Audit and Finance Committee (AFC) meeting Transcript – 4/26/2023 Title: ATXN-1 (24hr) Channel: 1 - ATXN-1 Recorded On: 4/26/2023 6:00:00 AM Original Air Date: 4/26/2023 Transcript Generated by SnapStream ================================== Please note that the following transcript is for reference purposes and does not constitute the official record of actions taken during the meeting. For the official record of actions of the meeting, please refer to the Approved Minutes. [9:33:49 AM] Good morning, everyone. Ann. I am Alison alter and I am chair of the audit and finance committee . I'm joined here this morning by council member Ryan alter and council member Vanessa Fuentes. Council member pool is out of town and I believe that council member Kelly will be joining us shortly. It is 934. I'd like to call this meeting to order. We have a long, hefty agenda today , so we are going to try to move quickly. But there are a lot of items that are of substance and merit on this agenda. And so we will take our time. We are scheduled until noon and hopefully we will we will manage to move through everything. Clerk I understand that there's no public communication, is that correct? Anyone know? Okay. So assuming we have no public [9:34:49 AM] comment. Ann our first item of business is the minutes and to I will entertain a motion to approve the minutes we have two sets of minutes from March 29th. The regular meeting and the special call to approve. Do I have a motion? Councilmember Fuentes makes that motion. Councilmember Ryan alter seconds without objection, we adopt the minutes as our second item is discussion and possible action regarding the fiscal year 2022 annual comprehensive financial report and single audit report by deloitte and touche. The city's external auditor. I'd like to invite the city comptroller up. Thank you. Mario Lucas. Good morning. Good morning. Can you hear me? I can. And just for those who are new to the [9:35:49 AM] committee or are watching, let me just say that the presentations that we're going to hear today are presentation burns from our external auditor , which is deloitte and touche. One is going to be the comprehensive and comprehensive financial report which we hear each spring and as well we're going to hear the single audit report which looks at how we're doing in complying with our grant process. Good morning. Good morning, council members. My name is Maria. I'm the city comptroller. I am here today with Tracy Cooley and Cameron decker with deloitte and touche to present the results of the city's comprehensive financial report and single audit for fiscal year 2022. The for report was issued on March 8th, 2023 and it is available on Austin finance online on the website listed on this slide. The requirements for an annual audit are outlined on this slide and the city is in compliance with each of these requirements. The [9:36:51 AM] single audit or the grants audit was issued on April 24th, 2023, and it is also available on Austin finance online on the following website and the single audit requirements are also listed on this slide and the city is in compliance with all of these requirements. And last , I want to thank the mayor and council members for your continued support of the city's goal of excellence in all aspects of financial management . The city manager and his executive team, the cfo and department directors for support of the comptroller's team and support and excellence of financial management. City staff, especially the financial services department, accounting and reporting team for their many hours of dedicated service towards the completion of these reports. And then deloitte for their professional and thorough manner, which they conducted these audits. So Tracy and Cameron will now take over the presentation. Thank you. Good [9:37:52 AM] morning, everyone. I'm Tracy Cooley with deloitte and I'm the managing director responsible for services that we provide to the city. And Cameron and I will go over the results of the audits that we've conducted. We won't cover every slide in this deck, but as we go along, if there are questions, please just stop us and we'll answer those questions as we go along. So I will turn it over to Cameron to begin the process. Thank you, Tracy. It's a pleasure to be with everyone this morning. And I'm going to start off with the financial audit that we issued. Our opinion on on March 8th. As Maria mentioned, this first slide talks about our responsibility Katy under generally accepted auditing standards. Those are the standards with which we conduct our audit as well as government auditing standards due to the single audit that was mentioned and earlier, just a couple of quick things related to our audit. We do not audit the component units of the of the [9:38:52 AM] city. Those are audited by other auditors. And we have included within our opinion a reference to those auditors. Also, just again, it's an unmodified opinion which that's a good thing. I know it sounds a little odd, but that's the language that the aicpa has given us, an unmodified or clean opinion is how we would describe the opinion on the financial statements. And as we move forward, we just want to highlight a few things related to the financial audit. The first of those is the significant accounting policies that are set forth by management. There have been no changes to those policies. This year except for the implementation of a couple of new accounting standards. As we've highlighted here, gas 87 related to leasing. That was the a large standard that was implemented by management. This year and obviously was subject to part of our audit as well. Pool and then we also call out the significant accounting estimates that management has used in creating those financial statements. We won't go through [9:39:53 AM] those in detail. We have included as appendix B, what those how those estimates are pulled together. And then our audit response associated with each of those, the items that we have called out here are the opeb and pension liabilities which are put together by actuaries from that are engaged by the city. And then we have our actuarial specialists as well. Look at those. The asset retirement obligations related to environmental liabilities, same thing. We have our specialists help us look at those. Our deloitte internal specialists are part of our team. And then the last one there that we have called out is the deferred amounts related to regulated operations. Similar there? Again, there's more detail in appendix B, a couple of quick things to call out related to misstatements. We perform our audit to obtain reasonable assurance for the absolute assurance about the financial statements being free of material misstatement. As part of our audit, we did accumulate one uncorrected misstatement that is included in [9:40:56 AM] appendix C, which is management's representation letter, and that includes one uncorrected misstatement, very minor to the overall operations of the city and then we're happy to report that there were no material corrected misstatements as part of this year's audit. The next couple of slides go through the various levels of assurance that we provide on what I'll call the non-core pieces of the financials. These include the required supplementary information such as mda, mda, a, as well as the pension and opeb schedules at the back. The supplementary information Ann and then other information. I'll leave everyone to read those or if you have specific questions, we can address those. This slide is one of my favorites. We get to the opportunity to say that we worked well with management and Marie and her team were a pleasure to work with. Again, this year. They're integral to our completion Ann of the audit with the amount of support that they have to provide. And so we [9:41:56 AM] would like to thank Maria and the team we as part of our gas audit, the government auditing standards. We do look at controls as it relates to the financial reporting and compliance. And this is not an opinion on controls, but this is a report on the design and implementation procedures that we perform that we conduct as part of our financial audit in appendix D, you will see that there are definitions for the various levels of deficiency pieces that are put forth by the aicpa. We did identify one significant deficiency related to the implementation of lease accounting this year. This was a large standard that was implemented for the city with a number of agreements that city management had to go through and assess for these new standards. The effect of this standard was effectively just a gross up on your balance sheet, adding on some liabilities and deferred [9:42:56 AM] inflows of resources as well as right to use assets. We identified Eid a handful. I guess, of errors input in that as those leases were going through. But again, happy to report that the input errors identified did not result in a material impact to the city as a whole. So we've just called this out in our finding and have our or management's response accompanying that. I'll turn it back to Tracy and she's going to cover the single audit and a couple of other audits. Thanks, Cameron. So the single audit this really relates to the compliance on the federal and state programs. We do both a federal single audit as well as a state single audit. These were issued on Monday. So they're hot off the presses and they were unmodified or clean opinions as it relates to compliance for the major programs. So we have one deficiency, significant deficiency that we noted related [9:43:57 AM] to the single audit programs. And this has to do specifically with the immunization outreach program. Like many grants, this grant does require reporting back to the grantors, whether it's qualitative financial information or any type of other information related to the grants progress. When we looked at the reporting for this grant, we noted that for two of the two of the separate grants, the quarterly reports in two instances were not filed. Management also zo was aware of that. And they found it, I think, right before we did and has really rectified Eid the process to make sure that they're able to complete these reports and submit them on time to the granting agencies. As far as the scope of the single audit from a federal program standpoint, the city expended almost $200 million in federal expenditures in fiscal 22. Our audit and the focus of our audit is really more on what the city [9:44:58 AM] spent rather than what they've been awarded. So you know, for the csf, there was a lot of money received in advance, but we're more focused on auditing that once it's spent. So this really is the spend rather than the award that we're focused on for our audit. These were the major programs that we selected for testing during the fiscal year. And you can see a lot of these are still related to some of the pandemic funding that the city had received during fiscal 22. And then on the state side, significantly fewer expenditures, roughly 4.5 million. And these were the state programs that we selected for testing. Other audits that we've concluded. One is the passenger facility charges report. This is a compliance report that is submitted to FAA based on how the city is spending the fees collected at the airport. That report was issued Monday as well. No findings, no comments on that report. And then lastly, we are involved with an agreed upon procedures report that the city needs to submit to tcu that [9:46:00 AM] report was filed timely as well , without any modifications as Carmen mentioned, there are some appendices attached to our presentation. We weren't going to go through those unless there were specific questions, but it's just additional information Ann related to the audit and just a little bit more of a deeper dive in the accounting estimates. And also includes the representation letter that management signed and gave to us as part of the audit process. So that concludes our remarks. If there are any questions or comments, we're happy to answer those Mario did you want to add anything? No. Okay. Thank you. Appreciate that. Clean car and understand that the one significant deficiency, as I understand it, had to do with adopting accounting standards. Luz given how many leases we have, another good reason to get out of our leases, you know, is was that and making that making [9:47:00 AM] that change. There were there were a few issues there that were corrected. I do want to point out on the single audit, you know, it looked like you reviewed about 90 million of the 200 million Ann and of the federal knell, there were no discrepancy at all. And I know that there are other cities and other places that are having challenges with respect to accounting and other issues and spending down on the federal money and I think that Austin can be proud of both the accounting aspect of this, but also that we have really managed to get a lot of that money out the door and spend it to help our community move forward. And colleagues, do you have any questions on the car or the single audit? Great well, thank you very much. Thank you for being here with us and thank you to our staff. I know that putting together the materials and doing the support takes a lot of time, as well as getting it right in the first place so [9:48:01 AM] that that process can be smooth. So thank you for your work on that. We will now move to item number three, and I will call miss stokes up to introduce this item or Mr. This is an item, so we like to look back at our prior order butts and see where we're at. And this is a case where we had done audit in 2017 of fire overtime. I think at my request we were having challenges in 2017. With respect to overtime and today's update is really a look back at that report and where we stand Eid with trying to address those issues. Thank you. Thank thank you. Corey stokes, city auditor . And this work was conducted by a contracted auditor, but Keith Solis was the manager on this and he will be presenting this work today. Thank you. All right. Good morning. My name is [9:49:02 AM] Keith Solis and I'm the assistant city auditor in the office of the city auditor. Like Corey said, this work was conducted by an external contractor. However, as the manager who oversaw this project . All right. So a little background information on the Austin fire department. They have an annual budget of about $230 million, of which about two thirds is spent on fire and emergency responses, as you can see in the graph there over time, expenses have ranged over the past several years from a little over $10 million to over $20 million. And since fiscal year 19, these expenses have been rising. That led us to conduct this audit. And our objective was to determine how does the fire department track their overtime, how does it assign their overtime, and are these decisions cost effective? So to answer the first question, we found quite simply that the fire department has a computer program that allows them to see their budget in real time. They can see the dollars and cents spent. They can see it as a percent of their budget. And we [9:50:03 AM] learned that their management team meets quarterly to discuss these numbers and make any adjustments they deem necessary to assign their overtime. They follow policies, put forth in their collective bargaining agreement as well as in their policies and procedure. Tirz and I want to note that there are policies and procedures specifically say it's the intent of their policy to assign overtime in the most cost effective manner possible. To that end, when you look at the items they consider when assigning overtime, the second one is the firefighters rate of pay, and they always try to assign it to the lowest paid firefighters first. So in answering the question, are the fire department's overtime decisions cost effective, we found that generally, yes, they are. So firefighters with the lowest hourly rate of pay are generally prioritized, although there may be some exceptions. So those exceptions include when we have needed expertise. So if there's a firefighter who's higher paid but has certain certifications or skill sets, they'll