HomeMy WebLinkAboutAC 04-27-2026 Youtube and Zoom TranscriptWEBVTT
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Speaker 1 (Quinlan Conf Room): Why don't we get on the in-house forum?
Why don't we get started? Yeah,
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Speaker 1 (Quinlan Conf Room): Well, I guess we have to connect it to
YouTube, and then…
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Speaker 2 (Quinlan Conf Room): Are we connected in? Okay, this is the,
April 2017.
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Speaker 2 (Quinlan Conf Room): We're meeting a senior audit committee and
city staff. Could you do a low call for us, please? Councilmember Mohan?
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Speaker 2 (Quinlan Conf Room): She's actually no longer on the committee,
so I don't expect her.
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Speaker 2 (Quinlan Conf Room): Is it right.
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Speaker 2 (Quinlan Conf Room): I think so.
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Speaker 2 (Quinlan Conf Room): Mayor Moore?
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Speaker 2 (Quinlan Conf Room): Present? Councilmember Wong? Present.
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Speaker 1 (Quinlan Conf Room): No, I don't think so. Councilmember.
Actually, Councilmember Wang. Wang, isn't it?
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Speaker 1 (Quinlan Conf Room): W-A-N-G-Z. Yeah, I think it goes by Wong,
though. Oh, does he? Yeah. Oh, okay, no.
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Speaker 2 (Quinlan Conf Room): Apologies. Committee Member Wong?
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Speaker 2 (Quinlan Conf Room): Vice Chair Wu? Here. Present. Chair
Schmidt? Here.
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Quinlan Conf Room: I'll present with Councilmember Wong absent.
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Speaker 2 (Quinlan Conf Room): Great. All right, for our meeting to order
there, we have a form, and…
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Speaker 2 (Quinlan Conf Room): Lindsay, is there anyone from the public
that wants to speak on general that you see? We have no speakers, Chair.
I see none in here either, so we'll just march forward into our…
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Speaker 2 (Quinlan Conf Room): First three items on the agenda, which are
the consent items.
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Speaker 2 (Quinlan Conf Room): And I do have one comment on… A second
item…
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Speaker 2 (Quinlan Conf Room): Which is, I've chatted with Jonathan and
Dennis, and I think in future reports, we're going to have a
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Speaker 2 (Quinlan Conf Room): Variance analysis attribution, which we've
talked about frequently.
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Speaker 2 (Quinlan Conf Room): So, we don't have it for the current
report, and expected, I think, in the future.
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Speaker 2 (Quinlan Conf Room): So let's comment on that consent item, and
then the question… I have a question on the third consent item.
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Speaker 2 (Quinlan Conf Room): which is the Treasurer's report. The
attachment is item A, Chandler's Investment Report, and I noticed that
there… this question, I guess, is for Carlos.
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Speaker 2 (Quinlan Conf Room): I don't know if Carlos is on the line, but
the question is, the city's… hi, Carlos, thanks for joining. We have a
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Speaker 2 (Quinlan Conf Room): you know, a way of approaching these
reports using the consent function now. So, my question is, for that
item.
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Speaker 2 (Quinlan Conf Room): The city's portfolio seems to have a,
overweighting to higher duration than the benchmark, and I wondered if
you could just briefly explain why that is.
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Speaker 1 (Quinlan Conf Room): You're on mute, Carlos.
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Carlos Oblites, Chandler Asset Management: Thank you, I apologize for
that. That is deliberate, although the position has been to start to
bring that duration position a little bit closer to the benchmark. As
you're aware, some of the decisions that we make as an investment manager
have to do with how we position the maturities in the portfolio. So the
term structure of all the investments.
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Carlos Oblites, Chandler Asset Management: will not necessarily look like
the benchmark. We make a decision, and we use analytics and some
processes to help us, to inform us on how we want to position that.
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Carlos Oblites, Chandler Asset Management: The actual duration, so when
we average out those maturities and their average durations, their
associated duration of all securities, how that averages out to the
duration of the portfolio, where we position that relative to the
benchmark is also a deliberate decision.
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Carlos Oblites, Chandler Asset Management: On top of that, obviously, how
much we have in different sectors is a deliberate decision that may
stray, and will definitely stray away from what the benchmark looks like.
Currently, the overall duration of the portfolio, as of March 31st, was
2.56 years.
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Carlos Oblites, Chandler Asset Management: The benchmark was at 2.47
years. You are longer 3 months prior. You are at 2.63. We have been
gradually bringing your duration down to be closer to the duration of the
benchmark.
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Carlos Oblites, Chandler Asset Management: You're at 2.63 years. 3 months
ago, as of March 31st, you're at 2.56, that's lower, and we're moving you
towards 2.47, where the benchmark is.
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Carlos Oblites, Chandler Asset Management: And we do that very gradually,
we take incremental steps, and we won't be exactly at the duration. Our
intent is to be slightly above it, and that's a call that we make based
on what we think the capital markets are going to do.
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Carlos Oblites, Chandler Asset Management: In this instance, this is
related to the volatility, related to the war in Iran and the Middle
East.
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Carlos Oblites, Chandler Asset Management: the rise in risk, or I should
say the rise in volatility of risk assets, and specifically the rise in
the price of a barrel of oil, has caused rates to move up and down with a
lot of volatility, and generally remain a little higher. And when we have
volatile periods, we want to be a little bit more neutral to our target,
as measured by the benchmark. So, the answer is, it's a deliberate
decision, it's not
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Carlos Oblites, Chandler Asset Management: random, and right now, you've
been longer since the fall of 2023, when we made a call that rates would
be falling, and that's exactly what they've done up until the beginning
of this war. Right now, we're in the process of moving you closer to
neutral, just slightly above to neutral, and that's our plan right now. I
hope that answers your question.
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Speaker 2 (Quinlan Conf Room): Yeah, it does, Carlos. Thank you very
much.
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Speaker 2 (Quinlan Conf Room): Are any other committee members having
comments or brief questions on the consent items, Mayor? Item 3, I want
to point out, almost 12.
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Speaker 3 (Quinlan Conf Room): $12 million in the operating checking
account, and I was wondering if that's… In alignment with the new…
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Speaker 3 (Quinlan Conf Room): cash flow policy, or… I don't… It's 5
million.
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Speaker 1 (Quinlan Conf Room): Target.
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Speaker 1 (Quinlan Conf Room): You, it is $5 million as our target.
Currently we're biting up against the lathe cap.
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Speaker 1 (Quinlan Conf Room): Okay. So, the, the idea, we'll be
exploring other options, other investment pools, to be able to tap into,
as well as possibly, longer-term investments with Chandler.
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Speaker 3 (Quinlan Conf Room): Okay, and there is that… something called
CAL… It's like a California one…
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Speaker 1 (Quinlan Conf Room): Yeah, CAMP, there's a handful of them
that, that would meet our, and we can get into it a little more in detail
in the, investment, investment policy, that kind of discusses that a
little more. Okay. Any other comments?
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Speaker 1 (Quinlan Conf Room): Question.
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Speaker 2 (Quinlan Conf Room): Excellent. I have one last question for
John. Mayor just mentioned the cash flow model. I'm wondering if in a
future to-be-determined audit committee meeting, we might have a brief
presentation on that cash flow model.
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Speaker 2 (Quinlan Conf Room): by staff? You can…
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Speaker 1 (Quinlan Conf Room): include it as part of our quarterly
investment report, if you'd like, so that we can kind of incorporate it
all into one. Or, you know what, better yet, there is a,
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Speaker 1 (Quinlan Conf Room): as part of our internal audit, they had
reviewed our cash flow policy and whatnot, so that'll kind of feed into
that. So that is set to go to,
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Speaker 1 (Quinlan Conf Room): to be heard by the audit committee in
July. That would be ideal if we could.
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Speaker 2 (Quinlan Conf Room): work it in a July meeting as part of that.
Fantastic.
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Speaker 2 (Quinlan Conf Room): Okay, do we have a motion for the consent
items?
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Speaker 2 (Quinlan Conf Room): Or, let's see, yeah, I need a mobile… I
gotta be my… it's been 3 months since I went through a meeting. I'm
inviting the staff before we've done that, we ask questions, oh, public
comments comes before my invitation of a motion, so are there any…
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Speaker 2 (Quinlan Conf Room): Lindsay, that you see out there.
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Speaker 2 (Quinlan Conf Room): No speakers share. Excellent. So why don't
we go to a motion on… More so moved. Excellent, I hear… is there a
second?
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Speaker 2 (Quinlan Conf Room): Second.
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Speaker 2 (Quinlan Conf Room): Beyond a second from… The Vice Chair?
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Speaker 2 (Quinlan Conf Room): Any other… Points of question, comment,
discussion from the committee.
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Speaker 1 (Quinlan Conf Room): It's just a.
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Speaker 3 (Quinlan Conf Room): clarify, I'm moving the consent item on
it.
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Speaker 3 (Quinlan Conf Room): Sounds good. Oh.
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Speaker 3 (Quinlan Conf Room): I missed what.
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Speaker 1 (Quinlan Conf Room): Because I'm so moved, but I don't think
you got your full sentence out. Oh, no, I did.
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Speaker 2 (Quinlan Conf Room): Okay, perfect. Okay, perfect. So, yeah, I…
well, seeing no other points of interest here, why don't we all vote? All
in favor of the motion?
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Speaker 2 (Quinlan Conf Room): Say aye. Aye.
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Speaker 2 (Quinlan Conf Room): Any opposed?
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Speaker 2 (Quinlan Conf Room): Looks like it carries unanimously.
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Speaker 2 (Quinlan Conf Room): So be it.
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Speaker 2 (Quinlan Conf Room): Excellent.
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Speaker 2 (Quinlan Conf Room): I'm so enthused about consent items, it
doesn't take much to get excited in an article.
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Speaker 2 (Quinlan Conf Room): You can just do so much more of them. All
right, so that brings us to new business, item number 4, receiving the
internal audit
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Speaker 2 (Quinlan Conf Room): Oh, yeah, and thank you, Carlos, if you're
still there, for attending our meeting. And thank you, internal auditors,
for coming to our meeting. This item is Receive the Internal Audit,
Fraud, Waste, and Abuse Programs, and Internal Audit Programs Updates.
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Speaker 2 (Quinlan Conf Room): So… Jonathan, or… Kelsey, just over to
you.
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Chelsea Ritchie, Baker Tilly: Yes.
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Speaker 2 (Quinlan Conf Room): Thanks for coming.
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Chelsea Ritchie, Baker Tilly: Thank you, it's nice to see you all
tonight. Let me share my screen here.
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Chelsea Ritchie, Baker Tilly: Is everybody able to see my screen?
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Speaker 2 (Quinlan Conf Room): Yes. Yeah, we can see it, but it's such
small font.
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Chelsea Ritchie, Baker Tilly: It's small. Let me get this bigger for us.
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Chelsea Ritchie, Baker Tilly: How about there?
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Chelsea Ritchie, Baker Tilly: Does that work?
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Speaker 2 (Quinlan Conf Room): Well, I'm pulling it up on my own screen,
so… but I don't know. Committee members, any thoughts? I think they're
younger than I am, so I'm sure they're all seeing it fine.
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Chelsea Ritchie, Baker Tilly: All right. Well, I will get us started
here. We still have one open item, project from the fiscal year 24 and
25, audit program, and that's over the Grant Management Internal Control
Review. We are still trying to finalize this report. I had talks with
Jonathan
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Chelsea Ritchie, Baker Tilly: last week, and I'm pretty confident that we
should have something to you by the next audit committee meeting. But
this one, that is the last remaining for the fiscal year 24-25.
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Chelsea Ritchie, Baker Tilly: So, looking at fiscal year 25-26 internal
audit program, we're going to be receiving… you'll be receiving a
presentation by my colleague, Annie Rose, today over the Council-wide
policy review inventory.
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Chelsea Ritchie, Baker Tilly: We are working, with City on feedback and
finalization of the investment slash cash flow policy review and
recommendation, so going back and forth with the City on those.
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Chelsea Ritchie, Baker Tilly: We also have this city-wide internal
control review. This is going really well. We've performed interviews,
and right now, we're really working on testing those high-risk controls
that we found, hoping to have a draft report to you all, next time
around.
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Chelsea Ritchie, Baker Tilly: And then, of course, our ongoing internal
audit services. This also includes, monitoring the fraud, waste, and
abuse hotline, as well as performing validation continuation.
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Chelsea Ritchie, Baker Tilly: And I will be going over, both of those
statistics here in a second. Is there any questions about, either
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Chelsea Ritchie, Baker Tilly: Last year's or this year's current internal
audit program.
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Speaker 2 (Quinlan Conf Room): I don't see any hands, unless there's a
question, we'll just… we may think of one, Chelsea, but if you could…
that's great.
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Chelsea Ritchie, Baker Tilly: Absolutely. Well, I will go into the fraud,
waste, and abuse statistics. So, I did see your question, about, you
know, the timing of this. So, really, the timing of when we're looking at
this quarter, it was from January 17th through April 20th.
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Chelsea Ritchie, Baker Tilly: And we have not received any complaints
this quarter. So, zero. So that still remains. We have 39 total reports,
31 of those reports have been closed, and there have… there still are 8
reports that are open.
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Chelsea Ritchie, Baker Tilly: So going into those reports, I will tell
you, I met a couple of times with the city attorney this… this quarter,
and she is very, very diligent in trying to get these, 8 closed as soon
as possible.
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Chelsea Ritchie, Baker Tilly: So, hoping to see this statistic go lower
in the coming quarter.
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Speaker 2 (Quinlan Conf Room): Yeah, while we're talking about this, a
couple questions, and the other members may have some as well. I'm
wondering if you could entitle this FWA? I think in the past you used to
do that, and it's useful for
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Speaker 2 (Quinlan Conf Room): Sometimes we extract this, and then show
it to city staff, for example, and if it says fraud, waste, and abuse at
the top, it's very helpful.
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Speaker 2 (Quinlan Conf Room): And along those lines, I showed this to
the city manager since our last audit committee meeting, since you
internal auditors were so gracious to say, well, you know, why don't you
go talk to the city manager? So, okay, I did.
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Speaker 2 (Quinlan Conf Room): And, I'm happy to see that the report has
some additional columns on it, like, for example.
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Speaker 2 (Quinlan Conf Room): refer to appropriate city officials under
review, that kind of thing. So I think our goal in the past had been,
well, how do we
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Speaker 2 (Quinlan Conf Room): demonstrate to the public that there's
actually some movement on some of these longer, outstanding items, and so
the
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Speaker 2 (Quinlan Conf Room): I think consensus with… Jonathan and Tina
and others.
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Speaker 2 (Quinlan Conf Room): Was that there can be additional steps
included in the report that indicate that there is, in fact, movement
behind the scenes, but at some point, it gets to the policy
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Speaker 2 (Quinlan Conf Room): anchor's decision, which I guess is
referred to, I don't know, appropriate city officials. I want to explain,
but…
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Speaker 2 (Quinlan Conf Room): At some point, it's…
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Speaker 2 (Quinlan Conf Room): get to the highest level it can get, and
it's, you know, that's where it needs to be resolved. Am I right in that,
Chelsea?
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Chelsea Ritchie, Baker Tilly: That is correct. That is correct, and I
think that is currently where the city is right now, you know, in getting
these resolved, especially some of the longer reports. So, like I
mentioned, I do think that you will see some positive movement in these
outstanding reports by the next quarter.
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Speaker 2 (Quinlan Conf Room): Great, any questions from… our committee
on this, at least, at the element.
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Speaker 3 (Quinlan Conf Room): Yeah, I just want to,
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Speaker 3 (Quinlan Conf Room): comment on the fraud, waste, and abuse
reporting. I did send an email to the city manager about it because I had
a difficult time getting to that page. If I go to the landing page.
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Speaker 3 (Quinlan Conf Room): The website's been changed a bit, so if I
don't know that the Fraud, Waste, and abuse hotline exists, I wouldn't
know to put it in the search box to find it.
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Speaker 3 (Quinlan Conf Room): I put this in my email a little bit more
prominent there, for new people.
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Speaker 3 (Quinlan Conf Room): Or members of the public.
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Speaker 3 (Quinlan Conf Room): wanna go and look at that page, so
hopefully that'll get… 10 of these.
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Speaker 3 (Quinlan Conf Room): So, you're both…
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Speaker 2 (Quinlan Conf Room): attacking it. Thank you, internal
auditors. I think both of us were given our to-dos on the last meeting,
so…
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Speaker 2 (Quinlan Conf Room): Great.
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Speaker 2 (Quinlan Conf Room): We're… we're making progress.
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Chelsea Ritchie, Baker Tilly: Wonderful. Well, talk about progress, let's
talk about the audit validation. So, you know, looking at the audit
validation, there were a total of 79 recommendations.
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Chelsea Ritchie, Baker Tilly: We have 25 that are still open, and during
this past quarter, we were able to validate 3 new recommendations. Those
were specifically all on the 2023 report. This was the library expansion
construction audit.
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Chelsea Ritchie, Baker Tilly: And so, looking at those, two of them were
talking about change orders. So, the city has added language on the
change order form to verify hourly labor rates with certified payroll
substantiation.
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Chelsea Ritchie, Baker Tilly: So the finding has been implemented. The
second one, the city was able to update the change order form to indicate
language about the amount to verify that sufficient markups are applied
on the next change order value.
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Chelsea Ritchie, Baker Tilly: And then, last but not least, one was
around, adding language to the design-build entity contract, that, the
contract supersedes any agreement between the design-build entity and
subcontractor.
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Chelsea Ritchie, Baker Tilly: So, that language has been further added
into the contract. So, really great, you know, I know that the city has a
lot going on right now, but yet they're still being able to validate
findings and get these cleared.
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Chelsea Ritchie, Baker Tilly: Any questions?
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Speaker 2 (Quinlan Conf Room): Yeah, I think I sent you one, which was…
it seems like in the open recommendations column, there's 25, of which
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Speaker 2 (Quinlan Conf Room): 16 relating to 22 or 20… 2023, so I… I was
wondering, hopefully it's not going to be that I need to go talk to the
city manager, but
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Speaker 2 (Quinlan Conf Room): what can we do to, I guess, estimate when
these may be resolved by… I know it takes city staff time, it takes, your
team time to evaluate their responses, but it seems like
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Speaker 2 (Quinlan Conf Room): 3 or 4 years ago is quite a lapse of time,
so my question is…
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Speaker 2 (Quinlan Conf Room): Do we have some guesstimate as to when we
may resolve these relatively older items?
