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[CALL TO ORDER]
ALISON ALTER AND I CHAIR THE AUDIT AND FINANCE COMMITTEE.AND I'M GOING TO CALL THIS MEETING TO ORDER I'M JOINED ON THE VIRTUAL DYESS BY COUNCIL MEMBERS, TOVO POOL KELLY AND MAYOR ADLER.
UM, WE ARE WAITING, UM, TWO OTHER COLLEAGUES TO JOIN US FOR THE MEETING, BUT WE'RE GOING TO GO AHEAD AND TAKE A LOOK AT THE
[1. Approve the minutes of the Audit and Finance Committee Meeting of March 31, 2021 and April 13, 2021.]
MINUTES.UM, WE HAVE TWO SEPARATE MINUTES AND I'LL ENTERTAIN A MOTION TO APPROVE THE MINUTES FROM MARCH 31ST AND APRIL 13TH, MOVED BY COUNCIL MEMBER KELLY AND SECONDED BY COUNCIL MEMBER POOL.
GO AHEAD, COUNCIL MEMBER POOL.
I WANTED TO CHECK WITH, UM, OUR CITY AUDITOR, IF THE MINUTES FROM OUR LAST MEETING, UM, INCLUDED THE BACKUP FROM, UM, THEY, UM, FROM ACE INC.
I THINK THAT, AND THEN ALSO, I THINK WE GOT SOME LIGHT BACKUP FROM THEM FOR THIS MEETING, BUT CAN WE BE SURE TO INCLUDE THOSE DOCUMENTS IN BOTH, UH, LAST MONTHS, LESS MEETINGS MINUTES, AND THEN ALSO THIS MEETING.
OKAY, WELL, UM, MAKE SURE THAT THEY'RE REFERENCED IN THE MINUTES AND THEN I INCLUDE THEM IN THE BACKUP FOR THE MEETING THAT WORKS.
UM, SO ALL THOSE IN FAVOR OF APPROVING THE MINUTES, YOUR OUT OR YOUR FAVOR, I ASSUME.
THAT IS UNANIMOUS ON THE DIASPORA PROVING BOTH OF THOSE SETS OF MINUTES, UM, WITH COUNCIL MEMBER POOL'S REQUEST NOTED.
UM, SO LOOKS LIKE WE HAVE DIANA THOMAS FOR OUR NEXT ONE OF OUR NEXT SESSIONS.
WE'RE JUST WAITING TO SEE A COUPLE OF THEIR COUNCIL MEMBERS WANTED TO JOIN US AND WE ARE, UM, TRYING TO GET THEM ON LINE HERE.
I'M SORRY, WHAT? JUST WANT TO MAKE SURE THAT THE REST OF THE TEAM THAT'S DOING THE PRESENTATION ARE ALSO BEING ADDED, SHOULD BE INTERIM CONTROLLER, MARIA, YOU KITSCH AND REAM SAMARA FROM DELOITTE, LIKE ROGERS FROM DELOITTE.
I'M MAKING SURE THAT I SEE THEM COMING UP NOW.
CTM, HOW ARE WE DOING ON MAYOR PRO TEM WHEN IT COMES TO MEMBER FRONT DESK SENT THEM BOTH THE LINK.
SO WE JUST NEED TO WAIT AND SEE IF THEY'RE ABLE TO LOG IN.
SO WE'LL TAKE UP THE DELOITTE ITEM FIRST.
UM, SO WE ARE GOING TO GO OUT OF ORDER, UM, FROM WHAT IS ON THE AGENDA.
I'M GETTING TEXTS ABOUT THIS MEETING SOMEWHERE ELSE HERE.
I'LL GO AHEAD AND SEND IT AS WELL.
SO, UM, I THINK WE WILL GO AHEAD AND START AND UM, HOPEFULLY CTM CAN GET, UM, OKAY.
SO, UM, AS I WAS SAYING, WE ARE GOING TO GO A LITTLE BIT OUT OF ORDER, UM, SO THAT WE CAN HAVE OUR EXTERNAL AUDIT, UM, GO FIRST.
