OR THE, ARE THOSE BOTH ENTIRELY WITHIN DISTRICT TWO OR IS ONE IN DISTRICT TWO AND ONE IN SIX OR EIGHT OR SOMETHING? UH, SO THEY, THEY CONSIDER AREA ONE AND AREA TO AREA.

ONE IS NEAR THE FOREST LANE AREA AREA TWO IS DOWNTOWN, BUT THEY CA THEY CALL IT ALL THE DAO DISTRICT.

I WAS JUST CURIOUS, CAUSE, UH, YEAH, THAT'LL BE A THING THAT EACH OF THOSE COUNCIL MEMBERS IS GOING TO WANT TO KNOW.

THE DOWNTOWN ONE IS ALL DISTRICT LOOKS TO BE ALL DISTRICT TOO, EVEN AS EXPANDED.

YEAH.

AREA ONE WAS UNCHANGED.

UM, AREA TWO IS THE ONE WHERE THE EXPANSION.

OKAY.

RIGHT.

I WAS JUST WONDERING WHAT COUNCIL DISTRICT THEY WERE IN.

CAUSE THOSE COUNCIL MEMBERS ARE GOING TO WANT TO, YOU KNOW, IT'S GOING TO IMPACT THEM AT LEAST AT SOME LEVEL.

SO IT LOOKS LIKE THEY'RE BOTH IN DISTRICT TWO.

I THINK, YOU KNOW, IT'S FUNNY BECAUSE I'VE BEEN HERE LONG ENOUGH TO JUST TWO AND EIGHT.

IT'S AN ACTIVE, I HAVE A MENTAL LIST OF, OF THE MOST TERRIFIC COUNCIL MEETINGS I'VE EVER SAT THROUGH.

AND THIS WAS ONE OF THEM AND IT WAS VERY, VERY CONTROVERSIAL WHEN IT WAS PUT IN PLACE.

IT WAS DR.

DAY'S IDEA.

AND, UH, AND HE WAS PUT IN PLACE WITH A LOT OF OPPOSITION, BUT IT WAS VERY, VERY BADLY NEEDED.

UM, AND, UH, AND IT WAS, YOU KNOW, UM, HIGHLY INNOVATIVE IN AND, UH, WAS, WAS THE RIGHT SOLUTION AT THE TIME.

UM, I, I CAN PROBABLY TELL YOU WITH SOME PRECISION AS TO WHEN IT, UH, UH, WHEN IT DROPPED OFF THE SCENE BY, BUT THAT'S BESIDE THE FACT, BUT, UH, THAT WAS A VERY LONG COUNCIL MEETING.

I, I W I'M THE, UM, IF THERE'S AN AUTOMOTIVE LOBBY IN, IN GARLAND, THAT IS NOT, UH, THEY'RE NOT PASSIVE.

SO VERY INTERESTING.

THANK YOU FOR THE INSIGHT ON THAT.

BRIAN GERMANY FAMILY MAKE ONE COMMENT.

ABSOLUTELY, PLEASE.

I, AT THE SAME TIME, I WANT TO APPRECIATE THE PLANNING DEPARTMENT BUILDING INSPECTION DEPARTMENT AND COURT COMPLIANCE.

THEY WORKED WITH US, UH, EXTREMELY WELL AND PROVIDE A LESSON, A LOT OF OPPORTUNITIES FOR INFORMATION AND STUFF LIKE THAT.

SO DO WANT TO APPRECIATE, NO, THANK YOU GUYS VERY MUCH.

I REALLY, YOU KNOW, THESE THINGS HAPPEN OVER TIME, SO THERE'S NO ROCKS TO BE THROWN AT STAFF OVER THIS WHERE'D YOU CAN PICK UP THE PIECES AND MOVE FORWARD.

THANK YOU VERY MUCH.

GREAT JOB.

THANKS.

UH, WHY SHOULD YOU GO TO YOUR SEAT? OKAY.

[00:35:01]

THIS DOES, I FORGOT MR. SERVICE CHAIR, JUST WHEN CHRISTIAN PARKING, UM, AUTOMOTIVE PLACES.

THIS IS CITYWIDE AS TOURISM, NOT, NOT JUST HERE NOVELA, BUT ACROSS THE CITY.

RIGHT.

WE'RE TALKING ABOUT THE APPLICATION.

WHAT YOU PRESENTED HERE IS THAT, IS THAT JUST TEAR OR IT IS HERE.

IT'S JUST HERE.

I KNOW YOUR FOCUS WAS THERE, BUT THE PIGGYBACK ON WHAT THE CITY MANAGER SAID, WHATEVER WE DO HERE, IT'S GOING TO HAVE RIPPLING AFFECTS CITYWIDE.

AND I'VE, I'VE GOT A NUMBER CARP PLACES IN MY DISTRICT.

AND AS THE CHAIRMAN SAID THAT, UH, IT'S A VERY CLOSE KNIT GROUP.

AND SO I JUST WANT TO THROW THAT OUT TOO.

I KNOW THIS IS JUST INVOLVING THIS, BUT WHATEVER COMES UP COMES OUT OF HERE, I CAN ASSURE YOU THAT IT'S NOT GOING TO BE LIMITED TO IMPACT DID THERE, SO, OKAY.

THANK YOU.

THANK YOU, SIR.

UH, AND WITH THAT, WHY DON'T WE MOVE ON TO THE NEXT ITEM ON THE AGENDA, WHICH IS THE VENDOR MASTER FILE AUDIT CHAIRMAN.

I WILL KICKSTART THIS AUDIT AS WELL.

