* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. TO THE [ NOTICE OF MEETING CITY OF GARLAND, TEXAS Committee Work Session Room of City Hall William E. Dollar Municipal Building 200 N. Fifth Street Garland, Texas MARCH 25, 2025 2:30 PM] [00:00:02] TUESDAY, MARCH 25TH. FIFTH. WHAT'S THIS? MARCH 25TH. MARCH 25TH MEETING OF THE AUDIT COMMITTEE. AND AS I LOOK AROUND THE ROOM, I SEE THAT WE HAVE A LOT OF PEOPLE WITH US TODAY WANT TO, UH, ACKNOWLEDGE, UH, CHRIS OTT AND, UH, BJ WILLIAMS, OUR COMMITTEE MEMBERS, UH, TO INCLUDE, WE HAVE OUR CITY MANAGER WITH US, JUDSON REX, ALONG WITH OUR AUDIT DIRECTOR, JETS JOHNSON. AND WE HAVE MATT, MATT, MATT, THE MONEY MAN WITH US TODAY. AND THAT'S NOT TO EXCLUDE ANYONE ELSE. WE'RE SO GLAD TO HAVE ALL OF YOU WITH US TODAY. AND, UH, AT THIS POINT, WE'RE GONNA GO AHEAD AND GET RIGHT INTO OUR MEETING. I WANNA START OUT WITH THE APPROVAL OF THE DECEMBER 17TH, 20, 24 MINUTES. I SO MOVED. MR. CHAIRMAN, WE HAVE A MOTION TO APPROVE. SECOND AND A SECOND. ALL IN FAVOR? AYE. AYE. ALL OPPOSED? AND THAT MOTION IS CARRIED. PUBLIC COMMENTS, PERSON TO DESIRE DUE ADDRESS THE COMMITTEE ON ANY ITEM ON THE AGENDA ALLOWED 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 A REQUEST OF THE MEMBER OF THE COMMITTEE. AND WILL IT BE WITH THE APPROVAL OF THE COMMITTEE CHAIRPERSON? DO WE HAVE ANY PUBLIC COMMENTS? ANY PUBLIC COMMENTS? ANY PUBLIC COMMENTS? THERE BEING NONE. WE MOVE NOW TO ITEM THREE, ITEMS FOR INDIVIDUAL CONSIDERATION, SORTING OUT. WE ARE GOING TO NOW TURN THE MEETING OVER TO OUR ILLUSTRIOUS, UH, LEADER, WHO, UH, MAKES SURE THAT ALL OF THESE AGENDA ITEMS ARE TAKEN CARE OF FOR US. JED, IF YOU WILL. THANK YOU, CHAIRMAN. GOOD AFTERNOON COMMITTEE. UH, APPRECIATE YOU HAVING US TODAY, AND THANK YOU FOR ALLOWING US TO GO OVER, UM, MANY ITEMS TODAY. FIRSTLY, I DO WANT TO THANK OUR EXTERNAL AUDITOR WEAVER FOR CONDUCTING THE 2024, UM, FISCAL YEAR, UH, FINANCIAL STATEMENT AUDIT. ALSO WANNA THANK, UH, MATT'S DEPARTMENT, ESPECIALLY CATHERINE, WHO'S SITTING BEHIND, UH, FOR ALL THE WORK THAT SHE HAS DONE, UH, TO ASSIST THEM. UH, IN PERFORMING THIS AUDIT, THE EXTERNAL AUDITOR HAS PREPARED A PRESENTATION FOR THE COMMITTEE. SO I'M GONNA TURN THIS OVER TO SARAH, WHO IS OUR PARTNER. GREAT. CAN YOU ALL HEAR ME? AWESOME. GOOD EVENING. THANK YOU FOR HAVING ME TODAY. UH, MY NAME IS SARAH DEMPSEY. I'M THE AUDIT PARTNER ON YOUR SEPTEMBER 30TH, 2024 AUDIT. I'LL GO THROUGH AN INTRODUCTION OF THE TEAM, OUR AUDIT PROCESS, THE AUDIT RESULTS, AND THEN WE HAVE REQUIRED COMMUNICATIONS THAT WE HAVE TO HAVE EVERY YEAR, AND I'LL OPEN IT UP FOR DISCUSSION. SO THE AUDIT LEADERSHIP THIS YEAR, MYSELF AS THE ENGAGEMENT PARTNER, WE ALSO HAD GE UM, JEFF WADI SERVE AS THE SENIOR MANAGER THIS YEAR. THAT WAS A LITTLE BIT OF A ROTATION TO GET A FRESH SET OF EYES. UH, WE HAD HAD THE SAME SENIOR MANAGER ON THE ENGAGEMENT FOR ABOUT FIVE YEARS. AND SO WE THOUGHT IT WOULD BE GOOD TO ROTATE, HAVE A DIFFERENT PERSPECTIVE ON THE AUDIT, AND INCORPORATE SOME OF THAT UNPREDICTABILITY THAT, UM, WE'D LIKE TO HAVE ON ALL OF OUR AUDITS AND ARE REQUIRED TO HAVE ON ALL OF OUR AUDITS. SO OUR AUDIT PROCESS IS A RISK-BASED APPROACH, AND WHAT THAT MEANS IS WE GO IN AND LOOK AT THE FINANCIAL STATEMENTS, COMPARE 'EM, COMPARE THEM TO LAST YEAR, AND SEE IF THERE ARE ANY UNUSUAL ITEMS. UH, WE'RE READING THE COUNCIL MINUTES, WE'RE LOOKING AT INFORMATION THAT WE CAN OBTAIN, WHETHER ONLINE IT'S THE BUDGET, UM, DISCUSSIONS WITH MANAGEMENT. AND WE'RE BASING OUR AUDIT PROCEDURES AROUND WHERE THE RISK OF MATERIAL MISSTATEMENT COULD EXIST. SO WE ALWAYS HAVE REVENUE RECOGNITION IN THE ENTERPRISE FUNDS AS, UH, AS A SIGNIFICANT RISK. AND THAT'S REALLY BECAUSE OF BOND RATINGS AND, UM, MAYBE THE SUSCEPTIBILITY OF BEING ABLE TO IMPROPERLY OVERSTATE REVENUE. WE ALSO HAVE MANAGEMENT OVERRIDE OF CONTROLS. AND SO WHEN YOU'RE THINKING ABOUT THE FINANCIAL STATEMENT PROCESS, THERE ARE JOURNAL ENTRIES BEING CREATED, AND COULD THERE BE THE POTENTIAL FOR A JOURNAL ENTRY TO COME THROUGH THAT'S NOT APPROVED, IT DOESN'T HAVE SUPPORT, AND THEN THEREFORE MATERIALLY MISSTATE THOSE FINANCIAL STATEMENTS. SO WE WANNA MAKE SURE THAT THE CONTROLS ARE IN PLACE, UM, TO, TO MAKE SURE THAT THAT DOESN'T HAPPEN AS WELL. SOME OTHER RISKS THAT WE IDENTIFIED JUST FROM GOING THROUGH THE AUDIT AND THE POTENTIAL, UM, OF HAVING A MATERIAL MISSTATEMENT WOULD BE, UM, UNRECORDED LIABILITIES. UM, WE ALSO HAVE ANY TRANSACTIONS SPECIFIC, UM, ITEMS THAT MIGHT BE UNUSUAL. SO GOING THROUGH AND SEEING WHAT THE UNUSUAL ITEMS ARE. UH, WE ALSO HAD THREE MAJOR PROGRAMS FOR SINGLE AUDIT THIS YEAR. WE HAD CDBG, UM, AND THEN WE [00:05:01] ALSO HAD THE HOUSING CHOICE PROGRAM AND YOUR ARPA MONEY. SO WE GIVE AN OPINION ON THE FINANCIAL STATEMENTS TO, UM, TO OPINE ON WHETHER WE THINK THEY'RE FAIRLY STATED, BUT THEN WE ALSO GIVE AN OPINION ON THOSE THREE MAJOR PROGRAMS TO MAKE SURE THAT THEY'RE, UM, IN COMPLIANCE DIRECT TO MATERIAL COMPLIANCE WITH THEIR COMPLIANCE SUPPLEMENT. SO THOSE ARE THE THREE. THEY MADE UP 91% OF YOUR FEDERAL EXPENDITURES. UH, WE DID TEST THE HOUSING CHOICE VOUCHER PROGRAM AS MORE OF A ELEMENT OF UNPREDICTABILITY, A RESPONSE TO A POTENTIAL, UM, FRAUD RISK BECAUSE THERE IS SO MUCH MONEY GOING IN AND OUT OF GARLAND HOUSING AGENCY. SO IT DIDN'T, IT WASN'T REQUIRED TO BE TESTED THIS YEAR, BUT WE DID SELECT IT FOR TESTING. UM, WE ALSO TEST INTERNAL CONTROLS OVER THE CASH DISBURSEMENT PROCESS, PROCUREMENT PROCESS, THE PAYROLL PROCESS. AND SO WHAT WE'RE DOING THERE IS LOOKING FOR, UM, MAKING SURE THAT THE CONTROLS ARE OPERATING AS DESIGNED OR THE PROPER APPROVALS IN PLACE, UM, THAT, THAT THE PROCEDURES HAVE BEEN DESIGNED TO, TO HAVE IN PLACE. UM, AND THEN THE JOURNAL ENTRY TESTING IS WHAT WE DO IN RESPONSE TO THAT MANAGEMENT OVERRIDE. SO WHAT THAT MEANS IS WE SELECT JOURNAL ENTRIES, UM, BASED ON ANY UNUSUAL