hire those people on for overtime before a lower paid person. If they need to have those skills on duty. Also, for safety reasons, you want to make [9:51:05 AM] sure that firefighters have ample rest between shifts so that they're able to be alert and they're not fatigued or exhausted while on duty. And they also prioritize firefighters on their day without getting into too many details, I know it gets really complicated, but Kelly, days are paid days off that are built into a firefighter schedule with that said, we don't think that this is a major driver of their overtime expenses because each firefighter only earns a very small number of Kelly days per year. I do, however, want to use Kelly days to exemplify one other area where we found that the fire department could be saving money on overtime expenses. So according to the collective bargaining agreement, all paid time off with the exception of sick leave and vacation leave counts towards the number of hours a firefighter needs to work before they get to earn overtime. So, Kelly, days like I said, are paid days off. So they're not actually on duty. However, those those hours count towards the 144 they need before they can start earning overtime for their pay period, according to federal guidelines. However because they [9:52:07 AM] weren't actually on duty for those Kelly days, we could pay all of this at the regular rate of pay, would not need to pay that extra shift at the overtime rates. But again, this is a relatively small driver of our overtime expenses is our understanding. So knowing that there are overtime decisions are generally cost effective and yet our costs have been increasing over the past several years. Our external contractor had a few additional observations about ways that we could lower our overtime costs. I do want to stress that these are observations and these are not audit recommendations. So the way that he thought about this was kind of two sides of an equation. So you have the number of positions that you need to fill at any given time. And you have the number of firefighters that are scheduled to fill those positions at any given time. When those are aligned, then you don't need overtime. If you have more positions that you need to fill, then you have people scheduled. Then you have to start using overtime to meet those positions. So we can either reduce the number of firefighters needed or increase the number of firefighters [9:53:07 AM] available. A couple observations of ways we could reduce the number of firefighters that we need at any given time are to start with revisiting the four person staffing model that we have right now by ordinance. All firefighting units need to be staffed with four firefighters. That's based on research that shows that four person units respond to structure fires more safely and more effectively than two and three person units. However when we looked at the numbers, we found that only about 1% of afg's calls in recent years were actually for structure fires, and the extreme majority of those situations, well over 99% of them, at least two units, responded to those structure fires. So we may be able to achieve the same goals while having smaller number of firefighters per unit. The other area that we may be able to lower the number of firefighters needed is by reconsidering how many units we have at each station or the number of stations that we have in general . So again, this is not an audit recommendation, just the [9:54:08 AM] beginning of a conversation. And on the other side of the equation, we are looking at the number of firefighters that are available to be scheduled at any given time. So we note that the fire department has not been fully staffed over the past several years. Last year, the fire department put out a memo that detailed their plan for achieving full staffing by the end of fiscal year 24. However when we looked at that, we feel like there are assumptions may be a little optimistic. Mok, for instance, not every cadet graduates from academy and the historical attrition rate may be actually a little lower than our current attrition rate. So it may take longer than the end of fiscal year 24 before they are fully staffed. The other area that we looked at was leave usage because of course, when a firefighter uses leave, then they're not available to work. Their shift. Now firefighter is just like every other city employee earned vacation leave and sick leave is a benefit to their employment. And we're not suggesting that they not use it. What we did look at, however, was the sick leave in particular, which accounts for over a quarter of all the leave that they use. And we found that [9:55:09 AM] just like we did in 2017, there's more sick leave being used on the weekends, Saturdays and Sundays. And there are in the middle of the week, which may suggest that firefighters are using sick leave instead of vacation leave. The reason that this is important is that when firefighters use vacation leave, that's often scheduled and granted several weeks or months in advance and allows the fire department to plan accordingly and make sure that they have somebody to fill that position. Ann when a firefighter uses sick leave, that often happens at the last minute and requires the use of overtime. All right, so with that, I'm happy to answer any questions you may have. Thank you. Do does the fire department want to respond at this point or just answer questions. Good morning, chief. [9:56:12 AM] Good morning. My name is Joel baker, fire chief city of Austin fire department. We appreciate I appreciate the city of Austin fire department, appreciate the audit report that's related to overtime. Some of the findings we believe are accurate. However however, I just want to caution Ann make a point of caution as it relates to reducing the number of firefighters on apparatus as well and or sending less equipment or the claim that if we send multiple units with two or possibly three firefighters, it would solve or be the same as sending four and four an apparatus, according to the national fire protection association, in nfpa 1710, I believe it is. It has conducted several studies that relate the importance of having four and four four person on an engine, four person on a truck. I support this as a fire chief to [9:57:15 AM] continue with staffing each unit, with four and four. And I say that unless you have been on a fire call 3:00 in the morning or 3:00 in the afternoon working a fire, it's hard to understand the significance and importance of the reduced fire load firework from a firefighter unless you have done cpr and someone's house for 10 or 15 minutes. It's hard to understand . And the significance of having that extra person not only to provide that medical care, but to look over your shoulders as a safeguard for other hazards endangered. They may produce yourself on the scene, but I stand here to answer, try to answer any question that you all may have as it relates to the audit report or anything relating to staffing or concerns . Thank you, chief. Colleagues councilmember alter and then acknowledged that mayor pro tem Alyssa has joined us. Thank you. [9:58:16 AM] Councilmember Ryan alder thank you, chief. Good morning. Good morning, sir. How are you? I'm doing wonderful. Shaw I wanted to ask you a little bit right where you left off and you touched on it in your response to the audit about exploring opportunities where for maybe two person crews in a truck of some sort might be a better use or an adequate response. So can you help or just give some more context to that? Absolutely. The only way that Wright rey reducing staffing could be a viable solution is to go with rescue units. That's what we have two person on a rest skew apparatus such as a pickup truck or SUV to respond on medical calls or non fire related calls. They could respond to a person stuck in an elevator possibly, but that can reduce the staffing. But on that apparatus [9:59:19 AM] , it may not necessarily reduce staffing in the fire department because we don't have two extra bodies to put on a rescue unit today. We need staffing to support even that concept. But again, the only way we can reduce staffing on an apparatus , well, it won't be reducing staff on an apparatus. So we're still going to have four on the each apparatus. But to put two firefighters or a firefighter, I mean, either a lieutenant or a fire special or a firefighter on a rescue unit to support that. And what I'm trying to think if this is where you're going and if it's not, feel free to correct me. But, you know, for instance, we have our standard unit who, let's say the individual knell, there's someone who needs cpr at their home or it's a car crash or I don't know, pick pick your emergency. And the four person crew gets in the fire truck, goes to that response. If we [10:00:19 AM] were instead if that station had one of these response trucks that, you know, two of them hopped in, two of them stayed there and went to that response , I'm just trying to think it would there would we be achieving an efficiency there, given that you still have, let's say, maybe two people left at the station. They might need another truck to do a different call? Are there are there stations where that might be more where they have more low level, you know, low priority responses where that that might behoove us to use that model or or is that help me think about that. I'm struggling. I'm just waiting for you to finish. I got answer. Sorry yeah. That model worked well. And make believe land but does not work well in reality. What do I mean by that ? Let's say for example station one right around the corner here we take to have four person on [10:01:21 AM] the engine. And today the Fauci said, well, we're going to put two on a rescue unit, two spun on those non life threatening calls and we'll keep two in the engine and so that rescue unit rescue one responded to our 35 on the car wreck call, which is crazy to do because now we put on those two firefighters, even more harm's way because they have no one to they they don't have that large apparatus to protect them from oncoming cars and traffic. But take that scenario out. We send that fire, that rescue unit, to zo three, Davis street had the shores condominium hotel to do a cpr call and we need that fire apparatus in the station. The rescue unit design. So the fire apparatus will be readily available for those fire calls or other hazard calls to respond to. But yet we take in those two rescue persons l203 Davis creek on that cardiac arrest call and for two people, two ems personnel, fire or ems to try to [10:02:22 AM] conduct cpr in it's not a good idea. I have done cpr and I wish I had more than two people on the scene. We have. Because unless you are pumping on that chest and you're 19 years old, you're in top physical shape, you're going to get very fatigued in doing so. But not only that, the medication you got to give and other things going on with doing cpr, it's hard to explain unless you've been there and seen it. But while you're on the scene that sits zo three, Davis street conducting your medical call, all of a sudden, since we don't have a crystal ball to predict when the next fire call will come in, a fire alarm bell ring at 122, Cesar Chavez. I'm making these addresses up on a fire call. Now we send the two personnel on a high rise building to try to mitigate a fire call. Two person their own engine, someone got to drive. Someone got to get the high rise [10:03:23 AM] pack and go upstairs. We're not going to send one person up unless you recommend. We just wait on the scene until additional equipment. And of course, you're not recommending that that take place. But we need the personnel to over whelm the situation now we say only 1% in the order, about 1% of the calls we go on fire calls. Unfortunately, I don't predict what day that 1% would exist. I don't know though. Fire is going to come in Monday or Tuesday, Wednesday, Thursday, Friday or Saturday. I don't know what time of the day those fire calls going to come in. I just know that if I'm in a building, I want adequate fire protection to come in and save me or to pull my child out of their house. 2:00 in the morning, back, back, back, back. Bedroom in the corner when we're in their sleep . Yeah. The fire department. We are better than state farm's and all state, you know, and what I mean by that is it's an insurance policy you're not paying us for what we do. You're [10:04:24 AM] paying us what we are prepared to do. And the men and women of Austin fire department are train well and colonoware every day and put themselves in harm's way to make sure we're able to meet the mission of this great city of Ralls. All all right. Well, I appreciate your your passion and the information and look forward to working with you on this. Thank you, sir. Thank you. Councilmember Fuentes. Thank you. Chief, can you speak to the finding on the overtime leave or I guess the finding that it seems like there's a higher rate of firefighters using sick time during the weekend. Can you speak to that observation and any other context that we should consider? Shaw I can try. It may not be adequate. I'm going to pause after I get to the give chief Smith the chief commander, the opportunity to say something [10:05:24 AM] Eid firefighters using sick leave on the weekends. I don't know. They I don't know because I'm not a medical doctor and doesn't confess to be one. Whether or not they are sick or their child is sick or their spouse is sick. On the weekend, I, I don't know. But I do know I do believe not just in Austin fire department, but all across the country and the fire service firefighter take sick leave on the weekend as well. But because we the study show the report showed a high level of firefighter taking sick leave on the weekend has increased our overtime rate. I believe that's true. But again, I cannot stand here and tell you why they are doing so. I just do not have that. Well, I guess my question is, have you considered perhaps a different scheduling practice Wright knowing that there is a higher rate of sick leave request coming in on the [10:06:25 AM] weekend? Should we be staffing at a higher level on the weekend to build in Ann for the fact that there might be more than average requests coming in on the weekend so that we're not tapping into that overtime? Well, I can't step higher because I don't have the bodies to step higher on the weekend. So I need the bodies to if I step higher, it's going to increase the overtime. So I'm a pause and let chief Smith try to add some value to that question and I'll jump back in. Division chief Thayer Smith. I'm the senior shift commander responsible for staffing on my shift each day. I have two counterparts that do the same. One of the items that the chief is alluding to is not having enough personnel to cover some of that. Leave is founded back when we went to four and four staffing in 2010, we didn't increase our overall number tirz of available personnel to help cover some of that overtime. So we're at a deficiency already in just the sheer number of firefighters available to cover some of that overtime. Can you [10:07:27 AM] remind me the vacancy rate right now that we have with AFD 78, round 78 and their currently in the they're currently in the cadet classes. But that just brings us back to the authorized strength. We have right now. What we're discussing is the fact that if you look at an hours based model formula for how many people you should have each day, we're deficient about 98 above our current authorized strength to help level some of that out. Now, that doesn't answer your question really about, you know, a different model on on the weekends and why we have sick leave. Currently. Our policies allow for two shifts of sick leave without question. So when we look at our policies, there's really, you know, without changing our policies, without changing how we do business, you know, we really Shea per se, don't look at why that rate is higher on the weekends. I mean, we can all speculate as to why. It's why it's higher on the weekends, right? And I want to be clear. [10:08:27 AM] I'm not questioning an individual's right to use sick leave. Wright I'm just asking like, what considerations has the department given understanding that there is a higher level of sick leave requests coming in on the weekend? Like what other scheduling practices have been considered? And I'd say we have not simply because the staffing model is the same, whether it's Monday or Tuesday or Saturday. I mean, the four and four required staffing doesn't change from from Monday to Saturday. So there's really in our current model knell, you could not do that. So it really goes back to looking at what the drivers are for the for the use. Okay. But it's more of the department hasn't just hasn't taken a look at the model to take that into account correct because the for the daily four and four requirement is the same. So. Okay. Thank you. Thank you, chief chief Smith mentioned we have approximately 7 to 8 vacancies, which is true. However, we have about 80, 75 to [10:09:27 AM] 80 recruits currently and training. And so once those recruits get out of training, the 7 or 8 vacancies go away. But not ready because we constantly have people retiring. And so we have about an average of 1 to 2 people retire per month. So the vacancy, what is that percentage rate, 78 vacancies, what is that equivalent to I don't know, the percentage rate. We have approximately 1400, 1350 firefighters. So out of 1350 per knell and that includes civilian 7 to 8 or sworn firefighter vacancy. So zo, I don't know. That's too percent. 