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GOOD EVENING, AND WELCOME TO THE SEPTEMBER 29TH, 2026 MEETING OF THE AUDIT COMMITTEE.
UH, MY NAME IS ED MOORE AND I AM THE CHAIRMAN.
WE'RE JOINED TODAY BY COUNCIL MEMBERS AND, UH, MAYOR PRO TEM.
YOU ARE MAYOR PRO TEM NOW, AREN'T YOU? NOT DEPUTY, BUT MAYOR, MAYOR PRO TEM.
GOT MAYOR PRO TEM CHRIS OUT HERE IN THE HOUSE.
WE HAVE COUNCIL MEMBER MARGARET LUT HERE IN THE HOUSE.
WE HAVE OUR ESTEEMED CITY MANAGER, MIKE BETS, AND WE HAVE JED JOHNSON, WHO IS OUR AUDIT COMMITTEE CHAIR, ALONG WITH, I WANNA CALL THESE NAMES HERE.
WE HAVE, UH, ZACHARY EVANS, J JAVEN, MATTHEW, AND MATTHEW DRAFT.
NOW, I'M NOT GONNA TRY TO CALL ALL REST BALL'S NAME.
I'M JUST SO GLAD THAT YOU'RE HERE.
IF I WAS IN CHURCH, I'D HAVE YOU GET UP AND START HUGGING EACH OTHER AND SAY, I'M GLAD THAT YOU'RE HERE, BUT SINCE WE'RE NOT, JUST WELCOME AND THANK YOU FOR BEING HERE.
JED, WE'RE GOING TO GO AHEAD AND TURN THIS OVER TO YOU.
WE HAVE, UH, QUITE A FEW ITEMS THAT WE'RE GONNA BE DISCUSSING TODAY.
WE'VE OUR AUDIT PLAN, THE GP AND A W, UH, WAREHOUSE SERVICE AGREEMENT AUDIT, F UTILITIES, CONTACT MANAGEMENT AUDIT, AND THE ANNUAL AUDIT PLAN.
SO IF YOU WILL JUST TAKE US THROUGH THAT AND, UH, WE'RE AT YOUR DISPOSAL COUNCIL'S MEMBER MOORE.
WE MAY WANT TO START OFF BY APPROVING THE JULY 7TH, 2026 MEETING MINUTES.
WHY DON'T WE DO THAT? WHY DON'T WE DO THAT? WE HAVE HAD OPPORTUNITY TO READ THE MINUTES.
NEXT THING IS OUR PUBLIC COMMENTS.
UH, MADAM SECRETARY, DO WE HAVE ANYBODY FOR PUBLIC COMMENTS? NO, SIR, WE DO NOT.
GOOD AFTERNOON, CHAIRMAN, COMMITTEE MEMBERS, UH, MANAGEMENT, APPRECIATE THE OPPORTUNITY TO GO OVER SOME OF THESE REPORTS WITH YOU.
BUT BEFORE WE GO OVER THE AUDITS THAT WE FINISHED, WE HAVE OUR EXTERNAL AUDITOR.
UH, UNFORTUNATELY, UM, SARAH DEMPSEY, WHO IS ALSO THE PARTNER, IS UNABLE TO ATTEND TODAY, BUT THEY DO, THEY DO HAVE A PRESENTATION FOR US, BASICALLY THE AUDIT PLAN FOR THIS YEAR.
SO, JEFFREY'S GONNA COVER THE DETAILS.
HE'S GONNA GO OVER THE PROCESS, COMMUNICATIONS, NEW ACCOUNTING, PRONOUNCEMENTS, AUDIT COMMITTEE, QUESTIONS, CONCERNS, AND DISCUSSION.
SO WITH THAT, UM, AS YOU'RE AWARE, THEY'VE BEEN WITH US FOR, THIS IS THE 14TH YEAR, IF I REMEMBER CORRECTLY.
UH, THANK, THANK YOU FOR BEING HERE, JEFF.
SO IF YOU COULD GO OVER THE PRESENTATION FOR US, PLEASE.
UH, CAN YOU, IS THIS, YEAH, I THINK IT'S ON, UH, YEAH, LIKE JED SAID, MY NAME IS JEFF WATA, ONE OF THE AUDIT PARTNERS ON THE EXTERNAL AUDIT WITH WEAVER.
AND I'M GONNA PRESENTING OUR PLANNING MEETING TO YOU, UH, TODAY.
ALRIGHT, SO THIS IS A HIGH LEVEL AGENDA.
I'LL JUST DO A LITTLE BIT OF AN INTRODUCTION, AND THEN WE'RE GONNA GO OVER THE AUDIT PROCESS THAT WE HAVE, UM, WHAT WE, UM, SOME INTERIM COMMUNICATIONS THAT WERE REQUIRED TO COMMUNICATE TO YOU AND WHAT WE'VE DONE ALREADY ON THE AUDIT, GO OVER NEW ACCOUNTING PRONOUNCEMENTS.
AND THEN AT THE END, WE'LL HAVE A TIME FOR DISCUSSION IF YOU HAVE ANY CONCERNS THAT YOU WANT US TO ADDRESS IN THE AUDIT THIS YEAR.
SO THIS IS THE ENGAGEMENT TEAM.
AND SO ONE THING YOU'LL NOTICE THAT'S A LITTLE BIT DIFFERENT IS THAT, UH, I'M ONE OF THE AUDIT PARTNERS.
I'VE BEEN ON THE ENGAGEMENT FOR THE PAST TWO YEARS, AND I WAS ON IT PRIOR TO THAT AS WELL, BUT I WAS A SENIOR MANAGER BEFORE THEN.
AND SO, UM, I WAS, I'VE MADE PARTNER THIS YEAR AT WEAVER, SO I'M GONNA BE ONE OF THE PARTNERS ON THE ENGAGEMENT THIS YEAR AS WELL.
AND, UH, SARAH DEMPSEY, SHE'S BEEN THE AUDIT PARTNER ON ENGAGEMENT FOR A WHILE NOW, AND YOU KNOW HER WELL, I THINK, BUT SHE'S STILL ON ENGAGEMENT.
SHE'S STILL GONNA BE DOING A QUALITY CONTROL REVIEW.
UM, SHE WASN'T ABLE TO MAKE IT TODAY, BUT SHE DID, UM, WANT US SEND HER REGARDS AS WELL.
UM, AND THEN SINCE WE WERE APPROVED FOR A NEW AUDIT CONTRACT, WHAT WE DID DO IS THAT WE DID SWITCH OUT THE MANAGERS.
WE HAVE A NEW SENIOR MANAGER ON THE ENGAGEMENT BAN AND VERA AND, UM, THE OLD MANAGER, KAYLEE, SHE WAS ON IT FOR ABOUT, I THINK SHE'S ABOUT SEVEN YEARS.
AND SO THE REASON WHY WE SWITCHED OUT, JUST TO GET A DIFFERENT PERSPECTIVE ON THE AUDIT, JUST TO MAKE SURE THAT YOU GETTING A HIGH QUALITY AUDIT.
AND CHOBANI, SHE HAS A LOT OF EXPERIENCE ON DOING MUNICIPAL AUDITS AS WELL.
AND THEN, UM, FOR THE REST OF EVERYTHING ELSE HERE, THIS IS WHAT WE NORMALLY HAVE.
WE HAVE OUR AUDIT STAFF, AND THEN WE HAVE OUR IT ADVISORY SERVICES.
SO WE DO TEST YOUR IT INTERNAL CONTROLS AS WELL.
AND THEN WE HAVE SOME, UH, DATA ANALYTICS TEAM WHERE WE, UH, USE THEM TO ANALYZE DIFFERENT THINGS LIKE JOURNAL ENTRIES AND DISBURSEMENTS.
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TIMELINE.AND SO WE'VE ALREADY DID OUR INTERIM FIELD WORK BACK IN AUGUST.
AND THEN TODAY WE HAVE THE AUDIT COMMITTEE, INTERIM AUDIT COMMITTEE MEETING, AND THEN WE'RE GONNA COME BACK FOR OUR FINAL FIELD WORK AND DO THE BULK OF OUR AUDIT WORK IN JANUARY AND FEBRUARY.
AND THEN WE'RE GONNA ISSUE THE FINANCIAL STATEMENTS IN EARLY MARCH.
AND THEN WE'LL HAVE OUR AUDIT COMMUNITY PRESENTATION IN MARCH AS WELL.
AND THEN AFTER THAT TOO, WHAT WE'D LIKE TO SAY IS THAT WE ARE YOUR AUDITORS ALL YEAR LONG, AND SO IT JUST DOESN'T END DURING THIS TIME.
AND SO YOU CAN REACH OUT TO US AND WE'LL BE IN COMMUNICATION THROUGHOUT THE YEAR AS WELL.
SO THE AUDIT PROCESS IS THAT OUR AUDIT IS A RISK-BASED APPROACH.
AND SO WHAT THAT MEANS IS THAT WE DON'T LOOK AT EVERY SINGLE THING IN YOUR FINANCIAL STATEMENTS, BUT WE TAKE A STEP BACK AND WE LOOK AT WHAT DO WE THINK ARE THE AREAS THAT ARE MORE RISKY, AND THEN WE PLAN OUR PROCEDURES THERE.
AND ONE OF THE THINGS THAT WE'RE REQUIRED TO COMMUNICATE TO YOU AS WELL IS, UH, RISKS THAT WE IDENTIFIED IN OUR PLANNING PROCESS.
AND SO UP HERE YOU CAN SEE THE RISK THAT WE IDENTIFIED IN THE FIRST ONE IS MANAGEMENT OVERRIDE OF INTERNAL CONTROLS.
AND SO THIS ONE ISN'T, THIS RISK ISN'T SPECIFIC TO THE CITY OF GARLAND.
IT'S SOMETHING THAT WE HAVE ON MOST OF OUR AUDITS.
AND THE REASON THAT WE DO HAVE THIS IS THAT BECAUSE MANAGEMENT HAS THE ABILITY TO PUT INTERNAL CONTROLS IN PLACE, THEY ALSO HAVE THE ABILITY TO CIRCUMVENT THOSE CONTROLS.
AND SO WE DO DESIGN AUDIT PROCEDURES TO MAKE SURE THAT'S NOT HAPPENING.
UM, AND IT'S BASED ON OUR AUDITS.
IN THE PAST YEARS AND WORK WE'VE DONE, THE CITY DOES HAVE VERY STRONG CONTROLS IN PLACE.
THE NEXT THING IS FOR, WE HAVE SOME RISKS OVER CERTAIN REVENUE STREAMS. AND REVENUE IS ALSO, UM, AN AUDIT RISK THAT IN ALL OF OUR AUDITS, WE CAN'T OVERCOME THE RISK THERE.
AND SO WE'RE GOING TO, WE TEST UTILITY REVENUES.
SO YOUR LECTURE UTILITIES, YOUR WATER SEWER, STORM WATER, WE TEST PROPERTY TAXES, AND WE ALSO TEST FEDERAL REVENUES AND EXPENDITURES.
AND SO THOSE WOULD BE THE FEDERAL GRANTS THAT YOU RECEIVE.
AND JUST BECAUSE WE IDENTIFY THOSE CERTAIN RISKS DOESN'T MEAN THAT WE DON'T DO OTHER AUDIT WORK TOO.
AND SO THESE ARE SOME OF THE OTHER AREAS THAT WE LOOK AT AS WELL.
SO WE LOOK OVER YOUR, IT CONTROLS CAPITAL PROJECTS, PURCHASING YOUR BID PURCHASE COMPLIANCE, PAYABLES, CRESS, VARIOUS EXPENDITURES AND OTHER COMPLIANCE REQUIREMENTS.
AND A BULK OF THE COMPLIANCE WILL BE, AGAIN, IN YOUR FEDERAL GRANTS, RIGHT? SO INTERIM FIELD WORK, WE DID IT BACK IN AUGUST.
AND WHAT WE GOT THROUGH, UM, THESE ARE SOME OF THE THINGS THAT WE ACCOMPLISHED ALREADY.
SO WE LOOKED AT YOUR PUBLIC FUNDS INVESTMENT ACT COMPLIANCE.
WE DID SOME SINGLE AUDIT TESTING.
UH, THIS YEAR WE'RE GONNA BE TESTING YOUR HOUSING CHOICE VOUCHERS PROGRAM.
AND SO WE DID SOME WORK THERE AS WELL.
YOU KNOW, THAT'S, UM, ONE OF YOUR LARGEST PROGRAMS THAT YOU HAVE FOR FEDERAL GRANTS, AND WE TEST THAT PRE FREQUENTLY.
SO I THINK THE LAST TIME WE TESTED IT WAS TWO YEARS AGO.
AND SO IT'S UP TO BE TESTED AGAIN THIS YEAR.
AND THEN WE WALKED THROUGH DIFFERENT SIGNIFICANT CLASS OF TRANSACTIONS SUCH AS CASH DISBURSEMENTS, PURCHASING, UM, CAPITAL ASSET ACQUISITION INVESTMENTS, PAYROLL PROPERTY TAXES, THE BUDGET OF FINANCIAL CLOSE PROCESS, UTILITIES, REVENUE AND GRANT REVENUE.
AND WE ALSO TEST YOUR CENSUS DATA FOR YOUR PENSION AND YOUR OPED PLANS THAT YOU HAVE.
AND THEN WE ALSO DID SOME INTERNAL CONTROL TESTING, UM, OVER CASH DISBURSEMENTS AND PAYROLL DISBURSEMENTS AND BIDS AND PROPERTY TAX RECEIPTS.
AND THEN EVERY, WE ALSO USE JED'S GROUP EVERY YEAR TOO IN INTERNAL AUDIT TO HELP ASSIST US.
AND IT HELPS US KEEP SOME OF THE COSTS DOWN AND BE MORE EFFICIENT.
AND THIS YEAR WE'RE GONNA USE THEM FOR PAYROLL CONTROL TESTING, HELP, UTILITY BILLING, AND THEN THE HCVP ELIGIBILITY TESTING IN THE FEDERAL GRANT SIDE.
AND WE ALSO HAVE DATA ANALYTICS TOO THAT WE USE, AND WE USE IT, UM, TO TEST JOURNAL ENTRIES AND TO ANALYZE JOURNAL ENTRIES FOR UNUSUAL ITEMS, AND ALSO DOING A VENDOR ANALYSIS TO LOOK FOR UNUSUAL ITEMS THERE AS WELL.
ALL RIGHT? AND SO NEXT WE HAVE SOME REQUIRED COMMUNICATIONS AUDITING STANDARDS REQUIRE US TO, UH, TO COMMUNICATE THESE TO THE AUDIT COMMITTEE.
AND SO I WON'T READ EVERYTHING IN DETAIL, BUT THESE ARE A HIGH LEVEL ITEMS THAT WE NEED TO DO.
SO WE'RE CONDUCTING OUR AUDIT IN ACCORDANCE WITH US GENERALLY ACCEPTED AUDITING STANDARDS AND GOVERNMENT AUDITING STANDARDS, UM, ON FINANCIAL STATEMENTS.
AND THE PURPOSE OF THIS IS FOR US TO EXPRESS OPINIONS ABOUT WHETHER THEIR FINANCIAL STATEMENTS REPRESENTED FAIRLY IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH US GAAP.
AND THEN AS WE DO OUR AUDIT TO, IF WE DO FIND DIFFERENT THINGS, WE ARE REQUIRED TO REPORT IT TO YOU.
SO IF WE DO FIND FRAUD, WHICH, YOU KNOW, HOPEFULLY WE WON'T, BUT IF WE DO, WE WILL COMMUNICATE IT TO YOU.
UM, ALSO ANY SIGNIFICANT MATTER, OTHER SIGNIFICANT MATTERS THAT COME UP DURING THE AUDIT, WE'LL COMMUNICATE IT TO YOU AS WELL.
ALRIGHT? AND SO THESE ARE OUR RESPONSIBILITIES UNDER UNIFORM GUIDANCE.
AND SO UNIFORM GUIDANCE IS ALSO KNOWN AS A SINGLE AUDIT.
AND SO THAT'S THE COMPLIANCE AUDIT THE FEDERAL GOVERNMENT REQUIRES FOR FEDERAL GRANTS.
SO IF YOU EXPEND MORE THAN $1 MILLION IN FEDERAL, UM, EXPENDITURES OR FEDERAL GRANTS, YOU NEED TO GET A SINGLE AUDIT AND TESTING COMPLIANCE WITH WHAT THE GOVERNMENT SAYS YOU COULD SPEND THE MONEY ON IN DIFFERENT PROGRAMS. AND SO FOR THIS, WE HAVE TO CONSIDER INTERNAL CONTROLS OVER COMPLIANCE, MAKING SURE THAT YOU HAVE PROPER SYSTEMS IN PLACE TO ENSURE YOU'RE, YOU'RE DOING WHAT YOU'RE SUPPOSED TO BE DOING WITH THE MONEY.
AND THEN WE TEST COMPLIANCE FOR EACH DIRECTIVE MATERIAL REQUIREMENTS.
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SURE YOU SPEND THE MONEY ON RIGHT THINGS AND THAT FOR LIKE HGVP, MAKING SURE THAT EVERYONE'S ELIGIBLE THAT'S RECEIVING BENEFITS.AND THEN IF WE DO HAVE ANY FINDINGS, WE ARE REQUIRED TO COMMUNICATE THAT TO YOU AS WELL.
ALL RIGHT, SO WE ALSO TEST YOUR IT CONTROLS.
WE KNOW THAT'S A BIG HOT TICKET ITEM TOO.
JUST IF YOU LOOK AT THE NEWS YARD, SEEING THAT MUNICIPALITIES ARE BEING TARGETED IN THIS AREA.
AND SO WE'RE LOOKING AT WORKDAY AND ACTIVE DIRECTORY, AND THEN WE'RE LOOKING AT PROGRAM CHANGES, UM, YOUR COMPUTER OPERATIONS, AND THEN ACCESS TO PROGRAMS AND DATA, YOUR SECURITY ADMINISTRATION, AND MAKING SURE THAT YOU HAVE PROPER CONTROLS IN THOSE AREAS.
UH, THE NEXT STEP, THESE ARE TO, FOR THIS YEAR, FOR FISCAL YEAR 26, THERE ARE TWO NEW ACCOUNTING STANDARDS, TWO NEW, UH, WHAT WE CALL GS BS FOR GOVERNMENTAL ACCOUNTING, GS B 1 0 3 AND GS B 1 0 4 THAT ARE EFFECTIVE.
AND SO THE FIRST ONE, GS B 1 0 3, IS CALLED FINANCIAL REPORTING MODEL IMPROVEMENTS.
AND SO THIS IS GONNA BE THE BIGGEST IMPLEMENTATION THIS YEAR, AND IT'S REALLY WHAT IT'S GONNA DO IS IT'S GONNA CHANGE THE WAY THAT YOUR FINANCIAL STATEMENTS LOOK.
AND SO YOUR MANAGEMENT DISCUSSION ANALYSIS, THAT'S WHICH IS THE BEGINNING PORTION OF THESE HUGE, UH, REPORTS THAT YOU HAVE.
UH, IT'S GONNA BE TAILORED MORE TO EXPLAIN WHAT HAPPENED DURING THE YEAR.
AND SO WE'LL WORK WITH THE FINANCE DEPARTMENT TO MAKE SURE THAT THEY'RE IN COMPLIANCE WITH THIS AREA.
UM, ALSO IN THE ENTERPRISE FUNDS, THERE'S A NEW REVENUE CLASSIFICATION, AND SO THEY HAVE AN ITEM CALLED SUBSIDIES THIS YEAR.
AND SO WE'RE IN THE PROCESS OF DISCUSSING WITH THE FINANCE TEAM ABOUT HOW TO IMPLEMENT THAT AND WHAT SHOULD, UM, GO ON THERE.
AND THEN THE BUDGET TO ACTUAL SCHEDULES ARE GONNA LOOK A LITTLE BIT DIFFERENT TOO.
AND THEN ALSO THE PRESENTATION OF THE DISCREETLY PRESENTED COMPONENT UNITS OF WHICH YOU HAVE ONE.
AND NEXT IS GSB 1 0 4 DISCLOSURE OF CERTAIN CAPITAL ASSETS.
AND SO PRETTY MUCH THIS IS SAYING THAT YOU HAVE TO DISCLOSE YOUR LEASING'S, UM, SUBSCRIPTION ASSETS SEPARATELY FROM YOUR OTHER CAPITAL ASSETS.
BUT THE CITY HAS ALREADY IMPLEMENTED THIS.
AND THE ONE THING I WANTED TO HIGHLIGHT HERE TO YOU AS WELL IS THAT THIS YEAR, WEAVER, WE'RE GONNA COME ON SITE AT THE END OF OCTOBER AND WE'RE GONNA DO EIGHT HOURS OF TRAINING WITH THE STAFF TOO.
AND WE'RE GONNA MEET GOING OVER THESE GS BS AND GONNA OVER SOME GOVERNMENTAL ACCOUNTING.
UM, THERE'S BEEN SOME TURNOVER IN THE FINANCIAL STAFF, SO WE THOUGHT, YOU KNOW, WE MADE AN AGREEMENT AND WE THOUGHT IT'D BE GOOD FOR US TO COME IN AND DO SOME ADDITIONAL TRAINING RIGHT? IN THE FUTURE.
