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TEXAS.[Audit Committee Meeting on June 26, 2024]
AND THIS IS THE MEETING OF THE AUDIT COMMITTEE FOR THE CITY OF GARLAND.OUR FIRST AGENDA ITEM FOR THIS MEETING IS APPROVAL OF OUR MARCH 24TH MEETING.
MR. ACTING CHAIR, I'D LIKE TO MAKE A MOTION THAT WE ACCEPT THE MINUTES AS PRESENTED.
PERSONS WHO DESIRE TO ADDRESS THE COMMITTEE ON ANY ITEM ON THE AGENDA OR ALLOW THREE MINUTES TO SPEAK TESTIMONY MAY BE HELD UNTIL THE ITEM IS CONSIDERED OR GIVEN AT THE BEGINNING OF ANY COMMITTEE MEETING.
INVITED TESTIMONY MAY ALSO OCCUR AT ANY TIME SUBJECT TO THE REQUEST OF A MEMBER OF THE COMMITTEE WITH THE APPROVAL OF THE COMMITTEE CHAIRPERSON.
DO WE HAVE ANY RECORD OF ANYBODY DESIRING TO SPEAK TODAY? MR. ASSISTANT CITY ATTORNEY, DO WE HAVE ANYBODY WHO SIGNED UP TO SPEAK TODAY? I DON'T BELIEVE SO.
NOW WE'LL MOVE TO THE ITEMS FOR CONSIDERATION AND, UH, I WILL TURN THIS PORTION OF THE AGENDA OVER TO, UH, MR. MR. JUDD FOR, FOR CONSIDERATION, SIR.
GOOD AFTERNOON COMMITTEE, AND GOOD AFTERNOON ATTENDEES.
UH, THANK YOU FOR THE OPPORTUNITIES TO, TO GO OVER THESE AUDITS WITH YOU TODAY.
UH, THIS AUDIT IN PARTICULAR, THE FIRST ONE THAT WE'RE COVERING IS THE LANDFILL RENEWABLE NATURAL GAS AGREEMENT AUDIT.
UH, UH, THIS AUDIT INITIALLY WAS REQUESTED BY THE PREVIOUS MANAGING DIRECTOR, SO I JUST WANTED TO GET THAT ON THE RECORD.
AND LAST YEAR, COUNCILMAN OT, UH, INQUIRED ABOUT THIS, UH, THIS PARTICULAR SUBJECT AS WELL.
SO I DO WANT TO THANK BOTH OF 'EM.
SO, BRINGING THIS TO THE COMMITTEE'S ATTENTION, THIS WAS ADDED TO THE ANNUAL AUDIT PLAN FOR THIS YEAR.
UM, AS YOU'RE AWARE, IN 2020, THE CD ENTERED AN AGREEMENT WITH MORE RE RENEWABLE, UM, ENERGY COMPANY, UM, TO CONVERT LANDFILL GAS INTO RENEWABLE NATURAL GAS.
SO THIS AUDIT WAS MAINLY, UH, A COMPLIANCE AUDIT.
UH, WE HAD TWO OBJECTIVES DETERMINE THE ACCURACY AND COMPLETENESS AND TIMELINESS OF PAYMENT RECEIVED BY THE CITY.
PART TWO WAS TO VERIFY IF THE OPERATOR IS COMPLIANT WITH RELEVANT CONTRACT TERMS SUCH AS METERING AND INSURANCE REQUIREMENTS.
THE SCOPE OF THE AUDIT WAS FROM JANUARY 21ST, 2020 THROUGH JANUARY 31ST, 2024.
I DO WANT TO COMMENT, UM, OUR LANDFILL TEAM, UH, AT THIS POINT, ESPECIALLY CHRIS, UM, MAYELLA, AND, AND IN ADDITION TO THAT, MORERO AS WELL, UM, WE, WE'VE HAD A VERY TRANSPARENT AUDIT.
THEY WENT ABOVE AND BEYOND TO WORK WITH US AND REQUESTING INQUIRIES WERE FULL, FULFILL PROMPTLY AND TRANSPARENTLY.
AND THEY ACTUALLY HAD A LOT OF PROACTIVE INITIATIVES WITHIN THE DEPARTMENT.
THEY HAD DEVELOPED THEIR OWN CHECKLIST.
THEY HAD AN ANNUAL AUDIT THAT THEY WERE CONDUCTING ON THIS.
SO YOU'RE GONNA HEAR A LOT OF GOOD THINGS ABOUT, UM, THIS PROGRAM AS WELL AS WHAT THEY HAVE ACCOMPLISHED, UH, INTERNALLY, AS, AS YOU'RE AWARE, THIS IS A GREAT REVENUE SOURCE FOR THE CITY.
AND, UH, TODAY, ERIN, UH, IS GONNA GO OVER THE AUDIT WITH YOU.
SHE LED THE AUDIT AND SHE'S GONNA TAKE A LITTLE BIT OF TIME TO GO OVER THE, THIS PROCESS ITSELF, UH, FOR TRANSPARENCY PURPOSES AND HAVE THE ROYALTIES ARE CALCULATED AND SOME OF OUR OBSERVATIONS.
SO WITH THAT, ERIN IS GONNA WALK YOU THROUGH THE PROCESS THEN SOME OF OUR OBSERVATIONS.
SO AS JUDD MENTIONED, UM, CHRIS AND MAYELLA, UM, WERE VERY ACCOMMODATING AND TRANSPARENT THROUGHOUT THE AUDIT, AS WELL AS MORE RENEWABLES.
UM, THEY WERE ACTUALLY INSTRUMENTAL IN HELPING US UNDERSTAND THE WHOLE OPERATION, UM, FROM WHAT WE OBSERVED.
LANDFILL HAS BEEN VERY PROACTIVE IN MONITORING CONTRACT COMPLIANCE, UH, SINCE THE BEGINNING OF THE CITY'S PARTNERSHIP WITH MORROW.
UM, FOR EXAMPLE, THEY ACTUALLY PERFORM THEIR OWN DOCUMENTATION AUDIT EVERY YEAR.
WE ALSO FOUND INSTANCES WHERE LANDFILL STAFF REACHED OUT TOMORROW FOR MISSING DOCUMENTATION REQUIRED IN THEIR MONTHLY STATEMENT RECONCILIATION.
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GO OVER THE BACKGROUND OF THIS AUDIT SUBJECT, AND THEN I'LL GET INTO THE OPPORTUNITIES FOR IMPROVEMENT.SO IN 2020, THE CITY OF GARLAND ENTERED INTO A 15 YEAR AGREEMENT WITH MORE RENEWABLES TO CAPTURE AND CONVERT LANDFILL GAS INTO RENEWABLE NATURAL GAS, UM, THROUGH WHAT'S CALLED A GAS COLLECTION AND CONTROL SYSTEM.
THE OPERATION REDUCES THE ODOR OF LANDFILL GAS FOR THE NEIGHBORING COMMUNITY AND GENERATES A SUBSTANTIAL AMOUNT OF REVENUE FOR THE CITY.
IN NOVEMBER OF 2023, MORROW WAS ACQUIRED BY ENBRIDGE.
UM, IT'S AN ENERGY AND PIPELINE COMPANY.
UM, THE CITY WAS GIVEN NOTICE ABOUT THIS, UH, ACQUISITION AND ACCEPTED THE CHANGE.
SO THE CONTRACT TERMS AREN'T SUPPOSED TO CHANGE.
AND THERE'S ACTUALLY A THREE YEAR PLAN, UM, TO PHASE IN ENBRIDGE TAKING OVER OPERATIONS.
SO, UM, THERE'S A FEW DIFFERENT WAYS THAT THE CITY, UM, EARNS REVENUE THROUGH THIS PARTNERSHIP.
UM, AND I'M GONNA WALK THROUGH THIS FLOW CHART HERE.
UH, SO LANDFILL GAS IS THE NATURAL BYPRODUCT OF THE DECOMPOSITION OF ORGANIC WASTE THAT'S FOUND IN THE LANDFILL.
SO LIKE FOOD BIODEGRADABLE PRODUCTS, UM, WHEN IT DECOMPOSES, IT EMITS A GAS THAT'S A MIXTURE OF METHANE, CARBON DIOXIDE AND OTHER GASES.
UM, MORROW HAS A PIPELINE SYSTEM IN THE LANDFILL THAT CAPTURES THIS GAS AND TRANSPORTS IT TO THEIR REFINERY THAT'S RIGHT NEXT TO THE LANDFILL.
UM, THE REFINERY THEN REFINES THE GAS TO A PIPELINE QUALITY RENEWABLE NATURAL GAS.
AND IT'S RENEWABLE GAS BECAUSE IT COMES ORIGINALLY FROM BIOGAS.
SO AT THAT POINT IN THE FLOW CHART, THE CITY ACTUALLY EARNS A 40 CENT PER MILLION BRITISH THERMAL UNIT, UM, OF RENEWABLE GAS PRODUCED, REGARDLESS IF IT'S SOLD OR NOT.
SO THE GAS CAN BE FLARED OFF OR IT CAN BE SOLD REGARDLESS.
WE GET 40 CENTS FOR EVERY M-M-B-T-U.
THE GAS IS THEN, UM, PIPED TO A COMMERCIAL BUYER, AND THIS IS A PREARRANGED PARTNERSHIP.
UM, THEIR PIPELINE IS ACTUALLY CONNECTED RIGHT INTO THE MORROW FACILITY.
UM, AND WE GET A, UH, 4% ROYALTY ON THE GROSS REVENUE OF THAT TRANSACTION AS WELL.
AND THEN THERE ARE A COUPLE OF, UM, GOVERNMENT SANCTIONED, UM, CREDIT SYSTEMS THAT, UM, I WON'T GET INTO TOO MUCH, BUT THEY'RE BASICALLY CALLED A RENEWABLE IDENTIFICATION NUMBER.
THAT'S ONE OF 'EM THROUGH THE EPA.
ANOTHER IS LOW CARBON FUEL STANDARD.
UM, THESE ARE CREDITS THAT ARE TREATED LIKE TRADABLE ASSETS BASICALLY.
SO WHEN, UM, WHENEVER MORO SELLS OUR RENEWABLE NATURAL GAS, THEY GENERATE THESE CREDITS, THEY SELL 'EM ON THE MARKET, UM, 4% OF THAT GROSS REVENUE AS WELL.
SO SINCE THE PARTNERSHIP'S INCEPTION, INCEPTION THROUGH DECEMBER, 2023, THE CITY'S RECEIVED OVER $3.5 MILLION IN REVENUE, AVERAGING ABOUT $370,000 A QUARTER.
FIGURE TWO, UM, IS THE SAME DATA AS FIGURE THREE.
IT'S JUST BROKEN DOWN BY QUARTER.
UM, BUT AS YOU CAN SEE, THE LARGEST PORTION OF THAT ENTIRE REVENUE PIE CHART IS THE, UM, RENEWABLE IDENTIFICATION NUMBER, CREDIT SALES ROYALTY.
UM, SO THOSE, UH, THAT'S IMPORTANT TO NOTE BECAUSE THOSE CAN BE AFFECTED BY POLICY CHANGES OR MARKET FLUCTUATIONS.
SO THIS GRAPHIC COMPARES ALL REVENUE TYPES IN TERMS OF M-M-B-T-U.
UM, THE AMOUNT OF GAS SOLD TO THE COMMERCIAL BUYER IS SLIGHTLY LESS THAN WHAT'S PRODUCED.
UM, THIS IS BECAUSE I, I'VE MENTIONED THAT BEFORE, SOMETIMES THE GAS IS DIVERTED TO THE FLARE.
THIS COULD BE BECAUSE OF, UM, PLANT DOWNTIME OR THEY NEED TO CONTROL THE PRESSURE IN THE PIPELINE.
UM, AND THEN YOU SEE THAT RINS, UM, ARE SLIGHTLY LESS THAN WHAT IS SOLD.
AND THIS IS BECAUSE OF, UM, A FEE AT THE TIME OF TRANSACTION WHEN THEY'RE SELLING TO A RENT BUYER.
THINK OF IT AS LIKE A BROKER FEE.
AND THEN YOU HAVE LCFS CREDITS HERE.
THIS IS ONLY LOWER THAN EVERYTHING ELSE BECAUSE THEY JUST STARTED, UM, SELLING THESE IN SEPTEMBER OF 22.
PAGE EIGHT SHOWS EXAMPLES OF HOW ALL OF THESE DIFFERENT REVENUE SOURCES ARE CALCULATED, IF
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YOU'RE INTERESTED IN LOOKING AT THAT.SO THE CONTRACT ALLOWS MORO TO CLAIM A STATEMENT CREDIT FOR QUALIFYING PLANT DOWNTIME UP TO 5% OF THE ENTIRE YEAR.
UM, THUS FAR THEY'VE ONLY CLAIMED, UM, LIKE A THIRD OF THAT.
SO $5,500, UM, FOR A SINGLE YEAR.
WE ALSO LEASE THE LAND THAT THE FACILITY SITS ON, UM, AND, UH, IT'S 12,000 PER YEAR.
AND THE CONTRACT ALLOWS MORRO, UM, TO USE THE LEASE PAYMENT AS A CREDIT AGAINST THE ROYALTIES.
SO AS LONG AS THE REVENUE COMING INTO THE CITY IS HIGHER THAN 12,000, THEY DON'T HAVE TO PAY ANYTHING.
UM, WHICH IT'S BEEN ABOUT A MILLION A YEAR, SO THAT'S NEVER COME UP.
SO WE DO HAVE, UM, THREE AREAS OF RISK THAT WE'VE IDENTIFIED.
AGAIN, OVERALL, THEIR, THEIR MONITORING ACTIVITIES AT LANDFILL ARE GREAT.
UM, THESE ARE JUST AREAS THAT WE THINK THEY COULD IMPROVE ON.
SO THE CITY GENERATES REVENUE THROUGH ROYALTIES FROM GAS PRODUCTION, GAS SALES, AND THE CREDITS.
UM, IN THE GRAPH THAT I SHOWED YOU BEFORE, THERE WAS A SLIGHT DIFFERENCE THAN WHAT WE EXPECTED BETWEEN WHAT IS SOLD AND WHAT THE RIN CREDITS EQUAL TO.
UM, INITIALLY WE WEREN'T SURE WHY THAT WAS, BECAUSE NONE OF THE DOCUMENTATION COULD EXPLAIN THAT WE COULDN'T RECONCILE OUR NUMBERS.
UM, CHRIS WENT BACK AND SPOKE WITH MORAL RENEWABLES AND THEY EXPLAINED THAT THERE'S THIS AGREEMENT, AN OFFTAKE AGREEMENT BETWEEN THE BUYER OF THE RENT CREDITS AND MORROW.
UM, SO WE GOT DOCUMENTATION OF THAT.
UM, BUT IF, IF, UM, LANDFILL DIDN'T HAVE THAT, THEY WOULDN'T BE ABLE TO RECONCILE THAT AND MONITOR THAT WE'RE GETTING THE CORRECT AMOUNT OF REVENUE.
SO OUR RECOMMENDATION IS THAT LANDFILL MANAGEMENT CONSIDER AMENDING THE CONTRACT TO INCLUDE OFFTAKE AGREEMENT CRITERIA AND POTENTIALLY ESTABLISH A MAXIMUM AND ALSO OBTAIN AND REVIEW THE LATEST RIN OFFTAKE DOCUMENTATION.
UM, OFFTAKE FEE DOCUMENTATION WITH THE MONTHLY STATEMENTS MANAGEMENT CONCURS.
UM, THEIR ACTION PLAN IS TO, UH, WELL, THEY'VE ALREADY REQUESTED, UM, AN OFFTAKE AGREEMENT FROM MORROW FOR THEIR MONTHLY VERIFICATIONS.
UM, AND THEY'VE ALSO UPDATED THEIR ANNUAL DOCUMENTATION AUDIT CHECKLIST, UM, TO ACCOUNT FOR THAT.
RENEGOTIATION OF THE CONTRACT TERMS HAS BEEN CAREFULLY CONSIDERED.
HOWEVER, IT'S NOT AN OPTIMAL TIME TO INITIATE THESE CHANGES, BUT WILL BE REVISITED AT A LATER DATE.
THE SECOND OBSERVATION, UM, DEALS WITH THE UTILITY PAYMENTS.
SO THE CONTRACT REQUIRES THAT MORE RENEWABLES PAY ALL OF THEIR UTILITIES TO RUN THE FACILITY.
UM, BUT THE CITY'S BEEN PAYING FOR THEIR WATER BILL, UM, AND THEY DON'T HAVE A SEPARATE METER, SO WE DON'T KNOW HOW MUCH THEY'RE ACTUALLY USING COMPARED TO OUR USE.
UM, SO OBVIOUSLY THAT'S, YOU KNOW, A RISK IF WE CAN'T MONITOR IT.
UM, SO OUR RECOMMENDATION IS THAT LANDFILL REQUIRE MORE TO OBTAIN THEIR OWN WATER METER AND PAY THEIR OWN WATER UTILITY OR AMEND THE CONTRACT TO MIRROR THE CURRENT PRACTICE LANDFILL CONCURS.
AND, AND, UM, THEY'VE ALREADY REQUESTED THAT MORROW INSTALL A METER ON THEIR USE IN ORDER TO MONITOR THE, UH, FISCAL IMPACT.
AND THEN AGAIN, RENE RENEGOTIATION OF THE CONTRACT TERMS HAS BEEN CAREFULLY CONSIDERED, BUT IT'S NOT AN OPTIMAL TIME AND WILL BE REVISITED AT A LATER DATE.
AND THE FINAL, UM, OBSERVATION, UH, MORROW'S BEEN PAYING WITH PHYSICAL MAILED CHECKS, UM, EVERY MONTH.
AND THESE RANGE FROM 47,000 TO $227,000.
OBVIOUSLY, THAT'S NOT THE MOST SECURE WAY THEY COULD BE DOING IT.
SO OUR RECOMMENDATIONS, UM, THAT LANDFILL REQUEST MORE, MAKE ELECTRONIC PAYMENTS, UM, AND AMEND THE CONTRACT TO REQUIRE ELECTRONIC PAYMENT METHODS MANAGEMENT CONCURS, THEY'VE ALREADY REQUESTED THAT MORE MAKE ELECTRONIC PAYMENTS, UM, WITH ENBRIDGE TAKING OVER, THERE'S BEEN SOME TALK ABOUT ELECTRONIC PAYMENTS, BUT THEY'LL MONITOR THAT AND STAY ON TOP OF IT.
AND AGAIN, RENEGOTIATION OF CONTRACT TERMS HAS BEEN CONSIDERED.
IT'S NOT AN OPTIMAL TIME, BUT IT'LL BE REVISITED AT A LATER DATE.
AND THEN IF YOU NEED ANY HELP WITH THE ACRONYMS AND STUFF, THERE'S A BACK PAGE TO ALL OF THIS WHERE YOU CAN REFERENCE IF NEEDED.
I SEE OUR INDUSTRIAL CHAIRMAN HAS MADE HIS ARRIVAL ON ON ON THE SCENE.
UH, ARD, ANY QUESTIONS GO YOU? I DO.
UM, WELL FIRST, THIS IS A VERY COMPREHEN, A COMPREHENSIVE REPORT.
IT'S, I KNOW THIS IS ONE OF THE, ONE OF THE, UH, AUDITS THAT I
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REQUESTED, AND IT'S, UH, IT'S A VERY INTERESTING, UH, UH, PROCESS THAT THEY HAVE THERE.AND I WASN'T JUST DOING THIS JUST BECAUSE OF THE PROCESS.
IT WAS PARTLY TO MAKE SURE THAT WE HAD, THAT ALL THE CONTRACTS WERE BEING TAKEN CARE OF.
THERE'D BEEN ENOUGH YEARS THAT HAD GONE BY.
