Dec 03, 2025 Audit and Finance Committee

UH, MEMBERS, UH, YES, MAYOR PRO TEM.

AND I APPRECIATE THE UPDATE.

YOU MENTIONED HAVING, UH, HAVING FINANCE PROVIDE AN UPDATE TO OUR COMMITTEE REGARDING THE, THE MAJOR, UH, CITY PROJECTS LIKE THE AIRPORT AND THE CONVENTION CENTER.

IS THAT, WOULD THAT FALL UNDER THIS? IT'S AT THE BOTTOM OF THE FIRST PAGE.

AUGUST 19TH, UPDATES ON MAJOR PROJECT FINANCING PLANS.

AND WOULD THE I 35 CAPTAIN STITCH PROGRAM ALSO BE CATEGORIZED WITHIN THAT, OR IS THAT UPDATE COMING SOONER? IT, IT, UM, NO, IT'D BE CATEGORIZED IN THERE.

IS THERE ANY TIMELINES THAT WE SHOULD BE AWARE OF WITH TXDOT? BECAUSE IT SEEMS AUGUST SEEMS FAR OFF NOW.

FAR AWAY FOR THAT.

UM, I, I DON'T HAVE A MOBILITY COMMITTEE MEETING TOMORROW.

UH, KIM WAS JUST TELLING ME THAT THERE IS A DISCUSSION AT THE MOBILITY COMMITTEE TOMORROW ON IT, WHICH COULD PROVIDE SOME ADDITIONAL INFORMATION.

BUT, UM, IF THERE'S A NEED OR A DESIRE FOR US TO DO SOMETHING WITH THE AUDIT FINANCE COMMITTEE BEFORE AUGUST, WE'LL MAKE SURE THAT HAPPENS.

JUST IF THERE'S AN ASSOCIATED TIMELINE OR TIMEFRAME THAT WE SHOULD BE AWARE OF.

I CAN'T REMEMBER WHAT THE COMMITMENT WAS, UH, ON US HAVING AN UPDATE ON THE PRIVATE SECTOR, THE PHILANTHROPY COMING IN, UM, TO FUND A PORTION OF IT.

ANYONE, WHAT WE'LL DO, THAT'S A GOOD POINT.

SO WHAT WE, WHAT WE CAN DO IS ON ITEMS LIKE THAT, IF ANYBODY HAS ITEMS LIKE THAT, LET ME KNOW.

AND WHAT I'LL DO IS I'LL MAKE SURE WE GET SOMETHING, EVEN IF WE DON'T MEET AS A FULL COMMITTEE, BUT WE MAY HAVE A FULL MEETING, MAKE SURE THAT Y'ALL ARE UP TO DATE ON ALL THE CALENDAR ITEMS, SO THAT IF YOU WANT TO HAVE IT BROUGHT UP ON AN AGENDA, WE CAN DO IT IN ADVANCE.

POST IT AS A BACKUP FOR A FUTURE MEETING, AND, AND THEN WE CAN DISCUSS IT.

AND I, AND I SHOULD SAY TOO, THERE WILL BE, UH, MEMORANDUMS, FINANCIAL RELATED MEMORANDUMS, SOME OF THE FINANCIAL REPORTS.

I ANTICIPATE IT'LL BE CARRIE LANG COMING TO THE COMMITTEE DIRECTLY WITH PRESENTATIONS.

AND OTHER CASES IT MAY BE A MEMORANDUM UPDATE.

AND OF COURSE, LIKE WE'VE BEEN DOING, WE WILL POST THOSE MEMOS AS BACKUP TO THE AGENDA.

SO IF THERE'S QUESTIONS OR DISCUSSION ABOUT THE MEMOS COUNT STAFF HAS PUT OUT, SO THIS MIGHT BE AN AREA TOO THAT COULD JUST FIT INTO THAT.

IF WE HAVE AN UPDATE ON THE TIMELINE, WE SEND YOU A MEMO ON THAT,

[00:10:01]

UM, JUST MAKE, MAKE IT A, A ROUTINE.

JUST MAKE IT PART OF THE ROUTINE, I THINK IS WHAT SHE'S ASKING, HUH? MM-HMM .

AND, UH, LAST QUESTION ON MY END.

THE SOCIAL SERVICE RESET THAT THE MANAGER IS LEADING IN, IN THE EFFORT IS UNDERWAY.

WOULD THAT BE ALSO BE UNDER THE SHARED SERVICES OPTIMIZATION EFFORT? UM, I WOULD VIEW THAT AS A LITTLE BIT DIFFERENT.

UH, THE WAY THE MANAGER LAID THAT OUT WAS, UH, KIND OF FOUR AREAS.

THE, UH, IT COST OPTIMIZATION, THE SHARED SERVICES OPTIMIZATION, WHICH WAS REALLY, UH, UM, HUMAN RESOURCES, CAPITAL DELIVERY SERVICES, BUDGET AND FINANCE HUMAN RESOURCES.

THAT'S WHAT I WAS THINKING ABOUT IN TERMS OF THE SHARED SERVICES.

THE, UH, THE WORK THAT'S BEING DONE, UM, ON THE, ON THE SOCIAL SERVICE CONTRACTS AND PERFORMANCE METRICS AND ALL THAT IS ALSO BEING DONE BY THE OFFICE OF BUDGET AND, AND ORGANIZATIONAL EXCELLENCE.

BUT THAT WASN'T WHAT I HAD IN MIND NECESSARILY FOR THIS ITEM.

UM, I DO ANTICIPATE THAT WILL BE HITTING THE COMMITTEES.

MAYBE THIS IS THE RIGHT COMMITTEE FOR IT, BUT IT MAY BE THAT SOME OF THE OTHER COMMITTEES, UH, THAT COUNCIL HAS MIGHT BE THE BETTER VENUE FOR THAT ONE.

HAPPY TO CONTINUE THAT CONVERSATION OFFLINE.

AND WE CAN ALSO CONSIDER IT IN THE PUBLIC HEALTH COMMITTEE, BUT JUST WANNA MAKE SURE THAT THAT'S FACTORED IN HERE.

THANK YOU, MAYOR.

COUNCILMAN WALTER.

I WAS WONDERING, EXCUSE ME, THE, THE DECISION TREE ITEM THAT YOU TOUCHED ON A LITTLE BIT, IS IT AROUND THE, THE SUBJECT OF THE BOND? I KNOW THAT THEIR CDS HAS, YOU KNOW, THEIR MATRIX AND HOW THEY'RE FILTERING, OR IS IT MORE OF A YES, NO, WE SHOULD HAVE A BOND RE AT LARGE? I THINK THAT'S ALL TO BE DETERMINED.

UM, WE, I, I THINK I'M IN CONVERSATIONS WITH THE MAYOR THAT I, I REALLY FELT THAT THE TRE FRAMEWORK, UM, WAS A HELPFUL WAY TO ORGANIZE, UH, COUNCIL'S THINKING AROUND A TRE AND THE TIMING OF ONE AND THE, THE SIZE OF ONE, AND WHAT THE CRITERIA SHOULD BE FOR WHEN WE CALL ONE.

SO THAT'S WHAT I KIND OF WAS, WAS THINKING.

BUT I THINK THAT'S STILL TO BE DETERMINED WITH FEEDBACK FROM THE COMMITTEE.

AND, AND FEEDBACK FROM THE COMMITTEE'S GONNA BE IMPORTANT ON THAT.

LEMME START WITH THAT, BUT PART OF THE THOUGHT PROCESS WAS, IS WE'RE ANTICIPATING THAT WE'RE GONNA GET SOMETHING THAT'S BIGGER THAN WHAT IS GOING TO BE ABLE TO BE DONE.

AND I THINK EVERYBODY NEEDS TO UNDERSTAND THAT AND APPRECIATE THAT HOW WE AS A COUNCIL COME TO A CONCLUSION IS GONNA BECOME IMPORTANT.

SO A THE THOUGHT PROCESS WAS THAT THIS COMMITTEE, MUCH LIKE WHAT WE DID WITH TRES IN TERMS OF BEING THE TRE, IN TERMS OF BEING ABLE TO SAY, HERE'S, HERE'S THE QUESTION WE NEED TO BE ASKING, WHAT'S THE ANSWER TO THAT QUESTION? AND WHERE DOES THAT LEAD US? WOULD BE WHAT WE WOULD LOOK TO SO THAT IT GOES THROUGH A PROCESS THAT PROBABLY INVOLVES WINNOWING DOWN, UH, HOW WE APPROACH THINGS.

HOW DO WE, HOW DO WE SET PRIORITIES? SO, SO EVERYTHING YOU SAID IS PROBABLY PART OF IT, AND WE'RE VERY EARLY INTO IT.

THAT WILL TAKE US TO ITEM NUMBER THREE, WHICH IS A DISCUSSION ON, UH, ESTABLISHING AN OFFICE HOLDER EXPENSE POLICY.

SO, UH, ANY IDEAS THAT ANYBODY HAS ABOUT WHAT THOSE QUESTIONS OUGHT TO BE AND WHAT A DECISION TREE MIGHT LOOK LIKE, UH, NOW'S THE TIME TO HELP THINK THOSE THROUGH.

ALRIGHT.

WE'LL PUT OUR THINKING CAPS ON.

UM, THE OTHER QUESTION I HAD, I'D LIKE TO SEE YOUR THINKING CAP TOO, BY THE WAY.

OH, IT'S, IT'S NOT VERY EXCITING.

NOBODY'S EVER SEEN THAT THING, AND, AND, AND THAT, THAT IT, IT'S HAD, IT IS HAD A LOT OF IMPACT ON THE CITY, SO WE OUGHT TO AT LEAST GET TO SEE IT AS A MATTER OF TRANSPARENCY.

UM, I KNOW COUNCIL MEMBER, UM, ELLIS HAD HER ITEM ABOUT KIND OF BUDGET PROCESS THAT'S SUPPOSED TO HAVE, ASK THE MANAGER TO DO SOMETHING, I THINK COME BACK IN FEBRUARY, BUT I THOUGHT MAYBE IN MARCH THAT MIGHT BE A GOOD TIME.

THAT'S A GREAT IDEA AT THIS MEETING TO JUST HIGHLIGHT BOTH WHAT SHE ASKED FOR AND ANY OTHER IDEAS.

ANYTHING ELSE? ALL RIGHT.

UH, WELL THEN MEMBERS, UH, I'LL ENTERTAIN A MOTION, WHICH WILL BE TO APPROVE THE CALENDAR YEAR 2026 FINANCE AGENDA ITEMS AND THE CALENDAR AMENDMENTS, UH, THAT ARE, THAT ARE INCLUDED.

AND IT'S MADE BY COUNCIL MEMBER VELA, SECONDED BY COUNCIL MEMBER UCHIN DISCUSSION WITHOUT OBJECTION.

UH, THAT ITEM IS ADOPTED MEMBERS

[3. Discussion and possible action on establishing an office holder expense policy.]

UH, I'LL JUST, I'LL TRY TO RUN THROUGH THIS QUICKLY.

UH, THIS IS, UH, AS YOU'LL RECALL, UH, THE, A RECOMMENDATION THAT WAS MADE IN A PROPOSAL ON NOVEMBER 6TH.

AND, AND WE HAVE A POWERPOINT THAT EVERYBODY HAS IN THEIR BACKUP.

UM, I WANNA MAKE SURE THAT EVERYBODY'S GOT THAT IF THEY WANT IT.

UM, AND LEMME JUST WALK THROUGH THIS.

FIRST OF ALL, I WANNA SAY THAT THIS TODAY'S GONNA BE A

[00:15:01]

HIGH OVERVIEW OF THE WORK DONE, THIS WORK THAT'S BEEN DONE SINCE NOVEMBER 6TH.

UH, WE, WE HAVE A LOT OF WORK TO DO TO GET TO THE DATES, AND I'LL TALK ABOUT THOSE IN JUST A SECOND.

I ALSO WANNA SAY THANK YOU TO CARRIE ROGERS AND DIANA THOMAS, UH, WHO HAVE BEEN VERY, VERY HELPFUL IN, UH, COLLATING, IF YOU WILL.

AND YOU'LL SEE IN, IN THIS PRESENTATION, YOU'LL SEE DISCUSSION ABOUT WHAT'S HAPPENING IN, IN PEER CITIES AND PEER PLACES, THAT SORT OF THING.

UM, AND, AND I WANNA SAY THANK YOU TO THEM.

AND IF WE HAVE QUESTIONS, UH, THEY MAY BE THE ONES THAT NEED TO ANSWER THE QUESTIONS.

BUT WE'LL START WITH THE PROPOSAL THAT, UH, WAS MADE ON NOVEMBER 6TH, 2025.

AND THAT IS TO REFORM CITY COUNCIL SPENDING, INCLUDING, BUT NOT LIMITED TO THE CRITERIA USED FOR THE TYPE, THE AMOUNT AND PURPOSE OF EXPENDITURES.

AND IT WAS STATED THAT IF WE WANT TO ASSURE TRUST, IT'S CRITICALLY IMPORTANT FOR US TO BE THE MODEL FOR BEST PRACTICES IN A PLACE THAT SETS THE HIGHEST STANDARDS.

COUNCIL PASSED A RESOLUTION ON NOVEMBER 20TH TO CREATE A POLICY RELATED TO COUNCIL BUDGETS AND CONSISTENT WITH THAT PROPOSAL, WHAT WE'VE ALSO INDICATED IS THAT ON JANUARY 22ND IS WHEN WE WILL, THAT'S OUR GOAL FOR TAKING UP THE FINANCIAL POLICY PROPOSAL.

AND ON THE 14TH OF JANUARY, WHICH WE JUST VOTED ON, WE WILL BRING BACK TO THE AUDIT AND FINANCE COMMITTEE A PROPOSED PROPOSAL, AND THAT WILL BE WHAT WE LOOK AT IN ANTICIPATION OF THE JANUARY 22ND MEETING.

UM, WE ALSO LOOKED AT PEER PRACTICES, AND WITHOUT GOING INTO ALL THE DETAIL, WE'VE DONE A REVIEW THAT INCLUDES NOT ONLY THE STATE LEGISLATURE GOOD.

WAS THAT GETTING READY TO GO UP THERE? GOOD.

UM, WE'VE DONE A REVIEW THAT INCLUDES THE STATE LEGISLATURE, STATEWIDE OFFICE ACCOUNTS, AND PURE CITIES, AND THOSE PURE CITIES, OR FORT WORTH, SAN ANTONIO, HOUSTON, DALLAS.

AND, UH, WE DID LOOK AT SOME OUTSIDE OF TEXAS, UH, TO, TO DETERMINE WHETHER THERE WAS ANYTHING PARTICULARLY USEFUL.

BUT WE, WE, THOSE ARE, THOSE ARE PRIMARILY THE PEER CITIES THAT WE'VE LOOKED AT.

IF YOU'LL LOOK AT THE, THE NEXT SLIDE, IT INDICATES THAT THE AUSTIN AND PEER CITIES HAVE VARIOUS ADMINISTRATIVE BULLETINS RELATING TO TRAVEL REIMBURSEMENTS AND USE OF PROCUREMENT CARDS.

I'LL SAY A COUPLE OF THINGS ABOUT THAT.

AS YOU MIGHT EXPECT, THERE'S DIVERSITY AMONG THE CITIES AND, AND, AND THE PEER, PEER ENTITIES THAT WE LOOKED AT.

UH, AUSTIN.

I, I THINK IT'S VERY SAFE TO SAY THIS COMMENT THIS WAY.

AUSTIN HAS IT FAR MORE DISPERSED THAN WHAT YOU SEE IN SOME OTHER CITIES.

UM, FOR EXAMPLE, UH, BETWEEN ADMINISTRATIVE BULLETINS, OTHER POLICIES INCLUDING TRAVEL POLICY, PROCO, POLICY, MANUAL, PROCUREMENT MANUAL, AND TEXAS STATUTES, THERE ARE ABOUT 10 POLICIES OR REGULATIONS GOVERNING CITY SPENDING.

UH, SO AUSTIN'S MORE DISPERSED.

DALLAS IS THE ONLY ONE WITH, IT APPEARS TO BE THE ONLY ONE WITH A SINGLE COMPREHENSIVE POLICY.

IN OTHER WORDS, HERE IS THE POLICY.

