[00:00:05]
[Capital Metro Board of Directors Public Hearing on January 27, 2025.]
QUORUM BEING ESTABLISHED.THANK YOU FOR JOINING US, UH, FOR THIS CAP METRO PUBLIC HEARING.
TODAY IS MONDAY, JANUARY 27TH.
WE ARE IN THE CAP METRO BOARDROOM, AND THE TIME IS 1203.
UH, SO NOW THAT WE'VE CALLED TO ORDER, THE TOPIC OF TODAY'S HEARING WILL BE THE RECENT QUADRENNIAL AUDIT RESULTS AND THE AGENCY RESPONSE, UH, DEPUTY CEO KERRY, UH, BUTCHER WILL, UH, GIVE US A BRIEF PRESENTATION AND THEN WE'LL TAKE ANY PUBLIC COMMENTS.
THANK YOU, CHAIR, PLEASE TAKE IT AWAY.
GOOD AFTERNOON, CHAIR ILIAN, BOARD MEMBERS PRESIDENT AND EO WATKINS.
I'M HERE THIS AFTERNOON TO PRESENT THE QUADRON RENEWAL PERFORMANCE AUDIT RESULTS.
BEFORE I DIVE INTO THE RESULTS, I WANNA FIRST SAY THANK YOU TO TERRY FULMER AND HIS AUDIT STAFF.
THEY DID YEOMAN'S WORK TO GATHER A LOT OF DOCUMENTS, ANSWER A LOT OF QUESTIONS, GET A LOT OF DIFFERENT PEOPLE TOGETHER TO PROVIDE ALL OF THE INFORMATION THAT OUR AUDITORS NEEDED TO MAKE THIS A SUCCESS.
IN CASE YOU DON'T KNOW AND AREN'T FAMILIAR WITH THE QUADRENNIAL AUDIT, THIS IS A PERFORMANCE AUDIT THAT IS REQUIRED BY TEXAS STATUTE.
THIS IS ACTUALLY THE ONLY PERFORMANCE AUDIT THAT WE UNDERGO.
AS YOU KNOW, WE ARE, WE HAVE ANNUAL FINANCIAL AUDITS OF ALL OF OUR FINANCIAL TRANSACTIONS AND OUR PROCESSES.
WE ALSO HAVE A TRIENNIAL FEDERAL AUDIT WITH THE FTA.
THIS IS NOT TO BE CONFUSED WITH THAT, THAT AUDIT IS, UH, PREDOMINANTLY A REVIEW OF OUR COMPLIANCE WITH FEDERAL REGULATORY THINGS THAT APPLY TO FEDERAL FUNDING.
SO THIS IS THE ONLY PERFORMANCE AUDIT THAT WE UNDERGO.
IT IS REQUIRED BY THE STATE, AND THE PURPOSE OF IT IS TO, UH, PROVIDE INFORMATION TO STATE LEGISLATORS, OFFICIALS, AND LOCAL OFFICERS ABOUT THE WORK THAT WE'RE DOING.
IT IS THE ONLY OVERSIGHT, UH, MECHANISM THAT THE STATE HAS OF TRANSIT AGENCIES.
MOST OF THE TEXAS TRANSIT AGENCIES ARE SUBJECT TO THIS SECTION OF THE STATUTE, BUT NOT ALL OF THEM.
THIS YEAR, OUR AUDIT WAS PERFORMED BY WEAVER AND TIDWELL.
WE ARE VERY FORTUNATE TO HAVE HAD WEAVER AND TIDWELL BECAUSE FOR A COUPLE OF REASONS.
ONE, THEY PERFORMED OUR LAST QUAD AUDIT, WHICH MEANS THAT THEY WERE BOTH FAMILIAR WITH OUR SERVICES AND OUR ORGANIZATION AND, AND OUR PEOPLE, BUT ALSO HAD THE OPPORTUNITY TO LOOK BACK AT WHAT THEY RECOMMENDED LAST TIME AND SEE OUR PROGRESS.