IT WAS SEEMED LIKE A FORTUITOUS TIME TO LOOK AT, UH, LOOK AT EVERYTHING.
UM, MY QUESTION IS, IS, UM, THE WATER VOLUME THAT THEY USED, DO YOU SUSPECT THAT IT, DO THEY USE WATER FOR THEIR PROCESS OR IS IT JUST MOSTLY FOR THE RESTROOM THERE AND BREAK ROOM, SOMETHING LIKE THAT? CHRIS, CAN YOU SPEAK TO THAT? YES.
IT'S A VERY SMALL AMOUNT OF WATER.
CHRIS, CAN YOU GET ON THE MIC PLEASE? HERE FOR ME? THANK YOU.
IT'S LIKELY TO BE A VERY SMALL AMOUNT OF WATER THEY'RE USING.
IT'S NOT PART OF THEIR PROCESS, IT'S JUST FOR THE RESTROOM.
UM, AND A BREAK ROOM, TYPICAL HOUSEHOLD FIXTURES, THERE ARE FIVE.
SO THEY PROBABLY AREN'T USING EVEN MAYBE A THOUSAND OR 2000 GALLONS A MONTH, SOMETHING LIKE THAT.
I GUESS THAT WAS THE MAIN TWO, UH, QUESTIONS I HAD.
BUT ONE OF THE THINGS I SAW THAT, THAT STOOD OUT ON THIS, IT WAS REALLY, REALLY INTERESTING, IS THAT THE ODOR COMPLAINTS DROPPED FROM 20 TO ONE IN THE PERIOD OF TIME THAT THEY HAD, THAT THAT PLANT HAS BEEN, UH, AND, UH, THAT WE'VE HAD IT IN PLACE.
AND THAT'S SOMETHING THAT TO ITSELF IS A CREDIT THAT'S REALLY, REALLY GOOD.
SO, UM, THANK YOU FOR THE, FOR THE GREAT WORK.
THANK YOU FOR THE EXCELLENT AUDIT.
AND, UH, LOOK FORWARD TO, YOU KNOW, ONCE WE GET ALL THE CONTRACT REDONE, IT'LL BE, IT'LL BE PERFECT.
THAT'S IT, SIR, YOU HAVE ANY, I I HAVE ONE.
UH, YOUR RECOMMENDATION, I, I JUST TRYING TO GET CLEARED IN TIME TOGETHER.
YOU TALKED ABOUT THE OPTIMA TIMES FOR THE CONTRACT RENEGOTIATION, AND YOU TALKED A LITTLE BIT ABOUT THE CLOSING THE PAPER CHECKS VERSUS THE ELECTRONIC, AND THAT IS IN PROGRESS.
AND YOU MENTIONED OPTIMA TIME.
CAN YOU CLARIFY FOR WHAT, UH, UH, CHRIS, WHAT, WHAT TIMEFRAME ARE WE LOOKING AT? WHEN IS THE CONTRACT WILL, WHEN DO YOU THINK WILL BE, OR DO YOU HAVE A, A TIME BOTH FOR, FOR RENEGOTIATIONS THAT WOULD INCLUDE THE RECOMMENDATION AS FAR AS THE, THE CHECK GOING ELECTRONIC? CHRIS, CAN YOU, CAN YOU CLARIFY THAT PLEASE? TWO ANSWERS TO THAT.
THE CONTRACT WILL RENEGOTIATE AT THE 15 YEAR MARK, WHICH WILL BE 12 YEARS FROM NOW.
HOWEVER, WE HAVE REQUESTED FROM THEM TO CONVERT TO ELECTRONIC PAYMENTS, AND THEY'VE AGREED TO DO THAT.
WE'RE ANTICIPATING THAT THEY'LL BEGIN THAT IN AUGUST.
AND, UM, IT'S RELATED TO THE CHANGEOVER FROM MORROW TO ENBRIDGE WHO RECENTLY PURCHASED TOMORROW.
SO WHILE WE'RE LOOKING FORWARD TO AUGUST, THERE, THERE MAY BE A DELAY BECAUSE OF ADMINISTRATION, BUT I'M, I'M ALMOST CERTAIN IT WILL BEGIN BEFORE THE BEGINNING OF OUR FISCAL YEAR.
SO IN THE COMING MONTHS WE'LL BEGIN RECEIVING ELECTRONIC PAYMENTS, I THINK.
AND, AND MY, MY SEC MY LAST QUESTION IS, UM, IN THE REPORT WE ALSO TALKED ABOUT THE IMPACT OF POLICY ON PROFITS, WHICH MADE, CAN YOU GIMME AN EXAMPLE OF EITHER ONE REQUIRES OF WHAT KIND OF POLICY CHANGES? YEAH, WHAT WE'RE TALKING, OR, OR CAN YOU, CAN YOU, YOU BET YOU UNDERSTAND MY QUESTION ABSOLUTELY.
IS WHAT KIND OF POLICY CHANGES? IS IT, WHAT'S THE NEXT BETWEEN THE POLICY CHANGES AND THE, AND AND THE PROFIT MARGIN? CHRIS, CAN YOU, IT'S A GREAT QUESTION.
AND THE TYPES OF POLICIES WE'RE REFERRING TO, THERE ARE NATIONAL, FEDERAL POLICIES.
THE MARKET IS ONE THAT HAS BEEN CREATED BY, UH, THE FEDERAL GOVERNMENT AND IS ADMINISTERED BY THE EPA.
SO IF WE SEE A CHANGE IN POLITICAL STANCE AT THE NATIONAL LEVEL, THOSE MARKETS HAVE THE POTENTIAL TO CHANGE.
I I MIGHT ADD THAT IN THE HISTORY OF THAT MARKET, IT HASN'T, WHEN ADMINISTRATION'S CHANGED AT THE FEDERAL LEVEL, IT'S STAYED CONSTANT, WELL STRONG ANYWAY.
IT HASN'T DROPPED OFF A CLIFF, BUT THOSE ARE THE POTENTIAL, POTENTIAL, UH, PITFALLS THAT WE'RE REFERRING TO IN THAT REGARD.
YOU HAVE ANY COMMENTS? NO, I HAVE NOTHING TO ADD.
THANK YOU FOR A VERY THOROUGH REPORT.
UH, IF THERE ARE NO OTHER QUESTIONS, UH, YOU MAY TAKE YOUR SEAT.
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SOMEBODY ELSE PROBABLY WANT THOSE TWO CHAIRS.UM, NEXT, UM, UH, MR. DIRECTOR? YES, SIR.
UM, SO THIS IS THE PARKS OPERATIONS PROGRAM AUDIT.
AND AS YOU, AS YOU'RE VERY MUCH AWARE, THIS IS A VERY COMPREHENSIVE PROGRAM.
UM, THEY MAINTAIN A LOT OF PARKS, UH, I BELIEVE ABOUT 2,800 ACRES OF PARKS.
AND SO THIS WAS A VERY COMPREHENSIVE AUDIT.
UM, TO, TO OUR SURPRISE, UH, ONE OF THE PRIOR DIRECTORS, UH, THE ADMINISTRATORS FROM PARK SHOWED UP BECAUSE IT WAS, HE SAW THE AGENDA.
SO, UH, WE APPRECIATE YOU BEING HERE.
BUT FOR THE PAST FEW WEEKS, WE'VE BEEN WORKING WITH ANDY, MATT, CHRIS, AND CASEY.
UM, I JUST WANNA SAY THAT THEY'VE BEEN VERY OPEN BOOK, UH, AND I, I BROUGHT, BROUGHT THEIR PARKS OPERATIONS MANUAL HERE, UH, ANDY AND, AND, AND MATT DEVELOPED THIS IN 2020.
THIS, IF THIS DOESN'T TELL US, THIS GIVES YOU SOMETHING, UH, I DON'T KNOW WHAT ELSE.
UH, SO WHEN WE INITIATED THIS AUDIT, ANDY GAVE ME A COPY OF THIS.
AND SO I KNOW MY STAFF IS GONNA GO OVER THE DETAILS OF, UM, HOW THEY CLASSIFIED PARKS AND THE GREAT WORKS THAT THEY HAVE DONE.
BUT WE HAD TWO OBJECTIVES, EVALUATE THE EFFECTIVENESS AND EFFICIENCY OF THE CITY PARK'S, GROUND AND MAINTENANCE EFFORTS.
PART TWO WAS TO EVALUATE IF THE PARK'S OPERATIONS DIVISION IS APPROPRIATELY MONITORING WHETHER THE CONTRACTORS ARE IN COMPLIANT WITH THE RELEVANT TERM CONTRACT TERMS SUCH AS SERVICES PROVIDED, INVOICING, INSURANCE REQUIREMENTS, ET CETERA.
UH, SO THEY DO MANAGE TWO, TWO CONTRACTORS AS WELL.
THE AUDIT SCOPE WAS FROM OCTOBER 1ST, 2021, AND THROUGH DECEMBER 31ST, 2023, UH, IN THIS AUDIT, UH, UM, PATRICIA AND JEV AND PATRICIA LED THE AUDIT.
AND THEY HAVE, UH, AT, AT THE REQUEST OF THE, OF MANAGEMENT, WE HAVE DONE SOME SURVEYS WITH OTHER MUNICIPALITIES IN THIS AREA JUST TO, UM, JUST TO EVALUATE WHERE WE ARE IN COMPARISON WITH THE OTHERS WHEN IT COMES TO BUDGET RESOURCES AND STUFF LIKE THAT.
UH, IN ADDITION TO THAT, UH, WITH THE HELP OF IT DEPARTMENT, I DO WANT TO THANK A AS WELL, GIS UM, WE HAVE DEVELOPED A NUMBER OF GRAPHS AND CHARTS IN HERE.
UM, SO YOU WILL SEE SOME OF THAT IN HERE.
SO THIS, LIKE I SAID, THIS IS A VERY COMPREHENSIVE AUDIT AND I DO WANNA APPRECIATE MANAGEMENT FOR GOING ABOVE AND BEYOND WORKING WITH US.
THEY WERE THOROUGH, THEY WERE OPEN, UM, AND THEY EVEN INVITED MY STAFF TO ATTEND THEIR OWN STAFF MEETINGS.
EVEN THOUGH WE DIDN'T REQUEST IT.
THEY ASK US TO GO TO RIDE ALONGS WITH THEM.
SO I DO REALLY DO APPRECIATE THEM FOR THEIR OPENNESS.
WITH THAT, I'M GONNA TURN IT OVER TO PATRICIA.
SHE'S GONNA GO OVER THE BACKGROUND AND SOME OF THE, UM, FINDINGS.
AND JEVON IS GONNA STEP IN AS WELL TO GO OVER SOME OF THOSE.
BEFORE YOU GET STARTED, I JUST WANT TO EXPRESS MY APPRECIATION TO COUNCILMAN WILLIAMS, COUNCILMAN OTT, AND TO ALL OF YOU FOR, UH, GOING AHEAD WITH THE MEETING.
UM, WE, UH, APOLOGIZE FOR BEING TARDY TODAY.
HAD TO GO AND, UH, GET OUR LICENSE RENEWED, WHICH IS JUST ABOUT A YEAR OLD.
I WANNA MAKE THE STREETS A MUCH SAFER PLACE TO DRIVE SO THAT I HAVE A LICENSE PLATE.
OKAY, SO WITH THAT, UH, MR. WILLIAMS, UH, CONSTABLE WILLIAMS, THANK YOU SO VERY MUCH FOR, FOR LEADING US.
UH, AS JED MENTIONED, UH, SOME OF THE THINGS THAT WE NOTICED WITH REGARD TO THE PARKS DEPARTMENT IS THEIR COOPERATION AND JUST GETTING TO ATTEND SOME OF THEIR STAFF MEETINGS AND DOING THE RIDE ALONGS.
WE NOTICED A GREAT DEAL OF CAMARADERIE AMONG ALL OF THE TEAM MEMBERS IN PARKS, VERY GOOD RELATIONSHIPS THROUGHOUT.
UM, AND AS JED MENTIONED, UH, THEY IN 2020 DID CREATE, UH, THE PARKS MANUAL.
UH, AND ALSO DURING THE AUDIT, UH, THE DEPARTMENT HAD EXPERIENCED SOME CHALLENGES WITH THEIR SOFTWARE SYSTEM, UM, A FEW YEARS AGO.
AND DURING THE AUDIT, THEY REIN, INITIALIZED, UM, TRYING TO GET THAT SYSTEM UP AND RUNNING AND EXPEDITED THAT.
AND THEIR CONTRACTOR INVOICES WERE ALWAYS PROCESSED IN A TIMELY MANNER.
SO I'M GONNA GO THROUGH THE BACKGROUND BEFORE I GET TO THE SURVEY.
UH, AS JED MENTIONED, THERE WERE, THERE ARE 2,800 ACRES OF PARKS, TRAILS, GREEN BELTS, PRESERVES, OPEN SPACE MEDIANS, AND RIGHT OF WAYS, YOU'LL NOTICE WHEN WE GET TO THE SURVEY THAT IT INDICATES THAT WE HAVE 2,372, IF I REMEMBER CORRECTLY, ACRES.
UM, BUT THAT IS JUST THE PARKS THAT DOES NOT INCLUDE THE RIGHT OF WAYS AND THE MEDIANS.
SO THAT'S THE DIFFERENCE IN THE TWO NUMBERS THAT YOU'LL SEE.
UM, SO IN ACCORDANCE WITH, UH, THE DIVISION'S, MAINTENANCE SCHEDULES, WHICH CAN CHANGE DUE TO CIRCUMSTANCES SUCH AS BOND PROJECTS AND WHETHER EVENTS, UH, OR BEING PULLED OFF FOR SPECIAL PROJECTS
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OR CITY EVENTS.UM, IN, IN ADDITION TO THAT, THERE ARE ALSO UNFORESEEN CIRCUMSTANCES SUCH AS IRRIGATION OR EQUIPMENT REPAIRS, HOMELESS CAMP CLEANUP, VANDALISM, GRAFFITI.
SO IT'S NOT JUST, YOU KNOW, GRASS, UH, AND TREES THAT THEY TAKE CARE OF.
UH, SO THE MANUAL THAT THEY CREATED IN 2020 PROVIDES FOR APPEARANCE, STANDARDS, TASK FREQUENCIES, STANDARD OPERATING PROCEDURES, BEST PRACTICES.
AND, UH, THE MAINTENANCE STANDARDS AND SERVICE LEVELS ARE DETERMINED BY FACTORS SUCH AS THE PARK TYPE USAGE, IRRIGATION, AMENITIES, FEATURES AND EQUIPMENT.
EACH LOCATION IS ASSIGNED A CLASSIFICATION RANGING FROM AA TO G, DEPENDING ON THOSE USES.
AND A SINGLE LOCATION MAY HAVE MULTIPLE CLASSIFICATIONS.
FOR EXAMPLE, AUDUBON, WHICH IS I BELIEVE AROUND 120 ACRES, HAS FOUR DIFFERENT CLASSIFICATIONS WITHIN THAT PARK.
IN ADDITION, THERE ARE TWO PRIMARY CONTRACTORS.
UH, WE'VE CONTRACTED WITH TWO SUPPLEMENT CITY STAFF, MAINTENANCE SERVICES CONTRACTOR A PERFORMS RIGHT OF WAY AND MEDIAN MAINTENANCE, UM, ALONG WITH LITTER REMOVAL, MOWING, EDGING, RADIATING, AND CONTRACTOR B DOES THE LANDSCAPE MAINTENANCE AND BED MAINTENANCE, GROUND COVER PRUNING, THAT SORT OF THING.
AND THAT'S PRIMARILY AT THE CITY OWNED FACILITIES, INCLUDING CITY HALL, UH, DOWNTOWN SQUARE, THINGS OF THAT NATURE.
IN ADDITION TO THAT, THE DIVISION, UH, BENEFITS FROM COMMUNITY VOLUNTEER EFFORTS.
WE'VE HAD VOLUNTEER GROUPS COME AND HELP PARKS FOR YEARS AND YEARS.
BUT IN FEBRUARY OF 2023, THE DIVISION BEGAN ORGANIZING A VOLUNTEER PROGRAM AND ACTUALLY TRACKING THE IMPACTS.
UM, THESE INCLUDE NEIGHBORHOOD HOAS, CHURCHES, AREA BUSINESSES, NONPROFITS.
AND HERE IN THE REPORTS YOU CAN SEE THE IMPACTS THAT IT HAS HAD.
THERE'S BEEN FOUR EVENTS, 868 VOLUNTEER HOURS WERE TRACKED, 176,000 POUNDS OF TRASH COLLECTED.
UM, SO IF YOU WOULD JUST TURN BACK TO PAGE TWO FOR THE SURVEY AND I'LL GO THROUGH THAT, UH, JUST A LITTLE BIT.
SO, AS JED MENTIONED AT THE DEPARTMENT'S, UM, DEPART REQUEST, WE PERFORMED A SURVEY WITH, UH, OTHER NORTH CENTRAL TEXAS MUNICIPALITIES.
WE HAD 10 CITIES THAT RESPONDED, UH, AND YOU CAN SEE UP HERE.
UH, AND YOU CAN SEE UP HERE THE DIFFERENT CITIES THAT, UH, RESPONDED AND PROVIDED, UM, ANSWERS TO A VARIETY OF QUESTIONS THAT WE HAD GARLAND RANKED, ALTHOUGH GARLAND IS NUMBER SEVEN IN, UH, HIGHEST POPULATION OUT OF 10, UM, THAT PRESUMABLY DOES MEAN MORE VISITORS TO OUR PARKS, BUT WE RANKED SECOND TO LOWEST OF 10 FOR THE NUMBER OF EMPLOYEES, AND THIRD LOWEST FOR CONTRACTOR USAGE.
WE WERE FOURTH LOWEST ON BUDGET AND SIXTH HIGHEST IN THE NUMBER OF ACRES MAINTAINED, WHICH MEANS THE DIVISION IS MAINTAINING A GREATER NUMBER OF ACRES WITH FEWER EMPLOYEES AND CONTRACTOR ASSISTANCE.
IN ADDITION, GARLAND WAS RANKED THIRD LOWEST IN BUDGET PER CAPITA, AND FOURTH LOWEST IN BUDGET PER ACRE.
YOU CAN SEE THE FULL, UH, SURVEY RESULTS, UH, AT THE BACK OF THE REPORT.
AND AT THIS POINT, I'LL TURN IT OVER TO VIN TO COVER, UH, THE OPPORTUNITY NUMBER ONE.
UM, YEAH, WE'LL GO START WITH OBSERVATION NUMBER ONE, AND THAT PERTAINS TO GROUNDS MAINTENANCE BY CITY STAFF.
AS YOU'VE HEARD, THE DIVISION CREATED AN OPERATION MANUAL, WHICH OUTLINES STANDARDS FOR PARK MAINTENANCE BASED ON TYPE AND CLASSIFICATION OF PARK.
UM, THE TYPE OF PARK MAY BE A NEIGHBORHOOD COMMUNITY OR REGIONAL PARK, OR IT MAY BE A GREEN BELT OR OPEN SPACE.
SO FOR PURPOSES OF THIS AUDIT, UH, WE SAMPLED OLI CLASS, AA, A AND B LOCATIONS.
UH, THE DIVISION MAY ALSO HAVE SINGLE CLASSIFICATION FOR THE ENTIRE ACREAGE OR MULTIPLE CLASSIFICATION BASED ON DEFINED AREAS WITHIN THE PARK.
THERE ARE 63 PARKS THAT ARE ASSIGNED CLASSIFICATIONS, AA, A AND B.
AND AS WE CAN SEE HERE, AUDUBON IS CLASSIFIED INTO AA FOR EIGHT ACRES.
UM, A HAS 85 ACRES AND B HAS 12.5 ACRES.