ACTIVITY OR RANDOM SELECTION, AND LOOK FOR THE PROPER APPROVAL AND THE PROPER SUPPORT TO MAKE SURE THAT WE ARE SEEING THAT APPROVAL PROCESS IN THE FINANCIAL STATEMENT. RECONCILIATIONS. UM, I, AGAIN, I'VE TALKED ABOUT THIS, THESE ARE THE SIGNIFICANT RISKS. I'M REQUIRED TO LET YOU KNOW WHAT THOSE ARE. UM, OTHER AREAS THAT WE TESTED JUST FOR, UM, FOR INFORMATIONAL PURPOSES, REALLY THE TAX REVENUE PROCESS. UM, WE HAVE OUR IT AUDITORS COME OUT AND ASSESS THE IT CONTROLS. UH, WE LOOK AT THE ESTIMATES. SO AN ALLOWANCE FOR DOUBTFUL ACCOUNTS IS REALLY AN ESTIMATE ON WHAT'S A RECEIVABLE AT YEAR END AND WHAT IS THE PERCENTAGE OF COLLECTABILITY. SO THAT'S AN ESTIMATE THAT WE TAKE A LOOK AT. YOU HAVE YOUR PENSION, YOUR OTHER, UM, POST-EMPLOYMENT BENEFITS LIKE HEALTH INSURANCE THAT WE'RE LOOKING AT, WHERE THERE ACTUARIAL VALUATIONS. UM, AND THEN WE'RE LOOKING AT CURRENT YEAR BOND ISSUANCES AND NOTES. UM, JUST A LONG LIST OF THE AUDIT AREAS. I DON'T, I DON'T NECESSARILY WANT TO READ TO YOU IF YOU'RE IF YOU CAN SEE IT, BUT THAT IS, UH, JUST MORE OF THE AUDIT PROCEDURES THAT WE'RE DOING BECAUSE IT IS A, A LONG AUDIT THAT WE'RE OUT THERE IN THE FIELD FOR. AND, UM, REALLY FOCUSING ON THAT BALANCE SHEET WHEN YOU'RE LOOKING AT YOUR FINANCIAL STATEMENTS. SO FOR THE AUDIT RESULTS, WE HAD AN UNMODIFIED OPINION ON YOUR FINANCIAL STATEMENTS, UM, WITH NO MATERIAL WEAKNESSES IDENTIFIED AND NO SIGNIFICANT DEFICIENCIES. SO A CLEAN AUDIT. UM, REALLY WHAT THAT'S, UM, LETTING YOU KNOW IS THAT WHEN WE GET THE FINANCIAL STATEMENTS FROM THE FINANCE DEPARTMENT, WE'RE NOT FINDING ERRORS, MAKING AUDIT ADJUSTMENTS, MAKING CORRECTIONS TO THE FINANCIAL STATEMENTS THAT WE'RE, THAT THE FINANCE DEPARTMENT IS PROVIDING TO US. UM, THERE WERE NO, UM, INSTANCES OF NON-COMPLIANCE THAT WERE MATERIAL OR NEED TO BE BROUGHT TO YOUR ATTENTION EITHER. SO FOR THE FEDERAL AWARDS, ALSO AN UNMODIFIED OPINION ON ALL THREE PROGRAMS. UM, ARPA, CDBG, AND THE HOUSING CHOICE, UM, VOUCHER PROGRAM. YOU'RE A LOW RISK AUDITEE. AND REALLY WHAT THAT MEANS IS THERE HAVE BEEN NO MATERIAL FINDINGS IN THE PAST TWO YEARS. UM, BUT THAT WOULD ALLOW US TO ONLY TEST 20% OF FEDERAL EXPENDITURES. AND BECAUSE OF HOW LARGE THE PROGRAMS ARE, WE WERE IN 91 ANYWAY. UM, NO MATERIAL WEAKNESSES WERE IDENTIFIED, UM, AND NO MATERIAL, UM, NO SIGNIFICANT DEFICIENCIES. WE DID HAVE, UM, AN ITEM OF NON-COMPLIANCE WHEN WE WERE TESTING THE HOUSING CHOICE VOUCHER PROGRAM, BUT, UM, I'LL GO THROUGH THAT IN A SECOND. ACTUALLY, THE NEXT SLIDE. SO, UM, WE DID HAVE KNOWN QUESTION COSTS AND WHAT WE FOUND, UM, AND ACTUALLY THE INTERNAL AUDIT DEPARTMENT, UM, HELPS US WITH THE TESTING AS YOU KNOW. UM, THEY LOOK AT SOME OF THE SINGLE AUDIT TESTING, THE INTERNAL CONTROL TESTING, AND THEN THE RECEIPTS ON UTILITY BILLING. SO, UM, ONE OF THE ITEMS THAT WE WORKED TOGETHER ON IS THE, UM, THIS PROGRAM IN PARTICULAR. AND AS THEY WERE, UM, LOOKING UP THE, UM, TENANTS AND THE LANDLORDS, THERE WAS A RELATIONSHIP IDENTIFIED BETWEEN THE LANDLORD AND THE TENANT, A FAMILIAL RELATIONSHIP. AND THAT'S NOT ALLOWED. AND SO, UM, WE WENT BACK AND LOOKED AT, UM, HOW MUCH THE TENANT HAD BEEN, UM, PROVIDED TO THE LANDLORD AND WHAT THAT DOLLAR AMOUNT IS. AND SO THAT'S CONSIDERED A QUESTION COST. WE DID FEEL LIKE THE INTERNAL CONTROL PROCESS IS OPERATING AS DESIGNED, SO THAT'S WHY YOU'RE NOT SEEING AN INTERNAL CONTROL FINDING THERE. UM, THE REASON BEING IS, UM, WHEN, WHEN THEY'RE SUBMITTING THEIR PAPERWORK, THEY HAVE TO CERTIFY THAT THEY'RE NOT RELATED TO THE LANDLORD, AND THE LANDLORD IS CERTIFYING, THEY'RE NOT RELATED TO THE TENANT. AND IT REALLY IS, UH, A DIFFICULT PROCESS OF HAVING TO SEE IF SOMEONE IS, IS NOT TELLING THE TRUTH. AND SO THAT WAS, UM, THAT WAS FOUND. UM, AND SO WE HAVE TO REPORT THAT WE HAVE TO REPORT ANYTHING OVER 25,000 [00:10:01] IS WHAT WE'RE REQUIRED TO DO. AND SO, UM, THE TOTAL QUESTION COST WAS ABOUT 65,000. SO, UM, THAT'S, THAT'S WHAT THAT IS. AND THAT IS ONLY, UM, THAT'S OVER THE COURSE OF MULTIPLE YEARS, IT WAS 11,000 IN THE FISCAL YEAR, SO IT WAS OVER THE COURSE OF, UM, ABOUT THREE OR FOUR YEARS THAT, THAT AMOUNT, UM, IS, IS IN QUESTION THAT WE HAVE TO REPORT. DO YOU HAVE ANY QUESTIONS? I DON'T WANNA, YOU DON'T HAVE ANYTHING? YES, I, YEAH, GO AHEAD. YES, I DO. GO AHEAD. OFFICER WILLIAMS. CHAIRMAN. YEAH, GO AHEAD. UH, YES, UH, ON THAT, THAT PARTICULAR, THE SCREENS YOU'VE GOT UP, OKAY. UH, OVER HOW MANY, SAY AGAIN, OVER HOW MANY YEARS IT WAS SINCE JUNE OF 2018, AND WHAT WOULD BE THE CORRECTIVE ACTION WOULD THE LANDLORD BE REQUIRED TO RE REIMBURSE? WHAT, WALK US THROUGH THE CORRECTIVE ACTION THAT'S REQUIRED TO FIX THAT. SURE. SO I DON'T THINK THERE WOULD BE A REQUIREMENT TO REIMBURSE, I DON'T THINK THIS IS ON THE THRESHOLD OF THE DEPARTMENT OF HOUSING, UM, NECESSARILY REQUIRING A REIMBURSEMENT. I THINK IT REALLY JUST, THERE WOULD BE PROBABLY MORE PAPERWORK TO COMPLETE TO ENSURE THAT, UM, THAT THIS IS IN FACT, YOU KNOW, NOT A RELATIONSHIP. UM, I, I DON'T FORESEE THAT ANYONE WOULD HAVE TO PAY THAT BACK, BUT POTENTIALLY THAT COULD BE WHERE THE LANDLORD IS REQUIRED TO GIVE BACK THAT, THAT MONEY. BUT, UM, GIVEN THE SMALL DOLLAR AMOUNT IN THE GRAND SCHEME OF, OF WHAT, UM, THE HUD IS DOING, I'M NOT SURE THAT THEY WOULD HAVE TO REPAY ULTIMATELY. SO THE, THE, THE, THE OWNERS, FOR LACK OF A BETTER WORD, IS WHAT'S ON THE LANDLORD, RIGHT? RIGHT. AND THE RECIPIENT, UH, OR THE BENEFACTOR HAS NO RESPONSIBILITY OR OBLIGATION, UH, TO REIMBURSE REIMBURSEMENT, HOW TO ASSIST, UH, UH, AFFECT THEIR ELIGIBILITY TO CONTINUE IN THE HOUSING PROGRAM OR DOES IT AT ALL, AT ALL? I THINK THAT'S WHAT IS, IS HAPPENING NOW, IS THEY'RE GOING, UM, BACK AND FORTH TO SEE IF IT, IF THEY ARE INELIGIBLE AND IF THAT DOES AFFECT THEIR HOUSING. OKAY. AND WHERE, WHERE IS THAT NOW? HAVE WE, I HAVEN'T HEARD IF IT'S, I HAVEN'T HEARD THE UPDATE ON IT YET. UM, WE HAVE