THE OTHER REASON THAT WE ARE FORTUNATE TO HAVE WEAVER INTO WELL IS THAT THEY HAVE PERFORMED A NUMBER OF THESE QUADRENNIAL AUDITS FOR OTHER TRANSIT AGENCIES IN TEXAS.
SO THEY HAVE, UH, A LOT OF BENCHMARKING EXPERIENCE THAT IS GOOD FOR US.
WE VIEW THESE AUDITS AS A, A, A REAL OPPORTUNITY FOR CONTINUOUS IMPROVEMENT FOR US.
THE QUADRENNIAL AUDIT SUBJECTS ARE DICTATED BY STATUTE.
THE FIRST IS TO REVIEW SOME STATE MANDATED PERFORMANCE INDICATORS.
THE SECOND IS TO ENSURE OUR COMPLIANCE WITH ALL OF THE STATE LAWS THAT APPLY TO US.
AND THE THIRD IS TO REVIEW ONE OF THREE SUBJECT MATTER AREAS.
THAT IS ADMINISTRATION AND MANAGEMENT, TRANSIT OPERATIONS, OR SYSTEM MAINTENANCE.
UH, THESE TOPICS ARE GENERALLY ROTATED, EACH QUADRENNIAL, UM, REVIEW PERIOD.
HOWEVER, WE HAVE AN OPPORTUNITY TO MAKE SUGGESTIONS TO THE AUDITORS OF WHAT WE THINK WOULD BE MOST BENEFICIAL TO US.
SO WE HAVE DONE THAT THIS YEAR FOR REFERENCE, BECAUSE TIME HAS PASSED.
THE REVIEW PERIOD FOR THIS QUADRENNIAL IS FY 2020 TO 2023.
SO HEIGHT OF THE PANDEMIC COMING OUT OF THE PANDEMIC, UM, AND SOME OF THE RECOVERY THAT GOES ALONG WITH THAT.
SO THAT IS THE REVIEW PERIOD FOR THIS.
A SUMMARY OF THE, THE RESULTS OF THE AUDIT FOR TASK ONE, THE AUDITORS FOUND THAT CAT METRO MET CHAPTER 4 51 REQUIREMENTS FOR PERFORMANCE INDICATORS FOR TASK TWO.
THEY IDENTIFIED ONE POTENTIAL AREA OF NON-COMPLIANCE WITH STATE LAW.
I'LL GET INTO ALL OF THESE A LITTLE BIT IN MORE DETAIL IN JUST A MOMENT.
AND THEN FOR TASK THREE, THEY FOUND THAT WE GENERALLY OPERATED IN AN EFFICIENT AND EFFECTIVE MANNER.
SO OVERALL, THERE WAS ONE FINDING AND EIGHT RECOMMENDATIONS FOR MANAGEMENT.
I AM GOING TO WALK THROUGH EACH OF THE FINDINGS AND RECOMMENDATIONS FOR MANAGEMENT.
FOR THE FIRST ONE, AS I MENTIONED, THERE ARE NINE KEY PERFORMANCE INDICATORS THAT ARE IN THE STATUTE.
THE STATUTE ACTUALLY LAYS OUT HOW THEY HAVE TO BE MEASURED.
AND SO WHAT, UH, AND THESE, THESE MEASURES ARE SLIGHTLY DIFFERENT THAN WHAT WE MEASURE FOR NTD, UM, BUT OVERLAP IN A LOT OF WAYS.
[00:05:01]
UM, SO THEY LAY OUT EXACTLY HOW TO MEASURE THEM.AND WHAT THE AUDITOR IS LOOKING TO DO IS TO SEE THAT WE HAVE ACCURATELY MEASURED KEY PERFORMANCE INDICATORS ACCORDING TO THE REQUIREMENTS OF THE STATUTE.
OUR PERFORMANCE INDICATORS DEMONSTRATED A DECLINE IN DURING THIS REVIEW PERIOD.
AND THAT DECLINE IS GENERALLY IN COST EFFICIENCY.