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Chelsea Ritchie, Baker Tilly: Yeah, that's a great question, and I think
this, you know, will be a conversation that I will have with city staff
and management to see if they are, you know, able to kind of give us an
idea of when they believe they can help remedy these findings and, you
know, clear some of the recommendations.
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Chelsea Ritchie, Baker Tilly: If city staff and management are able to do
that, I would be happy to add those statistics into this report.
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Speaker 2 (Quinlan Conf Room): So, I guess, throwing into it a little
more, is this a matter of resource allocation, or…
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Speaker 2 (Quinlan Conf Room): Maybe it's a question for Jonathan.
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Speaker 2 (Quinlan Conf Room): Any… any comments on… I guess you could
hire a bunch of people, but that's not practical.
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Speaker 1 (Quinlan Conf Room): I suppose it would be more of setting a
priority to address these. As you know, staff is limited in the amount of
time they have in the day, so if this is
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Speaker 1 (Quinlan Conf Room): Council's direction, or if this is
prioritized above some of the other responsibilities, we can certainly
make it a,
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Speaker 1 (Quinlan Conf Room): A task to get to, to either address or at
least provide a, implementation date.
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Speaker 2 (Quinlan Conf Room): although I heard the top policy-making
group mentioned
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Speaker 2 (Quinlan Conf Room): I look over at the representative.
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Speaker 2 (Quinlan Conf Room): But does this come to the City Council?
Just practically, how does this get into the City Council, the decision-
making tree?
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Speaker 2 (Quinlan Conf Room): If it does, or it doesn't… Cooks along by
itself.
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Speaker 1 (Quinlan Conf Room): Good question. Actually, this… the
internal audit program is bef…
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Speaker 1 (Quinlan Conf Room): I don't think that actually gets,
forwarded to Council now that I'm thinking about it.
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Speaker 1 (Quinlan Conf Room): So, let me go back to… to management and
discuss that one.
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Speaker 1 (Quinlan Conf Room): See how we can address this, and by July,
we'll have an answer for you.
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Speaker 1 (Quinlan Conf Room): Oh my god.
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Speaker 2 (Quinlan Conf Room): a super engine. Any other questions on
this element?
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Speaker 2 (Quinlan Conf Room): Great. Okay.
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Speaker 2 (Quinlan Conf Room): Thanks, Chelsea, for,
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Chelsea Ritchie, Baker Tilly: Thank you!
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Speaker 2 (Quinlan Conf Room): Appreciate the presentation. Appreciate
it.
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Speaker 2 (Quinlan Conf Room): Okay, do we need a… we don't need a motion
on that one, I think.
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Speaker 2 (Quinlan Conf Room): It's an informational.
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Speaker 2 (Quinlan Conf Room): Or we're receiving it, maybe we should
have…
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Speaker 2 (Quinlan Conf Room): I can ex… so, advice, everyone? Am I just
going to accept it?
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Speaker 2 (Quinlan Conf Room): I can receive it as chair.
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Speaker 2 (Quinlan Conf Room): Unless we have an appetite for making a
motion.
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Speaker 2 (Quinlan Conf Room): Since I see no appetite being expressed, I
hereby receive the report. Thank you very much.
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Speaker 2 (Quinlan Conf Room): On behalf of the committee, on to item
number… You know, we left off the public comment, which, I imagine,
Lindsay, you would have captured me if I had gone too far, so your
silence indicates we don't have any, correct? We have no speakers, Chair.
Okay, so moving on…
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Speaker 2 (Quinlan Conf Room): Item 5 on our agenda.
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Speaker 2 (Quinlan Conf Room): as an informational item, receive the City
Council Policy Review Final Report.
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Speaker 2 (Quinlan Conf Room): And this is going to be another Paker
Tilly, and
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Speaker 2 (Quinlan Conf Room): Annie, it looks like you're… you're
scheduled up to, present. Thank you for coming.
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Annie Rose Favreau | Baker Tilly: Yes, thank you so much for having me
here this evening. For those of you who I haven't met yet, I'm Annie Rose
Favreau, and I'm a director with the Baker Tilly team.
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Annie Rose Favreau | Baker Tilly: So, my group did the Council Policy
Review Project, and my plan for this afternoon was just to present to you
a brief overview of the scope of that work, our major findings, and then
see if there are any questions or conversation there. But in general, we
were looking at the Council-related policies, so the policies that guide
how Council operates.
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Annie Rose Favreau | Baker Tilly: And those included the Council
Procedures Manual, the Code of Ethics and Conduct, the policy and
guidelines on Sister Cities, friendship cities, and international
delegations, social media policy, and technology use policy. So those
were the primary areas that we were evaluating, and we were looking to
make improvements in clarity, consistency, alignment with industry best
practice.
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Annie Rose Favreau | Baker Tilly: to identify if there were any
significant gaps. So I would say the big picture takeaway, the frontline
takeaway that I'd like to leave you with is that when we were reviewing
the policies themselves, there were no policy areas that were entirely
missing. It wasn't like we found a policy that you fully did not have in
place. So that is fantastic. Within that, though, within the policies
that you do have, we did
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Annie Rose Favreau | Baker Tilly: find some gaps within each one of
those. And so that's what the majority of our report focuses on. We have
six observations here. Now, you will notice we were reviewing five
policies, and we have 6 observations. So our first observation was
actually not focused on a specific policy, but instead looking at the
environment in which the policies are created, reviewed.
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Annie Rose Favreau | Baker Tilly: trained on and sustained forward. And
what we found there is, again, good news, All of your policies…
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Speaker 2 (Quinlan Conf Room): Sorry, sorry to interrupt. I wonder if you
might flash on the screen the report that you may be referencing. Not
everybody maybe has a, you know, on their.
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Annie Rose Favreau | Baker Tilly: Absolutely.
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Annie Rose Favreau | Baker Tilly: Yeah, I can bring that up right now.
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Speaker 2 (Quinlan Conf Room): Thanks.
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Annie Rose Favreau | Baker Tilly: Yeah, absolutely. Okay, is that large
enough for people to see?
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Speaker 2 (Quinlan Conf Room): Yeah, it's not bad. Thanks.
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Annie Rose Favreau | Baker Tilly: Sweet.
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Annie Rose Favreau | Baker Tilly: So, in going through the observations,
the first one here, and this is just the summary, so there's a lot more
detail in the report itself, but the first one is focused on that policy
environment itself.
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Annie Rose Favreau | Baker Tilly: And the recommendation here is to look
at implementing a more structured policy management framework. So,
thinking about a formalized process to actually review your policies. So,
good news here, all the policies we looked at had been updated in the
last 5 years, but the updates have been happening in a pretty organic and
ad hoc manner, when an individual council member brings some things
forward, or they're
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Annie Rose Favreau | Baker Tilly: an issue that needs to be resolved,
versus what we would generally expect to see, which is on a cadence of
every 3 to 5 years, for example, the policies are brought forward and
reviewed. We'd also want to see standardized training to make sure that
all council members
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Annie Rose Favreau | Baker Tilly: staff who are supporting these policies
receive standardized training on a regular basis to make sure that the
policies are understood. And also, there were some questions here about
the enforcement mechanisms. What actually enforcement mechanisms or
procedures are even available to the city? So that was a general question
that came up that would, we would recommend
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Annie Rose Favreau | Baker Tilly: Adding some clarity around.
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Annie Rose Favreau | Baker Tilly: The rest of the observations that we
have listed here, and I'll go through these quickly as well, are focused
on the individual policies themselves. So the first one we looked at, and
the most robust of all of the work, is the City Council Procedures
Manual. This is a really great manual. It hits so many of the common
practices that we would want to see here, many of those foundational
topics.
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Annie Rose Favreau | Baker Tilly: And it covers a lot of ground. We did
compare it to several peer city manuals as well as part of this work. We
did peer benchmarking, and there were some sections that were either
partially present or fully a gap in terms of sections that we would
expect to see there. So we have a recommendation to consider revising the
manual to add or expand on particular sections that would really improve
the clarity and
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Annie Rose Favreau | Baker Tilly: the effectiveness of this guide to help
Council operations move forward.
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Annie Rose Favreau | Baker Tilly: Moving into the smaller policy areas,
we have the Code of Ethics and Conduct. This is a very comprehensive
policy, which is fantastic, but again, there are some areas here that are
really focused. Our recommendation is around improving the clarity and
administration of this policy to make sure that it's a really effective
guide there.
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Annie Rose Favreau | Baker Tilly: We also looked at the sister cities,
friendship cities, and international delegations policies. Of all the
ones that we looked at, this is the one that we would say needs the most
support and work at this point in time. There are quite a few gray areas
here, and a little bit of lack of clarity around why that
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Annie Rose Favreau | Baker Tilly: program in and of itself exists, and
what it's trying to do for the city. So we do recommend fully reviewing
and updating this policy to improve clarity, and that's both for council
members, but also for the staff who are required to implement that
policy. And I'm happy to go into details there.
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Annie Rose Favreau | Baker Tilly: And then the last two are very similar
recommendations. The city's social media policy and the city's technology
use policy, they're really focused at staff-level administrative
guidance, rather than focusing on Council-specific issues. And there are
certainly Council-specific issues that come up in both of these areas in
relation to meeting restrictions and things like that. So our
recommendations for both of those
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Annie Rose Favreau | Baker Tilly: areas would be to consider developing
standalone policies that would really be designed for elected and
appointed officials. They can build upon the city's current social media
and technology use policies and reference across, but something that
would really focus in on what would be most helpful for elected and
appointed officials.
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Annie Rose Favreau | Baker Tilly: So that is my brief overview, but that
being said, I'm happy to go into any of these sections if you have any
follow-up questions for me.
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Speaker 2 (Quinlan Conf Room): Great, thanks, Annie.
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Speaker 2 (Quinlan Conf Room): throw it to our committee members. Any,
questions?
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Speaker 2 (Quinlan Conf Room): Yeah, I had a question. Go ahead, Will.
Yeah, I've got two questions. One is.
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Speaker 4 (Quinlan Conf Room): What is this… Current status of the
observations.
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Speaker 4 (Quinlan Conf Room): And two is, what is the process going
forward in terms of closing these observations?
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Annie Rose Favreau | Baker Tilly: So these are being presented to you
today, so they have not yet, you know, been moved forward or actively
shared out broadly with staff. So I would say these… all of the
observations here are open, and they'll go through a similar process to
many of our other observations and recommendations, where there will be a
determination of
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Annie Rose Favreau | Baker Tilly: You know, whether you wish to
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Annie Rose Favreau | Baker Tilly: have staff resources, City Council and
management will decide on the right allocation of staff resources to
address these, and then they will be closed out as you move forward. In
general, though, from our perspective, the sister cities policy is the
one that we would recommend moving forward with, now. The others, I
think, can all wait until you come into the natural cycle of the next
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Annie Rose Favreau | Baker Tilly: time you update these policies, you
could pick up some of the recommendations that we have here and
incorporate. I think the Sister Cities is the one that we'd really focus
on currently, and the others can be done over time as well.
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Speaker 4 (Quinlan Conf Room): Yeah, thank you. There. Okay, so the.
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Speaker 3 (Quinlan Conf Room): Sister City's policy, will be coming to
the Council, I believe it's next week. And there's… some of the
recommendations are in there, and I did speak, to the city manager
earlier this afternoon, and
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Speaker 3 (Quinlan Conf Room): went over the policy recommendations and
the questions, that… that show up in this report. So, some will be
addressed, and some will need some… some more thought on.
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Speaker 3 (Quinlan Conf Room): You know, just…
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Speaker 3 (Quinlan Conf Room): right now, one of the issues that… that I
have is for a policy, is we've… we've had two absences of the council
appointee to this committee,
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Speaker 3 (Quinlan Conf Room): And in the Commissioner's handbook, I
think it's changed, the learnings have changed, if you… if a commissioner
misses,
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Speaker 3 (Quinlan Conf Room): 25% of the regular meetings, they would
be, I think, recommended for removal at this point. I don't think it's an
automatic. I think it had been automatic.
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Speaker 3 (Quinlan Conf Room): So… and I had assigned a second alternate
for this position after the first absence, and that did get passed
through, in February. So I don't know what happened.
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Speaker 3 (Quinlan Conf Room): here with regards to neither showing up.
So, I don't know if that should be a policy, should have a policy around
that for, council members not attending their committee assignments,
because that's, that's becoming an issue.
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Speaker 3 (Quinlan Conf Room): So… that's…
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Speaker 2 (Quinlan Conf Room): a comment, I guess. Is there a way… Maybe
the point is, how do we work in these kinds of questions into your
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Speaker 2 (Quinlan Conf Room): Analysis.
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Annie Rose Favreau | Baker Tilly: The question of whether there should be
a policy of attendance?
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Speaker 3 (Quinlan Conf Room): For the council members.
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Speaker 3 (Quinlan Conf Room): all these… because we have assignments,
regional assignments, and I'm hearing that there's been a number of
absences.
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Speaker 3 (Quinlan Conf Room): Yeah.
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Annie Rose Favreau | Baker Tilly: Yeah, and I think that that speaks to,
even in Observation 1, we're talking about, clearly defined enforcement
mechanisms, and you'll see in the report, that really gets down to when
folks are not doing the things that we have requested they do, what are
those enforcement mechanisms? What is appropriate consequences for that?
So I think that this is a good example of that, where we don't yet have
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Annie Rose Favreau | Baker Tilly: on that front around exactly, you know,
we might have the expectations clearly defined, but we don't necessarily
have that, immediate next steps defined if those expectations are not
met. So I would say that that is addressed here within that section, but
I think in general, you're bringing up an excellent point that we saw
really throughout many of the policy issues.
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Annie Rose Favreau | Baker Tilly: Areas where we don't have that clearly
addressed.
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Speaker 3 (Quinlan Conf Room): Okay, so I'm not really… I'm not really
sure with regards to…
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Speaker 3 (Quinlan Conf Room): that information, what you're hoping to
get from this committee. So, for example, we don't have a, process for,
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Speaker 3 (Quinlan Conf Room): admonition, or censure for the council
members, and I did… I was trying to, a couple years ago, get, have a
policy
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Speaker 3 (Quinlan Conf Room): put in place around that, and I was doing
some review of surrounding cities, what San Jose has, and what Los Altos
has.
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Speaker 3 (Quinlan Conf Room): Regarding that, and ordinarily, for
instance, I…
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Speaker 3 (Quinlan Conf Room): A council member would be removed from
their committee assignments as, that would be like a censure.
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Speaker 3 (Quinlan Conf Room): punishments that would happen. The way
our,
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Speaker 3 (Quinlan Conf Room): procedures manual, and that's coming to
the Council next week, is written up. We have no process for that, and so
a couple years ago, we had a council majority that voted to
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Speaker 3 (Quinlan Conf Room): pull two council members off of all of
their committee assignments without having a process of review.
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Speaker 3 (Quinlan Conf Room): It was just an action that they could do
then, and because there's been no change.
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Speaker 3 (Quinlan Conf Room): and no, process put in place, it could
still… it could still happen again, like that. And that should be…
that's, like, the last resort. They've done something really, you know.
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Speaker 3 (Quinlan Conf Room): terrible, and then you take them off their
assignments. Not as a kind of a willy-nilly, we're the political powers
now, and you're gonna take you off. Then there was another one with
regards to,
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Speaker 3 (Quinlan Conf Room): Investigating council members and, and,
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Speaker 3 (Quinlan Conf Room): How to do a proper investigation, what the
expectations of the council members that are being investigated, how that
process should unfold.
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Speaker 3 (Quinlan Conf Room): So is that… what are you hoping for from
this committee with regards to moving, this towards the City Council?
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Annie Rose Favreau | Baker Tilly: Great question. So, I think the items
that you're mentioning here are things that definitely come up within the
assessment itself, both in relation to the City Council Procedures Manual
and the Code of Ethics and Conduct as well. Our next steps after it is
received here, it has been requested that we present this full report to
City Council. So, that will be the last piece
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Annie Rose Favreau | Baker Tilly: as part of our work on this, and then
there will be, I assume, a discussion of which elements of these
recommendations you may wish to move forward.
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Speaker 3 (Quinlan Conf Room): Okay, that's good, thank you.
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Speaker 3 (Quinlan Conf Room): Any other from the committee members?
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Speaker 2 (Quinlan Conf Room): I have one, well, maybe upon you if you're
still thinking. I read with interest the,
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Speaker 2 (Quinlan Conf Room): let's see, I wrote it down. The, executive
summary, always a good starting point, right? Indicates that,
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Speaker 2 (Quinlan Conf Room): Baker Tilly evaluated the city's
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Speaker 2 (Quinlan Conf Room): Council-related policies to identify
opportunities to improve clarity, consistency, and usability, determine
whether there were any major gaps.
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Speaker 2 (Quinlan Conf Room): and align Council operational procedures
with best practices. So, my question is on the determine whether there
were any major gaps. I know you mentioned something about those, but I
was trying to read the report then to find… so, my question is, are all
six of these observations the…
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Speaker 2 (Quinlan Conf Room): maybe major gaps for going into the full
gaps that are indicated in more detail in the policy. Are those full gaps
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Speaker 2 (Quinlan Conf Room): Equivalent to major gaps, or are there no
major gaps altogether?
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Annie Rose Favreau | Baker Tilly: Great question. So, in terms of the
policies themselves, there are no policy gaps, meaning you are not
missing an entire policy. So that is the good news that we're working off
of. Within individual policies, we did identify some partial and some
full gaps where a particular topic was or was not addressed in the
policy.
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Annie Rose Favreau | Baker Tilly: So I'm not exactly sure of your
definition of full gaps, but when we're looking through and using the
word gap, that's really what we're talking… speaking to, is a specific
topic that we would expect to see in that particular policy, and it
either might be partially addressed, but not totally clear, or it might
not be addressed at all, in which case we would call that a full gap
within the policy.
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Speaker 2 (Quinlan Conf Room): Okay, that helps me understand what you
meant, because I honestly was trying to find,
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Speaker 2 (Quinlan Conf Room): Any major gaps. So, to me, possibly that
could be a strengthening in your report to indicate that there were, in
fact, no major gaps.
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Speaker 2 (Quinlan Conf Room): But that there are these other types of
gaps within the policies. But, you know, I'm not trying to get it into a
linguistic,
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Speaker 2 (Quinlan Conf Room): The…
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Speaker 2 (Quinlan Conf Room): too detailed there. I think we'll open it
up to comment, and then I think we should talk about a motion on this
particular item, rather than the chair receiving it, so…
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Speaker 2 (Quinlan Conf Room): Hey, stay around, Annie. Lindsey, any
public comments?