THE CORRECTIVE ACTION PLAN TO BE COMPLETED BY NEXT FISCAL YEAR. SO I THINK WITH THE PAPERWORK STARTING AND EVERYTHING, I'M NOT SURE THAT THERE'S, THAT IT'S COMPLETELY RESOLVED RIGHT NOW. OKAY. OKAY. WILL YOU BE REPORTING BACK TO THIS COMMITTEE, THE, THE, UH, ON THAT PARTICULAR ITEM? SURE, I CAN DEFINITELY DO THAT. WOULD YOU, UH, JUDGE YEAH, COUNCILMAN, WE'LL FOLLOW UP WITH, WITH OUR HOUSING DEPARTMENT, UM, TO SEE WHERE, WHERE WE ARE AND BY THE NEXT AUDIT COMMITTEE MEETING. OKAY. WE CAN, WHICH IS IN TWO WEEKS. OKAY. OH, WHICH WE CAN BRING THAT BACK. YEAH. RIGHT, RIGHT. THANK YOU. THANK YOU. THANK YOU, MR. CHAIR. YES. NO, YOU ANSWERED IT. THAT WAS THE SAME, UH, QUESTION THAT I HAD AND IT WAS ANSWERED QUITE WELL. OKAY. THANK YOU. READY? IF I MAY SURE. YEAH. MAKE ONE THING I DO WANNA APPRECIATE PATRICIA MOORE WHO DID THIS TEST. UM, SHE'S THE ONE WHO IDENTIFIED THIS. AND, AND SO JUST WANTED TO, JUST TO SAY THAT, YOU KNOW, WE, WE TESTED ABOUT 40 RIGHT? CLIENTS RANDOMLY SELECTED, UH, EXTERNAL AUDITOR SELECTED THAT SAMPLE SIZE AND HER THOROUGH WORK IS WHAT I, HOW WE IDENTIFIED THIS. YEAH. JUST WANTED TO STATE THAT IT IS, IT, WE, WE REALLY APPRECIATE IT. THIS IS A HARD TEST TO COMPLETE WITH GOING IN. AND SHE NOTICED AN UNUSUAL ITEM RUNNING THROUGH, UM, WHAT THE LANDLORD'S ADDRESSES, WHAT THE TENANT'S ADDRESSES WERE, AND, UM, WAS ABLE TO DIG INTO IT. SO YEAH, I APPRECIATE THAT. BUT WE TESTED 40 AND FOUND ONE EXACTLY. ONE OTHER QUESTION. MM-HMM . WAS THE LAND LANDLORD AWARE OF THE REQUIREMENT? YEAH, THEY HAD CERTIFIED THE DOCUMENTATION IS THE LANDLORD AND THE TENANT DO CERTIFY THAT THEY'RE NOT RELATED. SO THANK YOU, MS. CHAIR. OKAY. PROCEED PLEASE. SURE. SO THE AUDIT IS DONE IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, AND THAT REALLY MEANS THAT WE'RE GIVING, UM, REASONABLE ASSURANCE. WE CAN'T GIVE ABSOLUTE BECAUSE WE'RE NOT TESTING EVERY SINGLE TRANSACTION. WE ARE SAMPLING. UM, AND, AND THAT'S WHERE OUR UNMODIFIED OPINION IS. AND THEN THE GOVERNMENT AUDITING STANDARDS IS WHERE WE'RE GIVING AN, UM, WE'RE DOING AN INTERNAL CONTROL OVER FINANCIAL REPORTING REPORT. WE'RE NOT GIVING AN OPINION ON INTERNAL CONTROLS, BUT THE GOVERNMENT AUDITING STANDARDS, UM, ASKS US TO LOOK AT THE INTERNAL CONTROL PROCESS OVER FINANCIAL STATEMENTS, AND THAT'S WHERE YOU DON'T HAVE YOUR SIGNIFICANT DEFICIENCIES [00:15:02] OR MATERIAL WEAKNESSES NOTED. THEN THE UNIFORM GUIDANCE IS WHAT WE'RE USING TO DO THOSE FEDERAL AUDITS. SO THOSE THREE PROGRAMS THAT WE AUDIT ARE DONE IN ACCORDANCE WITH THE UNIFORM GUIDANCE. UM, AS FAR AS ANY UNUSUAL TRACK TRANSACTIONS, THERE WERE NONE THIS YEAR TO BRING TO YOUR ATTENTION. THERE WERE SOME GASB PRONOUNCEMENTS THAT CAME OUT, BUT NONE THAT AFFECTED YOUR FINANCIAL STATEMENTS THIS YEAR TO BRING TO YOUR ATTENTION. UH, WE ENCOUNTERED NO DIFFICULTIES. WE, UM, WE, EVERYTHING TIMELY WHEN WE COME OUT TO DO THE AUDIT, UM, EVERYONE IS READY. WE'VE BEEN GIVEN THE SUPPORT, FULL SUPPORT FROM THE INTERNAL AUDIT TEAM AS WELL. UM, THERE IS, UM, DEFINITELY A PRIORITY TO GET THE AUDIT COMPLETED, AND WE APPRECIATE THAT FROM ALL DEPARTMENTS THAT WE INTERACT WITH, UH, PRESENTATIONS AT THE END OF THE AUDIT STATING THAT THEY'VE GIVEN US EVERYTHING, THEY'RE NOT AWARE OF ANY ISSUES, UM, THAT THEY NEED TO BRING TO OUR ATTENTION, AND THEY SIGN THAT LETTER. AND IT'S MARCH 12TH, THE DATE OF THE FINANCIAL STATEMENTS, UM, NO INDEPENDENCE ISSUES. SO THE AUDIT TEAM AND THE FIRM ARE INDEPENDENT TO THE CITY, AND THEN THERE IS OTHER INFORMATION IN THAT LARGE DOCUMENT. THE, THE ACT FOR IS, UM, FAIRLY LARGE, BUT NOT ALL OF IT IS AUDITED. SO ANYTHING BEFORE THE FINANCIAL STATEMENTS, YOUR TRANSMITTAL LETTER, THOSE ARE UNAUDITED. AND THEN, UM, THE BACK AT THE STATISTICAL SECTION, THOSE ARE UNAUDITED AS WELL. SO JUST MAKING SURE THAT YOU KNOW THAT NOT EVERYTHING IN THE ACT FOR IS AUDITED. AND THEN THERE ARE ESTIMATES, WHICH I MENTIONED EARLIER, AND THAT'S, UM, WHERE WE'RE TESTING TO MAKE SURE THERE IS NO MANAGEMENT BIAS, BUT THERE ARE SIGNIFICANT ESTIMATES WITHIN THE FINANCIAL STATEMENTS THAT WE ARE TESTING AS WELL. SO WE DO USE OTHERS. UM, AND I'VE MADE A LIST OF EVERYONE THAT WE GET A REPORT FROM. SO YOU HAVE, UH, A COMPONENT UNIT, THE GARLAND HOUSING FINANCE CORPORATION THAT'S AUDITED BY ANOTHER FIRM. AND SO WE GET THEIR AUDIT, WE MAKE SURE THAT THEY'VE GOT A PEER REVIEW, UM, THE WE WEAVER IT ADVISORY GROUP I MENTIONED EARLIER, REVIEWING THE TECHNOLOGY SIDE. UH, WE HAVE INVESTMENT VALUATION SUPPORT THAT WE USE TO MAKE SURE THAT YOUR INVESTMENTS ARE FAIRLY STATED, AND THEN SOME OF THE ACTUARIES THAT WE'RE USING ARE LISTED BELOW. UM, AND THEN ALSO THE USE OF INTERNAL AUDIT IS MENTIONED AT THE BOTTOM AS WELL, WHICH IS WHERE WE'RE DOING THOSE SINGLE AUDIT PROCEDURES. UM, THE INTERNAL CONTROL PROCEDURES, AND THEN THE UTILITY BILLING TESTING AND NO AUDIT ADJUSTMENTS TO BRING TO YOUR ATTENTION. UM, AND NO PAST ADJUSTMENTS. SO A PAST ADJUSTMENT WOULD BE AN IMMATERIAL ITEM THAT WE DIDN'T MAKE THE ADJUSTMENT, BUT WE WOULD BRING IT TO YOUR ATTENTION SO THERE'S NO PAST ADJUSTMENTS TO BRING TO YOUR ATTENTION AS WELL. UH, AND THEN NO OTHER WRITTEN COMMUNICATIONS BETWEEN US AND THE CITY TO PROVIDE YOU WITH. SO THERE'S NOT AN INTERNAL CONTROL LETTER OR SOMETHING THAT, UM, THAT HAS JUST GONE BETWEEN THE FIRM AND AND MANAGEMENT. EVERYTHING THAT WE'VE PROVI PROVIDED TO THEM HAS BEEN PROVIDED TO YOU. AND I'M OPEN FOR ANY DISCUSSIONS THAT YOU HAVE. REALLY WANNA SAY THANK YOU TO EVERYONE FOR PROVIDING US WITH EVERYTHING SO QUICKLY AND, AND ACCURATELY COMMITTEE. OKAY. AS WE WENT THROUGH THAT, UH, IT SEEMS LIKE I HEARD ONE THING THAT WE'RE GOING TO BE BRINGING BACK, UH, COUNCILMAN WILLIAMS. YOU ASKED FOR SOMETHING IN THE WAY OF, UH, UH, REPLY IN A YEAR OR THE NEXT AUDIT. WHAT WAS THAT? THAT'S THE, UH, STATUS UPDATE ON THAT ONE, UM, OBSERVATION THAT WE HAD AS IT