SO THE OBJECTIVE OF THIS AUDIT WAS TO DETERMINE IF ADEQUATE CONTROLS EXIST AND OPERATING EFFECTIVELY OVER THE VENDOR MASTER FILE.

WHEN WE TALK ABOUT VENDOR MASTER FILE, WE WERE MAINLY TALKING ABOUT THE INFORMATION VENDOR INFORMATION STORED IN THE FINANCIALS MANAGED BY THE FINANCE DEPARTMENT.

SO THIS IS MORE OF A INTERNAL CONTROL AUDIT.

WE JUST WANTED TO MAKE SURE WE DO HAVE PROPER CONTROLS.

AS YOU ARE AWARE.

THERE IS A LOT OF ATTEMPT THESE DAYS TO, UM, CHANGE VENDOR INFORMATION.

SO, UM, FRAUDULENT OR INAPPROPRIATE, UH, PAYMENT WILL BE PROCESSED.

UH, FORTUNATELY, UH, OUR FINANCE DEPARTMENT MATT'S GROUP, UM, HAS BEEN VERY VIGILANT AND, UM, BUT WE STILL WANTED TO MAKE SURE, UM, UH, YOU KNOW, ARE THE PROPER CONTROLS OR HOW EFFECTIVE ARE THOSE CONTROLS? SO THE AUDIT SCOPE, UH, WAS WE COVERED BASICALLY FROM OCTOBER 1ST, 2019 THROUGH FEBRUARY 24TH, 2022.

UH, WE DID A LOT OF DIFFERENT TYPES OF TESTING, UH, OR THREE OF THE AUDITORS HERE, UH, DID PART OF IT.

SO THEY'RE GOING TO COVER THE AREAS THAT EACH ONE OF THEM COVERED.

UM, SO I'M GOING TO TURN IT OVER TO ALEX FIRST.

HE'S GOING TO COVER THE FIRST FEW FINDINGS THEN, UH, ACTUALLY THE FIRST ONE, AND THEN ERIN WILL JUMP IN.

AND AFTER THAT, WE'LL FINISH WITH ROBERT.

OKAY.

YEAH.

SO FOR FINDING ONE, THIS WAS THE VENDOR DATA RETENTION FINDING.

SO THE VENDOR MASTER FILE HAS TWO DIFFERENT TYPES OF FENDERS.

UM, THERE'S THE PERMANENT VENDORS, WHICH ARE KEPT OPEN AND THEY'RE KIND OF IN THE REUSE ON A RECURRING BASIS.

SO THOSE ARE KEPT OPEN AND THERE'S THE ONE-TIME VENDORS THAT ARE SUPPOSED TO BE DEACTIVATED IMMEDIATELY AFTER THEIR PAYMENT.

UH, AND THE VENDOR MASTER FILE SYSTEM USES A SEQUENTIAL NUMBERING WHENEVER A NEW VENDOR GETS ADDED TO THE LISTING.

SO WE LOOKED AT THE VENDOR NUMBERING TO IDENTIFY IF THERE WERE ANY GAPS THAT WERE PRESENT.

AND WE FOUND THAT THERE WAS 4,708 GAPS FOR THE PERMANENT VENDORS AND 18,000 OR 1,883 GAPS FOR THE ONE-TIME VENDORS.

AND THIS SHOWS THAT THIS WAS DUE TO THEM BEING DELETED, UM, IN SOME, AND ONE OF THE CALLS FOR THIS IS THAT FINANCE EMPLOYEES HAVE THE ABILITY TO DELETE VENDORS IN THE SYSTEM.

AND OUR RECOMMENDATION WAS FOR THEM TO REMOVE OR REMOVE THE ABILITY TO DELETE THE VENDORS FROM THE VENDOR MASTER FILE SYSTEM.

AND FOR THEM TO PERFORM A PERIODIC REVIEW OF THE VENDOR MASTER FILE TO IDENTIFY ANY NUMBERING GAPS THEY CONCURRED.

AND THEY GAVE A, A, A, THEY GAVE, UH, ONE POSSIBLE REASON AS TO WHY SOME OF THOSE GAPS MIGHT'VE BEEN THERE IS WHENEVER A NEW VENDOR IS GETTING ADDED.

IF WHOEVER'S SETTING UP THE VENDOR, DOESN'T COMPLETE THE PROCESS AND, AND BACKS OUT AT A CERTAIN POINT THAT GAP, UM, IT DOESN'T, IT, IT CREATES A GAP THERE.

SO THAT WOULD BE ONE POTENTIAL REASON WHY, AND ALSO THE, HER, THE VENDOR MASTER FILE WAS SET UP TO WHERE EMPLOYEES WOULDN'T BE ABLE TO DELETE VENDORS THAT ALREADY

[00:40:01]

HAD PAYMENT THAT WAS MADE IN THE PAST.

IT WAS ONLY, IT WOULD ONLY BE SOME, THEY DIDN'T HAVE ANY PAYMENTS MADE CURRENTLY.

UM, AND SO THE METRIC CONCURRED WITH OUR RECOMMENDATION AND THE FIRST PART OF THAT ACTION PLAN WAS THAT THEY REMOVED THE EMPLOYEE'S ABILITY TO DELETE THE VENDORS.

AND THE SECOND PART IS THEY, UM, IMPLEMENTED A PERIODIC REVIEW TO LOOK FOR THOSE GAPS AND THIS WAS IMPLEMENTED IMMEDIATELY, BUT, UM, I'LL BE COVERING THE SECOND FINDING, UM, REGARDING THE VENDOR ACCOUNT UPDATE.