NEXT YEAR WE HAVE JUST ONE GS B UM, SUBSEQUENT EVENTS.
AND SO IT'S JUST DISCLOSING EVENTS THAT HAPPEN AFTER THE FINANCIAL STATEMENT DATE.
UH, GS B'S GONNA CHANGE HOW THAT'S REPORTED, BUT THEN AFTER THAT, THERE'S CURRENTLY NOTHING IN THE PIPELINE THAT'S BEEN ISSUED YET.
SO THAT'S A LITTLE EXCITING, I'M SURE FOR THE FINANCE DEPARTMENT.
ALRIGHT, SO THAT ENDS THE REQUIRED COMMUNICATIONS I NEED TO GIVE.
SO AT THE END, WE JUST WANTED TO LEAVE IT OPEN IF YOU HAVE ANY AUDIT, UM, CONCERNS OR ANY QUESTIONS FOR US AS THE AUDITORS OR ANYTHING THAT YOU WANT US TO TAKE A LOOK AT SPECIFICALLY THIS YEAR.
AND SO THIS AGAIN, IS SOMETHING THAT WE'RE REQUIRED TO ASK AS WELL.
NOTHING TO UH, DISCUSS, BUT, AND YEAH, WITH THAT, THAT ENDS OUR PRESENTATION.
IF, AGAIN, FEEL FREE, YOU COULD ALWAYS REACH OUT TO MYSELF OR SIR IF YOU HAVE ANY QUESTIONS DURING THE YEAR, AND WE'LL BE HAPPY TO MEET WITH YOU OR TALK WITH YOU.
OH, I ACTUALLY DO HAVE ONE QUESTION.
WHAT IS H-H-C-V-P? YEAH, SO THAT'S THE HOUSING CHOICE VOUCHERS PROGRAM.
SO THAT'S THE, YEAH, I KNEW IT WAS SOMETHING ALONG THOSE LINES, I JUST DIDN'T NOTICE IT FOR, IT'S ONE OF THE FEDERAL GRANTS, SO WE'RE AUDITING THAT PROGRAM THIS YEAR.
ANY OTHER QUESTIONS, COMMENTS, CHAIRMAN, IF I MAY MAKE YOUR COMMENT? YES, THANK YOU FOR OFFERING THOSE TRAININGS FOR, FOR OUR STAFF, WHICH IS GONNA BE VERY VALUABLE TO US.
I ALSO WANNA, UH, INFORM THE COMMITTEE THAT IT IS OUR FINANCE DEPARTMENT THAT WILL BE PROVIDING A LOT OF INFORMATION AND SOUNDS LIKE IT CLOSELY.
I JUST WANNA THANK, UH, WEAVER AGAIN FOR THIS PRESENTATION AND, UH, CONTINUING, UM, THE PARTNERSHIP WE'VE HAD WITH THEM.
UM, AND THIS YEAR, YOU KNOW, THIS IS OUR FIRST FULL FISCAL YEAR IN OUR WORKDAY FINANCIAL SYSTEMS, UM, AS WELL AS WORKING THROUGH THE, UH, GS 1 0 3, UM, WHICH SOME OF THAT HAS TO BE IMPLEMENTED THROUGH THE SYSTEM.
SO, UM, HAVING THOSE COMMUNICATIONS, THE TRAINING IN OCTOBER, THOUGH THAT DISCUSSION DURING THIS INTERIM PROCESS OF EXACTLY HOW THAT WILL GET IMPLEMENTED.
UM, SOME OF YOU KNOW, THE CONTROLS THROUGH THE WORKDAY SYSTEM, HOW THEY MAY, UM, IMPACT OR, YOU KNOW, UH, SAFEGUARD THE CITY.
UM, AND JUST WALKING THROUGH THAT PROCESS WITH THEM AS WELL AS SOME OF THE, UM, OPEN ITEMS FROM OUR MANAGEMENT LETTER, UM, FROM OUR 2025 AUDIT, LARGELY RELATED TO THE IMPLEMENTATION OF WORKDAY IN THAT CONVERSION, WORKING WITH WEAVER ON HOW WE'RE ADDRESSING THOSE, HOW THOSE, UM, WILL BE ADDRESSED THROUGH THE FY 26 STATEMENTS.
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UM, AND JUST WALKING THROUGH THAT PROCESS WITH THEM SO THAT WE CAN BRING THAT BACK TO THIS COMMITTEE IN MARCH AS PART OF THE 26TH REPORT.IT SOUNDS LIKE A VERY EXHAUSTIVE, UH, PROCESS AND BASED ON ALL THAT I'VE HEARD, YOU'RE GONNA BE DEALING WITH A LOT OF DIFFERENT AREAS, BUT PRIMARILY SOUNDS LIKE YOU'RE REALLY GONNA BE DEALING WITH OUR FINANCES.
THAT, THAT PRETTY MUCH YES, SIR.
WELL, WE'VE DONE WELL WITH YOU IN THE PAST.
WE'RE LOOKING FORWARD TO WORKING WITH YOU AS WE GO INTO THE FUTURE.
THANK YOU SO VERY MUCH FOR THE PRESENTATION.
UH, MIKE, YOU GOT ANYTHING? NO, SIR.
THE NEXT AUDIT THAT WE WANT TO COVER TODAY IS THE GARLAND POWER AND LIGHT WAREHOUSE SERVICE AGREEMENT AUDIT.
UH, AS YOU MAY REMEMBER, APPROXIMATELY TWO YEARS AGO, THE CITY ADMINISTRATION, UM, ALONG WITH GPNL, HAS MADE THE DECISION TO OUTSOURCE OUR WAREHOUSE OPERATIONS FOR MAINLY GARLAND POWER AND LIGHT DISTRIBUTION SITE.
AND IN 2024 IS WHEN THIS DECISION WAS MADE ON JULY 16TH, 2024, THE CITY COUNCIL APPROVED THE AWARD, UH, TO A THIRD PARTY.
UH, THEIR COMPANY NAME IS CHECK LINE AND THE PROCUREMENT DOCUMENT ALLOWED FOR ANNUAL RENEWALS.
WE ACTUALLY, UM, EXECUTED THAT AGREEMENT IN SEPTEMBER 1ST, 2024, AND THE OPERATIONS BEGAN ON OCTOBER 1ST, 2024, SO IT'S ALMOST TWO YEARS.
SO WE WANTED TO, UM, MAKE SURE, UM, THAT WE EVALUATE WHETHER THE CITY'S VENDOR IS PROVIDING SERVICE AS THEY AGREED UPON.
WE ALSO WANTED TO ENSURE THAT THE PAYMENTS THAT WE HAVE PROCESSED ARE ACCURATE AND COMPLETE.
SO THOSE WERE THE TWO OBJECTIVES FOR THIS AUDIT.
OUR AUDIT SCOPE MAINLY COVERED FROM OCTOBER, 2024 THROUGH MAY, 2026.
UM, ONE OTHER THING THAT I WANNA POINT OUT, WE'RE NOT GONNA GO OVER THE REPORT IN DETAILS TODAY.
INSTEAD WE HAVE A PRESENTATION, UM, BUT THE REPORT IS AVAILABLE FOR THE COMMITTEE.
VIN ACTUALLY CONDUCTED THIS AUDIT IN A MINUTE.
HE'S GONNA GO OVER THE DETAILS OF A LITTLE BIT OF MORE BACKGROUND AND ALSO SOME OF THE POSITIVE OBSERVATION AS WELL AS SOME OF THE AREAS THAT WE FELT LIKE CAN BE IMPROVED ON.
I DO WANT TO TAKE A MOMENT TO THANK JONAS WHITEHEAD, WHO IS THE DIRECTOR OVER OUR DISTRIBUTION AREA, UM, WITH GARLAND POWER AND LIGHT.
HIM AND HIS TEAM WERE VERY RESPONSIVE.
UM, THEY WERE ONE OF THE BEST CLIENTS THAT WE HAD RECENTLY, SO I REALLY DO WANT TO THANK THEM.
EVEN WHEN WE BROUGHT SOME OF THE ISSUES THAT WE IDENTIFIED, THEY WERE IMMEDIATELY, UH, ON TOP OF EVERYTHING TO GET IT RESOLVED.
THANKS TO GERALD, AS WELL AS TOM HANCOCK, UH, FOR THEIR SUPPORT AS WELL.
WITH THAT EVIN, IF YOU DON'T MIND, GO OVER THE REPORT WITH US.
GOOD EVENING AUDIT COMMITTEE MEMBERS.
UH, TO THE BACKGROUND, THE CITY HISTORICALLY OPERATED AN A CENTRAL WAREHOUSE THAT SUPPORTED GPNL AND OTHER DEPARTMENTS.
IN 2024, THE CITY AND GPNL MOVED GPL DISTRIBUTION WAREHOUSE OPERATIONS TO A THIRD PARTY VENDOR.
CITY COUNCIL APPROVED THE AGREEMENT IN JULY, 2024 FOR AN ESTIMATED ANNUAL AMOUNT OF 10 MILLION.
THE AGREEMENT BECAME EFFECTIVE IN SEPTEMBER.
WAREHOUSE OPERATIONS BEGAN OCTOBER 1ST, 2024.
UNDER THIS MODEL, THE VENDOR PURCHASES MAINTAINS THE ELECTRICAL DISTRIBUTION INVENTORY STAFF, THE WAREHOUSE ISSUES AND REPLENISHES MATERIALS, PERFORMS INVENTORY COUNT AND SUPPORTS THE DAY-TO-DAY WAREHOUSE OPERATIONS.
PRICING IS BASED ON THE VENDOR'S AVERAGE COST AND INCLUDES AN 18.5% MARGIN IN THE SELLING PRICE.
WHAT'S WORKING WELL? UH, BEFORE DISCUSSING THE OBSERVATIONS, THERE WERE SEVERAL POSITIVE RESULTS FROM THE AUDIT.
OVERALL, WE FOUND THAT THE VENDOR IS GENERALLY PROVIDING SERVICES IN ACCORDANCE WITH THE AGREEMENT, AND GPNL IS GENERALLY PROCESSING THE RELATED PAYMENT PAYMENTS TIMELY AND IN ACCORDANCE WITH THE AGREEMENT.
DURING THE AUDIT PERIOD, GPL PURCHASED APPROXIMATELY $8.5 MILLION IN MATERIALS, UH, THROUGH THIS ARRANGEMENT.
WE ALSO FOUND THAT 92% OF REQUESTED ITEMS WERE ISSUED WITHIN 30 DAYS.
SO OVERALL, THE CORE WAREHOUSE SERVICE AND PAYMENT PROCESSING IS FUNCTIONING AS INTENDED WITH SOME AREAS WHERE OVERSIGHT CAN BE STRENGTHENED.
OUR FIRST OBSERVATION CAME OUT OF THE DATA ANALYSIS WE PERFORMED ON VENDOR PAYMENTS.
WE LOOKED ACROSS INVOICE NUMBERS, PAYMENT AMOUNTS, WORK ORDER NUMBERS, AND OTHER INFORMATION TO IDENTIFY TRANSACTION THAT APPEAR TO BE DUPLICATES.
UH, THAT REVIEW IDENTIFIED THREE DUPLICATE PAYMENTS TOTALING $164,000,
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UH, TO OCCURRED DURING CITY'S TRANSITION BETWEEN FINANCIAL SYSTEMS. AND THE THIRD OCCURRED DURING WAREHOUSE TRANSITION.ONCE THE DUPLICATES WERE CONFIRMED, GPO WORKED WITH THE VENDOR TO RESOLVE THEM, AND THE CITY RECOVERED THE FULL AMOUNTS THROUGH REFUNDS.
THE RECOMMENDATION AND ACTION PLAN RECOMMENDATION IS FOCUSED ON PREVENTING THIS FROM HAPPENING AGAIN BY USING SYSTEM CONTROLS AND ROUTINE DATA ANALYSIS TO IDENTIFY POTENTIAL DUPLICATES, AND THEN DOCUMENTING HOW ANY EXCEPTIONS ARE RESOLVED.
MANAGEMENT CONCURRED AND HAS ALREADY TAKEN SEVERAL STEPS.
GPNL ACCOUNTING HAS RECONCILIATION PROCESS IN PLACE.
WORKDAY PROCESS PROVIDES AN ALERT WHEN THE SAME INVOICE NUMBER IS ENTERED, AND ACCOUNTING HAS DEVELOPED A DATABASE TO BRING THE VENDOR INVOICE DATA TOGETHER SO STAFF CAN RUN QUERIES ACROSS THE FULL POPULATION.
THE DATABASE IS EXPECTED TO BE IMPLEMENTED IN OCTOBER, 2026.
THE SECOND OBSERVATION LOOKS AT HOW INVOICES MOVE THROUGH THE REVIEW PROCESS.
ON A TYPICAL DAY ABOUT 5G PNL EMPLOYEES ARE INVOLVED AND MANAGEMENT ESTIMATES THAT EACH PERSON SPENDS ABOUT TWO HOURS A DAY ON THESE ACTIVITIES.
THIS TAKES TIME, THIS TIME CAN TAKE EMPLOYEES AWAY FROM THEIR PRIMARY JOB RESPONSIBILITIES AND OTHER OPERATIONAL TASKS.
THE KEY ISSUE IS THAT THE SAME GENERAL REVIEW PROCESS IS USED REGARDLESS OF THE COST, QUANTITY OR TYPE OF ITEM.
FOR EXAMPLE, A VERY LOW COST GALVANIZED NUT, WHICH IS AROUND 11 CENTS, CAN GO THROUGH THE SAME PROCESS REVIEW STEPS AS A PAD MOUNTED SWITCHGEAR, WHICH COST ABOUT $140,000 PER UNIT.
THE MULTIPLE REVIEWS PROVIDE OVERSIGHT AND MAY CATCH HELP, MAY HELP CATCH ERRORS, BUT THERE IS AN OPPORTUNITY TO MAKE THE PROCESS MORE EFFICIENT BY MATCHING THE LEVEL OF REVIEW TO THE DOLLAR VALUE AND RISK OF THE TRANSACTION.
THE DEPARTMENT COULD ALSO MAKE GREATER USE OF THE AVAILABLE TECHNOLOGY AND AUTOMATED CONTROLS TO IDENTIFY POTENTIAL DUPLICATE INVOICES, UNUSUAL TRANSACTION OR OTHER EXCEPTION, ALLOWING STAFF TO FOCUS ON THEIR VER UH, TO FOCUS THE REVIEW ON HIGHER RISK ITEMS WHILE REDUCING TIME SPENT ON ROUTINE TRANSACTIONS RECOMMENDATION AND ACTION PLAN.
RATHER THAN APPLYING THE SAME LEVEL OF REVIEW TO EVERY INVOICE, WE RECOMMENDED A MORE RISK BASED APPROACH.
UM, HIGHER COSTS, UNUSUAL OR HIGHER RISK PURCHASES WOULD RECEIVE ADDITIONAL REVIEW WHILE LOWER RISK TRANSACTION COULD MOVE THROUGH A MORE STREAMLINED PROCESS.
WE ALSO RECOMMENDED USING SYSTEM GENERATED REPORTS TO IDENTIFY ANY UNUSUAL TRANSACTIONS.
MANAGEMENT CONCURRED GPNL DISTRIBUTION PLANS, UH, TO DEVELOP A TIERED APPROVAL PROCESS BASED ON INVOICE VALUE.
AND GPNL ACCOUNTING HAS DEVELOPED A DATABASE THAT WILL SUPPORT, UH, UH, SUPPORT QUERIES OR ANY EXCEPTION ANALYSIS.
BOTH ACTIONS ARE EXPECTED TO BE IMPLEMENTED IN OCTOBER, 2026.
UH, THE FINAL OBSERVATION COVERS TWO, UH, RELATED OVERSIGHT AREAS, COST INFORMATION AND WARRANTIES.
AS MENTIONED EARLIER, UH, THE PRICE, PRICE GPL PACE IS TIED DIRECTLY TO THE VENDOR AVERAGE COST WITHIN 18.5% MARGIN IN THE SELLING PRICE.
BECAUSE OF THAT STRUCTURE, PERIODICALLY REVIEWING THE UNDERLYING COST INFORMATION IS AN IMPORTANT PART OF CONFIRMING WHAT THE CITY IS BEING CHARGED.
GPNL REVIEWS INVOICES, INVOICES AS PART OF THE NORMAL PURCHASING PROCESS, BUT IT DOES NOT ROUTINELY REQUEST AND REVIEW THE DETAILED COST INFORMATION AVAILABLE UNDER THE AGREEMENT, INCLUDING THE COMPETITIVE PRICING REPORT.
WE ALSO FOUND THAT THE WARRANTY ISSUES ARE HANDLED AS THEY COME UP, BUT WARRANTY INFORMATION IS NOT CENTRALLY TRACKED WITHOUT THE VISIBILITY, THERE'S A RISK THAT THE CITY COULD PAY FOR A REPAIR OR REPLACEMENT THAT MAY STILL BE COVERED UNDER WARRANTY FOR RE UH, RECOMMENDATION AND ACTION PLAN.
UH, FOR COST INFORMATION, WE RECOMMENDED GPL REQUEST AND REVIEW THE AVAILABLE VENDOR COST AND PRICING INFORMATION AT LEAST ANNUALLY.
FOR WARRANTIES, WE RECOMMENDED A TRACKING METHOD, UM, FOR SIGNIFICANT MATERIALS.
SO AVAILABLE WARRANTY COVERAGE CAN BE CONSIDERED BEFORE THE CITY PAYS FOR REPAIR OR REPLACEMENT MANAGEMENT.
CONCURRED WITH THE COST AND REC COST RECOMMENDATION AND WILL BEGIN REQUESTING THE COMPETITIVE PRICING REPORT ANNUALLY WITH JANUARY 20, 27.
AS THE IMPLEMENTATION DATE MANAGEMENT PARTIALLY CONCURRED WITH THE WARRANTY RECOMMENDATION AND INDICATED GPNL WILL MONITOR SIGNIFICANT MATERIAL FAILURES THAT MAY BE ELIGIBLE FOR WARRANTY REPLACEMENT.
THAT PROCESS IS ALREADY IN PLACE.
UM, THAT CONCLUDES THE PRESENTATION.
I'M HAPPY TO ANSWER ANY QUESTIONS.
[00:25:01]
I HAD, UH, SOME THOUGHTS THAT ARE RELATED TO THIS, AND I DON'T KNOW IF THIS IS THE ONE OR NOT, BUT YOU SAID YOU HAVE AN 18 POINT MARGIN, 18.5.CAN YOU KIND OF EXPLAIN THAT? CAN YOU TALK A LITTLE BIT MORE ABOUT WHAT THAT MEANS IN THE WAY OF WHAT WE'RE PAYING FOR ITEMS VERSUS MAYBE, UH, WHAT MAYBE, UH, SOMEONE IN THE COMMUNITY WOULD BE PAYING FOR THAT SAME ITEM? KEVIN? YES.
IF YOU MAY PULL THE CONTRACT DOCUMENTS, YES SIR, PLEASE, WE COULD STOP YOU.
IT WOULDN'T BE RIGHT FOR YOU TO BE HERE AND NOT STEP UP.
SO THE 18.5% MARGIN, UH, SO THAT'S WHAT, UM, THE VENDOR, UM, ADDS ON TO WHAT THEY PURCHASE FROM THE MANUFACTURER.
SO, UH, FROM THE STANDPOINT OF THE WAY THE PROCESS USED TO BE DONE WITH REGARDS TO THE CITY WAREHOUSE, UH, YOU DON'T BUY DIRECT DIRECTLY FROM THE MANUFACTURER.
YOU, YOU BUY FROM A A THIRD PARTY BASICALLY, BASICALLY.
AND WHAT YOU TYPICALLY SEE IN THE INDUSTRY IS ABOUT A 15% MARKUP.
SO WE HAVE 18.5%, THREE POINT A HALF PERCENT OF THAT YOU CAN CONFIGURE IS GONNA BE GOING TO THE OPERATION ASSOCIATED WITH THE WAREHOUSE THAT THE VENDOR IS DOING.
IF YOU LOOK FROM A HISTORICAL STANDPOINT, UH, WE NORMALLY, WE AS G-P-L-G-P-L NORMALLY PLAYED ABOUT $900,000 ROUGHLY, UH, FOR, UH, THE CITY WAREHOUSE OPERATIONS.
IF YOU TAKE THAT IN FY 20, I'M TRYING TO REMEMBER, IT WAS 25 OR 26, WE, IT WAS ABOUT $5 MILLION OF PURCHASES THAT WE HAD, UH, VIA THIS, VIA THE NEW VENDOR.
SO IF YOU ASSUME THREE AND A HALF PERCENT OF THAT WAS GOING TO COVER OPERATIONAL EXPENSES AT FIVE AND A HALF MILLION DOLLARS, THAT'S WHAT, $165,000.
THAT WILL GIVE YOU THE IDEA OF THEIR OPERATION COST OF $165,000 VERSUS WHAT WE WERE PAYING OF 900,000.
THAT WAS PART OF THE REASON WHY WE WENT THROUGH THE PROCESS.