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Speaker 2 (Quinlan Conf Room): We have no speakers today.
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Speaker 4 (Quinlan Conf Room): Okay.
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Speaker 2 (Quinlan Conf Room): So, then what I'd like to do is move us
into a motion, and my thought here is.
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Speaker 2 (Quinlan Conf Room): building on what the mayor was asking, and
what Annie here is saying, one of the roles I see the audit committee
having is internal auditors report into
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Speaker 2 (Quinlan Conf Room): City Council and the Audit Committee, so
we have the opportunity of, drilling into the report in any way we like,
or once we're satisfied, forwarding it to the City Council with our
comments, or lack of comments, saying it's fine as it is. So I think this
is a good one for
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Speaker 2 (Quinlan Conf Room): Considering that, if the committee has an
appetite, we can have a motion that says, report was…
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Speaker 2 (Quinlan Conf Room): you know, we deliberated on it, and we had
a few changes or suggestions that were, debated back and forth, and we
think I like those, or we're not. So, I'm throwing this out as a…
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Speaker 2 (Quinlan Conf Room): What's the appetite here? Do we want to…
Clarify our music video.
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Speaker 2 (Quinlan Conf Room): I can just receive it.
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Speaker 3 (Quinlan Conf Room): I'd like the comments to go to the
Council.
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Speaker 3 (Quinlan Conf Room): I think so too, probably, and so at least
two of us.
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Speaker 2 (Quinlan Conf Room): Why don't we… drive to come up with a
motion, and I heard
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Speaker 2 (Quinlan Conf Room): something… some… a motion could be like
this, that we received the report, but had some points of emphasis, for
example, the disciplinary element that may flow through more than just
the one item of observation. That's one…
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Speaker 2 (Quinlan Conf Room): One way of phrasing emotion, I suppose.
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Speaker 3 (Quinlan Conf Room): evidence of affiliation.
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Speaker 3 (Quinlan Conf Room): policy members and with regards to their
committee assignments. Okay.
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Speaker 2 (Quinlan Conf Room): That's a… certainly, when we were starting
to talk, touch on city council stuff that we were suggesting, that's kind
of like… we can word that very carefully, I suppose.
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Speaker 2 (Quinlan Conf Room): But, okay, I hear you, that's good. Any
other… well, maybe we can have a motion if there are any other topics
that come to mind? I, you know, I honestly think you could do better on
the major gaps of learning, but I don't think it rises to us wanting to
emphasize that to City Council.
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Speaker 2 (Quinlan Conf Room): I thought that maybe the staff has
something to chime in on this. I think it's pretty humid, quiet down
there.
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Speaker 1 (Quinlan Conf Room): I just wanted to confirm, as of right now,
I only have two, which is the attendance and disciplinary action. Is
there any other topics that we want to include?
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Speaker 1 (Quinlan Conf Room): These items would be included in the staff
report.
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Speaker 1 (Quinlan Conf Room): As topics of discussion, or
recommendations for…
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Speaker 2 (Quinlan Conf Room): coincidental assist by the Audit Committee
after our deliberation.
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Speaker 2 (Quinlan Conf Room): Whereas part… I mean, this, to be honest,
this is one of the first times I've actually…
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Speaker 2 (Quinlan Conf Room): looked at this particular issue, I guess I
must have done a…
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Speaker 2 (Quinlan Conf Room): busy with other issues, but I'd like…
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Speaker 2 (Quinlan Conf Room): Baker Tilly has his internal auditor. I
guess this was on the internal audit, work program?
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Annie Rose Favreau | Baker Tilly: That's correct.
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Speaker 2 (Quinlan Conf Room): Yeah, so… So… It seems like there's a lot
of meat in the report.
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Speaker 2 (Quinlan Conf Room): be honest, but I'm not sure I have a lot
of other issues that I can feel confident raising at this point.
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Speaker 2 (Quinlan Conf Room): solved.
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Speaker 2 (Quinlan Conf Room): Those are the two summaries I see. We
could have a motion that includes the report, or, you know, very thankful
for having it. We have one clarifying question.
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Speaker 4 (Quinlan Conf Room): How often is the policy,
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Speaker 5 (Quinlan Conf Room): viewed.
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Speaker 5 (Quinlan Conf Room): Is this, like, an annual cadence, or is
this kind of…
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Speaker 5 (Quinlan Conf Room): Just trying to kind of understand.
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Annie Rose Favreau | Baker Tilly: Great question. So.
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Speaker 5 (Quinlan Conf Room): Yep.
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Annie Rose Favreau | Baker Tilly: We recommend a cadence of every 3 to 5
years for policies to be reviewed. All of the policies that we looked at
had been reviewed within the past 5 years, so they were falling within
that cadence.
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Speaker 2 (Quinlan Conf Room): Yeah, and this is the, I guess, a little
amplification on that. There's… there's city staff type of policies, and
then there's city council-related policies, and this is taking that
second
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Speaker 2 (Quinlan Conf Room): bucket.
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Speaker 2 (Quinlan Conf Room): So, I think those two are fine for a
motion, but…
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Speaker 3 (Quinlan Conf Room): And, and we're going over the Council
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Speaker 3 (Quinlan Conf Room): Also, again, each time… each mayor has
kind of their own way of doing things, and so, sometimes there's going to
be some adjustments based on that.
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Speaker 3 (Quinlan Conf Room): For instance, we've been going over the
future agenda Items topic, and how do we want that to be run, with an eye
towards ad meetings over 200 pages of agenda packet material. We want to
have another topic that could end up
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Speaker 3 (Quinlan Conf Room): extended, drawn-out conversation about the
wide universe of future agenda possibilities. The answer for me is no,
but next year it could be that somebody does want to have that, and so
that one is… some things are…
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Speaker 3 (Quinlan Conf Room): More on who's the chair, and what does the
chair want to see?
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Speaker 2 (Quinlan Conf Room): So it dawns on me that maybe a
subcommittee comes into play, not necessarily at our level, but that
could be something we consider in a motion that, you know, more in-depth
collaboration
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Speaker 2 (Quinlan Conf Room): staff, other interested community members,
because it's an ongoing question. How can some of these policy issues be
addressed?
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Speaker 2 (Quinlan Conf Room): I… but…
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Speaker 2 (Quinlan Conf Room): Yeah. And I don't know if we want to put
that in the motion, but… I would… yeah.
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Speaker 3 (Quinlan Conf Room): Some of it… some is the… the chair's
prerogative for how they're going to run meetings, so you don't want to
take that away.
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Speaker 2 (Quinlan Conf Room): Why don't we stick with the two that are
very obvious to us, and is anyone willing to step up and…
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Speaker 3 (Quinlan Conf Room): are so moved that we include the comments
from today's meeting, as almost goes to Ms. So…
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Speaker 2 (Quinlan Conf Room): Clarifying that motion, we're accepting
the report.
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Speaker 2 (Quinlan Conf Room): Grateful for it, and we've got to…
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Speaker 2 (Quinlan Conf Room): points of emphasis. Is there a second to
that?
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Speaker 2 (Quinlan Conf Room): Yes.
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Speaker 2 (Quinlan Conf Room): Okay, we've got a second. Okay.
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Speaker 2 (Quinlan Conf Room): You've got a motion? Any, further debate
on this motion?
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Speaker 2 (Quinlan Conf Room): All right.
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Speaker 2 (Quinlan Conf Room): Why don't we take a vote on it. All in
favor of the motion as stated.
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Speaker 2 (Quinlan Conf Room): They aren't?
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Speaker 2 (Quinlan Conf Room): There are no opposed, there's a unanimous
motion. Thank you very much, Annie, and thank for Tilly.
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Annie Rose Favreau | Baker Tilly: Thank you for your time tonight.
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Speaker 2 (Quinlan Conf Room): Thank you, service.
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Speaker 2 (Quinlan Conf Room): Okay, so we're moving on to,
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Speaker 2 (Quinlan Conf Room): Item 6, which is an annual review of the
City's investment policy.
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Speaker 2 (Quinlan Conf Room): Which, as Jonathan as the head, but
possible help from Chandler.
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Speaker 1 (Quinlan Conf Room): I'll go to start us off, and then,
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Speaker 1 (Quinlan Conf Room): Carlos will, finish. So before you use the
City's draft annual investment policy for your review. As part of our
standard practice, the policy is reviewed each year to ensure it remains
aligned with California government code requirements and industry best
practices, before being forwarded to City Council for adoption.
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Speaker 1 (Quinlan Conf Room): At a high level, the City's investment
objectives remain unchanged and continue to prioritize preservation of
principle, followed by liquidity, and then return… rate of return.
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Speaker 1 (Quinlan Conf Room): Overall, Chandler Asset Management has
concluded that the policy continues to be well-written and effective in
guiding the City's estimate portfolio.
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Speaker 1 (Quinlan Conf Room): This year's updates are relatively minor
and focuses on clarification and alignment with recent legislative
changes. The key updates include additional detail and eligibility
criteria for local government investment pools to strengthen oversight
while maintaining flexibility.
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Speaker 1 (Quinlan Conf Room): And minor updates to reflect recent
changes in state law, including SB 585. With that, I turn it over to
Carlos, who will walk us through some of these updates in a bit more
detail.
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Carlos Oblites, Chandler Asset Management: Absolutely, thank you very
much. So there were some minor edits to the policy as a result of
California Government Code, changes to California Government Code 53600
and the related sections. Those changes came from Senate Bill 595,
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Carlos Oblites, Chandler Asset Management: Effectively, Senate Bill 595
extended
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Carlos Oblites, Chandler Asset Management: the maximum maturity for
commercial paper, which is a type of investment instrument that the city
is eligible to purchase. It extended final maturity from 9 months out to
13 months, specifically 397 days. We think that that's a positive
development that the city should adopt.
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Carlos Oblites, Chandler Asset Management: Secondly, there were
provisions from, I believe, several years ago, Senate Bill 14… well, 5
years ago, Senate Bill 1489. Those bills basically allowed for a couple
of things. They allowed for,
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Carlos Oblites, Chandler Asset Management: they allowed for cities to be
able to purchase up to 40% commercial paper if there was, you know, in
case of an emergency, as long as they had investable assets of $100
million or more. So I think we extended that. The date… it's already… it
was already in your policy, but there was a sunset date of January 1st,
2026,
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Carlos Oblites, Chandler Asset Management: The new date is January 1st,
2031, so we extended that.
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Carlos Oblites, Chandler Asset Management: There used to be a prohibition
on purchasing zero interest rate accrual securities.
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Carlos Oblites, Chandler Asset Management: But that was lifted if it was
governmental security. That, again, was another law enacted back in 5
years ago, when the authors of that bill thought that the United States
would pursue a zero-interest rate policy, and if they did that, they
would inadvertently place you in a position of inadvertently breaking the
law. So they put that provision that you can own those, and that sunset
in January 1st of 2026,
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Carlos Oblites, Chandler Asset Management: And this past year, it was
extended again to 2031, so we made that update. Lastly.
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Carlos Oblites, Chandler Asset Management: One of the liquidity vehicles
that we have been discussing with staff for some time are local
government investment pools. They're organized in the state of California
as joint powers authorities, and they basically sponsor investment pools.
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Carlos Oblites, Chandler Asset Management: That run similarly to a money
market mutual fund.
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Carlos Oblites, Chandler Asset Management: But they have a little bit of
an advantage because they invest to look a little bit like a prime fund,
which is very well diversified, whereas most local governments take
advantage of a suite vehicle, which is typically a governmental money
fund with just treasuries and agencies. So, it has an advantage from a
yield perspective, and so we're exploring that with city staff.
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Carlos Oblites, Chandler Asset Management: And you already allowed these,
but the language was vague, so we went through and clarified it, made it
very specific, and made it to mirror the language in California
government code. I'll pause there and take any questions that you may
have on these.
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Speaker 1 (Quinlan Conf Room): Hey, committee members? Questions?
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Speaker 2 (Quinlan Conf Room): I think we're pretty good. I appreciate
the red line version. It makes some of us who've read these things a lot
easier to review the current version. So, thanks, Carlos, for your
efficient explanation, and Jonathan, as well, and your staff report.
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Speaker 2 (Quinlan Conf Room): Why don't we see if there's any public
comment?
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Speaker 2 (Quinlan Conf Room): We have no speakers here. Thanks, Lizzie.
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Speaker 2 (Quinlan Conf Room): Why don't we move forward to a motion?
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Speaker 2 (Quinlan Conf Room): Which would be to accept and forward the
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Speaker 2 (Quinlan Conf Room): has adjusted gridline version of the
investment policy to City Council for its approval.
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Speaker 2 (Quinlan Conf Room): More so moved. Excellent. Second. Second.
Great, thanks, Vice Chair.
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Quinlan Conf Room: Any more discussions?
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Speaker 2 (Quinlan Conf Room): Take a vote. All in favor, aye.
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Speaker 2 (Quinlan Conf Room): Aye. Aye.
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Speaker 2 (Quinlan Conf Room): In your post?
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Speaker 2 (Quinlan Conf Room): I think we're unanimous. I counted my
hearing corrected here, so thanks, everyone.
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Speaker 2 (Quinlan Conf Room): And we will now move on to the Agenda item
number 7… Just literally.
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Speaker 2 (Quinlan Conf Room): So anyone about all kinds of single audits
and
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Speaker 2 (Quinlan Conf Room): gain investment limits and storm drains.
So, Jonathan and… The fun group.
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Quinlan Conf Room: Sophia, as well as Mark.
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Quinlan Conf Room: I turn it over to you guys.
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Speaker 1 (Quinlan Conf Room): I'll let Sophia kick us off.
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Speaker 1 (Quinlan Conf Room): That hurts.
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Sophia Kuo, the Pun Group: Thank you, and good afternoon, chair and
community members. This is Sophia Co-Founder Pong Group, and I'm an all-
important for the City of Cupertino, so I'm here today to see if you guys
have any questions on the, agree upon procedures.
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Sophia Kuo, the Pun Group: that we performed, and also the fiscal year
2025 single audit. So, the first thing is the agree-upon procedures that
include the investment AUP, stone drain AUP, gallon limit AUP. So, we
have performed the agree-upon procedure, procedures that, I'm not going
into details, because all the procedures that we performed already been
listed on the, accountant's report that we issue.
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Sophia Kuo, the Pun Group: So, we completed all the procedures, we did
not have any findings to report, and I do have two things that I want to
emphasize on about these reports. So, the first thing that is we added an
additional detail on our accountant's report.
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Sophia Kuo, the Pun Group: on our investment AUP, that was on the second
paragraph of this report, about assisting the city's management in
determining the city's compliance with the policy, so that it report is
more in line with the city's investment policy requirement under the
internal control section. And this is also to address prior year comment
from the other committee meeting.
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Sophia Kuo, the Pun Group: And for the single audit, we assessed the
highway planning, construction, public work projects as our major program
this year. We completed the audit without any findings, which also
indicated that prior year findings from 2024 were properly addressed, so
that we don't have any findings to report this year. So this will be the
summary of all the
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Sophia Kuo, the Pun Group: reports that we issued, I will be happy to
answer any questions that you may have.
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Speaker 2 (Quinlan Conf Room): Fantastic. Thanks, Sophia, for modifying
that, procedures, as we had discussed.
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Speaker 2 (Quinlan Conf Room): Prior to last year. Any questions from
committee members?
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Speaker 2 (Quinlan Conf Room): I read the reports diligently, they look
very interesting, as I said, and I guess that overall, I asked this last
year, my apologies, I didn't look back in my notes.
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Speaker 2 (Quinlan Conf Room): The reason that we do the… the city does
the storm drain is because…
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Speaker 2 (Quinlan Conf Room): gives in that legislation? Requiring a AUP
or storm drain report, or… what's the reason?
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Speaker 1 (Quinlan Conf Room): I vaguely remember that there was, there
was a condition as part of the storm during tax that there would be an
AUP that would be provided to Council on an annual basis when they adopt
the rate increases.
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Speaker 1 (Quinlan Conf Room): And so this, AUP will provide it… will be
incorporated as part of Ursula.
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Speaker 1 (Quinlan Conf Room): the Sustainability Manager's report,
that's set to go to Council, I believe, later next month.
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Speaker 1 (Quinlan Conf Room): So I know this is…
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Speaker 2 (Quinlan Conf Room): Maybe not the right place to do it, but
maybe it would be good to confirm that there is actually that provision.
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Speaker 2 (Quinlan Conf Room): In the movie.
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Speaker 2 (Quinlan Conf Room): original legislation.
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Speaker 2 (Quinlan Conf Room): someone probably did that long ago, we
probably think that every year, and maybe next year I won't forget that
we did this and ask the same question again. Sorry. Mayor. They do
reference the.
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Speaker 3 (Quinlan Conf Room): Municode, section 3.38.160A.
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Speaker 3 (Quinlan Conf Room): observe the clean water and storm
protection fees have been deposited and recorded in Fund 230 within the
account, many numbers, for that section of the municipal. So it's
actually in the municipal?
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Speaker 2 (Quinlan Conf Room): It looks like that we do the storm drain
thing.
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Speaker 3 (Quinlan Conf Room): And they mention another part, 3.38.090.
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Speaker 3 (Quinlan Conf Room): Species that the City Finance Department
bills out fees to property owners in situations where the fee was not
included in the annual tax assessment.
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Speaker 3 (Quinlan Conf Room): I've read this code on this storm drain
feed past. Yeah, they're referencing
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Speaker 3 (Quinlan Conf Room): They reference 3 sections of the Muni
Code.
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Speaker 3 (Quinlan Conf Room): No, there's more. There's more that…
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Speaker 3 (Quinlan Conf Room): Many sections. Bill, good. Bill. Question
and answer.
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Speaker 1 (Quinlan Conf Room): Yeah, okay, so it's…
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Speaker 2 (Quinlan Conf Room): on the fly. Thank you very much there.
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Speaker 2 (Quinlan Conf Room): Okay, so this is an informational item,
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Speaker 2 (Quinlan Conf Room): Why don't I exercise my chair authority
here, and we hereby receive the reports, and thank city staff and the
Proup for being very ambitions from the public.
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Speaker 2 (Quinlan Conf Room): Cheers.
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Speaker 2 (Quinlan Conf Room): So, moving on to… Appendix item number 8.
Discuss amendments to audit committee use, hours, and responsibilities.
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Speaker 2 (Quinlan Conf Room): We have a staff report. Honestly, why
don't you kick us off? Yeah, this is another.