3. I don't I don't know that rate. Thank you . We're we're dealing with higher levels of vacancies across the city, but there is a basic vacancy rate that is normal. So it's not it's not true that we would always expect to have even Steven with our authorized force or with our with our our jobs in any in any [10:10:29 AM] department, completely. Chief, I have several questions for you and I ask if you could pull up the chart that has the overtime over time looking back, I think from 2015 to now the bar graph. That one. Thank you. So, chief, I know you were not here in Ann for fiscal year 17 when we had the 21 million. I, however, was here in the spring of that year when we were asked to do a very large budget amendment to accommodate the overtime. That's when we initiated the original audit here. And as you can see from these numbers, after we did that audit and we put some attention to trying to figure out how to address overtime, the numbers went down considerably in the next three fiscal years [10:11:31 AM] is what what in your mind is accounting for that increase in 21 and 22? Those are very large jumps from fiscal year 20 to 21. Ann clearly a piece of that is going to be covid. But what what is what in your mind is accounting for these overtime expenses? And how have you looked at these expenses to try to understand them and reduce them? Is my belief that in fiscal year 20 and 21 and 22, the overtime has increased one due to the members on sick leave on the weekend. That caused some overtime to go up two. And that's not necessarily in this order. Two is because covid now has slowed down. We still have covid here, but has slowed down. Members are not able to take the leave. They did not take sick and members are able to take the vacation time and some members are taking sick leave. But but [10:12:32 AM] mainly I believe members are taking the vacation time they did not take during fiscal year 19 and 20. And because members taking the vacation time we had to hire those positions because, like chief Smith pointed out, we do not have adequate staffing authorized Swint staffing to support the four and four staff without doing the overtime. So again, now members are able to get out and spend time with their family. They are taking a much needed vacation Ann time they Andy along with, I believe , fiscal year 2021, some of it, and I don't know the exact number is due to parental leave and we have the I think the six week parental leave that we're able to take because council blessed us with that, that has caused the number to increase. And then we have people who is on military leave and then we have approximately we I want to say. 60 to 70 members who are on [10:13:34 AM] injury leave who have not reported back to work. So that has increased. Also, I believe, in fiscal year 21 and 22 fiscal year 19 and 21, that had caused the increase in overtime. Okay. I want to please put that slide back up if you could. So chief, I appreciate all of all of those pieces, but in 2017, when we did this, there were steps that were taken Ann by the department in response to seeing the increase that helped us to control the costs and so what are you doing as chief to think about how we control the overtime? How do we better manage our staff? Obviously, our staff needs to be able to have the time off, but we have half as many vacancies as we had in 2017. Ann I think we were at 150, one, 63 at that point in time and we have the [10:14:36 AM] same overtime levels as the paternity leave, by the way, didn't go into effect for fiscal year 22. I don't believe, or at least not for much, that it could have a huge impact. So what are you as chief doing to help us get this under control? Because there is a model in which we can be at. 14 or 11 million instead of 20 million. And that difference is the cost of those extra employees that you are asking us to fund the money has to come from somewhere. Is there a way for us to save on overtime time so that we can fund these other things that will help make our community be safer? That is a management question that I have for you as chief. Can you help us get that number down? Yes. Yes, I, I think that's a valid question. I appreciate that question. But let me submit to this body that in fiscal year 17, we did not have mandatory forum for staffing and maybe I'm [10:15:37 AM] not explaining it clearly that, yes, you did have mandatory I'm sorry, I'm fairly certain that you had mandatory for person staffing in 17. It was in 2013 that it came on or you were just under just coming out of a consent decree and you had a lot of vacancies. You had a huge number of vacancies. We had to have the a lot of people who are in staff roles come out into operations. You came with. I have in my head that it was a $13 million increase in overtime , but that's not possible. It's at least 3 million overtime request that you came to council with mid-year. We're now up to 20 million fiscal year 22. I don't remember you ever coming to get a an amendment from us to go up that much. So I think this history matters and we we've seen that this can be under control. We can see that we can reduce that. I think everyone on this dais shares the desire to [10:16:39 AM] make sure that we're staffing. I think most of us on here were co sponsors of an item that council member Kelly had the other day to look and to see what we need in our department. But just as we're asking ems to do better on their revenue management so we can fund them, we need you to look at your overtime and fix your overtime. So we have the money to fund these these other things that that we want to have for our department. And I appreciate it. I think one of the things we have been struggling with and trying to do is to get those members who are on injury, leave back to work. That's been a struggle of ours. So if we have a firefighter who got hurt, what Andy duty, night duty, where the on duty or off duty to get them back his work that would help reduce overtime. I can say we got almost 70 people, which is a lot for each person that we had to hire in a place like $1,000 per day. So you you imagine $70,000 per day . Well, not per day because they [10:17:39 AM] all don't work every day. They work on three different shifts. So it's about 20 Fauci per person per shift. I believe that Iran, to be plus or minus. So one thing I say we're doing is looking at how can we get the personnel who are injured back to work. And another thing as as councilmember Fuentes talked about, what could we do, if anything, to look at how can we help reduce the sick leave on the weekend, which I'm not quite sure what method Alyssa that we can use standing here, but it may or may not be something that we can do, but something that we need to. I would deep dive deeper into is one other thing and another thing we since I've been here in Austin far, I have seen a large number of the members in our department who are either I don't want to use the word suffering from mental illness or PTSD, but I have seen [10:18:43 AM] , unlike I have seen in other in other departments across country, the Austin fire department personnel experienced some mental fatigue and that I believe, is also a reason of the increase of sick leave use. So the answer to your question, council member is I will look into how can we reduce sick leave to mental health care for our members? What policy without punishing our members that we can do to reduce sick leave on the weekends? Ann and as well as dive deeper into other factors according to Harris auditor pointed out this is just real quick. I just want to be really clear about my comments. It's not about reducing sick leave because I again, I support paid sick leave and I'm a strong proponent of that. It's about how do we reduce the overtime time pay. So I just want to make that distinction. Absolutely I mean, I understand we have to make we have to have the data [10:19:44 AM] and the information to make a decision of whether we should be hiring additional firefighters and paying at their rate or paying at the overtime rate. And understanding how those compare from a safety perspective, how those compare to from a financial perspective. And we're not we're not being we don't have the analysis to be able to make those choices at this point in time. I will add, with respect to the sick leave, I think part of the challenge I would would venture and hypothesize is that you only have a certain number of folks who can get vacation slots on the weekend and somebody has a graduation Ann or they have a wedding or something. And so they're taking sick leave now, I think you might in our collective bargaining process right now, want to consider and think through whether there's a better way to do that so that maybe twice a year they have an opportunity to go above that number. If it's not above a certain number. But they have to tell you in advance so you can plan for it. And it may be that being able to plan for overtime in advance rather than it happening as sick leave gives [10:20:45 AM] you more. And if they do that, you get the savings because they can't take that vacation day. Another day there may you have to look at the whole some you know of what is going on. I am going to ask you, chief, together with acm mills, to take a look at this overtime thing, I would like to know where we're tracking in fiscal year 23. We don't have the same covid things . You know, if that was the driver or this should be going down. Ann we need to understand where we are in our projections for fiscal year 23. And then we need to understand what steps we are taking to address that. Those steps may be that we need more firefighters. I don't know what the right balance is, is, but it doesn't seem like it has to be the norm to have of $20 million of overtime time being spent in the fire department as the as the regular pace of things. And there could be any number of solutions and they may [10:21:46 AM] you know on net be about the same amount of money but they may be better for the safety of our community and the safety of our employees. Or it could save us money. I don't have that information. Ann but if we don't put an emphasis on it and we don't look at it, we will not solve the problem. And I have confidence, as we did in 2017, that we'll be able to do that. And in those years we were able to reduce it a considerable amount. So I would ask you and I see acm mills in the back nodding that you guys will will look at that. Yes, we will for us. So thank you. Thank you. Appreciate it. Any other questions? Yes. Okay thank you, chief. Thank you. Thanks, everyone. Thank you. To the audit staff for looking back at this. Okay. We are now going to move to item number four, Shaw, which is another look back at another audit, although this one's a little bit different and that we've asked the city manager staff to come and report back to us on on what they're [10:22:48 AM] doing as as further implementation steps for an audit that that we initiated in 2021. Post uri to look at our disaster preparedness that was presented in 21. We've had several other reports, but one of the things in the original report is, was that we weren't actually implementing recommendations from after action reports. So we want to make sure that our staff is coming back and reporting to us until we're through all of these recommendations. Thank you. Good morning, Mr. Snipes. Good morning, chair. Good morning. Council members. Ken snipes director here with an update regarding the disaster preparedness audit recommendations, starting with a bit of history next slide please . On March 25th, 2021, council passed resolution number 2021. 0325-067 directing the office of the city auditor to conduct an audit of the city's response to winter storm uri in 2000 and [10:23:48 AM] also in 2020 1st November. For the office of the city auditor, released a report to staff. Staff responded by making several changes and adjusting to those. And in January 20th excuse me, January 19th of 2022, staff responded and made their first presentation to the audit and finance committee on the ten recommendations and then also gave a second update on June 15th of 2022. Next slide, please . The recommendations, there were ten recommendations that came from the office of the auditor. One was prepare for significant and catastrophic events. Two was prioritizing and comprehensive coop planning system. Three prioritize disaster preparedness and community resilience. Four was implement past corrective action mitigations recommendations. Five evaluate staffing and six [10:24:50 AM] was update policy and process for ensuring adequate staff are trained. This referring to citywide staff seven was insured city was adequate has adequate emergency supplies. Eight was create and implement a language access access plan and nine was ensure the city's disaster response efforts are equitable and that they also address concerns for vulnerable populations in the community and then finally, number ten was develop a plan to involve community disaster preparedness and planning. Next slide, please . The recommendations are categorized into four focus areas as those four focus areas are preparedness, Luz analysis and implementation staffing and outreach under the preparedness bucket, the staff and the team continued to expand planning and exercises. That's going to be a huge focus as we go forward. We [10:25:52 AM] understand that the need to practice and Eid and make sure that we are routinely learning and growing in this space is going to be hugely important. We also want to plan for uncommon events. I think one of the things that has become more common than uncommon anymore Shaw ice storms here has taught us a few things about the need to really put together plans that are comprehensive in nature. And so we really want to focus on that from an analysis and implementation perspective of the focus there is making sure that we're using the data that we've learned and that we have of and we want to make sure that we're not data rich and knowledge poor, but that we are using that data that we've collected as tools to grow and learn with going forward. The crisp community resilience improvement status portal is one of those tools. What we hope to [10:26:53 AM] do going forward is to make that tool as common as any other tool that you might have around your home and any other system that you use. So that it becomes a not only a repository for information, but a place that we can go to learn Ann. And as part of that, of course, we want to reevaluate our past staffing. Hiring continues to be a little bit of a challenge. We have made quite a bit of progress. We'll talk about that a little bit later in the presentation here. But training city staff is going