ONE WAS FOR COST SAVINGS, THE TWO, THE OTHER WAS BECAUSE THEY HAVE, I BELIEVE IT'S SIX FACILITIES WITHIN A 200 MILE RADIUS, RADIUS OF US, SO THAT THEY'RE ABLE TO DRAW UPON THEIR INVENTORIES FROM OTHER AREAS AND HAVE GREATER PURCHASING POWER.
UM, YOU SAW THE 92%, UM, AS FAR AS THE 30 DAYS AS FAR AS FULFILLING, UH, THEIR OBLIGATIONS, THAT IS SUBSTANTIALLY BETTER THAN WHAT WE WERE EXPERIENCING, UH, UNDER THE OLD ARRANGEMENT.
AND SO THAT, THAT'S WHERE IT'S 18.5%.
SO IT LOOKS LIKE, WOW, YOU'RE PAYING A LOT ON THAT MARGIN.
WELL, WE WERE ALREADY PAYING 15% FOR PURCHASING FROM A THIRD PARTY TO BEGIN WITH.
AND SO, UM, AGAIN, FOR US IT WAS A, A, A COST DECISION AS WELL AS A SERVICE DECISION WHEN WE WENT DOWN THIS PATH.
HOPEFULLY THAT HELPS AND ANSWERS THE YES, IT DOES.
UH, I, I GUESS MY THOUGHTS WERE, UH, WHEN I WATCH, UH, SOME OF THE, UH, GOVERNMENT, UH, REVIEWS AND WAY OF PURCHASING TAKES PLACE ON THE NATIONAL LEVEL, AND I SEE THAT, UH, THEY TAKE A, UH, A SEAT SUCH AS HERE, SITTING IN PRESENTLY THAT SEAT ONLY OPEN MARKET MAY COST $5, BUT BY THE TIME THE GOVERNMENT GETS IT THERE $25, THAT I WANTED TO UNDERSTAND MORE ABOUT THAT MARGIN, IF IT'S A MARKUP AS FAR AS THE MATERIALS OR AS FAR AS WHAT WE'RE PURCHASING.
BUT IT SOUNDS LIKE WHAT YOU'RE SAYING IS THIS IS A MARKUP THAT COVERS THEIR OPERATING COSTS AND WAREHOUSE AND SO ON AND SO FORTH.
YOU THINK THAT THIS IS OUR BEST ME METHOD, UH, METHODOLOGY OF GOING ABOUT DOING IT? CORRECT.
UH, I, I DON'T BELIEVE WE'VE HAD TO TELL ANYBODY SINCE, UH, WE STARTED THESE OPERATIONS THAT WE COULDN'T CONNECT THEIR BUSINESS OR THEIR RESIDENCE BECAUSE WE DIDN'T HAVE MATERIAL.
SO WE'RE, WE'RE IN A TIME, WE'RE IN A PERIOD RIGHT NOW WHERE MONEY, EVERYBODY IS CONCERNED ABOUT IT, WE DON'T HAVE ENOUGH OF IT.
AND WE BEGAN TO TALK ABOUT WASTE AND WE TALK ABOUT HOW WE'RE SPENDING OUR MONEY.
IT'S JUST GOOD TO BE ABLE TO SAY, OKAY, THERE ARE THE 15 OR 18%, BUT THERE ARE REASONS FOR THAT AND TO BE ABLE TO JUSTIFY IT.
NO, I WAS LOOKING FOR THE, I LEFT MY, I LEFT MY, UH, REPORT OVER THERE.
I WAS GONNA GIVE YOU THE, UM, MANAGEMENT ACCOMPLISHMENT, MANAGEMENT ACCOMPLISHMENTS WHERE YOU CAN, I JUST WANTED TO, TO, CAN'T REMEMBER THE NUMBERS OFFHAND 'CAUSE I'VE GOT TOO MUCH GRAY HAIR NOW.
DON'T WORRY, IT DOESN'T STOP
UM, SO YEAH, IF YOU LOOK IN FY 24, WE PURCHASED $5.9 MILLION VIA THE CITY WAREHOUSE PLUS ROUGHLY $900,000 FOR THEIR SERVICES FOR A TOTAL OF 6.8 MILLION.
[00:30:02]
UH, IF YOU LOOK AT FOR FY 25, UM, WE PURCHASED APPROXIMATELY $5 MILLION.UH, AND THAT DID NOT INCLUDE ANY TYPE OF ADDITIONAL CHARGES FOR THEIR WAREHOUSE SERVICES.
'CAUSE IT'S EMBEDDED IN THAT 18.5%.
SO THAT'LL GIVE YOU AN IDEA FROM A COMPARISON STANDPOINT.
NOW, OBVIOUSLY IT, IT, IT'S NOT ONE FOR ONE 'CAUSE WE COULD HAVE PURCHASED A LITTLE BIT MORE, UM, VOLUME WISE IN 24 THAN 25, BUT IT'LL AT LEAST GIVE YOU AN IDEA THAT, UM, OUR, OUR EXPECTATIONS THAT WE WOULD SAVE MONEY AS WELL AS INCREASE THE, UM, UH, THE QUALITY OF SERVICE.
AND THAT'S WHAT WE'VE EXPERIENCED SO FAR.
UM, YOU MENTIONED A 92% FULFILLMENT RATE.
WILL YOU TALK ABOUT THAT A LITTLE BIT? AND, AND IS THAT RATE HIGHER OR LOWER THAN PREVIOUS? WHEN? SO WE ONLY GOT TO TEST FROM THE NEW VENDOR, SO WE WEREN'T ABLE TO COMPARE IT TO ANYTHING PREVIOUSLY, BUT WE CHECKED, UH, FROM THE TIME THEY PUT IN THE ORDER, UH, AND WHEN THEY RECEIVED IT, AND IT WAS 90, 92% WITHIN 30 DAYS.
BUT I CANNOT SPEAK FOR ANYTHING PRIOR THIS AGREEMENT.
MR. KLEIN, DO YOU, UM, DO YOU HAVE ANY THOUGHTS ON THAT? UM, DO YOU FEEL THAT THE SERVICE IS BETTER? YES.
AND THAT GOES BACK TO THE QUESTION I WANTED TO MAKE SURE I CONFIRMED WITH JONAS, THAT MY UNDERSTANDING IS THAT SINCE THE VENDOR HAS COME INTO PLAY, WE HAVEN'T HAD TO MAKE A STATEMENT TO SOMEBODY, HEY, WE, WE, WE CAN'T CONNECT YOU TODAY A NEW BUSINESS, UH, A NEW SUBDIVISION, UH, BECAUSE WE'RE STILL WAITING ON, ON MATERIAL THAT WE EXPECT IT TO COME IN, UM, WITH INSUFFICIENT AMOUNT OF TIME.
AND SO AGAIN, IT GOES BACK TO THEY'VE GOT SIX DIFFERENT FACILITIES THAT THEY'RE PULLING, PULLING FROM.
AND SO IT, IT MAKES THE RESPONSE SO, UH, UM, YOU KNOW, THEY, THEY JUST GOT, THEY JUST HAVE MORE TO CHOOSE FROM, BASICALLY.
AND SO THEIR RESPONSE IS BETTER.
IF I MAY CLARIFY ONE THING, UM, UH, SINCE THE C'S WAREHOUSE DOES NOT EXIST ANYMORE AND SOME OF THE RUKU NOT EXCEEDS, WE, WE COULD NOT PERFORM SOME OF THOSE ANALYSIS UNDERSTOOD.
THAT WE WOULD'VE NORMALLY DONE.
I ALSO WANNA EMPHASIZE ONE THING.
AS DELL SAID, EVERY AUDIT REQUEST THAT WE HAD FOR THE VENDOR, THEY WERE EXTREMELY TIMELY AND COOPERATIVE.
AND EVEN THOUGH OUR, OUR CONTRACTS ALLOWED THEM 30 DAYS, WE DIDN'T HAVE TO WAIT FOR 30 DAYS.
THEY WERE REALLY COOPERATIVE WITH US, SO FANTASTIC.
WELL, I'LL TRUST MR. KLEIN'S, UM, OBSERVATIONS
DO WE HAVE THE, THE HARD DATA? NO, BUT JUST WHAT WE'VE EXPERIENCED, UM, HAS BEEN A, BEEN AN IMPROVEMENT.
VERY GOOD REPORT J THANK YOU SO VERY MUCH.
OH, AND SINCE I'M UP HERE, YES, YOU MIGHT, I WANNA SAY THANK YOU TO JN ALSO TO, UH, JED AND HIS GROUP, AND ALWAYS PLEASURE TO WORK WITH, WITH YOU GUYS AND, UH, APPRECIATE GOING THROUGH THE PROCESS AND IDENTIFYING AREAS FOR, FOR IMPROVEMENT AND ALSO JUST THE PERSPECTIVE FROM THE STANDPOINT OF PROVIDING THE INFORMATION.
UM, SO DEFINITELY APPRECIATE IT.
CHAIRMAN, THE NEXT AUDIT THAT WE WOULD LIKE TO COVER IS THE FACILITIES CONTRACT MANAGEMENT AUDIT.
UM, BEFORE WE GET INTO THE DETAILS, I DO WANNA, UH, INFORM THE COMMITTEE THAT THIS AUDIT WAS REQUESTED, UM, BY THE CITY MANAGER.
UM, SO, UM, HE, YOU KNOW, AS YOU'RE AWARE OF THE CITY STRATEGIC PLAN, THERE IS AN EMPHASIS ON STRENGTHENING OUR FINANCIAL CAPACITY AS WELL AS MAINTAINING LONG-TERM FINANCIAL STABILITY.
AND I BELIEVE THAT IS THE MAIN REASON WHY MR. CITY MANAGER REQUESTED THIS AUDIT.
UH, IN ADDITION TO HIS REQUEST, I ALSO WANNA, UM, INFORM THE COMMITTEE THAT UIO ACTUALLY ASKED US TO EXPAND ON WHAT WE WERE PLANNING ON DOING.
AND SO I DO WANNA THANK HIM AS WELL.
UM, OUR FACILITIES MANAGEMENT, UH, DEPARTMENT HANDLES, UH, THEY HAVE A LARGE PORTFOLIO TO MANAGE OVER 300 FACILITIES THAT THEY MANAGE, AND THEY HAVE 28 STAFF MEMBERS.
SO, UH, AND YOU KNOW, FROM A REALISTIC PERSPECTIVE, THEY'RE, THEY'RE NOT ABLE TO HANDLE, UH, ALL THE ROUTINE PREVENTATIVE MAINTENANCE, EMERGENCY REPAIRS, CUSTODIAL SERVICES, PLUMBING, ELECTRIC HEATING, AIR CONDITIONING, SECURITY CAMERAS, YOU NAME IT.
THEY DO PRETTY MUCH EVERYTHING.
UNFORTUNATELY, THEY CANNOT, OR IT'S NOT REALISTIC FOR THEM TO HANDLE THAT
[00:35:01]
INTERNALLY.SO THEY DO HAVE A LARGE AMOUNT OF CONTRACTS THAT THEY MANAGE, UH, OVER 30 FROM A SERVICE ORIENTED PERSPECTIVE.
SO WHEN ME AND MIKE TALKED ABOUT IT, WE WANTED TO LOOK AT THESE CONTRACTS TO SEE, UM, YOU KNOW, NUMBER ONE, UM, ARE THESE ADDING VALUES? YOU KNOW, CAN WE, ARE WE GETTING THESE SERVICES IN THE MOST EFFICIENT WAY AND COST EFFECTIVE WAY? SECONDLY, WE ALSO WANTED TO ENSURE THAT THESE CONTRACTS ARE MANAGED, UH, PROPERLY, UH, FROM A CONTROL PERSPECTIVE.
ARE WE, ARE WE REVIEWING THEIR PERFORMANCE? ARE WE ENSURING THAT THE CONTRACTORS ARE ACTUALLY, YOU KNOW, THEY'RE COMPLYING WITH THE AGREEMENTS AS WELL AS, UM, OUR PAYMENT PROCESSING? SO, UH, WE OBVIOUSLY, WE DID NOT LOOK AT ALL 30 CONTRACTS.
UH, WE JUDGMENTALLY SELECTED A NUMBER OF CONTRACTS INCLUDING, UH, SHARED USE AND MAINTENANCE AGREEMENTS WITH THE TWO APARTMENT COMPLEXES IN DOWNTOWN.
UM, SO I KNOW, UM, ZACH IS GONNA GO OVER THE DETAILS ON THAT ONE.
IN ADDITION TO THAT, WE DID LOOK AT THE CITYWIDE SECURITY CAMERA COST AND THE UTILIZATION, UH, OF THE ENTERPRISE MODEL, UH, THAT WE CURRENTLY HAVE.
WE ALSO WANTED TO LOOK AT THE CITYWIDE FURNITURE PURCHASES THIRD PARTY VENDOR ACCURACY OF PAYMENTS AND THE LIABILITY INSURANCE VERIFICATION.
SO WE, WE KIND OF LOOKED AT FROM A DIFFERENT ANGLE, UH, IN, IN DIFFERENT CONTRACTS.
SO ZACH HAS DONE AN EXCELLENT JOB, AND THIS WAS A VERY COLLABORATIVE EFFORT.
UM, WE NOT ONLY MET WITH THE FACILITIES DEPARTMENT AND CITY ADMINISTRATION, WE ALSO MET WITH PARKS DEPARTMENT, DOWNTOWN DEVELOPMENT OFFICE, CITY ATTORNEY'S OFFICE, THANKS TO THE CITY SECRETARY'S OFFICE FOR PULLING ALL THE CONTRACTS.
I ALSO WANT TO THANK, UM, THE DOWN THE OAKS PROPERTIES MANAGEMENT.
WE GOT THE PRIVILEGE TO MEET WITH MR. NORMAN, WHO'S THE OWNER AND HIS TEAM AS WELL.
AND THEY WERE EXTREMELY COOPERATIVE AND VERY OPEN ABOUT THE RELATIONSHIP, AND THEY CARE FOR THE, THIS COLLABORATION WITH, WITH THE CITY.
THEY DO VALUE OUR, OUR, OUR, OUR RELATIONSHIP AS WELL, AS MUCH AS WE VALUE OUR RELATIONSHIP, THEIR RELATIONSHIP.
SO WITH THAT, UH, ZACH IS GONNA GO OVER SOME OF THE BACKGROUNDS AS WELL AS SOME OF THE OBSERVATIONS THAT WE HAD.
AND HE DID AN EXCELLENT JOB AND J DID IT AS WELL WITH THE OTHER AUDIT.
I DIDN'T GET A CHANCE TO APPRECIATE HIM.
HE'S, HE IS DONE A GREAT JOB AS WELL.
WITH THAT, ZACH, MR. CHAIRMAN, BEFORE, BEFORE, UH, ZACH HAD STARTED, UH, I, I DID WANT TO REITERATE WHAT, UH, UH, JED SAID, WHICH IS I DID REQUEST THIS AUDIT AND, AND FOR SEVERAL REASONS.
NUMBER ONE, AS HE POINTED OUT, FINANCIAL STEWARDSHIPS AN IMPORTANT PART OF OUR, UH, STRATEGIC PLAN THAT IS, WHERE CAN WE SAVE MONEY? WHERE CAN WE RESERVE FUNDS? WHERE CAN WE BE TIGHTER AS AN ORGANIZATION? UH, SECONDLY, YOU KNOW, AS, AS YOU PROBABLY ARE AWARE, WE HAVE A NEW MANAGING DIRECTOR AND A NEW ASSISTANT CITY MANAGER OVER THESE OPERATIONS THAT ARE, HAVE TAKEN, UH, CONTROL OF THESE OPERATIONS.
AND, AND GIVEN THE LARGE NUMBER OF CONTRACTS THAT THEY ADMINISTER AND THE LARGE DOLLAR AMOUNTS AND THE IMPORTANCE THERE ARE TO OUR FACILITIES, I WANTED TO MAKE SURE THAT THE AUDIT WOULD GIVE BOTH ME AND THEM AN OPPORTUNITY TO SEE WHAT'S GOING ON SO THAT WE CAN LOOK AT THE, THE OPERATION HOLISTICALLY AND MAKE SURE THAT WE WEREN'T MISSING ANYTHING.
AND SO I ASKED JED, YOU KNOW, IT'S THE, THE KIND OF COLLABORATION THAT HE AND I HAVE IS TO BE ABLE TO SAY, HEY, I NEED TO BE ABLE TO HAVE THE FOLKS WHO ARE DOING THIS BE ABLE TO SEE INTO THIS ORGANIZATION BETTER AND BE ABLE TO KNOW WHERE THE WEAK POINTS ARE AND WHAT THEY NEED TO FOCUS ON IN THE MONTHS AND YEARS AHEAD.
AND SO, UH, I REALLY APPRECIATE, UH, JED BEING WILLING TO ADD THIS.
I KNOW YOU ALREADY HAD A PRETTY FULL LIST, BUT IT WAS SOMETHING, UH, GIVEN THE LARGE NUMBER OF CONTRACTS AND, AND THE DIFFICULTY SOMETIMES MANAGING THESE CONTRACTS, INCLUDING THE OAKS CONTRACT.
I MEAN, IT'S, AS SOMEBODY WHO LIVES OVER AT THEIR PROPERTY AND HAD REPORTED THE ELEVATOR OUT, NOBODY KNEW WHO ACTUALLY WAS RESPONSIBLE TO FIX THE ELEVATOR.
THE, THE FACILITIES FOLKS THOUGHT WE WERE RESPONSIBLE OR THOUGHT THE APARTMENTS WERE RESPONSIBLE.
THE APARTMENTS THOUGHT WE WERE RESPONSIBLE.
AND IT'S NOT THE ONLY ISSUE LIKE THAT.
IT'S TRUE WHEN LIGHT BULBS GO OUT AND EVERYTHING ELSE.
AND IT TURNS OUT THOSE ARE OLD CONTRACTS THAT, THAT WEREN'T WELL, UH, DRAFTED AT THE TIME THAT THEY WERE FIRST PUT IN PLACE AND, AND PROBABLY NEED SOME UPDATING.
SO I REALLY APPRECIATE, UH, THE AUDIT STAFF'S HELP WITH THIS BECAUSE, YOU KNOW, IT'S THE KIND OF THING THAT, THAT FEEDBACK THAT WE GET THAT CAN MAKE US BETTER AS AS AN ORGANIZATION.
AND SO I JUST WANTED TO POINT OUT THAT'S WHY WE ASKED FOR THIS AUDIT IN THE FIRST PLACE.
AND, UH, THANK YOU BOTH FOR THE BACKGROUND AS WELL.
I'LL TRY NOT TO COVER ANYTHING THAT YOU GUYS HAVE ALREADY COVERED.
UM, SO THE OBJECTIVES FOR THIS AUDIT WERE, UM, SPLIT INTO TWO.
THE FIRST ONE IS TO DETERMINE IF ADEQUATE INTERNAL CONTROLS EXISTED OVER THE ADMINISTRATION AND MONITORING OF FACILITIES, CONTRACTS TO ENSURE CONTRACTOR PERFORMANCE COMPLIANCE WITH CONTRACT TERMS AND ACCURATE PAYMENT FOR THE SERVICES THAT WERE RENDERED.
UH, THE SECOND ONE WAS TO EVALUATE
[00:40:01]
WHETHER THE CITY'S, UM, FACILITIES DEPARTMENT USES, UH, USE OF CONTRACTORS AND CONSULTANTS IS JUSTIFIED COST-EFFECTIVE AND PROVIDES VALUE TO THE CITY COMPARED TO PERFORMING THE WORK WITH CITY RESOURCES.UM, AND SO WE TOOK A LOOK BASICALLY PRIMARILY FROM OCTOBER 1ST, 2023 THROUGH JUNE, UH, 30TH OF THIS YEAR.
WE DID EXTEND, EXPAND THAT SLIGHTLY FOR ONE OF THE CONTRACTORS THAT WE'LL, UH, SEE LATER ON HERE IN THE REPORT.
UH, LIKE JET SAID, WE FOCUS MAINLY ON THE SERVICE LEVEL CONTRACTORS, UH, BUT WE HONED IN MOST OF OUR TESTING ON A SAMPLE OF 10 OF THEM.
THIS WAS, UH, THIS INCLUDES TWO ELECTRICAL SERVICES CONTRACTORS, TWO ACCESS CONTROL SLASH SECURITY CAMERA CONTRACTORS, TWO HVAC SLASH PLUMBING CONTRACTORS, ONE JANITORIAL SERVICE PROVIDER, ONE OVERHEAD DOOR CONTRACTOR, ONE AIR FILTER SYSTEM CONTRACTOR, AND ONE ELEVATOR SERVICE CONTRACTOR.
JED BASICALLY WENT THROUGH ALL THIS ALREADY.
LIKE YOU SAID, THEY HAVE A LOT OF FACILITIES AND PROPERTIES THAT THEY HAVE TO MANAGE.
THEY HAVE A SMALL TEAM AND THEY UTILIZE CONTRACTORS TO HELP FILL IN THOSE GAPS AND, UH, UH, TAKE THE LOAD OFF OF WHERE WE'RE NOT ABLE TO NECESSARILY, UM, COMPLETE THE WORK.