SO, UM, FINANCE, UH, HAS A LOT OF REQUESTS FOR VENDOR UPDATES, SUCH AS ADDRESSES, PHONE NUMBERS, BANK, ACCOUNT INFORMATION, UM, COMING IN, UH, SO THEY HAVE AN SOP THAT LINES OUT, UH, WHAT THEIR VERIFICATION PROCEDURES ARE.

UM, ACCORDING TO THE SOP, UH, WE HAVE TO FINANCE EMPLOYEES CONTACTING THE EMPLOYER, UM, AND SPEAKING TO TWO DIFFERENT EMPLOYEES AT THE VENDORS, UH, COMPANY.

UM, AND THEY ARE SUPPOSED TO DOCUMENT THIS, UM, WHO THEY SPOKE TO WHEN THEY SPOKE TO THEM AND WHAT INFORMATION THEY VERIFIED.

SO THAT'S FOR BANK ACCOUNT CHANGES, UM, FOR ALL OTHER CHANGES LIKE PHONE NUMBERS, ADDRESSES, UM, THEY ONLY REQUIRE ONE FINANCE EMPLOYEE TO MAKE A PHONE CALL.

UM, SO WE TESTED THAT.

WE ALSO TESTED TO SEE, UH, WHAT BANK VERIFICATION DOCUMENTS WERE, UM, WITH THESE REQUESTS.

UH, SO FOR EXAMPLE, AVOIDED CHECK WOULD, UM, SUFFICES, UM, VERIFICATION DOCUMENTATION IN THAT CASE.

SO WE TESTED 130, UH, VENDOR FILES THAT WERE FLAGGED AS UPDATED.

UM, WE INITIALLY TRIED TO PULL A REPORT FROM THE FINANCE SYSTEM CAYENTA, BUT, UH, THERE WASN'T A REPORT AVAILABLE, BUT FINANCE PROVIDED, UM, EVERYTHING THEY HAD FOR THE TIMEFRAME WE WERE LOOKING AT.

SO WE FOUND 121 OF THE 130 UPDATED VENDOR FILES HAD INSUFFICIENT DOCUMENTATION OF PHONE VERIFICATION CALLS.

UM, SO 69 OF THOSE, UH, DID NOT HAVE ANY SORT OF VERIFICATION PHONE CALLS DOCUMENTED.

AND THAT'S NOT TO SAY THEY DIDN'T DO IT.

IT JUST WASN'T DOCUMENTED THE WAY.

UM, WE WERE EXPECTING BASED ON THE SOP 31 OF THOSE 69 ALSO DID NOT CONTAIN, UM, A BANK VERIFICATION DOCUMENT WITH THE, THE FILE DOCUMENTS.

52 OF THE 121 HAD ONE VERIFICATION PHONE CALL DOCUMENTED, AND SEVEN OF THOSE 52 DID NOT ALSO CONTAIN BANK VERIFICATION DOCUMENTS FOR THE NON-BANK RELATED CHANGES.

UH, WE DIDN'T FIND ANY DOCUMENTATION OF A PHONE CALL BEING MADE.

SO, UM, AS YOU CAN SEE, UH, THE SOP IS NOT CONSISTENTLY BEING IMPLEMENTED.

UM, WE'RE NOT SEEING TWO DIFFERENT FINANCE EMPLOYEES MAKING VERIFICATION PHONE CALLS FOR BANK CHANGES.

UM, AND THEN WE'RE ALSO SEEING, UH, UH, VARIOUS, UM, DIFFERENT TYPES OF BANK FORMS BEING USED AS VERIFICATION.

UM, BUT, UH, WE THINK THIS IS DUE TO, UM, UH, UH, STAFFING LIMITATIONS IN THE FINANCE OFFICE, UM, A HIGH VOLUME OF REQUESTS COMING IN.

AND THEN ALSO, UM, WITH THAT ADDED ON TO, UM, TRYING TO MAKE TIMELY PAYMENTS, THEY MAY BE ACCEPTING INVOICES AS SUFFICIENT DOCUMENTATION TO UPDATE BANK INFORMATION INSTEAD OF A VOIDED CHECK OR A LETTER FROM THE BANK.

UM, SO AS WE KNOW, HACKING THESE DAYS IS EVER EVOLVING.

UM, SO THERE'S A LOT MORE OPPORTUNITIES OUT THERE, UH, FOR INAPPROPRIATE PAYMENTS.

UM, OUR RECOMMENDATION IS THAT, UH, MANAGEMENT REEVALUATE THE INTERNAL ORGANIZATION OF THE ACCOUNTS PAYABLE TO FILL GAPS IN VERIFICATION TASKS UNTIL ADDITIONAL RESOURCES BECOME AVAILABLE.

UM, FINANCE STATED THAT THEY CONCUR AND, UH, THEIR ACTION PLAN, UM, IS LOOKING INTO A CLOUD-BASED BUSINESS IDENTITY PORTAL TO BE USED TO ONBOARD VENDORS.

UM, AND THEN THAT WOULD ALSO ELIMINATE THE NEED TO HAVE FINANCE EMPLOYEES MAKING THE CALLS THEMSELVES, UH, TO VERIFY CHANGES.

UM, THERE'S ALSO NEGOTIATIONS ABOUT THAT COMPANY ACCEPTING FRAUD LIABILITY AS WELL UNTIL THIS OPTION COULD BE FULLY IMPLEMENTED.

FINANCES AGREED TO, UH, PLACE ADDITIONAL INDIVIDUALS AND POSITIONS TO COMPLETE THE SECONDARY VERIFICATION.

AND THIS IS TO HAPPEN IMMEDIATELY.