HEY, DO YOU, YES, DO YOU MIND GO OVER AA AND A AND B EXHIBIT A QUICKLY? YES.
[00:30:01]
YEAH, PAGE 19, WE CAN SEE HOW WHAT EACH CLASSIFICATIONS, UH, REALLY MEAN.AA IS THE HIGHEST LEVEL OF MAINTENANCE APPLIED TO AREAS THAT ARE HIGHLY VISIBLE, HAVE FREQUENT USERS AND TOURISM DESTINATION.
UM, SO THE CARE IS OBVIOUSLY, UH, MUCH MORE NEEDED HERE.
AND, UH, IT'S TWICE WEEKLY FOR MOWING AND GROWING SEASON FROM MARCH THROUGH OCTOBER AND WEEKLY FROM NOVEMBER THROUGH FEBRUARY.
AND IN A, WHICH IS THE NEXT HIGHEST LEVEL OF MAINTENANCE.
UM, IT INCLUDES CITY FACILITIES, UH, DEVELOPED PARKS AND LANDSCAPE MEDIAS.
UM, AND THEIR MAINTENANCE GOES AROUND ONCE PER WEEK DURING GROWING SEASON THROUGH MARCH, THROUGH OCTOBER AND BIWEEKLY IF NEEDED.
UH, AND B, THIS LEVEL OF MAINTENANCE IS TYPICALLY ASSIGNED TO AREAS WITHOUT IRRIGATION SYSTEMS, BUT MAYBE VISIBLE OR USED BY THE PUBLIC.
AND THIS LEVEL INCLUDES DEVELOPED PARK AREAS, RIGHT OF WAYS, MEDIANS, AND OTHER OPEN AREAS THAT BI-WEEK, WHICH INCLUDE BI-WEEKLY MOWING DURING GROWING SEASON.
SO AS WE JUST READ, THE FREQUENCY OF MAINTENANCE MAY BE TWICE PER WEEK OR AS LITTLE AS ONCE PER WEEK, DEPENDING ON THE CLASSIFICATION.
AND AS, UH, WHICH IS HIGHLIGHTED IN THE MANUAL AND MANUAL WORK ORDERS ARE USED DAILY TO FILL OUT WHICH LOCATIONS WERE VISITED, THE WORK PERFORMED, AND THE AMOUNT OF TIME IT TOOK TO COMPLETE EACH WORK AT EACH LOCATION.
FOR THE PURPOSE OF VERIFYING MAINTENANCE OPERATIONS EFFORT TO COMPLY WITH THEIR DEVELOPED CRITERIA, WE REVIEWED GROUND MAINTENANCE AND LITTER PICKUP FREQUENCY.
WE SELECTED TWO MONTHS OF THE ACT OF ACTIVITY CONSISTING OF 435 WORK ORDERS.
WITHIN THOSE TWO MONTHS, 12 OF 63 PARKS WITH CLASSIFICATION, AA A AND B WERE REVIEWED AND COMPARED TO THE CHARTS IN THE MANUAL.
DURING THIS REVIEW, THE FOLLOWING DATA LIMITATIONS WERE NOTED.
THE MAINTENANCE DETAILS CAPTURED ON THE WORK ORDERS DOES NOT DESIGNATE, UH, THE CLASSIFICATION OF AREA WITHIN THE PARK.
AS A RESULT, WE COULD NOT ALWAYS DETERMINE WHICH AREA OF THE PARK WAS SERVICED.
THE DATA PROVIDED ON THE WORK ORDERS WAS NOT SUFFICIENT TO DETERMINE REASONS FOR WORK NOT COMPLETED, OR REASONS FOR RETURNING TO THE SAME LOCATION ON MULTIPLE DAYS ON A GIVEN WEEK.
SO WE'LL GO THROUGH OUR OBSERVATIONS BELOW, UM, OUR GROUND MAINTENANCE.
SO WE LOOKED AT GROUND MAINTENANCE AND LITTER.
AND RIGHT HERE WE'RE GONNA LOOK AT GROUND MAINTENANCE.
UH, THIS IS CLASSIFICATION AA, AND I JUST WANNA REITERATE THE FOLLOWING ANALYSIS IS NOT AN INDICATION THAT THE STANDARDS WERE NOT MET, BUT RATHER DOCUMENTATION WAS NOT SUFFICIENT, UH, TO MAKE A DETERMINATION FOR SOME PARKS.
SO THE STANDARD FOR THIS CLASSIFICATION IS FOR MOWING TO OCCUR TWICE WEEKLY DURING GROWING SEASON.
UM, THERE COULD HAVE BEEN ISSUES DUE TO STAFFING OR OTHER EVENTS, BUT WE COULD NOT COME TO ANY CON COME TO A CONCLUSION DUE TO DOCUMENTATION, LACK OF DOCUMENTATION.
UM, IN JULY, 2022, FIVE OUT OF THE SIX PARKS MET STANDARDS AT LEAST THREE OUT OF FOUR WEEKS WITH ONE EXCEPTION.
AND JUNE, 2023, THREE OUT OF SIX PARKS MET STANDARDS AT LEAST THREE OUT OF FOUR WEEKS.
AND THE STANDARD FOR THIS CLASSIFICATION IS THAT, UM, MOWING TO OCCUR ONCE PER WEEK.
DURING GROWING SEASON, IN JULY, 2022, THREE OUT OF FOUR PARKS MET STANDARDS AT LEAST THREE OUT OF FOUR WEEKS WHILE ONE DID NOT.
AND IN JUNE, 2023, TWO OUT OF FOUR MET STANDARDS AT LEAST THREE OUT OF FOUR WEEKS WHILE OTHERS DID NOT.
AND CLASSIFICATION B, THE STANDARD FOR THIS CLASSIFICATION IS FOR MOWING TOKER ONCE EVERY 14 DAYS.
DURING GROWING SEASON IN JULY, 2022.
AND IN JULY, 2023 OUT OF TWO PARKS, ONE PARK WAS DOCUMENTED AS HAVING MET STANDARDS.
AND NOW WE LOOK AT LITTER PICKUP SERVICE FOR LITTER PICKUP SERVICE CLASSIFICATION.
THE STANDARD IS, UH, THE LITTER PICKUP TO OCCUR DAILY.
ALL PARKS REVIEWED WERE DOCUMENTED AS HAVING MET STANDARDS FOR ALL FOUR WEEKS.
IN JUNE, 2023, THREE OUT OF SIX PARKS WERE DOCUMENTED AS HAVING MET STANDARDS AT LEAST THREE OUT OF FOUR WEEKS.
THE STANDARD FOR CLASSIFICATION A IS, UH, LETTER PICKUP TO OCCUR WEEKLY OR AS NEEDED AND REQUESTED IN JULY, 2022.
IT APPEARS ALL FOUR PARTS MET STANDARDS IN JUNE, 2023.
ALL FOUR PARTS EXCEPT ONE, UH, APPEARED TO MEET STANDARDS CLASSIFICATION B, THE STANDARD FOR THIS CLASSIFICATION IS FOR LITTER PICKUP TO OCCUR BIWEEKLY AS NEEDED OR REQUESTED FOR JULY, 2022 AND JULY, 2023, ONE PARK WAS DOCUMENTED AS HAVING MET STANDARD AND, UH, THE OTHER PARK WAS NOT
[00:35:01]
OUR RECOMMENDATIONS, UH, INCLUDED.UM, THAT DIVISION MANAGEMENT SHOULD UPDATE THE MANUAL WORK ORDER FORM TO CAPTURE THE MAINTENANCE CYCLE UNTIL SYSTEM IS IMPLEMENTED.
COMMUNICATE TO STAFF THE EXPECTATION ON FULLY, UH, COMPLETING WORK ORDERS.
DEVELOP A SYSTEM OF MONITORING COMPLETION OF WORK ORDERS AND DOCUMENTING COMPLIANCE WITHIN WITH DEVELOPED STANDARDS.
IMPLEMENT THE WORK ORDER SYSTEM PROCESSES AND INCORPORATE MONITOR MONITORING WITHIN THE SYSTEM.
AND ALSO REEVALUATING STAFFING NEEDS.
CONCURS ACTION PLAN, UH, DIVISION IS IN THE FINAL STAGES OF IMPLEMENTING A WORK ORDER SYSTEM.
AS PART OF THIS PROCESS, THEY WILL DEVELOP A MORE ROBUST MONITORING PROCESSES.
UM, THE MISS CYCLES CAN OCCUR DUE TO A VARIETY OF FACTORS, INCLUDING WEATHER, CONDITION, EQUIPMENT ISSUES, STORM RESPONSE, SPECIAL EVENTS, AND STAFF, STAFF SHORTAGES.
UH, MANAGEMENT, WE WILL REEVALUATE THE STAFFING NEEDS AND THE IMPLEMENTA IMPLEMENTATION DATE WILL BE AUGUST 20, 24.
ARE THERE ANY QUESTIONS ABOUT THAT ONE? IT'S, UH, SOUNDS TO ME THAT, UH, THE PRIMARY THAT YOU'VE JUST STATED IS THE PARKS ARE BEING MAINTAINED, WE'RE JUST NOT DOCUMENTING.
AND AT THIS POINT, UM, THAT DOCUMENTATION SYSTEM IS BEING PUT INTO PLACE.
AND YOU'LL SEE THAT COME UP IN THE NEXT TWO AS WELL.
ALRIGHT, UH, SO THE SECOND OPPORTUNITY IS FOR CONTRACTOR COMPLIANCE.
UH, SO THE MAINTENANCE OPERATIONS DIVISION HAS THE TWO PRIMARY CONTRACTORS AS I MENTIONED PREVIOUSLY.
AND SOME SERVICES ARE YEAR ROUND, WHILE OTHER SERVICES ARE DURING THE GROWING SEASON ONLY, WHICH IS BETWEEN MARCH AND NOVEMBER.
UM, AS MENTIONED AND A REMINDER CONTRACTOR, A, UH, DOES THE MEDIANS AND RIGHT OF WAYS AND WAS INVOICED INVOICED US AND WAS PAID APPROXIMATELY $1.8 MILLION.
UH, AND THEY DO TAKE CARE OF THE MAJOR THOROUGH AFFAIRS AND HIGHWAYS, INCLUDING 78, 66 I 30.
UH, CONTRACTOR B TAKES CARE OF THE LANDSCAPING AND BED MAINTENANCE OF THE CITY OWNED PROPERTY AND INVOICED AND WAS PAID APPROXIMATELY $734,000.
THE DIVISION STATED THAT SUPERVISORS AND MANAGEMENT MAY PERFORM DRIVE-BY REVIEWS OF WORK PERFORMED WHEN TIME ALLOWS.
THERE IS NO STANDARDIZED INSPECTION PROCESS AND NO DOCUMENTATION OCCURS.
AND BASED ON THE INFORMATION AVAILABLE, I ATTEMPTED TO COMPARE CONTRACT SPECIFICATIONS TO THE INVOICE DETAILS TO THE SUPPORTING DOCUMENTATION REGARDING THE LOCATIONS, THE FREQUENCIES, AND THE CONTRACTED RATES.
WE SELECTED 10 MONTHS BUT COULD NOT RECONCILE THE DIFFERENCES DUE TO LACK OF DETAILED DOCUMENTATION OR LOCATION DESCRIPTION INCONSISTENCIES GAVE A COUPLE OF EXAMPLES OF THE LACK OF DOCUMENTATION DETAILS, UM, WHERE WE RECEIVED TWO INVOICES FOR JUST OVER $4,000.
AND THE DIVISION STATED THAT THE WORK WAS PERFORMED AT THE REQUEST OF COUNCIL OR CITY MANAGEMENT, BUT THEY JUST DIDN'T HAVE ANY DOCUMENTATION OF THAT.
UM, AND ANOTHER INVOICE, UH, WAS SUBMITTED PRIOR TO THE WORK BEING PERFORMED FOR UNKNOWN REASONS.
AND ON THE LOCATION DESCRIPTION EXAMPLE, I'VE GOT, UH, SOME SNIPS HERE TO SHOW THE CONTRACT SPECIFIES PRECISE LOCATIONS IN ACREAGE.
THE INVOICE DESCRIPTION IS FAIRLY GENERAL IN NATURE, AND THEN THE SUPPORTING DOCUMENTATION, UH, GETS A LITTLE BIT MORE THAN THE INVOICE, BUT NOT AS MUCH AS, UH, THE LOCATION, UH, THE CONTRACT SPECIFICATIONS.
SO OUR RECOMMENDATIONS WERE TO DEVELOP AND IMPLEMENT A PROCESS FOR CONTRACTOR COMPLIANCE INSPECTIONS, MONITOR AND DOCUMENT THE COMPLIANCE, DEVELOP A MECHANISM TO RECONCILE BETWEEN THE CITY SPECS, THE VENDOR INVOICING AND THE BACKUP DOCUMENTATION, AND COMMUNICATE ALL OF THIS TO THE VENDOR.
AND THE FINAL ONE IS, AGAIN, REEVALUATE THE STAFFING NEEDS MANAGEMENT CONCURRED.
AND DURING SAID, DURING THE AUDIT PERIOD, THEY ESTABLISHED A MANAGER POSITION TO OVERSEE CONTRACTS AND CONTRACTORS AND TO IMPROVE OVERSIGHT.
DEVELOPED A COMPREHENSIVE TRACKING SYSTEM TO MONITOR THE CONTRACTOR CYCLES COMPLETION, BILLING AND INVOICING, AND INTEGRATED, UH, ALL MAINTENANCE SITES INTO GIS FOR REAL-TIME MAPPING OF PROPERTIES BY CONTRACTOR.
UH, THEY INTEND TO HIRE ADDITIONAL STAFF USING SEASONAL STAFFING BUDGET TO INCREASE INSPECTIONS.
IMPLEMENTATION DATE IS THE NEW TRACKING SYSTEM IS IN PLACE AND GIS MAPPING WILL BE FULLY IMPLEMENTED WITHIN THE NEXT SIX MONTHS.
IS THERE ANY QUESTIONS ABOUT THAT ONE? DO DO I HAVE ONE, ONE QUESTION FOR YOU, MR. CHAIR.
[00:40:03]
NOT ON THAT SLIDE ON, BUT ONE OF YOU MENTIONED SETTING THE EXAMPLES OF LACK OF DOCUMENTATION.ONE OF THE THINGS YOU SAID THERE WAS AT THE REQUEST OF COUNSEL AND SOMEBODY ELSE, CAN YOU GO BACK TO THAT SCREEN? THAT WOULD'VE BEEN IN THE, UH, OKAY, YOU SAID, OKAY, REQUEST OF COUNCIL OR CITY MANAGEMENT, UH, UH, CITY MANAGEMENT.
HELP ME UNDERSTAND WHAT THAT AND PARKS, THE, UH, THE GRAPH THAT YOU PUT UP COMPARING OTHER CITY SAYS ALL FOR PARKS.
THAT'S ONE OF OUR, SO THAT'S ONE OF OUR, ONE OF OUR, ONE OF OUR AWESOME DEPARTMENTS.
UH, BUT IT SAYS THEY ARE, I KNOW ABOUT THEIR STAFFING, THEY'VE GOT STAFFING CHALLENGES, THEY'VE GOT MANPOWER CHALLENGES, THEY'VE GOT ANOTHER, EVEN WITH WITHSTANDING THOSE CHALLENGES, I THINK PARKS HAVE DONE A GREAT JOB.
THAT'S, I WANTED TO THROW THAT CAVEAT OUT.
BUT, BUT HERE, AND MAYBE YOU CAN ANSWER THAT QUESTION OR WE GOT SOMEBODY FROM PARKS.
'CAUSE I, IT SAYS WORK PERFORMED.
IT'S NOT HOW I, I GUESS WHAT I'M GETTING AT HERE, WHEN I, WHEN I READ THAT, I'M SAYING THE WORK IS PERFORMED.
SO AM I HEARING THE WORK IS NOT DOCUMENTED ONCE IT'S PERFORMED? HOW SO? CAN MAYBE MATT CAN EXPLAIN TO ME BECAUSE I, IT, THE WORK IS DONE, OURS ARE SPENT, RESOURCES ARE SPENT, AND I WANNA BE SURE THAT WHETHER IT'S COME FROM COUNCIL OR WHETHER IT'S COMES FROM THE CITY OF MANAGEMENT, TWO PARKS, THAT THERE'S SOME WAY OF DOCUMENTING THAT WORK.
BECAUSE THE WORK, I KNOW, YOU KNOW, UH, MATT AND HIS TEAM DOES AN OUTSTANDING THE JOB OF RESPONDING.
BUT I WANNA BE SURE THAT THAT WORK IS NOT JUST, IT'S NOT QUOTE FREE WORK.
SO, MATT, CAN YOU, YEAH, LET ME, LET ME CLARIFY ONE, CAN YOU CLARIFY THAT FOR ME PLEASE? YEAH.
SO, UM, WHAT THAT IS, IS MEANT TO CONVEY IS THAT A CITY COUNCIL MEMBER OR CITY MANAGEMENT MAY PICK UP THE PHONE, YOU KNOW, CALL MATT EVEN IN THE EMAIL, ASK HIM, HEY, CAN YOU TAKE CARE OF THIS? RIGHT? UH, THEY INITIATE GETTING THE CONTRACTOR TO TAKE CARE OF IT, BUT THERE'S NO DOCUMENTATION THEY COULDN'T FIND EMAILS, UM, YOU KNOW, FOR THE REQUEST AND BECAUSE THEY WEREN'T USING THE SYSTEM JUST YET.
UH, THERE'S NOT A RECORD OF IT.
WE GOT AN INVOICE, BUT THERE'S NOT A RECORD OF THE WORK BEING ASKED FOR.
UM, AND THERE'S NO RECORD OF IT BEING COMPLETED.
WE, SO SO THE SYSTEM UPGRADE WILL BEGIN TO CAPTURE THAT, IS THAT RIGHT? I BELIEVE SO, MATT.
THE SYSTEM WILL CAPTURE THAT AND THEN, WE'LL, WHAT WE'VE AGREED TO DO IS IF WE'RE ASKED TO TAKE ON ADDITIONAL PROPERTY, IF, UH, THE PERFECTLY EXAMPLE IS, IS WE PURCHASE PROPERTY THAT WE'RE GONNA USE FOR FUTURE ECONOMIC DEVELOPMENT STANDARDS, THAT PROPERTY THEN HAS TO BE MAINTAINED.
AND SO WE'LL BE ASKED TO ADD THAT TO OUR CONTRACT AND WE'LL DO A BETTER JOB OF, OF DOCUMENTING THAT THROUGH AN EMAIL OR THROUGH A WRITTEN PROCESS.
RIGHT NOW, A LOT OF THAT WAS DONE THROUGH TEXT OR A PHONE CALL OF ADD, ADD THIS PROPERTY TO, TO OUR MAINTENANCE CONTRACTS.
AND SO WE'LL JUST DO A BETTER JOB OF MAKING SURE THAT THAT GETS, UM, WRITING SO WE HAVE THAT BACKGROUND.
THANK YOU FOR THAT ANSWER, MAN.
'CAUSE I JUST, I JUST WANNA BE SURE THAT THAT WHATEVER IS THE, THE CATALYST FOR THE REQUEST FOR THE WORK THAT YOUR TEAM IS PERFORMING, THAT THAT WORK IS DOCUMENTED AND, AND YOUR TEAM IS CREDITED FOR.
'CAUSE I KNOW YOU'RE ALWAYS, YOU KNOW, YOUR TEAM ALWAYS RESPONDS TO WHETHER IT'S A PHONE CALL OR AN EMAIL.