RELATES TO THE RELATIONSHIP BETWEEN THE LANDLORD AND THE CLIENT. OKAY. AND IT, UH, FROM OUR INDICATION, IT SOUNDS LIKE, UH, ALL THAT WE CAN DO IN THIS SITUATION IS MAKE OUR DECISIONS BASED ON INFORMATION THAT WE HAVE AVAILABLE TO US, AND THAT IS WE PAY IN ACCORDANCE WHAT THEY SAY. AND WHAT THEY SAID WAS THAT IN FACT, THEY WERE NOT RELATED. AND SO WE COMPENSATED BASED ON THOSE FACTS. RIGHT. UM, MY UNDERSTANDING IS, UH, THE HOUSING PROGRAM IS WORKING WITH HUD. OBVIOUSLY THIS HAS TO BE REPORTED AND THEY PROBABLY WILL GET SOME RECOMMENDATIONS FROM HUT ON HOW TO PROCEED FURTHER. SO, VERY GOOD. VERY GOOD. IF THERE ARE NO FURTHER QUESTIONS, THANK YOU. JUST TO RECOGNIZE GO AHEAD. I JUST WANNA TAKE A MOMENT TO RECOGNIZE THE INTERNAL AUDIT TEAM WEAVER FOR THE GREAT JOB THEY DID. THEN ALSO FROM THE GPL PERSPECTIVE. THEIR ACCOUNTING SHOP'S DONE AN AMAZING JOB OVER THE LAST SEVERAL YEARS. AND THEN, AND FROM MY SHOP, CATHERINE RITCHIE, WHO'S SITTING IN FRONT OF DARRYL KLEIN, SHE'S BEEN HERE 21 YEARS, FOUR MONTHS, ONE DAY IN SIX HOURS, AND EVERY SINGLE HOUR, THERE YOU GO, HAS BEEN EXTREMELY IMPORTANT TO THE FINANCIAL HEALTH OF THE CITY. AND SHE, I MEAN, WHEN YOU'RE TALKING ABOUT A CITY WITH $3.6 BILLION OF ASSETS TO HAVE NO AUDIT FINDINGS YEAR OVER YEAR, SHE JUST, SHE IS AN AMAZING, SHE IS THE ROCK OF THE FINANCE DEPARTMENT. YES, SIR. AND IF IT WERE [00:20:01] APPROPRIATE, WE JUST STAND AND GIVE YOU A, AN APPLAUSE , UH, THE APPROPRIATENESS IS TO LOOK AT YOU AND SAY, JOB WELL DONE. THANK YOU. CONTINUE TO, OKAY. AND WHEN YOU CONSIDER, UH, THE JOB THAT IS TAKING PLACE HERE, WE ARE SAVING THIS CITY LOTS OF MONEY HERE. AND THAT'S REALLY WHAT IT'S ALL ABOUT. MAKING SURE THAT THE TAXPAYER'S MONEY IS BEING SPENT, THE PROPER MANNER THAT IT SHOULD BE, OR THAT WE'RE DISTRIBUTING THE MONEY IN THE MANNER BY WHICH WE SHOULD BE DISTRIBUTING IT. SO WITH THAT, THANK YOU. THANK YOU. ALRIGHT. COMING UP NEXT, JU YEAH, CHAIRMAN, THE NEXT ITEM THAT WE WOULD LIKE TO COVER IS THE SANITATION COMMERCIAL SERVICES AUDIT. UM, FIRST OF ALL, I DO WANNA THANK OUR SANITATION DEPARTMENT, ESPECIALLY PHIL URI, THOMAS OS, WHO'S NOT HERE TODAY. UM, THIS AUDIT PROCESS WAS EXTREMELY SMOOTH AND THEY WENT OVER BACKWARDS TO PROVIDE US THE INFORMATION. UM, WE WORKED AS A TEAM. UM, WE LOOKED AT A LOT OF THINGS. AND SO I, I REALLY DO WANT TO TAKE A MOMENT TO APPRECIATE THEM FOR THEIR COOPERATION AND LOOKING AT US, UM, MORE OF A TEAM THAN MORE, MORE THAN, YOU KNOW, THEY DIDN'T LOOK AT US TECHNICALLY AUDITORS. INSTEAD THEY LOOK AT US MORE CONSULTANTS, UH, TO SEE IF WE, HOW WE COULD COME AND, UH, AND HELP THEM OUT. UH, I KNOW THOMAS HASN'T BEEN HERE FOR TOO LONG, BUT HIS EXPERTISE AND HOW, UM, HOW MUCH ACTIVE HE'S IN THIS PROCESS, I DO WANNA APPRECIATE HIM, UH, FOR ALL THE HELP THAT THEY HAVE PROVIDED DURING THIS AUDIT. UH, WE BASICALLY HAD, UH, THREE OBJECTIVES. NUMBER ONE WAS TO VERIFY IF THE DEPARTMENT PROVIDES SOLID WASTE AND RECYCLING SERVICES AND GENERATES BILLS TO ITS COMMERCIAL CUSTOMERS IN ACCORDANCE WITH TAMSON CONDITION LISTED IN THE AGREEMENT. SECONDLY, WE WANTED TO SEE IF COMMERCIAL SANITATION APPLIES EFFECTIVE STRATEGIES TO ATTRACT AND MAINTAIN COMMERCIAL CUSTOMERS. AS YOU ARE AWARE, THIS IS AN OPEN MARKET. UH, MY UNDERSTANDING IS WE HAVE OVER 40 PLAYERS IN THIS FIELD, SO WE'RE COMPETING AGAINST CLOSE TO 50, IF I BELIEVE, UH, A AGAIN. SO WE HAVE TO BE VERY PROACTIVE AND, AND, AND YOU, YOU'LL SEE EVEN ZACH GOES OVER THIS AUDIT, SOME OF THE HARD WORK THEY HAVE DONE AND THE FRUIT OF THEIR LABOR. UM, CURRENTLY WE HAVE ABOUT 2200 CLIENTS, AND WITHIN THE PAST SEVEN YEARS, THEY HAVE DOUBLED THE REVENUE. AND SO KUDOS TO URIEL, UH, FOR, FOR HIS LEADERSHIP AND, AND DOING THIS. UH, AND THEN LASTLY, WE WANTED TO SEE IF THEY HAD ADEQUATE POLICIES AND TRAINING IN PLACE FOR DIVISION STAFF. WHILE I AM DOING THE PRESENTATION HERE, USUALLY, UH, PHIL'S NAME COME UP AND THERE'S A REASON FOR THAT. PHIL HAS BEEN, UM, ONE OF THE GUYS WHO WOULD ALWAYS APPRECIATE THE AUDIT. AND EVEN WHEN WE DID THIS AUDIT, HE CAME AND ASKED ME TO LOOK INTO CERTAIN AREAS THAT SHOWS HIS PROACTIVENESS AND LEADERSHIP. HE'S NOT AFRAID OF AUDIT, HE'S NOT AFRAID OF US LOOKING INTO, HE'S NOT AFRAID OF TRANSPARENCY. INSTEAD, HE CAME TO ME AND SAID, JET, CAN YOU ALSO ADD THESE TWO FEW THINGS? I REALLY DO WANNA APPRECIATE, PHIL, I'M NOT, THANK YOU, PHIL. YOU BACK THERE. AND THE SCOPE OF THE AUDIT WAS FROM OCTOBER 22 AND THROUGH DECEMBER, 2024. UH, I'M GONNA TURN THIS OVER TO ZACH WHO LED THIS AUDIT, AND HE'S GONNA GIVE YOU, GO OVER BRIEFLY A LITTLE BIT OF BACKGROUND, THEN HE'S GONNA GO OVER THE OBSERVATION. SO YES, THANK YOU, SIR. UH, SO REAL QUICKLY, I KNOW JED DID MENTION THAT THEY HAVE ROUGHLY 2200 CUSTOMERS. UH, AND JUST ONE MORE THING ON THE SCOPE. WE DID FOCUS MORE ON, UM, JUST THE FRONT LOAD AND ROLL OFF CONTAINERS, THE, THE BIGGER CONTAINERS. UM, THOSE ARE THE ONES WE FOCUSED IN ON, ON THIS AUDIT. UM, OKAY. SO JUST A LITTLE BIT OF BACKGROUND ABOUT THE DEPARTMENT. UM, LIKE JED WAS SAYING, THEY MANAGE APPROXIMATELY 2200 CUSTOMER ACCOUNTS AND THEY OFFER A VARIETY OF, UH, WASTE COLLECTION OPTIONS, FRONT LOAD DUMPSTERS, ROLL OFF CONTAINERS, UM, FOR CONSTRUCTION AND DEMOLITION DEBRIS, AS WELL AS BULK WASTE DISPOSAL. UH, CUSTOMERS CAN CHOOSE FROM DIFFERENT CONTAINER SIZES AND SERVICE FREQUENCIES TO BEST SUIT THEIR OPERATIONAL NEEDS. UH, A FEW THINGS, UH, THAT WE NOTED DURING THE AUDIT. THEY ARE EXTREMELY PROACTIVE IN GETTING NEW CUSTOMERS. UM, SEVERAL TIMES WHILE I WAS IN THE DRIVE THROUGH AT PANERA BREAD OR AT IN AND OUT, I WOULD SEE THE COMMERCIAL SANITATION, UH, ADVERTISEMENT COME UP ON THE BILLBOARD THERE AT FIRE WHEEL MALL, AS WELL AS A FEW YOUTUBE ADS THAT WOULD COME UP, UH, BEFORE VIDEOS TRYING TO ENTICE PEOPLE IN. UM, SO ONCE A BUSINESS DOES DECIDE TO USE, UH, THE CITY'S COMMERCIAL SANITATION