DO YOU HAVE ANY QUESTIONS ABOUT THAT FINDING, OKAY, WE'RE GOING TO JUMP TO NUMBER SIX SINCE THAT'S CLOSELY RELATED AS WELL.

SO NUMBER SIX, FINDING HIS SECONDARY CONTACT INFORMATION, UM, AS IT STANDS RIGHT NOW, THERE'S NO SECONDARY CONTACT, UM, SPACE AVAILABLE ON THE VENDOR APPLICATION FORM OR THE DIRECT DEPOSIT, UH, ENROLLMENT FORM.

UM, ALTHOUGH THE VIA, UM, VMF SOP STATES THAT THERE HAS TO BE, YOU KNOW, A DUAL

[00:45:01]

VERIFICATION FOR CHANGES, UM, AND THAT THEY HAVE TO CONTACT A SECOND, UH, EMPLOYER AT THE VENDOR'S OFFICE.

UM, SO, UH, WITH THAT LACK OF SECONDARY CONTACT MAY CAUSE DELAYS AND VENDOR MAINTENANCE UPDATES, UM, AND THEN IF WE HAVE THAT SECOND CONTACT INCLUDED IN THE APPLICATION AT ALL, UM, WOULD ALSO ELIMINATE THE NEED FOR, UM, THE FINANCE EMPLOYEES TO HAVE TO SEARCH, SEEK OUT A SECONDARY CONTACT, LIKE, YOU KNOW, VIA THE INTERNET OR WHATEVER YOU CAN FIND INSTEAD OF HAVING IT MAINTAINED ON THE ACTUAL VENDOR MASTER FILE.

SO, UH, WE RECOMMEND, UM, THAT THEY REVISE THE VENDOR APPLICATION FORM TO REQUIRE A SECONDARY CONTACT, UH, FOR DUAL VERIFICATION PURPOSES, UM, MANAGEMENT CONCURRED.

AND, UM, THEY'RE ALSO GONNA LOOK INTO SEE WHERE IN THE, UH, INFORMATION SYSTEM THAT, UH, THAT SECOND SECONDARY CONTACT CAN BE STORED.

UM, THEY'RE ALSO LOOKING INTO THE CLOUD-BASED BUSINESS IDENTITY PORTAL AS WELL.

AND THIS IMPLEMENTATION DATE IS THE FOURTH QUARTER QUESTIONS CHAIRMAN, IF I MAY ADD A COMMENT, UH, ON TOP OF WHAT ERIN INDICATED, UH, WE KNOW FOR A FACT THAT FINANCE DID LOSE A KEY PERSONNEL, UM, A FEW YEARS BACK, UH, ACCOUNTS PAYABLE SUPERVISOR.

SO WE HAVE TO TAKE THAT INTO CONSIDERATION AS WE ARE GOING THROUGH THIS.

AND AS YOU KNOW, AND I KNOW WORKING WITH MATT, UH, HOW MUCH HE STRUGGLES, UM, WITH LACK OF RESOURCES.

SO I JUST, I JUST WANTED THE COMMITTEE TO BE AWARE OF THAT.

UM, BECAUSE I KNEW THIS INDIVIDUAL, I WORKED WITH THIS INDIVIDUAL PREVIOUSLY AND SHE WAS VERY CAPABLE AND COMPETENT AND, UM, THEY KNEW HOW THE PROCESS WORKS, AND I BELIEVE SOME OF THESE, THE SOAPIES WERE WRITTEN BY HER, BUT WHEN WE LOST THAT INDIVIDUAL, THAT CREATED A GAP.

AND SO, AND I KNOW MATT HAS BEEN STRUGGLING, UM, SIGNIFICANTLY TO FILL SOME OF THOSE GAPS.

AND SO I DO WANT IT, UM, COMMITTEE TO BE AWARE OF THAT AS WELL.

THANK YOU.

YEAH, JUST, JUST SO THANK YOU, CHAD, FOR THAT.

SO AS A PART OF THE IMPLEMENTATION, UM, THE RECOMMENDATIONS THAT THAT STAFF IS GOING TO RECOMMEND, WE ALSO, AND I GUESS PROBABLY DIRECTING US MORE MR. CITY MANAGER TO SAY MOVE FORWARD, OR HE, SO AT THE STAFFING PORTION OF THIS TO, TO, TO THE EXTENT THAT WE CAN ADDRESS, UH, SOME OF THE MANPOWER ISSUES THAT JED TALKED ABOUT, WE WERE STRUGGLING WITH MANPOWER ISSUES ACROSS THE ORGANIZATION AS IS EVERY OTHER ORGANIZATION IN THE COUNTRY NOW.

AND WE ARE, UM, THERE'S A LOT OF OLD TIMERS LIKE ME THAT ARE, ARE RETIRING AND AN ENORMOUS AMOUNT OF KNOWLEDGE WALKS OUT THE DOOR.

WE'VE, WE'VE ALWAYS, WE'VE ALWAYS STRUGGLED WITH CROSS TRAINING BECAUSE OUR BUDGETS HAVE KEPT US THINLY STAFFED.

UM, WE, UM, AND MATT MAY WANT TO GO INTO THIS MORE, BUT WE'RE, UM, WE ARE, UH, PUTTING A LOT OF FAITH AND A LOT OF FOCUS ON A THIRD PARTY SOLUTION, UH, TO HELP US WHEN IT COMES TO PROTECTING OURSELVES FROM THE EVER INCREASING, UH, EVER, UM, MORE SOPHISTICATED FRAUD THAT WE'RE ENCOUNTERING.