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Speaker 1 (Quinlan Conf Room): verbal presentation. So this item is
returning to the Audit Committee following direction from City Council at
the October 7, 2025 study session.
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Speaker 1 (Quinlan Conf Room): At that meeting, Council supported the
original proposed updates of the committee's
401
00:57:41.555 --> 00:57:50.744
Speaker 1 (Quinlan Conf Room): And ask for additional items to be brought
back to the Audit Committee for further consideration before returning to
Council. At a high level, the original amendment
402
00:57:50.945 --> 00:58:05.175
Speaker 1 (Quinlan Conf Room): include renaming the committee to Audit
and Finance Committee, clarifying oversight of internal controls and
audit reports, and in adding a provision related to artificial
intelligence and financial oversight.
403
00:58:05.425 --> 00:58:11.664
Speaker 1 (Quinlan Conf Room): In addition to those items, Council
requested feedback from the committee on a few key areas.
404
00:58:11.785 --> 00:58:22.645
Speaker 1 (Quinlan Conf Room): First, a meeting frequency. Weather
increasing from 4 to 6 meetings per year would better support the
committee's role, with flexibility to counsel if there is no business.
405
00:58:22.785 --> 00:58:33.844
Speaker 1 (Quinlan Conf Room): Second, expanded financial oversight,
including potential review of the city's budget, long-term financial
forecasts, reserve policies, and major financial transactions.
406
00:58:34.025 --> 00:58:41.694
Speaker 1 (Quinlan Conf Room): And third, whether there is value in
establishing a budget subcommittee to allow for more detailed review of
the budget content.
407
00:58:42.205 --> 00:58:50.905
Speaker 1 (Quinlan Conf Room): The Treasurer's investment reports have
already been transitioned to the Council's consent calendar and
consistent with Council direction.
408
00:58:51.105 --> 00:59:02.414
Speaker 1 (Quinlan Conf Room): Today's discussion is intended to gather
your feedback on these items so staff can return to Council with a
refined recommendation. This ends my presentation, and I'm available to
answer any questions.
409
00:59:03.000 --> 00:59:09.410
Speaker 2 (Quinlan Conf Room): Great. And thank you, Jonathan. Any,
questions, comments from the committee?
410
00:59:11.070 --> 00:59:16.520
Speaker 3 (Quinlan Conf Room): With regards to the reserve policies,
411
00:59:16.800 --> 00:59:20.770
Speaker 3 (Quinlan Conf Room): So I've noticed that our account balances
have…
412
00:59:21.230 --> 00:59:26.009
Speaker 3 (Quinlan Conf Room): Interesting. Got $317 million, I believe.
413
00:59:26.230 --> 00:59:31.140
Speaker 3 (Quinlan Conf Room): So, the question that… Thanks, G.
414
00:59:31.900 --> 00:59:36.420
Speaker 3 (Quinlan Conf Room): having this, where is that…
415
00:59:37.320 --> 00:59:47.880
Speaker 3 (Quinlan Conf Room): sweet spot where we're not hoarding
taxpayer dollars, and by Instead of providing facilities.
416
00:59:48.170 --> 00:59:55.290
Speaker 3 (Quinlan Conf Room): And where… what's the dollar amount that
we should be targeting? And I don't have…
417
00:59:55.810 --> 01:00:00.819
Speaker 3 (Quinlan Conf Room): the expertise to be able to determine
that, but I feel as though we have
418
01:00:01.670 --> 01:00:15.300
Speaker 3 (Quinlan Conf Room): fiduciary duty to the taxpayers that,
during their lifetime, if we're awarding money for some reason, they're
not getting what they would be expecting, so I have that
419
01:00:15.430 --> 01:00:21.159
Speaker 3 (Quinlan Conf Room): Yeah, I love to see the bank account
growing, that's wonderful, but are we being fair to the public?
420
01:00:21.360 --> 01:00:24.540
Speaker 3 (Quinlan Conf Room): And then, what does FAIR look like?
421
01:00:25.540 --> 01:00:33.299
Speaker 3 (Quinlan Conf Room): that we should have no more than $250
million. Well, that's not going to make sense years from now.
422
01:00:33.810 --> 01:00:36.039
Speaker 3 (Quinlan Conf Room): So, that… that disregard.
423
01:00:36.220 --> 01:00:37.870
Speaker 3 (Quinlan Conf Room): such as…
424
01:00:39.880 --> 01:00:46.720
Speaker 3 (Quinlan Conf Room): I don't know who would be the financial
analyst, that this is their specialty, I don't know who…
425
01:00:48.960 --> 01:01:06.880
Speaker 2 (Quinlan Conf Room): Let me… let me say that that's not… this…
that sounds like a super interesting question, and it doesn't get any
more deeper than that, right? So, thank you for that. And I think it's
great, as we discuss the charter, I'll try to put this in context so we
can…
426
01:01:07.270 --> 01:01:09.580
Speaker 2 (Quinlan Conf Room): Live.
427
01:01:09.980 --> 01:01:13.379
Speaker 2 (Quinlan Conf Room): addressing everything. So, I think…
428
01:01:13.560 --> 01:01:19.060
Speaker 2 (Quinlan Conf Room): There… even… and in addition, maybe we
could put that in…
429
01:01:19.480 --> 01:01:29.549
Speaker 2 (Quinlan Conf Room): the other items that are addressed in the
staff report as additional possibilities that this committee either has
already authority or should consider asking.
430
01:01:31.670 --> 01:01:37.859
Speaker 2 (Quinlan Conf Room): So, maybe this is a good time for me to
comment while you guys are coming up with more questions. My comment…
431
01:01:38.640 --> 01:01:39.680
Quinlan Conf Room: clarifying.
432
01:01:39.970 --> 01:01:42.480
Quinlan Conf Room: on this fabric for it is.
433
01:01:43.360 --> 01:01:50.830
Speaker 2 (Quinlan Conf Room): There's already in the Municipal Code a
series of responsibilities, and some of those, I think, are pretty broad.
434
01:01:51.230 --> 01:01:57.370
Speaker 2 (Quinlan Conf Room): My theory is you want to keep them as
broad as you can without Hello.
435
01:01:57.490 --> 01:02:09.560
Speaker 2 (Quinlan Conf Room): hamstringing, or restricting or requiring
things that aren't… aren't maybe as important in the future, so that we
don't have to… the more you art code into a code, the more difficult
436
01:02:11.340 --> 01:02:14.829
Speaker 2 (Quinlan Conf Room): responsive to issues that come up. So…
437
01:02:15.050 --> 01:02:22.489
Speaker 2 (Quinlan Conf Room): Maybe it's each of these issues think
about in terms of, do we already have authority as a commission for
leadership?
438
01:02:22.930 --> 01:02:24.330
Speaker 2 (Quinlan Conf Room): So, pretty interesting.
439
01:02:24.720 --> 01:02:25.890
Speaker 2 (Quinlan Conf Room): Does there…
440
01:02:27.050 --> 01:02:39.050
Speaker 2 (Quinlan Conf Room): I could take a broad view of this, for
example, and say we clearly have authority to look over the audited
financial statements, which is the ACVER, and in the ACVER, there's all
kinds of
441
01:02:39.200 --> 01:02:41.159
Speaker 2 (Quinlan Conf Room): discussion about reserves.
442
01:02:41.430 --> 01:02:46.940
Speaker 2 (Quinlan Conf Room): So, we could say that we already have some
authority, because every year, we're supposed to
443
01:02:47.320 --> 01:02:50.600
Speaker 2 (Quinlan Conf Room): forward the act firm, and that's a big
responsibility of the government.
444
01:02:50.840 --> 01:02:52.680
Speaker 2 (Quinlan Conf Room): So, we could…
445
01:02:53.250 --> 01:03:00.679
Speaker 2 (Quinlan Conf Room): And again, I'm taking one extreme of how I
would approach these problems, say that, well, if there's an appetite in
my committee.
446
01:03:01.330 --> 01:03:06.539
Speaker 2 (Quinlan Conf Room): There's a lot of, goes into that. That's
an appetite, but when we're setting an agenda.
447
01:03:06.680 --> 01:03:08.330
Speaker 2 (Quinlan Conf Room): We could…
448
01:03:08.830 --> 01:03:25.959
Speaker 2 (Quinlan Conf Room): I think, address that by saying, okay,
it's part of the action. The audit… independent auditors address what the
reserves are, there's all kinds of revenue and financial statements
indicating that, and then there's comments about why the reserves are
what they are.
449
01:03:26.850 --> 01:03:40.619
Speaker 2 (Quinlan Conf Room): So, I think you're right. We did take that
authority under our big authority. We'd need some expert who could make
some narrow decisions, but I think we could easily ask the internal
auditors, for example, to do a special study.
450
01:03:40.710 --> 01:03:46.880
Speaker 2 (Quinlan Conf Room): If we wanted to go that route, or we could
even ask the independent auditors, but it's more like in the
451
01:03:48.410 --> 01:03:51.420
Speaker 2 (Quinlan Conf Room): internal auditor question, I think,
because it's,
452
01:03:51.860 --> 01:04:03.759
Speaker 2 (Quinlan Conf Room): special project, and we don't want to
tamper with the independence of Hunger. They have to give an opinion. So,
but I guess my answer, long-winded as it is, I'm trying to clarify all of
these, that
453
01:04:04.120 --> 01:04:18.660
Speaker 2 (Quinlan Conf Room): I think the internal auditors are a huge
resource. They've seen what they can do. They're very good at what they
do. Our authority is to tell them what to do, and then make sure there's
a budget, and city councils approving whatever we're recommending.
454
01:04:18.860 --> 01:04:27.540
Speaker 2 (Quinlan Conf Room): But I think that would be an example of
one where we have that. See, staff may have a view that maybe the actor…
maybe my interpretation is quite broad there.
455
01:04:28.160 --> 01:04:36.119
Speaker 1 (Quinlan Conf Room): Yeah, I think, thank you, Chair. The
starting point is the actor. That kind of establishes what your fund
balance is at the
456
01:04:36.120 --> 01:04:48.220
Speaker 1 (Quinlan Conf Room): end of a fiscal year, or the beginning of
the following fiscal year. So, just for reference, the general fund had
$181 million in fund balance at the end of last fiscal year.
457
01:04:48.440 --> 01:04:59.309
Speaker 1 (Quinlan Conf Room): Gfoa's best practice says that you should
have a minimum of no more than… no less than 2 months' worth of your
operating expenses or revenues.
458
01:04:59.330 --> 01:05:09.660
Speaker 1 (Quinlan Conf Room): And so, as you know, our general fund is
about $100 million a year, right? So that would equate to somewhere,
let's say, $150 to $20 million, right, in reserve.
459
01:05:10.390 --> 01:05:19.169
Speaker 1 (Quinlan Conf Room): we far exceed that amount, right? And so,
we know we have a hefty fund balance. Now, it's Council's
460
01:05:21.460 --> 01:05:29.839
Speaker 1 (Quinlan Conf Room): discretion or their direction as to how
that money should be spent, right? We just got out of the CDT.
461
01:05:30.040 --> 01:05:36.550
Speaker 1 (Quinlan Conf Room): And so that kind of put a pause on
spending, so we started building cash, right? Now we're…
462
01:05:36.720 --> 01:05:38.370
Speaker 1 (Quinlan Conf Room): seen sheriff's contract.
463
01:05:38.980 --> 01:05:43.789
Speaker 1 (Quinlan Conf Room): So that's another topic. So it's kind of
pausing any large construction projects.
464
01:05:44.460 --> 01:06:03.699
Speaker 1 (Quinlan Conf Room): However, Council also did direct staff to
go to perform an analysis for City Hall, which we know is going to be
quite pricey. And so, there's an analysis that needs to be performed as
far as what is the future spending of the city, what's the projection,
one, and then two, what are some of these major projects that the city
needs to…
465
01:06:03.770 --> 01:06:12.229
Speaker 1 (Quinlan Conf Room): pursue, or kind of spend. And where are we
going to land once all these projects are completed, and once you've
essentially drawn down that… that… that reserve?
466
01:06:12.560 --> 01:06:26.729
Speaker 1 (Quinlan Conf Room): And so, it's not to say, you know what you
have, let's say, from the 181, let's say you just say $20 million is the
minimum. Should we go spend $160 million tomorrow? Certainly not, right?
There should be a plan for that money.
467
01:06:27.320 --> 01:06:39.080
Speaker 1 (Quinlan Conf Room): And that's something that we would… we
should discuss further, but, we should go over one… one step at a time.
So, probably the biggest hurdle that the city has right now is the
sheriff's contract.
468
01:06:39.280 --> 01:06:42.680
Speaker 1 (Quinlan Conf Room): And then, some of these larger projects,
like City Hall.
469
01:06:43.060 --> 01:06:55.039
Speaker 1 (Quinlan Conf Room): I think once that's established. But in
the meantime, maybe this is a good project to include as part of the,
Baker Tilly's fiscal year 26-27 internal program… internal audit program.
470
01:06:56.080 --> 01:07:00.260
Speaker 2 (Quinlan Conf Room): I'm hearing Jonathan not object to the
structure, and he's trying to…
471
01:07:01.030 --> 01:07:03.379
Speaker 2 (Quinlan Conf Room): elucidate, so I have one example.
472
01:07:04.490 --> 01:07:16.300
Speaker 3 (Quinlan Conf Room): Yeah, so I do think that using the route
of the aquifer is… is good. I don't know if it could fall under…
473
01:07:16.330 --> 01:07:24.800
Speaker 3 (Quinlan Conf Room): E, which is to review city investment
policies and internal controls of such policies. And with that.
474
01:07:24.920 --> 01:07:41.770
Speaker 3 (Quinlan Conf Room): we have… there, I believe it's called a
reserve policy, which has the floor, but not a ceiling on that, which, at
some point, that should probably be discussed. I don't know where this
would fall
475
01:07:41.940 --> 01:07:43.640
Speaker 3 (Quinlan Conf Room): into,
476
01:07:44.330 --> 01:07:56.309
Speaker 3 (Quinlan Conf Room): the request from the Council, but the
budget, I've wanted to see a spot check of two of the budget units
that's… to see if
477
01:07:56.990 --> 01:07:58.059
Speaker 3 (Quinlan Conf Room): Number 8.
478
01:08:00.180 --> 01:08:03.049
Speaker 3 (Quinlan Conf Room): Are they nibbling upon old, old…
479
01:08:03.210 --> 01:08:11.399
Speaker 3 (Quinlan Conf Room): And, or can they actually go through and
find where it says contract services?
480
01:08:11.820 --> 01:08:17.969
Speaker 3 (Quinlan Conf Room): Back and spot check to see if the
contracts that are… are for that one.
481
01:08:19.010 --> 01:08:20.160
Speaker 3 (Quinlan Conf Room): those numbers.
482
01:08:20.370 --> 01:08:27.050
Speaker 3 (Quinlan Conf Room): any nexus at all. And I've kind of
wondered about that, and I think that that would be a Baker to…
483
01:08:27.279 --> 01:08:28.530
Speaker 3 (Quinlan Conf Room): That's… I think.
484
01:08:28.535 --> 01:08:33.664
Speaker 2 (Quinlan Conf Room): It could be, for sure, under the structure
that we set, because we've seen them do the formatting
485
01:08:33.935 --> 01:08:53.894
Speaker 2 (Quinlan Conf Room): help for us, as well as provide all kinds
of other operational comments. So, that's a… definitely one that… in
fact, my thought was when City Council did its study session, that this
would be a natural one. Maybe now's the time to put another element of
this on the table for all of us, is
486
01:08:54.145 --> 01:09:11.345
Speaker 2 (Quinlan Conf Room): There's… there's a budgeting element. I
mean, you want to say this is dollars behind every one of these projects,
so the way I look at it is, first you've got… first you've got the idea,
then you've got to structure the idea into how can you make it into
something that's doable by somebody, so whether that's city staff.
487
01:09:11.524 --> 01:09:12.815
Speaker 2 (Quinlan Conf Room): referral water.
488
01:09:13.225 --> 01:09:20.885
Speaker 2 (Quinlan Conf Room): independent auditors, so there… I think as
we add more of the items to our audit committee.
489
01:09:21.185 --> 01:09:34.095
Speaker 2 (Quinlan Conf Room): list of projects, I'm definitely not
opposed to having a whole bunch more, but I… we have this un… we don't
have budget authority ourselves, so we have to be
490
01:09:34.314 --> 01:09:51.244
Speaker 2 (Quinlan Conf Room): working in collaboration with city staff
and city council has got the policy to actually spend the money. So, I'm
not sure how we can clarify, I think, as a committee, how this would
work. Let's… every… every meeting, we have
491
01:09:51.595 --> 01:10:07.434
Speaker 2 (Quinlan Conf Room): you know, this list of what we're planning
to do. And we have the internal auditors come and prepare a program for
next year. So I think a lot of these we should probably plan to work it
into that. There's a budget that the internal auditors work with.
492
01:10:07.835 --> 01:10:11.325
Speaker 2 (Quinlan Conf Room): And before that, decided that Carlosures.
493
01:10:11.535 --> 01:10:18.195
Speaker 2 (Quinlan Conf Room): Policymakers to increase that budget so we
could actually do some of those things, right?
494
01:10:18.745 --> 01:10:20.884
Speaker 2 (Quinlan Conf Room): Yeah, I'm there.
495
01:10:22.290 --> 01:10:27.809
Speaker 3 (Quinlan Conf Room): First, need to look at 2.88.110.
496
01:10:28.170 --> 01:10:36.150
Speaker 3 (Quinlan Conf Room): city staff assistance, because I believe
we're having a municipal code update regarding finance.
497
01:10:36.460 --> 01:10:53.779
Speaker 3 (Quinlan Conf Room): Department. And this one says, the audit
committee shall have available to it such assistance of city staff as may
be required to perform its functions, the staff assignments, and
administrative procedures to be under the general direction and
supervision of the Director of Administrative Services.
498
01:10:53.920 --> 01:10:57.719
Speaker 3 (Quinlan Conf Room): I think that needs an edit for the GD code
update.
499
01:10:57.720 --> 01:10:58.820
Speaker 1 (Quinlan Conf Room): There's a… that…
500
01:10:59.210 --> 01:11:02.830
Speaker 3 (Quinlan Conf Room): I don't know if all of these little parts
are caught, if there's a few…
501
01:11:04.270 --> 01:11:09.779
Speaker 3 (Quinlan Conf Room): I think the treasurer one maybe needs it.
This is the first I noticed this, that the director…
502
01:11:09.780 --> 01:11:16.950
Speaker 1 (Quinlan Conf Room): Yeah, so this is referring to 80.110?