UM, AND IT, IT, IT FOLLOWS A FORMAT THAT MAKES A LOT OF SENSE.

AND, AND, UH, IT, IT, IT KEEPS IT ALL IN ONE PLACE.

THERE'S NOT REALLY A, UH, A SINGLE POLICY, UH, THAT THAT APPLIES TO US.

BUT THAT'S PART OF WHAT WE'RE ATTEMPTING TO DO, IS TO, IS TO COMPILE THAT TO, TO CREATE GREATER CLARITY.

I, WE, WE, IF YOU CAN GO BACK TO THE OTHER ONE.

GO, GO BACK TO THE PREVIOUS ONE.

UH, AUSTIN, AS YOU KNOW, REQUIRES TRAINING.

ON, ON TRAVEL AND REIMBURSEMENTS.

THE REASON WE MADE THIS A PART OF THE SLIDE IS, UH, BECAUSE THAT HAS RECEIVED SOME ATTENTION, AND IT WAS STATED PRETTY CLEARLY HERE, BUT TRAVEL MUST SERVE A CLEAR PUBLIC PURPOSE AND FALL WITHIN ESTABLISHED PER DIEM LIMITS.

THAT IS THE CASE NOW, EVEN IN AUSTIN.

BUT AGAIN, THE DOCUMENTATION, THE TIMELY SUBMISSION, ALL CITIES REQUIRE THAT.

SO SOME OF THE THINGS THAT WE'RE LOOKING AT IS PERHAPS HOW WE CAN PROVIDE CLARITY TO WHAT IS A PUBLIC PURPOSE.

AND SOME PLACES, I'LL POINT THIS OUT NOW, SOME PLACES REQUIRE THERE TO BE APPROVAL BY SOMEONE OTHER THAN THE COUNCIL OFFICE, SO THAT YOU GET ANOTHER SET OF EYES ON IT.

UH, AND, AND, AND MAYBE SOME FEEDBACK, UH, WITH REGARD TO THAT AND MAYBE PUSHBACK, UH, WHICH WE, WE, WE WILL NEED TO BE CONSIDERING AS WELL, ALL REQUIRE SOME MECHANISM FOR REPORTING AT SOME POINT IN TIME, QUARTERLY, SEMI-ANNUAL, ANNUAL, THAT KIND OF THING.

ALTHOUGH, I WANNA BE CLEAR, IT VARIES.

SO I THINK WE HAVE SOME DECISION MAKING THAT WE'LL WANT TO DO WITH REGARD TO THAT.

[00:20:01]

PEER CITIES ALSO REQUIRE ETHICS OR FINANCIAL DISCLOSURE TRAINING FOR ELECTED OFFICIALS, IN ADDITION TO THE PROCUREMENT CARD TRAINING WHEN A CARD IS OBTAINED.

UM, OBVIOUSLY THAT IS SOMETHING THAT, UH, I, I POINT OUT JUST BECAUSE WE'RE ALREADY DOING SOME, WE'RE ALREADY DOING SOME OF THESE THINGS, BUT WE NEED TO MAYBE PROVIDE A SINGLE PLACE IN CLARITY WITH REGARD TO THAT.

UM, ALSO, ALSO ON COUNCIL OFFICE ACCOUNTS, I'M GONNA, I'M GONNA SAY TWO THINGS ABOUT THAT.

ONE THAT'S ON THE SLIDE, AND ONE THAT'S NOT ON THE SLIDE.

WHAT'S NOT ON THE SLIDE IS THERE'S SOMETIMES CONFUSION, AT LEAST IT WAS CONFUSING FOR ME.

SO LET ME SAY, LET ME PUT IT ON ME AND NOT EVERYBODY ELSE.

BUT INSTEAD OF REFERRING TO OUR ACCOUNTS AS OFFICE HOLDER ACCOUNTS, WHICH HAPPENS, RIGHT? THAT YOU HEAR THE PHRASE OFFICE HOLDER ACCOUNTS.

WHAT I'VE CHOSEN TO DO IN THIS PRESENTATION, AND WHAT I WOULD SUGGEST WE DO AS WE GO FORWARD, IS WE TALK ABOUT COUNCIL OFFICE ACCOUNTS OR COUNCIL OFFICE BUDGETS.

AND THE REASON I SUGGEST THAT IS WHEN I THINK OF AN OFFICE HOLDER ACCOUNT, I THINK OF THE, UH, MONEY THAT GETS RAISED FOR A CAMPAIGN OR MONEY THAT CAN BE RAISED IN SOME, IN SOME PLACES FOR AN OFFICE HOLDER ACCOUNT THAT CAN BE USED.

IT'S OUTSIDE MONEY.

IT'S NOT BUDGETED BY THE CITY, NOT APPROPRIATED BY THE CITY THAT CAN BE UTILIZED, AS WE KNOW, THAT IS USED BY SOME PLACES, UH, PARTICULARLY AT THE LEGISLATURE WHERE YOU CAN RAISE MONEY.

YOU THEN HAVE AN OFFICE HOLDER ACCOUNT, AND THAT PAYS FOR A VARIETY OF THINGS THAT THEN DON'T COME OUT OF TAX DOLLARS.

IN AUSTIN, WE HAVE A LIMITATION ON OFFICE HOLDER ACCOUNTS, UH, AND, AND THE ABILITY TO RAISE MONEY.

AND, AND, UH, THAT CREATES AN ISSUE, I THINK, BECAUSE THERE'S NOT AS MUCH MONEY TO, TO DO THINGS LIKE TRAVEL, THOSE SORT OF THINGS, WHICH MIGHT OTHERWISE, UH, YOU MIGHT USE OTHER MONEY FOR THAT.

SO THAT I, I JUST WANNA POINT OUT THAT AS I TALK ABOUT THIS, I'LL, I'LL NOT REFER TO THINGS.

AND THE THINGS YOU'LL SEE COMING FROM MY OFFICE WITH REGARD TO THIS WON'T REFER TO OFFICE HOLDER ACCOUNTS.

IT WILL REFER TO COUNCIL OFFICE ACCOUNTS OR COUNCIL OFFICE BUDGETS.

UM, HERE WE, THE SECOND THING I'LL MENTION IS DEDICATED COUNCIL OFFICE ACCOUNTS VARY.

UH, YOU'LL SEE SOME OF THAT HERE IN A MINUTE.

UM, AND TYPICALLY THE BALANCE DOES NOT ROLL OVER AT THE END OF THE YEAR.

UH, FOR EXAMPLE, UH, THE TEXAS SENATE CAPS IT, THE ROLLOVER AT $20,000.

ALTHOUGH I WILL TELL YOU THAT IN MY EXPERIENCE, WHAT HAPPENS WITH THAT IS IT, IT DOESN'T ROLL OVER.

BUT THEN THERE'S A DISCUSSION AMONG THE SENATORS AND, AND ABOUT WHAT THEY WANT TO DO.

AND THERE'S USUALLY SOME ADDITIONAL ROLLOVER, AT LEAST THAT THAT'S THE WAY IT USED TO BE.

WE'VE CREATED A CHART FOR YOU.

THE NEXT SLIDE IS A, A CHART THAT I THINK IS VERY HELPFUL, UM, ONCE YOU UNDERSTAND WHAT'S IN IT.

AND, AND THAT IS HOW, HOW PEER PRACTICES WORK.

SO FOR EXAMPLE, FINANCIAL DISCLOSURE, UH, EVERYBODY THAT WE LOOKED AT DOES THAT.

AUSTIN, OF COURSE, DOES THAT.

UH, WHERE YOU START GETTING DIVERSITY, UH, AMONG THE PEERS IS THINGS LIKE TAXPAYER FUNDED COUNCIL OFFICE ACCOUNTS, UH, STATE OFFICIALS.

YES, YOU HAVE THAT.

UM, BUT THEN AGAIN, IT ROLLS OVER.

UM, AND, UH, IT HAS A LIMIT ON THE ROLLOVER, AT LEAST ON PAPER, AUSTIN, YOU DO.

AND THE BALANCE TENDS TO ROLL OVER WITH NO LIMITATION.

UM, DALLAS, YES, THERE IS A TAXPAYER FUNDED COUNCIL OFFICE ACCOUNT, BUT THE BALANCE DOES NOT ROLL OVER FORT WORTH.

IT DOESN'T HAVE THAT.

HOUSTON AND HOUSTON'S ALWAYS GONNA HAVE A LITTLE BIT OF HINS, AND I DON'T MEAN THAT IN A NEGATIVE WAY, IT'S JUST DIFFERENT BECAUSE THE FORM OF GOVERNMENT IS DIFFERENT.

AND ONE OF THE THINGS THAT THEY HAVE IS THEY HAVE FUNDING FOR COUNCIL DISTRICTS THAT ARE, UH, THAT THEY HAVE TO BE SPECIFIC TO PROJECTS.

UH, I WANNA SAY A COUPLE THINGS ABOUT THAT.

ONE IS THE MONEY IS ALLOCATED.

THEY CALL IT THE COUNCIL DISTRICT SERVICE FUND.

UM, BUT KEEP IN MIND, THEY DON'T HAVE A CITY MANAGER.

SO THEY, THEY, THEY, THEY, THEY AUTOMATICALLY HAVE TO COME AT THINGS DIFFERENTLY THAN WE DO BECAUSE WE HAVE A COUNCIL MANAGER FORM GOVERNMENT, AS OPPOSED TO THE FORMER GOVERNMENT THEY HAVE IN HOUSTON.

AND WHILE IT'S ALLOCATED IN HOUSTON, IT HAS TO SUPPORT SPECIFIC TYPES OF PROJECTS.

AND BY THE WAY, IT IS ONE FUND THAT THEY ALL WORK OUT OF.

IT'S NOT INDIVIDUAL FUNDS.

IT'S ONE FUND THAT THEY ALL WORK OUT OF.

AND THEY, UH, THEY, THEY GO THROUGH A REAL SIGNIFICANT PROCESS IN ORDER TO GET THAT MONEY TO BE UTILIZED.

THAT'S A VERY PUBLIC PROCESS.

UM, SAN ANTONIO, UH, DOES NOT HAVE TAXPAYER FUNDED COUNCIL OFFICE ACCOUNTS ON COUNCIL OFFICE EXPENSE POLICY.

[00:25:01]

UH, THAT'S WHERE YOU SEE SOME DIVERGENCY AS WELL.

UM, AND, AND ON HOUSTON, I, WE'VE GOT IT DOWN HERE AS, NO, BUT THAT'S PRETTY MUCH WHAT I JUST DESCRIBED, UH, ON GOVERNMENT ISSUED, UH, PROCUREMENT CARDS.

YOU SEE, YOU SEE THERE, UH, WHERE, HOW THOSE ARE UTILIZED.

TRAVEL POLICY, YES, WE'RE IN LINE IN TERMS OF TRAVEL POLICY AND REIMBURSEMENT.

WE'RE IN LINE WITH REGARD TO THE, IN THAT, ALTHOUGH WE MAY WANT TO SUGGEST SOME CHANGES, UH, AS THE AUDIT FINANCE COMMITTEE.

SO THAT'S KIND OF A QUICK RUNDOWN.

UH, WE'LL BE BRINGING BACK MORE DETAIL, BUT I, I PROMISE THAT WE WOULD DO THIS QUICKLY AND, AND GIVE EVERYBODY THE OPPORTUNITY TO SEE SOME OF THIS.

UM, NEXT STEPS ARE TO GET FEEDBACK.

AND SO I WOULD LOVE TO HAVE, UH, MEMBERS OF THE COMMITTEE AND MEMBERS OF THE COUNCIL PROVIDE FEEDBACK ON HOW THEY SEE BEST PRACTICES.

UM, AND AGAIN, AS I'VE INDICATED, WE'LL BRING FORWARD A POTENTIAL POLICY.

YOU WILL SEE THAT IN, IN, WELL IN ADVANCE.

UH, THAT IS ACTUALLY WHAT I CONSIDER TO BE THE NEXT STEP, IS FOR US TO PUT TOGETHER A, A SPECIFIC POLICY THAT IS A ONE SHOT.

IF HERE IT IS, HERE'S THE POLICY, GET THAT OUT TO YOU.

AND THAT, ACTUALLY, AS I HEAR MYSELF SAYING, IT PROBABLY IS GOING TO BE EASIER FOR YOU TO COMMENT ON THAN JUST AN UPDATE ABOUT THE WORK WE'VE DONE TO GET TO THIS POINT.

UM, AND SO I'LL WORK ON GETTING THAT TO YOU AS QUICKLY AS POSSIBLE, AND MAYBE BY THE END OF THE YEAR, GET YOU SOMETHING SO THAT WE HAVE PLENTY OF TIME IN JANUARY TO LOOK AT THIS.

THE GOAL STILL REMAINS TO TRY TO DO THIS BY THE END OF JANUARY.

UM, AGAIN, I GET THE, THE, THE, THE, THE PRECISION THAT WE WANT TO DO THIS WITH AND THE, UH, THE SPEED THAT WE WANT TO DO IT.

BUT I WANNA MAKE SURE WE GET IT RIGHT.

SO IF WE FEEL PUSHED, WE'LL, WE'LL PUSH IT A LITTLE BIT, BUT WE'LL GET IT SO THAT WE CAN GET IT RIGHT.

QUESTIONS OR COMMENTS? YES.

COUNCIL MEMBER LANE, THANK YOU SO MUCH FOR THE OVERVIEW.

VERY HELPFUL.

AS YOU KNOW, THIS HAS BEEN AN AREA I'VE BEEN, UH, WORKING ON.

UH, YES.

YOU'VE BEEN VERY HELPFUL.

UM, THE QUESTION THAT I HAVE IS, IF WE'RE TRYING TO MOVE QUICKLY, I MIGHT BE HEARING THAT THIS IS NOT THE RIGHT MOMENT FOR FEEDBACK.

AND WHEN AND HOW IS THAT? WELL, I, ANY FEEDBACK YOU'VE GOT MM-HMM .

UM, I, I'D BE HAPPY TO HAVE EVEN NOW.

AND IN ADDITION TO THAT, LIKE I SAY, AS I HEARD MYSELF LAYING THIS OUT MM-HMM .

ONE OF THE THINGS THAT BECAME CLEAR TO ME, UH, WAS THAT IT MIGHT BE BETTER TO HAVE, GIVE YOU A TARGET TO SHOOT AT AS OPPOSED TO A, A GENERALIZED WITH, I'D LIKE TO SEE THESE THINGS, BUT IF YOU HAVE SOMETHING, I WOULD LOVE TO EITHER HAVE YOU DO IT NOW OR PUT IT ON THE MESSAGE BOARD AND, AND GET THE MESSAGE BOARD ACTUALLY STARTED IN THAT REGARD SO THAT WE CAN THEN TAKE THAT FEEDBACK AND TRY TO PUT IT INTO WHAT THE TARGET ENDS UP BEING.

UNDERSTANDING THE PROCESS LIKE THAT IS VERY HELPFUL.

UM, MAYBE I COULD JUST SHARE SOME BULLET POINTS THAT SURE.

NO, NO.

UM, THAT'S WHY WE'RE HERE, SO FEEL FREE TO DO THAT.

GREAT.

UM, SO I, I LIKE THE IDEA OF MORE CLARITY, FOR EXAMPLE, AROUND PUBLIC PURPOSE.

UM, I ALSO THINK THAT IT WOULD BE HELPFUL WHEREVER WE'RE GIVING SUCH GUIDANCE OR WE'VE REALIZED THAT IT IS NOT CLEAR, I'VE SEEN IT BE PRETTY EFFECTIVE TO GIVE THE GUIDANCE AND THEN GIVE A FEW EXAMPLES OF, YES, THIS WOULD BE WHAT WE'RE TARGETING.

AND ALSO, NO, THIS IS AN EXAMPLE OF SOMETHING NOT TARGETED.

UM, AND I FOUND THAT TO BE A VERY HELPFUL APPROACH ON SOME OF THESE POLICIES.

UM, AND THEN I JUST ALSO WANTED TO RAISE A COUPLE OF CATEGORIES FOR CONSIDERATION AS YOU'RE WORKING ON PLEASE.

THE, UM, DRAFT.

SO ONE IS INVENTORY MANAGEMENT, AND THAT IS MORE FOR THE CITY STAFF SIDE THAN FOR THE COUNCIL SIDE.