to be really important to make sure that across the enterprise during emergencies, we have enough support bought to fully employ Sargent the response plans and practices that need to be put forward during an emergency outreach. Each targeted community education is going to be crucial and vital component. And then in general, just preparedness across the entire city and the region. A little bit about the next slide , please. The crisp tool, again, [10:27:54 AM] it is an automated comprehensive approach to after action reporting. It allows us to again , Ann, you know, categorize and capture material. It allows us to then use that material knell excuse me, that information to make better informed decisions. It is a FEMA standard of best practice. It identifies areas of improvement and actions that can be implemented. Eid it also allows us to compare ourselves to some of our other cities partner cities that are using the same system. So that we have a more robust lessons learned opportunity. It provides a dynamic and transparent system for updates and it allows us to aggregate data to make it easier for us to maybe sometimes understand better what the data is actually telling us or what it can tell us. Next slide, please. With respect to major disasters since 2013, the data [10:28:57 AM] in the system goes back to 2013, and since that time there have been 1147. After action recommendations collected and 995 of those recommendations have been implemented. Next slide as it relates to winter storm uri, there were 213 Ann rey recommendations and to date, 74 of those have been implemented and the rest staff continue to work on, continue to address those and we'll continue to do so going forward. With respect to staffing, one of the issues that the office tackled during covid was the fact that they lost one third of their staff during that time. Since then they've managed to rehire six positions and there are three additional positions that are currently in process right now to, to address some of the [10:29:58 AM] issues and to ensure adequate and adequate ability to respond to issues. The staff has created a couple of different options. One is the disaster reservist plan, where temporary staff are brought in to help work on some of the issues and citywide in 2021, the team conducted two trainings and training 70 staff. There and the reason there weren't more done during that time was due to covid and also in 2022. We've also trained 78 staff and ten classes. And the plan going forward is to have a training class at least once per month. Next slide a huge focus area marketing and outreach is one of those areas. A new citywide all hazards approach to marketing has been implemented. I think that's going to be [10:30:59 AM] important going forward because as we talked about, we want to understand that the changing environment and climate change has caused, I think, some impacts that we were not traditionally comfy, irritable, adjusting or addressing here in the city of Austin. We want to lead a seasonal based weather preparedness campaign Luz those allow us to address winter storms when that's appropriate, flooding when that's appropriate, and also fire season when that's appropriate at a language access plan that has been a huge focus area. We know there have been some gaps there and we are working to close the gaps on some of those areas. Also so there's a focus on addressing and reaching our youth and vulnerable populations and also restarting the community emergency response team, training. Next slide, Rainey. A central Texas Texas is [10:32:00 AM] a campaign that was created by the homeland security and emergency management team here in Austin, Ann it has a regional focus Luz and this is the attempt there is to leverage our partners in other cities and around the county in the region. It was launched phase one was launched in was launched and reached 300,000 people in phase two reached 2 million, 55,304 people. And this is a campaign that we will continue to push. And it has been very successful so far. We will continue to work on the program. Ann and evolve with it. Next slide. These are the results of the recommendations and many of the recommendations that you see here have continuous as a status and what that means is all of the short range Paige issues associated with those have been [10:33:02 AM] addressed. But there are many that are ongoing and they should be prepared for significant and catastrophic events, for example, that is something that we will continue to do. We don't want to get ourselves into a model where we address an issue and then we're done with it. We want to continue to keep these issues on the forefront to make sure that we're progressing the . That concludes my presentation and questions. Thank you, Mr. Snipes colleagues questions. Okay for the heesom vacancies, how many are they authorized? Used for currently? How many positions are they authorized for and how many have they? I think initially there were roughly 15 positions and then after the council ad, there was another 19 positions added. So zo all told, that's going to be what, 35 positions there that they'll have on staff and how many do they have on staff? [10:34:03 AM] What's the full 24? 24 right now? Okay so plus temps. Okay. Thank you. Again, I think it's a really high priority that we actually get these positions filled. It feels a little bit like the situation in 911 where we had really noticed that there was not enough staffing and we tried to address it and it wasn't addressed. We have added staffing. We have said we need these positions, we need to get people in there who can support these efforts. On that Wright there were a couple that were particular for and related to the recommendations from this audit, the mass care coordinator and the technology strategy officer. Have those been hired? Not yet. Those two are still vacant. Mosque closing on those. Those those are two of the three [10:35:04 AM] that are ongoing and closing. Okay. And then where do we stand on funding reimbursement and do we have a plan for when those funds come in, since I believe they've just been accounted for as taken out of the reserves, when that money comes, are we going to be re investing that in our preparedness? Do we have a plan for that? What where is the status for those set for windstorm? Laura? Question I mean, we have it for covid. I mean, there's probably we want to speak to covid. You know, there's tens of million if not $100 million worth of reimbursements from FEMA over the last few years. Councilmember Juan Ortiz, director heesom, there different disasters that we're currently managing right now, and each one is in different different stages . The most recent one is the one that was declared for windstorm Ora that one just got declared over the weekend. So we're barely going to meet with FEMA [10:36:05 AM] to actually submit out the reimbursement aspects of that. We've been working to make sure that all the damage assessments were submitted to the state to make sure that that declaration was achieved and it was achieved. So now we're in the next phase of actually working with FEMA and the Texas division of emergency management to submit those reimbursements. So that's going to start approximately $45 million were submitted as city does disaster related costs. Ann and we're going to be working on and trying to get that reimbursement that's going to be reimbursed at $0.75 to the dollar. So that's a significant amount of funding. The other ones are in different stages. We're still continuing with the covid reimbursement process and there's still additional work that that we're that we're working on that different, different Swint projects have already been submitted. We are working through answer additional [10:37:07 AM] questions and come up with resolutions to some of the issues and some of the more specific projects. But I think we can give you a detailed report of what funds have come in for those those costs that have been submitted. Okay. I think we can we can have this conversation offline in more more detail than is possible in this setting. But it is definitely something that I want us to think about. Wright and then I just want to point out, it doesn't look like crisp has been updated since 22 for obviously we don't have the Mario report yet, but we did have a boil water report. So there may just be some additional updates to crisp that I was just on there the other day. And as far as I might have not seen all of it, but I didn't didn't see say, the boil water situation. Ann sure we can follow up on that. But the team is actively working in crisp, so we can check and see what I was [10:38:08 AM] relatively new to crisp. There may be I was looking at the particular icon Luz for reports so it might be in there and I missed it but I want to make sure that it's as up to date as possible. Thank you for, for this update. We have 74 of 213 recs for uri implement. Is that what you said? Yes yes. Okay. So what is the plan for the other 140? I have my numbers right. We're working all of those updates and what I can do. If you want, we can share those with you specifically on what's outstanding and what the plan is for closing those. But they vary depending on the item. Okay. I mean, I think that was part of their so part of part of the idea of having these check ins is to make sure that we are getting all those after action report recommendations either implemented or deciding it's not [10:39:09 AM] the priority, because sometimes those may no longer be the priority or we've chosen to do something else. I understand that. But but we have seen with the series of disaster tirz that we come back to the same problem, say, language access, but because we never fixed it three disasters ago, it's still cropping up and we wanted to, in having these reports and having these conversations to be able to feel comfortable that we had resolved issues or at least openly made decisions about priority. Rs rather than just not doing things, which was the impression we had before. So when you come back to us again, which we will have you do, we really are going to want to see that progress on those other implementation items or, or why we haven't done those, to understand that. But it would in the meantime be helpful to [10:40:09 AM] understand and the status of which of the ones are complete and which ones are not complete from your rey we are more than two years out from the event. I don't know what the magnitude of those things are. I imagine that many of those hinge on not having the staff to do the work , which is why I'm emphasizing the need for that staffing. So if we can if we can plan for that, that interim report with the details relative to the 213 recs. And then when you come back to help us to understand where we're at with those recs, I think would be would be helpful. I appreciate the progress that has been made, you know, particularly in the work that has been done vis a vis the public. I was fortunate to have one of the early pop ups for the emergency preparedness and I think those were very well received in the community. We really do need to take advantage of the fact that our community is primed to know, okay, we do need to be prepared, but getting [10:41:11 AM] those resources in their hands now, I think, is important. I think that pop up series likely should continue and has been has been really important in that regard. And there were certain things that we saw that were improved in Mario even as we had to deal with the new design center. But but I think we do need to continue to make this a priority and that does require those resources within kesum to do it. Councilmember Fuentes, thank you. Just to echo your sentiments, councilmember, alter the pop up events were incredible. I know I received lots of great feedback from my community and I think that type of model would be helpful when you are developing the disaster preparedness plan with with the community. So having something like that where the community can come to a central location in the district to weigh in and help shape that plan would be helpful and happy to partner with you on that. I just wanted to take a quick minute to highlight the language access [10:42:11 AM] plan and the work that's being done around language access, because that has been raised in these last few disasters that we've had. And also just knowing that as a top issue for the area that I represent, where 1 in 5 one one out of every five residents in D two are immigrants. And so I you know, language access is top of mind for me. So can you speak to a little bit more about what the work that's taking place with that. Yes council member. A really good question. And I'm also going to ask members of the team if there's a part that I missed out to come up and expand on that where continuing to work on that. There's always a lot of areas that we need to do. But the main things that we're doing is looking at different ways that we can get the information out in different languages and on a timely basis, get it correctly. And if we make a mistake, change it and correct it and put it back out there [10:43:12 AM] very quickly, because we want to make sure that everyone has access to the information. One of the things that I'd like to highlight is the partnership that we had with the Travis county in creating the. Accessible hazard alerting system, which disseminates information in in American sign language to those residents. And so that's that's that's another part that is very important and not just translated into English or or mandarin or or other different languages, but we want to make sure that that we look at take a comprehensive approach in getting information out. More specifically, we're also we've created a alert website that has a lot of the information available there already in different languages and when we have an emergency, we're going to be providing updates, translating those into different languages and adding that information on that website. And our marketing campaign is aiming [10:44:13 AM] at making sure that everybody's aware of those efforts so that people know where to go to go get that information. In addition to that, we're going to we're looking to explore what other ways we can get information Ann in different languages and that may take a little bit longer time, but we want to make sure that the information is communicated in different and different languages, different platforms, and make sure that it's timely, make sure that it's accurate so that everybody gets the word. Yes, thank you for that. And just really with the emphasis being on the communication, getting out to the community, because we found with the with the power outages, it was difficult to rely solely on folks going to a web page. So to the extent that we can really lean into the tools that we have with text messaging, phone calls , radio updates, those are the other key pieces in this as well. Thank you. We will. Thank you. Thank you. Miss king, did you want to say something? No. Okay councilmember Fuentes, I'll just point out that our next item is the language access [10:45:14 AM] follow up audit, which is being postponed till next month. But we'll be having that conversation Ann in may. And we were asked to give them a little bit more time so that they could do to do more work on that. Any other questions for director snipes? I'm not sure what your title currently is, but thank you, Mr. Snipes. We appreciate the report. Thank you. We appreciate the work of all of our emergency management professionals. Thank you, Mr. Ortiz. Thank you. Do I have a I just want to check if I have a if that's councilmember Kelly on mine. Okay great. Welcome so item number five is the language access follow up audit, which we are going to without objection, Ann postpone. And then our next item is item six. Mr. Campos, director of small and minority business resources, will be [10:46:14 AM] speaking with us about the inclusive procurement working group final report and recommendations. And I just want to acknowledge that mayor pro tem sponsored the resolution that initiated that that work. Good morning. There we go. Good morning. Council