Yeah. Okay, yeah, I did capture that one. Okay, good, good.
503
01:11:16.955 --> 01:11:24.475
Speaker 3 (Quinlan Conf Room): Okay, good. But I'm wondering what this
means in terms of we want to have… get some things done,
504
01:11:25.085 --> 01:11:31.324
Speaker 3 (Quinlan Conf Room): You know, because that goes into, well,
staff wouldn't be doing it, it would be a consultant. It might be.
505
01:11:31.530 --> 01:11:33.600
Speaker 2 (Quinlan Conf Room): There's a lot of stuff the staff can do.
506
01:11:34.040 --> 01:11:40.550
Speaker 2 (Quinlan Conf Room): If there's gonna be an ongoing, for
example, charter for these kinds of projects, then that's a…
507
01:11:40.650 --> 01:11:55.360
Speaker 2 (Quinlan Conf Room): staff analysts, potentially. I mean, the
whole thing comes back in my mind, and again, speak up, there's a lot of
industry experience on this side of the table as well, as from your
slide, but there's staff resources that can do stuff.
508
01:11:55.360 --> 01:12:04.730
Speaker 2 (Quinlan Conf Room): Then there's independent contractors,
internal auditors, there's, all kinds of different people, so… .
509
01:12:04.860 --> 01:12:05.499
Speaker 3 (Quinlan Conf Room): I'd like to say.
510
01:12:05.505 --> 01:12:06.215
Speaker 1 (Quinlan Conf Room): such as…
511
01:12:06.220 --> 01:12:10.739
Speaker 3 (Quinlan Conf Room): to be staffed and do that. It could. Now,
but can…
512
01:12:12.130 --> 01:12:24.190
Speaker 3 (Quinlan Conf Room): because there's so many different budget
units, I would personally be saying, you're going to spot check. We want
to see a spot check of two, and this is getting into operational, more of
the
513
01:12:24.470 --> 01:12:29.170
Speaker 3 (Quinlan Conf Room): So if you go to a consultant and have them
do that, you've got that separation, but…
514
01:12:29.270 --> 01:12:39.880
Speaker 3 (Quinlan Conf Room): It's more like we would like the city
manager to be directing that this happens as an operational type thing.
It just seems like… I don't know how to…
515
01:12:40.100 --> 01:12:49.529
Speaker 2 (Quinlan Conf Room): what happens in industry, and maybe,
Jonathan, we've got the municipal, and our internal authors certainly can
comment too, but…
516
01:12:50.120 --> 01:12:52.440
Speaker 2 (Quinlan Conf Room): In industry, there's a…
517
01:12:52.540 --> 01:13:07.739
Speaker 2 (Quinlan Conf Room): The audit committee has huge authority to
go wherever its charter allows it, and that's an internal control, so if
it's an internal control issue, audit committee can draw on all kinds of
resources that the operational finance department will offer.
518
01:13:07.760 --> 01:13:22.439
Speaker 2 (Quinlan Conf Room): without any kind of complaint. In my
experience in the municipal situation, it doesn't work the same way. But
that doesn't mean it couldn't work in a different way than it is now. We
could start with, what's the budget of the internal audit?
519
01:13:22.950 --> 01:13:33.930
Speaker 2 (Quinlan Conf Room): We can… we could argue that it needs to be
X dollars that would then include the ability to flex into these kinds of
projects. Internal auditors, maybe in some years would not spend that
much.
520
01:13:34.040 --> 01:13:45.229
Speaker 2 (Quinlan Conf Room): But in other years, where we've got an
appetite, then they would. So, you could set that up as part of the
budgeting process that the city goes through.
521
01:13:45.350 --> 01:13:49.699
Speaker 2 (Quinlan Conf Room): So, I've commented before that Budget
could be…
522
01:13:50.250 --> 01:14:05.889
Speaker 2 (Quinlan Conf Room): I think the budget for the internal
auditors got sent into the city manager's department when I raised this
earlier. You happen to know off the top of what… who determines the
budget of the internal auditors currently? Finance or the city manager?
523
01:14:06.030 --> 01:14:07.979
Speaker 2 (Quinlan Conf Room): Oh, Council. Council.
524
01:14:08.570 --> 01:14:12.420
Speaker 2 (Quinlan Conf Room): Okay, so there we are. So, I think maybe…
525
01:14:12.960 --> 01:14:16.290
Speaker 2 (Quinlan Conf Room): You know, what has happened in the past
doesn't mean it has to happen
526
01:14:16.510 --> 01:14:25.700
Speaker 2 (Quinlan Conf Room): So there's different questions. One is,
what's the charter? What's the authority? What do we want the municipal
code to say? And the way I'm putting it out here is it already says a lot
of good stuff.
527
01:14:25.820 --> 01:14:35.269
Speaker 2 (Quinlan Conf Room): it's kind of up to us to say, well, we'd
like to start exercising some of that in a following way by increasing
the internal audit, scope. That's my…
528
01:14:35.400 --> 01:14:50.320
Speaker 2 (Quinlan Conf Room): answer to this whole meeting agenda, I
guess, other than the three items that the committee came up with. A
little bit of refinement in the name, as the staff report said, looking
at, you know, AI issues that I think are pocketable.
529
01:14:50.400 --> 01:15:02.970
Speaker 2 (Quinlan Conf Room): We could probably look at them anyways
under the authorities we have, based on the arguments I'm making, but
let's bring that one out. And then the third one is, making it clear that
we cover internal audit or internal control issues.
530
01:15:03.710 --> 01:15:21.519
Speaker 2 (Quinlan Conf Room): So, is that… I'm trying to go into what
we're addressing to charter, while at the same time addressing specific
projects, so it's kind of a big… we can also come back and address it
when we… when we address our… what our conflicts are here, but I think
it's good to get it into
531
01:15:21.770 --> 01:15:30.049
Speaker 2 (Quinlan Conf Room): a framework first. Any comments? You guys
are pretty familiar with internal audit, for example, or these kinds of
issues in industry. What's your thoughts?
532
01:15:31.000 --> 01:15:31.869
Speaker 2 (Quinlan Conf Room): Who else?
533
01:15:32.480 --> 01:15:33.520
Speaker 2 (Quinlan Conf Room): Come back.
534
01:15:35.390 --> 01:15:41.230
Speaker 2 (Quinlan Conf Room): Okay, but we don't have any public
comments, I presume? We have…
535
01:15:42.090 --> 01:15:45.910
Speaker 2 (Quinlan Conf Room): No speakers, share? Yeah, so we'll just
continue our little varies.
536
01:15:46.480 --> 01:15:57.140
Speaker 3 (Quinlan Conf Room): I'm not sure where to park this topic,
which, because of the… because of our position that we took on Measure A,
537
01:15:57.240 --> 01:16:10.559
Speaker 3 (Quinlan Conf Room): Which was the county sales tax, 0.65%. We
took a posed position on that. And then I started looking at the county
budget and where their money was going.
538
01:16:10.710 --> 01:16:30.340
Speaker 3 (Quinlan Conf Room): And now we have the issued sheriff's
contract, where they said, they've been subsidized for years. And so I
did a bunch of research into where our sales tax goes, and, where our
property tax goes. And…
539
01:16:30.850 --> 01:16:38.969
Speaker 3 (Quinlan Conf Room): I'd like this to become a topic of
discussion, but I'm not sure, where…
540
01:16:38.975 --> 01:16:56.164
Speaker 2 (Quinlan Conf Room): type ideas. It is. Very persuasive at the
last commissioner, by the way. Oh, so you've seen us. It's a report that
I can break out. It's on another section in our agenda, but the donor
seating concept is something the mayor introduced, and I thought was very
well presented. And there's… So, that's a great question, where that
would fit. I think…
541
01:16:56.375 --> 01:17:02.784
Speaker 2 (Quinlan Conf Room): One of the reasons we want to make our
agenda as efficient set items is some of the recurring stuff
542
01:17:03.275 --> 01:17:13.474
Speaker 2 (Quinlan Conf Room): put that into the bucket of consenting,
then we can move on to some of these other questions. So, where would a
question like that fit? That's a great question, actually.
543
01:17:13.475 --> 01:17:20.645
Speaker 3 (Quinlan Conf Room): oh gosh, a little over… no, I might have
been last week. Anyway, so I was looking at,
544
01:17:21.105 --> 01:17:23.705
Speaker 3 (Quinlan Conf Room): It's like Sunnyvale has a combined
sheriff.
545
01:17:23.885 --> 01:17:30.325
Speaker 3 (Quinlan Conf Room): fire, and so I was curious how much we
spent on fire. And it's,
546
01:17:30.605 --> 01:17:39.514
Speaker 3 (Quinlan Conf Room): It's a huge number, $81.6 million, because
it's based on our property tax. And, I think that at least it's way more
than it costs.
547
01:17:40.045 --> 01:17:47.715
Speaker 3 (Quinlan Conf Room): So we're subsidizing the whole network. A
normal city, 350 per person. This is $1,300 per capita.
548
01:17:48.085 --> 01:17:53.934
Speaker 3 (Quinlan Conf Room): That gun. So, this… it's… I think it's
information that… that…
549
01:17:54.095 --> 01:18:04.184
Speaker 3 (Quinlan Conf Room): needs to be shared, and that more of the
city should know about it, and then decide if this is something that
needs to be changed, but it… I don't know how this…
550
01:18:04.385 --> 01:18:09.494
Speaker 3 (Quinlan Conf Room): topic kind of fits into… like, what would
you call this?
551
01:18:09.715 --> 01:18:18.895
Speaker 2 (Quinlan Conf Room): Let me throw another one out. Since we
went through the actor thing, let's go back to the other element of the
municipal Code, which is we look at internal controls. That's the audit
committee's
552
01:18:19.415 --> 01:18:22.375
Speaker 2 (Quinlan Conf Room): One of the main functions of an audit
committee
553
01:18:22.765 --> 01:18:38.504
Speaker 2 (Quinlan Conf Room): financial internal controls often, but in
general, we've got the internal audit department, which can do
operational controls. So, okay, what's that mean? Well, budgeting is a
very important internal control that the city has.
554
01:18:38.605 --> 01:18:39.825
Speaker 2 (Quinlan Conf Room): If there's…
555
01:18:39.845 --> 01:18:50.874
Speaker 2 (Quinlan Conf Room): you know, a danger that the city may be
running out of reserves, or having a lot of revenue to cover its issues,
or particular contracts are subject to me, that's a…
556
01:18:50.885 --> 01:18:58.094
Speaker 2 (Quinlan Conf Room): That's a going concern type of issue that
in the industry, everybody just immediately jumps on, so yeah, we…
557
01:18:58.095 --> 01:19:11.905
Speaker 2 (Quinlan Conf Room): gotta look at that. So, again, I think the
authority is in the municipal pole already for us. Again, Jonathan, if
you get to apply, I think the last one that was… that I was stretching. I
don't think this one is much of a stretch, if there's a huge
558
01:19:11.905 --> 01:19:16.275
Speaker 2 (Quinlan Conf Room): Contractual issue that's suddenly subject
to
559
01:19:16.385 --> 01:19:21.624
Speaker 2 (Quinlan Conf Room): big numbers that the audit committee would
have authority in other contexts to go look at it.
560
01:19:22.215 --> 01:19:25.804
Speaker 2 (Quinlan Conf Room): But what's your view on that stretch of…
561
01:19:26.245 --> 01:19:28.654
Speaker 2 (Quinlan Conf Room): We want to call it a stretch.
562
01:19:29.270 --> 01:19:34.340
Speaker 1 (Quinlan Conf Room): to be frank, I probably wouldn't put it in
just the general internal controls.
563
01:19:34.480 --> 01:19:47.410
Speaker 1 (Quinlan Conf Room): upon Council's direction as far as the
formatting and the budget subcommittee, and kind of stretch budget
format, to include that. I think you would then be able to pull in the
564
01:19:47.680 --> 01:19:59.780
Speaker 1 (Quinlan Conf Room): sales and property tax, how that is
calculated into that, and how it kind of feeds into the budget, right? In
performing that analysis with them, right? So, you can tackle your…
565
01:19:59.780 --> 01:20:10.710
Speaker 1 (Quinlan Conf Room): sales and property tax can be the emphasis
one year. You can kind of move on to other taxes the next year, and you
kind of do some sort of cycle, right? I'm sure as audit subcommittee
members are
566
01:20:10.780 --> 01:20:14.879
Speaker 1 (Quinlan Conf Room): Moving seats, maybe…
567
01:20:14.890 --> 01:20:30.740
Speaker 1 (Quinlan Conf Room): a set of… a pair of committee members are
focused on property taxes and sales taxes, where the next is more on the
services fees the city charges the presidents, right? And so, you can go…
and then maybe, based off of that, those conversations had with staff.
568
01:20:30.740 --> 01:20:42.310
Speaker 1 (Quinlan Conf Room): and that analysis performed, they would
then report out to the rest of the audit committee, or even to Council as
far as findings, or in conjunction with the report that…
569
01:20:42.410 --> 01:20:45.010
Speaker 1 (Quinlan Conf Room): That, the staff provides.
570
01:20:46.960 --> 01:21:01.270
Speaker 1 (Quinlan Conf Room): as part of the budget process to, Council,
that, that, these emphasis or, certain topics were discussed as part of
the subcommittee, and this is what was, what, what, what was generated.
571
01:21:01.430 --> 01:21:07.359
Speaker 2 (Quinlan Conf Room): Let me restate in my opinion of
understanding what you're saying. I think that's a great point. There's
a…
572
01:21:07.480 --> 01:21:15.150
Speaker 2 (Quinlan Conf Room): We'll need to have subcommittees in
addition to supervising independent auditors, internal auditors,
contractors.
573
01:21:15.280 --> 01:21:21.800
Speaker 2 (Quinlan Conf Room): So we have done the subcommittee route,
and sometimes that's good to frame a project, which
574
01:21:22.100 --> 01:21:25.000
Speaker 2 (Quinlan Conf Room): I have to be honest, I think…
575
01:21:25.140 --> 01:21:31.210
Speaker 2 (Quinlan Conf Room): Committee members here can only be at the
high level of that kind of a subcommittee that we've worked on.
576
01:21:31.510 --> 01:21:41.710
Speaker 2 (Quinlan Conf Room): go into much more depth, that's really not
what these, typically, committee members are going to be able to do, but
helping frame a project, can then
577
01:21:42.360 --> 01:21:53.340
Speaker 2 (Quinlan Conf Room): let it go off into another incarnation. So
that's a great point. Not only do we have all the independent
contractors, we've got subcommittees that we have certainly utilized and
can utilize.
578
01:21:54.030 --> 01:21:56.420
Speaker 2 (Quinlan Conf Room): So that's… that does make more sense.
579
01:21:57.740 --> 01:22:10.630
Speaker 2 (Quinlan Conf Room): Yeah, please. I mean, we're interacting
here, I think, trying to keep it in a context of what can we agree upon
today that we can then forward to City Council in terms of what we have.
So this has been very productive. Keep going.
580
01:22:10.635 --> 01:22:13.274
Speaker 3 (Quinlan Conf Room): I was wondering if, if,
581
01:22:13.405 --> 01:22:21.554
Speaker 3 (Quinlan Conf Room): The committee feels that we're… the
Council has been looking at taxes, and should that
582
01:22:21.595 --> 01:22:31.105
Speaker 3 (Quinlan Conf Room): Maybe in the future, be something that
takes… has a stop here, where, the potential
583
01:22:31.105 --> 01:22:41.735
Speaker 3 (Quinlan Conf Room): taxes are discussed, and what their
implications would be before it gets to the Council, because there's a
dollar amount associated with each, potential, and I'm just kind of
584
01:22:41.745 --> 01:22:49.465
Speaker 3 (Quinlan Conf Room): Thinking, going back, if we could turn the
clock back, because we're already so far along this year, could or
should.
585
01:22:49.835 --> 01:22:53.004
Speaker 3 (Quinlan Conf Room): That be something that this committee
would look at?
586
01:22:53.255 --> 01:22:54.255
Speaker 3 (Quinlan Conf Room): Sure.
587
01:22:54.255 --> 01:23:08.784
Speaker 2 (Quinlan Conf Room): It could be, and that's a great question.
Again, what I would think is, first of all, there's the big question of,
is this an audit committee or a finance committee? And we sort of crossed
that decision point by saying, we've been acting
588
01:23:08.915 --> 01:23:12.895
Speaker 2 (Quinlan Conf Room): both capacities for decades. So…
589
01:23:13.615 --> 01:23:24.414
Speaker 2 (Quinlan Conf Room): Once you open up, in my mind, the finance
part of the committee, it's much less well-defined in a lot of ways than
the audit committee aspect of it, because,
590
01:23:24.415 --> 01:23:36.835
Speaker 2 (Quinlan Conf Room): there are these kinds of questions that
are inevitably less well-defined, so I… I think there's a tug and pull
here in terms of what kind of resources… how can we, as a committee, we
could
591
01:23:37.005 --> 01:23:38.404
Speaker 2 (Quinlan Conf Room): You could maybe…
592
01:23:38.575 --> 01:23:57.185
Speaker 2 (Quinlan Conf Room): you know, have more meetings, which is one
of our questions today. I'm not personally in favor of having more
meetings, because I think we should be efficient enough to delegate these
things to other experts, and not being experts necessarily ourselves, but
we could at least carve out what it is we're asking, and then supervise
that.
593
01:23:57.245 --> 01:24:16.874
Speaker 2 (Quinlan Conf Room): So I don't think more meetings necessarily
answer. Subcommittees are certainly an answer. Internal auditors are
certainly an answer once the project's well enough defined and the budget
has been obtained. In terms of actually looking at some of these finance
issues, it certainly could be done that way, but there's a tug and pull,
because we have trouble
594
01:24:17.105 --> 01:24:27.764
Speaker 2 (Quinlan Conf Room): getting at-large public members that are
qualified to do all these great things. Some of what you're saying, I
think, is a staff issue within the city.
595
01:24:27.845 --> 01:24:44.415
Speaker 2 (Quinlan Conf Room): that, where the policymakers say, okay, we
want a special report, whether that policymaker is coming from us as a
committee, city council, or some other committee, there is, ultimately,
some of this is a staff finance function.
596
01:24:44.505 --> 01:24:53.374
Speaker 2 (Quinlan Conf Room): Well, we want a report that breaks down
taxes, and that's what we would do if you, as policymakers, told us to do
something. The first thing we're going to look at is city staff.