AND WHEN I READ THAT, I JUST WANNA BE SURE THAT THE, THE NEW SYSTEM IS GOING TO SHOW THAT THAT WORK WAS PERFORMED IR IRRESPECTIVE OF WHETHER IT CAME FROM COUNCIL OR WHETHER IT CAME FROM CITY MANAGEMENT.
I JUST WANNA BE SURE THAT OUR SYSTEM DOESN'T, BECAUSE I KNOW, UH, MADNESS TEAM GETS A LOT OF CALLS, UH, A LOT OF EMAILS OF COUNCIL AND CITY MANAGEMENT, AND I JUST WANNA BE SURE THAT THAT WORK IS RECOGNIZED AND, AND WHAT, UH, YOU AND YOUR TEAM DOES.
IS THAT, DOES THAT MAKE SENSE? YES, IT DOES.
AND WHAT WE ARE DOING, AGAIN, WITH THE MAPPING AS, AS WE MENTIONED.
SO ANY PROPERTIES THAT ARE ADDED WILL BE ADDED TO OUR GIS.
WE'LL HAVE A A COM COMPREHENSIVE LIST OF ALL PROPERTIES THAT WE MAINTAIN.
MR. CHAIR, I'D LIKE TO JUST HEAR JUST A LITTLE BIT, UH, ABOUT THE SYSTEM AND WHAT THAT, UH, JUST A LITTLE BIT ABOUT WHAT THAT PROCESS WILL ENTAIL NOW VERSUS WHAT WAS HAPPENING BEFORE.
UH, SO I'LL GIVE YOU A LITTLE BACKGROUND.
WHEN I, WHEN I CAME ON BOARD, UH, FOUR YEARS AGO, WE WERE USING AN ACCESS DATABASE, UH, RIGHT AROUND THOSE SAME TIME, WE ALSO WENT INTO CONTRACT WITH A WORK ORDER MANAGEMENT SYSTEM CALLED
[00:45:01]
CARDI GRAPH.THAT'S THE SAME WORK ORDER MANDATES AND TRANSPORTATION USES.
UM, AROUND THAT SAME TIME, OUR ACCESS DATABASE LITERALLY BROKE, UM, AND WASN'T USABLE ANYMORE.
BUT WE ALSO, WE, WE WERE NOT READY TO FULLY IMPLEMENT CARDIOGRAPH AT THAT TIME.
UM, FOR ONCE YOU HAVE TO HAVE ALL OF YOUR ASSETS IN GIS SO THAT YOU CAN TRACK THE WORK AGAINST THOSE ASSETS.
UM, ALSO HALFWAY THROUGH THAT PROCESS, UH, CARDIOGRAPH WAS BOUGHT BY A COMPANY CALLED OPENGOV AND THEY HAD SOME TRANSITION ISSUES.
AND SO IT HAS TAKEN SOME TIME FOR US TO GET CARDIOGRAPH TO A POINT WHERE IT'S READY FOR US TO USE AS OUR WORK ORDER MANAGEMENT SYSTEM.
UM, AND SO INSTEAD OF PUTTING ADDITIONAL, SINCE WE WERE ALREADY PAYING FOR CARDIOGRAPH, WE DIDN'T INVEST MORE MONEY INTO ANOTHER WORK ORDER SYSTEM OR TO BUILD ANOTHER ACCESS DATABASE, AND WE WERE USING A PAPER SYSTEM WHERE WE GOT CA CAR GRAPH UP AND GOING, PA PAPER SYSTEMS HAVE THEIR FAULT.
AS, AS WE SEE HERE, I KNEW THAT THIS WAS A FAULT THAT WE HAD, WHICH IS WHY WE'VE BEEN PUSHING TO GET CAR GRAPH ONLINE AS QUICKLY AS WE POSSIBLY CAN.
UH, THAT'S WHERE WE ARE ON THE FINAL STRETCHES OF THAT.
AND WE WILL, WE HAVE BEEN USING CARDIOGRAPH WITHIN WHAT WE CALL THE TEST ENVIRONMENT FOR ABOUT THE PAST THREE TO FOUR MONTHS.
AND WE'LL BE FULLY INTO LIVE PRODUCTION MODE FOR CARDIOGRAPH COME THE 1ST OF AUGUST.
I KNEW THAT THIS WAS A SHORTFALL THAT WE HAD WITHIN OUR DEPARTMENT AND IT'S JUST TAKEN SOME TIME TO TO, BECAUSE WE LITERALLY WENT FROM, FROM NOTHING TO WHERE WE ARE NOW IN, IN THE LAST THREE AND A HALF YEARS IN TERMS OF HAVING NONE OF OUR ASSETS CAPTURED WITHIN GIS, WHICH IS ESSENTIAL FOR THESE WORK ORDER MANAGEMENT SYSTEMS, UM, TO BE ABLE TO, TO FUNCTION.
AND SO WE'RE, WE'RE FINALLY READY ALMOST TO, TO CROSS THE FINISH LINE ON THAT, BUT DO UNDERSTAND THAT THAT THE, THE SYSTEM WE WERE USING DID HAVE SOME FLAWS TO IT AND WE DIDN'T ACCURATELY CAPTURE SOME OF THE WORK THAT WAS BEING DONE.
SOUNDS LIKE THAT TOOK A LOT OF PRESSURE OFF OF YOU.
THE NEW SYSTEM SOUNDS LIKE IT'S TAKEN A LOT OF PRESSURE OFF IT.
UH, UH, IT WILL ONCE WE GET IT ACROSS THE FINISH LINE AND WE START IMPLEMENTING IT.
UH, WHEN ARE WE LOOKING AT IMPLEMENTATION? UH, SO WE'LL GO, UH, THE FIRST PHASE OF IT, WHICH WILL BE TRACKING, YOU KNOW, ESSENTIALLY OUR, OUR BASIC WORK, WHICH IS MOWING PARK VISITS AND THINGS LIKE THAT.
SO, ANYBODY ELSE? ALL MINES ARE CLEAR.
UH, AND, AND VIN DID STATE IT IN THE FIRST ISSUE THAT NONE OF THIS IS AN INDICATION THAT THE WORK ISN'T PERFORMED.
SO I I PROBABLY SHOULD HAVE RESTATED THAT ON NUMBER TWO.
SO HERE WE ARE ON NUMBER THREE.
UM, SO THE CITY UTILIZES EIST A PORTAL OFFERING CITIZENS ONLINE OR PHONE APPLICATION ACCESS TO SUBMIT TICKETS FOR CONCERNS.
UH, CUSTOMER SERVICE RECEIVES ALL OF THE TICKETS AND DISPATCHES TO THE APPROPRIATE DEPARTMENTS FOR THE THIS DIVISION.
THE SUBMISSIONS MAY BE RELATED TO ITEMS SUCH AS TALL GRASS, GRAFFITI, YOU KNOW, LITTER, BROKEN IRRIGATION SYSTEMS COULD BE JUST ABOUT ANYTHING.
SO WE REVIEWED, UH, THE SUBMITTED CITIZEN CONCERNS DURING THE SCOPE AND THEN SELECTED EIGHT FOR A DETAILED REVIEW.
WHAT WE LEARNED IS THAT ADMINISTRATIVE STAFF IS FORWARDING THE SUBMISSION VIA EMAIL TO THE GROUNDS SUPERVISOR AND THEN MARKS THE ONLINE SUBMISSION COMPLETED PRIOR TO THE CONCERN BEING ADDRESSED.
THE GROUND SUPERVISOR DOES NOT CONSISTENTLY CREATE AN INTERNAL WORK ORDER FOR THE ESS TICKET.
INTERNAL COMMUNICATION REGARDING THE COMPLETION OF THE WORK IS EITHER VERBAL OR VIA EMAIL, WHICH IS NOT ALWAYS RETAINED.
WHEN WE REVIEWED THE EIGHT IN MORE DETAIL, THEY WERE ABLE TO PROVIDE DOCUMENTATION FOR FOUR OF THOSE.
SO WE RECOMMENDED, UM, THAT THEY DISCONTINUE THE PRACTICE OF CLOSING THE E ASSIST TICKETS PRIOR TO COMPLETION OF WORK.
UM, CREATE AN INTERNAL WORK ORDER FOR ALL E ASSIST TICKETS, REQUEST ADDITIONAL TRAINING TO UNDERSTAND THE FULL FUNCTIONALITY OF E ASSIST, WHICH INCLUDES RUNNING REPORTS AND DEVELOP A DEPARTMENTAL STANDARD OPERATING PROCEDURE FOR THE EIST TICKETS.
MANAGEMENT'S RESPONSE WAS THAT THEY PARTIALLY CONCUR AND STATED THAT THEIR ACTION PLAN IS, ONCE THE WORK ORDER SYSTEM IS OPERATIONAL, THEY'LL DEVELOP AN SOP FOR THE EIST TICKETS.
AND THAT SOP WILL INCLUDE CREATING A WORK ORDER NUMBER WITHIN THE SYSTEM TO BETTER TRACK THE COMPLETION.
UH, AND THEN FURTHER STATED WORK CAN OFTEN TAKE SEVERAL MONTHS TO COMPLETE, WHICH LEAVES ESYS TICKETS OPEN FOR EXTENDED PERIODS, CREATING A BACKLOG OF UNRESOLVED TICKETS AND RESULTING IN DOUBLE TRACKING IMPLEMENTATION DATA IS THREE TO FOUR MONTHS.
THE PARTIAL CONCURRENCE, UH, WHAT'S, WHAT'S THE BASIC DIFFERENCE THERE? I BELIEVE, UH, MATT CAN, UM, ANSWER THAT, BUT, UH, IT'S BECAUSE THEY WANT TO COMPLETE, THEY, THEY WANNA KEEP THE PROCESS AS IT TODAY UNTIL THE SYSTEM IS IMPLEMENTED.
[00:50:01]
THE, THE LEAVING EIS TICKETS OPEN, UH, DOESN'T ALWAYS SEND A GOOD MESSAGE TO I THINK THE RESIDENTS 'CAUSE THEY DON'T GET THAT, THAT FOLLOW UP FEEDBACK.SO WHAT WE DO IS, WHEN I RESPOND TO AN ESIS TICKET TO AN ESIS, WE TELL 'EM THAT WE HAVE, UM, WE'RE WORKING ON THIS AND I GIVE THEM MY PERSONAL CONTACT INFORMATION TO SAY THAT I, SO I CAN FOLLOW UP WITH THEM OUTSIDE OF PCA, THE, THE EIST PROCESS.
'CAUSE UH, WHAT WE WERE FINDING WAS IF SOME OF, FOR INSTANCE, IF THEY SAID A, A SLIDE WAS BROKEN, WELL IT MIGHT TAKE FOUR MONTHS FOR US TO ORDER A SLIDE AND FOR IT TO COME IN FOR US TO REPAIR THAT.
IF YOU GET SEVERAL OF THOSE, NOW YOU HAVE ALL OF THESE, UM, BACKLOG OF, OF ESIS TICKETS THAT ARE OPEN.
AND THE CITY MANAGEMENT AND, AND US AS A WHOLE WANTED TO BE ABLE TO TRACK THAT IN A MORE REAL WAY, PLUS NOT HAVING TO THEN GO IN AND COMPLETE A WORK ORDER AND ALSO, UM, COMPLETE AN E ASSIST TICKET.
SO THAT'S REALLY WHERE THE PARTIAL, THE, THE PARTIAL CONCUR CAME FROM.
I THINK WE'VE ALL PROBABLY HAD THAT PROBLEM TOO.
UH, AS WE DEAL WITH PEOPLE IN THE COMMUNITY AND WE SAY THE ASSIST HAS BEEN COMPLETED, HOWEVER, WHAT WE'RE REALLY SAYING IS, WE GOT YOUR COMPLAINT
BUT ON THEIR END THEY'RE SAYING, HEY, YOU SAID IT WAS TAKEN CARE OF, BUT IT'S NOT TAKEN CARE OF.
SO I I, I HEAR HOW YOU MAY BE DEALING WITH THE PARTIALLY CONCUR, BUT ISN'T THAT STILL GOING TO CREATE THE SAME SITUATION THOUGH IF WE CONTINUE, IF WE CONTINUE TO SAY, YES, IT'S COMPLETED, BUT IT HASN'T BEEN COMPLETED.
YEAH, IT'S, IT'S, IT'S NOT A PERFECT SYSTEM BY ANY STRETCH OF IMAGINATION, WHICH IS WHY I, WE TRY TO GET AS AND AS MUCH INFORMATION FROM THEM AS WE CAN AND THEN WE FOLLOW UP OFFLINE OF THE EIST TICKET THROUGH EMAILS OR THROUGH PHONE CALLS.
UH, SOMETIMES WHEN PEOPLE SUBMIT AN EIST TICKET, THEY DON'T EVEN SUBMIT THEIR CONTACT INFORMATION OR, OR ANYTHING LIKE THAT.
'CAUSE IT CAN BE DONE ANONYMOUS ANONYMOUSLY.
UM, SO WE STRIVE AND WHERE WE, I DO CONCUR WITH THIS IS IF ONCE WE HAVE OUR, OUR TRACKING SYSTEM, WE CAN CREATE A, A TICKET NUMBER, WE CAN REFERENCE THAT TICKET NUMBER WITHIN OUR EIST RESPONSE TO THEM AND GIVE THEM ADDITIONAL CONTACT INFORMATION TO FOLLOW UP WITH US IF, UH, THEY WOULD LIKE MORE INFORMATION ON WHEN THAT TICKET, PARTICULAR TICKET WOULD BE COMPLETED.
IT'S THE LAST ONE, BUT, UM, I JUST WANTED TO ECHO ONE MORE TIME.
UH, ONE THING THAT I THINK WE AS A COMMUNITY, AS A CITY CAN ALL CONCUR ON THAT IS OUR PARKS ARE WELL TAKEN CARE OF VERY WELL.
AT THE SAME TIME, I DO HEAR THE CONCERNS OF THE AUDIT COMMITTEE TOO, AND THAT IS, UH, WE BEGIN TO TALK ABOUT INVOICES VERSUS DOCUMENTATION.
OF COURSE WE CAN BEGIN TO SEE THAT, HEY, WE CAN BE LOSING A LOT OF MONEY AND SPENDING A LOT OF MONEY NOT KNOWING WHY WE'RE DOING IT.
SO I THINK THAT THE AUDIT COMMITTEE HAS DONE A VERY GOOD JOB IN THE WAY OF, UH, THE AUDIT AND BY THE, UH, RECOMMENDATIONS THAT HAVE BEEN PUT FORWARD.
SO, AND, AND I DO WANNA JUST MENTION ONE THING.
AS WE WERE DOING THE REVIEW OF THE INVOICES, UH, WE FOUND, UM, TWO INSTANCES WHERE WE WERE OVERBILLED, IT WAS BROUGHT PARKS, BROUGHT IT TO THE CONTRACTOR'S ATTENTION, AND IT WAS CREDITED BACK TO THE NEXT INVOICE.
SO I FEEL LIKE THERE'S SOME MONITORING GOING ON THAT JUST MIGHT NOT BE DOCUMENTED SO WELL, AND I FEEL THAT WITH THE RECOMMENDATIONS THAT YOU HAVE MADE, UH, THAT'S CERTAINLY GONNA MAKE A BIG DIFFERENCE.
OKAY, JEN, CHAIRMAN, THE LAST AUDIT THAT WE WANT TO DISCUSS TODAY IS THE BENEFITS BILLING AUDIT.
UH, JUST A LITTLE BACKGROUND, WE CONDUCTED AN AUDIT IN 2015 AND THERE WERE SOME OBSERVATION AT THAT TIME, AND ONE OF THE THINGS THAT WE, WE OBSERVED AND WE RECOMMENDED BACK THEN WHEN WE DID THE AUDIT IN 2015, THERE WAS, UH, ONE INDIVIDUAL AT THAT POINT MANAGING THE WHOLE PROGRAM.
SO AGAIN, WE WERE TALKING ABOUT RESOURCES.
UH, THE GOOD NEWS IS HR, UH, HAS A TEAM RIGHT NOW.
UM, MEMBER TEAM ADMINISTERING 4 0 6.
I THINK THEY RECENTLY ADDED MAYBE TWO MORE PEOPLE ADDED AN ADDITIONAL FUNCTION.
UM, SO AFTER THIS AUDIT, UM, THIS PREVIOUS CITY MANAGER ACTUALLY REQUESTED, UH, TO CONDUCT AN AUDIT A FEW YEARS LATER.
AND THAT'S HOW IT WAS ADDED TO THE AUDIT PLAN.
BUT THEN, UH, WE HAD SOME, UM, REASONS WHY WE DELAYED THIS AUDIT.
ANYWAY, WE GOTTA GET IT DONE THIS YEAR.
UM, I JUST WANT TO THANK HR MANAGEMENT AND ALSO FINANCE DEPARTMENT FOR WORKING WITH US THROUGHOUT THIS AUDIT.
I'M GONNA GO OVER THE OBJECTIVES OF THIS AUDIT AND, UH, THE SCOPE.
VERIFY THAT ONLY ELIGIBLE EMPLOYEES, RETIREES AND THEIR DEPENDENTS ARE RECEIVING APPROPRIATE
[00:55:01]
BENEFITS AND THAT THEIR PAYROLL DEDUCTIONS ARE ACCURATELY PROCESSED.UM, YOU, YOU DO KNOW THAT WE ARE SELF-FUNDED, AND THAT'S WHY WE WANTED JUST TO MAKE SURE THAT EVERYTHING IS ACCURATE.
WE ALSO WANTED TO VERIFY THE ACCURACY, TIMELINESS, AND APPROVAL OF BENEFITS BILL PAYMENTS, ANALYZE STOP LOSS REIMBURSEMENT AND CLAIMS PAYMENT TRANSACTION TO VERIFY ACCURACY.
LASTLY, WE WANTED TO EVALUATE THE CITY'S PROCESS TO ENSURE ENROLL RELEASE DATA IS PROPERLY PROTECTED.
UH, OVERALL IT COVERED FROM JANUARY, 2022 TO JANUARY, 2024.
THERE WERE CERTAIN RESTRICTIONS, UH, I JUST WANNA GO OVER THOSE.
UH, FROM A, UM, REPORTING PERSPECTIVE, EMPLOYEE BENEFIT SELECTION, WE ONLY LOOKED AT ONE YEAR, WHICH WAS 2023.
UH, VERIFICATION OF EMPLOYEE ELIGIBILITY FOR CLAIMS PAID, WE ONLY LOOKED AT SIX MONTHS, DECEMBER, 2022 THROUGH FEBRUARY, 2023.
NOVEMBER, 2023 THROUGH JANUARY, 2024, STOP LOSS AND HIGH DOLLAR CLAIMS, UM, TPA, A, UH, WHICH IS ONE OF OUR VENDORS THAT WE WORK WITH, WE WERE ABLE TO COMPARE THE MONTHLY REPORTS, UH, TO THE ANNUAL STOP LOSS REPORT.
HOWEVER, WE DID NOT, UH, VERIFY THE IDENTITY OF THOSE INDIVIDUALS DUE TO LACK OF INFORMATION.
UH, AS I MENTIONED, UH, I'M NOT SURE IF I MENTIONED, WELL, ZACH DID THIS AUDIT AND HE HAD SOME PRIOR BACKGROUND IN PERFORMING THE AUDIT.
AS, AS YOU'RE AWARE, HE'S FAIRLY NEW TO THE CITY.
UM, SOME OF THE THINGS THAT HR HAVE IMPLEMENTED, UH, I KNOW HE'S GONNA COVER THIS, BUT I'M, I'M GONNA GO OVER SOME OF THE THINGS THAT THEY HAVE IMPLEMENTED SINCE WE DID THE LAST AUDIT.
IN 2020, THE BENEFITS TEAM ENGAGE HUB INTERNATIONAL, A THIRD PARTY CONSULTANT TO REVIEW THE C'S HEALTH AND WELLNESS BENEFITS PLAN, AND, AND DEVELOPED A THREE YEAR STRATEGIC PLAN.