members. Mayor pro tem Edward campos, director of the city of Austin, small minority business resources department. Thank you for having us on today. I'm joined with my business process consultant who led our efforts with the inclusive procurement working group. And she's going to walk you through some slides about the progress of the work, the final recommendations, which were released to council in March and next steps. So thank you and we'll be here to address any questions. Thank you, Edward. Good morning, council [10:47:15 AM] members. My name is Patricia bourenane, business process consultant with the small and minority business resources department. I want to thank you for this opportunity to really highlight the great work that was performed by the inclusive procurement working group, as well as city staff. So if we can go to the next slide, I'm going to give you a little bit of background about the council resolution and then highlight details of the work that was performed and then we'll go into the recommendations and next step. So a little bit of background on March 26th of 2020, council passed a resolution establishing the wg to review and perform an assessment of the minority excuse me, of the minority business enterprise and women business enterprise procurement program ordinance, as well as review sue our administrative processes so that they could recommend ways that we could enhance our operations to best suit the needs of our community . So that resolution also directed us to provide Eid the [10:48:18 AM] wg a briefing of the disparity study results, which actually at the time of this council adoption, the disparity study was well underway. In addition, we were to provide periodic updates on progress to the council. Knell. So the ordinance outlined 11 key areas that were categorized for the ipa. Wg so how we approached it in order to cover the wealth of information Ann of those 11 key areas, we categorize them into four groups. So those groups included the certification process, research resources to for our minority firms and women businesses as well as payment policies, a communications and transparency and local prioritization, as well as covering our ordinance and best practices. Additionally, the ipa, wg was very much interested in centering discussions around goal setting and good faith efforts and in the summer of [10:49:21 AM] 2022, we brought in our consulting, who then provided a briefing before the wg on the disparity study findings, which actually was really good timing as the working group was working to finalize their recommendations. So next slide, please. So at this time I'd like to recognize our ipa wg members. We had 18 representatives from various stakeholder groups that really were committed in worked throughout the entire review process. We have representatives from our advisory committee as well as our minority trade associations, our local chambers, other various stakeholder groups. And we also had representatives from our certified firms. I also want to recognize the great work by our city staff. I want to give a shout out to our smb team for their contributions throughout the overall process, as well as the community engagement division within the [10:50:21 AM] communications and public information office. They facilitated, facilitated a majority of our discussions, which were pretty lengthy and in depth. I also want to recognize FSD's capital contracting and Eid central procurement, both of those divisions provided great overview of their respective areas, as well as the law department and the equity office and office of performance management for being involved in the process. So we really couldn't do it without them. Next slide. So to give you a little bit more insight and their review process, we began meeting in August of 2021. The overall process spanned over a year and a half. We had 30 working group meetings where we had those in-depth, in-depth discussions covering those focused areas and then with every meeting we had a follow up meeting where we kind of provided another presentation of what we heard the ipa. Wg members say. So really circling [10:51:21 AM] back to make sure that we accurately recorded their recommendations. And regarding those periodic updates in January of 2020, our assistant director, Dr. Tamala Saldana, provided an update before the audit and finance committee on the disparity study and the dwgs progress and the following month, director campos was joined by two Roig members to provide a progress update during a city council work session and leading up to the official distribution Ann of the final report to the council, we had issued four memos to mayor council that included updates on the disparity study, but also the work that was being performed by the ipa. Wg so during these discussions, Luz staff teased out the recommendations and we came forth with 43 preliminary recommendations that we performed analysis on Ann and provided follow up responses to the working group as well as to [10:52:22 AM] our advisory committee. We then had a kind of what we called a secondary review that was guided by our community engagement division, and from that the wg decided to advance 20 recommendations and then what we did, we categorized those 20 recommendations. We assigned them with a specific specification which are current practice, minor modification and major modification. Ann so if you could advance two slides. So these are the five current practice recommend options. So what current practice means is what? It's what it says. It's a current practice of the city, but what we may need to do is enhance our outreach and engagement so that the public and our certified firms are aware that we actually have this as a current practice. We want to focus on recommendation number 69, utilizing social media to connect primes to subcontractors and really highlight the prime contractor. [10:53:24 AM] So we do use social media. We have a linkedin presence and a Facebook page, but really in the past couple of years we've enhanced that and we are exploring ways where we can use the tool to not only highlight the businesses, but really connect the primes with the sub primes. So these are our current practice recommendations, which are five. Next slide. So minor modification burns. We had six recommendations under this category and what minor modifications means is that we could implement these recommendation fairly easily if we just adjusted some of our policies and procedures. Luz these recommendations do not warrant an ordinance revision or a program rule change, nor does it require additional funding or staffing. So I want to focus on ten a and 30 mean, you know, offering hands on assistance to help wbs understand the bidding process. So we currently promote [10:54:25 AM] Austin finance online. They actually have doing business with the city. It's a video that highlights how you can do business with the city because it is a pretty rigorous process getting registered and, you know, submitting bids. And they also offer, you know, how to develop an offer. And in 2020. So we promote that currently, but we're looking at expanding this or expanding what we promote. We in 2021, we began contracting with garbology, which is an online portal that offers educational tools for small businesses. And we've been marketing that at our certified businesses, but we really want to take it up a notch and look at how we can create more videos that we can showcase to really inform and educate firms on the bidding process. Also want to highlight recommendation number 13, which is similar to recommendation. The previous recommendation 16 it's, you [10:55:26 AM] know, highlighting our the successes of our firms at events and presentations. Burns we're looking at rolling out kind of like a mentor panel where we feature all of our firms. So we can share their experiences, their knowledge and Eid just any tips that they may have for a newer businesses that are looking to get certified Eid and really ramp up their business as right now we relaunched our pre certification workshop and we have testimonials from our certified businesses. We've woven them into that process to really highlight the success of being certified with the city of Austin. So if you can advance two more slides, perfect. So major modification is we have ten recommendations under this. These are going to be a little bit more lengthy to implement what major modification burns means is that they actually do require either an ordinance [10:56:27 AM] revision or a program rule change. And in some cases, they may need additional funding. So we would require council approval for additional funding for staff or just resources a whole. So what we found throughout the entire process and what we heard very clear is through our supportive services survey that we actually launched earlier this year and through this process is that really what these firms are wanting are additional resources, technical assistance, info, automation on lending, the loan process also how to a lot of people really want marketing and outreach assistance so they can get their firms highlighted. So recommendations six and if you can go through the next slide, six through 12 are where they want those additional resources . So, so we heard that pretty loud and clear and we're looking and exploring possible contracts with small businesses in the area that can provide that [10:57:28 AM] expertise to our firms. So if you go to the next slide, please . So regarding next steps, as our council or I'm sorry, our ordinance is set to expire in August of 2023. So we have already begun the revision process for our ordinance based on these recommendations, but also the recommendations from the disparity study. We have draft copies that we've walked through with our advisory committee at their April meeting. And what we're going to be doing is we're posting it online next month, which is next week, and then from may through June, we'll have a public comment period and then we're expected to come back to council, to council for consideration in the summer time. So and then after we have our ordinance, that will then guide our administrative program rule revision process, which we see that occurring in the fall time. Next slide. So that [10:58:30 AM] concludes the presentation. I really do want to thank you for the opportunity and also leading this effort. It was a really good experience, so thank you. And rector compost and I are here if you have any questions. Thank you very much. Colleagues comments. Mayor pro tem Ellis. I really appreciate the presentation and I don't think I've seen a draft of that information yet and I'm super curious. I don't know if I can wait till next week or get a peek at it earlier. One thing that I wanted to ask about is, is when you mentioned the payment policies, I know one issue that has been brought to my attention through the years and working for a woman owned business myself before I was on the city council trying to get the subcontractors paid back quicker was something that always came up. It seemed like the firms were the primes were getting their payment in the stages as they completed their work. But sometimes the [10:59:30 AM] subcontractors were having to wait three months or longer to be able to get their compensation for the work that's done. Has there been any discussion of that in these in the working group? There was. We actually and thank you for the question. Council mayor pro tem, we actually did a full presentation from our financial services department as well as our partners in our public works department regarding the pay applications and any any quick fixes we can do to increase or decrease the timeline for payments. Actually, we did not find that there was a large issue with that in terms of impacting the majority of our subs. If there are issues related to the payments or discrepancies in the payment process, snbr does get involved. There is an assign Singh counselor from our office for every contract that is led by the city that has our program attached to it. So we would get involved and try to assist that subcontractor. But as of right now, that process didn't lead to any any improvements from the [11:00:31 AM] working group. Okay. That's really helpful. And remind me, does the city have a process for reaching out to the subcontractors to see when they got paid? I can't remember if that's a state platform or a city platform. We actually do have that. And we've actually just recently launched an electronic platform so that firms that are paid prime firms that are paid, can enter their payment information. Ann for our certified vendors, the certified vendors are then alerted and they can go in and confirm that payment with the city. Okay thanks for jogging. My memory about that and I appreciate the talking about mandatory pre-bid meetings. I know that's a really important way that sub contractors can introduce themselves to prime contractors and were you saying there was they wanted help with marketing or is there a way that the city is trying to help share one pagers that these companies put together? Can you talk a little bit more about what marketing assistance they need and what the city could provide? Sure. [11:01:33 AM] And I think part of the process that we're going to work through is some sort of a survey process to see what really works for that particular firm, what are the needs of that particular firm, and kind of do a menu approach. So if they want to have a one page where it outlines the services that their firm provides, as well as their certification status, we can do that for them. So we're really working with our two public information specialists at our embedded in smb R to see how we can reach out to our certified vendors to see specifically what do they need, and then how can we tailor some of those requests. Okay, that's great to hear. I think that's a really creative Singh solution. And then my last question would be on the lending and loans. Is that just giving people information about how to get loans or which banks might be open to doing that? Or is this city money that is being loaned out like grants? I think now we're going to be looking at how we can form partnerships with area banks that actually have some concerted efforts with small minority and women owned businesses. Cdfi's are around the community have also reached out to us about partnerships. So [11:02:35 AM] I think that's the first thing we're going to tackle now. I think that those discussions about having some sort of a pool of money for cip projects in particular has always been discussed, but we I don't know if we're ready to land there yet. Okay, okay. And then I lied. I have one more question. Has there been any discussion about insurance? Because I know that project by project sometimes the insurance requirements change and it can be quite costly for some big projects. Did that topic come up in the working group at all? It came up in the working group very slightly. It actually was one of the topics that the disparity study noted. And so we'll work with our partner departments about what we can do to reduce where we can any insurance requirements. It's really tough, however, especially when you're talking about work at like the airport where those insurance requirements are just high because of the of the safety requirements that we have surrounding those facilities. And Austin energy would fall into that as well. Absolutely. We do have those discussions. There's obviously people need to [11:03:35 AM] have insurance. They need to make sure their liable and performing good work and taking care of their employees. And I'm just also curious sometimes if there's a way to pool them together to make sure that small businesses have a chance to be competitive. And I think from our side, it's really educating the folks that want to work at those different departments. And there and their projects is letting them know what they're getting into before they bid on a project. And then they see that there's a large requirement for security or insurance or whatever the case may be. Okay, great. Thank you so much for the presentation. Thank