597
01:24:54.200 --> 01:24:56.460
Quinlan Conf Room: So, maybe that helps.
598
01:24:57.170 --> 01:24:58.460
Speaker 2 (Quinlan Conf Room): comments from…
599
01:24:59.040 --> 01:25:06.770
Speaker 2 (Quinlan Conf Room): you guys, in terms of how do we structure
ourselves in a discussion here where having more meetings, we haven't
touched on that.
600
01:25:07.020 --> 01:25:16.579
Speaker 2 (Quinlan Conf Room): feeling of the committee. Right now, I
think maybe you can recap. I always get confused, but in the past, I've
looked at it as having one
601
01:25:16.740 --> 01:25:18.639
Speaker 2 (Quinlan Conf Room): Choir quarterly meeting.
602
01:25:18.790 --> 01:25:28.290
Speaker 2 (Quinlan Conf Room): And then we've generally had two special
meetings, and when we've had million-dollar issues or other significant
issues, we've had many more meetings.
603
01:25:28.840 --> 01:25:37.540
Speaker 2 (Quinlan Conf Room): So it covers them on the number of
meetings, and I have to say the years where we had the default payment
was, a lot of work.
604
01:25:38.240 --> 01:25:43.800
Speaker 2 (Quinlan Conf Room): That was not billed the time, versus my
billing at zero, but… Helps.
605
01:25:45.100 --> 01:25:53.580
Speaker 2 (Quinlan Conf Room): So, I don't have an appetite for
increasing the number of meetings, but I'm certainly open to whatever the
committee thinks makes sense.
606
01:25:54.300 --> 01:25:57.210
Speaker 2 (Quinlan Conf Room): Or staff, or the cousin.
607
01:25:57.215 --> 01:26:05.295
Speaker 1 (Quinlan Conf Room): could make a recommendation to… I think
that would fall somewhere between our existing structure and what
Council's asking.
608
01:26:05.405 --> 01:26:15.185
Speaker 1 (Quinlan Conf Room): So yes, we meet on a quarterly basis. And
currently, we do have a special meeting planned for November slash
December to go over the
609
01:26:15.275 --> 01:26:25.045
Speaker 1 (Quinlan Conf Room): Annual Comprehensive financial report, so
that one is… would be number 5, right? It's kind of a moving target,
depending on when the audit's completed.
610
01:26:25.105 --> 01:26:36.064
Speaker 1 (Quinlan Conf Room): Should there be another meeting, kind of a
moving one, would probably, if there would be a recommendation, would be
June to close out specifically for internal audit work program.
611
01:26:36.065 --> 01:26:49.224
Speaker 1 (Quinlan Conf Room): items, so before going into the new fiscal
year, any outstanding, program, projects that, Baker Tilly has been
working on, and that's the sole purpose of that meeting, or anything that
may come up that's outside of it.
612
01:26:49.235 --> 01:27:05.034
Speaker 1 (Quinlan Conf Room): I thought that would kind of capture that
the year meet the six requirements, and not necessarily provide a great
workload. Now, let's say the internal audit work program items are
addressed within the normal course of business, right, during the
quarters.
613
01:27:05.085 --> 01:27:06.475
Speaker 1 (Quinlan Conf Room): Should… if…
614
01:27:06.685 --> 01:27:14.785
Speaker 1 (Quinlan Conf Room): Let's say we get to April, and we've
already addressed all of them. They've been heard by the audit committee.
At that point, it probably makes sense just to cancel that meeting.
615
01:27:15.035 --> 01:27:18.814
Speaker 1 (Quinlan Conf Room): And so that was what, essentially, the,
the, the, the,
616
01:27:18.965 --> 01:27:27.594
Speaker 1 (Quinlan Conf Room): from my understanding, what the Vice Mayor
was looking for, to have additional meetings, and Council, if needed,
those special meetings.
617
01:27:28.670 --> 01:27:40.269
Speaker 2 (Quinlan Conf Room): Thank you for that. That's very good. All
of this reminds me, the more we suggest heartfroning into the municipal
code, it's much more difficult to change it, so expanding it out has
618
01:27:40.630 --> 01:27:45.279
Speaker 2 (Quinlan Conf Room): Man, this occurred. Makes more sense to me
than hard coding, but…
619
01:27:45.440 --> 01:27:48.560
Speaker 2 (Quinlan Conf Room): I'm not hearing you object, so… You're
here.
620
01:27:48.810 --> 01:27:49.690
Speaker 2 (Quinlan Conf Room): on.
621
01:27:50.150 --> 01:28:06.729
Speaker 2 (Quinlan Conf Room): I guess in other contexts, it's like,
well, if the committee's not doing a good job, then maybe it wouldn't be
asked to meet more frequently. So I can look at this as a very positive
thing, and we certainly could take on more responsibilities, but it's
kind of like, well, what happens in the long term?
622
01:28:06.970 --> 01:28:12.699
Speaker 2 (Quinlan Conf Room): It's people burn out. I can see committee
members, honestly, I've done this long enough.
623
01:28:13.590 --> 01:28:18.209
Speaker 2 (Quinlan Conf Room): Burnout is a real risk. Hopefully, we're
adding some value to this, but…
624
01:28:18.390 --> 01:28:26.809
Speaker 2 (Quinlan Conf Room): shmitty, I think we're doing better. But
you can try to bite off too much, and I'm afraid that may be part of the
hard…
625
01:28:27.060 --> 01:28:29.290
Speaker 2 (Quinlan Conf Room): issue that we're addressing.
626
01:28:29.420 --> 01:28:38.589
Speaker 2 (Quinlan Conf Room): Wouldn't it be great if this committee
could do all kinds of things? I'm not sure that it is, so that's why I'm
coming.
627
01:28:39.110 --> 01:28:43.240
Speaker 2 (Quinlan Conf Room): Okay, how do we make this into a motion,
and then we can talk some more.
628
01:28:43.350 --> 01:28:47.899
Speaker 2 (Quinlan Conf Room): So, I'm happy to suggest a motion.
629
01:28:48.760 --> 01:28:52.530
Speaker 2 (Quinlan Conf Room): Why don't… I guess staff has a suggestion
here.
630
01:28:53.610 --> 01:28:54.190
Speaker 2 (Quinlan Conf Room): What the
631
01:28:54.630 --> 01:29:10.019
Speaker 2 (Quinlan Conf Room): I was happy with what the free charter
management, I want to call that. We had specific wording last year,
keeping those, as a continuing charter recommendation from us, and…
632
01:29:10.180 --> 01:29:13.020
Speaker 2 (Quinlan Conf Room): Keeping our meetings as they are
currently.
633
01:29:13.460 --> 01:29:24.710
Speaker 2 (Quinlan Conf Room): With the ability to have special meetings
called as appropriate, as well as subcommittee meetings, and as well as
increasing the internal audit budget as deemed appropriate.
634
01:29:27.640 --> 01:29:31.820
Speaker 2 (Quinlan Conf Room): So that could be the outline of something
that goes in low sheet.
635
01:29:33.240 --> 01:29:34.240
Speaker 2 (Quinlan Conf Room): Never.
636
01:29:36.960 --> 01:29:38.420
Speaker 2 (Quinlan Conf Room): Upstairs.
637
01:29:39.570 --> 01:29:40.780
Speaker 2 (Quinlan Conf Room): I ain't thinking.
638
01:29:42.250 --> 01:29:47.609
Speaker 3 (Quinlan Conf Room): I agree with that, but I think maybe for
the next item, with regards to the calendar.
639
01:29:48.170 --> 01:29:51.390
Speaker 3 (Quinlan Conf Room): I can request, perhaps.
640
01:29:52.160 --> 01:29:56.330
Speaker 3 (Quinlan Conf Room): That we look at,
641
01:29:57.210 --> 01:29:59.730
Quinlan Conf Room: Look at the taxes.
642
01:30:00.770 --> 01:30:15.259
Speaker 3 (Quinlan Conf Room): For that one, it isn't just the
percentage, it's ultimately that I… if I were to follow the topic all the
way to the top, it would be that I would want to see some direction given
to the manager to
643
01:30:15.530 --> 01:30:18.450
Speaker 3 (Quinlan Conf Room): Work on seeing if there's some…
644
01:30:19.350 --> 01:30:26.880
Speaker 3 (Quinlan Conf Room): legislative means that we could build in
order to get these 1978 percentages.
645
01:30:27.090 --> 01:30:28.500
Speaker 3 (Quinlan Conf Room): Updated.
646
01:30:28.620 --> 01:30:43.439
Speaker 3 (Quinlan Conf Room): Because that's really the crux of the
matter, is that we're locked in with these very old… the 15% of our
property tax going to the fire, where we only be able to keep 6.51, to
see if there's something… so that's kind of like…
647
01:30:43.870 --> 01:30:52.410
Speaker 3 (Quinlan Conf Room): I'm wondering if we begin it here, it
moves to Council, we reckon Council look at it, also say, wow, this is
terrible.
648
01:30:52.980 --> 01:31:00.679
Speaker 3 (Quinlan Conf Room): Yeah, is there something you can do about
it? And then that would follow on after this discussion with the sheriff,
so the…
649
01:31:01.310 --> 01:31:08.739
Speaker 3 (Quinlan Conf Room): I don't know if that makes sense as a way
to have this topic go through the system. It might, like.
650
01:31:08.745 --> 01:31:17.104
Speaker 2 (Quinlan Conf Room): And I like hearing that. Here's one issue
that we've touched on that comes right back into play, is
651
01:31:17.825 --> 01:31:18.585
Speaker 2 (Quinlan Conf Room): Oh.
652
01:31:20.575 --> 01:31:25.924
Speaker 2 (Quinlan Conf Room): how do we spend other people's money in a
way that makes sense? And…
653
01:31:26.155 --> 01:31:33.495
Speaker 2 (Quinlan Conf Room): Right now, I'm only asking this, and I'm
trying to get some Levity, well, we also have…
654
01:31:33.715 --> 01:31:47.164
Speaker 2 (Quinlan Conf Room): The problem here is we've got lots of
things that I could see we could come up with as projects, and I like
that one, for a lot, you know, but the previous one, I liked the previous
two, I liked those two.
655
01:31:47.315 --> 01:32:00.124
Speaker 2 (Quinlan Conf Room): But they're going to take staff time, and
they're going to take resources, whether it's our committee members not
burning themselves out, but bringing it, and then also maybe getting the
right experts that can bring some
656
01:32:00.525 --> 01:32:04.565
Speaker 2 (Quinlan Conf Room): experience as well as insight into the
project, so…
657
01:32:04.885 --> 01:32:18.395
Speaker 2 (Quinlan Conf Room): maybe another project we could add to this
that I could add as response to you, is how do we tighten up the
budgeting element of what… what do the four of us right now, the five of
us, what can we spend?
658
01:32:18.405 --> 01:32:27.415
Speaker 2 (Quinlan Conf Room): on some of these things, and how do we not
go crazy by saying, well, we want to do this project and this project,
and just send it to City Council if you guys worry about it?
659
01:32:27.745 --> 01:32:30.115
Speaker 2 (Quinlan Conf Room): We don't have the staff doesn't have them.
660
01:32:30.455 --> 01:32:37.015
Speaker 2 (Quinlan Conf Room): Yeah, but maybe they have it spoiled away
in budget for pillow authors that we are proving to right now.
661
01:32:37.195 --> 01:32:39.855
Speaker 2 (Quinlan Conf Room): Are you listening, Chelsea?
662
01:32:40.080 --> 01:32:42.769
Chelsea Ritchie, Baker Tilly: I am listening.
663
01:32:43.680 --> 01:32:45.370
Speaker 6 (Quinlan Conf Room): So…
664
01:32:46.010 --> 01:32:51.829
Speaker 2 (Quinlan Conf Room): I hear you saying, well, we can address
some of this in this part of the thing, but it doesn't shape the way the
whole
665
01:32:52.240 --> 01:32:55.610
Speaker 2 (Quinlan Conf Room): Problem of, you know, how do we fund it?
666
01:32:56.960 --> 01:32:59.060
Speaker 2 (Quinlan Conf Room): results. Simple.
667
01:32:59.230 --> 01:33:11.840
Speaker 2 (Quinlan Conf Room): let me throw out that we can, you know,
come up with a couple hundred thousand dollars. In a big… in a budget
that we have right now in the city, that's… that rounds to less than,
wow, 2%, one… it's not even a 1% problem.
668
01:33:11.840 --> 01:33:12.600
Speaker 6 (Quinlan Conf Room): You're right.
669
01:33:12.605 --> 01:33:16.155
Speaker 1 (Quinlan Conf Room): $100,000 for the auditors, so…
670
01:33:16.155 --> 01:33:19.375
Speaker 2 (Quinlan Conf Room): Was that per year? That's on a 3-year
lease. Annual lease.
671
01:33:20.800 --> 01:33:23.460
Speaker 5 (Quinlan Conf Room): And how does that compare to the…
672
01:33:24.540 --> 01:33:27.259
Speaker 1 (Quinlan Conf Room): We have to perform that analysis.
673
01:33:27.745 --> 01:33:29.134
Speaker 6 (Quinlan Conf Room): So what I'm saying is we…
674
01:33:29.140 --> 01:33:42.929
Speaker 2 (Quinlan Conf Room): triple the… whatever the audit budget is,
we can triple it, because they seem to be busy doing things already that
we're happy with, but we've got some more things we want to do. So, how
do we get some more clarity on that before we actually
675
01:33:43.500 --> 01:33:45.239
Speaker 2 (Quinlan Conf Room): I was, we can put it on.
676
01:33:45.245 --> 01:33:46.395
Speaker 7 (Quinlan Conf Room): But I'm still babbling.
677
01:33:46.395 --> 01:33:48.545
Speaker 2 (Quinlan Conf Room): It's so long as the standards, it's
doable.
678
01:33:48.550 --> 01:33:49.320
Speaker 7 (Quinlan Conf Room): That's, that's…
679
01:33:49.395 --> 01:33:52.464
Speaker 2 (Quinlan Conf Room): Not good either, but… so maybe we need a…
680
01:33:53.960 --> 01:33:54.730
Speaker 7 (Quinlan Conf Room): book.
681
01:33:54.960 --> 01:33:56.079
Speaker 7 (Quinlan Conf Room): Or, is a lot.
682
01:33:56.085 --> 01:34:02.374
Speaker 2 (Quinlan Conf Room): A staff report that could outline how we
could be more efficient in addressing this question.
683
01:34:02.705 --> 01:34:07.214
Speaker 2 (Quinlan Conf Room): How's that? Because we don't really know
what we can spend, so how can we tell Chelsea to…
684
01:34:08.990 --> 01:34:13.489
Speaker 3 (Quinlan Conf Room): Through the chair, what does the city
staff assistance actually…
685
01:34:13.630 --> 01:34:22.440
Speaker 3 (Quinlan Conf Room): means, the audit have available to it such
assistance of city… performance functions.
686
01:34:24.310 --> 01:34:31.020
Speaker 3 (Quinlan Conf Room): So, we… If we consider these things
artificial functions, And…
687
01:34:31.810 --> 01:34:34.520
Speaker 6 (Quinlan Conf Room): Where is the unlimited budget?
688
01:34:34.525 --> 01:34:40.464
Speaker 4 (Quinlan Conf Room): Depends on how much you want to give us,
right? I would agree with that. Is it unlimited?
689
01:34:41.280 --> 01:34:44.619
Speaker 7 (Quinlan Conf Room): The authority is there, is what you're
saying.
690
01:34:45.140 --> 01:34:47.049
Speaker 7 (Quinlan Conf Room): But there's a practical element.
691
01:34:47.530 --> 01:34:48.390
Speaker 7 (Quinlan Conf Room): So…
692
01:34:50.580 --> 01:34:54.699
Speaker 2 (Quinlan Conf Room): I think we could maybe make this a
collaborative element, so let's say…
693
01:34:54.800 --> 01:35:04.690
Speaker 2 (Quinlan Conf Room): you could come up with 3 or 4, maybe of
the 10 that all of us are thinking of that would be great projects, and
we could prioritize them. And then we could say.
694
01:35:04.960 --> 01:35:16.759
Speaker 2 (Quinlan Conf Room): City Manager, what do you think? I mean,
that is another observation. I've mentioned that resources are
constrained. In the past, we've had a lot of success with City Manager
actually being present.
695
01:35:16.900 --> 01:35:17.559
Speaker 2 (Quinlan Conf Room): first year.
696
01:35:17.745 --> 01:35:18.505
Speaker 7 (Quinlan Conf Room): for…
697
01:35:18.950 --> 01:35:22.269
Speaker 2 (Quinlan Conf Room): representative, but you're also an
independent finance
698
01:35:22.500 --> 01:35:33.390
Speaker 2 (Quinlan Conf Room): person, so I think having City Manager in
these kinds of discussions adds a practical element. I've asked city
manager some or senator delegate, but things haven't really worked out.
699
01:35:33.990 --> 01:35:39.780
Speaker 1 (Quinlan Conf Room): They attempted to… just as a… why they did
attempt to make it today, unfortunately, they got caught up at City…
700
01:35:39.785 --> 01:35:40.545
Speaker 7 (Quinlan Conf Room): are completely.
701
01:35:40.545 --> 01:36:00.214
Speaker 2 (Quinlan Conf Room): believe it and understand it, but we've
had some… the reason I bring it up is sometimes there's these default
patient issues that go cross-departmental things. Sometimes there's
authority issues that we're asking them. Like, right now, it would be
nice to know, well, yeah, they've got to scroll away $300,000 that we can
just pull out, and then we would probably quickly make our motion and
move to this.
702
01:36:00.305 --> 01:36:08.325
Speaker 2 (Quinlan Conf Room): But it's not that easy, because maybe they
don't have it scored away, or maybe in public, they're not going to say
it anyway, so…
703
01:36:08.415 --> 01:36:22.474
Speaker 2 (Quinlan Conf Room): But what I'd suggest is we move on to the
project list, which one way to get it started is we could have that
discussion when that's there, and in the meantime, we've been trying to
get our charter, which maybe I was just seeing an appetite here, but
704
01:36:22.495 --> 01:36:35.604
Speaker 2 (Quinlan Conf Room): a couple of us were nodding heads on the
motion I had sort of outlined. If we have agreement on that, then we can
sort of go from the principle of we have a lot of authority, what we're
still not sure of is how we can judiciously
705
01:36:35.845 --> 01:36:40.594
Speaker 2 (Quinlan Conf Room): Exercise that in a collaborative function,
and then we can talk about that in this.