SO BEFORE WE HOP INTO THE OBSERVATIONS, WE WANTED TO NOTE A FEW THINGS THAT WE, UM, IDENTIFY THAT ARE WORKING WELL CURRENTLY.
SO THE DEPARTMENT, UM, REALLY LEVERAGES HAVING THEIR TECHNICIANS AND PROJECT MANAGERS ON SITE, ON SITE WHILE THE WORK IS, UH, BEING COMPLETED.
UH, THIS ALLOWS THEM, UH, BEFORE INVOICE PAYMENT TO VERIFY THAT THE WORK WAS COMPLETED, APPROVED, AND DONE WITHIN THE, THE SPECIFICATIONS THAT THE CITY REQUIRES.
SO HAVING THAT STAMP ON EVERY INVOICE IS REALLY HELPFUL FOR KNOWING THAT THE WORK WAS DONE.
UH, SECONDLY, THEY DID A GREAT JOB AT, UH, DOING KIND OF A PERFORMANCE REVIEW SLASH JUST CONTRACT ANALYSIS ON ONE OF THEIR CONTRACTORS.
UH, AND DOING SO THEY WERE ABLE TO REDUCE THAT CONTRACT, UM, COST FROM AROUND A HUNDRED THOUSAND, I BELIEVE, TO 75,000.
SO ABOUT $25,000 IN SAVINGS JUST BY NEGOTIATING BASED ON THE EFFORT LEVEL THAT THE CONTRACTOR WOULD ACTUALLY NEED TO PUT IN.
ALRIGHT, SO JUMPING INTO OUR FIRST OBSERVATION, UH, LIKE JED WAS SAYING, THIS HAS TO DO WITH OUR AGREEMENT HERE WITH OAKS OR AGREEMENTS I SHOULD SAY.
UM, THESE AGREEMENTS HAD TO DO WITH THE TWO DIFFERENT GARAGES WE HAVE HERE, ONE RIGHT HERE BEHIND US, AND THE OTHER ONE ACROSS THE STREET.
THE, THE ONE FOR FIFTH STREET CROSSING.
THE ORIGINAL ONE, UH, WAS INITIATED BACK IN 2008.
AND SINCE 2011, THERE'S BEEN NO UPDATES THAT ARE RELATED TO MAINTENANCE OR, UH, HAVE ANY KIND OF IMPACT ON THOSE, UM, RESPONSIBILITIES.
THE NEWER ONE HERE FOR THE PARKING GARAGE WAS INITIATED IN 2013 AND HAS HAD NO MAINTENANCE RELATED UPDATES SINCE LATE 2015.
UM, AND LIKE JED WAS SAYING, THERE'S A LOT OF DOCUMENTS WITHIN THAT.
UM, WE'RE NOT GONNA GO THROUGH THEM HERE, BUT BASICALLY WHAT WE DID AS A PART OF THIS AUDIT IS WE, WE PULLED THESE AGREEMENTS APART AND WE WANTED TO TAKE A LOOK AT EACH LEVEL OF, UM, RESPONSIBILITY EACH.
LIKE, WHO'S RESPONSIBLE FOR ELEVATORS, WHO'S RESPONSIBLE FOR LIGHTS, STAIRWELLS, THIS, THAT, OR THE OTHER.
AND WE JUST WANTED TO KIND OF COME UP WITH A, A MATRIX SO THAT WE CAN UNDERSTAND THESE AGREEMENTS BETTER INSTEAD OF JUST HAVING THEM IN A THOUSAND DIFFERENT PLACES.
SO I'M GONNA GO OVER SOME OF THE HIGH LEVEL AREAS THAT WE LOOKED AT, ELEVATORS, LIGHTS, AND JUST, UH, GO FROM THERE.
SO THE FIRST PLACE WE LOOKED AT WAS ELEVATORS.
UM, BASICALLY CURRENTLY THE CITY IS DOING THE MAJORITY OF THE WORK AS PART OF THE AGREEMENTS.
WE'RE ALLOWED TO GET COST SHARING FOR CERTAIN TYPES OF WORK.
AND THE, I WON'T GO INTO SPECIFICS FOR THIS GARAGE, IT'S DIFFERENT THAN FOR THAT GARAGE.
THE, THE LEVELS THAT WE'RE SUPPOSED TO GET REIMBURSED FOR DIFFERENT PERCENTAGES.
AND WE'RE ONLY ALLOWED TO GET REIMBURSED FOR CERTAIN ITEMS THAT ARE DIFFERENT IN EACH OF THESE GARAGES.
UH, CURRENTLY WE'RE NOT GETTING ANY REIMBURSEMENT, BUT AGAIN, SOME OF THESE THINGS HAVE PROBABLY JUST GOTTEN LOST IN THE DOCUMENTS.
WE PROBABLY DIDN'T EVEN KNOW THAT WE SHOULD HAVE BEEN GETTING THESE REIMBURSEMENTS.
UH, NEXT, UH, MARKINGS AND LIGHTINGS, THIS HAS TO DO WITH, UH, STREET MARKINGS WITHIN THE GARAGE.
THE LIGHTING WITHIN IT, AGAIN, UH, WE ARE RESPONSIBLE FOR MAINTAINING QUITE A BIT OF THAT AS, AS PER THE CURRENT AGREEMENTS.
ALL OF THESE HAVE SOME LEVEL OF COST SHARING, UM, SAME AS THE THE ELEVATORS.
AND CURRENTLY WE'RE NOT GETTING, UM, ANY REIMBURSEMENTS FOR THESE.
NEXT HAS TO DO WITH THE LANDSCAPING.
UM, I SPLIT THIS UP INTO TWO DIFFERENT SLIDES.
THE FIRST ONE HERE IS FOR THE PROPERTY ACROSS THE STREET.
CURRENTLY WE'RE GETTING A BILL FROM OAKS THAT WE PAY EVERY MONTH AROUND 900 2900 $70.
UM, AND THAT IS FOR 50% OF THEIR LANDSCAPING BILL IN RELATIONS TO THAT PROPERTY.
THE, THE AGREEMENT THAT WE HAVE SPECIFIES THAT WE SHOULD BE GETTING KIND OF A BROKEN OUT INVOICE THAT SPECIFIES, OKAY, THIS PERCENTAGE IS FOR THE CITY CONTROL AREA, THIS PERCENTAGE IS FOR OUR CONTROL AREA.
YOU ONLY HAVE TO PAY THIS MUCH, BUT THEY'RE JUST BILLING US AT A FLAT 50%.
[00:45:02]
AND FOR THE CURRENT, UH, OR NOT, SORRY, THIS FACILITY HERE THAT WE'RE IN, AS WELL AS THESE ATTACHED, UH, APARTMENTS, WE'RE EACH RESPONSIBLE FOR OUR OWN CONTROL AREAS.YOU CAN SEE IN GREEN, I KNOW IT'S HARD TO SEE, UM, WE'RE RESPONSIBLE FOR AROUND THE CITY HALL AREA.
IF YOU CAN VISUALIZE ANYTHING ON OUR SIDE OF THIS PATHWAY HERE, WE'RE RESPONSIBLE FOR.
AND ANYTHING ON THAT SIDE, THEY'RE RESPONSIBLE FOR.
UH, SOME CONCERNS, UM, DID COME UP FROM THE PARKS DEPARTMENT THAT THEIR CONTRACTORS MIGHT NOT BE AWARE OF CERTAIN CITY LEVELS OF, UM, BEAUTIFICATION OR, UM, LEVELS OF SERVICE THAT WE SHOULD BE SHOWING HERE IN OUR DOWNTOWN SQUARE.
SO SOME OF THOSE, UH, CONCERNS WERE BROUGHT UP AS WELL.
UH, LASTLY, WE JUST HAD A FEW COMMENTS THAT OAKS BROUGHT TO US WHENEVER WE MET WITH THEM.
JUST HIGH LEVEL, THEY MENTIONED AN INTEREST IN POTENTIALLY UPGRADING THE EV CHARGERS IN THE GARAGES CURRENTLY THAT WOULD FALL ON US FOR ANY KIND OF MAINTENANCE.
BUT THEY DID EXPRESS SOME INTEREST.
THEY DID ASK THAT THE CITY WOULD LOOK AT PROVIDING THE INFRASTRUCTURE COSTS AS FAR AS THE ELECTRICITY GOES.
AGAIN, WE DIDN'T LOOK INTO ANY OF THAT.
THIS IS JUST SHARING WHAT THEY SHARED WITH US.
THEY ALSO VOICED SOME POTENTIAL INTEREST IN WANTING TO PUT SOME KIND OF COVERED SOLAR PARKING, UM, AT THE TOP OF THIS GARAGE, IN THAT GARAGE.
UM, JUST LOOKING FOR AMENITIES FOR THEIR, UM, FOR THEIR TENANTS.
AND THEN ONE OTHER THING THAT THEY DID NOTICE IS THAT THERE'S A PARKING, UM, AREA, UH, BETWEEN, I FORGET THE STREET NAMES, RIGHT OVER HERE BY RO FEED AND SEED, BUT THEY HAVE A LONG-TERM LEASE ON THAT PROPERTY.
WE DID GET A, A SHORT-TERM LEASE BACK ON THAT AROUND COVID TIME.
WE STILL HAVE A PUBLIC PARKING SIGN, VERY MINIMAL.
THEY WEREN'T VERY UPSET ABOUT IT, FRUSTRATED, THEY JUST WANTED TO PUT IT ON THE RECORD.
AND I THINK EITHER THAT'S BEEN REMOVED OR IT'S BEING REMOVED, IT'S, THEY'RE TAKING CARE OF IT HERE WITH THE CITY.
UM, SO OUR RECOMMENDATION ON THIS ONE IS THAT FACILITIES SHOULD WORK IN COORDINATION WITH THE CITY ATTORNEYS, UH, CITY ADMINISTRATION AND OAKS TO FIGURE OUT POTENTIALLY ONE CONSOLIDATED AGREEMENT JUST TO MAKE THIS EASIER GOING FORWARD.
CLEARLY LINING OUT WHO'S RESPONSIBLE FOR WHAT, WHO GETS PAID FOR, WHAT DO WE DO, THIS AND THOSE KIND OF DEALS.
THE ACTION PLAN IS THAT FACILITIES HAS CONDUCTED MULTIPLE MEETINGS WITH THESE DEPARTMENTS TO IDENTIFY THESE CONCERNS, BRING EVERYTHING TOGETHER, AND UH, THEY ARE PRESENTING THIS WITH OAKS FOR DISCUSSION NEGOTIATION.
AND IMPLEMENTATION DATE IS APRIL 1ST, 2027.
SO IF YOU HAVE ANY QUESTIONS ON THE OAKS PIECE, I'LL STOP NOW.
UM, MY QUESTION IS REGARDING THE EV CHARGERS THAT THEY HAVE REQUESTED, HAS THAT BEEN DISCUSSED WITH CITY MANAGEMENT YET, OR ANYONE? IBEL? I THINK THE THE DEPARTMENTS ARE AWARE OF IT AND I, I BELIEVE THAT THEY'RE, UM, I'M NOT TOO SURE WHAT'S GONE ON PAST THAT.
UH, URIEL LOOKS LIKE HE'S COMING UP HERE.
SO THAT IS PART OF THE DISCUSSION THAT WE'RE HAVING WITH THE CITY MANAGER'S OFFICE, THE CITY ATTORNEY'S OFFICE RIGHT NOW TO IDENTIFY EXACTLY WHAT THE NEXT STEP IS GONNA BE WHEN WE REVISE THESE AGREEMENTS.
AND IT SAID THAT THAT REQUIRED GPNL TO UPDATE THE ELECTRICAL LINES THERE, I'M ASSUMING.
SO WHAT THE COST OF THAT ASK IS? NO, WE DON'T KNOW.
THE, THE COST HAS NOT BEEN IDENTIFIED, BUT, UM, EVERYONE'S AWARE OF THAT.
THERE'S GONNA BE A MAJOR UPGRADE IF WE NEED TO, IF WE NEED TO, UM, UH, DO THAT.
YEAH, UNFORTUNATELY ALL THE INFRASTRUCTURE WAS POURED INTO THE CONCRETE AND ALL FOR, SO WE'LL HAVE TO FIND A WHACK OF THE GARAGE TO WHERE WE FIGURE OUT AND THE, THE COST OF ELECTRICITY FOR CHARGING THOSE, UH, ELECTRIC VEHICLES, IS THAT BEING PAID FOR BY THE CITY OR ARE THEY CHARGING THOSE? UM, THE WAY IT WORKS CURRENTLY, BECAUSE, SO WE WERE UNDER, WE HAD A, A SER SORRY, YOU WANNA GO TO THE OTHER SIDE.
UM, WE HAD, WE HAD A SERVICE CONTRACT WITH A COMPANY THAT MANAGED THE CREDIT CARDS FOR, UH, PAYMENTS ON THAT.
UM, AS YOU, MOST OF YOU PROBABLY KNOW THAT TO GET YOUR CAR CHARGED ON THERE WOULD TAKE ABOUT SIX HOURS FOR LIKE A NISSAN LEAF TO GET CHARGED.
UM, SO WE DID, WE DIDN'T GET VERY MANY CREDIT CARDS RUN, BUT THAT CONTRACT WAS COSTING US $14,000 A YEAR.
AND, UH, WE GOT BACK BETWEEN THREE AND FOUR IN CREDIT CARD CHARGES.
SO, UH, UH, WHEN PHIL WAS STILL HERE, WE DECIDED TO GET RID OF THE CONTRACT.
UH, AS A CITY, WE ONLY HAVE ONE
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ELECTRICAL VEHICLE IN OUR FLEET, SO WE TURNED ALL OF THE OTHER CHARGERS OFF, BUT BECAUSE WE'RE OBLIGATED TO KEEP THEM ON IN THE GARAGE PER THE OAKS AGREEMENT, THEY'RE ON IN THE GARAGES RIGHT NOW, AND THEY'RE NOT BEING LIKE, WE'RE PAYING FOR THAT.SO I THINK THAT THAT'S SOMETHING THAT NEEDS TO BE CONSIDERED WITH THIS NEW CONTRACTUAL AGREEMENT, ESPECIALLY IF WE ARE INSTALLING NEW EV CHARGERS.
UM, THERE NEEDS TO BE SOME KIND OF COST RECOVERY FROM THOSE CHARGERS.
I THINK THAT IN ONE OF THOSE CONTRACTS, WE'RE NOT ALLOWED TO, LIKE, WE HAVE TO, WE HAVE TO MAKE THE UPGRADES.
I BELIEVE IT, IT DEPENDS ON INTERPRETATIONS OF THAT.
WE'VE KIND OF GONE BACK AND FORTH AND, UH, I MEAN, LIKE THEY SAID, NORM'S BEEN REALLY GOOD ABOUT IT.
THEY, THEY ARE HAPPY TO EITHER CONTRIBUTE TO IT, THEY WANT TO KEEP IT, BECAUSE AS THE CITY, I MEAN, I CERTAINLY DON'T WANNA MANAGE CREDIT CARD ACCOUNTS AND, AND CHARGING AND ALL THAT KIND OF STUFF, UH, FOR UPGRADED LIKE TESLA CHARGERS, BUT RIGHT.
AND IT'S REALLY JUST AN AMENITY FOR THEM.
IT DOESN'T SERVE OUR PURPOSE, UH, SINCE WE DON'T HAVE, UH, AN ELECTRIC FLEET ANYMORE.
SO HE, HE WANTS TO KEEP THAT AND THEY'RE HAPPY TO PUT SOME OF THOSE IN AND WORK WITH US.
WE JUST HAVEN'T HAD THOSE COMPLETE DISCUSSIONS YET, TRYING TO FIGURE OUT WHAT EXACTLY THE AGREEMENT'S GONNA LOOK LIKE WITH THEM.
AND THAT IS BEING CONSIDERED AS FAR AS THE, THE REVISED AGREEMENT.
AS A MATTER OF FACT, I SPOKE TO, UH, BRIAN THIS MORNING ABOUT THAT SPECIFICALLY.
WELL, I'M SURE THAT, UM, MR. LEVINE AND OUR CITY ATTORNEY'S OFFICE WILL DEFINITELY INTERPRET IN THE CITY'S BEST INTEREST THOSE CONTRACTS.
IF I MAY ADD A LITTLE PERSPECTIVE TO THIS, UH, PLEASE KNOW THAT, UM, BACK IN 2008 WHEN THIS DEVELOPMENT CAME TO DOWNTOWN, YOU KNOW, THEY WERE THE FIRST ONES YEAH.
UM, TO, TO INVEST IN, IN DOWNTOWN GARLAND.
AND BASED ON OUR DISCUSSION, HE'S WILLING TO INVEST FURTHER.
UM, SO THIS IS A GREAT RELATIONSHIP FOR US, SO WELL, AND IF THEY DO INSTALL THOSE SOLAR PANELS, MAYBE THAT CAN BE, I I WOULD DEFINITELY CONSIDER SOME KIND OF COORDINATION BETWEEN THE SOLAR PANELS AND THE EV CHARGERS.
MAYBE THOSE THINGS CAN WORK HAND IN, IN TANDEM TO KIND OF COVER COSTS.
YEAH, I DON'T, YEAH, AS I SAID, WE DID, WE HAVEN'T INVESTIGATED IT A WHOLE LOT.
I MEAN, I JUST, BASED ON ME MAKING SOME GUESSES AND CALLING AROUND, I WAS LOOKING AT LIKE A MILLION, MILLION AND A HALF, UH, FOR SOME UPGRADES.
UM, SOME OF THAT, IT DEPENDS ON THE, THE, THE NEW GRANTS.
SOME OF THAT COULD BE GRANT REIMBURSED MONEY, UM, BUT YOU WOULDN'T KNOW THAT UNTIL JANUARY WHEN ALL THE NEW GRANT FUNDING ROLLS OUT.
UM, SO I THINK THERE'S OPPORTUNITY THERE.
UM, AND AGAIN, WE'RE HAPPY TO WORK WITH THEM ON WHATEVER THEY DECIDE THEY WANT TO DO.
PRETTY MUCH IT APPEARS TO BE THE, THERE IS A LOT OF A GIVE AND TAKE IN THIS CONTRACT, AND I THINK THAT YOUR ACTION PLAN IS PRETTY MUCH WHERE EVERYTHING STANDS AT THIS POINT.
THAT IS, WE NEED TO TALK IT ALL.
MR. CHAIRMAN, I WILL SAY CONGRATULATIONS, BY THE WAY, ON BEING ABLE TO MAKE SENSE OF THE MULTIPLE CONTRACTS.
UH, AND, AND YOU CAN UNDERSTAND THE CONFUSION IF ANYBODY, AND AND I CAN TELL YOU, I'VE BEEN ASKED THIS WHEN I WAS IN MY FORMER ROLE.
CAN YOU TELL ME WHO PAYS FOR WHATEVER? WELL, YOU'VE GOT LIKE A DOZEN DIFFERENT CONTRACTS AND YOU'RE LOOKING THROUGH TRYING TO FIGURE OUT, THIS WAS PUT TOGETHER AT A TIME WHEN ESSENTIALLY WE WERE BEGGING THEM TO COME DOWNTOWN.
AND SO NOBODY WAS PRESSING ANYBODY FOR DETAIL AND ALL THIS STUFF.
WE JUST WANTED DEPARTMENTS BUILT DOWNTOWN.
AND NOW WE'RE AT THE POINT WHERE EVEN FOR THE FOLKS AT THE O UH, OVER AT THE OAKS, YOU KNOW, FOR NORMS, PEOPLE NOBODY REALLY KNOWS WHO HAS TO PAY FOR WHAT.
AND SO IT WASN'T EVEN A MATTER OF, OF WORRYING ABOUT THE COST OF IT IF MUCH OF WHO IS RESPONSIBLE FOR THIS.
AND SO THE ABILITY TO GO THROUGH AND RECOGNIZE ALL THE PROBLEMS WE HAD, I, MY HAT'S OFF TO, BECAUSE I, I'VE SPENT SOME TIME WITH THOSE CONTRACTS AND SAID, I, I GIVE UP
YOU KNOW, JUST GO OUT THERE AND FIX IT.
WHO CARES? WE GOTTA GET THIS THING FIXED.
AND SO I THINK THAT IT, IT PROBABLY WILL TAKE A SIGNIFICANT EFFORT TO, TO NEGOTIATE A CONTRACT THAT WILL WORK FOR BOTH PARTIES AND WILL, WILL BE EASY TO ADMINISTER SO THAT IN THE FUTURE IF SOMEBODY CALLS AND SAYS, WELL, WHO THE LIGHT BULBS ARE OUT ON THREE, WHO PAYS FOR THAT? SOMEBODY CAN GO, OH, THAT'S EASY.
THEY PAY FOR IT, WE FIX 'EM, SEND 'EM THE BILL AND THEY PAY FOR IT.
RIGHT NOW, YOU CAN'T REALLY TELL THAT IT'S IN A LOT OF PLACES.
I MEAN, YOU'RE ABLE TO DIG THROUGH AND FIGURE OUT SOME OF THIS STUFF, BUT IT'S, IMAGINE THE FOLKS AT FACILITIES WHO ARE LOOKING AT THIS TRYING TO FIGURE OUT WHAT THEY DO WITH IT.