BUT SOMEHOW MAKING THAT CONNECTION BETWEEN PURCHASES MADE AND THEN MANAGING THAT INVENTORY, AND INCLUDING ALSO A PROCESS FOR SIGN AND SIGN OUT OF, UM, PROCESS FOR WHAT, SAY, I'M SORRY, PROCESSES, A PROCESS FOR SIGN IN AND SIGN OUT OF BADGES AND KEYS.

UM, IN ADDITION TO INVENTORY.

UM, UH, ANOTHER, I THINK, YOU KNOW, TRAVEL HAS COME UP A LOT AND IT IS IMPORTANT TO GIVE MORE CLARITY TO PUBLIC PURPOSE OF IT, BUT ALSO PROVIDING JUST MORE DESCRIPTION OF WHAT CONSTITUTES AN OPERATIONAL NECESSITY FOR A COUNS FOR A COUNCIL OFFICES, WORK WITH THOSE EXAMPLES.

UM, AND THEN A COUPLE OTHER CATEGORIES ARE USE OF FUNDS FOR FOOD AND REFRESHMENTS.

UM, I MEAN, THERE IS ABSOLUTELY A VERY CLEAR PURPOSE IN OUR COUNCIL OFFICES FOR USE OF, UH, FOR BUYING FOOD AND REFRESHMENTS WHEN IT WILL BE ACCESSIBLE TO COMMUNITY MEMBERS AND SUCH.

BUT I THINK THAT THAT'S ANOTHER CATEGORY WOULD BE HELPFUL TO LAY OUT MORE SPECIFICS.

[00:30:01]

COUNCIL MEMBER VALA, UH, WE'VE DISCUSSED THIS.

I, I, I'M TRYING TO REMEMBER MY, MY, UH, UH, MEMORY.

UH, IT, IT'S NOT A HUNDRED PERCENT CLEAR, BUT WE HAD A BUDGET AMENDMENT, AND I THINK THIS COULD BE HELPFUL IN KIND OF WHERE RIGHT NOW WE'RE EACH DOING OUR OWN REIMBURSEMENT, YOU KNOW, TRAVEL ACCOUNTING, LIKE EACH OFFICE, YOU KNOW, HAS EITHER A STAFF MEMBER, HALF STAFF MEMBER, WHATEVER THE CASE MAY BE, KIND OF DEDICATED TO MANAGING THE, THE ACCOUNTING AND THE PURCHASING AND WHATNOT.

UM, I, I FEEL LIKE THERE'S A PLACE FOR A COUNCIL OFFICE, A COUNCIL LIAISON, YOU KNOW, SOMEONE WHERE, IN OTHER WORDS, ALL OF THE COUNCIL, THE 10 COUNCIL OFFICES AND THE MAYOR ARE LEANING ON, YOU KNOW, ONE, TWO, YOU KNOW, STAFF MEMBERS TO, UH, UH, HELP THEM WITH THE, THE, YOU KNOW, REIMBURSEMENT, THE TRAVEL POLICIES, THOSE KINDS OF THINGS LIKE THAT.

AND NOT ONLY FROM A, FROM A, THE LABOR PERSPECTIVE, 'CAUSE THAT STUFF CAN BE, IT CAN BE QUITE, UH, UH, CHALLENGING, BUT ALSO FROM A, UM, YOU KNOW, APPROPRIATENESS AND KIND OF, UH, A PERSPECTIVE AS WELL.

UH, SO I JUST WANTED TO KIND OF PUT THAT OUT THERE THAT, YOU KNOW, I, I THINK, AND AGAIN, YOU KNOW, MOST OF US HERE, I THINK, HAVE HAD SOME EXPERIENCE IN THE TEXAS LEGISLATURE, KIND OF THE, THE HOUSE ADMIN, UH MM-HMM .

WOULD BE THE EQUIVALENT WHERE, YOU KNOW, THERE'S A BODY THAT KIND OF, EVERYTHING RUNS THROUGH.

AND THEN THAT BODY KIND OF IS, IS IS HELPING US KIND OF WITH THE SCOPE AND THE APPROPRIATENESS AND, AND, AND THAT KIND OF STUFF, AND GIVES US ANOTHER SET OF EYES.

IT GIVES US ANOTHER SET OF EYES, AND THAT, AND THAT'S NOT INCONSISTENT WITH WHAT, UH, I INDICATED YOU SEE IN OTHER PEER CITIES.

I, I THINK THAT WOULD BE HELPFUL.

'CAUSE RIGHT NOW IT'S REALLY JUST KIND OF OUR OFFICE AND ESSENTIALLY FINANCE, UH, UH, STAFF AND, AND, AND THAT'S, IT WOULD BE HELPFUL TO HAVE KIND OF SOMEONE HELPING US ORGANIZE.

SO I WOULD, UH, UH, JUST, UH, UH, THROW THAT OUT THERE.

UM, AND, AND AGAIN, I MEAN, WITH REGARD TO, TO FOOD, YOU KNOW, WE, WHENEVER WE HAVE A TOWN HALL, WE HAVE, YOU KNOW, FOOD AND BEVERAGES FOR, YOU KNOW, FOLKS, UH, AGAIN, JUST SNACKS.

WE'RE ASKING PEOPLE TO COME OUT TO A MEETING AT, YOU KNOW, FIVE 30 ON A TUESDAY AFTERNOON OR SOMETHING LIKE THAT.

IT'S ALMOST ONLY FAIR TO TO, TO, YOU KNOW, GIVE THEM, UH, UH, UH, YOU KNOW, REFRESHMENTS AND, AND JUST SOMETHING SO THAT THEY'RE, THEY'RE NOT STARVING BY THE TIME THEY LEAVE AT, AT, AT SEVEN O'CLOCK.

I, I, I, AGAIN, I, I THINK THOSE ARE COMPLETELY APPROPRIATE, UH, EXPENDITURES.

UM, I, I JUST WANNA MAKE SURE THAT IN KIND OF ANY ZEAL TO, UM, YOU KNOW, TO, TO CLIP, UH, EXPENSES THAT, UH, WE'RE NOT JUST ELIMINATING, UH, WHAT I THINK ARE, ARE VERY HELPFUL, UH, EXPENSES THAT, THAT ENABLE THE, THE PUBLIC TO, YOU KNOW, ENGAGE AND, AND, AND TO BE THERE.

UM, AGAIN, I MEAN, TRANSLATION SERVICES IS ANOTHER THING THAT, THAT WE WILL USUALLY PAY FOR, UH, AS AT OUR TOWN HALLS, THOSE ARE KINDS OF THINGS.

AGAIN, THEY'RE EXPENSES, BUT THEY IMPROVE, UM, OUR OUTREACH.

THEY IMPROVE THE CONSTITUENTS EXPERIENCE WHEN THEY COME TO A A, A TOWN HALL.

UH, SO I JUST WANNA MAKE SURE THAT, YOU KNOW, WE, WE DON'T SACRIFICE THE KIND OF THE QUALITY, UH, UH, OF EVENTS 'CAUSE UH, THAT, THAT MAKES A DIFFERENCE.

AND THAT DEFINITELY, UH, BRINGS PEOPLE OUT.

GOOD, GOOD COMMENTS.

THAT IT WAS GONNA ROLL OVER.

COUNCIL MEMBER UCHIN.

THANK YOU, MAYOR.

AND THANK YOU FOR THE WAY YOU'VE LAID OUT THIS INFORMATION, THE RESEARCH THAT WENT BEHIND IT.

UM, I'M CURIOUS, IT LOOKS LIKE IN THE TABLE THAT YOU'VE GOT THERE, ONE OF THE KEY DIFFERENCES IS HOW WE'RE APPROACHING THE TAXPAYER FUNDED COUNCIL ACCOUNTS AND WHETHER THEY CAN ROLL OVER.

AND, UM, I'M SURE YOU GUYS HAVE ALREADY BEEN THINKING ABOUT THIS.

MY BIGGEST CONCERN IS THAT THIS IS A SUBSET OF THE COUNCIL, AND THAT THE FOLKS THAT HAVE BEEN ROLLING OVER THOSE ACCOUNTS, SOMETIMES FOR MANY YEARS, THAT MIGHT HAVE ACCUMULATED MAYBE HUNDREDS OF THOUSANDS OF DOLLARS ARE NOT HERE WITH US.

IT MIGHT BE IMPACTED IN A WAY THAT THEY ARE NOT PART OF THIS CONVERSATION.

SO I'M JUST WANNA FLAG, HOW DO WE MAKE SURE THAT THEY, OH, I'M MAKE YOU MIGHT BE DISPROPORTIONATELY IMPACTED.

THE, THE NEW FOLKS LIKE MYSELF AND CUSTOMER LANE WILL BE ABLE TO FIGURE OUT EITHER HOW THEY'RE GONNA SPEND THAT, THOSE DOLLARS, OR HOW THEY'RE GONNA, HOW WE'RE GONNA APPROACH THAT SOLUTION.

I DON'T KNOW THE ANSWER.

UM, BUT IT'S, IT'S A LEGITIMATE QUESTION.

AND, AND, AND IT'S, THIS IS A, THIS IS A, FRANKLY, I THINK THIS IS AN, AN INTERESTING ISSUE FOR US TO CONSIDER, UM, IN PART BECAUSE IF YOU, IF SOMEBODY IS, YOU DON'T WANNA CREATE A, A, AN UNINTENDED MOTIVE, RIGHT? AND, AND, AND HERE'S WHAT I MEAN BY THAT.

IF WHAT YOU DO IS YOU SAY YOU CAN'T ROLL OVER ANY MONEY, AND LET'S SAY IN ONE YEAR A COUNCIL OFFICE HAS AN A, A VACANCY AND THEY DON'T HAVE, THEY, IT TAKES A WHILE TO FILL THAT VACANCY TO FIND THE RIGHT PERSON FOR THAT JOB.

AND SO THEY SAVE MONEY IN THAT WAY, IT SHOULD, THEY THEN BE PENALIZED THAT THEY SAVE MONEY, OR DO THEY NEED TO SPEND IT ALL? AND, UH, I WILL TELL YOU, I SAW THAT AT THE CAPITOL WHERE YOU HAD MEMBERS

[00:35:01]

SO BY THE TIME THEY GOT TO THE END OF IT, THEY HAD SPENT THAT MONEY.

UM, AND, UH, SO YOU DON'T WANNA CREATE AN UNINTENDED CONSEQUENCE TO THAT, OR, OR A A MOTIVE THAT'S NOT A, YOU KNOW, IT'S NOT A INAPPROPRIATE MOTIVE NECESSARILY, BUT IF THEY CAN USE IT LATER.

SO THIS IS, THIS IS ONE THAT WE'RE GONNA NEED TO PUT SOME THOUGHT INTO, INCLUDING THE ISSUE THAT YOU'RE, YOU'RE BRINGING UP IS, IS HOW DO WE, HOW DO WE APPROPRIATELY MOTIVATE THIS AND MAKE SURE THAT SOMEBODY DOESN'T GET PENALIZED FOR SAVING MONEY, UH, OR SOMEBODY DOESN'T GET PENALIZED FOR BEING NEW.

JUST TO BE CLEAR, I DON'T HAVE THE ANSWER.

I JUST KNOW THAT SOME OF THE FOLKS THAT ARE, UM, POTENTIALLY MUCH MORE IMPACTED THAN MYSELF, UH, ARE NOT PART OF A FC AND, WELL, I WANNA MAKE SURE THAT THE WHOLE COUNCIL HAS ALL OF THIS.

UH, WE'RE JUST USING THE, THE, THE COMMITTEE AS A MEANS FOR START GETTING THIS PROCESS GOING.

I MEAN, THAT'S WHY COUNCIL MEMBER LANE IS HERE IS IS, AND I'VE INVITED EVERYBODY TO BE PART, UH, I'VE SAID IT OVER AND OVER AGAIN THAT AS WE TAKE THIS UP, IF WE'RE TAKING SOMETHING UP AT AUDIT AND FINANCE AND YOU WANNA BE PART OF IT AS, AND YOU'RE A MEMBER OF THE COUNCIL, COME ON.

UH, BECAUSE I, WE, THIS IS, THIS NEEDS TO BE A COUNCIL LED DEAL, AND THAT'S WHY WE'RE DOING IT THE WAY WE'RE DOING IT.

BUT, UM, BUT BRING, BRING, BRING ALL IDEAS, AND I'M GONNA MAKE SURE IT'S UP ON THE MESSAGE BOARD WITH THIS PRESENTATION SO THAT PEOPLE HAVE THE OPPORTUNITY TO FULLY NO, THAT MAKES PERFECT SENSE.

SURE.

MAYOR TIM, THANK YOU.

I WOULD JUST ADD THAT, UM, YOU KNOW, WE ALL SUBMIT OUR MONTHLY EXPENSE REPORTS, AND I THINK FOR ME, MAKING THAT MORE PUBLICLY ACCESSIBLE SO THAT ANYONE CAN YES, PULL OUR EXPENDITURES, WOULD BE HELPFUL.

UH, IT MIGHT BE TOO CUMBERSOME TO HAVE IT MONTHLY, BUT AT LEAST ON A QUARTERLY OR SEMI-ANNUALLY SIM SEMI-ANNUAL BASIS, UH, TO HAVE THAT MORE PUBLICLY AVAILABLE.

GOOD.

ANYTHING ELSE? YES, I HAVE MORE, YES.

COUNCIL MEMBER LINE.

WILL TAKE US TO ITEM NUMBER FOUR, WHICH IS A BRIEFING.

JUST CIRCLING BACK ON SOME OF THE COMMENTS THAT HAVE JUST COME UP, I, I REALLY LIKE THIS IDEA OF A LIAISON.

I ALSO LIKE THE IDEA THAT YOU MENTIONED MAYOR OF POSSIBLE REVIEW BY ANOTHER LEVEL, ANOTHER SET OF EYES.

AND, UM, I KNOW THAT CAN GET TRICKY, RIGHT? BECAUSE WE ANSWER TO OUR CONSTITUENTS AS OPPOSED TO WHOEVER WOULD BE PROVIDING THAT FEEDBACK.

AND SO, UM, WHAT I DO THINK COULD BE HELPFUL IS A DEFINED PROCESS IN WHICH THAT LIAISON, OR WHOEVER THAT PERSON IS THAT'S ADDRESSING ALL THE COUNCIL OFFICE IS FLAGGING THINGS IN WRITING, AND THEN THIS, THE CHIEF OF STAFF OR COUNCIL MEMBER CAN, YOU KNOW, OVERRULE, UM, AND THEN IT'S BETWEEN THEM AND THE VOTERS.

BUT, UM, IN THE ABSENCE OF ANY LEVEL OF AUDIT FUNCTION AND FEEDBACK ABOUT WHEN WE ARE GOING OUTSIDE OF THE INTENT, IT'S VERY CHALLENGING TO ADAPT TO WHAT'S ACTUALLY EXPECTED.

SO I, I THINK THAT'S A REALLY KEY PART, AND I'M GLAD THAT YOU BROUGHT IT UP AND WANTED TO GIVE THOSE, UM, ADDITIONAL THOUGHTS.

AS FAR AS THE ACCOUNT ROLLOVERS GO, I THINK THAT IT WOULD BE, I, I WONDER IF, UH, THE GOAL FOR THIS ITERATION ON THIS POLICY COULD BE PROVIDING GUIDANCE ABOUT APPROPRIATE USES OF, UM, UNUSED FUNDS AS OPPOSED TO DEFINING WHAT'S GONNA HAPPEN.

YOU KNOW, YOU, YOU HAVE TO SPEND THEM OR NOT, BUT JUST SIMPLY PROVIDE GUIDANCE ON THE USES.

AND THAT CAN HAPPEN AT ANY POINT DURING THE COUNCIL MEMBER'S TERM, BUT AGAIN, WITH EXAMPLES OF YES AND NO, UM, AND I THINK THAT IF WE AS A BODY ARE COMFORTABLE WITH THOSE USES, THEN WE HAVE GIVEN OURSELVES GUIDANCE, WHICH IS GREAT.