AND IN 2022, THEY ELECTED THE SAME VENDOR AS THEIR, UH, HEALTH, AS THE C'S HEALTH BENEFITS BROKER, UH, THROUGH A COMPETITIVE BID PROCESS.
AND IN 2023, UH, AS YOU ARE AWARE, UM, THE CITY IMPLEMENTED THE BENEFIT ADMINISTRATION THROUGH ONE GARLAND.
WITH THAT, I'M GONNA TURN IT OVER TO ZACH, WHO'S GONNA GIVE, GO OVER THE TESTING THAT WE DID AND, UH, SOME OF THE OBSERVATIONS THAT WE HAD.
UM, FIRSTLY I'M JUST GONNA GIVE A BRIEF BACKGROUND OF THE BENEFITS, UM, BILLING PROGRAM, AND THEN WE'LL HOP INTO OUR, UH, AREAS FOR, UM, OPPORTUNITIES FOR IMPROVEMENT.
UM, SO THE CITY OF GARLAND OFFERS SEVERAL HEALTH INSURANCE OPTIONS, INCLUDING MEDICAL, DENTAL, VISION, CRITICAL CARE, AND LIFE INSURANCE.
THE GROUP HEALTH INSURANCE FUND IS SELF-FUNDED BY CO CONTRIBUTIONS FROM THE CITY AND PREMIUMS PAID BY POLICY SUBSCRIBERS.
UH, THIS BASICALLY MEANS THAT ALL MEDICAL AND DENTAL, UH, CLAIMS ARE PAID BY THE CITY.
UH, SO THERE ARE THREE DIFFERENT THIRD PARTY ADMINISTRATORS OR TPAS, UH, CONTRACTED BY THE CITY TO PERFORM A VARIETY OF BENEFITS RELATED ADMINISTRATIVE FUNCTIONS, INCLUDING CLAIMS PROCESSING AND THE BILLING OF RETIREE PREMIUMS. ADDITIONALLY, THE CITY PARTNERS WITH 15 BENEFIT PROVIDERS THAT OFFER A WIDE VARIETY OF OPTIONS TO EMPLOYEES AND RETIREES AND THEIR DEPENDENTS.
UH, AND THESE INCLUDE INSURANCES LISTED ABOVE AS WELL AS FLEXIBLE SPENDING, LEGAL PLAN AND MORE.
UH, THERE'S A GRAPH THERE THAT YOU CAN USE IF, UH, YOU READ THE REPORT TO KIND OF GIVE YOU A MAP OF WHAT EACH OF THESE, UH, PROVIDE.
UH, SO COVERAGE IS AVAILABLE FOR ALL FULL-TIME EMPLOYEES AND THEIR ELIGIBLE DEPENDENTS.
UM, A NEW EMPLOYEE IS ELIGIBLE TO SUBSCRIBE TO AN INSURANCE PLAN UPON THEIR HIRE DATE.
UH, RETIRED EMPLOYEES AND TERMINATED EMPLOYEES AS WELL AS THEIR ELIGIBLE DEPENDENTS ARE ALSO OFFERED CERTAIN HEALTH BENEFITS FROM THE CITY.
RETIREES MAY ENROLL IN THE CITY'S BENEFITS AT A HIGHER PREMIUM AND TERMINATED EMPLOYEES MAY ELECT COVERAGES THROUGH THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT, OR COBRA.
UM, AS JED MENTIONED, UH, THEY'VE, UM, CONTRACTED WITH A THIRD PARTY CONSULTANT TO HELP WITH THEIR, UM, BROKERAGE OR BROKERING AND, UM, TO DEVELOP THE, THE THREE YEAR, UH, STRATEGIC PLAN.
AND I'D ALSO LIKE TO NOTE A FEW OTHER ITEMS. SO OUR REVIEW OF THE PAYROLL DEDUCTIONS AND THE EMPLOYEE BENEFIT ELECTIONS FOR THE NOVEMBER 3RD, 2023 PAY DATE REVEALED THAT EMPLOYEES ARE ENROLLED IN THE APPROPRIATE BENEFIT.
ELECTIONS AND PAYROLL DEDUCTIONS ARE ACCURATE.
UM, ADDITIONALLY, UM, BENEFIT BILL PAYMENTS ISSUED TO BENEFIT PROVIDERS DURING THE SAMPLED MONTHS WERE FOUND TO BE ACCURATE AND APPROPRIATELY APPROVED BY MANAGEMENT.
AND THE STOP LOSS REIMBURSEMENT AMOUNT, UH, REPORTED IN THE ANNUAL STOP LOSS REPORT WAS REASONABLY EQUAL TO WHAT WAS WAS REPORTED ON TPAS MONTHLY SUMMARY REPORTS.
OKAY, NOW I'M GONNA JUMP TO THE OPPORTUNITIES FOR IMPROVEMENT.
THE FIRST RELATED TO, UH, RETIREE PREMIUM PAYMENT COLLECTIONS FROM TPAC.
UH, THE CITY IS CONTRACTED WITH TPAC TO FACILITATE THE COLLECTION OF MONTHLY PREMIUMS FROM ALL RETIREE AND COBRA ENROLLEES.
UH, THE ENROLLEES PAY THEIR PREMIUMS THROUGH THE TPA WHO THEN SENDS THESE PREMIUMS LESS AN ADMINISTRATION FEE TO THE CITY EACH MONTH.
AS OF MAY 13TH, 2024 PREMIUM PAYMENTS FORWARDED TO THE CITY TOTALED APPROXIMATELY $4.6 MILLION PER YEAR FOR CALENDAR YEAR 22 AND CALENDAR YEAR 2023.
[01:00:01]
IDENTIFIED THAT ALL MONTHLY PAYMENTS WERE RECEIVED EXCEPT FOR THE $423,000 DUE TO THE CITY IN NOVEMBER, 2023.THIS UNPAID AMOUNT ACCOUNTED FOR OCTOBER, 2023 RETIREE AND COBRA PREMIUMS. UH, ADDITIONALLY, THE CITY RECEIVED THE FOLLOWING MONTH'S PAYMENT, UH, ONE MONTH PASSED THE DUE DATE.
UH, FOR THAT I RECOMMENDED THAT HR MANAGEMENT SHOULD REQUEST THE DELINQUENT PAYMENT FROM TPAC IMMEDIATELY AND REEVALUATE THE RECONCILIATION AND MONITORING PROCESS TO ENSURE ALL MONTHLY BILLS ARE RECEIVED TIMELY AND ACCURATELY.
UM, SO MANAGEMENT CONCURS AND THEIR ACTION PLAN WAS ONE, THE OCTOBER PAYMENT HAS ACTUALLY ALREADY BEEN RECEIVED AND APPLIED AS OF MAY 20TH, UH, 2024 AFTER THE NOTIFICATION OF THIS FROM IA.
UM, ADDITIONALLY FOR NUMBER TWO, A RECONCILIATION AND MONITORING PROCESS IS ALREADY IN PLACE AND IS JOINTLY ADMINISTERED, UH, ADMINISTERED, SORRY, BY HR AND FINANCE.
UH, THE CURRENT PROCESS IS SHARED BETWEEN HR AND FINANCE, IN WHICH HR NOTIFIES PAYMENT OR FINANCE OF ANTICIPATED VENDOR PAYMENTS AND GL ALLOCATIONS TO FINANCE RECEIVES AND APPLIES THE PAYMENTS TO THE APPLICABLE ACCOUNTS.
IN THIS INSTANCE, HR NOTIFIED FINANCE OF THE PENDING PAYMENT AND AGAIN, FOLLOWED UP ON THE REMITTANCE FINANCE ACKNOWLEDGED RECEIPT OF THIS ALERT.
HOWEVER, THE PAYMENT WAS NOT RECEIVED FROM THE VENDOR.
A RECOMMENDED THIRD STEP SHOULD BE ADDED TO THE PROCESS IN WHICH HR ESCALATES ANY PAYMENT NOT RECEIVED BY FINANCE AS SCHEDULED FOR MANAGEMENT FOLLOW-UP WITH THE VENDOR THROUGH TO COMPLETION.
IN ADDITION, A FOLLOW-UP MEETING WAS HELD IN MAY, 2024.
WITH THIS TPA REGARDING FAILURE TO REMIT AS CONTRACTED.
DURING THIS DISCUSSION, IT WAS NOTED THAT THE CITY IS ON A NON-STANDARD REMITTANCE CYCLE WITH THE VENDOR, WHICH THEY BELIEVE CONTRIBUTED TO THE DELAYS.
THIS HAS SINCE BEEN NOTED WITH ADDED MONITORING PROTOCOLS IN PLACE.
UM, IN ADDITION, UH, TO THE INTERNAL STEPS NOTED ABOVE, UH, WITH THE IMPLEMENTATION DATE ALREADY BEEN COMPLETED IN MAY, 2024.
THE NEXT ISSUE, OR SORRY, OPPORTUNITY FOR IMPROVEMENT IS ISSUE TWO.
UM, WHAT DOES THAT MEAN? KRISTEN, WOULD YOU LIKE TO SPEAK TO THAT
BUT WHAT DO WE MEAN WITH A NON-STANDARD REMITTANCE? AND THAT'S MY WORDING.
I PROBABLY MADE IT SOUND TOO TECHNICAL.
UM, BUT BASICALLY IN THE FOLLOW UP CONVERSATION WITH THAT PARTICULAR VENDOR, THE CITY'S ON A, A DIFFERENT DUE DATE THAN THE MAJORITY OF THEIR OTHER CUSTOMERS.
SO THEY HAVE THEIR OWN INTERNAL, YOU KNOW, WE'VE BEEN WITH THIS PROVIDER FOR A LONG TIME, SO THEY HAVE THEIR OWN INTERNAL CHECKS AND BALANCES OF WHEN OUR PAYMENTS ARE SUPPOSED TO BE SUBMITTED TO US, BUT IT IS OUTSIDE OF THEIR TRADITIONAL, UM, SCHEDULE.
AND SO BECAUSE THIS IS A, A LONG, UM, STANDING PARTNERSHIP, I, I DEFINITELY DON'T KNOW.
AND, UM, THE STAFF THAT WORK WITH THEM.
WE, WE DON'T KNOW WHY WE HAVE THIS DIFFERENT SCHEDULE.
IT WAS PUT IN PLACE BY, YOU KNOW, WHO KNOWS WHO AT THIS POINT.
I DID ASK THEM, IS THERE A NEED TO CHANGE THIS, UH, SO THAT WE REFLECT MORE, YOU KNOW, WHAT YOUR OTHER CUSTOMERS, UH, ARE DOING? AND THEY SAID, NO.
THEY JUST, THEY HAVE, UM, SIMILAR TO WHAT WE HAVE DONE, THEY'VE LOOKED AT THEIR CHECKS AND BALANCES.
THEY SAID IT SHOULDN'T BE AN ADDITIONAL MONITORING LAYER THAT THEY'VE PUT IN PLACE.
I DON'T KNOW WHY THE REMITTANCE IS NON-STANDARD, BUT THAT IS MY TECHNICAL WORDING THAT I PROBABLY SHOULD HAVE JUST PUT IN LAYMAN'S TERMS. COUPLE OF QUESTIONS ON THAT.
ARE YOU, WELL, IT DOESN'T, FIRST OF ALL, IT DOESN'T SOUND LIKE IT HAPPENED ONCE, THAT THE MONEY DIDN'T COME THROUGH ON TIME.
IS THAT CORRECT, SIR? IN OUR, UH, TWO YEARS THAT WE LOOKED AT IT ONLY, IT ONLY HAPPENED ONCE.
AND THE OTHER THING IS, ARE YOU OKAY WITH CONTINUING WITH THE CURRENT SYSTEM AS IS? YES.
WE, WE HAVE A, AGAIN, A LONGSTANDING RELATIONSHIP WITH THIS VENDOR.
UM, THEY PARTNER WITH US IN, UH, SEVERAL AREAS, I WILL SAY.
AND THERE'S ABSOLUTELY, YOU KNOW, NO EXCUSE FOR, UM, THE, THE LACK OF MONITORING FOR THAT PARTICULAR MONTH.
UM, BUT I DO WANT TO NOTE THAT THAT WAS THE MONTH AFTER OUR, UH, WORKDAY PROJECT LAUNCHED, UM, WHICH ALSO, UH, IMMEDIATELY LED INTO OPEN ENROLLMENT IN A BRAND NEW SYSTEM.
AND WE WERE, UM, UPENDED IN MANY WAYS.
AND SO, UH, I DO, YOU KNOW, STRONGLY BELIEVE THAT BECAUSE OUR TEAM WAS OPERATING IN A WAY THAT WAS EXTREMELY UNUSUAL.
THERE WAS A LAPSE IN THAT OVERSIGHT.
BUT, UM, I, I DON'T HAVE ANY ISSUES WITH THIS PARTICULAR PROVIDER.
WELL, I'VE GOT, I WAS GONNA HOLD THIS, BUT SINCE MS. CHRISTIAN IS, IS HERE IN PRESENT, SHE'S IN, DON'T HAVE TO
[01:05:01]
ACCEPT ON ONE OF THE SLIDES BEFORE, I THINK I WROTE THIS DOWN CORRECTLY.IT SAYS, REGARDING PROFIT AND LOSS REPORT, AND IT SAYS, PROFIT AND LOSS REPORT WAS REASONABLY ACCURATE, REASONABLY WHEN COMPARED WITH TPAS MONTHLY SUMMARY REPORT THAT WHAT DOES THAT MEAN? THE STOP LOSS? IS IT THE STOP-LOSS, YOU THINK? STOP IT.
YOU, YOU, I DON'T WANT TO INTER INTERRUPT YOUR QUESTION, BUT IT, I STOP LOSS WITH MY QUESTION.
I'M JUST TRYING TO F AND OUT WHEN, WHEN WE SAY REASONABLY ACCURATE TO THE MONTHLY, WHAT DO WE SAY? AND SO JUST FOR BACKGROUND, YOU KNOW, STOP LOSS IS OUR COVERAGE FOR REALLY HIGH COST CLAIMANTS, CATASTROPHIC CLAIMANTS.
UH, AND SO, UH, THERE WAS A LIMITATION IN, UH, SOME OF THE PHI INFORMATION THAT WE SHARED WITH INTERNAL AUDIT BECAUSE IT IDENTIFIED THOSE, UM, PARTICULAR HIGH COST CLAIMANTS.
AND SO I DON'T, I, THAT THAT PART IS NOT MY WORDING.
SO ZACH MAY WANNA SPEAK TO THAT.
SO, UH, WHAT WE'RE, WHAT WE'RE TALKING ABOUT THERE IS, UH, WE RECEIVED AN ANNUAL REPORT OF THAT STOP-LOSS, UM, REIMBURSEMENT.
AND WE ALSO RECEIVED A MONTHLY SUMMARY.
UM, AND WHAT WE DID WAS WE JUST COMPARED THE TWO AND, UM, THE MONTHLY REPORTS THAT WE GOT, UM, EQUALED, UH, VERY CLOSELY TO THAT ANNUAL ACTUAL FINANCIAL REPORT THAT THEY SENT THAT WE RECEIVED BACK.
AND, UM, AND REIMBURSEMENTS, THE AUDITORS ALWAYS PROVIDE REASONABLE ISSUANCE, NOT ABSOLUTE REASSURANCE.
UH, AND IN THIS CASE, UM, THE, THE, THE, THE AMOUNT WAS REASONABLY CLOSE, LET'S SAY WITHIN 5%.
AND IT WAS IN EXACT, AND I'M SURE THERE ARE SOME REASONS, MAYBE THE MONTHLY REPORTS HAD CERTAIN DATES OR THE ANNUAL REPORTS HAD CERTAIN DATES CUT OFF FROM THE BEGINNING AND END.
UM, SO, UH, THAT WE ARE ASSUMING THAT THAT'S WHAT COST IT, BUT WE FELT COMFORTABLE TO, UM, BELIEVE THAT THOSE WERE REASONABLY CLOSE.
SO IT'S AN AUDITOR'S CONCLUSION.
AND CAN I ALSO ADD THAT IN ADDITION TO, YOU KNOW, THIS PARTICULAR REVIEW, UM, MONITORING OUR STOP-LOSS, IT IS A COLLABORATIVE EFFORT BETWEEN BOTH HR, OUR BROKER, THE BUDGET TEAM, AND FINANCE.
SO WE DO A LOT OF RECONCILIATION THROUGHOUT THE YEAR ON OUR STOP-LOSS REIMBURSEMENTS, WHAT WE'RE EXPECTING TO RECEIVE, UH, AND WHAT IS ACTUALLY RECEIVED.
IT'S KIND OF A MOVING TARGET DEPENDING ON, YOU KNOW, WHERE PEOPLE ARE IN THE CLAIMS PROCESS.
CHRISTIAN, ARE YOU, ARE YOU COMFORTABLE, YOU COMFORTABLE WITH THE REASONABLE ACCURACY OF, OF THE, THE STOP LOSS AS REFLECTED IN THE STOP LOSS? OR ARE YOU COMFORTABLE WITH, I UNDERSTAND THE, I UNDERSTAND THAT THE LATERALS AND THE TIME CHANGES AND RECONCILIATIONS AND, AND THE NUMBER OF HANDS THAT ARE SORT OF IN, IN, IN, AND THE POT ON THIS.
I'M VERY COMFORTABLE WITH OUR STOP-LOSS PROCESS AND OUR INTERNAL CONTROLS AND MONITORING AROUND STOP-LOSS REIMBURSEMENTS.
AND I DO UNDERSTAND THE COMPLEXITIES THAT COME WITH THIS TYPE OF, UM, COVERAGE.
SO I'M, I'M, I'M COMFORTABLE WITH OUR STOP-LOSS PROCESS.
SO REASONABLY ACCURATE MEANS THAT MEANS, MEANS EXACTLY THAT.
IT DOES NOT MEAN REFLECT ANY RE ANY REASONABLE INACCURACIES.
IT MEANS YOU, YOU'RE COMFORTABLE WITH THAT DESCRIPTION.
WHAT I BELIEVE THAT IS REFERRING TO, AND I'M LOOKING TO THE AUDIT TEAM, IS IT'S REASONABLE AS FAR AS WHAT THEY HAVE TO, RIGHT, RIGHT.
DETERMINE THE ACCURACY OF OUR REIMBURSEMENTS ON THE ACCOUNTING AND BUDGET SIDE.
IS THAT WOULDN'T BE AN ACCURATE NO.
LIKE WE WOULDN'T BE COMFORTABLE WITH, THIS IS REASONABLE.
WE WANT IT, WANT IT TO BE SPECIFIC ON YOUR SIDE.
ARE YOU COMFORTABLE WITH IT? YES, I'M COMFORTABLE WITH THAT ASSESSMENT.
THANK, THANK YOU VERY MUCH, CHRIS.
AND YOU AS AN AUDIT TEAM, YOU'RE COMFORTABLE WITH, UH, THE ACCESS THAT YOU HAD THROUGH THE INFORMATION IN ORDER TO DO THE, THE AUDIT ITSELF.
UH, SIR, IF I MAY JUMP INTO, OBVIOUSLY, AND, YOU KNOW, YOU CAN SCOPE THE AUDIT, UM, EXTRA CAN DO EXTREMELY THOROUGH, OR YOU CAN SCOPE IT DOWN TO, UM, SINCE WE INITIATED THE AUDIT, ME AND JED, UM, WE AND CHRISTIAN, WE WORK TOGETHER TO COME UP WITH THIS, UH, WITH THE SCOPE.
SO WITHIN THE SCOPE OF THE AUDIT, WE ARE COMFORTABLE.