706
01:36:41.330 --> 01:36:45.340
Speaker 3 (Quinlan Conf Room): So, given the various additional topics
that we would
707
01:36:45.590 --> 01:36:53.270
Speaker 3 (Quinlan Conf Room): I'd like to entertain, perhaps. We don't
know what the budget is, and we need to have some clarity around that.
That's what I meant, yes.
708
01:36:53.470 --> 01:36:59.710
Speaker 2 (Quinlan Conf Room): Yeah, plus all the things that maybe the
City Council went through in their study session, I think fits into the
same thing.
709
01:36:59.830 --> 01:37:00.540
Speaker 2 (Quinlan Conf Room): That's the authority.
710
01:37:00.545 --> 01:37:01.895
Speaker 7 (Quinlan Conf Room): as far as I'm concerned.
711
01:37:01.895 --> 01:37:03.244
Speaker 2 (Quinlan Conf Room): Concern is still there.
712
01:37:03.585 --> 01:37:13.625
Speaker 2 (Quinlan Conf Room): I don't think we need more meetings, which
is by necessity going to make us be efficient to handle any extra
projects that are added in addition, or…
713
01:37:13.855 --> 01:37:26.715
Speaker 2 (Quinlan Conf Room): something will get more meetings, or
something. They don't have to be hard-coded. I guess I'm coming back as a
broken record, so… Hey, I'm seeing enough nods to… do we want to have a
motion that somehow strives to.
714
01:37:27.700 --> 01:37:29.820
Quinlan Conf Room: publish what I had previously said.
715
01:37:32.320 --> 01:37:37.919
Speaker 2 (Quinlan Conf Room): Jonathan, did you keep track? Well, I
guess we're trying to keep… I'll make the motion. The motion is to…
716
01:37:38.170 --> 01:37:48.409
Speaker 2 (Quinlan Conf Room): continued part of the City Council for its
approval. The vast majority of the community arrived at last year for
school three areas.
717
01:37:48.530 --> 01:37:55.069
Speaker 2 (Quinlan Conf Room): And… Not change the number of meetings,
or…
718
01:37:55.180 --> 01:37:59.530
Speaker 2 (Quinlan Conf Room): Municipal code suggest times for meetings.
719
01:38:00.840 --> 01:38:02.340
Speaker 7 (Quinlan Conf Room): And…
720
01:38:03.600 --> 01:38:12.509
Speaker 2 (Quinlan Conf Room): all the things that were requested in the
study session would be under our authority, but we're not sure how the
heck… no, I can't go there, but that's too much.
721
01:38:12.880 --> 01:38:15.310
Speaker 2 (Quinlan Conf Room): Can I cut it off whenever I said
previously?
722
01:38:15.700 --> 01:38:19.759
Speaker 2 (Quinlan Conf Room): I guess no more extra meetings, the three
things we suggested last time.
723
01:38:20.130 --> 01:38:25.430
Speaker 2 (Quinlan Conf Room): Everything else is in doubt, because we
don't know the budget, and we want internal auditors to be able to do it.
724
01:38:26.010 --> 01:38:29.650
Speaker 3 (Quinlan Conf Room): So we're… we're needing budget authority.
725
01:38:30.260 --> 01:38:32.059
Speaker 3 (Quinlan Conf Room): Yeah, you know, but…
726
01:38:32.450 --> 01:38:33.200
Speaker 6 (Quinlan Conf Room): So we won't.
727
01:38:33.205 --> 01:38:37.914
Speaker 2 (Quinlan Conf Room): put that in the charter. It doesn't seem
like that. We want to make the charter motion clean.
728
01:38:38.445 --> 01:38:53.795
Speaker 1 (Quinlan Conf Room): In terms of what's being recommended, it
seems like it's essentially everything status quo. However, based off the
conversation that's had, and some of the desires of Council, it seems
like the Audit Committee can address those through an increase in the
budget and recall asking.
729
01:38:53.875 --> 01:39:01.095
Speaker 1 (Quinlan Conf Room): The internal auditors or another
consultant to perform an analysis, which would then report back to the
audit committee.
730
01:39:01.265 --> 01:39:02.814
Speaker 2 (Quinlan Conf Room): That could be in the staff report.
731
01:39:02.945 --> 01:39:05.675
Speaker 2 (Quinlan Conf Room): That goes with this. Okay.
732
01:39:05.675 --> 01:39:07.315
Speaker 6 (Quinlan Conf Room): is clean. Is that…
733
01:39:07.550 --> 01:39:13.240
Speaker 2 (Quinlan Conf Room): Charter is clear. There's 3 municipal code
amendments, and there's no additional meetings.
734
01:39:13.670 --> 01:39:21.440
Speaker 2 (Quinlan Conf Room): And that's it. That's what we're
recommending the municipal code change to. And then in addition, we have
this discussion of staff supports, or whatever.
735
01:39:22.690 --> 01:39:24.119
Speaker 7 (Quinlan Conf Room): to the authority.
736
01:39:24.675 --> 01:39:28.945
Speaker 2 (Quinlan Conf Room): Or additional projects that we would then
work into our normal course of action.
737
01:39:30.135 --> 01:39:38.665
Speaker 2 (Quinlan Conf Room): We have mechanisms for setting the
internal audit program already. It comes to us first, then it goes to
City Council, so…
738
01:39:38.845 --> 01:39:41.424
Speaker 2 (Quinlan Conf Room): Well, next year, when that arrives, you
can do that.
739
01:39:41.425 --> 01:39:42.155
Speaker 7 (Quinlan Conf Room): hardware.
740
01:39:42.670 --> 01:39:45.370
Speaker 2 (Quinlan Conf Room): You have subcommittees and all these other
things to talk about.
741
01:39:47.990 --> 01:39:55.220
Speaker 2 (Quinlan Conf Room): You want to leave the motion? We kind of
have a second before you have a lead back of the motion. Anyone want a
second whenever it looks like a second?
742
01:39:57.410 --> 01:39:58.840
Speaker 6 (Quinlan Conf Room): I can make blood sleep.
743
01:40:00.330 --> 01:40:05.249
Speaker 2 (Quinlan Conf Room): Three, do you want to repeat what the
municipal sold is recommending?
744
01:40:05.920 --> 01:40:24.330
Speaker 1 (Quinlan Conf Room): So, need to retain the three original,
motions, by the audit committee, one being the name change, two being
clarification on oversight of internal audit reports, and three being the
use of artificial intelligence as a tool for financial reporting.
745
01:40:24.610 --> 01:40:28.059
Speaker 1 (Quinlan Conf Room): In addition to those three would be to…
746
01:40:28.260 --> 01:40:32.449
Speaker 1 (Quinlan Conf Room): Not change the meeting requirements as set
by the municipal Code.
747
01:40:32.730 --> 01:40:37.269
Speaker 1 (Quinlan Conf Room): That would be the… the action. And then
included in the
748
01:40:37.700 --> 01:40:49.140
Speaker 1 (Quinlan Conf Room): Staff report is the request of additional
appropriations for, other projects as…
749
01:40:50.480 --> 01:40:52.110
Speaker 1 (Quinlan Conf Room): Set at a future date.
750
01:40:52.250 --> 01:40:55.529
Speaker 1 (Quinlan Conf Room): Or, per recommendation, me and Julie.
751
01:40:56.550 --> 01:40:58.949
Speaker 2 (Quinlan Conf Room): That sounds like a clear enough motion.
752
01:40:59.240 --> 01:41:00.109
Speaker 6 (Quinlan Conf Room): A second?
753
01:41:00.420 --> 01:41:04.529
Speaker 2 (Quinlan Conf Room): Alright, we've got a second. Excellent.
Now we can actually debate the motion.
754
01:41:05.150 --> 01:41:06.020
Speaker 7 (Quinlan Conf Room): See, though.
755
01:41:06.410 --> 01:41:07.440
Speaker 7 (Quinlan Conf Room): Tuggets.
756
01:41:08.200 --> 01:41:09.840
Speaker 7 (Quinlan Conf Room): Questions, thoughts?
757
01:41:11.870 --> 01:41:16.739
Speaker 2 (Quinlan Conf Room): I'd like to compute a little bit of time,
and we're gonna jump into it soon.
758
01:41:17.390 --> 01:41:18.320
Speaker 7 (Quinlan Conf Room): is…
759
01:41:19.200 --> 01:41:20.380
Speaker 2 (Quinlan Conf Room): budget issue.
760
01:41:20.820 --> 01:41:24.329
Speaker 2 (Quinlan Conf Room): Maybe it's appropriate. Do you guys think
it's more appropriate to go over.
761
01:41:25.105 --> 01:41:25.625
Speaker 6 (Quinlan Conf Room): Partly.
762
01:41:25.625 --> 01:41:26.585
Speaker 2 (Quinlan Conf Room): Well, this is the stronger.
763
01:41:26.585 --> 01:41:29.294
Speaker 7 (Quinlan Conf Room): Talk about it, or talk about it now.
764
01:41:32.590 --> 01:41:36.099
Speaker 6 (Quinlan Conf Room): Explain a little further what that title
means to you? Yeah, what that means.
765
01:41:36.100 --> 01:41:40.730
Speaker 2 (Quinlan Conf Room): is I can easily see tripling Chelsea's.
766
01:41:41.310 --> 01:41:43.319
Speaker 7 (Quinlan Conf Room): Internal audit budget.
767
01:41:43.320 --> 01:41:48.970
Speaker 2 (Quinlan Conf Room): projects, and whatever additional staff
time that implies.
768
01:41:48.975 --> 01:41:50.574
Speaker 7 (Quinlan Conf Room): 13 is dependent on.
769
01:41:50.705 --> 01:41:51.425
Speaker 7 (Quinlan Conf Room): staff.
770
01:41:51.425 --> 01:42:01.435
Speaker 2 (Quinlan Conf Room): providing them with as much information as
possible, so there's a huge cost involved there. So, whatever tripling
means for staff, it could be more, but,
771
01:42:02.395 --> 01:42:05.904
Speaker 2 (Quinlan Conf Room): if you give me free rein personally, I
could come up with some…
772
01:42:06.005 --> 01:42:15.465
Speaker 2 (Quinlan Conf Room): exciting problems. I'd ask you first, and
then we'd list some more. So, I'm having some struggle bringing it back
to practicality.
773
01:42:15.675 --> 01:42:29.025
Speaker 2 (Quinlan Conf Room): I've got to chair these meetings, and
today we've been very efficient. Well, sometimes we have a lot of
discussion on other topics that are worthy. We only have 2 hours at a
regular meeting, so this goes to, well, why aren't you having more
meetings?
774
01:42:29.440 --> 01:42:30.799
Speaker 6 (Quinlan Conf Room): Well, I think we can.
775
01:42:30.805 --> 01:42:36.184
Speaker 2 (Quinlan Conf Room): get what we're currently tasked with doing
done with the meetings that are required, but we start adding
776
01:42:36.415 --> 01:42:37.644
Speaker 2 (Quinlan Conf Room): All kinds of fun.
777
01:42:37.645 --> 01:42:38.845
Speaker 6 (Quinlan Conf Room): finance related.
778
01:42:38.850 --> 01:42:55.540
Speaker 2 (Quinlan Conf Room): issues. I'm willing to take that on as a
chair, but I'm just observing that these meetings are going to take more
time. They're going to go into issues that aren't easily addressed in our
staff report. First of all, we five don't have a lot of.
779
01:42:55.545 --> 01:42:56.335
Speaker 7 (Quinlan Conf Room): crap, bro.
780
01:42:56.340 --> 01:42:58.700
Speaker 2 (Quinlan Conf Room): So we're gonna need a lot more reading
time.
781
01:42:59.040 --> 01:43:07.880
Speaker 2 (Quinlan Conf Room): committee members are going to have to
read these reports, we're going to need more basic stuff, so… I think
this is all fine, because it's being responsive to City Council, but I'm
just…
782
01:43:08.330 --> 01:43:11.780
Speaker 2 (Quinlan Conf Room): Raising it since this is the time to
discuss why we have the motion.
783
01:43:13.160 --> 01:43:16.550
Speaker 2 (Quinlan Conf Room): So, I don't think it changes the notion,
but it just clarifies it.
784
01:43:18.100 --> 01:43:22.200
Speaker 1 (Quinlan Conf Room): Can I just ask one question? It's actually
going to be directed to Chelsea.
785
01:43:22.460 --> 01:43:27.030
Speaker 1 (Quinlan Conf Room): Do you have the bandwidth To increase your
budget.
786
01:43:28.040 --> 01:43:32.230
Chelsea Ritchie, Baker Tilly: Absolutely, yeah, you know, we have over 50
787
01:43:32.280 --> 01:43:48.359
Chelsea Ritchie, Baker Tilly: 50 team members that do this within, our
internal audit team, so definitely can add more members if needed.
Obviously, we would want to talk to you all about the details.
788
01:43:49.910 --> 01:43:52.000
Speaker 7 (Quinlan Conf Room): Thank you for a great question.
789
01:43:52.005 --> 01:43:54.825
Speaker 2 (Quinlan Conf Room): We shouldn't assume anything.
790
01:43:56.945 --> 01:44:05.115
Speaker 2 (Quinlan Conf Room): Okay. On that note, we'll probably need
more clarification, but are we happy? Want to take a vote? Everybody's
had a chance to…
791
01:44:05.535 --> 01:44:09.314
Speaker 2 (Quinlan Conf Room): It's for us? Okay, why don't… why don't we
take a vote on the motion as…
792
01:44:10.065 --> 01:44:13.914
Speaker 2 (Quinlan Conf Room): All the table? All in favor, aye. Aye.
793
01:44:14.465 --> 01:44:22.384
Speaker 2 (Quinlan Conf Room): Any opposed? No. We don't have any. It
looks like it's immense. Thank you very much for an intriguing
discussion.
794
01:44:22.705 --> 01:44:25.205
Speaker 6 (Quinlan Conf Room): Jonathaniel carries out that still.
795
01:44:25.210 --> 01:44:26.209
Speaker 2 (Quinlan Conf Room): done for us?
796
01:44:26.460 --> 01:44:28.720
Speaker 2 (Quinlan Conf Room): And now, we move on to…
797
01:44:29.960 --> 01:44:34.129
Speaker 7 (Quinlan Conf Room): Oh, by the time, sorry. Next page. Reduce
our…
798
01:44:35.090 --> 01:44:50.729
Speaker 2 (Quinlan Conf Room): It's an informational item, but probably
we should… unfortunately, we've got 10 minutes to actually discuss it, so
it's gonna be more discussion time, so I think my question would be, can
we just list right now, maybe the three that we
799
01:44:50.770 --> 01:45:02.910
Speaker 2 (Quinlan Conf Room): already had on the table. There was one
that was a budget-related issue that was very interesting, very big-
level, reserve slash budget. How can we put that in some sort of a…
800
01:45:03.320 --> 01:45:05.029
Speaker 2 (Quinlan Conf Room): phrase that we could…
801
01:45:05.250 --> 01:45:23.500
Speaker 2 (Quinlan Conf Room): I think what I'm looking for is
identifying 3 or 4 items here that we need more staff consideration and
thinking on for us to be able to deliberate in a future meeting as to
when we might address it, and who might address it, right? Because we
don't know budgeting, we don't know what's
802
01:45:23.870 --> 01:45:28.490
Speaker 2 (Quinlan Conf Room): I don't know if there's input on all this
is. We don't know what Chelsea's input might be, so…
803
01:45:28.690 --> 01:45:33.990
Speaker 2 (Quinlan Conf Room): The goal here is to maybe… what 3
additional projects or more can we rattle off here?
804
01:45:33.995 --> 01:45:35.435
Speaker 7 (Quinlan Conf Room): the essence.
805
01:45:35.695 --> 01:45:36.814
Speaker 7 (Quinlan Conf Room): or Liz.
806
01:45:37.670 --> 01:45:40.119
Speaker 2 (Quinlan Conf Room): Further considered behind the scenes.
807
01:45:40.440 --> 01:45:41.450
Speaker 2 (Quinlan Conf Room): Helps out.
808
01:45:41.670 --> 01:45:44.820
Speaker 2 (Quinlan Conf Room): So, first one that you mentioned, sounded
interesting, was…
809
01:45:45.200 --> 01:45:58.600
Speaker 2 (Quinlan Conf Room): How do we compare the city's reserves as
currently constituted of… in light of… legal… It is.
810
01:45:58.740 --> 01:46:00.190
Speaker 2 (Quinlan Conf Room): fiduciary…
811
01:46:00.820 --> 01:46:02.670
Speaker 6 (Quinlan Conf Room): responsibilities and constraints.
812
01:46:05.120 --> 01:46:09.460
Speaker 2 (Quinlan Conf Room): that good for one. Jonathan, maybe we're
gonna need your… Keynes.
813
01:46:11.350 --> 01:46:20.709
Speaker 2 (Quinlan Conf Room): pretty… I think all of these are going to
be very broad, because we're still trying to figure out how do we time in
and structure them into a way that we can.
814
01:46:21.370 --> 01:46:24.380
Speaker 7 (Quinlan Conf Room): you know, get to work on. That was one.
815
01:46:25.360 --> 01:46:28.060
Speaker 2 (Quinlan Conf Room): Then you had a couple more, and I'm sorry,
Maya.
816
01:46:28.065 --> 01:46:43.144
Speaker 3 (Quinlan Conf Room): So, the one regarding the budget was, I'd
like to see a spot check of the actual budget book get into, for
instance, you have a blackberry farm.
817
01:46:43.945 --> 01:46:47.044
Speaker 3 (Quinlan Conf Room): golf course item. You know, can someone…
818
01:46:47.445 --> 01:46:51.025
Speaker 3 (Quinlan Conf Room): But check five on those numbers and see
if…
819
01:46:51.135 --> 01:46:57.355
Speaker 3 (Quinlan Conf Room): check for accuracy, and that doesn't
really… I mean, we could get… receive a report on that, but that's…
820
01:46:57.505 --> 01:47:01.905
Speaker 3 (Quinlan Conf Room): The auditor and, whoever is…
821
01:47:02.475 --> 01:47:07.785
Speaker 3 (Quinlan Conf Room): That department, had, you know, to talk to
whoever's set up that.
822
01:47:08.325 --> 01:47:16.555
Speaker 3 (Quinlan Conf Room): budget unit. So my concern is that it
could be that over time, some of these, as we were
823
01:47:16.765 --> 01:47:26.535
Speaker 3 (Quinlan Conf Room): The budget had, kind of underestimated the
revenue and overestimated the expenses.