UM, AND THEN THE OTHER THING THAT I WOULD MENTION, UM, IS I THINK THAT WHEREVER I KNOW THAT WORK IS ALSO BEING DONE ON THE STAFF SIDE, OUTSIDE OF THE MAYOR AND COUNCIL OFFICES ON, UM, POLICIES AND PROCESSES AROUND THESE ISSUES AND WHEREVER WE CAN BEING SIMILAR IN HOW WE LAY OUT WHAT'S APPROPRIATE AND NOT, SO THAT IT BECOMES EASIER FOR THE STAFF WHO ARE DOING THE AUDIT FUNCTION ACROSS TO CLEARLY PROVIDE, PROVIDE CLEAR AND EFFECTIVE GUIDANCE WITHOUT HAVING TO LOOK AT A, AT A LOT OF DIFFERENT THINGS THAT ARE VERY DIFFERENT FROM EACH OTHER.

ANYTHING ELSE? THANK YOU.

GOOD FOLKS, WE'LL PUT UP ON THE, WE'LL PUT THIS, MAKE SURE IT'S ON THE MESSAGE BOARD WITH A SHORT, UM, I'LL PUT UP A SHORT MESSAGE ABOUT WHAT, WHAT THE, UH, WHAT IT IS AND WHAT WE'RE DOING AND THE TIMELINE.

UM, BUT THESE ARE ALL GREAT.

THIS IS WHAT I WAS HOPING WOULD HAPPEN IS, IS WE'D GET THIS KIND OF FEEDBACK.

SO THANK Y'ALL VERY MUCH.

UM, THAT

[4. Briefing on pensions and other post-employment employee benefits. [Diana Thomas, Deputy Chief Financial Officer, Austin Financial Services].]

AND, BUT BEFORE I GO TO THE BRIEFING, AND SINCE SHE'S STANDING THERE, LET ME SAY THANK YOU TO DIANA AND, AND THANK YOU TO CARRIE, UH, FOR THEIR CONTINUED GOOD HELP ON THIS.

NOW, WITH THAT, UH, MR. VINO, I'LL LOOK AT YOU AGAIN.

UH, THANK YOU CHAIR.

ITEM NUMBER FOUR ON YOUR AGENDA IS STAFF'S ANNUAL UPDATE ON OUR THREE CITY PENSION FUNDS.

AS YOU KNOW, THERE'S BEEN A LOT OF CHANGES TO THOSE FUNDS OVER

[00:40:01]

THE LAST SEVERAL YEARS, UH, LEGISLATIVE ACTIONS OCCURRED.

UM, SO WE WANNA PROVIDE YOU AN UPDATE ON THOSE CHANGES AND, AND HOW THE SYSTEMS ARE PERFORMING.

UM, WE ALSO WANT TO PROVIDE YOU, UH, THIS YEAR AN, AN UPDATE AND SOME BACKGROUND ON WHAT IS COMMONLY REFERRED TO AS OPEP, WHICH STANDS FOR OTHER POST-EMPLOYMENT BENEFITS.

LARGELY THE MEDICAL BENEFITS, UH, THE PENSIONS ARE ABOUT THE PENSION INCOMES, YOUR RETIREMENT SALARY YOU GET AFTER YOU LEAVE SERVICE WITH THE CITY OF AUSTIN.

THE POST-EMPLOYMENT BENEFITS ARE ABOUT THE, UH, MEDICAL BENEFITS THAT ARE PROVIDED TO RETIREES AFTER, UH, SERVICE WITH, UM, WITH THE CITY OF AUSTIN.

UH, THERE IS A LOT OF SIMILARITIES TO, UM, THE CHALLENGES WE SAW WITH THE PENSIONS AND THE POTENTIAL SOLUTIONS.

SO THOSE CHALLENGES, UM, BETWEEN OPEP AND, AND, AND THE PENSIONS, AND THAT'S WHY WE THOUGHT IT MADE SENSE TO TALK ABOUT THEM AT THE SAME TIME.

SO, UH, DEPUTY CFO, DIANA THOMAS, AND MYSELF, ARE GONNA TAG TEAM ON THIS PRESENTATION, AND SHE'S GONNA START.

GOOD MORNING COMMITTEE MEMBERS.

DIANA THOMAS, DEPUTY CHIEF FINANCIAL OFFICER, UH, CITY HAS THREE CONTRIBUTORY DEFINED BENEFIT RETIREMENT SYSTEMS. UH, THE EMPLOYEES, WHICH COVERS EVERYONE EXCEPT POLICE AND FIRE, AND POLICE AND FIRE, HAVE THEIR OWN SEPARATE SYSTEMS. THE EMPLOYEE SYSTEM ALSO INCLUDES EMS SWORN MEMBERS.

UH, EACH ONE IS ADMINISTERED BY AN INDEPENDENT BOARD OF TRUSTEES, AND THERE'S AN ANNUAL PENSION UPDATE.

THIS MEETING IS THAT, THAT ANNUAL PENSION UPDATE TO THE COUNCIL'S AUDIT AND FINANCE COMMITTEE.

ALL THREE PLANS WERE CREATED BY STATE LAW, AND STATE LAW GOVERNS THE BENEFITS AND CONTRIBUTIONS PROVISIONS, AND ANY AMENDMENTS MUST BE MADE BY THE STATE LEGISLATURE.

FROM AN ACCOUNTING PERSPECTIVE, THE PEN, THE CITY FOLLOWS THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD, AS DO THE THREE PENSION SYSTEMS. UH, GASB STATEMENT NUMBER 67 AFFECTS THE PLANS AND HOW THEY REPORT THEIR FINANCIAL INFORMATION AND THEIR STATUS.

GSB STATEMENT NUMBER 68 IS THE PLAN SPONSORS, AND THEN WE ALSO FOLLOW ACTUARIAL STANDARDS OF PRACTICE RELATIVE TO PENSIONS.

UH, THESE REGULATIONS DEFINE HOW THE CITY'S SYSTEMS MEASURE THE ASSETS, LIABILITIES, DISCOUNT RATE, AND AMORTIZATION PERIOD OF THE PENSION SYSTEMS. AND THE CITY AND THE SYSTEMS ARE ALL COMPLIANT WITH THESE REPORTING STANDARDS.

SO I WANTED TO GIVE YOU A LITTLE BIT OF BACKGROUND.

UM, I THINK YOU'RE ALL AWARE OF THE FACT THAT OVER THE LAST FOUR YEARS, WE'VE MADE SIGNIFICANT, UH, REFORMS TO OUR THREE PENSION SYSTEMS IN COLLABORATION WITH THE, UH, THE BOARDS AND THE EXECUTIVE DIRECTORS AND THE STAFF FROM THE PENSION SYSTEMS. AND THE BACKGROUND FOR, UH, THE NECESSITY OF THOSE REFORMS IS THAT ALL THREE SYSTEMS WERE OUTSIDE THE BEST PRACTICE GUIDELINES ESTABLISHED BY THE TEXAS PENSION REVIEW BOARD.

THEY HAD, UM, UH, FUNDING LEVELS BELOW, UM, THE RECOMMENDED LEVELS AND THE TIME PERIOD CALLED THE AMORTIZATION PERIOD TO PAY BACK THOSE LIABILITIES WAS OUTSIDE OF, OF THE, UH, STANDARDS.

UM, ALL THREE SYSTEMS WERE EITHER ON THE PENSION REVIEW BOARDS, UH, MANDATORY RESTORATION, UH, FUNDING PLAN, RESTORATION LIST, OR THEY, UM, WERE ON THE WATCH LIST INDICATING THAT, THAT THEY WERE ANTICIPATED THEY WOULD TRIGGER IT AT SOME POINT IN THE NEAR FUTURE.

UM, AS A RESULT OF THESE GROWING PENSION LIABILITIES AND NO PLAN, UH, NO OBVIOUS PLAN FOR ADDRESSING THEM, UM, FITCH RATINGS DOWNGRADED THE CITY FROM ITS AAA STATUS TO AA PLUS.

UM, THERE'S A LOT OF BULLET POINTS ON THE NEXT FOUR SLIDES, AND I'M NOT GONNA HIT ON EVERY ONE BECAUSE THERE'S A LOT OF SIMILARITIES IN THE REFORMS WE MADE BETWEEN THE THREE SYSTEMS. UH, THE, THE ONE I'LL START WITH IS THE AUSTIN POLICE RETIREMENT SYSTEM.

DURING THE 87TH LEGISLATURE IN 2021, WE COLLABORATED WITH THE SYSTEM ON REFORMS THAT MOVED THE CITY CONTRIBUTIONS FROM A STAFF FROM A FIXED LEVEL TO AN ACTUARILY DETERMINED LEVEL.

UM, THAT'S A FANCY WAY OF SAYING THAT CITY CONTRIBUTIONS INCREASED AND THAT THEY'RE ALSO SUBJECT TO FURTHER INCREASES DEPENDING UPON THE, THE, THE PERFORMANCE OF THE SYSTEM.

THERE ARE CAPS ON THAT AND LIMITS ON THAT, BUT LARGELY THE CITY'S FUNDING CAN NOW FLUCTUATE DEPENDING UPON THE PERFORMANCE OF THE SYSTEM.

UM, UH, LOWER BENEFIT TIER WAS ESTABLISHED FOR NEW HIRES.

CAN, CAN WE INTERRUPT JUST LONG ENOUGH? COUNCIL MEMBER BAIL HAS A QUESTION, SIR.

JUST A QUICK UAAL.

WHAT DOES THAT, UH, STAND FOR THERE ON THAT LAST BULLET POINT? YEAH, THAT'S THE UN ACCRUED, UM, ACTUARIAL, UM, THE UNFUNDED ACTUARIAL.

THE UNFUNDED, WHAT'S THE SECOND NAME FOR UNFUNDED? ACTUARIALLY? ACCRUED LIABILITY, YES.

OKAY, GOT IT.

THE, BASICALLY THE OUTSTANDING, THE, THE, THE DEBT, FOR LACK OF A BETTER WORD, OF LIKE YOUR HOME MORTGAGE, HOW MUCH DO WE OWE OBLIG? GOT IT.

SO THIS IS, THIS WOULD BE AN ITEM THAT YOU COULD SPEND MONEY ON TRANSLATION SERVICES.

REALLY IS THAT, UM, THESE UNFUNDED LIABILITIES YOU SEE HERE ON THE SECOND BULLET POINT, UM, ARE ALL ON SCHEDULE TO BE PAID OFF WITHIN A 30 YEAR PERIOD, WHICH IS THE PENSION REVIEW BOARD GUIDELINES.

UM, AND I, THERE ARE A LOT OF ACRONYMS IN THIS WORLD.

I I THOUGHT WE HAD GOT RID OF MOST OF THEM, BUT UAAL SNUCK THROUGH, SO, SORRY.

THERE YOU GO.

UM, A, A LOWER BENEFIT TIER

[00:45:01]

FOR NEW HIRES.

AND AS WE GO THROUGH THIS, YOU'LL SEE THAT THE, THE BENEFIT REDUCTIONS WERE SIMILAR.

PART OF THIS WAS TO MAKE SURE THAT AS WE WERE REFORMING OUR PENSION SYSTEMS, THAT WE WERE KIND OF DOING IT IN A FAIR AND EQUITABLE MANNER.

SO IN THE CASE OF THE POLICE RETIREMENT SYSTEM, THAT NEW BENEFIT TIER HAD A SIX PERCENTAGE POINT REDUCTION, ESSENTIALLY IN THE COST OF THE BENEFIT.

THEY CALL IT THE NORMAL COST OF THE BENEFIT.

AND THAT WAS LOWERED BY SIX PERCENTAGE POINT, WHICH IS ROUGHLY AT THE SAME LEVEL THAT IT WAS LOWERED BY FOR THE OTHER TWO SYSTEMS AS WELL.

SO NEW HIRES INTO THE SYSTEM, UM, UH, AFTER JANUARY 1ST, 2022, RECEIVED THIS LOWER BENEFIT LEVEL.

SO IT BROUGHT THE COST OF THE BENEFIT DOWN, CITY CONTRIBUTIONS WENT UP, AND THEN EMPLOYEE CONTRIBUTIONS ALSO INCREASED BY TWO PERCENTAGE POINTS FROM 13% TO 15%.

UM, THERE WAS A VARIETY OF GOVERNANCE CHANGES MADE, INCLUDING, UM, A REMOVAL OF THE BOARD'S AUTHORITY TO UNILATERALLY GRANT, UH, BENEFIT ENHANCEMENTS AND COST OF LIVING ADJUSTMENTS.

UM, AND THEN THERE ALSO WAS A CHANGE TO THE BOARD COMPOSITION THAT GAVE THE CITY MORE REPRESENTATION ON THE BOARD OF TRUSTEES OF THE POLICE RETIREMENT SYSTEM.

YOU CAN SEE AT THE BOTTOM LINE, UH, THE AMORTIZATION PERIOD FOR THAT SYSTEM WAS INFINITE, UM, WHICH IS ABOUT AS BAD AS IT SOUNDS.

UH, THAT WAS AN INDICATION THAT THE OUTFLOW OF MONEY WAS EXCEEDING THE INFLOW OF MONEY AT A PACE WHERE THE FUND WOULD EVENTUALLY RUN OUT.

UM, THE AMORTIZATION PERIOD FOR THE SYSTEM WITH THESE REFORMS IS NOW DOWN TO 27.4 YEARS.

THE, UH, THE PENSION REVIEW BOARD STANDARD IS FOR THAT AMORTIZATION PERIOD TO BE LESS THAN 30.

WE ARE LESS THAN 30, AND SO, AND WE ARE ON A PATH TO HAVE THOSE LIABILITIES FULLY PAID OFF IN 27 YEARS.

UM, MUCH LIKE A HOME MORTGAGE, THESE SYSTEMS TAKE A WHILE.

YOU KNOW, THERE'S A LONG GLIDE PATH TO GETTING THESE SYSTEMS BACK TO FULL FUNDING LEVEL, UH, FOR THE EMPLOYEE'S RETIREMENT SYSTEM WAS KIND OF A TWO STEP PROCESS WAY BACK IN 2011.

SO WE PUT INTO PLACE THAT LOWER BENEFIT TIER IN 2011, AND THEN ALSO IN 2011.

IT WASN'T STATUTORILY REQUIRED, BUT THE CITY COUNCIL APPROVED, UH, VOLUNTARY INCREASES IN CONTRIBUTIONS TO THE CIVILIAN PENSION SYSTEM TO KEEP IT IN, UM, UH, UM, BETTER, UH, FUNDING STATUS.

UM, THOSE REFORMS WERE HELPFUL.

THEY DIDN'T GET US EVERYWHERE, UM, THE FULL WAY THERE.

AND SO IN 2023, WE AGAIN COLLABORATED WITH THE COER SYSTEM TO MAKE THE, UH, FURTHER CHANGES.

RIGHT ALONG THE SAME LINES AS WHAT WE DID FOR THE POLICE RETIREMENT SYSTEM.

WE MOVED TO AN ACTUARILY DETERMINED CONTRIBUTION FUNDING MODEL.

UH, CITY CONTRIBUTIONS INCREASED AS A RESULT OF THAT.

UH, MEMBER CONTRIBUTIONS INCREASED FROM EIGHT TO 10%.

UM, WE ALSO MADE THE SIMILAR GOVERNANCE CHANGES OF REMOVING BOARD AUTHORITY FOR BENEFIT ENHANCEMENTS AND COST OF LIVING ADJUSTMENTS, AND ALSO MAKING A CHANGE IN BOARD COMPOSITION, WHICH, UM, UH, GAVE, UH, AGAIN, GAVE THE CITY ADDITIONAL REPRESENTATION ON THE BOARD.

AFTER THAT LEGISLATION PASSED, WE MOVED FROM A 30 FEE, FOUR YEAR AMORTIZATION PERIOD TO TODAY'S 29 YEAR PERIOD, AGAIN, WITHIN THE PRB GUIDELINES, AND AGAIN, ON A GLIDE PATH TO GET TO FULL FUNDING, UM, WITHIN THE NEXT 30 YEARS.

UM, AND THEN MOST RECENTLY IN 2025, THE LEGISLATURE APPROVED VERY SIMILAR CHANGES TO THE AUSTIN FIREFIGHTERS RETIREMENT FUND, A, UH, LOWER BENEFIT TIER FOR NEW HIRES AND ACTUARILY DETERMINED CONTRIBUTION MODEL, UH, WHICH RESULTED IN INCREASED CITY FUNDING, AND THEN GOVERNANCE CHANGES.