SERVICES, THEY DRAFT UP A CONTRACT, UM, AND IT'S REVIEWED INTERNALLY AND SIGNED BY BOTH CUSTOMER AND SANITATION. UM, AND THEN ONCE THIS, UM, CONTRACT IS SIGNED, THIS, UH, THE ACCOUNT IS SET UP THROUGH CUSTOMER SERVICE. THIS ALLOWS THE CUSTOMER TO HAVE ONE PLACE TO PAY ALL THEIR UTILITY BILLS, WHETHER IT'S SANITATION, WHETHER IT'S WATER OR ELECTRIC. SO THE DIVISION [00:25:01] HAS SHOWN, LIKE JED WAS SAYING, LARGE GROWTH IN REVENUE, DOUBLING IN SIZE OVER THE LAST SEVEN YEARS FROM $3.8 MILLION IN REVENUE IN FISCAL YEAR 18 TO $7.56 MILLION IN REVENUE AND FISCAL YEAR 24. UH, THIS CAN BE AGAIN, BE ATTRIBUTED TO THEIR DEDICATION TO CUSTOMER SERVICE AND THEIR USE OF VARIOUS FORMS OF MARKETING. SO A FEW THINGS. I KNOW JED MENTIONED A FEW OF THE FAVORABLE OBSERVATIONS THAT WE NOTED. I JUST WANT TO GO AND LIST THROUGH THEM AGAIN. SO AGAIN, UM, LIKE WE SAID, THEY MANAGED 2200 CUSTOMER ACCOUNTS. UM, DURING OUR UNANNOUNCED VISIT, ALL DRIVERS PERFORMED AND DOCUMENTED THEIR PRE AND POST TRIP INSPECTIONS PER THE DIVISION'S POLICIES, VEHICLE OPERATION, TRAINING LOGS ARE ALL MAINTAINED. E ASSIST COMPLAINTS WERE ADDRESSED TIMELY ADD-ON SERVICE CHARGES, SUCH AS ADDITIONAL WASTE HAUL OFFS. IF YOU NEED YOUR DUMPSTER TO BE HAULED MORE THAN ONCE, UM, WERE BILLED AT THE PROPER RATES. AND WE ALSO NOTE THAT ACCOUNTS SET UP AND SERVICING ARE PERFORMED AT COMMERCIAL SANITATION WHILE PAYMENT PROCESSING OCCURS AT CUSTOMER SERVICE DEPARTMENT, UH, WHICH CREATES A GOOD SEGREGATION OF DUTIES. NOW WE MOVE ON TO THE OPPORTUNITIES FOR IMPROVEMENT. SO FIRST UP, UH, WE HAVE ONE TITLED DRIVER SAFETY SLASH INCIDENT REVIEW PROCESS. SO A TOTAL OF 73 INCIDENTS WERE DOCUMENTED DURING THE AUDIT SCOPE, AND YOU CAN SEE A BREAKDOWN OF THESE INCIDENTS, UH, CATEGORIES BELOW, UH, BASED ON THEIR DAMAGE TYPE AND WHETHER THEY WERE, UH, DEEMED PREVENTABLE OR NON-PREVENTABLE. SO INCIDENTS INCIDENT LOGS SHOW THAT ONE EMPLOYEE WAS INVOLVED IN EIGHT PREVENTABLE INCIDENTS WITHIN A SEVEN MONTH PERIOD. DIVISION RECORDS DO INDICATE THE DISCIPLINARY ACTIONS WERE TAKEN FOR THIS EMPLOYEE IN ACCORDANCE WITH THE CITY SAFETY MANUAL. THE DIVISION'S CURRENT INCIDENT REVIEW PROCESS REMAINS LARGELY INTERNALIZED WITH INTERVIEWS, INSPECTIONS AND ASSESSMENTS CONDUCTED BY A DRIVER FROM EACH DIVISION WITHIN SANITATION, A SUPERVISOR AND A DESIGNATED SAFETY SPECIALIST, A FORMAL REVIEW AND PARTNERSHIP WITH THE RISK MANAGEMENT DEPARTMENT WOULD PROMOTE A MORE THOROUGH AND CONSISTENT EVALUATION PROCESS AND FACILITATE CITYWIDE SAFETY PRACTICES. ADDITIONALLY, DURING TESTING, DRIVERS WERE OBSERVED OPERATING VEHICLES WITHOUT WEARING SEAT BELTS. AND THE CITY SAFETY MANUAL EXPLICITLY STATES THAT SEAT BELTS MUST BE ALWAYS WORN WHEN PROVIDED REGARDLESS OF THE VEHICLE'S SIZE OR OPERATIONAL SCOPE. SO THE CITY'S, UH, CURRENT SAFETY MANUAL WAS ISSUED BACK IN 28, UH, 2008, SORRY. AND ACCORDING WITH THE RISK MANAGEMENT DEPARTMENT, A COMPREHENSIVE REVIEW OF THE SAFETY MANUAL WAS RECENTLY COMPLETED, UH, FOCUSING SPECIFICALLY ON THE OPERATION OF MOTOR VEHICLES AND EQUIPMENT. AND AS A RESULT OF THIS, A MULTI-DEPARTMENT FOCUS GROUP WAS FORMED AND PROPOSED ENHANCEMENTS, WHICH WILL BE INCLUDED IN THE FORTHCOMING CITYWIDE UH, DIRECTIVES PLAYBOOK. THIS WILL INCLUDE SEVERAL KEY IMPROVEMENTS INCLUDING, UH, AN ANONYMOUS VEHICLE ACCIDENT, UH, REVIEW PROCESS, A MORE ROBUST DRIVER PROFILE POINT SYSTEM, AND STRICTER CORRECTIVE ACT, UH, ACTION GUIDELINES. SO WITH THIS, I RECOMMENDS THAT RISK MANAGEMENT SHOULD WORK WITH CITY ADMINISTRATION TO FINALIZE THE UPDATED SAFETY PRACTICES AND COMMUNICATE THEM TO ALL DEPARTMENTS AND RISK MANAGEMENT CONCURRED. THEIR ACTION PLAN IS TO FORMALLY RECOMMEND CHANGES TO CITY ADMINISTRATION, WHICH INCLUDES PRESENTING THE PROPOSED CHANGES AND THEIR EXPECTED IMPACT ON CITYWIDE OPERATIONS, UH, TO WORK COLLABORATIVELY WITH COLLABORATIVELY WITH CITY ADMINISTRATION TO EVALUATE THE PRACTICALITY OF THE PROPOSED CHANGES AND ADDRESS ANY CONCERNS REGARDING IMPLEMENTATION, AND THEN ADJUST THE RECOMMENDATIONS AS NEEDED BASED ON OPERATIONAL AND LEGAL CONSIDERATIONS. NEXT, FINALIZE THE MOTOR VEHICLE AND EQUIPMENT OPERATION GUIDELINES, WHICH WOULD INCLUDE INCORPORATING FEEDBACK FROM CITY ADMINISTRATION AND FINALIZING THE DOCUMENT, ENSURING ALL UPDATES ALIGNED WITH CITY POLICIES, INDUSTRY BEST PRACTICES AND LEGAL REQUIREMENTS, DEVELOPING A COMMUNICATION AND IMPLEMENT IMPLEMENTATION STRATEGY, WHICH INCLUDES CREATE A ROLLOUT PLAN FOR INTRODUCING THE UPDATED MANUAL TO ALL DEPARTMENTS, DEVELOPING TRAINING MATERIALS AND INFORMATIONAL SESSIONS TO EDUCATE EMPLOYEES ON NEW POLICIES AND ASSIGNING DEPARTMENTAL OR DEPARTMENT LIAISONS TO FACILITATE UNDERSTANDING AND COMPLIANCE. NEXT, DISTRIBUTING THE FINALIZED GUIDELINES, UH, BY PUBLISHING THE MOTOR VEHICLE AND EQUIPMENT OPERATIONS GUIDELINE IN BOTH DIGITAL AND PHYSICAL FORMATS AND ENSURING ACCESSIBILITY FOR OUR EMPLOYEES. LASTLY, THEY'LL BE MONITORING, UH, THE IMPLEMENTATION AND COMPLIANCE BY ESTABLISHING A PROCESS FOR TRACKING ADHERENCE TO THE UPDATE UPDATED GUIDELINES, GATHERING FEEDBACK FROM DEPARTMENTS AND EMPLOYEES TO IDENTIFY ANY CHALLENGES AND CONDUCT, UH, CONDUCTING PERIODIC REVIEWS TO ENSURE THE GUIDELINES REMAIN EFFECTIVE AND RELEVANT WITH AN IMPLEMENTATION DATE OF OCTOBER 1ST, 2025. IN ADDITION TO THIS, WE HAD RECOMMENDATIONS FOR SANITATION, WHICH WE RECOMMENDED THAT COMMERCIAL SANITATION SHOULD ENSURE ALL DRIVERS ARE AWARE OF ALL SAFETY REQUIREMENTS FOR OPERATING CITY VEHICLES. AND AS WELL MONITOR DRIVERS TO ENSURE THEIR COMPLYING WITH SAFETY REQUIREMENTS WHILE OPERATING CITY VEHICLES, INCLUDING THE USE [00:30:01] OF DASH CAM FEEDS, COMMERCIAL SANITATION CONCURS. AND THEIR ACTION PLAN SAYS IN ADDITION TO THE CURRENT BIWEEKLY SAFETY TRAINING CONDUCTED BY THE SAFETY SPECIALIST, STAFF WILL HOLD TRAINING SPECIFIC TO SAFETY REQUIREMENTS FOR OPERATING CITY VEHICLES BASED