A FEW EXAMPLES OF THE THINGS THAT WE HAVE BEEN TALKING WITH YOU ABOUT OVER THE LAST COUPLE OF YEARS THAT INFLUENCED OUR COST EFFICIENCY WOULD BE INCREASING WAGES.
WE NEEDED TO DO THAT IN ORDER TO ATTRACT AND RETAIN OPERATORS DURING THE FOLLOWING.
THE PANDEMIC SUPPLY CHAIN ISSUES THAT LED TO PARTS AND OTHER COST INCREASES THAT HAVE HAD A NEGATIVE IMPACT ON OUR COST EFFICIENCY.
AND THEN OF COURSE, FEAR RECOVERY DURING THIS PERIOD WAS WHEN WE SAW A STEEP DECLINE AND THEN A GRADUAL INCLINE IN RIDERSHIP.
AND SO FAIR RECOVERY ALSO DECLINED DURING THIS PERIOD.
HOWEVER, UH, WE'VE RENTED WELL FOUND THAT WE HAD TAKEN THE STEPS TO ADDRESS EACH OF THOSE ITEMS AND THAT WE WERE CONTINUING TO DO SO.
SO THEY DID NOT RAISE ANY FINDINGS IN THAT AREA.
THERE WERE NO FINDINGS IN TASK ONE.
THEY DID HAVE TWO RECOMMENDATIONS FOR MANAGEMENT.
THEY ARE, UH, RECOMMENDATIONS FOR PROCESS IMPROVEMENT AND CONTINUING TO ASSESS AREAS OF COST EFFICIENCY THAT WE COULD BE WORKING ON.
THE FIRST IS TO CONTINUE TO IMPROVE OUR SERVICE RELIABILITY.
WE'VE BEEN TALKING WITH Y'ALL A LOT OVER THE LAST FEW MONTHS AND ACTUALLY YEAR ABOUT ALL OF THE THINGS WE'RE DOING TO IMPROVE OUR SERVICE RELIABILITY.
AND THEN THE SECOND IS TO CONTINUE REALLY TO ASSESS OUR COST EFFECTIVENESS, AND WE WILL CONTINUE TO WORK WITH OUR PARTNERS.
UM, THE INDUSTRY IS LOOKING AT THIS JUST AS HEAVILY AS WE ARE.
WE ARE NOT THE ONLY ONES IN THIS, UH, BOAT, SO THEY HAD NO FINDINGS.
AND TWO RECOMMENDATIONS FOR TASK ONE.
WEAVER HAS A LIST OF ALL OF THE POSSIBLE STATE LAWS THAT COULD APPLY TO CAT METRO.
THERE ARE ALMOST 400 OF THEM THAT THEY LOOK AT.
THEY FIRST DETERMINE WHETHER THE PARTICULAR LAW APPLIES TO US AND THEN, AND THEN DETERMINE WHETHER WE COMPLIED WITH IT.
ABOUT 200 OF THEM WERE NOT APPLICABLE TO US.
SOME OF THOSE ARE LAWS THAT JUST DON'T APPLY TO US AT ALL.
THEY MIGHT APPLY TO A DIFFERENT, UM, AGENCY, A DIFFERENT, UH, TRANSIT AGENCY.
AND SOME OF THEM ARE LAWS THAT WOULD APPLY TO US IF WE HAD TAKEN THE ACTION DURING THIS REVIEW PERIOD.
A GOOD EXAMPLE OF THAT IS BONDS.
IF WE HAD ISSUED BONDS DURING THIS PERIOD, THERE'S A WHOLE HOST OF STATUTES THAT THEY WOULD'VE REVIEWED COMPLIANCE WITH, BUT WE DID NOT.
THEY FOUND THAT WE, UH, COMPLIED WITH ROUGHLY 172
WE PROVIDED LOTS AND LOTS OF DOCUMENTATION ON ALL OF THESE, BUT THEY IDENTIFIED ONE POTENTIAL AREA OF DEFICIENCY, AND I'LL TALK ABOUT THAT NEXT.
THIS IS THE ONE FINDING THAT WEAVER AND T TIDWELL HAD.