UH, IN THIS CASE, UH, THE, THE APPROVAL AUTHORITY FOR COLAS REMAINS WITH THE BOARD, BUT THERE ARE VERY SUBSTANTIAL FINANCIAL GUARDRAILS IN PLACE THAT RESTRICT AND LIMIT WHEN THOSE COLAS CAN, CAN BE GRANTED.

AND THEY'RE, THEY'RE PRETTY, UH, SOLID AND, AND HIGH GUARDRAILS, UM, IN PLACE.

AND AGAIN, WE HAD A BOARD COMPOSITION CHANGE, WHICH RESULTED IN THE CITY COUNCIL HAVING AN ADDITIONAL APPOINTEE TO THE BOARD.

UM, THOSE REFORMS WERE JUST ENACTED, SO WE'RE AT 30 YEARS.

THAT'S, THAT'S THE, UH, AGREEMENT THAT WE HAD, WAS TO MAKE THESE REFORMS TO GET US TO A 30 YEAR AMORTIZATION PERIOD.

BUT THAT'S DOWN, YOU KNOW, NEARLY 50% ARE ACTUALLY A LITTLE BIT MORE, UH, COMPARED TO THE, UH, 48.6 PER YEARS THAT WE HAD BEEN AT.

UM, IN THIS CASE, WE DID NOT INCREASE MEMBER CONTRIBUTIONS FOR TWO REASONS.

ONE, MEMBER CONTRIBUTIONS WERE ALREADY AT 18.7% OF PAY, WHICH IS, UM, UH, QUITE HIGH AND, UM, HIGH RELATIVE TO OUR OTHER TWO SYSTEMS. AND THE SYSTEM WAS IN SUBSTANTIALLY BETTER FUNDED STATUS THAN THE OTHER TWO SYSTEMS WITH A FUNDING LEVEL ABOVE 80%.

SO FOR BOTH OF THOSE REASONS, UM, IT JUST WASN'T NECESSARY FOR THERE TO BE A COMMENSURATE INCREASE IN EMPLOYEE CONTRIBUTIONS, UM, UH, IN FUNDING THE RESULTS OF ALL THIS.

UM, YOU KNOW, THE BOTTOM LINE

[00:50:01]

AND YOU'LL NOTICE THEY SAY TO BE PAID OFF.

IT'S NOT AN ESTIMATE, IT'S NOT A, MAYBE THEY WILL BE PAID OFF ON THOSE TIMELINES.

THIS IS A, UH, UH, A FIXED MORTGAGE SITUATION WHERE WE KNOW WHAT THE EXISTING LEGACY LIABILITIES ARE.

THEY ARE ON A PAYMENT SCHEDULE THAT WILL GET THE LIABILITIES PAID OFF BY THESE, UM, DATES.

UH, THE BOTTOM LINE, THE TAKEAWAY FROM ALL THIS IS THAT FITCH RATINGS, UM, AFTER ALL THESE REFORMS WERE IN PLACE, UM, UM, EVEN THOUGH WE STILL HAD THE LIABILITIES, WE NOW HAD A, UH, A SOUND PLAN FOR ADDRESSING THE LIABILITIES AND GETTING THE SYSTEMS BACK TO FULL FUNDING, UH, FITCH RATINGS RESTORE THE CITY'S AAA BOND RATING EARLIER THIS YEAR.

GREAT.

UM, THANK YOU FOR THAT AND THANKS FOR ALL THE WORK ON IT.

PARTICULARLY, I'M, I'M AWARE OF 11 AND I'M AWARE, I'M VERY AWARE OF 2011, AND I'M VERY AWARE OF LAST SESSION, AND I REALLY APPRECIATE ALL THE GREAT WORK THAT THE, UH, FINANCIAL STAFF IN OUR IGR OFFICE DID WITH REGARD TO THAT.

UM, MEMBERS, YOU GOT QUESTIONS OR THOUGHTS? YES.

COUNCILMAN BRAT.

WE, WE DO HAVE A LITTLE BIT MORE, BUT, OH, I'M SORRY.

MIGHT BE A PLACE TO PAUSE IF YOU, SORRY, GO AHEAD.

SO NEXT WE JUST HAVE AN UPDATE ON SOME OF THE DETAILS ABOUT THE PENSIONS THEMSELVES.

UM, FIRST JUST TALKING ABOUT PENSION MEMBERSHIP.

NOW COORS HAS 24,000 MEMBERS, A PRS, A LITTLE OVER 3000 AND FIRE A LITTLE OVER, UH, 2000 MEMBERS.

AND THAT INCLUDES, UH, MEMBERS WHO ARE CURRENTLY RECEIVING BENEFITS AND ACTIVE MEMBERS WHO ARE NOT CONTRIBUTING, BUT HAVE NOT YET STARTED RECEIVING BENEFITS AND THEN ACTIVE MEMBERS UNDER THE RETIREMENT ELIGIBILITY PROVISIONS.

I'M NOT GONNA READ ALL THE DETAILS ON THIS CHART, BUT WANTED TO MAKE SURE THAT YOU KNEW KIND OF WHAT THOSE RETIREMENT, UH, ELIGIBILITY CRITERIA ARE, ESPECIALLY WITH FIRE AND THE NEW GROUP B THAT WE CREATED, UH, WITH THE MOST RECENT LEGISLATION IN THAT, IN THAT WE CREATED A GROUP B THAT CAN RETIRE AT 10 YEARS OF SERVICE AT AGE 50, 25 YEARS OF SERVICE AT ANY AGE WITH NO EARLY RETIREMENT.

AND THAT'S THE ONE KEY CHANGE BETWEEN GROUP A AND GROUP B IS THE NO EARLY RETIREMENT OPTION.

AND THEN THE COLAS ARE DIFFERENT FOR GROUP A AND GROUP B.

UNDER THE NEW LEGISLATION GROUP A, THERE'S FINANCIAL STABILITY TESTS THAT CHECK TO MAKE SURE, UH, THAT WE CAN AFFORD TO PAY TO MAKE A COLA, AND IT IS CAPPED AT ONE POINT A 5%, AND THEN FOR GROUP B, THEIR PERFORMANCE BASED COLAS.

SO IT LOOKS AT HOW IS THE SYSTEM PERFORMING AND CAN, CAN COLA BE AWARDED BASED ON ARE WE BRINGING IN EXTRA REVENUE OVER WHAT WE EXPECTED TO BRING IN ON OUR INVESTMENTS THAT WOULD ALLOW US TO GRANT A COLA? EACH YEAR WE HAVE ACTUARIAL VALUATIONS DONE ON EACH PENSION SYSTEM.

THEY, THEY'RE THE ONES WHO ACTUALLY CONTRACT FOR THAT.

AND ACTUARIAL VALUATION ASSESSES THE STATUS OF THE FUND AND CALCULATES A RECOMMENDED CONTRIBUTION.

IT IS A SNAPSHOT AS A MOMENT IN TIME.

UM, ON THIS CHART, IT LISTS THE NORMAL COST, THE ACTUARIAL VALUE OF ASSETS, AND THE ACTUARIAL ACCRUED LIABILITY.

THOSE ARE, ARE CALCULATIONS DONE BY A LICENSED ACTUARY TO LOOK AT FOLLOWING ACTUARIAL STANDARDS THAT LOOK AT HOW DO WE VALUE THE ASSETS THAT THE FUNDS HOLD, HOW DO WE VALUE THE LIABILITIES THAT WE OWE BASED ON WHAT HAS BEEN ACCRUED FOR MEMBERS TO DATE.

AND THEN THE UNFUNDED PORTION IS KIND OF THE DIFFERENCE BETWEEN THOSE TWO.

UM, AND THAT UNFUNDED ACTUARIAL ACCRUED LIABILITY.

UM, AS ED DESCRIBED, MOST OF THAT IS BEING PAID OFF OVER TIME.

UM, WE LIST ALSO THE FUNDED RATIOS THAT RANGE FROM 58% FOR POLICE TO 77% FOR FIRE IN THE AMORTIZATION PERIODS THAT WE'VE ALREADY COVERED.

IN ADDITION TO THE ACTUARY EVALUATIONS THAT ARE CONDUCTED BY THE SYSTEM, THE CITY ALSO CONDUCTS AN ACTUARIAL AUDIT OF ALL THREE SYSTEMS EVERY FIVE YEARS.

AND THE LAST AUDIT WAS CONDUCTED IN 2024, AND WE BROUGHT THAT AUDIT AS A PRESENTATION TO THE AUDIT AND FINANCE COMMITTEE.

WHEN YOU LOOK AT CITY CONTRIBUTIONS OVER THE LAST FIVE YEARS IN 2022, THE CITY CONTRIBUTED $185 MILLION TOWARD PENSION, UH, COVERING PENSION COSTS IN 2026.

THAT GREW TO 283 MILLION.

AND A LARGE PORTION OF THAT IS THOSE LEGACY LIABILITY PAYMENTS THAT ARE BEING BUILT IN NOW TO OUR BUDGETS AS WE KNOW THAT THAT'S, THAT'S ON OUR PAYMENT PLAN AND ON OUR PAYMENT SCHEDULE, AND WE'RE MAKING EVERY EFFORT TO MOVE THAT.

BUT IT SHOWS THE CITY'S INVESTMENT OF OVER A HUNDRED MILLION DOLLARS INCREASE BETWEEN 2022 AND 2026 IN OUR CONTRIBUTIONS.

THIS NEXT CHART REPRESENTS

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THE NUMBER OF YEARS IT WOULD TAKE TO PAY OFF THE UNFUNDED LIABILITIES IF CONTRIBUTIONS REMAINED CONSISTENT.

IT KIND OF SHOWS YOU WHERE, HOW THE SYSTEMS WERE PERFORMING OVER TIME, AND IT ALSO SHOWS YOU WITH THE STARS WHERE THE LEGISLATION FOR EACH SYSTEM TOOK EFFECT AND HAD A SIGNIFICANT IMPACT ON THOSE AMORTIZATION PERIODS.

AND THEN LASTLY, WITH REGARD TO GOVERNANCE, JUST WANTED TO PROVIDE A SUMMARY OF THE BOARD COMPOSITION.

UM, COER AND A PRS BOTH HAVE 11 MEMBER BOARDS, UM, AND THE FIRE SYSTEM WILL HAVE A SEVEN MEMBER BOARD AFTER WE IMPLEMENT IN JANUARY THE LEGISLATION THAT WAS RECENTLY PASSED.

UH, AND THOSE BOARDS ARE TYPICALLY A COMBINATION OF ACTIVE AND RETIRED MEMBERS WHO ARE ELECTED BY THE BODY OF MEMBERSHIP.

THEN THERE ARE BOARD, BOARD APPOINTED CITIZEN CITIZENS IN ERS AND A PRS AND THEN CITIZEN, UH, COUNCIL APPOINTED CITIZENS IN ERS A PRS AND NOW IN IN AUSTIN FIRE.

AND WE JUST RECENTLY BROUGHT THOSE APPOINTMENTS TO THE, TO THE COUNCIL AND TO THIS COMMITTEE.

AND THEN WE HAVE CITY APPOINTED MEMBERS, UM, IN EACH OF THE, IN EACH OF THE THREE, UH, SYSTEMS. SO JUST TWO, JUST TWO MORE SLIDES.

UH, WE'LL BE OUTTA YOUR HERE REAL QUICK HERE.

JUST TALK ABOUT OTHER POST-EMPLOYMENT BENEFITS.

AS I MENTIONED EARLIER, WHEN, UH, SOMEONE RETIRES FROM THE CITY OF AUSTIN, NOT ONLY DO THEY RECEIVE A PENSION INCOME THROUGH ONE OF THE THREE PENSION SYSTEMS, BUT THEY ALSO RECEIVE OTHER POST-EMPLOYMENT BENEFITS, UM, WHICH IS TO MEAN, UM, MEDICAL BENEFITS, UM, THAT THE BENEFIT LEVEL DEPENDS UPON HOW LONG THE EMPLOYEE HAS BEEN WITH THE CITY.

UM, AND THERE ARE A LOT OF SIMILARITIES BETWEEN PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS.

UM, FIRST OFF, UH, SIMILAR TO PENSION SYSTEMS, THERE ARE ACCOUNTING STANDARDS AND ACTUARIAL STANDARDS OF PRACTICE THAT THAT NEED TO BE FOLLOWED IN REGARDS TO THE, UM, ACCOUNTING AND REPORTING AND VALUATION OF THE LIABILITIES FOR THE SYSTEM.

THEY'RE DIFFERENT STANDARDS, BUT THERE ARE STILL, THERE ARE STANDARDS IN PLACE, UM, AND ALL THOSE STANDARDS ARE FOLLOWED, UM, BY THE CITY.

CURRENTLY, OUR, OUR LIABILITY FOR POST-EMPLOYMENT BENEFITS IS $1.3 BILLION, WHICH PUTS IT A LITTLE BIT BELOW WHERE OUR COS LIABILITY IS, BUT HIGHER THAN THE POLICE AND, UH, FIRE PENSION LIABILITIES.

AND THAT DOES PUT PRESSURE ON THE CITY'S CREDIT RATING.

SO, UM, IT'S ALWAYS BEEN OUR PLAN AFTER WE WERE ABLE TO GET THROUGH THE, UH, EXTENSIVE REFORMS TO THE PENSION SYSTEMS TO TURN OUR ATTENTION AND START FOCUSING ON OUR POST-EMPLOYMENT, UH, BENEFIT LIABILITIES.

ONE BIG DIFFERENCE FROM THE PENSION SYSTEMS IS THAT THE PENSION SYSTEMS HAVE A TRUST INVOLVED WITH THEM.

THERE IS A PRE-FUNDING PLAN FOR THE PENSION SYSTEM.

SO AS SOMEBODY WORKS FOR THE CITY AND THEIR, UH, RETIREMENT PENSION GUARANTEE INCREASES, UH, THE FUNDING IS BEING SET ASIDE TO PAY OFF THOSE BENEFITS OVER TIME.

IN THE CASE OF POST-EMPLOYMENT BENEFITS, THE CITY, LIKE MOST OTHER CITIES, HAVE FOLLOWED A PAY AS YOU GO PROCESS FOR RETIREMENT BENEFITS.

SO PEOPLE THAT ARE RETIRED TODAY, THE FUNDING TO PAY THEIR, UH, MEDICAL BENEFITS IN RETIREMENT IS COMING OUT OF THE CURRENT, UH, YEAR'S BUDGET.

THERE IS NO TRUST THAT'S BEEN SET ASIDE TO PAY THOSE BENEFITS.

AND THE REASON FOR THAT HAS LARGELY BEEN BECAUSE UNLIKE PENSION BENEFITS, UH, POST-EMPLOYMENT, MEDICAL BENEFITS ARE NOT CONSTITUTIONALLY GUARANTEED.

UM, AND THAT'S MADE CLEAR TO ALL EMPLOYEES WHEN THEY, UH, SIGN UP TO WORK WITH THE CITY THAT, UH, POST-EMPLOYMENT BENEFITS CURRENTLY ARE IN PLACE AND HERE'S WHAT, HOW, HOW THEY WORK.

UM, BUT IT'S NOT A GUARANTEED BENEFIT.

UM, THEY COULD BE ME REMOVED AT ANY TIME.

ACCOUNTING STANDARDS HAVE CHANGED AND THOSE LIABILITIES ARE NOW REQUIRED TO SHOW ON OUR FINANCIAL STATEMENTS.

AND AGAIN, IT DOES PUT, UH, PRESSURE ON OUR CREDIT.

UM, BUT THAT IS A HUGE DIFFERENCE FROM HOW THE PENSION SYSTEMS HAVE BEEN SET UP.

UM, UH, SO ESSENTIALLY WE'RE STARTING A PROCESS NOW WITH OUR HUMAN RESOURCES DEPARTMENT AND SOME OUTSIDE CONSULTANTS TO LOOK AT OPTIONS FOR TRYING TO GET A HANDLE ON THE, UM, UM, LIABILITIES ASSOCIATED WITH OUR POST-EMPLOYMENT BENEFITS.