UM, AND THE, THE COMMITTEE MIGHT, MIGHT LIKE TO HEAR FROM MATT ON, ON THOSE, UH, THOSE STEPS.

YES, SIR.

I JUST WANTED TO CHIME IN TO TALK A LITTLE BIT ABOUT WHAT OUR PROPOSED STRATEGY IS TO CORRECT THIS AND TO MITIGATE, HOPEFULLY ELIMINATE ALL FRAUD RELATED TO OUR VENDOR MAINTENANCE.

UM, THERE'S A THIRD PARTY IT'S CALLED PAYMENT WORKS.

BASICALLY WHAT IT IS IS IT'S JUST A SECURE PORTAL FOR VENDORS TO DO ALL OF OUR VENDOR MAINTENANCE FOR US.

THEY HAVE TO GET A SECURE DECRYPTED FILE FROM, FROM US TO ENTER IN ALL THEIR BANKING INFORMATION.

AND THIS THIRD PARTY VALIDATES ALL OF THIS INFORMATION THROUGH THEIR NETWORK AND THROUGH THEIR ALGORITHMS, THEY FEEL SO CONFIDENT IN THEIR PRODUCT THAT THEY HAVE AGREED TO PER FRAUD ATTEMPT THAT ACTUALLY GETS THROUGH THIS.

THEY WILL BACK $2 MILLION OF THAT LIABILITY PER FRAUD ATTEMPT.

WE HAVE STARTED THE PROCESS.

YOU'LL SEE THIS PROBABLY COME FORWARD TO COUNCIL IN JULY, AND WE'RE GOING TO START THE PROCESS TO GET THAT UP AND RUNNING AS FAST AS WE POSSIBLY CAN, BECAUSE WE'VE HAD TO GO BACK TO OLD SCHOOL ON VERIFICATIONS ON VENDORS, BECAUSE THEY'VE GOTTEN SO SOPHISTICATED.

IT'S NOT SO MUCH THAT THEY'RE HACKING US, THEY'RE HACKING OUR VENDORS.

SO WE'RE GETTING LEGITIMATE EMAILS FROM OUR VENDORS

[00:50:01]

WHO WE'VE DONE BUSINESS WITH FOR 20 YEARS, FROM THAT ADDRESS, FROM THAT PHONE NUMBER, BUT IT'S NOT FILM.

SO THIS IS SOMETHING THAT'S KEPT ME UP AT LATE AT NIGHTS FOR TWO YEARS NOW WITH THE BOND PROGRAM IMPLEMENTED, THIS IS THE BEST SOLUTION THAT I FOUND WITHOUT HAVING TO INCREASE STAFF, TRAIN PEOPLE, TO ENSURE THAT THE CITY OF GARLAND'S FUNDS AND TAXPAYER DOLLARS ARE SECURE AND THAT VENDORS PAYMENTS ARE SECURE.

SO WHEN THEY GO OUT, SO I'M REALLY EXCITED ABOUT THE IMPLEMENTATION OF THIS.

AND AGAIN, WHAT YOU CAL FULL COUNCIL SHOULD SEE THIS IN JULY, AND THEN WE'LL MOVE FORWARD AFTER THAT AND IMPLEMENT IT AS QUICKLY AS WE CAN.

I THINK WE'RE TALKING ABOUT, ABOUT AN EIGHT WEEK TIMEFRAME FOR IMPLEMENTATION AND WE'LL BE FULLY UP AND RUNNING.

OKAY.

THANK YOU.

THANK YOU, MATT.

THANKS FOR CHAIR BRINGING UP.

ALL RIGHT.

DO YOU HAVE ANY INCIDENCES OF, OF WHERE WE ARE OR VENDORS HAVE BEEN DEFRAUDED SO FAR? I MEAN, WHERE THERE'S BEEN MONEY LOST.

THERE'S BEEN FROM THE OPPOSITE SIDE, WE'VE HAD A VENDOR WHO OWED US MONEY, GET HACKED AND LOST THEIR MONEY.

AND WE DO HAVE A FEW OPEN, UH, FRAUD CASES WITH OUR BANK RELATED TO CHECK FRAUD, WHICH BASICALLY SOMEBODY ELSE ENDORSED A CHECK AND USE THEIR PHONE TO DO THAT.

SO WE'RE WORKING WITH OUR BANK NOW TO FIND, DETERMINE THE END, THE END PRODUCT OF WHO'S LIABLE FOR THOSE.

AND I PRESUME WE HAVE THOSE HALF GUESS HOW THIS HAPPENED, BUT ARE THOSE, I MEAN, HOPEFULLY MORE THAN LIKELY IT WOULD BE ON THE VENDOR'S END, RIGHT? RIGHT.

SOMEBODY IN SOME INSECURE MAIL RECEIPT OR INTERNAL FRAUD OR SOMETHING LIKE THAT, HOPEFULLY NONE OF THOSE WERE ANY OF OUR BIG BOND PROGRAM.

UM, NO, THEY WERE, THEY WERE SMALL, SMALL DOLLAR AMOUNTS.

UM, PART OF THIS PROCESS, WHAT WE'RE GOING TO BE LOOKING TO DO, WE HAVE ALWAYS ENCOURAGED PEOPLE TO USE ACH THROUGH THIS THIRD PARTY.

WE'RE GOING TO PUSH THAT A LITTLE FURTHER TO TRY TO GET PEOPLE TO MOVE TO ACH BECAUSE IT'S MORE SECURE.

YOU GET YOUR PAYMENT FASTER AND YOU'RE USING THIS THIRD PARTY VENDOR TO ENSURE THAT YOU'RE GETTING YOUR PAYMENT AND IT'S ACCURATE.