UM, SO, UH, THAT'S, THAT'S, THANK YOU, JED.
THEY BOTH ANSWERED MY QUESTION.
I'M ASSUMING I'LL BE BACK, SO I'LL JUST
AND, AND, AND HONESTLY, LET ME SAY THIS TOO.
I, UH, I'M CERTAIN THAT OFTENTIMES WE WOULD LIKE FOR YOU TO JUST GO STRAIGHT ON THROUGH, UH, BUT, UH, AS YOU GET A LITTLE OLDER, YOUR MIND DOESN'T CAPTURE AND, UH, REMEMBER A WHOLE BUNCH OF THE INFORMATION.
[01:10:01]
SO A LOT OF TIMES I MAY STOP YOU INT NOT YOU, I'M TALKING TO THE AUDIT TEAM NOW,THAT WAY I DON'T HAVE TO WORRY ABOUT REMEMBERING IT LATER ON.
UH, SO I'LL MOVE ON TO OPPORTUNITY FOR IMPROVEMENT.
NUMBER TWO, THIS HAS TO DO WITH, UH, CLAIMS AUDIT OVERVIEW.
UH, THE CITY'S MEDICAL AND DENTAL HEALTH INSURANCES ARE SELF-FUNDED, AS I SAID EARLIER, BY CONTRIBUTIONS FROM THE CITY AND PREMIUMS PAID BY POLICY HOLDERS.
UH, TPAS ARE CONTRACTED BY THE CITY TO PROVIDE ADMINISTRATIVE SERVICES AND HEALTH BENEFIT SERVICES TO THE SUBSCRIBERS.
EACH WEEK, THE MEDICAL AND DENTAL TPAS PROCESS THE CLAIMS AND DEDUCT THE COST OF THE CLAIMS FROM THE CITY'S BANK ACCOUNT.
UH, PER THIS, UH, RESPECTIVE SERVICE CONTRACTS, THE CITY HAS THE RIGHT TO AUDIT THESE TPA RECORDS, UH, RELATING TO ITS INSURANCE CLAIMS. UM, THE CITY HAS NOT HIRED A THIRD PARTY AUDITOR TO CONDUCT DETAILED CLAIMS AUDIT, UH, DESPITE THE RECOMMENDATION FROM THE 2015 BILLINGS AUDIT BENEFITS BILLING AUDIT.
AND ALTHOUGH THE CITY HAS ACCESS TO CLAIMS DETAILS AND TPAS PORTAL, THERE IS CURRENTLY NO CLAIMS REVIEW PROCESS IN PLACE.
UM, ACCORDING TO THE CITY'S ANNUAL COMPREHENSIVE FINANCIAL REPORTS, THE TOTAL AMOUNT THE CITY HAS PAID FOR CLAIMS SINCE THE LAST REPORT IN 2015 IS APPROXIMATELY $207 MILLION WITH FISCAL YEAR 2023 BEING APPROXIMATELY $30 MILLION.
UM, REGULAR AUDITS, UM, ENSURE THAT FUNDS ARE USED APPROPRIATELY.
UH, IT MINIMIZES LOSSES FROM CLAIM OVERPAYMENTS OR FRAUD, AND ENSURE EMPLOYEES ARE CLAIMANTS ARE RECEIVING THE BENEFITS TO WHICH THEY'RE ENTITLED UNDER THE CITY POLICIES.
UH, SUCH AUDITS ALSO AIM TO ENSURE THAT THE TPAS ARE MANAGING CLAIMS EFFECTIVELY AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE CONTRACT WITH THE CITY, SUCH AS PROVIDING IN-NETWORK DISCOUNTS.
UH, THIS INCLUDES VERIFYING CLAIMS ARE PROCESSED ACCURATELY, PROMPTLY, AND ARE COMPLIANT WITH POLICY TERMS AND REGULATORY REQUIREMENTS.
UM, UPON AAA'S INQUIRY TPA A PROVIDED A SOC ONE REPORT, UM, COVERING OCTOBER 1ST, 2022 THROUGH SEPTEMBER 30TH, 2023 TO THE CITY.
WHILE THIS PROVIDES CERTAIN ASSURANCE RELATED TO INTERNAL CONTROLS OVER THE FINANCIAL REPORTING AND CLAIMS PROCESSING, IT'S STILL IMPORTANT FOR THE CITY TO HIRE A CLAIMS AUDITOR TO VERIFY THE ACCURACY OF CLAIMS DETAILS.
UM, I WOULD RECOMMEND THAT HR MANAGEMENT SHOULD HIRE A THIRD PARTY AUDITOR TO CONDUCT A COMPREHENSIVE CLAIMS AUDIT PERIODICALLY, AND TO DEVELOP, IMPLEMENT, AND DOCUMENT A PROCESS TO REVIEW A SAMPLE OF CLAIMS MONTHLY.
THIS REVIEW SHOULD INCLUDE A MINIMUM VERIFICATION OF COVERAGE ELIGIBILITY, UM, MANAGEMENT, PARTIALLY CONCURS.
AND THEIR ACTION PLAN IS, UM, THAT THE CITY ESTABLISHED A NEW HEALTH BENEFITS BROKER IN 2022, AS MENTIONED EARLIER, WHO WAS SPECI, UH, SPECIFICALLY IDENTIFIED TO DEVELOP BEST PRACTICES IN THIS AND RELATED AREAS.
AS A RESULT, THE CITY CONDUCTED A FORMAL PROCUREMENT PROCESS TO EVALUATE HEALTH TPAS IN 2024, WHICH IS THE PRECURSOR TO DEVELOPING THE AUDIT CYCLE.
THIS EFFORT INCLUDED TERMS FOR PROVIDING CREDIT DOLLARS TOWARDS FUNDING AND ESTABLISHING AUDIT PROTOCOLS.
UH, BEST PRACTICE IN THIS AREA IS TO PARTNER WITH A FIRM THAT HAS THE EXPERTISE TO REVIEW CLAIMS AND EVALUATE TPA ADMINISTRATION WITHIN CONTRACT PARAMETERS.
CLAIMS AUDITS FOLLOW AN ANNUAL LOOKBACK CYCLE ON THE AVAILABLE DATA.
UH, ESTIMATES FOR COMPLETION OF A CLAIMS OR PHARMACY AUDIT ARE FOUR TO SIX, UM, MONTHS, AND CAN RANGE IN PRICE FROM $20,000 TO $50,000 EACH PAYABLE BY THE CITY.
THE CITY DOES NOT HAVE THE RESOURCES NOR EXPERTISE TO CONDUCT CLAIMS ANALYSIS INTERNALLY PER INTERNAL AUDITS RECOMMENDATION, NOR IS THERE RECOMMENDATION, SORRY, RECOMMENDATION, INDUSTRY STANDARD.
IN ADDITION, THE CITY PARTNERS WITH TPAA, AN INDUSTRY LEADER IN THIRD PARTY ADMINISTRATION WHO IS CLOSELY REGULATED, MONITORED, AND AUDITED AGAINST SERVICE, UH, DELIVERY COMMITMENTS.
AND THE IMPLEMENTATION DATE OF THAT IS JANUARY, 2025.
GENTLEMEN, ANYTHING THINK I HAVE JUST ONE COMMENT, RIGHT? I THINK THE AUDIT WAS THANK, THANK YOU J FOR FOR CLARIFYING SCOPE AND I THINK WITHIN SCOPE THAT YOU AND KRISTEN AND, AND JU HAD COME UP WITH, IT SOUNDS LIKE THE AUDIT WAS DONE WITHIN THE SCOPE OF WHAT WAS PLANNED AND DISCUSSED.
UH, I THINK JACKSON AUDIT, I'M NOT THE PARTIALLY CONCURRED DOESN'T, DOESN'T CONCERN ME.
'CAUSE YOU EXPLAINED THAT VERY WELL.
ALSO, I UNDERSTAND FROM MY OTHER LIFE, WHEN YOU START MIXING AUDIT WITH HEALTH ISSUES, YOU, YOU HAVE TO BE BRAVE TO EVEN GO THERE INITIALLY AND THE COMPLEXITIES OR JUST INSURMOUNTABLE.
SO I, I, I COMMEND THIS FOR EVEN, EVEN, UH, WITHIN THE SCOPE THAT WERE SET FOR DOING THIS AUDIT.
AND, UH, UH, I LOOK FORWARD TO THE IMPROVEMENTS THAT WERE FOUND AND, UH, BECAUSE OF THE CORPOR THE CORPORATION THAT, THAT, UH, A JUDGE JED ARTICULATED AND CHRISTIAN'S RESPONSE, YOU KNOW, I THINK IT'S WITHIN THE SCOPE.
[01:15:01]
YOU'VE HIT THE TARGET, SO, SO I APPRECIATE THE FINDINGS AND THE OUTCOME.I'D LIKE FOR YOU TO GO BACK TO THE PARTIALLY CONCUR AND GIVE ME, NOW THIS IS THE SECOND ONE HERE.
GIVE ME A LITTLE, IN LITTLE BACKGROUND MORE ABOUT WHAT THAT PARTIAL CONCUR CONCUR IS IN THAT AREA.
SO, UM, TO GO BACK TO INTERNAL AUDITS, UH, RECOMMENDATION, UM, UH, ONE HIRE A THIRD PARTY AUDITOR, SO I EXPLAINED THE PROCESS.
SO IT'S, IT REALLY IS A, IT'S A PROGRESSION THAT WE HAVE TO GET TO, AND THAT'S ONE OF THE REASONS WHY WE, UM, HAVE BEEN ON THIS STRATEGIC PLAN WITH OUR HEALTH BENEFITS.
THE PARTIALLY CONCUR THAT I INCLUDED, UM, WAS ABOUT DEVELOPING A MONTHLY PROCESS FOR CLAIMS AUDIT.
UM, MY STAFF DOES NOT HAVE THE EXPERTISE TO MONITOR MEDICAL CLAIMS, ESPECIALLY WE HAVE, WITH US BEING SELF-INSURED, WE HAVE OVER 5,000 PARTICIPANTS ON OUR, UH, HEALTH BENEFITS.
UH, WE DON'T HAVE MEDICAL BILLING AND CODING AND, UH, A LOT OF THE EXPERTISE THAT WOULD COME FROM AN EXTERNAL AUDIT.
THAT'S WHY OUR FOCUS HAS BEEN ON, UM, BUILDING OUR PARTNERSHIP, UH, GOING OUT FOR AN RFP FOR, YOU KNOW, NEW BENEFITS.
AND THEN WE HAVE ALSO BUILT WHAT YOU'LL SEE IN THE UPCOMING BUDGET, UM, BUILT IN A LINE ITEM FOR THE, THE, UM, BENEFIT AUDIT PROCESS.
UM, BECAUSE AS A PART OF OUR, UM, RFP, WE HAVE CREDITS TOWARDS THAT.
SO WE WANT, WE WANT THAT PROCESS TO HAPPEN, BUT WE ALSO WANT DOLLARS, UH, TOWARDS IT.
SO THE CITY IS NOT FULLY INCURRING THAT CAUSE.
SO IT'S BEEN A PRO PROGRESSIVE, UM, PLAN THAT HAS ALREADY BEEN IN PLACE THAT PREDATES AUDIT.
BUT AGAIN, THE PARTIALLY CONCUR WAS ABOUT THE RECOMMENDATION FOR INTERNALLY AUDITING MEDICAL CLAIMS. WE JUST DO NOT HOUSE THAT EXPERTISE.
AND SO BEST PRACTICE IS TO MAKE SURE THERE'S FUNDS, UH, ALLOCATED FOR THAT AND TO PARTNER WITH AN EXPERT TO BE ABLE TO DO THAT.
UM, AS SMART AS WE ARE, BLUE CROSS BLUE SHIELD IS NOT GONNA SAY, YES, COME IN HERE.
AND, UM, I APOLOGIZE FOR SAYING THE NAME OF THE PROVIDER, BUT IT'S PUBLIC INFORMATION.
OUR, OUR BENEFIT PARTNER IS NOT GOING TO JUST OPEN THE DOOR AND ALLOW US TO GO IN AND AND AUDIT ALL OF THEIR INFORMATION.
AND SO THAT'S WHY PARTIALLY CONCURRED ON THAT RECOMMENDATIONS SPECIFICALLY.
SO FOR CLARIFICATION, WE ARE SAYING THEN THAT YOU DO FEEL THAT WE NEED THE MONITOR, OR DO WE HAVE TO LOOK AT IT EACH MONTH, BUT WE'RE TALKING THOUSANDS AND MILLIONS OF DOLLARS HERE THAT WE HAVE TO LOOK AT IT CONSISTENTLY.
WE DON'T HAVE THE STAFF TO DO THAT, BUT I SAW SOMETHING THERE WHERE WE MAY HIRE SOMEONE TO DO IT, RIGHT.
THAT'S THE PIECE THAT I, ALRIGHT, ABSOLUTELY.
THAT'S ALREADY, THAT WAS ALREADY A PART OF OUR STRATEGIC PLAN, UH, FOR HEALTH BENEFITS.
AND THE, THE ONLY, UM, ADDITION TO THAT IS THAT WE JUST WENT THROUGH A FORMAL PROCUREMENT PROCESS FOR BENEFIT PARTNERS AND AS A PART OF THAT FORMAL PROCESS, WE ASKED FOR CREDITS TOWARDS, UH, AUDIT DOLLARS.
AND SO YOU'LL SEE THAT REFLECTED IN THE, IN THE BUDGET AS AN ACTUAL LINE ITEM AS WELL.
ALRIGHT, ANY OTHER QUESTIONS? THANK YOU SO VERY MUCH.
IS THIS THE, WE GOT ONE MORE? NO, WE HAVE IT.
WE GOT ONE MORE TO WE'RE NOT DONE YET.
OH, YOU GET, OH, WE, WE ARE STILL MOVING.
WE CAN CONCISE IT AND HIT THE HIGH LEVEL.
UH, SO THE NEXT ONE IS THE CITYWIDE HIPAA COMPLIANCE FRAMEWORK AND TRAINING.
A HIPAA COMPLIANCE FRAMEWORK IS ESSENTIAL FOR ENSURING THE CONFIDENTIALITY, INTEGRITY AND SECURITY OF PROTECTED HEALTH INFORMATION.
IT INVOLVES CONDUCTING RISK ASSESSMENTS AND DEVELOPING COMPREHENSIVE POLICIES, PROCEDURES, AND PRACTICES THAT ALIGN WITH THE REQUIREMENTS OF HIPAA, UH, PRIVACY AND SECURITY RULES.
UM, I HAVE FOUND THAT THE CITY CREATED A HIPAA CONFIDENTIALITY AGREEMENT AS A RESULT OF THE 2015 BENEFITS AUDIT, BUT IT DOES, UH, NOT APPEAR TO BE USED ANYMORE.
INSTEAD, EMPLOYEES SIGN AN ACKNOWLEDGEMENT FORM OF THE HR 17 STANDARDS OF EMPLOYEE CONDUCT DIRECTIVE UPON HIRE.
AND THIS DIRECTIVE DOES NOT COVER ALL COMPONENTS OF HIPAA.
UH, DURING THE AUDIT, WE IDENTIFIED THAT FIVE HR AND TWO NON, UM, HR EMPLOYEES HAD ACCESS TO PI WITHIN TPAS PORTAL.
UM, AND AS A REVIEW OF THE HIPAA TRAINING CERTIFICATES, IT INDICATED THAT THREE OF THESE EMPLOYEES RECEIVE NO TRAINING AND FOUR HR EMPLOYEES RECEIVE TRAINING DURING THE AUDIT.
UM, I RECOMMENDS THAT CITY MANAGEMENT SHOULD WORK WITH THE CITY ATTORNEY'S OFFICE TO DEVELOP AND IMPLEMENT A POLICY THAT ESTABLISHES A FRAMEWORK FOR SUPPORTING HIPAA COMPLIANCE, SUCH AS PERFORMING AND DOCUMENTING RISK ASSESSMENTS AS WELL AS ENFORCING TRAINING STANDARDS.
AND SECOND, UH, ENSURE ALL STAFF WITH ACCESS TO PHI RECEIVE PERIODIC HIPAA TRAINING MANAGEMENT, PARTIALLY CONSER CONCURS.
AND THEIR ACTION PLAN IS THAT THE ELEMENTS OF HIPAA, WHICH WOULD PERTAIN TO CONFIDENTIALITY AND DISCLOSURE
[01:20:01]
AT THE DEPARTMENT LEVEL, ARE DIRECTLY STATED IN THE CITY'S STANDARD, UM, OF CONDUCT, WHICH IS SIGNED BY EVERY EMPLOYEE AT HIRE.CITY MANAGEMENT FORESEES FULFILLING THE AUDIT RECOMMENDATIONS ON THIS ITEM IN TWO PHASES.
ONE, UNDERSTANDING THE APPLICABLE LEGAL AND REGULATORY REQUIREMENTS FOR HIPAA COMPLIANCE AND DEVELOPING A POLICY FRAMEWORK AND TWO, WRITING AND IMPLEMENTING A POLICY IN RELATED PROCEDURE CONSISTENT WITH THE FRAMEWORK, IT'LL BE CITY'S MANAGE CITY MANAGEMENT'S GOAL AND COMMITMENT TO BUILD A POLICY AND ASSOCIATED IMPLEMENTATION THAT WILL BE ADMINISTRATIVELY SUSTAINABLE GIVEN THE LIMITED RESOURCES AND STAFFING AVAILABLE FOR IMPLEMENTATION OF AUDITS RECOMMENDATIONS.
A ROBUST FRAMEWORK SUGGESTED IN THE RECOMMENDATION TO INCLUDE PERFORMING AND DOCUMENTING RISK ASSESSMENTS MAY NOT BE FEASIBLE, GIVEN LIMITED RESOURCES AND OTHER PRIORITIES.
MANAGEMENT WILL CONSIDER ALL FACTORS INCLUDING UNDERSTANDING AND ASSESSING RISK, UH, COMPETING PRIORITIES AND RESOURCE LIMITATIONS WHEN IMPLEMENTING THESE RECOMMENDATIONS.
UH, THE IMPLEMENTATION DATE OF PHASE ONE IS SEPTEMBER 30TH, 2024 AND PHASE TWO, DECEMBER 31ST, 2024.
ASK MY WASN'T, BUT I WILL YOU GO RIGHT HERE JUST TO SAY, THIS IS HIPAA COMPLIANCE IS NON ABATE NONGO.
AND THAT, THAT'S VERY CRITICAL.
SO I LOOK FORWARD TO DOING, UM, MANAGER, WHATEVER WE NEED TO DO, WHETHER WE SEE IT IN THE BUDGET OR WHATEVER, WHATEVER WE NEED CHRISTIAN TO GET OURSELVES IN A POSITION WHERE WE CAN CHECK THE BOXES AND SAY YES ON COMPLIANCE IS, IS ABSOLUTELY NON-NEGOTIABLE.
UH, THAT, UH, THE FOLKS THAT, UH, THE FOLKS THAT, IT'S NOT OUR ART TEAM, BUT THE FOLKS THAT BRING THE MICRO FOLK, MICRO THE MICROSCOPE, WE LOOK AT THAT AND SAID, WE, THAT'S SITTING AT THE TABLE TODAY.
AND, UH, WE DON'T, WE DON'T NECESSARILY WANT THOSE FOLK, UH, IN OUR PRESENCE, MR. CITY MANAGER.
WE DON'T WANT TO HAVE THAT CONVERSATION, UH, WITH HIM.
'CAUSE AGAIN, IN MY OTHER LIFE, THAT CONVERSATION IS NOT A, NOT A PRETTY ONE.