ON EXISTING CITY DIRECTIVES AT LEAST TWICE PER YEAR. ALL CITY DIRECTIVES ARE CURRENTLY UNDER REVIEW. UM, AND THIS HAS BEEN TOLD TO THE AUDIT STAFF AS WE UPDATE PROCESSES, ONCE THE DIRECTIVES ARE UPDATED, WE'LL COMMUNICATE CHANGES TO ALL SANITATION STAFF. SECOND, MANAGEMENT WILL PERIODICALLY REVIEW THE DASH CAM FEES TO ENSURE THE STAFF ARE COMPLYING WITH SAFETY REQUIREMENTS WITH AN IMPLEMENTATION DATE OF APRIL 1ST, 2025. ALRIGHT, MOVING ON TO THE NEXT ECONOMIC DEVELOPMENT AGREEMENTS. SO THE ECONOMIC DEVELOPMENT DEPARTMENT UTILIZES INCENTIVES SUCH AS TAX EXEMPTIONS, REDUCTIONS AND REBATES TO ATTRACT DEVELOPERS AND BUSINESSES TO GARLAND. UH, THE DEPARTMENT USES WRITTEN AGREEMENTS TO ESTABLISH THESE BENEFITS AS WELL AS REQUIREMENTS OF THE DEVELOPER OR BUSINESS. SO ACCORDING TO THE ED DEPARTMENT, THERE ARE EIGHT ACTIVE AGREEMENTS THAT REQUIRE BUSINESSES TO USE THE CITY SOLID WASTE SERVICES AND ONE ACTIVE AGREEMENT THAT ENCOURAGES IT DURING TESTING, I FOUND THAT SEVEN OF THESE NINE BUSINESSES WERE NOT UTILIZING THE CITY SOLID WASTE SERVICES. THE FINANCIAL IMPACT OF THESE CUSTOMERS NOT USING THE CITY SOLID WASTE SERVICES IS CONSERVATIVELY ES ESTIMATED TO BE A TOTAL REVENUE LOSS OF $81,248 ON AN ANNUAL BASIS USING THE FISCAL YEAR 2024 RATES. AND THAT'S CALCULATED, UM, BACK IN EXHIBIT A. BASICALLY, WE, WE WANTED TO BE QUITE CONSERVATIVE WITH THIS, SO WE WOULD TAKE, BASED ON THE VIEW THAT WE SAW THAT THE CUSTOMER HAD, WHAT CONTAINERS THEY HAD, WE WOULD, UH, ESTIMATE THAT AT THE MID RANGE SIZE AND THEN ONLY ESTIMATE USING ONE PICKUP PER WEEK, EVEN THOUGH THEY COULD VERY WELL BE GETTING PICKED UP SIX TIMES A WEEK. SO, RECOMMENDATIONS, COMMERCIAL SANITATION SHOULD COORDINATE WITH THE ED DEPARTMENT TO INITIATE DISCUSSIONS WITH IDENTIFIED BUSINESSES TO UTILIZE THE CITY SOLID WASTE SERVICES AND PERIODICALLY FOLLOW UP WITH THE ED DEPARTMENT TO DETERMINE IF ANY NEW APPLICABLE AGREEMENTS ARE EXECUTED. MANAGEMENT CONCURS AND THE ACTION PLAN STATES SANITATION DID NOT HAVE KNOWLEDGE OF THESE ACCOUNTS. SANITATION WILL REACH OUT TO IDENTIFIED ACCOUNTS AND WILL FOLLOW UP WITH ECONOMIC DEVELOPMENT ON A MONTHLY BASIS ON ANY ACCOUNTS ENCOURAGED TO USE SANITATION SERVICES WITH AN IMPLEMENTATION DATE OF APRIL 1ST, 2025. NEXT WE HAVE RATE AND ALLOCATION DOCUMENTATION. COMMERCIAL SANITATION ALLOWS CUSTOMERS TO SHARE CONTAINERS, WHICH INVOLVES SPLITTING THE COST OF THE SERVICE. CURRENTLY, THE DIVISION DOES NOT USE THE FORMALIZED CRITERIA FOR DETERMINING HOW TO ALLOCATE THE COST BETWEEN CUSTOMERS. INSTEAD THEY USE EXPERIENCE AND JUDGMENT. TWO EXAMPLES, UH, FOR THESE SHARE CONTAINER PER UH, PERCENTAGES ARE PROVIDED BELOW. UM, YOU CAN SEE ON THERE CONTAINER A AND CONTAINER B TWO REAL LIFE EXAMPLES OF THIS. SO OUR REVIEW OF THE, UM, TOTAL, THERE'S 19 SHARED CONTAINERS, UM, THAT WE IDENTIFIED. AND IN OUR REVIEW OF THESE, WE IDENTIFIED THAT FIVE SHARED CONTAINERS ARE NOT FULLY OR 100% ALLOCATED AMONG CUSTOMERS RESULTING IN AN ESTIMATED UNDER BILLING OF $190 PER MONTH. TWO SHARED CONTAINERS USING THE RC 36 RATE CODE ARE NOT FULLY ALLOCATED AMONG CUSTOMERS WHEN CALCULATED USING THE STANDARD RATE RESULTING IN AN ESTIMATED UNDER BILLING OF $175 PER MONTH. AND I'LL GET TO THE RC 36 RATE CODE HERE IN ONE SECOND. UM, AND THEN THREE SHARED CONTAINERS USING THE RC 36 RATE CODE ARE ALLOCATED AT OVER 100% WHEN CALCULATED, USING THE STANDARD RATE RESULTING IN AN ESTIMATED OVERBILLING OF $230 PER MONTH. SO THIS RC 36 RATE CODE WAS SET UP IN FEBRUARY, 2024 AS A FLEXIBLE, UH, COMMERCIAL RATE, UM, TO BE USED IN SPECIAL CIRCUMSTANCES SUCH AS THE DOWNTOWN AREA. UM, THIS FLEXIBILITY HAS BEEN USED TO ADAPT, UM, TO, UM, CUSTOMERS COMING IN AND OUT, NEW CUSTOMERS BEING ADDED IN THE, UH, DOWNTOWN AREA. IN THIS PROGRAM, I RECOMMENDED THAT SANITATION SHOULD DEVELOP AND IMPLEMENT A STANDARD METHODOLOGY FOR DETERMINING PERCENTAGES ON SHARED CONTAINERS AND ENSURE ALL CONTAINER COSTS ARE FULLY ALLOCATED AND REEVALUATE THE USE OF THE RC 36 RATE PROGRAM MANAGEMENT. CONCURS AND THEIR ACTION PLAN IS MANAGEMENT WILL DEVELOP AND IMPLEMENT A STANDARD METHODOLOGY FOR DETERMINING PERCENTAGES ON SHARED CONTAINERS AND ENSURE ALL CONTAINER COSTS ARE FULLY ALLOCATED IN REFERENCE TO SECTION 52 15 OF THE CITY ORDINANCES. IN ADDITION, MANAGEMENT WILL, UH, REVIEW SHARED CONTAINERS, INCLUDING ONES UNDER THE RC 36 RATE PROGRAM EVERY SIX MONTHS TO ENSURE THESE PROCEDURES ARE FOLLOWED APPROPRIATELY WITH AN IMPLEMENTATION DATE OF JUNE 1ST, 2025. NEXT, WE MOVE TO DISCOUNT ACCURACY. [00:35:01] THE COMMERCIAL SANITATION DIVISION MUST COMPETE WITH OTHER PROVIDERS AS GARLAND IS AN OPEN MARKET CITY LIKE JED WAS SAYING EARLIER. WITH REGARD TO THE COMMERCIAL, UH, SOLID WASTE SERVICES, DISCOUNTS ARE ONE OF THE METHODS AVAILABLE TO THE DIRECTOR TO ENCOURAGE CUSTOMERS TO UTILIZE THE CITY'S COMMERCIAL SANITATION SERVICES. THE CITY ORDINANCES ALLOW THE DIRECTOR TO GRANT UP TO A 35% DISCOUNT FOR SINGLE CONTAINER COMMERCIAL, UM, CUSTOMERS, AND UP TO A 45% DISCOUNT FOR MULTIFAMILY SHOPPING CENTER OR OTHER MULTI CONTAINER COMMERCIAL CUSTOMERS. HOWEVER, DISCOUNTS ARE NOT PERIODICALLY REVIEWED FOR REASONABLENESS. SO OF THE 1,760 COMMERCIAL CUSTOMERS, 103 OF THEM ARE RECEIVING DISCOUNTS. WE IDENTIFIED THAT ONE OF THE DISCOUNTED MULTIFAMILY COMMERCIAL ACCOUNTS WERE FOUND TO EXCEED THE MAXIMUM DISCOUNT AMOUNT OF 45%. THIS CUSTOMER HAS BEEN RECEIVING A DISCOUNT OF 52.46% SINCE AT LEAST FEBRUARY, 2014, RESULTING IN AN ESTIMATED REVENUE LOSS OF $5,400. UH, USING THE DIFFERENCE BETWEEN THE MAXIMUM ALLOWED OF 45% TO THE ACTUAL 52.46, WE SAMPLED 12 OF THESE CUSTOMERS OUT OF THE REMAINING 102 THAT WERE BELOW THE MAXIMUM DISCOUNT AND IDENTIFIED THE FOLLOWING. ONE CUSTOMER'S CONTRACT, UH, GRANTS 11 DISCOUNTED CONTAINERS. FIVE OF THESE WERE SWAPPED OUT AT SOME POINT CONTAINERS. THEY, THEY GOT RID OF THEIR OLD ONES AND NEW ONES