IS THERE SOMETHING WE CAN DO GOING FORWARD? OR IS THERE ANYTHING THAT YOU NEED FROM COUNCIL TO ESTABLISH SOME KIND OF POLICY THAT WE, IF YOU DON'T TAKE ACH, WE DON'T PAY YOU WELL, IS THAT UNREASONABLE? I THINK AT THIS POINT, IT'S UNREASONABLE FROM, FROM WE HAVE, WE HAVE A LOT OF REFUND CHECKS THAT WE SEND OUT FOR UTILITY BILLS.

THOSE TYPES OF THINGS STILL NEED TO OCCUR.

BUT AS FAR AS ARE, THEY TALKED ABOUT PERMANENT VERSUS ONE TIME ENTERS OUR ONE-TIME VENDORS ARE USUALLY THESE REFUNDS AND, UH, WE CAN ISSUE CHECKS AND WE USUALLY DON'T HAVE PROBLEMS WITH THEM BECAUSE THEY'RE OUR CITIZENS, UH, OUR, OUR PERMANENT VENDORS AND OUR CONSTRUCTION, ESPECIALLY OUR CONSTRUCTION OR HIGH DOLLAR, WE ARE GOING TO ALL, BUT THEY'RE GOING TO HAVE TO HAVE A REALLY GOOD REASON TO GET A CHECK FROM ME.

SO WE'RE GOING TO ALL, BUT BASICALLY FORCED ALL OF THEM ON ACH.

OKAY.

I MEAN, IF YOU NEED ANYTHING FROM COUNCIL ON THAT, ANYTHING OVER SOME DOLLAR AMOUNT, IT JUST SEEMS THAT THE RISK IS, IS, IS, IS GROWING.

AND JUST WITH THE EFFORTS THAT PEOPLE HAVE, IT NOT JUST FROM WE'RE NOW ISSUING, I SUSPECT WE'RE NOW WISHING WITH ALL THE BOND WORK WE'RE DOING, WE'RE SEEING A LOT MORE CHECKS OF SUBSTANTIAL SIZE AND PEOPLE TRY PEOPLE ARE, UM, YOU KNOW, I THINK WE SEE IT.

I MEAN, YOU KNOW, ELECTED OFFICIALS NOW ARE REQUIRED TO TAKE THESE, YOU KNOW, DON'T GET DEFRAUDED CLASSES AND STUFF LIKE THAT.

AND IT'S, SOME OF THE SCAMS ARE, UM, ARE VERY, VERY ELABORATE AND THEY'RE TARGETED AND ALL OF THIS STUFF.

SO I THINK PUSHING IT OUT IS, UM, TO A THIRD PARTY VENDOR WHO'S WILLING TO TAKE, WHO'S WILLING TO INSURE THE RISK IS.

AND THE GOOD THING IS THEY WEREN'T DIRECTLY WITH OUR DEPOSITORY BANK.

THEY HAVE A RELATIONSHIP WITH THEM, OUR CURRENT DEPOSITORY BANK, JP MORGAN, AND THE SECOND PHASE OF THIS WILL BE MOVING TOWARDS IT'S CALLED SINGLE USE ACCOUNTS.

AND BASICALLY WHAT IT IS, IS A CREDIT CARD THAT CAN BE USED ONE TIME.

SO IT'S LIKE GOING A LITTLE BIT BEYOND ACH AND WHAT THIS DOES IS GET THEM IMMEDIATE PAYMENT GUARANTEED.

BUT WHAT WE GET IS A REBATE, JUST LIKE AN INDIVIDUAL GETS WITH CREDIT CARDS.

SO WE'RE GOING TO START EXPLORING THAT OPTION TOO, AS WE MOVE FURTHER ALONG, I MEAN, IT ALMOST SOUNDS LIKE THE CITY EARNING, YOU KNOW, MY ULCER OR WHATEVER, BUT, UH, OH, BUT WE, WE DO WAIT AND WE CURRENTLY DO ON OUR P-CARD PROGRAM AND THIS WOULD BE JUST ANOTHER OPTION.

BUT WHAT I'VE ALWAYS ASKED WITH THAT IS WHAT'S IN IT FOR THE VENDOR AND I'M ACTUALLY STARTING TO SEE THAT, WELL, THEY'RE GETTING IMMEDIATE PAYMENT FROM US.

[00:55:01]

THEY DON'T HAVE TO WAIT FOR ANYTHING.

SO, YEAH.

AND TH THAT'S AN UNDENIABLE VALUE ON THIS, IF WE CAN TURN AROUND PAYMENTS TO THESE FOLKS.

UM, BUT NO, I APPRECIATE THAT.

AND I APPRECIATE THE, THE HARDSHIPS ON, ON STAFF ALL AROUND ON HIRING AND, AND, YOU KNOW, WE'VE ALWAYS BEEN VERY LEANLY STAFFED AS A CITY.

WE'VE ALWAYS DONE MORE WITH WHAT WE HAVE THEN I THINK ANY OTHER CITY IN THE METROPLEX IN EVERY ONE OF OUR DEPARTMENTS AND WHEN YOU'RE ALREADY STAFFED VERY LEAN.

AND THEN ALL OF A SUDDEN IT BECOMES VERY DIFFICULT TO HIRE PEOPLE JUST BECAUSE OF THE, THE ENVIRONMENT.

UM, YOU KNOW, IT MAKES IT THAT MUCH MORE CHALLENGING.

SO, UM, THE AUDIT, IF YOU DON'T MIND FINISHING THIS REPORT, WE HAVE A FEW MORE, OH, SO SORRY.

SORRY.