UM, WE WERE UNABLE TO PROVIDE DOCUMENTATION THAT WE HAD SUBMITTED OUR PRIOR QUADRENNIAL, UH, TO THE PROPER STATE AUTHORITIES.
NOW, WE ARE CONFIDENT THAT IT WAS SUBMITTED.
THE STATE HAS IT ON ITS WEBSITE, BUT WE WERE UNABLE TO PROVIDE THE DOCUMENTATION THAT WE HAD SENT IT AND THEY HAD RECEIVED IT.
UM, WE DID NOT HAVE A CENTRALIZED PROCESS IN PLACE, AND THE STAFF MEMBER WHO DID THE WORK IS NO LONGER WITH THE AGENCY.
SO WE HAVE ALREADY PUT IN PLACE A STANDARDIZED PROCESS SO THAT WE, UM, DON'T HAVE THIS KIND OF A FINDING.
AGAIN, AGAIN, WE'RE CONFIDENT IT GOT SUBMITTED.
WE JUST DIDN'T HAVE THE RECEIPTS.
UM, BUT THAT, UH, ACTION HAS ALREADY BEEN COMPLETED.
THEY ALSO HAD TWO RECOMMENDATIONS TO MANAGEMENT IN THIS AREA, BOTH RELATED TO INFORMATION ON OUR WEBSITE.
UM, THE FIRST IS TO ADD SOME LANGUAGE TO OUR WEBSITE ABOUT, UM, PRIVACY OF INFORMATION.
WE HAVE ALREADY UPDATED OUR WEBSITE TO REFLECT THAT.
THE SECOND IS TO ADD INFORMATION TO OUR WEBSITE, MAKING IT CLEAR THAT TRESPASSING IS A MISDEMEANOR.
WE BELIEVE BOTH OF THOSE THINGS WERE GOOD RECOMMENDATIONS FOR CLARITY.
THOSE ARE BEST PRACTICES, AND WE ARE IMPLEMENTING THAT ONE, AND IT SHOULD BE COMPLETED BY THE END OF THIS MONTH.
AND THEN FINALLY, AS I MENTIONED, WE ASKED THEM TO REVIEW ADMINISTRATION.
AS YOU KNOW, UM, DURING THIS REVIEW PERIOD, WE MADE SIGNIFICANT SUBSTANTIVE CHANGES TO OUR OVERSIGHT OF AND OUR MODEL FOR OUR BUS OPERATIONS.
AND SO WE ASKED THEM TO LOOK SPECIFICALLY AT, UM, OUR OPERATIONS ADMINISTRATION, UM, AND GIVE US SOME FEEDBACK FOR IMPROVEMENT.
[00:10:01]
THE LEFT HAND SIDE HERE, THESE ARE ALL OF THE DEPARTMENTS THAT THEY FOCUSED ON.AND THEY GENERALLY CONCLUDED THAT WE HAD APPROPRIATE PERSONNEL WITH THE RIGHT SKILL SETS AND TRAINING AND CREDENTIALS TO DO THE WORK.
UM, AND THEY OFFERED US A COUPLE OF OPPORTUNITIES TO ENHANCE OUR ADMINISTRATIVE PROCESSES.
AGAIN, THERE WERE NO FINDINGS.
IN TASK THREE, THEY OFFERED FOUR RECOMMENDATIONS FOR US.
THE FIRST WAS FOR US TO REFINE OUR AGENCY-WIDE FRAMEWORK FOR CONTRACT MANAGEMENT.
WE HAVE DETAILED CONTRACT MONITORING AND MANAGEMENT PLANS FOR EACH OF OUR SERVICE PROVIDER CONTRACTS AND LOTS OF OTHER OTHERS.
UM, BUT THERE ARE, THEIR RECOMMENDATION WAS THAT WE COULD HAVE MORE COMMONALITIES WITH THEM.
UH, THEY'RE ALL VERY DIFFERENT.
WE AGREE WITH THIS RECOMMENDATION AND ARE GOING TO BE REFINING, REFINING OUR AGENCY WIDE FRAMEWORK.
WE EXPECT THAT WORK TO BE DONE BY JULY.