you. Thank you. Mayor pro tem. I have a couple of questions as other anyone else want to ask questions? Thank you. This is really helpful presentation. It looks like there are some things that will be addressed in the draft ordinance that were recommended, but that there are other things where you need resources in this presentation. You simply said you needed resources. Can you give us a sense more of a sense of what those resources would be? [11:04:36 AM] Because ideally we would be addressing these issues in the budget? Sure. Thank you for that question, councilmember. So we were very lucky to receive a program manager position as part of the fy 23 budget process and we're in the hiring process now for that position. Once that position is in place, they will help us create a framework for how we move forward on various supportive services, options for our certified vendors. And I think as we create that framework, it will allow us to come back to council with request on various components, such as a mentor protege program in particular. That was something that was identified by the working group as well as by our disparity study consultant as a need. And so we have that program manager look at what that cost would be by looking at other cities around Texas as well as around the country and see what additional services we could use to firm up that mentor protege program and then come back to council with a proposal on what we need. So you don't anticipate needing budget [11:05:38 AM] resources, additional budget resources in this next budget at this point for our supportive services. We're not asking for additional funding. Okay thank you. And then overall, did you want to share kind of any big takeaways that were are important to you as director from this process? And thank you. Yes and thank you for the question. I think the biggest takeaway for me as the director of the department Burt was the working group was very happy with the results of the study. They were also very happy with the overall performance of the program. And I think if you look at the major modifications, the majority of them were centered on new services that the city could offer and not modifications to existing services. So I was really proud of that effort and really proud of the team that came to the table to assist the working group members with understanding what we do, why we do it, and what areas of improvements we can make. So thank you and for my colleagues, I want to just flag that in may we will be [11:06:38 AM] talking with James Scarborough, our chief procurement officer, about the small business local preference initiative that I initiated when we approved the mwb study and that is additional to this work will help a similar group of firms, but it focuses on the prime level and is will help our local businesses generally, including our mwd program. And I think we have a good plan forward and I'm looking forward to that presentation in may. Shea if there are no further questions. Thank you both for being here. We appreciate that. Our next item is to item number seven, which is a briefing on capital improvement program financials. And this is a briefing that the city manager's office asked us [11:07:39 AM] to hold so that they could provide us with some critical information about our capital improvement program. We are hoping to likely have a series of these discussions in audit and finance over the next several months moving forward, whether it's on the financials or on different aspects, working with the city manager's office to make sure that we have a good look into these programs and where we're at. Good morning, ladies. Good morning, council members, I'm Kim Olivares, deputy chief financial officer from the financial services department. I also have with me this morning, Belinda weaver, our treasurer, and Tina van wie, our capital budget manager. She's here to do some pinch hitting for us. If depending on the questions you all might have . So we want to thank you for the opportunity Katy to present today. I there's been some prior communications to the full council regarding our cip and particularly on certain [11:08:40 AM] projects, but also some overall perspectives. And we wanted to take some time today to provide you all information about the current state of our capital improvement program. So I want to start the day by providing an overview of the key objectives and takeaways from the presentation. Ann first, you're going to hear about what the impact of off cycle bond programs, construction market conditions and Eid aggressive spending plans have when it comes to our overall project delivery, as well as our financial situation. Ann you're also going to learn about our authorize but unissued voter approved bonds right now we are $1.8 billion of authorized and will provide additional detail of what that really means later in the presentation. But with each of the challenges that we are, we're incurring, the city manager has definite really taken note of its importance and has taken action by creating capital delivery services department and also. But staff will always continue to focus on completing each of our current [11:09:40 AM] bond programs as so first we're going to start out with a cip spending overview. We know that when it comes to the financials and cip in particular, the terms can get pretty wonky. So we wanted to make sure to provide a reference sheet for the community to understand what are all what each of these terms mean as we work through this content. So this chart you see here provides an overview of our entire capital improvement program. The vast majority of our program is driven by our enterprise funds, particularly Austin energy, Austin water and aviation, but also our voter approved bonds. You also notice how significantly our cip is growing in the coming years. A lot of that is related to the expansion plans at the airport. This significant growth in our capital program will certainly have an impact on staff that are working to deliver on these projects, but it'll also have an impact on the consulting and [11:10:40 AM] contractor community as well as our city's financial planning efforts. So as we wanted to dig down from our overall cip program into our voter approved bond program, so this slide provides just an overview of our historical historically, since 2006, what bond programs have been taken to the voters is 2006 was a comprehensive plan at the time, was the largest we had ever done in 2010. That was during the great recession timeframe. We did do a mobility bond of about $90 million off cycle. We then did our next comprehensive bond program in 2012. Portion of that program did fail. And so we went back to the voters in 2013 to ask them to reconsider, at which point they did approve, and that was for the housing component at 2016. Was as a mobility focused program. So 2018 was a comprehensive then. Our definitely our largest bond [11:11:41 AM] program in our history, 2020 was an off cycle mobility program and 2022 is an off cycle housing focus program. So we're very fortunate. The voters of Austin have indicated their support for our strong investment in our capital infrastructure and our facilities. As you can see here, between 2000 and 6 and through 2022, approximately 3.5 billion in voter approved bonds, also known as public improvement bonds, have been approved by the voters. The vast majority of that, nearly 50, is related to mobility and transportation and then followed up by that is affordable housing with $720 million over time and the remaining is split out with various amounts for our public safety, our parks, drainage and open space libraries, cultural facilities and our health department. So the $3.5 billion has been authorized. But we also wanted to provide a breakdown of [11:12:41 AM] where we are in terms of expenses, encumbrances and balance. So expenses, those are the money out the door, encumbrances are funds that have been obligated to various contracts or agreements. Then the balance is what funding is still available. Now the balance does not mean that those funds have not been allocated. It just means they have not been spent. So as you can see here, affordable housing has about $360 million in remaining. But a huge portion of that 350 was for the bond program that was approved, literally just a matter of months ago when it comes to the remainder of our bond programs, mobility and transportation, Ann has the largest amount remaining at $803.6 million. And then as a smattering of amounts from there. Now, when it comes to our libraries, museum and cultural facilities, that does $100 million, does can seem significant, but it's also allocated between just a small number of projects. So it's not like it's spread out among numerous projects. Butts and [11:13:43 AM] this data is also through quarter two of the current fiscal year. So we've we now we want to dig into to the actual spending for our most recent bond programs. So 2016, voter approved voters approved $720 million for our mobility bond and you can see there's a very significant slope in that curve as we look at spending in the future years with any bond program, you're going to see a significant slope towards the latter half because there's typically design work that has to take place in the beginning, but the bulk of your spending will take place in the construction phases. However, that being said, we are seeing Garza ups and slowdowns in terms of spending on our various bond programs. We're we're seeing challenges in labor markets as the supply chain and inflation Ann over the years that came out [11:14:44 AM] of covid. So that's certainly impacting things. But also as we'll continue to talk about the frequency of off cycle programs does have an impact as well with the 2016 mobility bond Eid it was approved to be an eight year bond life cycle, but we're actually now projecting that it will take 12 years for completion with the final issuance of debt taking place in 2028. From there, we have our 2018 and our 2020 bond programs is in the next slide. It's a similar graph for the 2018, which was a comprehend bond program. It was approved to be an eight year bond. It's currently projected to take ten years with the final issuance of debt taking place in 2028. And then similarly for 2020, it was approved to be a six year bond and its currently projected to be an eight year program with that final issuance in 2028. It has had the most slow start of these programs, only $9 million [11:15:45 AM] has been issued as of yet. But this is a challenging and situation. But like I noted at the beginning, we are definitely digging into this in depth with the city manager. What was very as soon as he came on board, he named capital delivery to be one of his top priorities for the organization and in that vein, he created the capital delivery services department just over just about a month ago to be singularly focused on our capital project delivery. James snow is the current director of that department. He is here to answer any questions you have. But I anticipate that this this particular subject matter is something that could generate quite a bit of conversation that the committee might be interested in having in more depth in a future meeting. But in terms of their priorities, they are particularly focused on speed Eid and delivering [11:16:45 AM] projects, working to cut in half our capital execution time and delivering process improvements across the system. So in addition to our vote on does the do your projects burns include cutting it in half or do they your projections on how long it will take? Does that factor in the changes being implemented by the city manager? Yes. So that's Mr. Snow and his department. They will be actively pursuing process changes to that. Will cut in half. How long it takes us to deliver on capital projects in general. Knell but they will also be focusing significantly on our current bond programs. But James is here. I've got Jesus B James okay, so here's the what we've determined or what we've, we've observed is the department submit their projections of expenditures. That's under the given system. But their [11:17:46 AM] projections were always much more ambitious S than the actual reality. So those projections have been submitted by, by by the directors as we kind of roll out, this is what the plan, the spending plan is. But but James snow is now in charge of trying to sort through that to figure out what are realistic projections is and then to put in the process improvements in to deliver those projects in a speedier fashion. And I don't know whether James wants to add to that, but he's done a really great job at least bringing some organizing principles to this. You go back a slide real quick. What we did was when I was given this opportunity, what we looked at was we had reports from 2004 to just recent one that was done in March. And what I did with my team is look back and look at all those things, because a lot of these lessons were learned but just not applied. So these four that we put as the priorities were, the ones that were mentioned, the most in the reports. So as Kim alluded to right now, those projections that she's provided does not [11:18:46 AM] show any of the work that my department's going to do. What we're doing right now is we're actually going through first 2016, then 18, then 20, and looking at those and finding opportunities to. One of the key things in here is I'm looking at we plan sequentially, but we implement in parallel. And one thing is problem is that we also were doing sequential execution Ann, which slowed a lot of things up. So what we're trying to do is find opportunities where we can say, hey, we could do these three tasks at the same time. We don't have to wait for one or the other happening. The one place that we're focusing on first is the design phase. One of the one of the goal I've been given, Ann, is that it usually takes 7 to 9 years to deliver a project. We're going to do it 4 to 5, and we're using tenants that are best industry practices that we're leaning on some expertise that we learned from other cities on how to do that. But the first place we're focusing on is the design phase. We're looking at permitting and also the way that we actually design work. So that we can take that phase from 3 to 4 years down to one, one one year to about 18 months. That includes [11:19:47 AM] permitting and also coming to you all for the authorization to go into construction, construction is not really our weak point right now. We're doing construction about 3 to 4 years. What it is, is how we set it up. And one of the things that Jesus related to is going forward, one of the process improvements is when we come to you all and say, this is a project, it's not going to be a concept we're going to give you a scope schedule budget, which then you can hold us accountable to saying that's how we're going to deliver it and that's the budget. We're going to do it with what we've done in the past is we've come up with concepts or ideas and they've not been vetted out to you. And then what happens is the first thing you see is that the budget goes goes from 4 to 17 million. Why is it different things like that? And we want to make sure we do a better job when we come to you. So we're looking at all those proposals that are coming forward, working and working hand in hand with Kim and her team to look how we can make sure we have a consistency on the way we spend and way we project and way we deliver to. Thank you, Mr. Snow and I believe we're scheduled to have you speak to us in a in a future month, if I'm not mistaken. Look [11:20:47 AM] forward to that in more detail about that process. So I think that'll that'll be helpful. But it sounds like the projections are before the work of Mr. Snow so it's possible. Knell with the investments that the city manager is making and the focus that we can accelerate the trajectory. But it would be perhaps difficult at this point in time to predict how that how that would how that would look. Correct. Okay thank you. If you want to continue. Thank you. Sorry, I thought that was a quick question. Sorry. No, no worries. So