I'M JUST, OH, CAUSE WE SKIPPED TO THE, I GOT YA.

YEAH.

SORRY.

OKAY.

I DIDN'T MEAN TO CUT ANYONE OFF.

THAT'S NO PROBLEM FOR YA.

I JUST SAW THIS REPORT GETS PEOPLE EXCITED, SO THAT'S FINE THERE.

YEAH.

SO THE NUMBER THREE, THE PERMANENT AND ONE-TIME VENDORS.

UM, SO THE, UM, PERMANENT VENDORS ARE SUPPOSED TO BE DEACTIVATED AFTER FIVE YEARS OF NO USAGE.

AND ONE TIME VENDORS ARE SUPPOSED TO BE DEACTIVATED IMMEDIATELY AFTER THE PURCHASE.

AND WE FOUND THAT THERE WAS 502, UM, PERMANENT VENDORS THAT WERE STILL ACTIVE THAT HAD ACTIVITY, OR THAT DID NOT HAVE ANY ACTIVITY OVER FIVE YEARS.

AND WE FOUND THERE WAS 1,517, UM, ONE TIME VENDORS THAT WERE STILL ACTIVE.

AND, UH, SOME OF THE CAUSES FOR THIS IS THAT THE FINANCE IS NOT PERFORMING, UH, LIKE THE VENDOR MAINTENANCE, UH, TIMELY AND FOR THE ONE-TIME VENDORS, THERE'S ACTUALLY AN ISSUE IN THE SYSTEM WHERE THEY'RE NOT BEING AUTOMATICALLY DEACTIVATED AFTER THE PAYMENT.

AND OUR RECOMMENDATION WAS THAT FINANCE SHOULD SET UP BENDERS APPROPRIATELY AND ALSO PERFORM A RECURRING REVIEW OR PERFORM RECURRING VENDOR MAINTENANCE TO MAKE SURE THOSE ARE DEACTIVATED TIMELY AND THEY CONCURRED AND, UH, THEY'RE GOING TO PERFORM OR FOR THE EXTRA PLAN, THEY'RE GONNA PERFORM A SEMIANNUAL REVIEW FOR THE FENDERS, UM, THERE TO MAKE SURE NO VENDORS ARE STILL ACTIVE AFTER HAVING FIVE YEARS OF NO USE.

AND THEY'RE GOING TO ADD A PR UH, PROCESS TO THEIR CHECKLIST TO MAKE SURE THAT THE ONE-TIME VENDORS ARE NOT REMAINING OPEN AND THAT'S GOING TO BE, UM, IMPLEMENTED IMMEDIATELY REMEMBER, OKAY, SORRY FOR THE MASS, BUT I'VE BEEN EXPOSED OVER THE WEEKEND.

SO I'M KEEPING MY GERMS TO MYSELF.

SO I'M GOING TO GO OVER SEX OR FINDINGS NUMBER FOUR.

UM, AND THEN, UM, I'M GOING TO JUMP TO SEVEN BECAUSE THOSE GO HAND IN HAND AND THEN I'LL COME BACK TO NUMBER FIVE.

SO, AND NUMBER FOUR, UH, INTERNAL AUDITS.

WHAT WE DID IS WE REVIEWED FINANCES OF TO SEE IF THERE WERE MONITORING THE VENDOR MASTER FILE.

UH, WHAT WE NOTICE IS OBVIOUSLY, YOU KNOW, AS WE STATED EARLIER, WE HAD THE AP SUPERVISOR WHO RETIRED, USED TO MONITOR THAT THE VENDOR MASTER FILE ACTIVITIES THERE, UH, THOSE DUTIES WEREN'T DELEGATED, OBVIOUSLY WE'RE, SHORT-STAFFED IN THE FINANCE DEPARTMENT AND, YOU KNOW, AFTER HER RETIREMENT, WHICH THEY'RE TRYING TO DO THE BEST THEY CAN WITH, UH, THE SHORT STAFF THAT THEY HAVE IN THE OFFICE.

UM, THOSE DUTIES THERE RIGHT NOW, UH, NEEDS TO BE DELEGATED TO SOMEBODY ELSE TO CONTINUE TO MONITOR.

THAT'S WHAT WE OBVIOUSLY FOUND DURING, UH, THIS REVIEW.

UH, AND THE REASON WHY WE'RE LOOKING AT THAT IS BECAUSE THEY CAN ACCIDENTALLY OR INCORRECTLY MAKE CHANGES INTO THE VENDOR MASTER FILE IN THE ACCOUNT.

AND THAT CAN CAUSE PROBLEMS DOWN THE ROAD, UH, FINANCE, THEY CONCUR ON THAT AND HAS MADE CHANGES TO THOSE DUTIES.

OBVIOUSLY RIGHT NOW, THEY ARE MONITORING THAT ON A WEEKLY BASIS WITH THE STAFF THAT THEY HAVE.

AND ON TOP OF THAT, I MEAN, OBVIOUSLY IF SOMEONE'S GOING TO MAKE ANY CHANGES TO THE VENDOR MASTER FILE, AS FAR AS BANK ACCOUNTS, THOSE HAVE TO BE APPROVED, UH, BY SOMEBODY IN MANAGEMENT AND, UH, BEFORE THEY CAN ACTUALLY ISSUE ANY PAYMENTS ON THAT AT THE CURRENT MOMENT, OBVIOUSLY WE'RE TALKING A THIRD PARTY VENDOR GOING FORWARD, UH, JUMPING TO NUMBER SEVEN, THE SOP, THE STANDARD OPERATING PROCEDURE MANUAL THAT THEY HAVE IN PLACE, UH, AND NEEDS TO BE UPDATED.