AND SO I'M, I'M HOPEFUL THAT, UH, YEAR AND HIS TEAM CAN NEGOTIATE AN AGREEMENT THAT WORKS FOR BOTH PARTIES.
YOU KNOW, WE'RE, AS, AS JED POINTED OUT, NORM'S BEEN AN EXCELLENT PARTNER DOWNTOWN AND WE'D LIKE TO BE AS FAIR AS WE CAN WITH HIM, BUT WE ALSO MORE
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IMPORTANTLY AND ENDS WITH, THEY LIKE CLARITY SO THAT EVERYBODY UNDERSTANDS WHO'S PAYING FOR WHAT AND LET'S GET IT.'CAUSE THE, THE, THE BIGGER IMPEDIMENT SOMETIMES IS JUST GETTING THE THING REPAIRED BECAUSE NOBODY KNOWS WHO'S, NOBODY KNOWS WHO'S RESPONSIBLE FOR IT.
AND SO YOU GO BACK AND FORTH TILL YOU FINALLY FIGURE OUT, LET'S JUST FIX IT AND WE'LL WORRY ABOUT THAT LATER.
AND, AND THAT'S KIND OF THE, THE HOPE IS HERE.
AND SO I REALLY APPRECIATE THIS AUDIT.
IT WAS SOMETHING THAT, THAT WAS NECESSARY AND, AND WILL HELP US, UH, BETTER, UH, IN OUR RELATIONSHIP WITH THAT APARTMENT COMPLEX.
YEAH, A NEW SEASON WE SHALL REAP IF WE FAINT NOT AND IF INDEED OF THE NEW SEASON.
THAT'S THE REASON FOR THE AUDIT.
SO, UH, MIKE AND UH, EURO FOR BRINGING THIS ONE TO US.
WE STILL HAVE A FEW MORE ITEMS OF THIS.
I DON'T KNOW IF WE GOT THIS ONE.
HANG OUT UP HERE JUST IN CASE.
ALRIGHT, SO NEXT, UM, JUST QUICKLY TO GET THROUGH THIS ONE, WE TOOK A LOOK AT THE CITYWIDE SECURITY CAMERA, UM, PROGRAM.
I KIND OF LEANED ON HIS ANALYSIS FOR THIS ONE, SO THANK YOU SO MUCH SIR.
UM, SO AGAIN, WE HAVE A LOT OF FACILITIES, A LOT OF CAMERAS AT THOSE FACILITIES WATCHING, UH, KEEPING EYES OVER EVERYTHING.
UM, SO CURRENTLY WE HAVE JUST OVER A THOUSAND CAMERAS IN, UH, IN USE.
JUST A FEW COSTS RELATED WITH THAT.
WE HAVE A ONGOING ANNUAL IT COST OF AROUND $350,000.
THAT'S OUR, UH, OUR PROGRAM AS WELL AS STORAGE COSTS.
AND CURRENTLY WE'RE IN YEAR THREE.
YEAR THREE, RIGHT? YEAH, YEAR THREE OVER ONE ACTUALLY, YEAH, TWO DAYS AWAY FROM YEAR THREE OF, UH, A $200,000 ANNUAL CONTRACT WITH UM, A THIRD PARTY WHO PROVIDES ONSITE SUPPORT.
UM, AND THAT IS ONE DEDICATED PERSON, UM, EVERY YEAR.
SO THE AVERAGE REPLACEMENT COST BILL ALSO IDENTIFIED IT BEING AROUND AN AVERAGE OF $1,300 TO REPLACE A SINGLE CAMERA THAT CAN BE HIGHER OR LOWER.
AND THEN LASTLY, WE HAVE ROUGHLY $60,000 OF INTERNAL STAFFING THAT'S ALLOCATED TO, UH, OVERSEEING THIS, UM, CAMERA PROGRAM.
SO ONE THING WE DID WANNA NOTE IS THAT WE DO HAVE A LOT OF CAMERAS.
UH, ONE ONE NOTE THAT WE'VE HEARD CONSISTENTLY IS WE DON'T KNOW WHO'S REVIEWING THESE CAMERAS.
I THINK WE KNOW THAT SOMEONE'S NOT SITTING THERE WATCHING THEM 24 7 GOING BACK.
UM, SO BASICALLY WHAT WHAT WE NOTED IS THAT POTENTIALLY USING SOME KIND OF INTERNAL STAFFING SLASH CALLING WHEN NEEDED, UM, THE, A THIRD PARTY CONTRACTOR AS OPPOSED TO HAVING 24 7 ON ON SITE SPECIALISTS MIGHT PROVIDE SOME COST SAVINGS AS WELL AS SOME POTENTIAL ALTERNATIVE CAMERA SOLUTIONS, UM, AS OPPOSED TO THE, THE TRADITIONAL HARDWIRED TO THE NETWORK, UM, SECURITY CAMERAS FOR EVERY NEED.
THERE ARE MOST INSTANCES, YOU KNOW, IN PUBLIC PLACES, POOLS, LIBRARIES, UM, MUNICIPAL COURT WHERE WE NEED THOSE CAMERA SYSTEMS. BUT SOME PLACES LIKE JED WANTING TO KEEP AN EYE ON WHO'S COMING TO HIS FRONT DOOR OF THE OFFICE, WE DON'T NEED A CAMERA LIKE THAT.
SO A RECOMMENDATION IS THAT FACILITY SHOULD, UH,
UM, AND THAT THEY SHOULD DEVELOP TIERED CAMERA STANDARDS THAT REQUIRE DEPARTMENTS TO CONSIDER THE SECURITY RISK INTENDED USE AND, AND TOTAL LIFECYCLE CAUSE BEFORE SELECTING A ENTERPRISE CONNECTED CAMERA, INCLUDING LOWER COST SOLUTIONS WHEN THEY MEET OPERATIONAL NEED.
I REPEATED SO MANY WORDS THERE, MY APOLOGIES.
UM, SO FACILITIES IS ACTIVELY DEVELOPING A STRATEGIC PLAN, UH, TO EVALUATE AND OPTIMIZE THE CAMERA, UH, SYSTEM SUPPORT MODEL.
THIS INCLUDES, UH, REVIEW OF EVERY CAMERA BY DEPARTMENT OPERATIONAL USE AND NECESSITY WITH THE GOAL OF DEACTIVATING NON-ESSENTIAL CAMERAS, REDUCING THE OVERALL SUPPORT WORKLOAD AND USING THE RESULTS TO DETERMINE THE MOST EFFICIENT STAFFING MODEL GOING FORWARD.
SECONDLY, FACILITIES HAS IMPLEMENTED A REVIEW PROCESS REQUIRING ALL REQUESTS FOR NEW CAMERAS TO BE EVALUATED BY FACILITIES MANAGEMENT AND THE CITY MANAGER'S OFFICE PRIOR TO APPROVAL.
THE REVIEW CONSIDERS THE SECURITY RISK INTENDED OPERATIONAL USE AND OVERALL NEED FOR AN ENTERPRISE CONNECTED CAMERA, INCLUDING WHETHER AN A LOWER CAUSE ALTERNATIVE CAN MEET THE DEPARTMENT'S OPERATIONAL NEED AND IMPLEMENTATION DATE ON THAT IS JANUARY 1ST, 2027.
I COMMENT ON THAT, MR. CHAIRMAN.
UH, JUST, JUST SO THE, THE COMMITTEE KNOWS WHAT WAS GOING ON WITH CAMERAS, BECAUSE EACH INDIVIDUAL CAMERA IS A FAIRLY LOW COST ITEM AND THE DEPARTMENTS DON'T ALWAYS FULLY APPRECIATE THE BACKEND COST AND THE LONG-TERM MAINTENANCE COST OF THOSE, UM, DEPARTMENTS WOULD SOMETIMES SAY, OH, CAN I GET A CAMERA HERE AND ONE THERE AND ONE THERE? 'CAUSE IT SEEMS LIKE A LOW COST JUST FOR THE ONE CAMERA NOT REALIZING THAT THAT COLLECTIVELY WITH ALL THE BACKEND COSTS AND THE MAINTENANCE COST AND ALL THE REST OF THIS, YOU END UP WITH A SIGNIFICANT EXPENSE
[01:00:01]
TO THE CITY.AND THEN WHEN YOU START LOOKING AND SAYING, WHO HAS EVER LOOKED AT THAT CAMERA? HAS ANYBODY EVER ACTUALLY PULLED FOOTAGE OFF THAT CAMERA? NOBODY'S WATCHING IT.
THE MARSHALS WATCH A DOZEN CAMERAS.
THEY WATCH SOME AT THE JAIL, AND THERE'S OTHER PLACES AT THE POOLS AND PLACES WHERE THEY HAVE TO WATCH THE CAMERAS.
WE HAVE, I WOULD GUESS HUNDREDS OR MAYBE MAYBE MULTIPLE HUNDREDS OF CAMERAS THAT NOBODY ACTUALLY LOOKS AT.
AND WE CAN'T, YOU'D BE, UH, SHOCKED TO FIGURE OUT THAT NOBODY'S EVER ACTUALLY PULLED FOOTAGE FROM THEM FOR ANY PURPOSE.
AND EVEN SOME OF THE PLACES WHERE WE HAVE EMPTY FACILITIES, AND I JUST WANT TO GIVE YOU THE CONTEXT OF THIS, WHY THIS WAS AN IMPORTANT AUDIT TO ME, IS THAT SOME OF THE PLACES WHERE WE HAVE THEM ON BACK DOORS OF FACILITY SOMEWHERE, OKAY, WELL, NOBODY LOOKS AT IT TILL WE GET THERE ON MONDAY MORNING AND FIND OUT WE'VE BEEN BURGLARIZED, SOMEBODY BROKE THE DOOR OPEN AND DID IT, AND NOW WE SEE A GUY WITH A MASK AND A HOOD AND THE POLICE GO, OKAY, THAT'S NOT REALLY GONNA BE HELPFUL TO US.
AND SO NOW WE SPENT, YOU KNOW, ALL THE MONEY FOR THIS CAMERA THAT'S SITTING THERE AND IT DIDN'T REALLY DO ANYTHING TO MAKE US MORE SECURE.
BUT FROM AN IN INDIVIDUAL DECISION MAKING, WHEN YOU'RE PUTTING A CAMERA UP, WELL, IT'S ONLY A THOUSAND DOLLARS.
GIMME A CAMERA HERE AND A CAMERA THERE, AND A CAMERA THERE.
NOT REALIZING THAT THE LONGER TERM EXPENSES AND THE COLLECTIVE EXPENSES OF MAINTAINING ALL THOSE CAMERAS HAVE BECOME UNWIELDY.
AND SO I I, I ASKED SPECIFICALLY, CAN WE LOOK INTO THIS? AND, AND, UM, UH, CITY MANAGER BRIAN HAS, HAS, UH, AGREED TO TRY TO COME UP WITH A PLAN TO, UH, ALONG WITH URIEL, TO, TO FIGURE OUT WHAT CAMERAS DO WE ACTUALLY NEED HERE AT THE CITY.
AND, AND LET'S NOT LOOK AT THESE AS LOW DOLLAR ITEMS BECAUSE INDIVIDUALLY THEY MAY BE, BUT COLLECTIVELY THEY ARE EXPENSIVE IN COSTING US MONEY.
AND SO THAT WAS THE, THAT WAS KIND OF THE IDEA BEHIND THIS.
AND I JUST WANTED TO GET THAT OUT THERE.
'CAUSE YOU MIGHT WONDER, WELL, WHY ARE WE, WHY ARE WE AUDITING OUR CITYWIDE SECURITY CAMERAS? THAT WAS THE REASON FOR IT.
IT WAS AN OPPORTUNITY THAT I LOOKED AT UNDER OUR PLANET, WHERE COULD WE SAVE MONEY THAT THINGS THAT DON'T LOOK LIKE THEY'RE EXPENSIVE AND THEN TURNS OUT THEY REALLY ARE.
I WOULD HAPPILY WATCH THEM FOR $255,000.
ALRIGHT, THAT, THAT WAS REALLY ONE OF MY QUESTIONS TOO.
HAVE WE HAD OPPORTUNITY, HAS THERE BEEN AN OCCASION? HOW MANY OCCASIONS HAVE WE ACTUALLY UTILIZED THE CAMERAS THAT THEY SAVED US? OR WE, WE SAW SOMETHING TRULY HAPPENING SAVED US IN THE WAY OF MONEY OR PRODUCT? I WENT THROUGH, I DON'T REMEMBER THE EXACT NUMBERS, BUT IT WAS SHOCKINGLY SMALL.
LIKE I, I WANNA SAY LIKE THE POLICE USED 12 CLIPS AND OUT OF THE 12, MAYBE FOUR ACTUALLY WERE USED IN AN ACTUAL COURT CASE AND SOME KIND OF EVIDENCE OUT OF A THOUSAND CAMERAS THAT WE HAVE FOOTAGE ON.
AND UH, YOU KNOW, ALL OF THEM HAVE 30 DAYS OF SERVER, UH, TIME AND BACKING 'EM UP AND TECHNICIANS.
AND THEN THE CAMERA LIFE IS ON AVERAGE THREE TO FIVE YEARS.
SO YOU'RE TALKING ABOUT IN FIVE YEARS, THERE, THERE ARE PLACES, MR. CHAIRMAN, WHERE WE, WE DO NEED THE CAMERAS, FOR EXAMPLE, IN THE JAIL AND AT THE COURTHOUSE.
AND THERE'S, THERE'S CERTAIN FACILITIES WHERE THEY'RE ACTUALLY THE MARSHALS WATCH THE CAMERAS SO THEY CAN FIGURE OUT, OKAY, SOMETHING'S GOING ON HERE, BUT THE VEST MAJORITY OR A LARGE NUMBER OF CAMERAS, UH, I'D VENTURE TO SAY NOBODY HAS EVER LOOKED AT THE FOOTAGE ON.
AND EXCEPT WHEN THEY SET IT UP TO SEE THAT THEY LIKE THE SCREENSHOT, THOSE CAMERAS JUST SIT THERE AND DON'T REALLY DO VERY MUCH.
AND SO THAT'S WHAT WE'RE LOOKING AT IS TO SEE HOW CAN WE LOWER THAT PROFILE.
AND, AND I WANT TO GET THE WORD OUT TO DIRECTORS AND PEOPLE WHO ARE SELECTING THESE CAMERAS.
THIS IS, IT LOOKS LIKE A LOW COST.
IT'S LIKE THERE'S JUST A THOUSAND DOLLARS CAMERA, 2000 CAMERA, JUST PUT A CAMERA IN.
YEAH, BUT THAT'S, NOW WHEN YOU TAKE IT OVER THE COURSE OF YEARS AND THE MAINTENANCE AND THE STORAGE AND ALL THE REST OF THIS, AT SOME POINT YOU'RE TALKING REAL MONEY.
AND, AND THAT WAS KIND OF THE POINT OF IT.
OR LONG, OH, CHRIS? NO, THAT, UH, THE, THE SUPPORT CONTRACT IS THAT FOR ONE INDIVIDUAL THAT WE HAVE? YES SIR.
IT IS FOR ONE INDIVIDUAL FULL TIME.
AND I, I HAD NOBODY ELSE ON STAFF WHEN HE WAS GONNA RETIRE.
AND AT THAT POINT IN TIME, WE WEREN'T HIRING PEOPLE.
UH, SO THE ALTERNATIVE WAS TO BRING A PERSON IN ON A CONTRACT BASIS TO GET A PERSON IN-HOUSE THAT COULD GET TRAINED ON PROCESS AND HOW TO HANDLE THE CAMERAS AND THE SOFTWARE.
NOW WE PROBABLY COULD HAVE GOT AWAY WITH THIS SHORTER THAN A THREE YEAR TRACK, BUT I THINK THE INTENT GOING FORWARD IS NOT TO RENEW WITH THAT, BUT FIND A DIFFERENT MODEL.
'CAUSE I DO HAVE A PERSON THAT MANAGES THE SOFTWARE.
I THINK THERE'S ALWAYS GONNA BE A SERVICE CONTRACT BECAUSE WE NEED THEM TO FIX THE HARDER TO FIX CAMERAS AND,
[01:05:01]
YOU KNOW, PARTS AND ALL THAT KIND OF STUFF.BUT, UM, IT, IT WON'T BE AT THAT LEVEL.
AND PART OF THE REASON WHY STILL WE STILL HAVE THAT CONTRACT IN PLACE IS BECAUSE WE SIGNED THAT AS A THREE YEAR CONTRACT.
AND IF WE WERE TO EXIT RIGHT NOW, WE'RE REQUIRED TO PAY 50% OF THE THIRD YEAR, WHICH IS ABOUT A HUNDRED, $2,000.
SO IT WOULDN'T MAKE ANY SENSE TO, TO THE CITY FINANCIALLY.
SO ONCE IT'S, IT COMES UP FOR RENEWAL, WE DEFINITELY HAVE SOME IDEAS TO REPLACE THAT.
DO WE USE THEIR SERVICES? I MEAN, Y'ALL CALL THEM AND OH YEAH.
THEY, IT'S SOMEONE AND I'M SORRY, BILL.
WE'VE GOT THE PERSON IN MY OFFICE THAT IS DAILY DOING STUFF OUT, ADJUSTING CAMERAS, DOING SOFTWARE UPDATES.
THEY PASSWORDED ALL THE CAMERAS FOR US.
SO THAT, UH, THEY'RE, THEY'RE, HE, HE'S DOING A REAL GOOD JOB.
WE'RE HAPPY WITH THE PERSON THAT'S IN THERE RIGHT NOW DOING THE, PRETTY MUCH ANY ISSUES THAT WE RAN WITH CAMERAS.
WE HAVE A FULL-TIME PERSON THAT CAN JUST ADDRESS THOSE ISSUES IMMEDIATELY MONDAY THROUGH FRIDAY FROM EIGHT TO FIVE.
AND I BELIEVE THAT THE ACTION PLAN SPEAKS TO WHAT NEEDS TO TAKE PLACE AT THIS POINT AND WE, SOME OF WHAT WE SEE AS WASTE HERE.
THE, THE REST OF THESE ARE FAIRLY BRIEF, SO WE'LL JUST, WE'LL GO OVER THESE.
UH, NEXT WE TOOK A LOOK AT THE CITYWIDE FURNITURE PURCHASES, AND I DO WANNA EMPHASIZE CITYWIDE.
UM, SO DURING THE AUDIT PERIOD, THERE WERE ABOUT 75 INVOICES, UH, TOTALING AROUND 1.4 MILLION.
ABOUT 1 MILLION OF THESE WERE FOR LARGER CITY PROJECTS.
UH, LET'S SAY A NEW BUILDING IS BUILT, COME THROUGH AND, UH, GET FURNITURE FOR THE ENTIRE BUILDING.
WE LOOKED AT THE ONES THAT WERE MORE SO, UM, SMALLER PURCHASES, UM, MAYBE A FEW CHAIRS, UM, REPLACING, YOU KNOW, WITHIN AN OFFICE, NOT NECESSARILY A CONSTRUCTION PROJECT MANAGEMENT, UM, PROJECT.
SO WE DID, WE LOOKED AT 20 INVOICES.
UH, SO OF THOSE 20 INVOICES WE LOOKED AT, THE ORIGINAL AMOUNT OF THOSE INVOICES WERE AROUND $155,000.
UH, WHAT WE DID IS WE JUST, WE WANTED TO TAKE A LOOK AND BASICALLY FIND A BENCHMARK.
I WANT TO EMPHASIZE THAT THIS IS NOT, THIS IS NOT A TRUE, WE COULD HAVE SAVED THIS MUCH MONEY IF WE JUST DID THIS.
THIS IS JUST A BENCHMARK NUMBER OF THE LOWEST COST ALTERNATIVE.
I ALSO WANT TO NOTE WE DID NOT OBTAIN THESE ITEMS AND TEST THEIR DURABILITY.
UM, I KNOW THAT'S IMPORTANT AS WELL.
WE JUST WANTED TO PROVIDE SOME KIND OF BENCHMARK HERE.
SO WHEN WE DID THAT, UH, THESE 20 INVOICES, UH, WHENEVER WE DID FIND THAT LOWEST COST ALTERNATIVE WAS AROUND $50,000 FOR THIS, WHICH IS AROUND $105,000 LESS THAN THAT, UH, ORIGINAL INVOICE AMOUNT.
SO BASED ON LOOKING AT THIS, WE RECOMMENDED THAT CITY ADMINISTRATION SHOULD ESTABLISH CITYWIDE FURNITURE PROCUREMENT STANDARDS REQUIRING CONSIDERATION OF CONSIDERATION OF COST EFFECTIVE CITY APPROVED RETAIL OPTIONS, EXPENDITURE BASED APPROVAL THRESHOLDS, AND DOCUMENTED APPROVAL OF EXCEPTIONS, UH, FOR LARGE AND PROJECT BASED FURNITURE PURCHASES, UH, REQUIRE COMPETITIVE BIDS OR PRICE COMPARISONS TO ENSURE THE CITY RECEIVES THE BEST OVERALL VALUE.
SO THE ACTION PLAN, UM, FACILITIES MANAGEMENT PARTIALLY AGREES WITH THE RECOMMENDATION AND RECOGNIZES THE POTENTIAL FOR COST SAVINGS THROUGH CONSIDERATION OF LOWER COST RETAIL OPTIONS.