we started out with our our voter approved debt, our public approved bond. So now we wanted to move on to our non voter approved debt, which includes certificates of obligation, Ann and contractual obligations. So and Belinda will go into this in a little bit more detail, but we utilize a mechanism called a reimbursement resolution that allows us to appropriate now but issued the debt later as a result. We do have a number of current projects and programs that are underway that have are backed by the future issuance of this non voter approved debt. So right [11:21:50 AM] now, when it comes to certificates of obligation, we have approximately $250 million. Notable projects include walnut creek, but that's supported by the walnut creek tirz and then a mix of fire and ems projects, some transport station, some building renovations and a domestic violence shelter in addition to the comes, we also have the contract contractual obligations where there's approximately $75 million plus that to be issued. The vast majority of that is related to fleet and related equipment. And just also to clarify, contractual obligations are a more short term form of debt, a 5 to 7 year time frame. So that's why you're only going to see it for things like fleet and equipment technology types of things, because it's related to the life of the asset. But there's also the human capital management system that is forthcoming as well as our regional radio system. But in addition to those pending [11:22:51 AM] issuances, there's also a number of pending operational needs that could utilize coes going forward. Has has been discussed by council on a number of occasions. We are working actively to move out of leased office and administrative and warehouse space and into city owned space. We have done considerable Andy analysis on the cost of being in leased space versus owned and there is significant savings. Associate with owned versus leased space. In addition, council knell previously approved the creation of a public facilities corporation Ann that was created to accelerate delivery of these major facility types and for lower project costs. But some of those pending projects coming forward include northeast service center, which will support our Austin resource recovery and fleet services. They are in dire need of facility upgrades and space expansion. There's also a Rutherford lane campus where we're looking at consolidating [11:23:53 AM] our public safety headquarters into a single campus. And there's also a need to look at replacement of downtown ems, fire and police stations. So there's a the list is of needs is often lengthy. The mechanisms to fund them is however not as lengthy. So at this point, I'm going to pass it over to Belinda weaver, our treasurer, to talk about our tax rate and general obligation debt. Thank you, Kim . So just following up on the discussion of cip, is how is the city going to fund for the cip projects? That's where the tax rate in general obligation debt discussion comes in. Next slide. So to start off with, when general obligation bonds, that's both voter approved and non voter approved debt are issued, they are supported by the full faith and credit of the city and are funded through the debt service tax rate. And just for some context, the city of Austin property tax rate has three components. The first is the [11:24:54 AM] operations and maintenance tax rate, and that funds the general fund. And then there is the Austin transit partnership tax rate that is that dedicated property tax that was approved in the 2020 tax rate election. And finally, the debt service tax rate, which funds the general obligation debt service, coming due in the following fiscal year. Next slide. So the debt service, fiscal impact. This is just a historical look at the debt service tax rate and the taxpayer impact for the typical homeowner. And the takeaway from this really is that the tax impact for bond elections prior to 2016 have been realized already. And that's because the majority of the bonds have already been issued. However for the tax impacts for the 2016, the 2018, the 2020 and the 2022 bond program will continue on into future years. And that's because they're still a significant amount of authorized. But unissued bonds that are [11:25:54 AM] associated with those programs. So just a little bit of information on general obligation debt. There are three types that Kim's gone over already. There's the voter approved public improvement bonds that fund capital improvement projects. There are the certificates of obligation that are non voter approved and those fund real property. I generally equate those to non movable assets like land purchases, buildings, things of that nature, and then contractual obligations. And these are personal property. I equate those to like movable assets as Kim already mentioned, fire trucks, police cars, things like that. And there is currently. 1.7 billion in outstanding general obligation debt. As of today, general obligation debt is issued once per year. It's generally done in the fall when we bring it to council for approval. And this is where I'm going to just mention that the city does utilize those reimbursement resolutions where the city [11:26:56 AM] appropriates funds to projects without having to issue that debt up front. And by doing this , the city doesn't have to pay interest on unutilized bond proceeds. And in addition to that, it's just fiscally prudent cash management. There's also the notation, again, that the debt is backed by the full faith and credit of the city and taxes. But this does also list the authorized but unissued totals. And in addition, again to that 1.7 billion in outstanding debt that we currently have on our books right now, there's over 1.8 billion an issue or approved debt from various bond programs that date back to 2006. You can see the amount remaining to be issued relative to the bond programs that they were approved by the voters with. So again, the grand. Total 1,804,895,000 remaining to be issued. So this is just a snapshot of the [11:27:57 AM] historical public improvement bond issuance is since 2016. So again, this is that voter approved debt and this is the amount that has actually been issued. And if we were to maintain pace, you know, of average issuances over, say, the last four years, that would equate to about $150 million issued per year. And for the remaining 1.8 billion in authorized Benigno issued, that would take about 12 years to issue that debt. We could look at it also from the perspective of, you know, 200 million, which was our last bond issuance. If we were to issue on that amount , it would take about nine years to issue the remaining 1.8 billion. And finally, some financial policy and credit rating considerations. There are certain financial policies that have been adopted by council in relation to timing of bond [11:28:58 AM] elections. The first is that there would be an estimated two years of authorized, but unissued bonds remaining before an election would be held and also when we went for the election, that bond election propositions recommended to the voters would not exceed the city's ability to issue those bonds within a normal six year period. So based on these policies, along with the current spending projections that Kim previously discussed, the earliest a new bond election would occur would be 2026. And finally, those credit rating agency considerations we have listed here the city's geokret credit ratings. We have S&P, moody's and Fitch. Those are the three main credit rating agencies. S&P has the city's credit at triple a, which is the highest rating you can have. Moody's and Fitch is one notch lower. Moody's is at double a one and Fitch is at double a plus. And the city was triple a rated by all three rating agencies prior to 2020 and 2020. [11:30:00 AM] Moody's downgraded the city from triple a to double a one, and Fitch from triple a to double a plus in 2021. And one reason noted for both downgrades was elevated fixed costs and included in those fixed cost metrics is debt requirements of the city. And that is coupled with retirement benefits as well . And the city's current debt balances again, at that 1.7 billion, along with future debt issuance plans, are key factors in determining the city's debt rating. So we want to keep that in mind along with the fact that future debt issuances must be carefully managed relative to triple-a credit standards and triple-a credit ratings from all agencies is really the ultimate goal since that will ultimately save on those debt costs. And again, just to reiterate what was mentioned earlier in the presentation, the impact of these off cycle bond programs, along with the construction [11:31:01 AM] markets and aggressive spending plans, have kind of culminated in this large authorized but unissued voter approved bond balance of 1.8 billion. Again, the city manager has taken action with creation of the capital delivery services department, whose primary objectives are developing and implementing a consistent approach to capital delivery across the city. Along with adopting a concept of speed and delivering those projects. And finally, just noting that staff will continue to focus on completing current bond programs . So that's the end of our presentation. There are in the backup, there are a number of there's an appendix to those slides. Some of the additional detail for reference, but we're available for any questions that you may have. Oh, and we have a special guest. Good morning. Council members. Eid Benigno chief financial officer and I just wanted to close it out by thanking you for putting this on [11:32:02 AM] your agenda to hear this important information, thanking staff for pulling together what I think was a real comprehensive and important update on our capital program. And you know, really just wanted to stress what, you know, what you heard about, you know, a lot of bond programs in recent years starting in 2016. We essentially have had one every two years that's resulted in a substantial amount of authorized. But unissued bonds, it is going to take us a while to work through that. We do have a new capital delivery approach that we're working on which is going to speed up, but that still is going to take us a lot. It's going to take us a while to work through that. We're going to have to manage it prudently against our our credit ratings and those metrics that the credit ratings look at. And, you know, it's going to be a while before staff would come forward to council seeking additional voter approval for more bond money, we got a full plate and we need some time to work through what we have on our plate. So just wanted to end with that. Thank you. Thank you. Mr. Benigno colleagues questions [11:33:04 AM] council member Fuentes thank you and thank you, Mr. Benigno, for your comments there at the end that was leading into the question. I was going to ask. Just knowing and I and I really appreciate the presentation because it's super comprehensive and gives us a really good picture of where we're at with our with our debt and, you know, and also understanding all of the factors that impact our our credit rating as a city and I appreciate the commitment from the city manager and the capital services delivery department division and the importance of that work and what that will do, because it does have a significant long term impact on how we're able to deliver services for our community. And so, you know, recently in the last few months, I mean, one example I have is that we approved the library vision plan that set out the needs of our library system, including many of them, includes adding new libraries across the city and expanding certain libraries. But [11:34:04 AM] all of that would, of course, would be funded through a bond proposal. And so I guess my question is, knowing that staff's recommendation at this point is wait until 2026 before coming forward with another bond package for our voters. What would be the process that you would recommend to undertake that work? Because I mean, libraries is one, but we saw the majority of the unissued bond debt is related to the housing bond that we just approved and the mobility bond that, that, that we also approved. But knowing that we have needs as a city, basic essential services, including our drainage infrastructure, our libraries, our parks, how, how, how best can we balance the needs of our services as well as knowing that we have of this substantial amount of unused bonds at this moment? Thank you. Council member. So vision plans like the [11:35:05 AM] library one you just recently approved, they are incredibly important when it comes to our capital improvement program planning process. So without those strategic efforts at looking at our facility needs support, our operations, it makes it much harder to develop our five plus year cip plan overall, that being said, when it comes to the funding, I know Tina and all of financial services, quite frankly, but Tina's team in particular is going to be looking really closely at all of our remaining funds amongst the different bond programs, but amongst all of our funding sources that we have to ensure that we are allocating them as effectively as possible . Also looking at where there might be some funding gaps for existing projects that are already on the on the books to be completed. So we're I think it's important for us to continue through that work to be looking at continuing to dig in deeper about our current state of all those projects. But then also incorporate that plus the future needs into our cip planning process as a whole. [11:36:05 AM] Then we're going to be able to come back to with a better, a much more comprehensive recommendation on how we handle funding each of these projects going forward so that we can get ourselves back on a more regular cycle according to our financial policies, for our bond programs, but ensure that we're not leaving departments in a lurch in terms of the facilities needed to support their operations. And with that, do you project the kind of the assessment that the departments are providing that will inform the capital improvement plan delivery plan? How how long will that take? Are you all projecting that perhaps by the end of this calendar year to come back to council with that assessment of the funding sources to meet the current needs or is that a much longer effort? I think there's portions of it that we can complete sooner than later, but like a full comp prehensive review is going to take some time and I'm hesitant to commit to a specific time frame. But I think as we're going deep into budget season Ann, we'll we'll definitely be [11:37:07 AM] looking at those most immediate needs to make sure that we can bring back recommendations on that front. But also there's going to be significant collaboration with James and his crew as they're working to make improvements to our delivery processes overall, we will be partnering with him to look at how that relates to our finances , our debt issuances and so on. So that we can have again, continue to bring more comprehensive recommendations and information to this body as opposed to kind of one off projects or situations. Okay. Thank you for that. And colleagues, I know I've spoken with a couple of you all about the conversations that my team has been having with city staff around the formation of a bond advisory commission. What that might look like, taking understanding that we have significant unmet needs and that we're a growing city and it's on us to ensure that we are providing the services at the at the rate and the scale and the reliability that our community deserves. While, you know, doing [11:38:07 AM] that visioning process. We have to be good stewards as well. So all that to say is that I look forward to the continued conversations and Eid and the information that you all bring back to us. Thank you. Mayor pro tem, you chair I have a question about about the scoping of some of these bond programs. How how do we build in that the city sometimes has to raise its minimum wage and we create these bond programs with certain expectations of the delivery process. And then as