AND WHAT I'M TALKING ABOUT UPDATING IS BASICALLY YOU HAVE, UH, YOU KNOW, OBVIOUSLY WE DON'T HAVE NAMES IN THIS MANUAL.

WE KEEP IT WITH POSITION TITLES.

AND WHAT I'M REFERRING TO IS, YOU KNOW, WE HAVE AP SUPERVISOR AT COUNTY REP TO LEAD ACCOUNTING REP.

SOME OF THOSE PEOPLE HAVE RETIRED, TRANSFERRED, GONE ELSEWHERE, GOTTEN PROMOTIONS.

SO WE NEED TO UPDATE SOME OF THOSE TITLES IN THE SOP.

UH, IT'S NOT A BIG DEAL, BUT I MEAN, BASICALLY WE WOULD JUST WANT SOME, UH, UPDATING

[01:00:01]

ON THAT AND MAKE SURE THAT ALL THE EMPLOYEES ARE AWARE OF ALL THE CHANGES ON THAT, UH, FINANCE CONCURRED ON THAT.

AND THEY WILL MAKE CHANGES ON THAT MANUAL ON THE SOP.

BY THE FOURTH QUARTER OF THIS YEAR, I'M GOING TO NUMBER FIVE, FINDING NUMBER FIVE.

THIS IS SOMETHING THAT I LOOKED AT AS FAR AS THE JUSTIFICATION OF THE VENDOR IN THE ACTUAL SYSTEM, UH, IN THE SOP.

ONE OF THE THINGS THAT THEY STATED ON THERE IS THAT, UH, IT WAS IMPORTANT TO ESTABLISH THAT THE VENDOR CANDIDATE WILL BE AWARDED THE CONTRACT OR PURCHASING AGREEMENT WITH THE CITY OF GARLAND PRIOR TO SET UP IS YOU'RE ALL AWARE THE VENDOR MASTER FILE.

WHEN YOU HAVE AN EMPLOYEE, A CITY EMPLOYEE GET ACTIVATED INTO THE VENDOR MASTER FILE, THE SUPERVISOR MUST SIGN THAT APPLICATION ON THE VENDOR MASTER FILE FROM VENDORS COMING FROM THE OUTSIDE.

THEY DID NOT REQUIRE A MANAGER SIGNATURE ON THE APPLICATION.

SOMETIMES THEY ARE EMAILED TO FINANCE BY THE DEPARTMENT MANAGER, THAT'S OBTAINING THE SERVICES OR THE GOODS, BUT IN GENERAL, THE VENDOR CAN GO AHEAD AND FAX IT IN, EMAIL IT TO FINANCE DIRECTLY AND SUBMIT THAT DOCUMENTATION IN, UH, WHEN THEY SUBMIT THAT THEY'RE OBVIOUSLY SUBMITTED IT WITH BANK INFORMATION.

THIS IS MY BANK ACCOUNT.

THIS IS MY APPLICATION.

UH, FINANCES, YOU KNOW, THEY'LL RESEARCH THAT VENDOR MAKES SURE IT'S A LEGITIMATE VENDOR.

UM, THERE IS NO ATTACHMENT OF A PO PURCHASE ORDER OR CONTRACT OR ANYTHING OF THAT NATURE, UH, FINANCE CONCUR THAT WE NEED TO MAKE SOME CHANGES TO THAT.

AND THAT WILL BE ALSO UPDATED IN THE FUTURE AS FAR AS HAVING A MANAGER SIGNATURE SPOT ON THE APPLICATION TO BE INCLUDED ON THERE.

SO IF A VENDOR WANTS TO BE SOME, YOU KNOW, CREATED IN THE SYSTEM THAT THEY WOULD HAVE A MANAGER APPROVAL, BUT OBVIOUSLY NOW GOING FORWARD, IF WE'RE GOING TO HAVE A THIRD-PARTY VENDOR, THIS CHANGES EVERYTHING.

SO RIGHT NOW EVERYTHING'S ON A CONTINGENCY BASIS OF WHAT WE'RE GOING TO DO GOING FORWARD AND THAT THERE, AND IF THE APPLICATION IS INCOMPLETE, FINANCE WILL RETURN IT TO THE VENDOR OR THE DEPARTMENT MANAGER.

SO THEY'RE NOT ENTERING HALF THE INFORMATION AND SAYING, OKAY, LET'S JUST PUT THAT IN THERE.

THEY'RE NOT DOING THAT.

THEY DO SOME, SEND IT BACK AND SAYING YOU'RE MISSING DOCUMENTATION.

SO THAT'S ALL I HAVE FOR THAT AS FAR AS FOUR, SEVEN AND FIVE.

I DON'T KNOW IF YOU HAVE ANY QUESTIONS ON THOSE.

I MEAN, IT SOUNDS LIKE MOST OF THIS, MOST OF THESE ISSUES, NOT ALL, BUT MOST WILL BE ADDRESSED BY ACROSS ALL OF THESE, BY IMPLEMENTING A THIRD PARTY, IT'S KIND OF A ONE RESOLUTION FITS EVERYTHING, BUT WE'LL STILL NEED TO HAVE OVERSIGHT OF WHATEVER THE THIRD PARTY IS DOING IN AUTHORIZING THE, THE ADDITIONS TO THE, IS THAT SOMETHING WHERE WE NOTIFY THEM, ADD THIS PERSON, OR DO THEY, HOW DOES, HOW DOES THAT WORK WITH RESPECT TO THE THIRD PARTY? YEAH, THE WAY IT'S SET UP IS THAT WE WILL