SO WHATEVER RESOURCES WE NEED TO ENSURE THAT WE IMPLEMENT THE RECOMMENDATIONS OUTTA THE TEAM, THAT WE ARE IN COMPLIANCE, THAT I'M SURE THAT'S, THAT'S GONNA BE A TOP PRIORITY.
ANY, IT LOOKS LIKE YOU WANNA SAY SOMETHING BACK TO ME, SO FEEL FREE.
AND OBVIOUSLY, UH, COMPLIANCE IS NON-NEGOTIABLE.
LIKE THAT, THAT'S OUR COMMITMENT.
I, I THINK WHERE I WENT AND I, I WROTE THIS PART SPECIFICALLY.
THIS IS MORE FROM A MANAGEMENT STANDPOINT, BUT, UH, IN TERMS OF WHAT THE PARTIALLY CONCUR MEANS, IT'S COMPLIANCE.
OBVIOUSLY WE'RE GONNA CONCUR WITH THAT.
IT'S, UH, HOW FAR CAN WE GO IN TERMS OF DOCUMENTING, TRAINING AND, UM, YOU KNOW, PERFORMING AND DOCUMENTING RISK ASSESSMENTS AND, AND ALL THE SUGGESTIONS AND RECOMMENDATIONS BY AUDIT, WE MAY BE ABLE TO DO THAT AND, AND GO THAT FAR, UH, UNTIL WE FULLY UNDERSTAND WHAT, UH, WHAT THAT LOOKS LIKE, WHAT THE RESOURCES ARE REQUIRED, WE'RE GONNA GO AS FAR AS WE CAN.
BUT WITHOUT KNOWING THAT A HUNDRED PERCENT UNTIL WE DIG INTO THIS MORE, THAT'S WHY IT'S PARTIALLY CONCURRENT.
INSTEAD OF CONCUR, OBVIOUSLY WE'RE GONNA FOLLOW THE LAW.
UM, ANYTHING BEYOND THAT THAT'S GONNA TAKE RESOURCES.
I JUST, I WANNA BE ABLE TO MANAGE EXPECTATIONS FROM HOW FAR WE CAN TAKE THAT.
UH, WHETHER IT'S RISK ASSESSMENTS OR OTHERWISE, WE JUST NEED TO, WE NEED TO KNOW BEFORE WE MAKE THAT COMMITMENT.
ONCE I MAKE A COMMITMENT, I WANT TO KEEP IT.
AND SO I DON'T WANNA MAKE A COMMITMENT UNLESS I, I OR I DON'T WANNA MAKE A PROMISE THAT I KNOW I WON'T BE ABLE TO KEEP.
THAT'S WHERE I WENT WITH THAT.
DOCUMENTING TRAINING COULD BE A, A CONCERN, A PROBLEM.
THAT'S THE, THAT'S THE POINT IS WE NEED MORE INFORMATION BEFORE WE DECIDE EXACTLY WHAT THIS, WHAT THIS IS GONNA LOOK LIKE.
BECAUSE THERE'S A, AGAIN, A HUNDRED PERCENT COMMITTED TO WHATEVER THE, WHATEVER THE COMPLIANCE ASPECT IS, WE'RE GONNA DO IT.
WE ALWAYS KNOW THAT THERE'S MORE THAN THAT.
UH, ESPECIALLY FROM AN AUDIT PERSPECTIVE THAT, OKAY, WELL YOU DID THAT.
DID YOU SAY YOU DID IT? DID YOU DOCUMENT THAT YOU DID IT? UM, DID YOU, YOU KNOW THAT OKAY.
I DON'T WANT, WE ARE NOT GONNA, YEAH.
UH, WHAT, WHAT I'D LIKE TO DO, UH, THE END OF THAT SLIDE, SORRY.
YOU GO AHEAD, CHRISTIAN,
THE END OF THAT SLIDE IS, UH, I GUESS THE AREA THAT I WOULD GO TO AT THIS POINT.
AND, UH, WHERE YOU TALK ABOUT, UH, THE, THE TIMEFRAME IMPLEMENTATION OF THE TIME.
PHASE ONE, SEPTEMBER 30TH, 2024.
DECEMBER 31ST, 2024, RIGHT DOWN THE ROAD.
AND WE WOULD THEN HAVE OPPORTUNITY TO SEE JUST EXACTLY WHAT IT LOOKS LIKE AND WHAT IT'S GOING TO ENTAIL.
UH, BECAUSE AT THIS POINT I'M JUST BASED ON WHAT I'M SEEING UP TOP THERE, IT JUST DOES NOT, BUT AS YOU'RE SAYING, IT COULD BE MUCH MORE
[01:25:01]
DETAILED.THE RECOMMENDATION SEEMED TO BE PRETTY REASONABLE, BUT NEITHER HERE NOR THERE, YOU WOULD KNOW THAT MUCH BETTER THAN MYSELF.
SO WILL THIS BE COMING BACK TO US, UH, ONCE THE IMPLEMENTATION HAS TAKEN PLACE YET? WELL, THAT'S UP TO THE COMMITTEE.
UM, YEAH, I'D LIKE TO SEE WHAT THE IMPLEMENTATION LOOKS LIKE, UH, ONCE IT'S, UH, PUT INTO, INTO WRITING.
THAT WILL HELP ME THEN TO BE ABLE TO SEE IF THE RECOMMENDATIONS ARE REASONABLE, IF THEY'RE NOT, WHAT THE CASE MAY BE.
CHAIRMAN, IF I MAY, UM, ATTORNEY, PLEASE LET ME KNOW IF I'M GOING OFF THE TOPIC.
UM, J AND I DISCUSSED AND J REQUESTED THAT, UH, WE LOOK AT THE PRIOR FEW YEARS AUDITS THAT WE HAVE DONE AND FOCUS MORE ON THE, ON THE AUDIT FOLLOW UPS, UH, NEXT YEAR, NEXT FISCALLY AS WE ARE PREPARING FOR THE ANNUAL AUDIT PLAN.
SO THIS COULD BE ONE THAT WE CAN INCORPORATE AS PART OF THAT PLAN.
I, I WOULD SAY EVEN DOGET SAID DECEMBER 31ST, I WOULD LIKE TO GIVE HIM A LITTLE BIT MORE TIME MAYBE BY MID NEXT YEAR
AND, UH, I HAVE NO PROBLEM AT ALL WITH THAT.
AS A MATTER OF FACT, YOU KNOW, WE'VE HAD DISCUSSIONS ABOUT LOOKING AT PAST ARTISTS VERSUS CONTINUING TO, UH, LOOK AT FUTURE ARTISTS AND SO ON AND SO FORTH.
AND, UH, I'M, I'M NOT SO, SO MUCH IN AN EITHER ARE, BUT MORE IN A BOTH END.
YOU KNOW, YOU GUYS, YOU'RE RIGHT, YOU HAVE TO WORK TOGETHER.
THERE'S NO WAY AROUND THAT PIECE.
AND WE, AS A COMMITTEE, WHAT WE TRY TO DO, WHAT I THINK WE TRY TO DO IS HELP YOU AND TO FACILITATE THAT PROCESS.
SO AS A RESULT OF THAT, UH, I DON'T HAVE ANY PROBLEM WITH WHAT YOU'RE, WHAT YOU'RE SAYING HERE.
GO AHEAD, CHRISTIAN, WHAT DO YOU, I JUST WANT TO, UH, CLARIFY A COUPLE OF THINGS.
SO IT'S, IT'S REALLY KIND OF TWO, UM, DISCUSSIONS IN THIS, UM, IN THIS FINDING.
SO THE FIRST IS ABOUT, UM, AN ACKNOWLEDGEMENT FORM, RIGHT? SO IT'S MENTIONED IN 2015 THAT INTERNAL AUDIT KIND OF, UH, CREATED THEIR OWN EMPLOYEE ACKNOWLEDGEMENT.
YOU KNOW, I MAY BE ACCESSING PHI OR OTHER CONFIDENTIAL INFORMATION.
UH, OUR EMPLOYEE STANDARDS OF CONDUCT, UH, DOES MENTION CONFIDENTIALITY AND, UM, UH, ENSURING, UH, PROPER PROTECTIONS.
SO THAT PORTION OF THE FINDING IS MORE ABOUT SEMANTICS.
SHOULD THEY SIGN THIS ACKNOWLEDGEMENT OR THAT ACKNOWLEDGEMENT.
BUT AT THE END OF THE DAY, TO COUNSEL, UM, COUNCILMAN WILLIAMS POINT, HIPAA IS A VERY COMPLICATED, UM, REGULATION.
UM, THE CITY HAS SEVERAL AREAS.
WE HAVE OUR, UM, CITY CARE CLINIC, WE HAVE RISK MANAGEMENT, WE HAVE PUBLIC HEALTH, WE HAVE, UM, OUR FIRE EMS, WE HAVE, UH, OUR GROUP HEALTH.
SO IT'S A MUCH FAR RE MUCH FARTHER REACHING, UH, REQUIREMENT.
AND, UM, THE CITY MANAGER AS WELL AS THE CITY, UH, ATTORNEY, UM, BOTH UNDERSTAND THAT.
AND I THINK THAT'S PART OF THE, WE NEED TO MAKE SURE THAT WE HAVE A CITYWIDE FOCUS ON THIS AND UNDERSTAND ALL OF THE TARGETS INSTEAD OF IT JUST BEING, UM, THE RECOMMENDATION, JUST BEING FOCUSED ON GROUP HEALTH.
'CAUSE WE HAVE OTHER AREAS THAT WE NEED TO HAVE A MUCH MORE ROBUST FRAMEWORK.
SO AN EMPLOYEE SIGNING AN ACKNOWLEDGEMENT DOES NOT PUT SAFEGUARDS IN PLACE, UH, THAT WOULD MEET HIPAA FRAMEWORK.
SO IT'S, UM, THE CITY MANAGER'S RECOMMENDATION WAS AROUND ESTABLISHING THAT LARGER FRAMEWORK THAT WOULD TAKE CARE OF ALL OF THE AREAS OF THE CITY THAT HAVE, UH, THESE REQUIREMENTS.
UH, AND HAVING A LITTLE BIT OF KNOWLEDGE AS FAR AS HIP WAS CONCERNED.
W-B-A-I-I DO AGREE THAT IN FACT WE DON'T HAVE A CHOICE WHEN IT COMES TO OUR, UH, FOLLOWING THE RULES.
UH, WHAT, WHAT MY CONCERNS ARE RIGHT NOW.
AND I'M, I'M NOT GONNA EVEN GO INTO A LOT OF THAT BECAUSE THAT'S SOMETHING WE CAN DO OFF OFFSITE, OFF STATION.
BUT MY CONCERN THEN BECOMES, OKAY, WE'VE JUST HEARD A REPORT HERE WHERE WE HAD EMPLOYEES LOOKING AT INFORMATION THAT WEREN'T EVEN TRAINED.
AND I'D LIKE TO SAY WE DON'T HAVE RECORD THAT THEY LOOKED OR NECESSARILY ACCESSING THESE DOCUMENTS, JUST THAT THEY HAD ACCESS TO IF THEY WANTED TO.
AND IT, IT, I WONDER JUST HOW FAR THE AUDIT TEAM CAN GO.
AND SO, UH, I'LL BE INTERESTED IN JUST SEEING HOW THAT'S WHAT I'M GONNA END THIS WITH.
HOW I'LL BE INTERESTED IN SEEING HOW WE, UH, WORD OUR PHASE ONE SEPTEMBER 30TH, PHASE TWO, DECEMBER.
AND, UH, JED HAS ALREADY SAID HE IS GONNA GIVE YOU THE APRIL MAY OF NEXT YEAR TO PULL THAT TOGETHER.
I'LL BE INTERESTED IN SEEING HOW WE PULL THAT WORDING TOGETHER ABSOLUTELY.
SUCH THAT WE CAN MAKE SURE THAT WE ARE COMPLIANT WITH HIPAA, BUT AT THE SAME TIME WE HAVE ACCESS THAT IS NECESSARY IN ORDER TO DO
[01:30:01]
WHATEVER THE AUDIT COSTS FOR.SO, CHAIRMAN, I MAY CLARIFY ONE THING.
UH, I KNOW BACK IN 2015, IF I'M LOOKING AROUND THE ROOM, UM, J WASN'T HERE, CHRISTIAN WASN'T HERE.
MAYBE MATT AND I
SO THE, THE CHECKLIST THAT WE WERE REFERRED HERE, WE DID NOT CREATE THAT THE CITY MANAGEMENT AT THAT POINT CREATED THAT.
I JUST WANTED TO CLARIFY THAT.
UM, IT'S NOT JUST AN HR, UM, IS WHERE WE HAVE THE PHI, WE HAVE THE HEALTH DEPARTMENT, WE HAVE CITY CARE CLINIC, FIRE DEPARTMENT.
I THINK THAT GIVES, THAT IS EVEN MORE REASON WHY WE NEED TO HAVE A FRAMEWORK.
BECAUSE NOW THE RISK HAS, YOU KNOW, THE RISK UNIVERSE HAVE IS, IS BIGGER.
AND I, I THINK, AND, AND I AGREE WITH COUNCILMAN WILLIAMS AND, YOU KNOW, WE JUST DON'T WANT, UM, IT, IT WON'T BE FUN, UH, IF YOU HAVE TO GO THROUGH A, A PENALTY OR SOMETHING LIKE THAT.
UM, YOU KIND OF MENTIONED A LITTLE BIT ABOUT THIS ONE ALREADY.
UM, I'LL, I'LL JUST BRIEFLY, UH, GO OVER THIS ONE.
SO THE MEDICAL AND DENTAL INSURANCE PROVIDERS USED BY THE CITY EACH HAVE ONLINE PORTALS AVAILABLE FOR THE CITY TO VIEW, UH, WEEKLY BILLS CLAIMS, AND STOP-LOSS DETAILS, AS WELL AS OTHER REPORTS, UH, LIKE YOU MENTIONED DURING TESTING, TWO NON-HR EMPLOYEES THAT WERE NOT TRAINED ON HIPAA REGULATIONS WERE FOUND TO HAVE EXCESSIVE ACCESS RIGHTS WITHIN THE MEDICAL PORTAL.
SPECIFICALLY, THESE EMPLOYEES COULD VIEW PHI IN FULL CLAIMS DATA FOR ALL EMPLOYEES.
AND THIS, UM, THIS CONDITION AND, AND, UH, ISSUE IS MAINLY RELATED TO ACCESS RIGHTS, NOT NECESSARILY THE HIPAA PORTION OF IT.
UM, SO THE RECOMMENDATION IS THAT HR MANAGEMENT SHOULD REEVALUATE ONLINE PORTAL ACCESS RIGHTS, AND LIMIT, UM, ACCESS ACCORDING TO SPECIFIC ROLES AND PERIODICALLY REVIEW ACCESS RIGHTS FOR APPROPRIATENESS, UH, MANAGEMENT CONCURS.
AND THEIR ACTION PLAN IS THAT, UM, EMPLOYEES OUTSIDE OF HUMAN RESOURCES MAY REQUIRE ACCESS TO THESE, UH, THE BILLING INFORMATION TO RECONCILE PAYMENTS.
HOWEVER, THIS ACCESS SHOULD BE LIMITED TO ONLY INFORMATION AS APPLICABLE, UM, OR BE PROVIDED WITH REDACTED REPORTING FROM HR.
UM, A FORMAL PROCESS WILL BE DEVELOPED TO PERIODICALLY REVIEW VENDOR PORTAL ACCESS, WHICH IS CURRENTLY REVIEWED AT HIGHER AND TERMINATION OF BENEFIT TEAM MEMBERS.
ABSENT A CITYWIDE DIRECTIVE PROVIDING THE GUIDANCE EMPLOYEES HAVE SIGNED ACKNOWLEDGEMENT OF THE STANDARDS OF CONDUCT, WHICH ADDRESS CONFIDENTIALITY AND UNINTENDED DISCLOSURE OF SAID INFORMATION.
AND IN RELATION TO THE HIPAA, UH, THIS FINDING IS REDUNDANT TO ISSUE THREE.
ANY QUESTIONS ON THIS ONE? NO, SIR.
UM, NUMBER FIVE, PERSONALLY IDENTIFIABLE INFORMATION, PII FOUND ON CITY DOCUMENT RETENTION SYSTEM.
UM, EVERY MONTH THE CITY RECEIVES STATEMENTS FROM BENEFIT PROVIDERS, UM, HR REVIEWS AND INTERNALLY APPROVES THE STATEMENTS FOR PAYMENTS.
UH, AND THIS PROCESS INVOLVES THE UPLOADING OF THESE STATEMENTS, UH, OR DOCUMENTS TO THE FINANCE MODULE OF THE CITY'S DOCUMENT RETENTION SYSTEM.
UH, DURING I'S REVIEW OF THESE STATEMENTS IN THE DOCUMENT RETENTION SYSTEM, 40 STATEMENTS WERE FOUND TO CONTAIN EMPLOYEES SOCIAL SECURITY NUMBERS, ONE OF WHICH LISTED 556 SOCIAL SECURITY NUMBERS.
UPON I'S NOTIFICATION OF THIS TO HR, THE PII ON THE STATEMENTS WERE REDACTED.
UM, I RECOMMENDS THAT HR MANAGEMENT SHOULD REEVALUATE THEIR PROCESS TO ENSURE THAT ALL PII INFORMATION IS REDACTED BEFORE STORING ON THE CITY'S DOCUMENT RETENTION SYSTEM.
UH, THEIR RESPONSES THAT THEY PARTIALLY CONCUR AND THAT, UM, THEIR PROCESS OF REDACTING OR LIMITING PII WHEN ADDING SUPPORTING DOCUMENTATION TO THIS STORAGE SYSTEM IS ALREADY IN PLACE.
AND THE MAJORITY OF THESE DOCUMENTS REFERENCED WERE FROM A VENDOR WHO INCLUDED A 10 DIGIT CONTROL NUMBER ON THEIR MONTHLY INVOICES FOR EACH INDIVIDUAL.
THIS WAS LATER DETERMINED TO BE EMPLOYEE SOCIAL SECURITY NUMBERS WITH A LEADING ZERO.
UH, ANY REMAINING BILLS WITH PII HAVE SINCE BEEN ADDRESSED.
AND OUR INTERNAL PRACTICE IS TO PROVIDE THE A RECONCILIATION STATEMENT ONLY FOR PAYMENT, WHICH DOES NOT INCLUDE THE PII.
ANY QUESTIONS ON THIS ONE? NO.
AND LASTLY, UH, ELIGIBILITY REVIEW.
SO IN ADDITION TO PROVIDING INSURANCE COVERAGE TO EMPLOYEES AND THEIR DEPENDENTS, THE CITY ALSO OFFERS COVERAGES TO RETIREES AND RETIREE DEPENDENTS, UM, FROM DECEMBER, 2023 TO RETIREES.
SINCE THE CITY IS PROVIDING COVERAGE FOR APPROXIMATELY 1400 RETIREES, INDEPENDENTS, UM, IA SAMPLED 20 OF THESE ENROLLEES TO VERIFY THEIR ELIGIBILITY.
AND DURING THIS TEST, HR INFORMED IA THAT FIVE OF THE SAMPLED ENROLLEES HAD SPECIAL AGREEMENTS WITH THE CITY, UH, FOR THEIR BENEFITS.
HR PROVIDED THE DOCUMENTATION FOR ONE OF THESE ENROLLEES RECEIVING EXECUTIVE LEVEL RETIREMENT, UH, RETIREMENT BENEFITS.
IA ALSO ATTEMPTED TO LOCATE THE REMAINING SPECIAL AGREEMENTS OF THE OTHER FOUR, BUT WAS UNSUCCESSFUL.
HR WAS ABLE TO PROVIDE THE ELIGIBILITY INFORMATION FOR THE REMAINING 15 ENROLLEES.