the city changes its minimum wage and increases it, how do we make sure that those contracts can still be in compliance with how how the cost of living is going up in Austin? I can provide a general overview. I might ask my colleague, Mr. Snow, to come and jump in as well. But with each of these projects, arts and various programs, there are project managers assigned to [11:39:08 AM] them that are actively looking at what is the scope, what are the requirements both from an internal perspective amongst our staffing and our policies, procedures, but also externally to make sure that all of those things are taken into account as they as they further refine the budget and the contracting needs for each of those projects as with any program, it's approved at the point it's approved and we recognize that things will be changed and that policies or procedures might change in the coming years. As a result, it's very important that we include Eid contingency in each of the project budgets to allow for some of that flexibility for some of those changing circumstances. But there are times when the circumstance may be more than the contingency can can handle. So here's where I will be tagging my colleague to come in and add in. So, yeah, he's been making his way up here again, respectful of your time. The quick answer that mayor pro [11:40:09 AM] tem is what we try to do is we try to build as Kim alluded to, contingencies as far as funding to be able to have the dexterity and agility. But I'm working with the purchasing department, especially Sean Willett, and the idea of how we look at contractually how we can do this. We there is a challenge that when we make changes on the diocese as far as a living wage, that we have to go back and look at former contracts and see how we can work with the people. And then possibly reissue them. But that's a hand in hand. So in my department, I'm working with her actually, she's going to embed a group with my group so that we can have a back and forth talk about these things to make sure that we can address what we have now. But in future have the contingency agility to deal with it. Thanks. Because I think one of these didn't it say we still have bonds to issue all the way back from 2000 Eid six? Yes ma'am. And I just know that the cost of rent and food has gone up so much. And what we try to do is there is contingency in there. We'll work with those sponsor departments to figure out how we can still deliver on the expectations. And then come to you. And if there's any changes in the expectations, [11:41:09 AM] communicate to council. Okay that sounds good. My next question is probably also for you, so don't go too far. There's been discussion of a special permitting team for the voter approved bonds and city projects. Is that currently happening? Yes, I'm working with Jesus on excuse me, Jose on that. I always do that. Sorry. Jose is the new director of development services. We're working hand in hand on that. That's one of the first things we're tackling in this process. Improvement is how we can do this more efficiently and effectively. We actually kicked off the team last Wednesday. And then we're also having so we have the doers, as I put it, the people who are really involved in the process. We're work flowing, the whole process and looking at how we can streamline it. And then what we're trying to do as far as globally is then I'm having a, a quarterly meeting with the sponsor departments to tell them how we're doing those improvements. So they can understand that. How is this going to help them impact their projects that we're trying to deliver for them? So it's I've been very lucky that between working with Jose Roig. Jose morales, Jose Jorge [11:42:10 AM] morales, and also zo Jesus yeah, I know I do that all the time. I apologize. I'll get used to it. And also working with the water utility as far as how we as a group can figure this out, because a lot of those a lot of those things are permits that we lie in either watershed or Austin water that we need to work with. As far as how we can streamline it. But it's, you know, it's a great team. We're trying to make it happen. So that's that's good to hear. That's very exciting. That's all my questions. Chair councilmember Rainey can you just help me understand a sentence you have on slide 23? You said an estimated two years of authorized unissued bonds shall remain Ann before an election will be held, shall remain for what? I'm just not understanding that sentence and how you're okay. So basically, when Belinda was going over our all of our the authorized but unissued so we look at okay when we have say we had in 2006 we had a bond program around around [11:43:11 AM] and then we did another comprehensive in 2012 at around the 2010 point we look at how where where are things looking in terms of remaining. We start out like doing that analysis and so that if we plan on going to have another bond election in 2012, that that we are we have two years or less from that prior those prior programs remaining to be issued. So we're always we're looking forward, but we're also always looking back in terms of our issuance. And because our normal we say a typical period is six years, really what you're saying in these two sentences is we should only issue bonds every four years. No not issue. We're talking we're not issue. We should only go we the policy of getting voter approved bonds shouldn't occur any faster than every four years. Really? You're looking at that six year time frame because historically, back in prior decades, really a bond [11:44:11 AM] program would typically take six years to be complete Eid or thereabouts. So if you do every six years, then then you're probably because we don't issue debt until after the expenditures occur. You're you're in that zone of being able to bring forward a new bond election. But be on that very that downward near the very end of the downward slide of issuing debt from prior bond programs. So it's all about trying to keep things relatively smooth in our bond issuances so we don't have huge spikes and drops year over year and how does your your statement about waiting until 2026 for our voter approved bonds affect what we do for certificates obligation Ann contractual obligation? Or does that factor in so the so that financial policy is speaking to typically to our voter approved bond elections, not our non [11:45:11 AM] voter approved bond elections. So it's so the certificates of obligation wouldn't necessarily play into that. But if we were to issue large amounts of certificates of obligation, would that impact our ability Katy or when we're looking at credit ratings and making the best financial decision on when to have go to the voters? Or would that delay or have an impact in any way in voter approved debt? Well, from a credit rating perspective, they review our existing debt as a whole right. So it's voter approved. It's non voter approved. Eid now, whether or not that would delay there are specific parameters within statute which in which certificates of obligation can be used. So I think it's the preference of the city to go forth to voters for approval. Those are really done in particular situations regarding certificates of obligation. Ann [11:46:13 AM] okay, but we're also every year we're looking at additional debt issuances. We're we're just like the credit agencies are looking at our full debt portfolio. So are we. So we're looking we're always looking to make sure that we're we're being very strategic about our issuances of cos relative to spending, but also relative to our overall issuance. And I'm fairly certain the answer to this is no, but this has zero bearing on going to the voters for tree, a tree would be a completely separate conversation. Revenue, not debt. Yes. All right. I appreciate it . Thank you. I wanted to go back to the slides and just get a couple of quick clarifications. Slide number five, you have the cip spending overview and you have the section for other is that just our codes and contractual obligations or what? What is falling in that bucket? Other includes certificates of obligation, contractual obligations. You might also have [11:47:13 AM] transfers from general fund or support services. Basically like stabilization, one time type funds. It also includes things like grants, also some of the utilities will also make transfers to from their operating budget, like watershed . So watershed they while they have a very important capital program, it's not the size is what you would see with Austin energy Austin water. So they're not singled out here. So other has quite a mix in there. Okay so I mean, just looking at this , there's so much of the planned future that is the airport and then there's this other category which is a bit of a black box. So can we get some more detail on what you're planning and projecting and how much money that is? Yeah I don't have all that information at my fingertips, but we can definitely gather our information on what the growth in other is in the future years. Okay and if it's easier to just [11:48:14 AM] meet with me or whatever's the most appropriate next step on that, if we can do that and then . On slide nine, in the yellow part, if I'm under standing correctly, those that's authorized as debt that has is not been obligated but has potentially been allocated, but not necessarily readily allocated. Generally it has been allocated Eid, for example, in accordance with whatever the contract or the voters might have been. So it might be allocated on that front, but it there might be some project specifics that have not been nailed down entirely, but it's generally been allocated according to how it was communicated to the voters. So for the non affordable housing, non mobility stuff, if we wanted to drill down into to that yellow section of allocated, but not obligated authorized debt, how do we get that information we so we can provide that for sure. There's also some websites [11:49:16 AM] that Tina and her crew and many others have worked incredibly hard on creating for folks to be able to dig into for the capital programs. And we can share those links with you as well. Those are publicly available sites, but it might be valuable for us to just to provide separately some additional detail, some listings of what the yellow represents. Okay. I think that would that would be helpful. And again, this may be I may be the only one who wants this, but because, you know, just looking, say, at the library, there's a lot of projects that they just don't have enough money because the costs have gone up so much relative to what they had. And I think they're short $8 million to finish the library projects. So it's helpful to understand why this money is not being spent because I don't know that it's solved by fixing the contract Singh process. If what we have is a shortfall of funds and that's part of the overall assessment that I previously [11:50:16 AM] mentioned that we're doing to look at where we are with our remaining funds, those allocations, what are the projects, scopes and estimated costs relative to available funding and having to make potentially some hard decisions about certain projects may just not be able to happen because of overall needs. But that's part of that overall assessment that we're working on going forward. Okay so it sounds like I'll need to have another another conversation about that. But but in terms of the spending down going back to my earlier question with Mr. Snow, these projections are before the changes that the city manager has, has implemented. So presumably we would get on a slightly different track directory. And it sounds like at this point in time it would be the prudent thing not to do a bond until 2026, but without actually going through that exercise and really diving into that other process, we can't we can't say what that process will [11:51:17 AM] yield. Is that a fair assessment? Yes. Okay thank you. City manager. Did you want to add anything to close us out or general comments? I know edge probably said that already. One is we have an enormous amount of unissued debt. 1.8 billion is a lot of money. What happens when Ann you can't run a bond program on a timely cycle. So those estimates that were done in the in the earlier years by the time you begin to start to implementing, there's not a way to achieve the objective that the voters and the public expected because you've got a project that's exploded in terms of cost first point, second point is we've allowed sometimes, as James alluded to a few minutes ago, where people have put a wish number together and that somehow has found itself onto a bond ballot. But it was a number that hadn't been given a lot of thought to. And [11:52:19 AM] when you start thinking through what it's going to take you to build that project, we didn't cross all the T's and we didn't dot all the I's, and then the expedited process that we're trying to do with this capital improvement office is to try to understand our process improvements that we have, that we have to have as an organization. So that we can get these projects built in a more timely way. And I would discourage to the degree that I'm able to discourage it off cycle elections that is, it's a process that that will not work for a capital program that you want to be delivered on time and on budget and I would want a more thoughtful process from our standpoint as an administrative staff to be able to have thoughtful processes in terms of how we devise projects to get built and why they should be a priority. Because what you're trying to build is you're trying to build a great city, you're not trying to build a fire station or a library. Those are things certainly that you're trying to do. But what you're trying to do is add to the quality of life of this city, and that has to be thoughtfully done. So I would just urge council to assist us in achieving that objective. Thank [11:53:19 AM] you. City manager Garza any other comments or anything? I have one last thought. Sure we recently had a housing and planning committee meeting. I think it might have been yesterday. I get my days mixed up, but I also want to be mindful of just how much project management it takes and how much staff we have to complete the tasks. When we got the list for housing and planning of all the different code properties we had been talking about over the past few years, the list was a lot longer than even I realized it was so I want to make sure that we have the staff to be able to deliver them and to properly manage the programs as well. Thank you. I think we've been working to try to do that in some instances, but haven't necessarily addressed that across all of the different the different bonds. Yes. And the city is hiring and the city is hiring. Yes. Lots of good jobs here. All right. So our last item is to identify items. Thank you all for this work and for putting this presentation. This [11:54:19 AM] will be an ongoing conversation. I think, moving forward and thank you to the city manager. Miss stokes, we're going to talk about future meetings. Yes, we show the language access follow up project, which was postponed today, will be at the may meeting. This is the may 24th meeting. Ann we also have we're scheduled to do an audit update, just a status report back on the Austin energy vegetation management audit out there. It looks like there's a briefing on the city's relocation ordinance from financial services as well as us financial policy change from financial services and a briefing, I believe we've on local and small business procure Swint the preference program. So that is what I show for now. So there may be other items that come up between now and when the agenda posts out. I think we were also doing an audit update for wildfire since it's wildfire awareness. That's right. Great. [11:55:20 AM] Thank you. Any other items? Great with that it is 1155 and we will be adjourning by councilmember alter. Will we'll need to visit whether we need to have a 12:00 and for our next meeting as well. We're skipping June so we need to fit a lot of things in there in may. Thank you very much, everyone. And with that, we are adjourned.