CAME IN AND THE DISCOUNT WAS NOT REAPPLIED TO THE NEW ONES IN THE BILLING SYSTEM LEADING TO A MONTHLY OVER BILLING OF $356 AND 37 CENTS A SECOND. CUSTOMER'S CONTRACT GRANTS, THREE DISCOUNTED CONTAINERS, TWO OF THEM WERE SWAPPED OUT AND THE DISCOUNT WAS NOT REAPPLIED, LEADING TO A MONTHLY OVERBILLING OF $242 AND 49 CENTS. UH, ANOTHER CUSTOMER IS CURRENTLY RECEIVING AN 18% DISCOUNT ON THEIR SERVICE, BUT A CONTRACT AUTHORIZING THIS DISCOUNT CANNOT BE LOCATED. UM, WE RECOMMEND THAT COMMERCIAL SANITATION SHOULD IMPLEMENT A PERIODIC REVIEW AT LEAST ONCE EVERY SIX MONTHS OF DISCOUNT AMOUNTS AND REASONABLENESS SLASH NECESSITY AND UPDATE THE CONTRACTS AS APPLICABLE AND DEVELOP AND IMPLEMENT A PROCESS TO PERIODICALLY SAMPLE AND REVIEW BILLS FOR ACCURACY MANAGEMENT CONCURS. THEIR ACTION PLAN IS THAT MANAGEMENT WILL REVIEW CONTRACTS AND SAMPLE AND A SAMPLE OF BILLS INTERNALLY ONCE EVERY SIX MONTHS AND WORK WITH THE CITY ATTORNEY'S OFFICE TO IDENTIFY REASONABLENESS NECESSITY TERMS AND LINKS OF DISCOUNTS. AND THE IMPLEMENTATION DATE OF THAT IS MAY 1ST, 2025. NEXT UP, DEPOSIT METHODOLOGY. THE COMMERCIAL SANITATION DIVISION REQUIRES A DEPOSIT FROM SANITATION ONLY CUSTOMERS WHO DO NOT PROVIDE A VALID TAX IDENTIFICATION NUMBER UPON ACCOUNT SET UP SANITATION ONLY, MEANING THE CUSTOMER HAS AN ACCOUNT FOR THEIR WATER ELECTRIC UTILITIES, BUT A SEPARATE BILLING ACCOUNT FOR THEIR SANITATION. JUST SOME CLIENTS LIKE IT THAT WAY. I SAMPLED 45 OF THE 126 SANITATION ONLY ACCOUNTS AND FOUND THAT EIGHT DID NOT HAVE DEPOSITS WHILE ALSO HAVING A TAX ID ON FILE, OR SORRY, ALSO NOT HAVING A TAX ID ON FILE. MY APOLOGIES. WE RECOMMEND THAT COMMERCIAL SANITATION SHOULD DEVELOP AND IMPLEMENT DEPOSIT PRACTICES THAT ALIGN WITH CITY ORDINANCES AND CUSTOMER SERVICE PRACTICES AND ENSURE CUSTOMER CONTRACTS INCLUDE LANGUAGE ON DEPOSIT REQUIREMENTS MANAGEMENT. CONCURS AND STAFF WILL DEVELOP AND IMPLEMENT PROCEDURES THAT ALIGN WITH CITY ORDINANCES AND CUSTOMER SERVICE PRACTICES. STAFF WILL ALSO CONSULT WITH THE CITY ATTORNEY'S OFFICE TO IMPLEMENT LANGUAGE ON DEPOSIT REQUIREMENTS AND CURRENT CONTRACTS WITH AN IMPLEMENTATION DATE OF JUNE 1ST, 2025. LAST UP, WE HAVE THE PICKUP FREQUENCY WHERE WE'RE COMPARING THE BILLS OF THE CUSTOMERS TO THE ROUTE SHEET THAT THE DRIVERS HAVE TO PICK UP THESE CONTAINERS. SO THE COMMERCIAL SANITATION DIVISION USES A DAILY LIST OF CONTAINERS THAT ARE TO BE PICKED UP, WHICH INCLUDES THE ADDRESS, CUSTOMER NAME AND ASSET NUMBER THAT IS PAINTED ON THE DUMPSTER FOR EACH OF THE 2,367 CONTAINERS ENROLLED IN THE UTILITY BILLING SYSTEM. DURING THE AUDIT SCOPE, IA COMPARED THE NUMBER OF PICKUPS PER WEEK BETWEEN THE ROUTE SHEET AND PER THE BILLING SYSTEM, AND FOUND THAT 105 CONTAINERS PICKUP FREQUENCY DID NOT ALIGN BETWEEN THE ROUTE SHEET AND THE BILLING SYSTEM. WE SAMPLED 12 OF THESE AND FOUND THAT, UH, ONE CUSTOMER WAS BILLED FOR ONE PICKUP PER WEEK, BUT RECEIVES SERVICE TWICE PER WEEK. UH, A NOTE IN THE CUSTOMER'S ACCOUNT STATED THAT THIS DIFFERENCE IN FREQUENCY AND CHARGES IS USED AS A WAY TO PROVIDE A DISCOUNT. AND THE OTHER 11 ACCOUNTS WERE FOUND TO ACTUALLY MATCH WITH THE, SO WHAT WAS ACTUALLY BEING PICKED UP MATCHED WITH WHAT THEY WERE BEING BILLED FOR. UM, BASED ON THE DIVISION'S LIVE MAPPING SOFTWARE, THEY HAVE SOFTWARE THAT ALLOWS 'EM TO SEE WHERE THEIR DRIVERS ARE AT, AND UH, REVIEW VIDEO FOOTAGE OF THAT RECOMMENDATIONS. COMMERCIAL SANITATION SHOULD PERIODICALLY REVIEW THE ACCURACY OF PICKUP FREQUENCY AND CONSIDER UTILIZING AN EXISTING SOFTWARE SYSTEM TO MANAGE ROUTES SLASH CONTAINERS MANAGEMENT. CONCURS [00:40:02] AND MANAGEMENT WILL REVIEW ROUTE SHEETS TO MATCH COLLECTION FREQUENCIES AT LEAST ONCE EVERY SIX MONTHS, AND STAFF WILL DETERMINE FEASIBILITY OF UTILIZING EXISTING SOFTWARE TO MANAGE ROUTES AND CONTAINERS WITH AN IMPLEMENTATION DATE OF MAY 1ST, 2025. I APPRECIATE Y'ALL BEARING WITH ME. THANK YOU SO VERY MUCH. COMMITTEE GO FIRST, . WELL, UM, THIS SPEAKS WELL OF OUR, UH, OF OUR SANITATION DEPARTMENT AND THE COMMERCIAL CREW IN PARTICULAR. I MEAN, THEY'VE DOUBLED THEIR REVENUE IN SEVEN YEARS AND, UM, THEY'RE, THEY'RE ALWAYS WILLING TO CHANGE AND ADAPT TO. AND SO I COULDN'T BE MORE PLEASED WITH WHAT YOU'RE, WHAT YOU'RE REPORTING. SO I THANK YOU FOR ALL YOUR EFFORTS. IT'S, THIS IS A BIG AUDIT AND IT TOOK A LOT OF EFFORT AND SO THANK YOU FOR EVERYTHING. I JUST WANNA SAY I'M, REPEAT THE WORDS THAT, BUT, UH, I WANT TO SAY DITO TO THOSE COMPLIMENTS. UH, SANITATION IS DOING A, UH, AN EXCELLENT JOB IMPROVED. I'D JUST LIKE TO KNOW THE, AN ANSWER TO A COUPLE OF QUESTIONS. DO YOU KNOW THE DEFINITION BETWEEN A A, UH, THE ACCIDENTS CATEGORIES? UH, YOU MENTIONED, UM, UM, LET'S SEE. YEAH, GO BACK TO THAT SCREEN. YOU, YOU GOT TWO CATEGORIES? YEAH. YES, SIR. YEAH. PREVENTABLE AND NON-PREVENTABLE. YES, SIR. WHAT'S, CAN HELP ME UNDERSTAND THE, I THINK I KNOW WHAT, WHAT THOSE ARE. YEAH, BUT, UH, OH YEAH, . OH YEAH, HE JUST, HE'S JUST ANXIOUS TO GET EVEN WAY, SIR. SO BASICALLY, BASICALLY, UH, PREVENTABLE IS, UH, NOT PREVENTABLE MEANS THAT, UH, IT WASN'T THE EMPLOYEE'S FAULT. PREVENTABLE MEANS THAT THE EMPLOYEE COULD HAVE DONE SOMETHING TO PREVENT THE ACCIDENT. SO IT WAS THE EMPLOYEE'S FAULT. OKAY. ALRIGHT. ALRIGHT. AND WHEN YOU HIRE DRIVERS AND THEY GO THROUGH ALL THESE TRAINING SCENARIOS, ARE THEY ALONE OR ARE THEY WITH A MORE, QUOTE, A VETERAN CREW? EXPLAIN SORT OF WHAT IT LOOKS LIKE FIRST SIX MONTHS OR SO. EXPLAIN TO ME, TO US, WHAT DOES THAT, WHAT IT, WHAT DOES THAT TRAINING LOOK LIKE FOR NEW, NEW PERSON IN THE TRUCK? FIRST TIME DRIVER? EXPLAIN WHAT IT LOOKS LIKE. YES, SIR. SO ONCE WE HIRE A NEW PERSON ON DAY ONE, I MEET WITH THE EMPLOYEES. I KIND OF SET THE EXPECTATION AS IT PERTAINS TO SAFETY, ATTENDANCE AND EVERYTHING RELATED, UH, TO THE DEPARTMENT. THEN WE PAIR THAT EMPLOYEE WITH OR BEST EMPLOYEES. UH, MOST OF THE TIMES IT, IT'S EITHER