AND IT'S LARGELY THE SAME SOLUTION OPPORTUNITIES OR OPTIONS THAT EXIST FOR PENSIONS TO CREATE A LOWER BENEFIT TIER FOR NEW HIRES, UM, AND OR TO CREATE A PRE-FUNDED TRUST, UM, THAT WOULD BE SET ASIDE IN ADVANCE AND INVESTED.

SO WE'RE GONNA BE LOOKING AT THOSE OPTIONS, UM, OVER THE COURSE OF THE NEXT, UH, YEAR TO SEE WHAT STRATEGIES MIGHT BE AVAILABLE TO US.

WE'VE ALREADY TAKEN SOME STRONG STEPS.

YOU SEE THAT HUGE REDUCTION IN THE LIABILITY FROM 2023 TO 2024, UH, RE OR REDUCED BY MORE THAN HALF FROM 3.2 BILLION TO 1.3 BILLION.

AND THAT LARGELY HAD TO DO WITH MAKING, UM, UM, MEDICARE ELIGIBLE INDIVIDUALS PARTICIPATE IN MEDICARE ADVANTAGE, UM, WHICH,

[01:00:01]

UH, UH, WAS A, IT MAINTAINED THE BENEFIT LEVELS OF THE EMPLOYEES.

IN SOME CASES.

IT MAY BE IMPROVED THE BENEFIT LEVELS, BUT IT CAME AT A MUCH LOWER COST.

UH, SO MAKING IT MANDATORY, UM, REDUCED OUR LIABILITIES SUBSTANTIALLY.

SO THERE ARE THINGS WE CAN DO TO BRING THESE LIABILITIES DOWN AND IMPROVE OUR FINANCIAL POSITION.

UM, SO THAT'S OUR PRESENTATION.

I JUST WANNA LEAVE YOU WITH THAT.

YOU KNOW, THESE ARE OBVIOUSLY HUGE FINANCIAL COMMITMENTS THAT THE CITY COUNCIL IS MAKING TO OUR EMPLOYEES TO BE PAID OUT IN RETIREMENT.

WE'RE TALKING ABOUT BILLIONS OF DOLLARS HERE.

THE SYSTEMS ARE VERY COMPLEX, INVOLVING LOTS AND LOTS AND LOTS OF, UH, TECHNICAL TERMS AND, AND, UH, AND ACRONYMS. UM, WE'RE TALKING LONG RANGE HORIZONS.

MOST OF US WON'T BE HERE, YOU KNOW, UH, WHEN THESE, WHEN THESE LIABILITIES ARE STILL BEING PAID OFF AND MANAGED, AND THEY REALLY NECESSITATE A VERY HIGH DEGREE OF OVERSIGHT.

UM, AND THAT WE, WE AS A CITY ARE DOING THAT.

UM, I SIT ON THE COER BOARD, I'VE BEEN ON THE POLICE RE RETIREMENT BOARD BEFORE.

DIANA IS CURRENTLY ON THE COS AND POLICE BOARDS.

THE MAYOR'S ON THE FIRE BOARD, UH, COUNCIL MEMBER LANE IS ON THE COER BOARD.

SO WE HAVE A LOT OF CITY STAFF COUNCIL MEMBERS.

UH, WE HAVE CITIZEN APPOINTEES TO THESE BOARDS.

SO WE HAVE A LOT OF INDIVIDUALS WHO ARE PROVI DOING A GREAT JOB PROVIDING OVERSIGHT TO THE SYSTEMS. UM, WE HIRE OUTSIDE ACTUARIES TO GO IN AND AUDIT ALL OF THE SYSTEMS ACTUARIAL ASSUMPTIONS AND TO LET US KNOW THAT EVERYTHING IS BEING DONE CORRECTLY INTO STANDARDS.

UM, OF COURSE WE HAVE OUR FINANCIAL AUDITORS AND THE SYSTEMS THEMSELVES ARE REQUIRED TO DO, UM, AN OUTSIDE REVIEW OF THEIR INVESTMENT PORTFOLIOS AND THEIR INVESTMENT STRATEGIES, UM, TO, TO MAKE SURE THAT THEY'RE FOLLOWING BEST PRACTICES IN REGARDS TO THEIR INVESTMENT GUIDELINES.

SO THAT'S REALLY, TO ME, LIKE THE KEY TAKEAWAY IS A LOT OF OVERSIGHT IS NECESSARY AND A LOT OF OVERSIGHT IS OCCURRING ON ALL OF THESE LIABILITIES THAT THE CITY HAS.

YOU HAPPY TO ANSWER ANY QUESTIONS.

THANK YOU, SIR.

UM, AND, AND FOR THE RECORD, I WAS ON THE FIRE RETIREMENT FUND BOARD AND NOW, UH, COUNCIL MEMBER ALTER IS BECAUSE, UH, IN THE LAST SESSION OF THE LEGISLATURE, UH, IS IT WAS MANDATORY THAT THE MAYOR SERVED ON, UH, THE RETIREMENT FUND BOARD UNTIL THE LAST SESSION OF THE LEGISLATURE.

AND IT'S NOW, UM, IT CAN BE AN APPOINTEE AND, AND COUNCIL MEMBER ALTER HAS AGREED TO DO THAT.

SO HE'S, UH, PICKING THAT UP AND I'LL RECOGNIZE HIM FOR A QUESTION.

THANK YOU VERY MUCH.

UM, I WANTED TO START WITH SLIDE 16, WHICH WAS THAT SHOWING OF HOW DRAMATICALLY THE CITY CONTRIBUTIONS HAVE INCREASED OVER JUST FOUR YEARS, A HUNDRED MILLION DOLLARS, AND GET A, AN UNDERSTANDING JUST WITHIN THE BUDGET OR WHERE WOULD THE PUBLIC FIND THESE? ARE THESE IN A, THE OTHER CATEGORY OR IS THE CONTRIBUTION TO POLICE RETIREMENT IN THE POLICE BUDGET, THE RETIREMENT, THE FIRE, UH, FIRE AND THE FIRE BUDGET, I GUESS IN THE CORES, I DON'T KNOW WHERE.

YEP.

UH, WELL, THE, THE, THE POLICE CONTRIBUTIONS ARE IN THE POLICE BUDGET, FIRES AND FIRE.

UH, THE CO'S CONTRIBUTIONS ARE ACROSS ALL OF OUR FUNDS, AND IT'S BY FAR THE LARGEST OF THE, OF THE THREE SYSTEMS. SO WHEN YOU LOOK AT THE INCREASE, JUST KEEP IN MIND THIS WASN'T AN INCREASE JUST IN THE GENERAL FUND.

IT WAS AN INCREASE IN GENERAL FUND AUSTIN ENERGY, AUSTIN WATER AVIATION, ALL OF THE FUNDS HAD INCREASES TO THE CON TO THE DIFFERENT RETIREMENT SYSTEMS, UM, IN ACCORDANCE WITH THE, UM, CHANGES IN STATE LAW THAT WERE NEGOTIATED BETWEEN THE LEGISLATURES, THE CITY, AND THE, UM, AND THE SYSTEMS. UM, AND WE HAVE, UH, WITHIN THE PERSONNEL BUDGETS OF EVERY DEPARTMENT, WE HAVE A SEPARATE LINE ITEM THAT ACCOUNTS FOR THE COST OF THE PENSION CONTRIBUTIONS.

AND I ASSUME SAME STORY FOR OPEP COSTS.

UM, YES, WE DO HAVE A, YES, WE HAVE A, UM, A CONTRIBUTION THAT WE MAKE TO AN EMPLOYEE'S BENEFIT FUND.

SO IF YOU LOOK IN OUR BUDGET DOCUMENT, YOU'LL SEE AN EMPLOYEE'S BENEFIT FUND WHERE THE CONTRIBUTIONS FROM THE DIFFERENT DEPARTMENTS FLOW INTO THAT FUND.

AND THEN THAT'S HOW WE ADMINISTER THE BENEFITS OUT OF THAT FUND.

UH, A LITTLE BIT DIFFERENT FOR THE PENSION SYSTEMS, 'CAUSE THOSE ARE SEPARATE, THOSE, THOSE ARE NOT FUNDS MANAGED BY THE CITY.

THERE'S STATUTORILY SEPARATE SYSTEMS FROM THE CITY.

WE PROVIDE CONTRIBUTIONS TO THEM, BUT GOT IT.

YEP.

AND WHEN LOOKING AT THE, SO THE NUMBER, YOU HAVE THE 1.3 BILLION IN OPED LIABILITY, I ASSUME THAT'S THE ACTUARIAL LIABILITY.

SO OVER THE ENTIRETY, NOT OBVIOUSLY WE'RE NOT PAYING THAT IN AN INDIVIDUAL YEAR.

IT'S, THAT'S EXACTLY RIGHT.

THAT IS THE, UH, ACTUARIAL LIABILITY.

UM, THAT WOULD BE IF YOU, IF YOU PUT A A A, A CURRENT DAY PRESENT VALUE ON ALL OF THE LIABILITIES THAT WE CURRENTLY WOULD BE PAYING OUT OVER THE NEXT 30 PLUS YEARS, UM, UM, IN ORDER TO HONOR THE BENEFITS THAT HAVE BEEN PROMISED TO THOSE EMPLOYEES, WE WOULD NEED 1.3 BILLION SET ASIDE IN A TRUST IN ORDER TO BE ABLE TO PAY FOR ALL THOSE BENEFITS ESSENTIALLY.

AND, AND WE DON'T HAVE THAT CURRENTLY.

AGAIN, WE'VE BEEN DOING IT ON A PAY-AS-YOU-GO BASIS.

RIGHT.

I WAS ALSO WONDERING IF THE NEW FEDERAL,

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UH, YOU KNOW, THE, THE TAX RECONCILIATION BILL, WHICH HAS WITHIN IT MY UNDERSTANDING A PROVISION REQUIRING PARTICIPATION IN SOCIAL SECURITY FOR EVEN ENTITIES THAT HAVE NOT, THAT HAVE OPTED OUT OF SOCIAL SECURITY, I WAS WONDERING IF THAT'S SOMETHING THAT HAS COME UP ON YOUR END, UH, OR NOT? NO, I HAVE NOT SEEN THAT YET.

I, I, I, I JUST, I READ A, A NEWS REPORT AND, YOU KNOW, WHO KNOWS HOW ACCURATE THE, THE GRANULARITY IS OF THAT, BUT I WAS CURIOUS IF THAT'S SOMETHING THAT WE HAVE TO LOOK OUT FOR IN TERMS OF, YOU KNOW, ENTITIES THAT WERE NOT CONTRIBUTING TO SOCIAL SECURITY THAT NOW WE'LL HAVE TO IN THE FUTURE AT SOME POINT, UH, AND HOW THAT WOULD IMPACT OUR, OUR PENSION REQUIREMENTS.

YEAH, WE CERTAINLY NEED TO LOOK INTO THAT.

AND OF COURSE WE HAVE FOLKS UP AT, UM, IN WASHINGTON THAT MONITOR ALL THAT STUFF FOR US.

SO I'LL FOLLOW UP WITH GARY ROGERS ABOUT THAT AND SEE IF WE CAN GET AN UPDATE ON THAT BILL.

OTHER QUESTIONS? YES, COUNCILOR VELA? JUST THE QUESTION, THE, THE LEGACY LIABILITY, THE, THE, THE ONE THAT YOU SET ASIDE AND PUT ON THE SET PAYMENT PLAN, IS THAT GROUP A, YOU KNOW, IN OTHER WORDS, LIKE, ARE, ARE WE DISTINGUISHING KIND OF SAYING THAT GROUP A IS LEGACY AND GROUP B IS KIND OF CURRENT? OR HOW DOES THAT BREAK DOWN FOR A PRS AND FIRE? IT IS ESSENTIALLY A GROUP A LIABILITY, BUT FOR COORS, BECAUSE WE CREATED GROUP B BACK IN 2011, UHHUH, THAT UNFUNDED LIABILITY ACTUALLY INCLUDES BOTH GROUP A AND GROUP B.

GOT IT.

THAT WAS MY ONLY QUESTION.

GOOD.

WE'LL GO TO ITEM NUMBER FIVE.

A ANYTHING ELSE? GREAT, THANK YOU ALL VERY MUCH.

MEMBERS,

[5. Audit of the effectiveness of Aviation contract and vendor management. [Kathie Harrison, Acting Assistant City Auditor; Kristina Kern, Auditor - Office of City Auditor].]

HI, MY NAME'S CHRISTINA KERN AND I WAS THE AUDITOR IN CHARGE FOR THIS PROJECT.

THE OBJECTIVE OF THIS PROJECT WAS TO DETERMINE IF AVIATION CONTRACTS WERE ADMINISTERED AND MONITORED EFFECTIVELY.

THIS AUDIT WAS CONDUCTED AFTER OUR OFFICE COMPLETED AN AVIATION RISK ASSESSMENT IN 2024.

IN THE RISK ASSESSMENT, OUR OFFICE IDENTIFIED CONTRACT AND VENDOR MANAGEMENT AS A TOP RISK AREA.

SINCE THE RISK ASSESSMENT, AVIATION STAFF HAS TAKEN STEPS TO ADDRESS RISKS AND IMPROVE THEIR CONTRACT ADMINISTRATION AND MONITORING PROCESSES.

HOWEVER, THERE ARE STILL ISSUES.

OUR AUDIT HAD ONE FINDING, WE FOUND THAT AUSTIN AVIATION'S CONTRACT MANAGEMENT PROCESS DOES NOT ENSURE THAT DOCUMENTATION IS ACCURATE, LEADING TO A SIGNIFICANT AMOUNT OF INCORRECT INFORMATION AND MAKING IT DIFFICULT FOR AUSTIN AVIATION TO ENSURE CONTRACT DOCUMENTATION REQUIREMENTS ARE MET.

OUR OFFICE LOOKED AT TWO TEAMS IN THE AVIATION DEPARTMENT, THE AVIATION PURCHASING AND CON CONTRACT MANAGEMENT TEAM, AND THE COMMERCIAL MANAGEMENT TEAM.

THESE TWO TEAMS MANAGE OVER 700 CONTRACTS.

OUR TEAM SAMPLED 49 CONTRACTS BETWEEN THE TWO TEAMS AND IDENTIFIED THAT 45 OUT OF THE 49 CONTRACTS SAMPLED HAD DOCUMENTATION ERRORS.

THE MOST COMMON ISSUES WERE MISSING DOCUMENTATION AND EXPIRED INSURANCE DOCUMENTATION.

ONE CHALLENGE THAT THE TEAMS HAVE IS THAT MOST OF THESE PROCESSES REQUIRE MANUALLY ENTERING REQUIREMENTS FOR CONTRACT DOCUMENTS.

HOWEVER, STAFF MAY FORGET TO UPLOAD DOCUMENTATION OR MAY MAKE ERRORS.

SOME OF THESE ERRORS WE FOUND DURING OUR SAMPLING INCLUDED NOT HAVING THE EXECUTIVE CONTRACT UPLOADED, NOT HAVING UPTODATE INSURANCE ON FILE AND MISSING REQUIREMENTS.

FOR INSTANCE, THERE WAS A CONTRACT THAT WITH A LIVING WAGE REQUIREMENT AND IT WAS NOT DOCUMENTED CORRECTLY.

IF SOMEONE WERE TO GO UP, LOOK UP THAT CONTRACT IN THE SYSTEM, THEY MIGHT NOT KNOW THAT THE CONTRACT REQUIRES THAT LIVING WAGE AND THEN WOULDN'T KNOW THAT THEY SHOULD BE MONITORING OR CHECKING THAT COMPONENT OF THE CONTRACT.

IT'S IMPORTANT TO HAVE DOCUMENTATION ORGANIZED, ACCURATE, AND COMPLETE SO THAT AVIATION CAN BE MONITORING THESE CONTRACTS EFFECTIVELY.

STAFF TRY TO MITIGATE ERRORS BY CREATING MANUAL REMINDERS OF IMPORTANT CONTRACT DATES, SUCH AS WHEN A CONTRACT'S INSURANCE EXPIRES.

HOWEVER, STAFF'S RELIANCE ON MEMORY CAN BECOME INCREASINGLY CHALLENGING WHEN MANAGING MULTIPLE CONTRACTS.

WE SURVEYED STAFF AND RECEIVED A 100% RESPONSE RATE.