824
01:47:26.535 --> 01:47:38.225
Speaker 3 (Quinlan Conf Room): And we would end up with a large
unassigned fund balance at the end of the year, and this went on for a
good while, and I kind of wonder if there's a potential there in spot
checking.
825
01:47:38.815 --> 01:47:53.954
Speaker 3 (Quinlan Conf Room): highlighted. There's a potential that some
of these, items are… are too high. They need to go down, or… or that
there's some errors that are being hidden, because of the… because the
budget is too… too big.
826
01:47:54.725 --> 01:47:57.145
Speaker 3 (Quinlan Conf Room): I don't know how to word that better, but
just…
827
01:47:57.145 --> 01:47:57.884
Speaker 6 (Quinlan Conf Room): No, it's a common.
828
01:47:57.890 --> 01:48:01.409
Speaker 2 (Quinlan Conf Room): problem, I think, in the industry. This is
an operational issue that…
829
01:48:03.270 --> 01:48:11.760
Speaker 2 (Quinlan Conf Room): pointing out, so we can definitely, I
would think, get that into some sort of a SIT. The internal auditor guys
would be able to help us phrase that, but…
830
01:48:12.430 --> 01:48:16.819
Speaker 5 (Quinlan Conf Room): And perhaps, like, a various threshold
that, you know, went over.
831
01:48:17.010 --> 01:48:18.309
Speaker 5 (Quinlan Conf Room): private label.
832
01:48:18.550 --> 01:48:19.880
Speaker 5 (Quinlan Conf Room): Right.
833
01:48:20.760 --> 01:48:28.439
Speaker 2 (Quinlan Conf Room): So you're, you're raising, I mean, use it
or most of the whole budgeting integrity is part of what you're, you're
asking.
834
01:48:29.250 --> 01:48:41.439
Speaker 2 (Quinlan Conf Room): So, I think there's a couple sub points,
at least, that come to mind. One is you raise Blackberry, but there's
also the materiality element of it. So, independent auditors do something
in this area.
835
01:48:41.750 --> 01:48:46.780
Speaker 2 (Quinlan Conf Room): Because they're having to issue a pinion.
836
01:48:47.120 --> 01:48:55.680
Speaker 2 (Quinlan Conf Room): on… the city's… budgeting, right? Because
that's kids in the ACRA, or is that just in the MD&A?
837
01:48:55.680 --> 01:49:12.129
Speaker 1 (Quinlan Conf Room): So the internal functions don't
necessarily come in. They wouldn't necessarily have an opinion, right?
Because even AUPs don't have opinions, they just have findings, right?
Whereas, like, a single audit or the annual comprehensive financial
report does have an opinion.
838
01:49:12.150 --> 01:49:17.040
Speaker 1 (Quinlan Conf Room): And so what they would provide is, by the
sounds of it.
839
01:49:17.670 --> 01:49:24.390
Speaker 1 (Quinlan Conf Room): Is the budget too conservative, right? Are
we underestimating revenue too much and overestimating expenses?
840
01:49:24.570 --> 01:49:32.709
Speaker 1 (Quinlan Conf Room): And so, how far from actuals, or
realistically what you're going… what you anticipate, should you be
deviating?
841
01:49:35.140 --> 01:49:42.990
Speaker 2 (Quinlan Conf Room): Right, and there's some other variance
analysis that I think the vice chairs may be raising, so what we can do
is we're going to make the project that's
842
01:49:43.590 --> 01:49:56.069
Speaker 2 (Quinlan Conf Room): Looks at the budget in terms of integrity
of the process, as well as so people aren't gaining the system by asking
for more than what they have in one chance of sending, so…
843
01:49:56.230 --> 01:49:58.449
Speaker 2 (Quinlan Conf Room): That's what I mean by integrity.
844
01:49:59.250 --> 01:50:10.259
Speaker 2 (Quinlan Conf Room): tighten up that wording, but also to your
point on variance… various variance analysis in the budget that made it
more efficient, something like that. That's an operational issue.
845
01:50:10.420 --> 01:50:14.260
Speaker 2 (Quinlan Conf Room): Chelsea, are you still on the line, by the
way?
846
01:50:15.780 --> 01:50:17.000
Chelsea Ritchie, Baker Tilly: I sure am.
847
01:50:17.630 --> 01:50:25.500
Speaker 2 (Quinlan Conf Room): I wonder if we can make this interactive,
so we have the first one that was relatively easy, because I made it so
general, it's hard to,
848
01:50:25.800 --> 01:50:28.329
Speaker 2 (Quinlan Conf Room): The second one here is that operational
849
01:50:28.500 --> 01:50:40.500
Speaker 2 (Quinlan Conf Room): element of budget, you probably have… are
top of mind, all kinds of things you could think of that relate into
that, that might help us phrase this very general topic that we're trying
to put on the table.
850
01:50:41.710 --> 01:50:55.170
Chelsea Ritchie, Baker Tilly: Absolutely. So, I did hear, you know, us
saying that we would do periodic spot checks of the budget, so creating…
having samples, throughout the year, that's something that we could do.
851
01:50:56.010 --> 01:51:00.729
Chelsea Ritchie, Baker Tilly: Checking for accuracy and the overall
budget intake process.
852
01:51:02.680 --> 01:51:04.200
Speaker 2 (Quinlan Conf Room): Yeah, I think maybe…
853
01:51:04.340 --> 01:51:19.219
Speaker 2 (Quinlan Conf Room): Right, so it's going to take more
refinement, but for example, let's say I'm given a budget, I'm in the
audit committee, and suddenly now I want to budget for $100,000 next
year, because we're going to spend some money, and
854
01:51:19.410 --> 01:51:24.270
Speaker 2 (Quinlan Conf Room): You know, how… what are the guardrails
around that general request?
855
01:51:25.640 --> 01:51:27.769
Quinlan Conf Room: That… so those kinds of projects…
856
01:51:29.100 --> 01:51:30.000
Chelsea Ritchie, Baker Tilly: Right.
857
01:51:30.650 --> 01:51:46.219
Chelsea Ritchie, Baker Tilly: So, I think looking at, probably we would
want to look at the overall policy and procedure that the city has in
place for this, and making sure that the guardrails that are included in
that policy and procedure are
858
01:51:46.480 --> 01:51:50.740
Chelsea Ritchie, Baker Tilly: Are, you know, being abided by for those
special projects.
859
01:51:51.670 --> 01:52:10.720
Speaker 2 (Quinlan Conf Room): Okay, so let's leave it at that for a
moment, because what I'm thinking, we could have input from committee
members separately provided to Jonathan, maybe, as a clearinghouse, and
then Chelsea, you could provide input as to whether the project makes
sense. But we've got something there in terms of spot checking budget,
let's say, for a moment.
860
01:52:10.730 --> 01:52:14.809
Speaker 2 (Quinlan Conf Room): And then I… for some reason, I thought
there were 3 that you have sort of brought up.
861
01:52:14.815 --> 01:52:16.924
Speaker 7 (Quinlan Conf Room): Yeah, I also said property taxes.
862
01:52:16.925 --> 01:52:17.845
Speaker 6 (Quinlan Conf Room): electrical tax.
863
01:52:17.960 --> 01:52:21.910
Speaker 2 (Quinlan Conf Room): Taxes. Yes, okay. By the way, the audit
committee.
864
01:52:23.300 --> 01:52:24.520
Speaker 3 (Quinlan Conf Room): 31,000.
865
01:52:25.150 --> 01:52:25.930
Speaker 6 (Quinlan Conf Room): Here we go.
866
01:52:26.150 --> 01:52:30.199
Speaker 6 (Quinlan Conf Room): Okay. Great, I think that's… that's
probably.
867
01:52:30.205 --> 01:52:30.945
Speaker 7 (Quinlan Conf Room): staff person.
868
01:52:30.950 --> 01:52:34.110
Speaker 1 (Quinlan Conf Room): Also, contract, yeah.
869
01:52:34.115 --> 01:52:35.135
Speaker 2 (Quinlan Conf Room): Hope that worked.
870
01:52:35.480 --> 01:52:37.630
Speaker 7 (Quinlan Conf Room): There's no lines of contract.
871
01:52:37.635 --> 01:52:40.655
Speaker 3 (Quinlan Conf Room): But that's the council.
872
01:52:42.355 --> 01:52:43.525
Speaker 3 (Quinlan Conf Room): Correct.
873
01:52:44.680 --> 01:52:48.539
Speaker 1 (Quinlan Conf Room): I'll have to go looking for it, but it was
moved, so we'll have to…
874
01:52:49.060 --> 01:52:51.079
Speaker 1 (Quinlan Conf Room): I'm sure that it's in the right spot.
875
01:52:53.500 --> 01:52:54.220
Speaker 7 (Quinlan Conf Room): Right.
876
01:52:55.300 --> 01:52:59.409
Speaker 2 (Quinlan Conf Room): So, another placeholder, can relate to
877
01:52:59.770 --> 01:53:10.399
Speaker 2 (Quinlan Conf Room): something else that somebody might be
thinking of. So, we've mentioned the likelihood that we're going to have
authority for artificial intelligence, so we could
878
01:53:10.720 --> 01:53:16.820
Speaker 2 (Quinlan Conf Room): I know next year, assuming that that got
into the municipal code, we were going to have something related to that.
879
01:53:17.080 --> 01:53:23.910
Speaker 2 (Quinlan Conf Room): So, that could well be an interview
project that says, how is staff currently using AI?
880
01:53:24.410 --> 01:53:27.339
Speaker 2 (Quinlan Conf Room): And then we would… I want to know what…
881
01:53:27.460 --> 01:53:30.520
Speaker 2 (Quinlan Conf Room): How that impacts the financial statements.
882
01:53:31.540 --> 01:53:33.110
Speaker 7 (Quinlan Conf Room): Or not.
883
01:53:34.030 --> 01:53:38.990
Speaker 1 (Quinlan Conf Room): Short is, staff is not using currently in
its ERP system.
884
01:53:39.160 --> 01:53:47.930
Speaker 1 (Quinlan Conf Room): AI for financial reporting. However, with
the new ERP system, there is a component
885
01:53:47.980 --> 01:54:03.690
Speaker 1 (Quinlan Conf Room): that uses AI to help, streamline some
processes. So, as we're moving through that implementation, we can notate
how it's being used or utilized, and how, in the future, it could play a
factor in its reporting.
886
01:54:03.890 --> 01:54:11.450
Speaker 1 (Quinlan Conf Room): I know that Pungrit currently uses AI to
help, They're, they're, they're,
887
01:54:11.850 --> 01:54:22.109
Speaker 1 (Quinlan Conf Room): sample selection, and so to identify what
would be likely causes of, or misreporting issues. So…
888
01:54:22.670 --> 01:54:25.270
Speaker 1 (Quinlan Conf Room): That's the short of AI.
889
01:54:25.275 --> 01:54:33.364
Speaker 2 (Quinlan Conf Room): for that. I think having the authority is
important, but we may need to think this committee motion. I'm hesitant
to even put that on the…
890
01:54:33.745 --> 01:54:39.824
Speaker 2 (Quinlan Conf Room): Anything else based on the staff report
from the City Council and study session?
891
01:54:41.150 --> 01:54:42.099
Speaker 7 (Quinlan Conf Room): We're on here.
892
01:54:42.830 --> 01:54:44.090
Speaker 2 (Quinlan Conf Room): be honest, I'm…
893
01:54:47.160 --> 01:54:51.830
Speaker 2 (Quinlan Conf Room): having an adult brain toward the end of
our meeting here, and I'm not… it's not coming.
894
01:54:52.330 --> 01:54:54.729
Speaker 2 (Quinlan Conf Room): So, I'm happy not to add anymore.
895
01:54:55.500 --> 01:55:04.090
Speaker 1 (Quinlan Conf Room): I would like to point out there was a
slight modification to the work plan. I highlighted here in red…
896
01:55:04.800 --> 01:55:09.250
Speaker 1 (Quinlan Conf Room): Not included in the… the desk.
897
01:55:09.360 --> 01:55:12.590
Speaker 1 (Quinlan Conf Room): Yeah, and this is just based off of
conversations we had earlier.
898
01:55:12.720 --> 01:55:30.029
Speaker 1 (Quinlan Conf Room): So as part of the July meeting, included
the pending three internal audit work program items, which is the
citywide, internal control review, investment and cash flow policy review
and recommendation, and lastly, the Grants Management Internal Control
Review.
899
01:55:30.470 --> 01:55:37.420
Speaker 1 (Quinlan Conf Room): That's… I just added it earlier, so this
is, essentially a working document, so based off of
900
01:55:38.040 --> 01:55:41.809
Speaker 1 (Quinlan Conf Room): What's discussed here, this is how it's
going to end up laying out.
901
01:55:42.560 --> 01:55:44.179
Quinlan Conf Room: So I can provide an updated version.
902
01:55:45.940 --> 01:55:54.260
Speaker 2 (Quinlan Conf Room): Yeah, well, thank you for doing that,
because this is a great example how the agenda, is going to bring along,
put some more things in the consent, bucket.
903
01:55:57.140 --> 01:56:15.839
Speaker 2 (Quinlan Conf Room): Okay, so unless you have some more items,
anyone, I think, I'm happy with this… these changes, and we've got some
more behind-the-scenes moments, most likely staff report will come back
to us, a lot of interesting things. Excited to, everybody, thank you for
a very efficient meeting, and I caused some of my…
904
01:56:15.970 --> 01:56:22.760
Speaker 2 (Quinlan Conf Room): Well, let's see. We also have some… So,
Partnership, sorry guys, step.
905
01:56:23.010 --> 01:56:24.780
Speaker 2 (Quinlan Conf Room): Looks on it.
906
01:56:25.790 --> 01:56:32.609
Speaker 3 (Quinlan Conf Room): Well, I don't, but I have a question.
Could I be… What are you?
907
01:56:33.410 --> 01:56:37.460
Speaker 3 (Quinlan Conf Room): As a way to introduce
908
01:56:38.550 --> 01:56:42.490
Speaker 3 (Quinlan Conf Room): charts as a report, and so…
909
01:56:42.495 --> 01:56:53.825
Speaker 2 (Quinlan Conf Room): That would be great, because I can report,
but I don't think it's enough that you gave that, neat presentation, like
a half hour, so I think the committee could…
910
01:56:54.205 --> 01:56:59.285
Speaker 2 (Quinlan Conf Room): Send us a… Found a voice point, whatever
you use.
911
01:57:00.730 --> 01:57:01.420
Speaker 3 (Quinlan Conf Room): to death.
912
01:57:01.640 --> 01:57:14.739
Speaker 3 (Quinlan Conf Room): Or for… to be included for written
communication. For this agenda? Yeah. Oh, okay. Does that seem legit, to
do that? True, yes.
913
01:57:14.740 --> 01:57:16.230
Speaker 6 (Quinlan Conf Room): Okay, seems great.
914
01:57:16.235 --> 01:57:17.115
Speaker 2 (Quinlan Conf Room): info.
915
01:57:17.355 --> 01:57:23.205
Speaker 2 (Quinlan Conf Room): setting we already covered. Jonathan, so
what's the difference between that one and item 9?
916
01:57:24.945 --> 01:57:28.684
Speaker 2 (Quinlan Conf Room): I guess, future agendas that you can learn
in general?
917
01:57:28.690 --> 01:57:29.530
Speaker 6 (Quinlan Conf Room): concept?
918
01:57:29.800 --> 01:57:33.210
Speaker 1 (Quinlan Conf Room): Yeah, from my understanding, some
committees don't have a dedicated
919
01:57:33.330 --> 01:57:39.139
Speaker 1 (Quinlan Conf Room): schedule and work plan, so maybe that's a
little separate. It may be redundant.
920
01:57:39.145 --> 01:57:41.755
Speaker 2 (Quinlan Conf Room): it in the future, Lindsey can look into
it.
921
01:57:42.505 --> 01:57:43.335
Speaker 2 (Quinlan Conf Room): Need it.
922
01:57:43.885 --> 01:57:49.014
Speaker 2 (Quinlan Conf Room): I think we should keep number 9 on our
quarterly meetings, yes.
923
01:57:49.015 --> 01:57:56.985
Speaker 3 (Quinlan Conf Room): That's because you have an Item 9. So this
is an item… this is an issue that we were, discussing, this morning.
924
01:57:57.325 --> 01:58:20.035
Speaker 3 (Quinlan Conf Room): procedures are coming up, and so there's
been some debate, because on the City Council, we have a future agenda
items heading, but it's just a report, and it's not to have discussion
about those. Those, if you want, for the Council, if you want to put
something on the agenda, you would get a second.
925
01:58:20.035 --> 01:58:21.365
Speaker 3 (Quinlan Conf Room): And she would do…
926
01:58:21.365 --> 01:58:34.014
Speaker 3 (Quinlan Conf Room): go through email, so the mayor can put
stuff on the agenda, but it goes onto a TBD list, so we're actually
setting things, so this is a little bit different. Interesting. Yeah, so…
927
01:58:34.015 --> 01:58:40.224
Speaker 2 (Quinlan Conf Room): It's much more useful, because a lot of us
have different views, and we work it out as a committee, rather than
building out that committee.
928
01:58:41.130 --> 01:59:00.099
Speaker 3 (Quinlan Conf Room): And we're not having a… we're not haggling
over, so one of the things that was sort of happening at the last meeting
was the… the haggling over, so you… when you do that, you're getting into
a deliberation on, here are the merits of this thing that I want to have
on the agenda, and then somebody might not agree. Right.
929
01:59:00.100 --> 01:59:07.290
Speaker 3 (Quinlan Conf Room): I see that you're using it through item 9,
the calendar, so I think that's a neat way to do it.
930
01:59:07.290 --> 01:59:16.279
Speaker 2 (Quinlan Conf Room): Great, so maybe, Lindsey, we can get rid
of future agenda setting, and we'll just keep number 9 done. Call us
hereby and Nerd.
931
01:59:16.380 --> 01:59:18.220
Speaker 2 (Quinlan Conf Room): Thank you.
932
01:59:19.050 --> 01:59:19.720
Speaker 7 (Quinlan Conf Room): Wow.
933
01:59:19.840 --> 01:59:20.750
Speaker 7 (Quinlan Conf Room): Thank you, Amy.
934
01:59:20.750 --> 01:59:21.989
Chelsea Ritchie, Baker Tilly: Thank you all!
935
01:59:22.460 --> 01:59:23.919
Speaker 7 (Quinlan Conf Room): Big thing out, Sue!
936
01:59:26.970 --> 01:59:28.260
Quinlan Conf Room: Do you have that?