HOWEVER, BECAUSE THE ALTERNATIVES IDENTIFIED IN THE AUDIT WERE NOT INDEPENDENTLY EVALUATED FOR QUALITY, DURABILITY, WARRANTY, OR LONG-TERM PERFORMANCE FACILITIES, DEPARTMENT WILL BALANCE INITIAL COST WITH THESE FACTORS WHEN DEVELOPING, UH, PROCUREMENT STANDARDS TO ENSURE PURCHASES PROVIDE THE BEST OVERALL VALUE AND MEET THE OPERATIONAL DEMANDS OF THE CITY.
FOR THE SECOND PIECE, FACILITIES HAS IMPLEMENTED A PROCESS TO OBTAIN AND COMPARE MULTIPLE BIDS FOR LARGE AND PROJECT BASED FURNITURE PRO, UH, PURCHASES TO HELP ENSURE THE CITY RECEIVES THE BEST OVERALL VALUE.
STAFF ALSO CROSS CROSS-REFERENCES VENDORS SUCCESSFULLY USED BY OTHER CITY DEPARTMENTS, INCLUDING PMO PROJECT MANAGEMENT TO IDENTIFY COMPETITIVE PRICING AND RELIABLE VENDORS.
UH, MANAGEMENT PARTIALLY CONCURRED DUE TO THAT.
AND IMPLEMENTATION DATE OF OCTOBER 1ST, 2026.
DO YOU HAVE ANY QUESTIONS ON THAT ONE? PARTIALLY CONCURRED? UH, YES SIR.
SIR, YOU WANNA I WAS JUST GONNA SAY THE PARTIAL CONCURRENCE IS JUST BECAUSE WE DON'T KNOW WHAT THE QUALITY OF THE, ON THE BENCHMARKING, WE DON'T KNOW WHAT THE QUALITY IS.
THE LONG-TERM DURABILITY, THE WARRANTY, AND THE LONG-TERM PERFORMANCE OF SOME OF THIS FURNITURE IS, IT'S NOT ALWAYS THE FACT THAT YOU COULD BUY A PARTICULAR CHAIR TABLE SET OR WHATEVER ON A VENDOR THAT YOU FIND ONLINE.
UM, AND, AND NOT TO, NOT TO BE TRITE ABOUT IT, BUT I MEAN, YOU CAN BUY REALLY NICE LOOKING FURNITURE ON TEMU, BUT WHEN YOU GOT IT TO YOUR HOUSE, YOU MIGHT NOT ACTUALLY WANT IT IN YOUR HOUSE.
AND, AND THE FIRST TIME WE SAT ON IT, YOU KNOW, AND, AND THE TYPE OF WEAR THAT SOME OF OUR FURNITURE GETS HERE AT CITY HALL AND OTHER FACILITIES IS SIGNIFICANTLY GREATER THAN THE CONSUMER GRADE FURNITURE THAT YOU MIGHT SIT ON, YOU KNOW, ONCE A MONTH OR TWICE A
[01:10:01]
MONTH SOMEWHERE AND SITS IN THE BACK OF A HOUSE.AND SO THE ONLY REASON FOR THE PARTIAL CONCURRENCE WAS I AGREE THAT THIS NEEDS TO BE A, AN ISSUE.
AND I THINK THAT FACILITIES AGREES WE NEED TO LOOK AT HOW DO WE PRICE FURNITURE.
AND, AND, AND REALLY WHAT THE, THIS WAS DRIVEN BY IS, FOR A LONG TIME HERE AT THE CITY DECADES, I WOULD SAY WE'VE USED A VENDOR FOR OUR FURNITURE PURCHASES HERE.
AND THIS WAS PARTIALLY DRIVEN BY MY REQUEST TO UNDERSTAND WHY WE'RE USING THAT FURNITURE VENDOR.
UH, IS THERE A BETTER WAY, CHEAPER WAY TO DO THIS? AGAIN, IN ACCORDANCE WITH OUR STRATEGIC PLAN, I'M LOOKING TO SEE WHERE CAN WE SAVE MONEY AND, BUT WE HAVE TO BE SMART ABOUT IT.
RIGHT? AND THAT'S WHY WE PARTIALLY CONCUR.
WE CAN'T SAVE MONEY, BUT, BUT WE COULD SAVE A LOT OF MONEY BY BUYING OUR FURNITURE OFF FATI.
I CAN TELL YOU, I'VE WORDED SOME STUFF WITH TEMU.
IT LOOKS GREAT IN THE PICTURES.
IT EVEN LOOKS GREAT WHEN YOU SET IT UP MM-HMM
AND THEN YOU SIT ON IT AND FIND OUT IT'S CARDBOARD AND YOU CRUNCH THROUGH IT THE FIRST TIME YOU SIT AND YOU'RE LIKE, OKAY, MAYBE NOT.
AND SO, UH, THAT, THAT'S WHY THE PARTIAL OCCURRENCE, UH, OVERALL WE AGREE THAT WE NEED TO, TO FIND A WAY TO MAKE SURE THAT WE'RE GETTING THE BEST VALUE IN OUR FURNITURE PURCHASES AND NOT RELY ON A SINGLE VENDOR.
THIS YOU DID, YOU BEAT ME TO IT.
BASICALLY JUST LOOKING FOR BALANCE BETWEEN QUALITY AND COST.
UH, THIS WAS KIND OF THE EXAMPLE THAT I ALLUDED TO EARLIER, THAT I DO BELIEVE THAT WE CAN DO A MUCH BETTER JOB AS IT RELATES TO, UH, THE PURCHASING.
ESPECIALLY WHEN YOU HAVE A, IT MAY NOT BE TMU, BUT ESPECIALLY WHEN YOU CAN GET THE SAME QUALITY IN MANY INSTANCES FOR MANY, MANY DOLLARS LESS.
SO NOW WHAT IS GOING TO BE, I I, I HEAR, I SEE YOUR ACTION PLAN, BUT IS THERE SOMEONE GOING TO BE, UH, RESPONSIBLE FOR THIS? IS, UH, HOW IS THAT PIECE GOING TO WORK? SO WE'RE GONNA BE WORKING WITH CITY ADMINISTRATION TO IMPLEMENT A CITYWIDE POLICY ON HOW WE'RE GONNA, UH, BE ORDERING FURNITURE GOING FORWARD.
UH, AS IT PERTAINS TO LARGE PROJECTS.
WE, WE DO BID THAT OUT SO THAT WE CAN GET AT LEAST THREE COMPETITIVE BIDS.
DO THESE NOT GO THROUGH PURCHASING AND PROCUREMENT? SO IF I MAY, IF I MAY ANSWER TO THAT.
SO TRADITIONALLY, UH, BEFORE I SAY THAT, I DO WANNA EMPHASIZE ONE THING, UEL, BILL, MIKE, UH, NONE OF THE MANAGERS OR DIRECTORS OR YOU KNOW, WHO ARE MANAGING THIS, WERE PRESENT AT THE TIME WHEN THIS DECISION WAS MADE LONG TIME AGO.
SO THEY PRETTY MUCH INHERITED THIS, THIS TRADITION OR THIS CULTURE THAT THE CITY CURRENTLY, YOU KNOW, HAS BEEN ONGOING.
SO I DO WANNA APPRECIATE THE CITY MANAGER FOR TAKING THE INITIATIVE TO ADDRESS THIS.
UM, SO NUMBER OF YEARS AGO, THE CITY HAS DECIDED TO PIGGYBACK ON A CO-OP AGREEMENTS WITH, I BELIEVE IT WAS WITH COLIN COUNTY.
SO WE ARE PRIMARILY USING THAT CONTRACT, UM, TO PROCURE THIS THROUGH ONE VENDOR PRIMARILY.
UH, AND SO THEN, YOU KNOW, WHATEVER THE, THE COST OR THE PRICE THAT THE VENDOR SET, WE DO GET A DISCOUNT THROUGH THAT CONTRACT.
BUT THAT HAS BEEN TRADITIONALLY HOW WE HAVE BEEN PROCURING THIS.
AND FROM A LEG LEGALITY PERSPECTIVE, FROM A COMPLIANCE PERSPECTIVE, YES, WE DO MEET THE COMPLIANCE REQUIREMENTS.
PART, PART OF WHAT HAPPENED IS FOR AN INDIVIDUAL FURNITURE PURCHASE, IF I JUST BUY A CHAIR LIKE THIS, I DON'T HAVE TO, IT'S LOW ENOUGH DOLLAR AMOUNT THAT I DON'T HAVE TO GO THROUGH PROCUREMENT.
THAT IS, I DON'T HAVE TO GO OUT TO COMPETITIVE BIDDING 'CAUSE I WANT ONE CHAIR FOR MY OFFICE.
AND WHAT HAPPENED OVER THE YEARS WERE THERE WAS A WIDE VARIANCE OF PEOPLE BUY A CHAIR HERE, A CHAIR THERE, A CHAIR THERE.
AND SOMETIME LONG BEFORE I WAS IN THIS SEAT, LONG BEFORE MR. BRADFORD WAS IN THIS SEAT, PROBABLY SOMEBODY DECIDED WE'RE GONNA USE THIS SINGLE VENDOR.
SO EVERYBODY'S BUYING THEIR CHAIRS FROM HERE, SO WE'RE NOT BUYING THEM HERE AND THERE AND EVERYWHERE AT ALL THESE DIFFERENT PRICES.
AND THAT MAY HAVE MADE A LOT OF SENSE BACK AND I DON'T KNOW, I JUST KNOW THAT TODAY, UH, USING A SINGLE VENDOR WHERE THE WORLD IS MUCH DIFFERENT THAN IT WAS 20 YEARS AGO, AND HOW WE CAN GET CHAIRS AND TABLES AND OTHER THINGS DELIVERED, UH, I I ASK THAT WE LOOK INTO A MORE COMPETITIVE, UH, UH, FINANCIALLY BENEFICIAL WAY TO PURCHASE FURNITURE.
AND, AND, UH, AT ONE TIME IT WAS A CONTROL.
ONE TIME IT WAS A CONTROL SO THAT EVERYBODY WAS USING THE SAME FURNITURE MANUFACTURER, SAME FURNITURE SOURCE, UH, THAT WAS LONG AGO BEFORE THINGS SHOWED UP ON THE INTERNET AND WE COULD BUY THINGS EASILY.
AND NOW IT'S NO LONGER SERVES AS A CONTROL, IT MORE SERVES AS A LITTLE BIT OF A, A WEIGHT UPON US.
AND SO I THINK THAT THAT'S WHY I, I LIKE THIS PLAN AND I LIKE WHAT, WHAT, UH, EURO AND THE STAFF COME UP WITH IS, LET'S FIGURE OUT A WAY THAT WE CAN MAKE SURE PEOPLE ARE GETTING THE BEST VALUE FOR THE CITY.
UH, WE'RE OUT OF THE REALM OF WHERE WE NEED TO CONTROL HAVING A SINGLE VENDOR.
THIS IS, THAT WAS 25 YEARS AGO, I DON'T KNOW HOW LONG, PROBABLY MORE THAN 20 YEARS AGO.
'CAUSE WHEN I SHOWED UP HERE 22 YEARS AGO, THEY WERE USING THAT VENDOR.
WERE YOU ABLE TO FIGURE OUT HOW LONG
[01:15:01]
IT WAS WE WERE USING THEM? NO, IT'S BEEN DECADES.WE STAYED WITHIN THE SCOPE OF THE AUDIT ON THAT ONE.
WE ONLY LOOKED BACK TO OCTOBER 1ST, 2023 AS LONG AS EVERYBODY, YEAH.
AND REMEMBER WE'VE BEEN USING THAT SINGLE VENDOR AND AGAIN, IT MADE REALLY GOOD SENSE 25 YEARS AGO.
BUT WHEN I CAME IN AND LOOKED AT IT, I WAS LIKE, YEAH, WE WE NEED TO DO SOMETHING DIFFERENT.
SO THAT'S, MAY I ADD? YES, PLEASE.
ONE ADDITIONAL POINT OF CONTEXT, JUST, UM, GIVEN THE RESPONSE TO THE PARTIALLY CONCUR REGARDING THE EXPENDITURE BASED APPROVAL THRESHOLD.
SO, UM, CITY COUNCIL POLICY DICTATES OUR PROCUREMENT, UM, EXPENDITURE APPROVAL THRESHOLDS AND EVERYTHING FOLLOWS THAT.
AND ONE ADDITIONAL ITEM WE IMPLEMENTED WITH THE MOVE TO WORKDAY IS THAT CERTAIN, UM, PROCUREMENT CODES, SO PURCHASING CODES THAT, UH, THE NGIP CODES TO BE EXACT, THAT ARE FACILITIES RELATED.
THOSE THAT IF A DEPARTMENT OTHER THAN FACILITIES INITIATES PROCUREMENT USING ONE OF THOSE CODES, IT ROUTES THROUGH, I'M SORRY, IT ROUTES THROUGH THE SYSTEM SO THAT FACILITIES HAS VISIBILITY INTO THOSE PURCHASES CAN ASSURE IT MEETS OUR PROCUREMENT STANDARDS, THE DURABILITY WARRANTY, AND MAKE SURE IT'S BENEFICIAL.
AND, AND THIS MEETS OUR OVERALL CITY STANDARDS.
UM, SO THAT'S ONE, UM, KIND OF A, AN ENHANCEMENT WE'VE ADDED THROUGH THROUGH THE FINANCIAL CONTROLS AS IT RELATES TO THIS.
AND I KNOW FROM A FINANCIAL CONTROL AND FINANCIAL MANAGEMENT AND PROCUREMENT PERSPECTIVE, WE'RE HAPPY TO CONTINUE TO PARTNER WITH FACILITIES TO ENHANCE THAT.
BUT I JUST WANTED TO POINT THAT OUT FOR THE COMMITTEE.
THAT'S ONE STEP WE'VE TAKEN IN TERMS OF EXPENDITURE CONTROL AS IT RELATES TO THIS.
AND I, I WOULD SAY WE'RE, WE'VE DISCUSSED TRYING TO COME UP WITH A STANDARD.
I I THINK THE, THE DIFFICULTY BECOMES THAT FURNITURE VENDORS, MUCH LIKE CARPET VENDORS AND TILE VENDORS HAVE FIGURED OUT HOW TO ROTATE WHAT IT IS EVERY THREE TO FIVE YEARS.
AND SO THAT MEANS YOU WOULD HAVE TO UPDATE THAT STANDARD EVERY THREE TO FIVE YEARS TO TRY AND KEEP THINGS AND HAVE A STANDARD.
AND, UH, ALONG WITH THAT, NEW BUILDINGS ARE COMING ON AND IT'S A DESIGN THAT THE ARCHITECT PICKS ALL THE FURNITURE THAT HAS TO MATCH THE DESIGN.
AND THAT WOULD BE LIKE, THAT'S PROBABLY NOT THE STANDARD THAT WE WOULD HAVE FOR CITY HALL VERSUS SENIOR CENTER.
SO I'M TRYING TO FIGURE OUT WHAT A GOOD STANDARD IS OTHER THAN, YOU KNOW, IS IT A COMMERCIAL QUALITY, UH, TYPE OF FURNITURE? UM, IS IT GONNA LAST, IS IT DURABLE? YOU KNOW, THOSE KIND OF ASPECTS.
BUT AS, AS YOU CAN TELL, COMMERCIAL FURNITURE IS NOT CHEAP.
AND, UH, YOU KNOW, IF IF IT IS CHEAP, IT USUALLY DOESN'T LAST VERY LONG.
I DON'T KNOW, IT'S A BIT OF A HARD NUT TO CRA TO CRACK ON THAT ONE.
SO, UH, I'M NOT OPPOSED TO EVERY THREE TO FIVE YEARS GOING BACK AND TAKING A LOOK AT IT EITHER BECAUSE, UH, IT SEEMS TO ME THAT THAT'S KIND OF THE SEASON THINGS ARE CHANGING SO QUICKLY TODAY.
AND IF WE'RE GONNA CONTINUE TO SAVE THE CITY MONEY AND BE ON TOP OF THAT, THAT'S PROBABLY A, A GOOD STANDARD.
BUT ANYWAY, I THINK THAT, AGAIN, THE ACTION PLAN SPEAKS FOR ITSELF.
YOU KNOW, IT TELLS EXACTLY WHAT NEEDS TO BE DONE IN ORDER TO RESOLVE THE ISSUES THAT ARE FACING ZACH.
ALRIGHT, UM, OKAY, SO NUMBER FOUR.
THE REST OF THESE HAVE KIND OF BEEN ALL OVER THE PLACE, DIFFERENT CONTRACTS.
THESE LAST TWO ARE MORE SO RELATED, UM, TO THEM AS A WHOLE.
SO, UM, JUST BASED ON THIS IS LOOKING AT, WE WANTED TO TAKE A LOOK AT THE INVOICES THAT WERE BEING PROCESSED FOR THESE, UH, CONTRACTORS.
WE TOOK A LOOK AT A SAMPLE OF 73 OF THESE INVOICES FROM THESE TEN EIGHT OF THE CONTRACTORS.
INVOICES FROM EIGHT OF THE CONTRACTORS HAD NO ISSUES WHATSOEVER.
WE DID NOTE THAT WHEN REVIEWING THIS, THERE WAS ONE PLUMBING CONTRACTOR THAT STARTED BILLING UNAPPROVED HIGHER RATES, UH, BACK IN JANUARY, 2026.
THAT IS THE ONE CONTRACTOR THAT WE EXPANDED THAT REVIEW FOR.
UH, THE DIFFERENCE WENT FROM THE PLUMBER LABOR WENT FROM $150 AN HOUR TO 1 75.
THE HELPER WENT FROM 75 TO 87 50.
AND THE GARLAND, IT WAS LIKE A SERVICE CALL WENT FROM 79 TO $99 A CALL.
UM, SO WE DID TAKE A LOOK AT THAT JUST TO GET THE TOTAL IMPACT FROM JANUARY ONE THROUGH AUGUST 31ST.
AND THERE WAS APPROXIMATELY $7,500 IN TOTAL OVER BILLING.
AND THERE WAS ALSO ONE ACCESS CONTROLLER CONTRACTOR THAT HAD TWO INVOICES WITH ABOUT $210 IN TOTAL OVER BILLING.
WE DIDN'T LOOK ANY FURTHER INTO THAT.
IT LOOKED COMPLETELY RANDOM AND JUST A PURE MISTAKE.
SO, UH, WE RECOMMENDED THAT FACILITIES SHOULD, UH, COMPLETE THAT EXPANDED REVIEW OF THE BILLING, UH, FROM THAT ONE CONTRACTOR.
AND TO OBTAIN SOME KIND OF CREDITS OR RECOVER THESE OVERPAYMENTS, WE RECOMMENDED THAT THEY SHOULD, UH, MAINTAIN A CENTRALIZED CONTRACT RATE MASTER SHEET JUST TO KIND OF HELP THEM AS THEY'RE REVIEWING THESE INVOICES, ONE PLACE THEY CAN TAKE A LOOK AT.
UH, AND ALSO JUST TO PERFORM, UH, PERIODIC DATA ANALYTICS, UH, OVER THESE, UM, OVER THESE PURCHASES AND OVER THESE PAYMENTS JUST TO IDENTIFY ANY RATE CHANGES, DUPLICATE CHARGES, UH, UNSUPPORTED SERVICE FEES, STUFF LIKE THAT.
[01:20:01]
SO THE ACTION PLAN, THEY CONCUR AND THE ACTION PLAN IS TO THAT THEY'VE ACTUALLY ALREADY CONTRACT, UH, CONTACTED THE PLUMBING CONTRACTOR AND THEY'VE IDENTIFIED, UM, THE TOTAL OVERCHARGES HERE AND THEY'RE WORKING TO OBTAIN A REFUND ON THAT ONE.UM, SECONDLY, THEY ARE WORKING ON DEVELOPING A CENTRALIZED DATABASE, IDENTIFYING THESE CONTRACTORS, UM, AND ANY OF THESE, UH, CONTRACT RATES THAT WE HAVE HERE, UM, THEY WILL ALSO CONDUCT INTERNAL TRAINING FOR STAFF, UH, TO ENSURE THAT THE, UM, THAT THEY KNOW WHAT TO GO THROUGH WHENEVER THEY'RE APPROVING THESE INVOICES.
LASTLY, UH, THEY WILL IMPLEMENT A PERIODIC REVIEW OF THESE RECURRING, UH, INVOICES AND, AND HELP THEM IDENTIFY THESE RATE CHANGES, DUPLICATE CHARGES, UNSUPPORTED SERVICE FEES, AND OTHER BILLING ANOMALIES.
ANY QUESTIONS ON THIS ONE THAT I'LL MOVE ON TO THE LAST PIECE.
SO FOR THESE 10 CONTRACTORS, WE, WE WANTED TO TAKE A LOOK AT, UH, THE REQUIREMENTS WITHIN THE CONTRACT REALLY, UM, WITHIN THEIR CONTRACTS, REALLY THIS CAME DOWN TO LOOKING AT INSURANCE REQUIREMENTS.