WE LEARNED THAT THERE ARE NOT CONSISTENT PRACTICES OCCURRING.

FIVE OF 10 STAFF REPORTED THAT NO ONE ELSE REVIEWS THEIR CONTRACT DOCUMENTATION AND ALSO FIVE OF 10 REPORTED NOT HAVING RECEIVED TRAINING IN OVER A YEAR.

STAFF SHARED THAT MORE EXTENSIVE TRAINING AND ANNUAL TRAINING WOULD HELP THEM IMPROVE THEIR CONTRACT ADMINISTRATION AND MONITORING SKILLS.

OUR AUDIT ISSUED THREE RECOMMENDATIONS.

THE FIRST RECOMMENDATION STATES THAT THE AUSTIN AVIATION CHIEF EXECUTIVE OFFICER SHOULD

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STRENGTHEN CONTRACT ADMINISTRATION AND MONITORING PRACTICES BY WORKING WITH AUSTIN FINANCIAL SERVICES AND IMPLEMENTING PROCESSES TO ENSURE DOCUMENTATION IS REVIEWED BY ANOTHER PERSON, MAINTAIN RECORDS OF CONTRACT MANAGEMENT TIMELY, AND ENSURE CONTRACTS HAVE UP TO DATE INSURANCE DOCUMENTATION.

THE SECOND RECOMMENDATION STATES THAT THE AUSTIN AVIATION CEO SHOULD WORK WITH STAFF TO DEVELOP AND HOLD REGULAR TRAININGS ON HOW TO DOCUMENT AND MONITOR THE CONTRACTS.

AND FINALLY, THE THIRD RECOMMENDATION STATES THAT THE AUSTIN AVIATION CEO SHOULD EXPLORE AVAILABLE TECHNOLOGY TO IMPROVE CURRENT AVIATION CONTRACT MANAGEMENT SYSTEMS MANAGEMENT AGREED WITH THESE RECOMMENDATIONS.

WE'D LIKE TO THANK THE AVIATION DEPARTMENT FOR THEIR TIME ON THIS AUDIT.

WE APPRECIATE THE HARD WORK AND THEIR CONTINUED EFFORTS TO IMPROVE THEIR PROCESSES.

THIS CONCLUDES MY PRESENTATION.

THANK YOU FOR LISTENING.

AND AT THIS TIME I CAN ANSWER ANY QUESTIONS BEFORE WE GO TO QUESTIONS.

LET ME ASK IF THE, IF AVIATION WANTS TO SAY ANYTHING AND THEN WE'LL, WE'LL OPEN IT UP FOR QUESTIONS.

GOOD MORNING, CHAIR AND COMMITTEE MEMBERS.

KLAI, CHIEF EXECUTIVE OFFICER FOR, FOR AVIATION.

FIRST, I WANT TO THANK THE AUDITORS.

APPRECIATE ALL THE HARD WORK, APPRECIATE THE RISK ASSESSMENT LAST YEAR, AND APPRECIATE THE WORK ON THESE AUDITS SINCE THE RISK ASSESSMENT.

WE TOOK A LOT OF STEPS.

WE DID, WE DID ADD STAFFING LAST YEAR AND THIS YEAR TO STRENGTHEN THE CONTRACT MANAGEMENT AND APPRECIATE THE AUDITS, IDENTIFYING THE ORGANIZATION AND THE DOCUMENTATION, APPRECIATE THE AUDITORS REVIEWING THE DOCUMENTATION IN THE SYSTEM WILL BE WORKING WITH US IN FINANCIAL SERVICES TO ENSURE THAT THE DOCUMENTS ARE UPLOADED.

WE'LL WORK ALSO ON THE TRAINING AND EXPLORE OPPORTUNITIES FOR THE SYSTEM.

WE CURRENTLY HAVE DIFFERENT TYPES OF CONTRACTS THAT WE MANAGE AT THE AIRPORT.

I KNOW THE SCOPE, THE SCOPE DID NOT INCLUDE THE CONSTRUCTION CONTRACTS, BUT IF I MAY JUST PROVIDE SOME INFORMATION ABOUT THAT PROCESS.

ONE OF THE BEST PRACTICES THAT THE AUDITORS MENTIONED DURING THE AUDIT IS HAVING ONE SINGLE SYSTEM.

SO FOR THE MANAGEMENT OF THE CONSTRUCTION CON CONTRACTS, WE DID PROCURE ONE SINGLE SYSTEM.

IT'S AN INDUSTRY SPECIALIZED SYSTEM TO MANAGE ALL THE CONTRACTS AND THANK YOU TO COUNCIL MEMBERS FOR THEIR SUPPORT.

LAST YEAR AND THIS YEAR WE DID PROCURE A PRO PROGRAM CONTROLS CONTRACTOR AND CONSULTANT THAT, THAT PROVIDE OVERSIGHT OF ALL, ALL THE CONSTRUCTION CONTRACTS AND THE STAFFING INCLUDES AUDITORS, ONSITE CONTRACTS, MANAGERS, COST ESTIMATORS, SCHEDULERS AND AND COSTS, UH, MANAGEMENT AND CHANGE MANAGEMENT STAFF.

THIS TEAM IS PROVIDING THE OVERSIGHT OVER ALL THE CONSTRUCTION CONTRACTS.

ADDITIONALLY, OUR FINANCE STAFF, THEY DO PROVIDE REVIEW OF, OF EVERY SINGLE INVOICE.

AND WE PROCURED CONTRACTORS THAT HAVE EXTENSIVE EXPERIENCE MANAGING MULTI-BILLION PROJECTS AT OTHER AIRPORTS.

AND THEY PROVIDING US THE PROJECTS MANAGERS, THE CONSTRUCTION MANAGERS, THE INSPECTORS AND SAFETY PROFESSIONALS THAT HAVE EXPERIENCE DELIVERING SUCH PROGRAMS AS OTHER AIRPORTS.

AND AS THE AUDITORS MENTIONED, WE HAVE THE COMMERCIAL MANAGEMENT CONTRACTS.

THOSE ARE MANAGED AND SUPERVISED BY US AND AVIATION STAFF.

WE DO HAVE ONE SYSTEM THAT'S AN AVIATION SYSTEM USED BY OTHER AIRPORTS TO MANAGE THE COMMERCIAL CONTRACTS.

THE SAME SYSTEM IS USED BY OUR FINANCIAL STAFF TO MANAGE ALL THE BILLING.

WE DID HIRE RECENTLY, UH, COMMERCIAL MANAGEMENT STAFF, SO WE'LL ENSURE THERE IS ADDITIONAL OVERSIGHT AND ADDITIONAL REVIEW AND TRAINING OF THOSE CONTRACTS.

AND AS FAR AS THE LAST CATEGORY, THAT'S THE VENDOR MANAGEMENT CONTRACT.

WE COLLABORATE AND WORK CLOSELY WITH US AND FINANCIAL SERVICES STAFF ONCE THE CONTRACT IS EXECUTED, IS UPLOADED TO THE SYSTEM BY US AND FINANCIAL STAFF.

AND THEY UPDATE THE INSURANCE REQUIREMENTS, THE LIVING WAGE, AND ITS COLLABORATIVE APPROACH.

AND WE'LL WORK WITH THEM TO ADDRESS, UH, THE, ALL THE AREAS THAT NEEDS IMPROVEMENTS.

MEMBERS, YOU HAVE QUESTIONS OR COMMENTS? YES.

MAYOR PRO 10.

THANK COUNCIL MEMBER UCHIN.

PROVIDE THAT DOCUMENTATION AND THEN, UH, STAFF PERSONNEL PROVIDE THAT VERIFICATION THAT, YOU KNOW, THOSE CHECKS ON WHETHER OR NOT THEY'RE IN COMPLIANCE? YES, YES.

THANK YOU TO, UH, OUR AUDITOR'S OFFICE FOR THIS INFORMATION.

I AM CURIOUS, IT SEEMS THAT WE'RE TALKING ABOUT HUNDREDS OF CONTRACTS THAT ARE MANAGED THROUGH OUR AVIATION DEPARTMENT, AND YOU MENTIONED THAT ONE OF THE FINDINGS INDICATED THAT STAFF, UM, WERE NOT UPLOADING DOCUMENTATION, UM, IN SOME CASES INSURANCE VERIFICATION.

YOU KNOW, SINCE THE CITY'S ENTERING IN THIS ERA OF OPTIMIZATION, DID WE CONSIDER, OR DID Y'ALL CONSIDER A RECOMMENDATION THAT INSTEAD OF HAVING IT MANUALLY ENTERED BY STAFF, HAVING THE VENDOR ENSURE THAT THEY ARE UPLOADING THE DOCUMENTATION, LIKE MANY PROCESSES, UM, ACROSS VARIOUS INDUSTRIES REQUIRES THE ONUS IS ON, UH, THE COMPANY AND THE FIRM TO

[01:15:01]

AND THAT'S WHY WE HAD THAT THIRD RECOMMENDATION SO THAT, UH, THE AVIATION DEPARTMENT COULD EXPLORE TECHNOLOGY AND HOPEFULLY FIND OPPORTUNITIES TO AUTOMATE THOSE PROCESSES SO THAT, UH, AND THAT KIND OF SPEAKS TO THAT MANUAL ENTRY RISK THAT'S BEEN OCCURRING.

UM, DIRECTOR BADAWI, ANY ADDITIONAL CONTEXT THAT YOU'D LIKE TO ADD JUST GIVEN THE HIGH VOLUME OF CONTRACTS THAT GO THROUGH OUR AVIATION DEPARTMENT? NO, THANK YOU, MAYOR PROAM.

I JUST WANNA ADD THAT THE PROCORE SYSTEM THAT WE USE TO MANAGE THE CONSTRUCTION CONTRACT THAT PROVIDES THAT ABILITY.

SO ALL THE CONSTRUCTION COMPANIES AND THE DESIGNERS THAT WE WORK WITH TODAY, THEY DO SUBMIT ALL THE DOCUMENTATION DIRECTLY THROUGH PROCORE.

SO IT IS A CENTRALIZED SYSTEM WHERE ALL THE DOCUMENTATION IS, IS STORED AND WILL BE WORKING CLOSELY WITH US FINANCIAL SERVICES TO EXPLORE ANY OPPORTUNITIES TO ENHANCE THE ECRI SYSTEMS. THAT'S THE CITY SYSTEM THAT WE USE FOR THE VENDOR CONTRACTS AND, AND EXPLORE OPPORTUNITIES TO, THAT WILL ALLOW FOR THAT TRANSFER OF THE INSURANCE BECAUSE SPECIFICALLY TO THE INSURANCE CERTIFICATES, THE VENDORS ARE, ARE HAVE INSURANCE, THEY ARE SENDING THE CERTIFICATES, THEY'RE JUST SENT VIA EMAIL.

IF THERE'S A WAY TO AUTOMATE THAT, THAT WILL ADDRESS THE FINDING OF THIS AUDIT.

NOW YOU BRING UP A GOOD POINT IN THAT THE COMPLIANCE IS MANAGED WITHIN THE AUSTIN FINANCIAL SERVICES DEPARTMENT.

SO THAT, THAT IS THE STAFF THAT IS DOING THE MANUAL UPLOAD.

IS THAT CORRECT? I DEFER TO JAMES SCARBOROUGH, BUT THAT'S MY UNDERSTANDING.

GOOD MORNING.

THERE WE GO.

GOOD MORNING.

MEMBERS OF THE COMMITTEE, UM, AND, UM, MAYOR PER, UH, UH, FUENTES, JAMES SCARBOROUGH, UH, AUSTIN FINANCIAL SERVICES? UH, THAT IS CORRECT.

UM, CERTIFICATES OF INSURANCE ARE SUBMITTED, UH, CENTRALLY TO, UM, UH, FINANCIAL SERVICES.

AND THAT'S PRINCIPALLY BECAUSE, UM, WE OFTEN WILL HAVE MULTIPLE CONTRACTS WITH A SINGLE COMPANY.

SO A SINGLE COMPANY, IF THEY HAVE 10 CONTRACTS, WE HAVE TO TAKE THAT CERTIFICATE AND APPLY IT TO 10 DIFFERENT SYSTEMS. AND AS THOSE CERTIFICATES EXPIRE, THEY HAVE TO BE, UM, WE HAVE TO RECEIVE THE NEW CERTIFICATE AND THEN APPLY TO HOWEVER MANY CONTRACTS ARE IN PLACE AT THAT TIME.

WE ARE ABSOLUTELY LOOKING AT THE OPPORTUNITY TO AUTOMATE, UH, HOW WE RECEIVE AND HOW WE MANAGE THE CERTIFICATES OF INSURANCE.

UM, UM, THAT IS A PART OF A LARGER, UH, FINANCIAL MANAGEMENT SYSTEM PROJECT THAT WE ARE CURRENTLY, UM, UM, INVOLVED IN, BEEN WORKING ON FOR THE LAST YEAR OR SO AND INVOLVES A REVIEW OF MULTIPLE FINANCIAL SYSTEMS, INCLUDING THE CITY'S PROCUREMENT SYSTEM AND ONE FUNCTION.

ONE, ONE, UM, UM, PORTION OF THAT, UM, UH, SYSTEM FUNCTION WILL INCLUDE THE MANAGEMENT OF CERTIFICATES OF INSURANCE.

SO, UM, WE, WE, WE APPRECIATE THE, THE REVIEW THAT WAS DONE BY OUR COLLEAGUES AT, UH, AT, AT, AT, UM, OFFICE OF CITY AUDITING AND AS, AS WELL AS OUR COLLEAGUES AT, UH, AVIATION.

THIS IS A, UM, UH, GOOD HIGHLIGHT OF SOME OF THE CHALLENGES THAT WE'VE BEEN EXPERIENCING WITH OUR MULTIPLE SYSTEMS AND HOPE TO OVERCOME, UH, WITH THE SELECTION AND THE IMPLEMENTATION OF THE NEW CITY PROCUREMENT SYSTEM IN THE COMING YEAR.

VERY GOOD.

'CAUSE I KNOW THE, THE RECOMMENDATIONS ARE VERY FOCUSED ON THE AVIATION DEPARTMENT, BUT TECHNICALLY RIGHT, THE RESPONSIBILITIES ARE FALL UNDER YOUR DEPARTMENT.

ANY OTHER ADDITIONAL THOUGHTS THAT YOU'D LIKE TO ADD? NO, YOU HIT THE, THE NAIL ON THE HEAD.

WE, UM, WE, UH, WORK WITH ALL DEPARTMENTS WHEN IT COMES TO THEIR, UH, THEIR MONITORING OF CITY CONTRACTS.

AND SO THERE'S A, THERE'S A, THERE'S A RELATIONSHIP BETWEEN THE ADMINISTRATION, UH, THE CREATION AND THE, THE, UH, THE AVAILABILITY OF THE CONTRACT, THE AUTHORIZATION OF THE CONTRACT THAT WE, WE WERE RESPONSIBLE FOR, AND THE DAY-TO-DAY MONITORING OF THE RELATIONSHIP WITH THE CONTRACTOR AND THE DOCUMENTATION TO, UM, SHOW PERFORMANCE OF THE CONTRACT, UM, AS USED BY THE CUSTOMER DEPARTMENTS.

AND TOGETHER THAT CREATES THE CONTRACT FILE.

THAT CONTRACT FILE, THAT DOCUMENTATION IS USUALLY THERE MIGHT BE IN DIFFERENT PLACES, IT MIGHT BE IN DIFFERENT, UM, UH, DATES ASSOCIATED WITH WHERE IT WAS SAVED AND WHO IT WAS RECEIVED BY.

THAT COORDINATION IS MADE MORE STRAIGHTFORWARD IN A MORE CONTEMPORARY MODERN PROCUREMENT SYSTEM, WHICH IS WHAT WE HOPE TO ACCOMPLISH BY THE CURRENT PROJECT.

VERY GOOD, THANK YOU.

GOOD, THANKS COUNCILOR UCHIN.

THANK YOU, MAYOR.

I HAVE A COUPLE OF QUESTIONS.

ONE IS JUST TO BUILD ON MAYOR PROM'S.

QUESTION FOR DIRECTOR BAWI TO HELP ME UNDERSTAND, UH, OR CLARIFY THE ROLES AND RESPONSIBILITIES BETWEEN, SINCE IT SOUNDS LIKE YOU'VE GOT AN A FS TEAM EMBEDDED IN YOUR DEPARTMENT.