THEIR SECOND RECOMMENDATION IN THIS AREA WAS TO DEVELOP GUIDANCE FOR DEPARTMENTAL PROCEDURES.
WE, AS AN AGENCY, HAVE VERY DETAILED PROCESSES AND PRACTICES FOR DEVELOPMENT AND REVIEW AND COMMUNICATION OF POLICIES, BUT WE HAVE ALLOWED DEPARTMENTS TO DO THAT INDIVIDUALLY.
AND SO THEIR RECOMMENDATION WAS FOR US TO STANDARDIZE THAT AND WE AGREE WITH THIS RECOMMENDATION, AND THAT SHOULD BE COMPLETED BY THE END OF THE YEAR.
ONE RECOMMENDATION THEY OFFERED TO US, WE FEEL LIKE THIS IS A GREAT OPPORTUNITY FOR US.
THEY ASKED US TO REFLECT ON THIS, THE CHANGES THAT WE MADE TO OUR OVERSIGHT MODEL AND SEE IF THERE WERE OTHER, UH, LESSONS THAT WE COULD LEARN FROM THAT CHANGE AND EFFICIENCIES THAT WE COULD DEVELOPMENT DEVELOP.
SO WHILE WE ARE ALWAYS REFLECTING ON THE WORK THAT WE DO, WE'RE GOING TO TAKE THIS OPPORTUNITY TO DO A DEEP DIVE INTO THOSE, THE CHANGES IN THE STRUCTURE THAT WERE MADE, UH, AND APPLY THOSE LESSONS TO THE UPCOMING RAIL TRANSIT PROCUREMENT, WHICH WILL BE UPCOMING, IS THAT THIS YEAR, WHICH WILL BE COMING LATER THIS YEAR.
WE EXPECT THAT DEEP DIVE TO BE DONE BY THE END OF THIS YEAR AS WELL.
AND THEN FINALLY CAN GET WATER.
FINALLY, THEY RECOMMENDED THAT WE, UM, CONTINUE TO DO THE THINGS WE ARE DOING TO ENHANCE OUR PROFESSIONAL DEVELOPMENT OPPORTUNITIES.
RECALL THAT THE PERIOD OF PERFORMANCE FOR THIS AUDIT WAS, WAS 2020 TO 2023.
UM, UH, I WOULD SAY THAT PROFESSIONAL DEVELOPMENT WAS NOT OUR FOCUS
HOWEVER, OVER THE COURSE OF THE LAST YEAR, YEAR AND A HALF, WE HAVE PUT IN PLACE, UM, THANKS TO OUR FANTASTIC PEOPLE AND CULTURE DEPARTMENT, UM, A A VARIETY OF NEW PROGRAMS AND OPPORTUNITIES FOR PROFESSIONAL DEVELOPMENT.
THEY RECOGNIZED THAT FOLLOWING THE PERIOD OF REVIEW, UM, AND, AND RECOMMENDED THAT WE CONTINUE DOWN THAT PATH.
UH, DONNA TALKED WITH YOU GUYS, THE FINANCE AND ADMINISTRATION COMMITTEE IN JANUARY ABOUT SOME OF THE THINGS WE'RE DOING FOR PROFESSIONAL DEVELOPMENT.
UM, SO THAT IS SOMETHING THAT IS ONGOING AND THAT IS ALL.
UM, IT WON'T, SORRY, THAT, SORRY.
IT WON'T, IT WOULDN'T ADVANCE.
UM, I DIDN'T KNOW IF IT WOULDN'T MOVE OR IT WOULDN'T MOVE.
BUT, UH, OVERALL WE THINK THIS WAS A VERY CLEAN AUDIT.
WE HA WILL DIG DEEPER INTO ALL OF THEIR RECOMMENDATIONS.
WE THINK THEY IDENTIFIED SOME BEST PRACTICES FOR US AND WE LOOK FORWARD TO THE OPPORTUNITY FOR CONTINUOUS IMPROVEMENT.
I'M HAPPY TO ANSWER ANY QUESTIONS.