UM, SO OF THE 10 THAT WE TOOK A LOOK AT, FIVE OF THEM MET ALL THEIR CONTRACTUAL OR, UH, INSURANCE REQUIREMENTS.
UH, ONE OF THEM DID NOT HAVE, UH, THE PROPER UMBRELLA COVERAGE AS PER THEIR CONTRACT REQUIRED.
AND FOUR OF THE 10 OF THEM WE JUST HAD, UH, WE DIDN'T HAVE THE MOST CURRENT UPTODATE, UM, CERTIFICATE OF INSURANCE ON FILE FOR THAT, UH, CONTRACTOR.
UM, ONE THING WE DID NOTE IS WE REACHED OUT TO, UH, FACILITIES AND PROCUREMENT AND THERE WAS A LITTLE BIT OF MISUNDERSTANDING AS TO WHO WAS RESPONSIBLE FOR THAT ONGOING, UM, I GUESS, UH, RESPONSIBILITY OF KEEPING THOSE INSURANCE DOCUMENTS AND OBTAINING THE NEW ONES, UH, PROCUREMENT, UH, ASSUMED IT WAS THE DEPARTMENT'S RESPONSIBILITIES.
THE DEPARTMENT RELIED ON THE CONTRACT MANAGEMENT DEPARTMENT TO, TO KEEP TRACK OF THAT.
SO OUR RECOMMENDATIONS FOR THIS IS FOR FACILITIES MANAGEMENT SHOULD OBTAIN AND VALIDATE THEIR CURRENT INSURANCE DOCUMENTATION FOR ALL THE CONTRACTORS IDENTIFIED WITH EXPIRED OR INCOMPLETE INSURANCE AND DETERMINE WHETHER ANY ADDITIONAL ACTIONS NECESSARY, UH, THAT THEY SHOULD, UH, CITY ADMINISTRATION SHOULD FORMALLY ASSIGN A POST AWARD RESPONSIBILITY FOR TRACKING, REVIEWING, RETAINING, AND ESCALATING CONTRACTOR INSURANCE AND OTHER REQUIRED COMPLIANCE DOCUMENTATION, INCLUDING THE ROLES OF FACILITIES PROCUREMENT AND RISK MANAGEMENT AS APPLICABLE.
AND THAT THEY SHOULD UTILIZE THE CURRENT CONTRACT ADMINISTRATION DASHBOARD TO RECORD REQUIRED COVERAGE, POLICY LIMITS, EXPIRATION DATES, RECEIPT OF RENEWALS, AND RESPONSIBLE CONTRACT OWNERS WITH ADVANCED REMINDERS AND ESCALATION FOR UNRESOLVED, UM, EXCEPTIONS MANAGEMENT PARTIALLY CONCURRED AND JUST OVERALL DUE TO STAFFING LIMITATIONS.
UM, THEY'RE GOING TO, THEY'RE GOING TO EVALUATE THIS MATTER AND JUST TRY TO BASICALLY COME UP WITH THE BEST PLAN THAT THEY CAN TO ADDRESS THIS WITH HAVING THAT STAFFING LIMITATIONS AND, UH, FINANCIAL LIMITATIONS IN MIND, UM, WHILE PUTTING THAT TOGETHER.
AND I'M NOT UNDERSTANDING WHY THIS IS BEING PUSHED ONTO A DEPARTMENT THAT'S, UM, IN CHARGE OF MAINTENANCE, IF I MAY ADDRESS THAT.
YEAH, PROCUREMENT IS A CITY, IT'S AN INTERNAL SERVICE DEPARTMENT.
IN THE CONTRACT DIVISION THERE'S ABOUT FOUR ASSIGNED STAFF MEMBERS THAT SUPPORT THE ENTIRE CITY.
I DON'T HAVE THAT NUMBER WITH ME TODAY, BUT THAT IS A LARGE VOLUME OF PURCHASE ORDER CONTRACTS AND NON PURCHASE ORDER CONTRACTS.
UM, THAT THEY ARE PRIMARILY RESPONSIBLE IN PARTNERING WITH THE DEPARTMENT TO ENSURE THE, UM, KIND OF EXECUTION OF, THEY DO HAVE A COMPLIANCE DASHBOARD WHERE THEY DO TRACK THE LIFECYCLE OF THAT, BUT THEY ARE NOT ULTIMATELY THE OWNER OF THAT CONTRACT.
THE, THE CITY DOES HAVE, UM, A PROCUREMENT AND CONTRACT DIRECTIVE THAT DOES SPECIFY THAT A MANAGING DIRECTOR OF EVERY DEPARTMENT SHOULD BE ASSIGNING A CONTRACT OWNER WITHIN THEIR RESPECTIVE DEPARTMENTS, UM, THAT ENSURE COMPLIANCE WITH THE PERFORMANCE OF THE CONTRACT, INCLUDING DATA POINTS, DELIVERABLES IN THE CONTRACT, AND ACTING AS THE LIAISON BACK TO THAT PROCUREMENT CONTRACT DIVISION.
JUST BECAUSE OF THE VOLUME OF PROCUREMENT BEING A CENTRALIZED INTERNAL SERVICE DEPARTMENT, WE CANNOT ENSURE THAT EVERY INVOICE MATCHES ALL THE CONTRACT TERMS, THAT EVERY ITEM IS RECEDED IN TERMS OF THE CONTRACT TERMS OR THAT ALL THE DOCUMENTATION IS MAINTAINED OVER THE LIFE OF THE CONTRACT TERMS. NOW, WHEN A CONTRACT COMES BACK
[01:25:01]
THROUGH PROCUREMENT FOR, LET'S SAY RENEWAL OR EX YOU KNOW, RE EXECUTION SAY THAT HAS MULTIPLE RENEWALS OVER A PERIOD OF TIME AND THEY'RE GOING FROM, YOU KNOW, TO EXTEND THEIR YEAR TWO OR YEAR THREE OPTIONAL RENEWAL, UM, PROCUREMENT WILL MAKE SURE THE DOCUMENTATION AND THE INSURANCE IS UP TO DATE AND VERIFIED AND SUPPLIED BACK TO THE CITY AND RECORDED IN OUR CENTRALIZED DATABASE AT THE TIME OF THAT SET RENEWAL DATE.BUT SHOULD THAT INSURANCE LAP DURING THE, THAT PERFORMANCE PERIOD, IT WOULD BE ON THE CONTRACT ADMINISTRATOR OR AUTHORITY WITHIN THOSE DEPARTMENTS TO ENSURE THAT GETS PROVIDED TO THE DOCUMENT BY THAT OR TO THE DEPARTMENT BY THAT VENDOR, AND THEN ULTIMATELY TO CENTRALIZED PROCUREMENT JUST BECAUSE OF THE LARGE VOLUME OF THE OVERALL CITY.
DOES THAT MAKE SENSE? OR, AND IF YOU HAVE ANY ADDITIONAL QUESTIONS, I'M HAPPY, BUT I'M NOT SAYING PROCUREMENT ISN'T DEVOLVED OF ANY OWNERSHIP HERE, BUT THEY CAN'T TAKE ENTIRE OWNERSHIP.
SO HAPPY TO WORK WITH CITY MANAGEMENT AND ALL THE CITY DEPARTMENTS AND CITY LEADERSHIP TO, TO FIGURE OUT WHERE THAT PARTNERSHIP COULD WORK BETTER IN THE FUTURE.
IF I MIGHT MAKE ONE MAKE ONE POINT HERE, ONE OF THE THINGS THAT I NOTICED AND I TALKED TO JED ABOUT IS WE PUT THESE INSURANCE REQUIREMENTS IN ALMOST EVERY CONTRACT AND WE MAKE PEOPLE GET INSURANCE FOR THINGS THAT WE COULDN'T POSSIBLY HAVE EXPOSURE FOR.
I CAN TELL YOU AS A LAWYER, YOU WOULD NEVER SPEND THE TIME OF YOUR OWN IF IT WAS YOUR OWN MONEY, YOU WOULDN'T HAVE STAFF RUNNING DOWN TO MAKE SURE PEOPLE HAD A MILLION DOLLARS INSURANCE WHEN THERE'S NOT SOMETHING THAT THEY COULD CAUSE A MILLION DOLLARS IN DAMAGE OR WE COULD HAVE LIABILITY FOR BECAUSE OF OUR STATUS AS A GOVERNMENT ENTITY.
BUT THEY BECOME STANDARD TERMS AND THEN THEY SHOW UP IN AN AUDIT BECAUSE, WELL, WE DON'T HAVE THE INSURANCE THAT THE CONTRACT SAYS WE SHOULD HAVE.
AND IT BECOMES A QUESTION OF, OKAY, WE'VE POINTED OUT, THEN THE QUESTION IS HOW MUCH STAFF DO WE HAVE? ARE WE GONNA HIRE TO MAKE SURE WE HAVE ALL THIS STUFF? AND THEN YOU HAVE TO STOP AND SAY, AND TO WHAT END? IF IT WAS YOUR OWN MONEY, YOU WOULD NEVER HIRE STAFF.
IF IT WAS A BUSINESS WE WERE RUNNING, YOU WOULDN'T HIRE STAFF TO MAKE SURE THAT WE'RE MEETING INSURANCE REQUIREMENTS THAT WE WOULD NEVER GET ANY BENEFIT FROM.
BUT THEY'RE IN THE CONTRACT AND SO THEN THEY BECOME AN AUDIT FINDING AND THEY BECOME AN AUDIT FINDING.
AND THAT'S WHY AS JED AND I TALK ABOUT AN AUDIT FINDING DOESN'T MEAN WE'RE DOING SOMETHING WRONG.
IT SOMETIMES MANAGEMENT SAYS WE WOULDN'T SPEND THE MONEY TO SOLVE THIS RISK TO MAKE SURE THAT EVERY CONTRACT, NOW THAT SAID, THERE ARE SOME CONTRACTS WHERE THE INSURANCE IS IMPORTANT TO US AND WE NEED TO FIGURE OUT, AND THAT'S WHY I THINK WE PARTIALLY CONCUR.
WE NEED TO FIGURE OUT A WAY TO LOOK AT THOSE CONTRACTS AND FIGURE OUT HOW WE DO CONTRACT MANAGEMENT ON THOSE CONTRACTS.
AND IT GOES WAY BEYOND THE SCOPE OF JUST THIS AUDIT THAT JED AND I HAVE TALKED ABOUT IS TRYING TO FIND A WAY CITYWIDE TO DO CONTRACT MANAGEMENT AT A CITY OUR, OUR SIZE.
YOU KNOW, IDEALLY YOU'D HAVE FIVE OR SIX EMPLOYEES WHOSE SOLE JOB WAS CONTRACT MANAGEMENT.
WE HAVE NEVER BEEN ABLE TO AFFORD THAT AT THE CITY OF GARLAND.
AND, AND IT WAS AN ISSUE THAT I RAISED A DECADE AGO WITH GP AND L THAT THEY DIDN'T HAVE CONTRACT MANAGEMENT AND THEY ACTUALLY HIRED A CONTRACT MANAGER WHOSE WHOLE JOB IS KEEPING ALL THE CONTRACTS IN BINDERS AND CALENDARING EVERYTHING AND MAKING SURE ALL THE BOXES ARE CHECKED.
WE DON'T HAVE SUCH POSITIONS ON THE NON GP AND L SIDE AND DEPARTMENTS, UH, UH, VARY IN THEIR ABILITY TO MANAGE CONTRACTS.
AND IT'S A LONG-TERM ISSUE THAT I'VE BEEN WORKING WITH CHAD ON FIGURING OUT WHAT DO WE, WHAT CAN WE DO THAT DOESN'T COST A LOT OF MONEY, THAT CAN REDUCE THE RISK AS GREAT AS POSSIBLE.
BUT THE, THE NOTION THAT, AND I'VE LOOKED AT SOME OF THESE CONTRACTS WHERE I LOOKING ON SOMEBODY DIDN'T HAVE INSURANCE, I'M LIKE, WE WOULDN'T POSSIBLY NEED IT FOR ANYTHING ANYWAY.
THEY COULDN'T CAUSE A MILLION DOLLARS IN DAMAGE AND WE WOULDN'T EVER HAVE A MILLION DOLLARS IN LIABILITY.
I WOULDN'T SPEND AN HOUR OF TIME CHECKING MAKING SURE THEY HAD THAT INSURANCE.
IT'S NEVER GONNA BENEFIT US AT ALL.
BUT IT ENDS UP AS A STANDARD TERM IN EVERY CONTRACT.
AND HOW THAT HAPPENS IS A WHOLE SEPARATE, UH, UH, ISSUE.
SO IT'S A, IT'S AN ISSUE THAT WE'RE WORKING THROUGH TO FIGURE OUT HOW CAN WE MAKE SURE THAT THE, FOR THOSE CONTRACTS WHERE WE NEED NOT ONLY THE INSURANCE BUT THE OTHER TERMS OF, OF THE CONTRACTS MANAGED, THAT WE HAVE THAT MANAGEMENT IN PLACE AND WE MAKE THOSE DISTINCTIONS OF WHAT MONEY CAN WE SPEND WITHOUT HIRING SIX EMPLOYEES TO MANAGE ALL THE CONTRACTS AT THE CITY WHEN WE DON'T HAVE THE FINANCIAL CAPACITY FOR SIX ADDITIONAL EMPLOYEES.
IF I MAY ADD ONE THING TO WHAT MIKE SHARED, I DON'T KNOW IF YOU REMEMBER DURING OUR LAST AUDIT COMMITTEE MEETING WE TALKED ABOUT WHETHER WE SHOULD HAVE THESE INSURANCE REQUIREMENTS IN SOME OF THESE CONTRACTS.
AND DURING THAT TIME MIKE INFORMED THE COMMITTEE THAT UH, HE'S GONNA HAVE THE RISK MANAGEMENT DEPARTMENT START LOOKING AT IT GOING FORWARD.
YOU KNOW, WE CANNOT JUST APPLY THE SAME CRITERIA IN EVERY CONTRACT.
MAYBE CERTAIN CONTRACTS DO NOT NEED INSURANCE, BUT OUR GOAL FROM AN AUDIT PERSPECTIVE, THIS IS WHAT WAS REQUIRED.
WE JUST WANTED TO EXPOSE THAT TO YOU.
IT'S UP TO MANAGEMENT TO, YOU KNOW, ADDRESS IT, MITIGATE IT OR ACCEPT THE RISK.
[01:30:01]
I DO THINK THAT IS THE ISSUE.UM, I THINK ONE OF THE ADVANTAGES OF TEACHING CITY COUNCIL PEOPLE AI IS THAT
BECAUSE FOR ME AND MR UH, I'M TALKING TO LEGALS NOW, IF IN FACT THE, A CONTRACT CALLS FOR INSURANCE, REGARDLESS OF IF WE THINK THAT THIS IS SOMETHING THAT WE MAY USE OR NOT USE OR WHATEVER THE CASE MAY BE, IF THE CONTRACT CALLS FOR IT AND WE ARE CALLED ON IT, THEN IN FACT, UH, WE'RE GONNA BE LIABLE FOR NOT HAVING IT.
AND SO MY CONCERN THEN BECOMES, OKAY, YEAH, WE DO NEED TO EVALUATE AND HAVE A STANDARD, HAVE A POLICY WHICH CONTRACTS ARE GOING TO HAVE INSURANCE, WHICH ARE NOT, OR WHOEVER THE CASE MAY BE THERE BECAUSE IF IT CALLS FOR IT, THEN I WOULD THINK THAT WE NEED TO HAVE IT.
WE, I HAVE, YOU'VE TALKED ME ABOUT DOING WORKFLOWS.
OKAY, WELL IF IN FACT WE HAVE ALL THESE CONTRACTS THAT WE DON'T HAVE PEOPLE THAT CAN DO IT, MAYBE WE NEED TO SET IT UP IN SUCH A FASHION THAT OUR AI IS ABLE TALK ABOUT THAT.
FOR ME, I THINK THAT WE CERTAINLY COULD SET UP WORKFLOWS AND IT'S SOMETHING THAT JED AND I HAVE TALKED ABOUT IS HOW WE MAY BE ABLE TO DEVELOP APPLICATIONS THAT WILL DO CONTRACT MANAGEMENT HERE.
WE'RE AT THE RIGHT AT THE PRECIPICE OF BEING ABLE TO DO THAT.
UH, I WILL TAKE ISSUE WITH ONE THING THAT YOU SAID IS THAT THERE ARE TERMS THAT COULD PUT IN THESE CONTRACTS BECAUSE PROCUREMENT HAS STANDARD TERMS AND THEY REQUIRE INSURANCE.
AND, AND AND AN EXAMPLE OF THIS THAT I USED WAS FROM THE LAST AUDIT WAS ONE WHERE WE WERE REQUIRING PEOPLE WHO HAD THOSE LAKEFRONT, THE LAKEFRONT PROPERTIES TO MAINTAIN COMMERCIAL INSURANCE THAT NOBODY ACTUALLY HAD AND WAS PROTECTING US FROM A RISK THAT WE DID NOT ACTUALLY HAVE.
RIGHT? THERE WAS NO REASON FOR IT.
IT JUST GOT STUCK IN AS A STANDARD TERM AND THEN IT SHOWS UP AS AN AUDIT FINDING.
WELL, NOBODY HAS THIS INSURANCE.
HALF THOSE HOMEOWNERS DOWN THERE COULDN'T EVEN OBTAIN THIS INSURANCE IF THEY WANTED TO IN ANY WAY THAT WOULD BE COST EFFECTIVE FOR THEM.
THEY WOULDN'T HAVE THE INSURANCE.
WE DON'T CARE WHETHER THEY HAVE THE INSURANCE OR NOT.
WE DON'T HAVE ANY LIABILITY FOR IT.
BUT IT WAS DETERMINED THE CONTRACT AND NOW IT SAYS, WELL THESE PEOPLE DON'T HAVE THE INSURANCE.
THAT'S JED'S JOB IS TO POINT OUT THEY DON'T HAVE THE INSURANCE.
IT'S MY JOB TO LOOK AND GO, WHY ARE WE MAKING THEM HAVE INSURANCE IN THE FIRST PLACE? WHY AM I MAKING SOMEBODY WHO'S SUPPLYING ME, YOU KNOW, STRAWS FOR OUR
WHY AM I DOING THAT? THEY, WHAT'S OUR LIABILITY IF THEY DON'T HAVE INSURANCE AND, AND I'M BEING A LITTLE BIT TRITE, BUT THERE'S SOME OF THE CONTRACTS YOU LOOK AT AND YOU SAY, OKAY, WE JUST STUCK A STANDARD TERM AND YOU'RE GONNA HAVE A MILLION DOLLARS OF INSURANCE.
WE COULDN'T HAVE A MILLION DOLLARS OF LOSS IN LIABILITY IN ANY WAY, SHAPE OR FORMAT.
I WOULDN'T SPEND TWO MINUTES OF TIME HAVING SOMEBODY SPEND AN HOUR ON THE PHONE CHECK IT DOWN TO SEE IF WE HAD IT OR NOT.
BUT WE ADD 'EM ALL AS STANDARD TERMS BECAUSE IT'S EASIER SOMETIMES THAN GOING THROUGH AND DOING THE WORK.
'CAUSE WE DON'T HAVE THE MANPOWER TO BE ABLE TO FIGURE OUT, IS THIS ONE THAT NEEDS INSURANCE OR ISN'T IT? AND WE'RE GONNA TRY TO FIGURE OUT HOW DO WE DO A BETTER JOB, MAYBE HAVE RISK MANAGEMENT LOOK AND SAY, HERE'S THE CONTRACTS WHERE WE SEE A REAL RISK.
SO THAT YOUR POINT WOULD BE RIGHT, WHICH IS IF WE DON'T HAVE INSURANCE, WE COULD BE LIABLE OR THEY COULD DO A LOT OF DAMAGE TO OUR BUILDING AND MIGHT NOT BE ABLE TO PAY FOR IT.
THOSE NEED TO HAVE THE INSURANCE.
WE NEED TO HAVE SOMEBODY WHO CHECKS ON THE INSURANCE AND DO THAT.
AND, AND BUT AT THE SAME TIME IT POINTS OUT ANOTHER PLACE WHERE WE HAVE CONTRACTS THAT REQUIRE INSURANCE THAT YOU SCRATCH YOUR HEAD AND SAY, WHY WOULD WE DO THAT? WHY WOULD WE MAKE THEM HAVE INSURANCE? WHY WOULD I SPEND A MOMENT OF TIME CHECKING IF THEY HAD INSURANCE? IT WOULD NEVER POSSIBLY BENEFIT US IN ANY WAY, SHAPE OR FORM.
THAT'S SOMETHING THAT WE'RE GOTTA WORK THROUGH AND FIGURE OUT HOW TO DO.
AND THEN I AGREE WITH YOU, WE COULD, ONCE WE FIGURE OUT THOSE WHERE WE NEED IT, WE PROBABLY ARE AT THE POINT WHERE WE CAN SET UP WORKFLOWS, FEED THE CONTRACTS IN AND HAVE THEM DO REGULAR CHECKING AND MAINTENANCE ON THOSE WHERE WE DON'T HAVE THE MANPOWER TO DO IT.