A LEAD OR A SUPERVISOR. UH, THE TRAINING PROGRAM IS, IS, IS, IT DEPENDS ON THE EMPLOYEE, HOW PROFICIENT THEY ARE WITH THE EQUIPMENT. UH, WE WILL NEVER PUT AN EMPLOYEE ON THEIR OWN UNLESS WE FEEL 100% COMFORTABLE THAT THEY CAN OPERATE THAT EQUIPMENT SAFELY. SOMETIMES IT WILL TAKE EIGHT WEEKS, SOMETIMES IT WILL TAKE LONGER THAN THAT. IT, IT ALL DEPENDS ON THE EMPLOYEE. ALSO, SOMETIMES WE GET EMPLOYEES THAT COME WITH, COME TO US WITH EXPERIENCE FROM ANOTHER CITY. SOMETIMES AFTER TWO WEEKS WE, WE, WE LET THEM GO ON THEIR OWN BECAUSE AT THAT POINT WE FEEL 100% COMFORTABLE THAT THOSE EMPLOYEES ARE OPERATING THOSE EQUIPMENT SAFELY. RIGHT. AND FOR THE GROUP THAT, UH, FOLLOWING THAT PREVENTABLE CATEGORY, IS THERE RETRAINING, UH, DESCRIBE BRIEFLY THE RETRAINING, THE RE YOU KNOW, YOU, YOU GOT TO DO THIS AGAIN, YOU GOT TO RUN THROUGH THIS AGAIN. WHAT DO YOU DO, UH, FOR THOSE WHO, LET'S SAY FALL IN THAT PREVENTABLE, UH, CATEGORY? YES, SIR. UM, I WILL USE THE, UH, I BELIEVE IT'S LISTED THAT ONE, ONE EMPLOYEE HAD, UH, SEVEN INCIDENTS, UH, DURING THE AUDIT THAT WAS IDENTIFIED. BUT THAT EMPLOYEE, WE HAD TO START ALL OVER AGAIN FROM THE BEGINNING TO MAKE SURE WE, SO WE STARTED A BRAND NEW TRAINING PROGRAM WITH HIM, JUST LIKE WE DID WHEN WE, WHEN WE INITIALLY HIRED HIM. WHAT HAPPENED WITH THIS EMPLOYEE WAS THAT HE TRANSFERRED FROM ONE DIVISION TO ANOTHER, FROM ONE PIECE OF EQUIPMENT TO A COMPLETELY DIFFERENT PIECE OF EQUIPMENT. SO DEPENDING ON WHAT IT IS, WE SPECIALIZE THE TRAINING TO BE, TO ADDRESS THE INCIDENT, TO MAKE SURE IT DOESN'T HAPPEN. AND ON TOP OF THAT, WE FOLLOW UP MONTHLY JUST TO MAKE SURE THAT THAT EMPLOYEE, UH, WAS ABLE TO RETAIN THE INFORMATION AND IS NOT HAVING ANY MORE ISSUES. ALRIGHT. ALRIGHT. AND MY LAST QUESTION FOR YOU IS, DO YOU HAVE, YOU DON'T HAVE TO, I'M NOT LOOKING FOR NAMES AND NOTHING LIKE THAT, BUT DO YOU [00:45:01] HAVE AN INDIVIDUAL WHO'S RESPONSIBLE FOR MANAGING THE DISCOUNT PROGRAM? YES, SIR. UM, I MEAN, THAT, THAT'S ME. I'M, I'M THE DIRECTOR, , UH, SO, SO TECHNICALLY, UH, ALL OF THIS IS ON ME, SIR. UH, THE FOCUS HAS BEEN ON REVENUE AND, AND WE DO AUDIT, UH, ON A MONTHLY BASIS OR LARGE CUSTOMERS, GISD, UH, GEL WINDOWS ARE, OR, YOU KNOW, HUNDREDS OF THOUSANDS OF DOLLARS PER YEAR CUSTOMERS. SO ON A MONTHLY BASIS I CAN TELL YOU THAT WE GO THROUGH EVERY SINGLE BILL TO MAKE SURE THAT THEY'RE BUILT, UH, CORRECTLY. UH, SOME OF THESE ACCOUNTS YOU KIND OF, YOU KIND OF BALANCE IT OUT TO ON HOW YOU ALLOCATE YOUR STAFF TIME, YOU KNOW, SO WHEN YOU HAVE AN ACCOUNT WHERE WHEN YOU'RE MAKING, YOU KNOW, $75 A MONTH, DO YOU REALLY WANNA SPEND THE TIME LOOKING INTO THAT ACCOUNT? SO OUR FOCUS HAS BEEN ON THE LARGER ACCOUNTS. HOWEVER, AFTER THIS WE, WE CAME UP WITH A SYSTEM TO, TO, TO MAKE SURE THAT WE LOOK AT EVERY ACCOUNT TO MAKE SURE THAT, UH, EVERYBODY IS BEING, UH, BILLED CORRECTLY AND THE DISCOUNTS THAT ARE GIVEN ARE ALSO, UH, IN LINE WITH THE, WITH THE CITY ORDINANCE. THANK YOU. THANK YOU, MR. CHAIR. THANK YOU LACK, I THINK YOU DID A GREAT JOB IN THE WAY OF A VERY COMPREHENSIVE, VERY COMPREHENSIVE AUDIT. UH, WHEN I CONSIDER THE SAMPLINGS THAT WERE DONE AS A RELATED EURO TO THE INCIDENTS AND THE CONCERNS THAT CAME OUT OF IT, I HAVE TO ALSO ECHO THE SENTIMENTS. THAT JOB WELL DONE BY BOTH OF YOU. I'M VERY IMPRESSED WITH, UH, OUR SANITATION DEPARTMENT AND EVER SINCE I'VE COME TO THE CITY, IT SEEMS THAT, UH, YOUR NAME, YOUR JUST COMES UP CONTINUALLY IF NOTHING ELSE. AND WE ARE BEING PROACTIVE IN THE WAY OF LOOKING TO ALWAYS SAVE THE CITY MONEY AND THEN GOING OUT AND BEING PROACTIVE AND BRINGING MONEY TO THE CITY. SO WHEN I TAKE A LOOK AT, UH, THIS ONE EMPLOYEE WITH THE EIGHT INCIDENTS, FOR EXAMPLE, HOW MANY EMPLOYEES DO YOU HAVE? 117 SIR. 117. I GUESS THAT'S NOT TOO BAD. . WELL, WE DO CLOSE TO HALF A MILLION COLLECTIONS PER MONTH. RIGHT. , RIGHT. I'LL TAKE THAT, SIR. YEAH. AND UH, I'M JUST LOOKING AT THE, THE VARIOUS THINGS HERE TO SHARE COMPARTMENTS AND CONTAINERS AND SO ON AND SO FORTH. THAT GREAT JOB, ZACH. GREAT JOB. YOUR THANK YOU SIR. DOES ANYONE ELSE HAVE ANYTHING? CHAIRMAN, IF I MAY ONE COMMENT. UM, OF COURSE SANITATION REALLY HELPED US AS PART OF THE AUDIT, BUT I DO WANNA RECOGNIZE CUSTOMER SERVICE AND RISK MANAGEMENT. UM, WE ALSO WORKED WITH THEM CLOSELY AND SO I JUST WANT TO RECOGNIZE THEM AND FOR THEIR CORPORATION AS WELL. AND WE PROBABLY NEED TO LET PHIL RAISE HIS HAND ONE MORE TIME TOO. I MEAN, HE . SO, UH, WITH THAT, UH, ANY OTHER COMMENTS? ANY OTHER? OKAY. THANK YOU SO VERY MUCH. THANK YOU FOR THAT. YES SIR. SANITATION WEAVER. OKAY. UH, JED, IT SEEMS THAT, UH, WE'RE READY NOW TO, UH, TAKE A BREAK AND GO INTO EXECUTIVE SESSION. IS THAT WE'RE READY? CHAIRMAN, I BELIEVE YOU ARE SUPPOSED TO READ. YES, I'M GOING. I WANTED TO HEAR FROM YOU FIRST THAT WE ARE READY TO GO. I'M GONNA READ THAT. OKAY. ALRIGHT, HERE WE GO. THE AUDIT COMMITTEE WILL ADJOURN INTO EXECUTIVE SESSION PURSUANT TO SECTIONS 5 5, 1 0.0 7 6 5 5 1 0.089 AND 5 5 1 0.07. ONE OF THE TEXAS GOVERNMENT CODE TO DELIBERATE TO DISCUSS MATTERS RELATED TO THE SECURITY OF THE ANIMAL SERVICES FACILITY AND OPERATIONS AND ATTORNEY-CLIENT COMMUNICATIONS RELATED TO THE SAME, A GP AND LIT RISK ASSESSMENT BRIEFINGS, SECTION 5 51 0.089, DISCUSSIONS AND DELIBERATIONS REGARDING SECURITY ASSESSMENTS OR DEPLOYMENTS RELATING TO INFORMATION, RESOURCES, TECHNOLOGY, NETWORK SECURITY INFORMATION AND DEPLOYMENT OF SPECIFIC OCCASIONS FOR IMPLEMENTATION OF SECURITY PERSONNEL, CRITICAL INFRASTRUCTURE OR SECURITY DEVICES. UH, COMMITTEE, I'M LOOKING AT OUR CLOCK HERE AND WE STARTED TODAY, I BELIEVE AT TWO 30. WE'RE AT THREE 19 PRESENTLY. UH, WE CAN TAKE A BREAK IF YOU WOULD LIKE AND THEN COME BACK OR WEEK IN? 10 MINUTES. 10 MINUTES. 10 MINUTES EVERYONE. OKAY. THREE 20. LET'S TAKE, UH, LET'S BE BACK HERE AT THREE 30. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.