UM, THE HR DEPARTMENT ALREADY HAS IN PLACE PROCESSES THAT HELP IDENTIFY RETIREES WITH LIFE STATUS CHANGES, SUCH
[01:35:01]
AS REACHING AGE 65 DEATH, OR THE AGING OUT OF A CHILD DEPENDENT.HOWEVER, SOME STATUS CHANGES COULD BE MISSED DUE TO NOT INCLUDING RETIREE DEPENDENTS IN THEIR ANNUAL, UM, DEPENDENT AUDIT THAT THEY PERFORM EVERY YEAR.
UM, IA RECOMMENDATION IS THAT CITY ADMINISTRATION SHOULD DEVELOP AND IMPLEMENT A PROCESS TO ENSURE ALL AGREEMENTS ARE RETAINED IN ACCORDANCE WITH LOCAL SCHEDULE.
GR AND HR MANAGEMENT SHOULD PERFORM A PERIODIC ELIGIBILITY REVIEW OF RETIREE DEPENDENTS.
MANAGEMENT PARTIALLY CONCURS AND STATE THAT ADMINISTRATION WILL DETERMINE THE BEST METHOD OF STORING ANY SPECIAL AGREEMENTS GOING FORWARD.
AND THAT HR DOES CONCUR THAT A PROCESS SHOULD BE IMPLEMENTED TO INCLUDE RETIREE DEPENDENTS IN THE ANNUAL DEPENDENT ELIGIBILITY AUDIT MOVING FORWARD, WHICH IS CURRENTLY LIMITED TO ACTIVE PARTICIPANT DEPENDENTS WITH AN IMPLEMENTATION DATE OF FEBRUARY, 2025.
UH, ACTUALLY WE HAVE A ONE QUICK ONE.
WITH THIS AUDIT, WHAT I'M GONNA, UH, I JUST WANT TO END IT BY SAYING THIS.
I THINK ONE OF THE THINGS THAT WE ALL, UH, CAN COME, CAN INCUR ON TODAY IS THE PARTNERSHIP.
AND I'M VERY HAPPY WITH THE PARTNERSHIP THAT I SEE TAKING PLACE BETWEEN, UH, THE THREE DEPARTMENTS, HR, MANAGEMENT, AND LEGAL.
BECAUSE THERE IS WHERE IT'S ALL REALLY GOTTA COME TO, COME TO BEAR.
IN ORDER FOR US TO COME UP WITH A DOCUMENT THAT WE'RE GOING TO BE ABLE TO LIVE WITH, IT'S GONNA SECURE AND SAFEGUARD HR, IT'S GONNA SECURE AND SAFEGUARD OUR EMPLOYEES.
IT'S GOING TO ALLOW AUDITING TO DO WHAT IT NEEDS TO DO.
THAT PARTNERSHIP HAS TO BE INTACT.
AND SO AS A RESULT OF THAT, WHEN I SEE AND HEAR YOU TALKING TOGETHER, THE MANNER OF WHAT YOU'RE DOING, I THINK THE ONLY THING THAT WE CAN DO AT THIS POINT IS WAIT AND SEE JUST HOW THE WRITING, WHAT THE WRITTEN DOCUMENT TURNED OUT TO BE.
BECAUSE IN THE END, IT REALLY TURNS OUT TO BE THAT IF WE ARE SUED OR WHATEVER THE CASE MAY BE,
BUT IF WE CAN ALLEVIATE THAT BEFORE WE GET THERE, BEFORE WE GET TO ANY OF THOSE SITUATIONS, THAT'S WHAT THE AUDIT IS TRULY ALL ABOUT, TO HELP US TO SEE WHAT WE MAY BE FEELING, AND THEN TO SECURE THE BEST WAY TO GO ABOUT RESOLVING THOSE ISSUES.
SO I JUST WANNA SAY THANK YOU SO VERY MUCH FOR THE WORK THAT YOU'VE BEEN DOING.
UH, WE'VE, WE'VE DEALT WITH SOME VERY SENSITIVE STUFF HERE TODAY, BUT I THINK THAT WE ARE IN VERY GOOD HANDS WITH THAT.
THANK YOU SO VERY MUCH, CHAIRMAN.
I THINK MATT MAY BE, UH, THE BEST PERSON TO ADDRESS THIS.
I WILL ADD SOMETHING TO HIM, UH, AFTER, AFTER HE COVERS THIS.
WHAT THIS ITEM'S ABOUT IS, UH, BASED ON OUR, YOUR Y'ALL'S COUNSEL'S POLICIES, WE ARE TO GO OUT EVERY FIVE YEARS FOR A REQUEST FOR PROPOSAL FOR EXTERNAL AUDIT SERVICE RELATED TO OUR FINANCIAL STATEMENTS.
AND Y'ALL REMEMBER SARAH DEMPSEY, WHO COMES FROM WEAVER AND PROVIDES THE, THE ANALYSIS.
WHAT WE WOULD LIKE, WHAT I WOULD LIKE TO DO IS REQUEST, SO THIS, WE'RE UP FOR THAT THIS YEAR, SO WE'VE GONE THROUGH THEM FIVE YEARS, BUT I WOULD LIKE TO REQUEST FOR AN EXTENSION OF TWO MORE YEARS BEYOND THAT FOR REALLY ONE SPECIFIC REASON.
UH, KRISTEN EARLIER MENTIONED, UH, THE IMPLEMENTATION OF A NEW, UH, PAYROLL HR SYSTEM.
WE ARE IN THE THICK OF A FINANCE SYSTEM UPGRADE RIGHT NOW, AND MY STAFF IS FULLY DEDICATED TO THAT RIGHT NOW IN IMPLEMENTING THAT NEW SOFTWARE TO HAVE A NEW AUDITOR COME IN AND HAVE TO, UNFORTUNATELY THERE IS JUST A LOT OF TRAINING AND A LOT OF BACK AND FORTH WHEN A NEW AUDITOR COMES IN TO GET THEM UP TO SPEED ON HOW WE DO THINGS.
I WOULD LIKE TO REQUEST A TWO YEAR EXTENSION TO KEEP WEAVER THE SAME PRICING MODEL THAT THEY'VE BEEN DOING, AND THEN WE WILL GO OUT FOR BID AFTER THE IMPLEMENTATION OF THIS FINANCE SYSTEM.
IT'S JUST AT THE TIME WITH RESOURCES, IT'S GOING TO BE EXTREMELY DIFFICULT TO PROPERLY GIVE THE AUDIT THE ATTENTION IT NEEDS AND THE WORKDAY SYSTEM IMPLEMENTATIONS THE, THE ATTENTION IT NEEDS.
SO WITH THAT, I WOULD LIKE TO REQUEST THAT, UH, THE AUDIT COMMITTEE ALLOW US TO GO FORWARD TO COUNSEL TO REQUEST THIS EXTENSION BEYOND THEIR POLICY FOR THIS ONE TIME, ONE TIME ITEM OF JUST HAVING TWO ADDITIONAL YEARS BEYOND THE FIVE YEAR WITH WEBER CHAIRMAN.
IF I MAY ADD SOMETHING TO, UH, TO WHAT MATT JUST SAID, THE COUNCIL POLICY SAYS THE AUDIT COMMITTEE AND STAFF SHALL REVIEW THE OUTSIDE AUDIT EACH YEAR TO DETERMINE WHETHER THE CITY COUNCIL SHOULD CONSIDER A CHANGE IN THE FIRM CONDUCTING THE OUTSIDE AUDIT OR A CHANGE IN THE SENIOR AUDITOR IN KEEPING WITH THE GOAL STATED IN THIS POLICY.
SO MATT AND I SPOKE WITH, UM, SARAH DEMPSEY, AND WE
[01:40:01]
ASKED HER IF THE COMMITTEE AND THE COUNCIL AGREES TO GO WITH, WITH, WITH THIS, UH, NEW AGREEMENT, ARE YOU WILLING, DO YOU HAVE THE RESOURCES TO CHANGE, UM, THE AUDIT MANAGER? UM, AND SHE DID IN, IN THIS PROPOSAL ACTUALLY, IF YOU WOULD SCROLL, SHE ACTUALLY SAID YES.AND SHE ACTUALLY DID CHANGE THE AUDIT MANAGER.
SO THEY'RE WILLING TO HAVE A NEW AUDIT MANAGER WHILE WE'RE KEEPING THE SAME AUDIT TEAM.
UH, THE AUDIT MANAGER WILL BE DIFFERENT.
UM, SO ACTUALLY, UM, MAYBE IT'S NOT ALL KEEP GOING DOWN.
I THINK YOU, I THINK IT'S TOWARDS THE END.
SO SARAH WILL, SHE'S THE PARTNER.
SO YOU PROBABLY REMEMBER CLAIRE WOOTEN WAS THE AUDIT MANAGER FOR THE PAST SEVERAL YEARS.
JEFF ADA, UM, IS IS WHOM THEY'RE PROPOSING TO AS A NEW NEW AUDIT MANAGER.
SO I JUST WANTED TO ADD THAT TO WHAT MATT SAID.
WHICH MEANS THAT, THAT, THAT INDIVIDUAL IS WHO IS REVIEWING ALL THE WORK AND ALL THE DOCUMENTATION THAT THAT TEAM WOULD BE DOING.
SO THERE WILL BE FRESH EYES ON OUR FINANCIAL AUDIT, BUT THE SAME FIRM GENTLEMEN, MY, UH, ONLY MY ONLY QUESTION IS, OKAY, SO THE AUDIT MANAGER'S PROPOSAL, I'M, I'M GOOD WITH THE INITIAL RECOMMENDATION THAT MATT, UH, MADE.
SO THE AUDIT MANAGER WILL BE MR. WATER.
BUT THE, THE AUDIT TEAM, WHAT WILL BE THE CHANGES THERE? SO, UM, THEY USUALLY HAVE A SENIOR, I BELIEVE THEY'RE GONNA KEEP THE SAME SENIOR, BUT THEN THEY HAVE TWO OR THREE AUDITORS.
AND THAT USUALLY, THEY USUALLY ROTATE, UM, PEOPLE AS WELL THROUGHOUT.
SO, UM, PARTNER IS GONNA BE THE SAME.
UM, THEN WE'LL HAVE THE SAME SENIOR, BUT THE AUDIT MANAGER AND POTENTIALLY SOME AUDIT STAFF WILL BE DIFFERENT.
THE TEAM, IS THE TEAM USUALLY A TOTALLY NEW TEAM OR DO THEY USE, I DON'T KNOW HOW MANY, I I DON'T REMEMBER HOW MANY WAS ON A TEAM, BUT AS AN EXAMPLE, IF THERE ARE FOUR TEAM MEMBERS, IF WE GO WITH THIS AND THERE ARE FOUR TEAM MEMBERS, WILL THAT BE FOUR NEW TEAM MEMBERS OR WILL ANY OF THE INDIVIDUALS WHO, UH, UH, JET WHO HAVE SERVICED US BEFORE BE ON THAT TEAM? OR WILL IT BE TOTALLY NEW TEAM MEMBERS? DO YOU KNOW? IT WILL BE MORE THAN LIKELY THE SENIOR AUDITOR WILL BE THE SAME BASED ON MY DISCUSSIONS WITH HER, NOT SET IN STONE, BUT USUALLY THE AUDITORS BELOW THAT, THERE'S USUALLY ONE TO TWO, UH, RE REALLY FIELD AUDITORS BELOW THAT.
AND USUALLY THOSE ROTATE IN AND OUT UP EACH YEAR.
SO I WOULD EXPECT TO SEE NEW FIELD AUDITORS.
THE SENIOR AUDITOR MORE THAN LIKELY WILL STAY THE SAME, BUT THEY WILL BE REPORTING TO A NEW AUDIT MANAGER WHO'S JEFF WATTA.
SO CHAIR COUNCILMAN, IF I MAY ADDRESS THIS, THE REASON WHY WE WANT A NEW AUDIT MANAGER OR A NEW, OR A NEW SENIOR AUDITOR, A NEW AUDIT MANAGER, SORRY, IS BECAUSE THAT'S THE PERSON WHO REALLY DOES THE ANALYSIS OF RISK ASSESSMENT AND LEAD THE TEAM.
THE STAFF AUDITORS JUST FOLLOW, UM, THIS PERSON'S LEAD.
SO WE JUST WANNA MAKE SURE A FRESH EYE, AS MATT SAID, IS LOOKING AT ALL THE PROCESSES AND EVALUATING RISK.
UM, SO WE WANNA MAKE SURE THIS PERSON IS COMPETENT AND JEFF ACTUALLY WORKED WITH US A NUMBER OF YEARS AGO, RIGHT? HE WAS A SENIOR AT THAT POINT, IF I BELIEVE CORRECTLY.
SO, UM, HE'S GONNA BE THE PERSON WHO'S GONNA DO MORE, MORE OF A PLANNING RISK ASSESSMENT, LEADING THE TEAM AND ALL OF THAT STUFF.
SO THAT'S, THAT'S WHAT WE WANTED.
WE WANTED A FRESH EYE, UM, BECAUSE THE OTHERS, OUR SENIOR MANAGER WAS THERE FOR, FOR A LONG TIME.
SO, SO, UM, I'M I'M GOOD WITH THAT.
SO, BUT THE SENIOR AUDITOR, YOU'RE SAYING JEN WILL PROBABLY BE SOMEONE WHO'S HAD PRIOR ENGAGEMENT WITH US? THAT'S WHAT YOU'RE SAYING, RIGHT? YEAH, I I I THINK THEY'RE GONNA, LIKELY THEY'RE GONNA KEEP THE SAME.
I'M, I'M GOOD WITH THAT BECAUSE I THINK AND AGREE OR DISAGREE WITH ME.
I THINK EVEN THOUGH GIVEN THE BACKGROUND OF THE, THE, UH, THE, THE, THE TOP PERSON, I THINK, I THINK CONTINUITY AT SOME DEGREE OF INSTITUTION KNOWLEDGE IS ALSO IMPORTANT IN THIS PROCESS.
THAT'S WHY I'M ASKING THOSE QUESTIONS.
I KNOW THAT, THAT, MR. WATERWAY, BUT TO SAY THAT, THAT THE SENIOR AUDITOR WILL BE, WILL MORE THAN LIKELY NOT NOTHING IS GUARANTEED, MORE THAN LIKELY WILL BE SOMEONE WHO'S HAD SOME ENGAGEMENT EXPERIENCE WITH,
[01:45:01]
WITH, WITH YOUR TEAM HERE.AND THAT WE, AND RECOGNIZING THAT THE FOLKS THAT ARE ACTUALLY ON THE GROUND MAY BE ALL NEW, BUT WE'VE GOT A SENIOR PERSON WHO HAS SOME RELATIONSHIP, SOME, SOME INSTITUTIONAL KNOWLEDGE.
THAT'S THE WORD I'M LOOKING FOR.
I THINK THAT YOU LOOKS LIKE YOU WANNA SAY SOMETHING.
SAY I'M OFF JET, BUT AM I YEAH, NO, YOU'RE CORRECT.
AND THAT'S PART OF THE REASON THAT I THINK SARAH BEING HERE AS THE PARTNER AS WELL, SHE'S GOT THE INSTITUTIONAL KNOWLEDGE.
SHE KNOWS THE AUDIT COMMITTEE, SHE KNOWS THE AUDIT TEAM, FINANCE TEAM.
UM, I, I THINK THAT WILL BE HELPFUL BOTH TO THEM AS WELL AS TO US, UH, AS A TEAM.
I KNOW WE DON'T DO NAME SELECTION, BUT I WAS THINKING OF SARAH WHEN I WAS ASKING MY QUESTION, SO, SO, SO YEAH, THAT YOU'VE ANSWERED MY QUESTIONS FOR, FOR THAT, FOR THAT PIECE.
SO MATT, YOUR ASK AGAIN IS, IS TO EXTEND, SO WE WOULD LIKE TO DO A CONTRACT AMENDMENT TO EXTEND THE ENGAGEMENT PERIOD WITH WEAVER BASED OFF OF THESE CHANGES, CHANGING THE AUDIT AUDIT MANAGER AND EXTENDING IT FOR AN ADDITIONAL TWO YEARS.
AND WE WOULD BRING THIS, SO I GUESS IN THE AUDIT COMMITTEE IT WILL BE, UH, SPOKEN OUT THAT Y'ALL MET.
AND IF Y'ALL CONCUR THAT, UH, WE WILL BE BRINGING FORWARD AN AMENDED CONTRACT TO COUNSEL FOR APPROVAL FOR AN ADDITIONAL TWO YEARS.
AND SUE, WILL THIS BE AS A CONSENT, A A CONSENT AGENDA ITEM? THAT, THAT WAS MY PLAN.
AND 'CAUSE IT IS GONNA GET REPORTED OUT THE WORK SESSION FROM THE AUDIT COMMITTEE AND I'LL BE THERE IF THERE'S QUESTIONS FOR ME.
BUT I REALLY APPRECIATE JED UNDERSTANDING THIS AND KNOWING THAT MY STAFF IS JUST, WE'RE WE'RE LEAN STAFF.
YOU HEARD SOME OF IT ABOUT IN PARKS TODAY.
WE'RE LEAN STAFFED IN A LOT OF PLACES AND WE DO A GREAT JOB AT A LOT OF PLACES.
BUT, UH, WHEN TAKING ON A HEAVY LIFT, LIKE A NEW FINANCE SYSTEM AND THEN HAVING A NEW AUDITOR COME IN, IT IS JUST GONNA BE TOO MUCH FOR OUR STAFF TO TAKE.
SO I WAS WORRIED ABOUT OUR, MY STAFF.
I JUST WANNA BE CLEAR, UH, MR. CITY MANAGER ON THE PROCESS OF, I I, I ENVISION THIS AS A, AS A CONSENT AGENDA ITEM AFTER THIS COMMITTEE, AFTER OUR CHAIR MAKES A REPORT TO THE COUNCIL.
BUT THIS ONE ITEM THEN WOULD BE PRESENTED TO COUNCIL AS A CONSENT AGENDA ITEM THAT YOU'RE THINKING.
I I JUST WANTED TO, TO, TO MAKE SURE WE UNDERSTAND WHAT THE PROCESS IS, SIMPLIFY, I KNOW THE SUBSTANCE OF IT, BUT WHAT'S THE PROCESS? SO, UM, THANK YOU MR. CHAIR.
I'M COMFORTABLE WITH WHAT I'VE HEARD.
UH, I MEAN, MATT AND JED UH, DESCRIBED EVERYTHING VERY WELL, SO I DON'T HAVE ANY PROBLEM WHATSOEVER.
UM, YOU KNOW, WE RELY UPON YOUR EXPERTISE AND YOUR PROFESSIONALISM IN THOSE AREAS.
AND IT SOUNDS LIKE TO ME, 'CAUSE I WAS, I WAS NOT GONNA EVEN ASK THE QUESTION OF WHY YOU WOULD'VE CHANGED, BUT YOU ANSWERED THAT FOR US.
SO, UH, I DO AGREE THAT, UH, THIS SHOULD, UH, GO FORWARD AND YOU CAN BRING IT FORWARD ON THE CONSENT AGENDA.
I DO WE NEED, DO WE NEED TO DO ANY VOTING OR ANYTHING OF THAT NATURE? I THINK, I THINK THAT THERE'S BEEN A RECOMMENDATION THAT YOU MOVE THAT TO THE FULL COUNCIL FOR CONSIDERATION.
THE FULL COUNCIL'S GONNA HAVE TO CONSIDER IT.
SO I THINK WE'RE FINE IN THAT REGARD.
SO PROCESS WISE, IT JUST GOES INTO THE MINUTES.
ANYTHING ELSE? ANYTHING ELSE? ANYTHING ELSE? OKAY, WE'RE ADJOURNED THEN AT 4:19 PM THANK YOU SO VERY MUCH.