IT'S ONE OF THE TAILWINDS THAT I SEE, UH, WITH ARTIFICIAL INTELLIGENCE FOR AN ORGANIZATION OUR SIZE AND THE MANPOWER LIMITATIONS WE HAVE.
I'M THINKING FROM A LEGISLATIVE PERSPECTIVE AND THAT IS FOR COUNSEL BECAUSE COUNSELING IS THE ONE THAT HAS TO APPROVE DISAPPROVE.
I'M THINKING FROM OUR PERSPECTIVE THEN IT COMES DOWN TO ARE WE WILLING TO ACCEPT THE RISK OR DO WE, THE THREE ITEMS THAT YOU PUT FORWARD AND IF IN FACT WE'RE WILLING TO ACCEPT THAT RISK, NOT A PROBLEM, ARE WE WILLING TO ACCEPT THE RISK? SOUNDS LIKE WE ARE.
I WANTED TO MAKE ONE MORE POINT IF IT'S OKAY.
CHAIRMAN, UH, IT WAS MENTIONED, YOU KNOW, WITH THE AI AND THE TECHNOLOGY, UM, BUT THE, IT STILL COMES DOWN TO THE BIGGEST RISK FROM, YOU KNOW, I'M NOT AN AUDITOR, BUT YOU KNOW, CPA, FORMER CFO, IT COMES DOWN TO PEOPLE AND WHO HAS THE RESPONSIBILITIES.
AND WE ARE WORKING THROUGH A PRETTY ROBUST TRAINING RIGHT NOW.
UH, LEADERSHIP TRAINING FOR ALL, ALL THE WAY DOWN FROM FRONT LEVEL CREW LEADERS TO ACMS
[01:35:01]
TO CITY MANAGER, EVERYONE GOING THROUGH THIS TO HAVE CLEAR UNDERSTANDING ON RESPONSIBILITIES AND DIRECTIVES.AND I THINK THAT IS A ANOTHER KEY PIECE THAT WE HAVE IN THE WORKS AS AN ORGANIZATION BECAUSE WE, YOU KNOW, GENERAL, WE TALKED ABOUT PROCUREMENT, GENERAL FUND DEPARTMENTS, CITY OF GARLAND, WE'VE GOTTA GET THE STRATEGIC PLAN MOVING BEFORE WE'RE GONNA SEE REAL MONEY INTO THIS.
SO WE HAVE TO BE SMARTER AND WE HAVE TO USE AI.
WE HAVE TO USE OUR TECHNOLOGY, BUT WE ALSO HAVE TO TAKE THE TIME TO TRAIN OUR MANAGERS FOR THEIR RESPONSIBILITIES AND HOLD THEM ACCOUNTABLE.
SO THOSE ARE IN THE WORKS AS WELL.
YEAH, WE HAVE A, WE'RE STARTING IN JANUARY A MANAGEMENT TRADING ACADEMY INTERNALLY THAT ALL MANAGER LEVEL EMPLOYEES AND PEOPLE WHO MANAGE ANYBODY GOES THROUGH AND WE HAVE THREE TIERS FOR MANAGERS, DIRECTORS AND MANAGING DIRECTORS TO GO THROUGH.
AND THIS WAS SOMETHING THAT WE INTRODUCED, UH, ABOUT FOUR MONTHS AGO AND STARTED WORKING ON AND, AND THE ACADEMIES WILL BE BEGIN IN JANUARY.
SO IT'S KINDA LIKE INCOME TAXES, WHAT MATTER OF RISK ARE YOU WILLING TO TAKE?
I THINK THAT, UH, AGAIN, GO BACK TO UH, YOUR, YOUR ACTION ITEMS AGAIN, I THINK YOUR ACTION ITEMS SPEAK TO, UH, EXACTLY WHAT WE NEED TO BE DOING IN THE WAY OF DISCUSSING IT.
AND, UH, AGAIN, ONE MORE TIME.
HE'S NOT HERE AND UM, YEAH, VERY HELPFUL DURING THIS AUDIT.
BUT BEFORE I GO, INTRODUCE, WELCOME MATTHEW.
HE'S A SAFEGUARD CALLED FINANCIAL SINCE WE DID AN EXCELLENT JOB FOR YOU, ONE OF THE STAFF.
SO STAND UP KENNEDY, HOW YOU DOING? ALRIGHT, WELCOME
SO KENNEDY WILL BE THE BEST STILL WILL STILL BITTER ABOUT HIMS STEALING HER FROM THE CITY MANAGER SIDE.
AND I HOPE THIS IS BROUGHT UP IN HIS REVIEW IN NOVEMBER THAT HE'S STEALING SOME OF MY BEST EMPLOYEES.
MAKE A NOTE, PLEASE MAKE A NOTE.
UH, THE KEY THOUGH IS GETTING IT ONTO THE, UH, ON THE RECORDING.
I HIT THE BUTTON THAT SAID REQUEST TO TO SPEAK.
SOMEONE WANT TO COME BACK AND UH, AND REVIEW THEY HERE.
SORRY, JUST FOR THE RECORDING.
[01:40:01]
GO.SO THE FIRST AUDIT IS CONTRACT MANAGEMENT.
UH, I DON'T NEED TO EXPLAIN THAT WHY WE DO THIS.
WE JUST WENT OVER A CONTRACT MANAGEMENT AUDIT, SOMETHING SIMILAR TO THAT.
WE'LL CONDUCT AN AUDIT NEXT YEAR.
THE NEXT AUDIT IS CARE A TC CONTRACT.
AS YOU'RE AWARE, IN 2024, CITY OUTSOURCED IT, ITS HEALTHCARE SERVICES TO A THIRD PARTY.
SO SINCE THEN, UM, THAT SERVICE HAS BEEN OUTSOURCED AND WE JUST WANTED TO MAKE SURE THAT THEY'RE IN COMPLIANCE WITH THE CONTRACT SCOPE OF WORK SERVICE STANDARDS AND PERFORMANCE REQUIREMENTS.
AND WE ALSO WANTED TO MAKE SURE THE PAYMENTS THAT WE ARE PROCESSING TO THEM IS ACCURATE, SUPPORTED, AUTHORIZED, AND COMPLY WITH THE AGREEMENT.
NEXT AUDIT IS THE STREET RECONSTRUCTION PROGRAM.
UH, ANALYZE THE EFFECTIVENESS AND EFFICIENCY OF THIS PROGRAM ITSELF.
WE ALSO WANTED TO MAKE SURE HOW WE WERE TRACKING LABOR MATERIAL AND EQUIPMENT COST.
NEXT AUDIT IS THE SINGLE SHORT TERM MULTIFAMILY LODGING RENTAL PERMIT.
WE WANT TO ENSURE THAT RENTAL PROPERTIES IN GARLANDS ARE PERMITTED BY THE CITY AND EVALUATE THE HOMESTEAD EXEMPTION STATUS, WHICH THEY'RE NOT SUPPOSED TO HAVE.
ENSURE REQUIREMENTS STATED IN THE COURT OF ORDINANCES ARE EFFECTIVELY ENFORCED SUCH AS PERMIT, FEE COLLECTION, AND TIMELY INSPECTIONS.
UH, AUDIT NEXT TO THAT IS THE COURT FINES AND FEES.
IT'S BEEN A WHILE SINCE WE HAVE GONE DOWN THERE.
UH, AND SINCE THE NEW DIRECTOR HAVE, UM, ASSUMED THE RESPONSIBILITY, WE HAVE NOT DONE AN AUDIT IN THAT AREA.
AND ALSO THEY HAVE IMPLEMENTED A NEW SYSTEM.
SO WE WANT TO ENSURE THAT WHETHER ALL CITATIONS AND CASES ARE, ARE COMPLETELY AND ACCURATELY RECURRED, PROPERLY ADJUDICATED AND SUPPORTED BY APPROPRIATE AUTHORIZATION AND DOCUMENTATION.
FINES AND FEES ARE ACCURATELY ASSESSED, COLLECTED AND RECURRED AND SECURELY HANDLED.
UH, WE ALSO WANNA MAKE SURE THAT THEY ARE CALCULATING WHAT WE ARE SUPPOSED TO PAY AND COLLECT, UH, FOR THE STATE.
UM, SO, UH, IN ACCORDANCE WITH THE REQUIREMENTS.
LASTLY, WE WANNA EVALUATE THE EFFECTIVENESS OF PROCESS FOR COLLECTING DELINQUENT FINES AND FEES.
NEXT AUDIT IS THE WORKDAY FINANCIALS POST IMPLEMENTATION AUDIT.
YOU HAVE HEARD SOME OF THE GOOD CONTROLS THAT WE HAVE PUT IN PLACE SINCE WE MOVED TO WORKDAY, THANKS TO ALLISON AND HER TEAM.
UM, BUT OUR HOPE IS TOWARDS THE END OF THIS FISCAL YEAR, WE CAN GO BACK AND EVALUATE THE INTERNAL CONTROLS OVER THE FINANCIALS JUST TO ENSURE THAT THEY'RE APPROPRIATELY DESIGNED, IMPLEMENTED, AND OPERATING EFFECTIVELY.
ALSO, UM, DO WE HAVE, YOU KNOW, TO DEFINED BUSINESS AND OPERATIONAL REQUIREMENTS CONFIGURED AND FUNCTIONING AS APPROPRIATELY.
ALSO, WE WANTED TO ENSURE THAT THE REPORT DATA AND OTHER SYSTEM GENERATOR INFORMA INFORMATION ARE ACCURATE, COMPLETE RELIABLE.
NEXT AUDIT IS THE CUSTOMER SERVICE BILLING COLLECTION AND RATE ADMINISTRATION.
THIS AUDIT ALSO, IT'S BEEN A WHILE SINCE WE HAVE LOOKED AT THAT.
UM, WE ALSO HAVE A NEW MANAGER IN PLACE SINCE KEVIN SLAYER RETIRED.
UM, SO WE WANTED TO MAKE SURE THAT WE ARE ACCURATELY, UM, PROCESSING BILLS, METER READINGS AND COLLECTION PROCESSES.
UH, ALSO WE WANNA MAKE SURE THAT, UM, ALL THE RATES ARE ASSESSED IN ACCORDANCE WITH THE CITY ORDINANCES.
NEXT AUDIT WAS ONE OF THE ONES REQUESTED BY COUNCIL COUNCILWOMAN LU, AS WELL AS COUNCILWOMAN, UM, CARISSA DUTTON, UH, STARS CAMP.
UH, AS YOU'RE AWARE, THIS IS A SUMMER CAMP.
WE WANNA MAKE SURE THAT ONLY ELIGIBLE PARTICIPANTS ARE, UM, PROCESSED THROUGH THIS.
UM, ALSO THE REGISTRATION PROCESS AND INTEL CONTROLS ARE EFFECTIVE AND CONSISTENTLY APPLIED.
THIRDLY, WE WANNA DETERMINE WHETHER REGISTRATION FEES AND PROGRAM EXPENDITURES ARE PROPERLY AUTHORIZED, COLLECTED, RECURRED, SAFEGUARDED AND MANAGED IN ACCORDANCE WITH CITY POLICY AND APPLICABLE REQUIREMENTS.
THEY DO GET A GRANT THROUGH CDBG PROGRAM, SO WE WANNA MAKE SURE THAT THEY'RE IN COMPLIANCE WITH THAT.
NEXT AUDIT IS CITY VEHICLE RETIREMENT AUCTION PROCESS.
EVALUATE TIMELINESS, INTERNAL CONTROLS AND COMPLIANCE OVER THE CITY'S VEHICLE, EQUIPMENT, RETIREMENT AND AUCTION PROCESS.
SECONDLY, ENSURE THAT ALL ASSETS AND AUCTION PROCEEDS ARE ACCOUNTED FOR.
NEXT AUDIT IS SPECIFIC USE PROVISION.
UH, THIS WAS REQUESTED BY THE MAYOR.
MAINLY THE OBJECTIVE IS TO ENSURE THAT WE ARE ACTUALLY COMPILING, MAINTAINING A COMPLETE AND ACCURATE INVENTORY OF ALL ACTIVE AND APPROVED SUP PROPERTIES.
ASSESS WHETHER PROPERTIES WITH SUP IS COMPLIES WITH APPLICABLE APPROVAL CONDITIONS AND
[01:45:01]
REGULATORY REQUIREMENTS.WE WANNA ENSURE THAT ALL PHYSICAL AND VIRTUAL MATERIALS THAT THEY'RE PROCURING ARE ACCOUNTED FOR AND AVAILABLE FOR CITIZENS' USE.
NEXT AUDIT IS THE ONE THAT COUNTS.
UH, MAYOR PRO OT REQUESTED, UM, TO ROAD USAGE ANALYZED TOLLWAY USAGE OF CITY DEPARTMENTS DETERMINE IF COSTS ARE MONITORED AND THE CITY IS TAKING ADVANTAGE OF THE TOLL PROGRAM.
NEXT ONE IS THE PAYROLL AUDIT.
AS YOU'RE AWARE, WE ALSO IMPLEMENTED THE PAYROLL, UH, THROUGH THE NEW WORKDAY FINANCIALS.
IT'S BEEN TWO YEARS, I BELIEVE, OVER TWO YEARS.
AND SO WE WANNA ENSURE THAT, UM, PAYROLL PROCESSES TO VERIFY THAT CONTROLS ARE IN PLACE TO ENSURE THE ADEQUACY AND RELIABILITY OF DATA PROCESSED.
NEXT AUDIT IS THE BUILDING PERMIT PROCESS.
UH, LAST TIME WHEN WE DID THE AUDIT AT THE BUILDING INSPECTION, IT WAS MAINLY, UM, FEES, ACCURACY, UM, FOCUSED.
THIS TIME IT'S GONNA BE MORE FROM, FROM A PERFORMANCE PERSPECTIVE.
THIS AUDIT WAS REQUESTED BY COUNCILWOMAN LU AS WELL AS DEPUTY MAYOR PRO TEM.
UH, THREE OBJECTIVES EVALUATE THE EFFICIENCY OF THE PERMITTING PROCESS BY REVIEWING PROCESS TIMES, PROCESSING TIMES AVAILABLE GUIDANCE FOR STAFF AND OPPORTUNITY TO IMPROVE CUSTOMER SERVICE AS HAS CONTROLS OVER PERMIT TRACKING AND INSPECTION BY REVIEWING HOW OPEN PERMITS ARE MONITORED, INSPECTED AND CLOSED, INCLUDING ENFORCEMENT OF INCOMPLETE OR UNCLOSED PERMITS.
LASTLY, DETERMINE WHETHER PERMITTING ACTIVITIES COMPLY WITH GDC BY REVIEWING STAFF RETURNS TO REQUIREMENTS AND THE PROCESS FOR APPROVING VARIANCES.
LASTLY, AS WE NORMALLY DO, WE WANNA DO A CASH COUNT AUDIT CITYWIDE JUST TO ENSURE THAT CASH FUNDS ARE IN COMP, KEPT IN COMPLIANCE WITH CITY DIRECTIVES, FINANCIAL POLICIES AND PROCEDURES, AS WELL AS DETERMINE WHETHER CASH IS SECURED.
SO I KNOW THAT'S A LOT OF AUDITS.
UH, PLEASE KNOW THAT AS I'VE MENTIONED LAST YEAR, WE MAY NOT BE ABLE TO GET INTO ALL OF THIS, BUT I WANTED TO PUT MORE JUST IN CASE AT TIMES WE WE'RE ABOUT TO START AN AUDIT AND THE CLIENT MAY SAY, CAN YOU DELAY IT? WE'RE GOING THROUGH A SYSTEM IMPLEMENTATION OR SOMETHING ELSE, SOME OTHER PRIORITIES THEY'RE WORKING ON.
SO I KNOW IT'S A LOT OF LOT FOR A SMALL DEPARTMENT WITH FOUR STAFF MEMBERS, BUT I JUST WANTED TO INFORM YOU.
IN ADDITION TO THAT, WE WILL, AS YOU HAVE HEARD EARLIER, WE WILL PROVIDE SERVICES TO EXTERNAL AUDIT, UM, AUDITORS.
AND HOPING THAT NEXT YEAR, TOWARDS THE END OF THE YEAR, WE CAN PARTICIPATE IN THE FLEET FUEL INVENTORY.
IT'S A SPECIAL PROJECTS THAT WE NORMALLY DO TOWARDS THE END OF THE YEAR, AND WE MAY ALSO CONDUCT INVESTIGATIONS AND OTHER SPECIAL PROJECTS.
UM, SO THAT IS THE AUDIT PLAN THAT I'M PRESENTING TO THE AUDIT COMMITTEE.
UM, THIS YEAR WE TRY TO ALIGN THESE AUDITS WITH THE CITY MANAGERS AND CITY COUNCIL STRATEGIC, UM, INITIATIVES.
AND THOSE ARE REFERENCED NEXT TO THE, UM, NEXT TO THE, EACH ONE OF THE AUDITS.
ZACH, IF YOU MAY GO TO PAGE FIVE, YOU CAN SEE UNDER EACH GOAL, UM, HOW MANY AUDITS THAT WE ARE ADDRESSING.
SO JUST WANNA MAKE SURE WE ARE ADDING VALUE BY FOCUSING ON THIS AREA.
SO WITH THAT, I WILL TAKE ANY QUESTIONS.
IF NOT, I WOULD LIKE TO GET A CONCURRENCE FROM YOU.
THAT'S A VERY AMBITIOUS, UH, AUDIT PLAN FOR THE YEAR.
SO, UH, IF YOU THINK YOU CAN DO IT, GO FOR IT.
UM, I HAVE A QUESTION ABOUT THE ORDER IN WHICH THOSE ARE PRESENTED.
IS THAT THE ORDER IN WHICH YOU WILL PERFORM THE AUDITS? NO, MA'AM.
UM, IN, IN LIGHT OF THAT, UM, I WOULD LIKE TO REQUEST BUILDING INSPECTIONS IS GOING THROUGH A, A PRETTY ROBUST TRAINING PROCESS RIGHT NOW.
UM, SO I WOULD LIKE TO HOLD THE BUILDING INSPECTIONS TO THE END OF YOUR AUDIT CALENDAR, IF THAT'S OKAY.
ALSO, I WOULD, I WOULD NOTE FOR THE COMMITTEE THAT THEY'RE ALSO GONNA BE INCLUDED, I THINK IN THE SALESFORCE SOFTWARE IMPLEMENTATION.
AND SO, UM, IT'S POSSIBLE THAT WE MAY COME BACK TO THE COUNCIL AT SOME POINT IF THAT, IF WE GET TO THE POINT WHERE THEY CAN'T GET THE, WHERE THE SOFTWARE JUST GETS IMPLEMENTED.
NOW YOU'RE, WHAT ARE YOU EVALUATING THE SYSTEM BEFORE THE SOFTWARE? 'CAUSE THEY CURRENTLY OPERATE WITHOUT SOFTWARE ESSENTIALLY, OR VERY MUCH SOFTWARE OR POST SOFTWARE IMPLEMENTATION.
SO THAT'S, IT'S GONNA BE PUSHED TOWARDS THE END FROM MY DISCUSSIONS WITH JED, BUT WE'RE GONNA HAVE TO SEE HOW THE IMPLEMENTATION GOES IN, UH, COMPLETING THE SALESFORCE PROJECT.
CAN I GET AN APPROVAL IF YOU'RE OKAY WITH, OH, OKAY.
UH, WE HAVE, UH, BEEN REQUESTED TO APPROVE THIS, UH, THE PLAN AND MOVE FORWARD.
YOU HAVE THE PRIOR APPROVAL ON THAT.
[01:50:01]
EVERYTHING ON OUR AGENDA.WELL, I, MR. CHAIR, MR. CHAIR, WHO MADE THE MOTION TO APPROVE THE PLAN? OH, WE DID A CONSENSUS.
REALLY? WE DID A DO YOU NEED, DO YOU NEED TO, OKAY.
DO YOU NEED A MOTION? NO, THAT'S OKAY.
NOW IS THERE ANYTHING HERE THAT, UH, WE NEED TO TAKE BEFORE COUNCIL FOR ACTION? THE AUDIT PLAN.
ALL THE OTHERS WILL BE BRIEFED ON NEXT MONDAY'S COUNCIL WORKS.
ARE THERE ANY OTHER ORDERS OF BUSINESS THAT WE NEED TO CONCLUDE TODAY? YES.
LET ME EXPRESS MY APPRECIATION TO ALL OF YOU FOR, UH, BEING HERE TODAY.
AND I'M ESPECIALLY, UH, THANKFUL AND APPRECIATIVE TO, UH, JED AND HIS TEAM FOR THE WORK THAT THEY DO AND ALSO FOR OUR CITY MANAGER.
I MEAN, WHEN THE CITY MANAGER ASKS FOR AN AUDIT OF, OF AREAS THAT TELLS YOU THAT HE WELCOMES AUDITS AND HE'S NOT AFRAID OF AUDITS AND HE KNOWS THE VALUE OF AUDITS AND WE JUST WANT TO EXPRESS OUR APPRECIATION TO YOU FOR, FOR THAT.
AND TO, UH, MY COMMITTEE MEMBERS, THANK YOU SO VERY MUCH FOR BEING HERE TODAY AND, UH, LOOK FORWARD TO ANOTHER SEVEN MONTHS OF WORKING WITH YOU.