YOU'VE GOT AN EXTERNAL A FS TEAM DOING OTHER WORK, INCLUDING THE WORK THAT MR. SCARBOROUGH JUST MENTIONED, AND THEN YOU'VE

[01:20:01]

GOT YOUR OWN TEAM.

CAN YOU CLARIFY THOSE DIFFERENT RESPONSIBILITIES AND ROLES THAT ARE OCCURRING BETWEEN THOSE THREE TEAMS? NO, THANK YOU FOR THE QUESTION.

LAST YEAR WE WORKED COLLABORATIVELY WITH ASEL FINANCIAL SERVICES, AND I APPRECIATE THEIR SUPPORT.

WE EMBEDDED A TEAM TO HELP US PROCURE ALL THE DESIGN AND CONSTRUCTION CONTRACTS.

SO THE MAIN FUNCTION OF THE EMBEDDED TEAM HAS BEEN FOCUSED ON CONSTRUCTION AND DESIGN, AND THEY'VE BEEN HELPING US WITH THE PROCUREMENT OF OTHER VENDOR CONTRACTS.

SO THE ASAN FINANCIAL SERVICES TEAM DOES HELP US DURING THE PROCUREMENT OF THE CONTRACTS, ALL THE WAY TO THE EXECUTION PHASE OF THE CONTRACT.

THEY DO UPLOAD THE CERTIFICATE OF INSURANCE, UPLOAD THE CONTRACTS INTO THE CITY E CAPRI SYSTEM, AND MY TEAM DOES HANDLE THE MANAGEMENT AND THE OVERSIGHT OF THE DELIVERABLE.

SO MY TEAM, THEY DO HAVE WEEKLY MEETINGS, MONTHLY MEETINGS WHERE THEY DO REVIEW THE DELIVERABLES OF EACH CONTRACTOR.

ARE THEY MEETING THE SERVICE LEVEL THAT WE EXPECT THEM TO DELIVER AT THE AIRPORT? AND THOSE MEETINGS ARE HAPPENING AND THE AUDITORS ATTENDED SOME OF THE MEETINGS AND SAW THE OVERSIGHTS THAT'S PROVIDED, UH, ON THE CON ON THE COMMERCIAL MANAGEMENT TEAM, US AND AVIATION TEAM MANAGE THOSE CONTRACTS.

AND FROM BEGINNING OF THE NEGOTIATION ALL THE WAY TO THE EXECUTION AND THE CONTINUOUS MANAGEMENT.

AND WE USE AN AIRPORT SYSTEM TO MANAGE THOSE CONTRACTS.

AND FOR THE CONSTRUCTION, UH, CONTRACTS, WE DO WORK WITH US ON FINANCIAL SERVICES TO PROVIDE THE MANAGEMENT AND OVERSIGHTS.

BUT AS I MENTIONED EARLIER, IN ADDITION TO THAT, WE HIRED THE PROGRAM CONTROLS CONSULTANTS WITH EXTENSIVE EXPERIENCE DELIVERING MULTI-BILLION DOLLAR PROGRAMS AT OTHER AIRPORTS TO PROVIDE THAT OVERALL STRUCTURE, THAT OVERALL CONTROLS AND REVIEW OF THOSE CONTRACTS AND THE SYSTEMS. THANK YOU FOR HELPING ME UNDERSTAND THAT.

UH, THE LAST QUESTION I'VE GOT IS REGARDING THE TECHNOLOGY SYSTEMS. UM, IT LOOKED LIKE FROM THE AUDIT REPORT THERE ARE, THERE'S THE E CAPRI SYSTEM, THERE'S THE ADVANTAGE SYSTEM, AND THEN WE WERE SUPPLEMENTING THAT WITH EXCEL AND SHAREPOINT.

UM, AND THEN I ASSUME THAT'S FURTHER COMPLICATED BY HAVING THESE SORT OF THREE BUCKETS OF DIFFERENT CONTRACTS WITH DIFFERENT PROCESSES WITH THE DIFFERENT CONTRACTS AND DIFFERENT PEOPLE INVOLVED IN, IN UPLOADING DIFFERENT INFORMATION AND MANAGING THEM.

UM, I KNOW MR. SCARBOROUGH JUST TOUCHED ON A NEW PROCUREMENT SYSTEM.

DOES THAT HELP ADDRESS THIS CHALLENGE? UM, AND IS THAT GONNA ADDRESS THAT CHALLENGE IN THOSE THREE DIFFERENT CONTRACT SPACES? UH, YES.

COUNCIL MEMBER, THAT, THAT IS THE, THAT IS THE, THE, THE GENERAL, UH, INTENTION IS TO, IS TO LIMIT THE NUMBER OF SYSTEMS, LIMIT THE NUMBER OF PROCESSES AND TOOLS USED, UM, TO, UM, MANAGE THE CONTRACTS.

OFTENTIMES WE WILL, UM, UH, USE ADDITIONAL TOOLS LIKE E CAPRI THAT WAS, THAT WAS ACTUALLY DEVELOPED BY CITY STAFF YEARS AGO.

AND OVER THE YEARS IT HAS GROWN INTO A, A MORE, UH, UH, COMPLETE REPRESENTATION OF A LOT OF, OF, OF OUR BUSINESS PROCESSES.

BUT, BUT MAINTAINING YOUR OWN APPLICATION, UH, CAN BE KIND OF A FULL-TIME ACTIVITY.

AND, AND, UM, AT THE SAME TIME, THE THE MARKET IS, IS EVOLVING AND THE PRODUCTS ARE EVOLVING IN, IN THE MARKET.

AND SO, UM, OUR MOVE TO A COMMERCIAL, UH, PRODUCT IS MORE TO, UM, UM, GET OUT OF THE KIND OF THE, THE MAINTAINING OF OUR OWN TOOLS AND CREATING ADDITIONAL SUPPLEMENTAL TOOLS THAT THE, THAT THE AVIATION DEPARTMENT, AS AN EXAMPLE OF, UM, SHAREPOINT SITES AND, AND, AND EXCEL SPREADSHEETS USED TO KIND OF CONNECT THE DOTS THAT ARE NOT FULLY CONNECTED IN THE, IN THE, IN THE PRIMARY SYSTEM.

OUR HOPE IS TO GET AS MUCH OF THAT DONE IN A, IN A CENTRAL PROCUREMENT SYSTEM AS POSSIBLE TO THE EXTENT THAT THERE WILL BE SOME SUPPLEMENTAL FUNCTIONS DONE BY SYSTEMS. UM, UM, THAT'S, THAT'S STILL A POSSIBILITY.

BUT, BUT THE INTENTION IS THAT THE DOCUMENTS, AND THAT WAS REALLY WHAT THE, THIS REVIEW WAS FOCUSING ON, IS WHERE ARE THE DOCUMENTS, HOW ARE THEY ORGANIZED AND ARE THEY ACCESSIBLE AND ACCURATE? AND, AND WE REALLY WANT TO HAVE THAT TO THE EXTENT POSSIBLE IN ONE LOCATION.

SO WE, THAT, THAT IS VERY MUCH, UH, THE UNDERLYING, UM, UM, KIND OF DRIVER FOR THE, THE CURRENT, UH, FINANCIAL MANAGEMENT SYSTEM, UM, REVIEW.

UM, IS THE SENSE THAT THIS PROCUREMENT SYSTEM IS GONNA ADDRESS THAT CHALLENGE COUNCIL MEMBER? WE BELIEVE THAT IT'S GOING TO GREATLY ADDRESS IT, UM, UH, TO THE EXTENT THAT IT'LL ADDRESS ALL THE, THE, THE KIND OF THE INDIVIDUAL NEEDS OF THE VARIOUS DEPARTMENTS.

AND I APPRECIATE YOU WORKING THAT.

IT SOUNDS LIKE THERE'LL BE AN UPDATE NEXT YEAR REGARDING THE STATUS OF THAT PROJECT.

AND THEN THE, THE JUST LAST QUESTION REGARDING THAT IS, MY CONCERN WHEN I VISITED WITH THE AUDIT TEAM TWO DAYS AGO WAS THAT IF WE DID A SIMILAR KIND OF ANALYSIS IN A DIFFERENT DEPARTMENT, WE MIGHT UNCOVER POTENTIALLY THE EXACT SAME CHALLENGE MM-HMM .

WHICH IS WE'VE GOT MULTIPLE SYSTEMS THAT MAY OR MAY NOT HAVE GREAT INTEGRATION, UM, BEING USED TO MANAGE DOCUMENTATION IN THIS CAPACITY.

SO I DIDN'T HAVE A SENSE OF WHETHER, UM, HOW UNIVERSAL THIS PARTICULAR CHALLENGES ACROSS DIFFERENT DEPARTMENTS OUTSIDE OF THE AIRPORT AND OUTSIDE OF THE SCOPE OF THE AUDIT,

[01:25:01]

THEIR, THEIR MISSIONS ARE, ARE, ARE DIVERSE.

SO WE BELIEVE THAT IT'LL ADDRESS, UH, A, A LARGE PROPORTION OF THEM, UM, WITH THE INTENTION OF OF, OF MINIMIZING THE, THE NEED TO RELY ON EXTERNAL TOOLS.

'CAUSE THAT'S REALLY WHERE THE, THE, THE DATA DISCONNECTS OCCURS.

WHEN YOU HAVE THESE EXTERNAL SOURCES OF, OF PRESERVING CONTRACT DOCUMENT DATA, UM, YOU ALLOW FOR DUPLICATION, TRIPLICATION OF DATA ENTRY, UM, UH, THE, THE, THE DATA ENTERED CAN BECOME DATED.

IT CAN BECOME INACCURATE.

THERE CAN BE, UM, O OMISSIONS AND ERRORS.

AND SO TO THE EXTENT THAT WE CAN GET ALL THE CONTRACT DOCUMENT IN THE CONTRACT DATA IN ONE LOCATION, IF WE HAVE SUPPLEMENTAL SYSTEMS OR INTEGRATIONS WITH OTHER SYSTEMS, AT LEAST WE KNOW THAT THERE'S ONE, ONE SOURCE OF TRUTH.

AND THAT, THEN THAT WOULD BE WHERE WE WOULD LOOK FIRST AND, AND LAST TO FIND, YOU KNOW, THE, THE ACCURATE CONTENTS OF, OF EACH OF THE CITY CONTRACTS.

WE WOULD SEE SOME VERSION OF, OF THESE TYPES OF, OF CHALLENGES IN, IN THE MANAGEMENT OF, OF CONTRACTS IN OTHER DEPARTMENTS TO A GREATER OR LESSER EXTENT, NOT, NOT ALL DEPARTMENTS CONSUME CONTRACT SERVICES OR, OR PRODUCTS THE SAME.

UM, SO WE'LL SEE IT TO A GREATER OR LESSER EXTENT.

BUT THESE ARE ALL KNOWN, UH, CHALLENGES THAT HAVE BEEN ON OUR RADAR FOR SOME TIME AND HAVE BEEN DRIVING US IN THIS CURRENT REVIEW OF THOSE SYSTEMS. WE'RE VERY EXCITED BY THE, THE, THE UPCOMING DECISION AND IMPLEMENTATION.

SO, UM, WE SEE THIS AS VERY MUCH A, A, A, UM, CONFIRMING AND A CONSTRUCTIVE, UH, REVIEW OF, OF OUR CURRENT, UH, UM, PROCUREMENT, UH, SYSTEM ENVIRONMENT.

NO, I APPRECIATE THAT ANSWER.

I LOOK FORWARD TO, UH, THE UPDATES NEXT YEAR, AND I'M ENCOURAGED BY THE WORK YOU'RE DOING TO TRY AND ADDRESS THIS PROBLEM, YOU KNOW, SYSTEMICALLY.

SIX AND WHILE WE'RE, UH, CHANGING STAFF FOR ITEM NUMBER SIX, I'M GONNA TAKE JUST A MINUTE.

THANKS, COUNCIL MEMBER.

THANK Y'ALL VERY MUCH.

UM, WE'LL GO TO ITEM NUMBER

[6. City Attorney’s annual report regarding enforcement of Lobbyist Regulations, City Code Chapter 4-8. [Zachary Brown, Assistant City Attorney - Austin City Attorney’s Office].]

UH, AND, AND ON BEHALF OF THE COMMITTEE, I WANT TO RECOGNIZE THAT THIS IS, UH, OUR CITY AUDITOR, CORY STOKES LAST AUDIT AND FINANCE COMMITTEE MEETING FOREVER.

UM, WHICH I JUST CAN'T IMAGINE HOW THAT MUST FEEL THAT YOU CAN NEVER GET TO COME BACK TO AN AUTO VAN.

YEAH, I'LL TELL YOU WHAT, WE'LL INVITE YOU BACK, WE'LL INVITE YOU BACK, COMMUNICATE.

OH YEAH, YOU CAN DO THAT.

PLEASE DO THAT.

WE HOPE WE SEE YOU THERE.

UM, BUT EVERYBODY KNOWS COREY.

UH, AND IF YOU DON'T, I DON'T KNOW HOW YOU, YOU MISSED HER.

UM, I MEAN, SHE'S BEEN HERE SINCE 1999 AND, UM, HAS SERVED AS OUR CITY AUDITOR IN, IN WITH GREAT DISTINCTION AND HAS BEEN SUCH A BIG HELP TO ALL OF US.

AND SINCE THIS IS THE, SHE RE RETIRES AT THE END OF, UH, THIS YEAR, UH, WE HAVE ALREADY SELECTED, UH, HER DEPUTY TO BE, UH, THE NEW AUDITOR.

JASON WILL BE, WE'RE ALL LOOKING FORWARD TO THAT AS WELL.

BUT IT JUST SEEMS APPROPRIATE THAT WE PAUSE FOR A SECOND AND SAY THANK YOU.

WE WISH YOU THE BEST OF LUCK AND GREAT, GREAT HAPPINESS IN YOUR RETIREMENT.

SO THANK YOU VERY MUCH.

AND UM, WE WILL CUT YOU OFF AT THREE MINUTES IF YOU SHOW UP AS CITIZEN COMMUNICATION .

UH, YEAH.

VERY GOOD.

UM, NO, WE DEEPLY APPRECIATE YOU.

AND WE LOOK FORWARD TO WORKING WITH, UM, JASON.

SO WITH THAT, I'LL TURN IT OVER.

WE'RE NOW MEMBERS.

WE'RE NOW ON ITEM NUMBER SIX.

GOOD MORNING.

MY NAME IS ZACH BROWN.

I'M ACTING DIVISION CHIEF OF THE OPEN GOVERNMENT ETHICS AND COMPLIANCE DIVISION OF THE CITY ATTORNEY'S OFFICE.

AND I'M HERE TODAY ON BEHALF OF THE CITY ATTORNEY TO SUBMIT OUR ANNUAL REPORT RELATED TO COMPLIANCE AND ENFORCEMENT OF CHAPTER FOUR EIGHT OF THE CITY CODE, WHICH REGULATES CITY LOBBYISTS.

WE PROVIDED THE SAME PRESENTATION LAST DECEMBER AND SINCE THEN HAVE PROVIDED QUARTERLY REPORTS WHICH ARE INCLUDED AS BACKUP TO THIS ITEM.

TODAY'S REPORT COVERS THE ENTIRE CALENDAR YEAR DURING 20 25, 8 NOTICES OF LOBBYIST VIOLATIONS WERE PROVIDED BY THE CITY CLERK TO THE ETHICS REVIEW COMMISSION FOR FAILURE TO FILE QUARTERLY ACTIVITY REPORTS REQUIRED BY SECTION 4 8 6 OF CITY CODE.

THE ETHICS REVIEW COMMISSION HAS DISCRETION TO ACT ON THESE, AND BASED ON THE OUTCOME OF ANY COMPLAINT PROCEEDINGS, THE ERC MAY REFER IT TO THE CITY ATTORNEY'S OFFICE FOR PROSECUTION AND MORE UPDATES WILL BE PROVIDED ON THE STATUS OF THESE REFERRALS IN YOUR QUARTERLY REPORTS.

ANY QUESTIONS? ANY QUESTIONS? ANYBODY? ALRIGHT.