TERRY FULMER IS HAPPY TO ANSWER ANY TECHNICAL QUESTIONS THAT YOU MAY HAVE.
BOARD MEMBERS, DO WE HAVE ANY QUESTIONS? BOARD MEMBER STRAND? YEAH, KERRY, I WAS JUST CURIOUS, THIS PERIOD OF TIME ALSO REFLECTED A PERIOD OF CHANGE WITHIN THE, UM, ORGANIZATION AS WE WERE TRYING TO FIGURE OUT, UH, HOW WE WERE GONNA IMPLEMENT PROJECT CONNECT AFTER WE PASSED THE VOTE.
UM, HOW DID THE, HOW WAS THE, UM, THE, THE AUDIT AGENCY INSTRUCTED TO, TO TREAT THAT? OR HOW DID THEY TREAT THAT AS THEY WERE LOOKING AT THIS PERIOD OF TIME AND THE CHANGES WITH LEADERSHIP AND HOW A TP WAS GONNA FALL, KIND OF PARTNERING WITH OR UNDER THE SAME UMBRELLA WITH THE CEO AND THEN WE UNDERWENT A SEPARATE, UM, A SEPARATE STUDY IN ORGANIZATIONAL GOVERNANCE AND THEN SPLIT THAT ALL OFF.
DID THEY LOOK INTO ANY OF THAT AT ALL? OR, AND, AND THE REFLECTION IN THIS OR OR DID THEY JUST KIND OF SAY, OKAY, THAT, THAT THAT'S AN A TP THING AND KIND OF PUSH THAT OFF AND LET IT BE ATPS THAT REALLY ISN'T IN THEIR SCOPE.
'CAUSE THEY ARE FOCUSED PREDOMINANTLY ON THE PERFORMANCE, THE TRANSIT PERFORMANCE.
SO THEY ARE LOOKING MOSTLY AT, UM, OUR STRUCTURE TO DELIVER THE SERVICE THAT WE DELIVERED AT THE TIME AND THE METRICS THAT GO ALONG WITH IT.
[00:15:01]
EXPANSION PLANS.THAT WE HAD ON, ON, ON THE TABLE.
ALMOST THOUGHT I NEEDED AN ORGAN
UH, ANY OTHER QUESTIONS? SAVE IT FOR LATER.
I WAS JUST GONNA SAY THANK YOU.
OH, UM, YOU KNOW, UH, AN AUDIT SPANNING THIS PERIOD OF TIME AND HAVE ONE SUPER MINOR THING POP UP SAYS A LOT TO, UM, THE CAP METRO STAFF AND UM, AND ALL THE FOLKS THAT WORKED ON THIS.
AND I THINK I HEARD BOARD MEMBER HARRIS WHO'S JOINING US REMOTELY, UH, BOARD MEMBER.
HARRIS, DO YOU HAVE ANY QUESTIONS? JUST WANNA MAKE SURE I GIVE THEM AN OPPORTUNITY.
IF THERE ARE NO FURTHER QUESTIONS, THEN UH, WE'LL GO INTO THE, UH, INTO THE PUBLIC HEARING PORTION.
UH, DO WE HAVE ANYBODY, UM, ONLINE MR. EASTON? WE DO NOT MR. CHAIR.
UH, WE'RE SEEING THAT WE HAVE NO ONE ONLINE THAT, THAT WILL ASK ANY QUESTIONS.
DO WE HAVE ANYBODY IN THE ROOM THAT WOULD LIKE TO, UH, TO UM, PRESENT TO THE BOARD OR ASK ANY QUESTIONS? I'LL ASK THREE TIMES.
DO WE HAVE ANYONE IN THE BUILDING THAT WOULD LIKE TO ASK ANY QUESTIONS IN THIS PUBLIC SETTING? THIRD TIME.
I WILL THANK EVERYBODY FOR COMING TO THE MEETING.
THANK YOU FOR THE PRESENTATION, THE DETAIL THAT YOU ALWAYS PROVIDE US.
AND WE WILL CALL THE MEETING ADJOURNED AT 1219.