SO ESSENTIALLY WE'RE GOING TO TAKE THE BRIEFINGS FIRST.
UM, WE'RE GOING TO, YOU KNOW, AUDIT ITEM FOUR, THEN WE'RE GOING TO TAKE THAT SMB AR UM, WHICH IS ITEM FIVE, UM, BECAUSE WE HAVE POSTPONED THEM MULTIPLE TIMES AND THEN WE WILL TAKE UP THE RELATED TO ACE AND THEN WE WILL TAKE UP THE CONVENTION CENTER, FINANCIAL QUESTIONS, ITEM SEVEN, AND THE STORM AUDIT WILL THEN HAPPEN IN FUTURE ITEMS. AND I APOLOGIZE FOR, UM, THE DISCOMBOBULATION, BUT OUR EXTERNAL AUDITORS.
WE WANTED TO MAKE SURE WE COULD GET THEM, UM, IN FIRST.
AND SO AS LONG AS WE WERE JIGGERING, EVERYTHING, WE
[00:05:01]
DECIDED TO DIG IT ALL.AND I WILL, UM, JUST NOTE FOR STAFF, UM, AS OF LAST NIGHT THERE WAS A BUNCH OF BACKUP ON PRESENTATIONS THAT WAS NOT LOADED UP.
UM, SO IF YOU HAVE NOT ALREADY DONE SO THIS MORNING, IF YOU COULD PLEASE MAKE SURE THAT THAT BACKUP GETS UP FOR TRANSPARENCY PURPOSES, UM, AND JUST FOR THE RECORD COMES TO NUMBER FOUR, THIS IS WATCHING ON ATX AND I THINK SHE DID JUST GET THE LINK THOUGH.
[4. The Fiscal Year 2020 Comprehensive Annual Financial Report by Deloitte & Touche LLP, the City's external auditor (Financial Services Department)]
SO, UM, DIANA THOMAS, ARE YOU THE ONE WHO'S KICKING US OFF FOR THIS PRESENTATION? I WILL.I'M THE INTERIM DEPUTY CHIEF FINANCIAL OFFICER.
AND I'M GOING TO INTRODUCE MARIA.
YOU COULD CHOOSE THE INTERIM CONTROLLER TO LEAD PRESENTATION.
UM, CAN WE BRING UP THE PRESENTATION OR GREAT, THANK YOU.
GOOD MORNING, MAYOR AND COUNCIL MEMBERS.
YOU COULD ENTER IN CITY CONTROLLER.
I AM HERE WITH DREAM SUMMER FROM DELOITTE AND TOUCHE, LLP.
THE CITY'S EXTERNAL AUDITOR TO PRESENT THE RESULTS OF THE FISCAL YEAR 2020 PENSIVE ANNUAL FINANCIAL REPORT OR THE REPORT AUDIT YOU'LL RECEIVE YOUR BOND COPIES OF THE REPORTS DISCUSSED TODAY.
AS SOON AS WE CAN GET THEM PRINTED, CAN WE ADVANCE TO THE NEXT SLIDE PLEASE? THE CITY'S REPORT WAS ISSUED IN MARCH 19TH, 2021.
WE'RE REQUIRED TO ISSUE BY MARCH 31ST.
SO WE ARE PLEASED THAT WE WERE ABLE TO ISSUE EARLY.
THE REPORT IS AVAILABLE ONLINE AT AUSTIN FINANCE ONLINE.
THE WEB ADDRESS IS LISTED BELOW THE PICTURE OF THE COVER 2020 MARK AUSTIN ENERGY'S HUNDRED AND 25TH YEAR AS THE CITY OF BOSTON'S COMMUNITY OWNED PUBLIC UTILITY.
AND THIS YEAR'S REPORT CELEBRATES THIS MILESTONE.
THIS YEAR'S, THIS YEAR'S REPORT AND AUDIT ARE THE FIRST ONES THAT WE HAVE COMPLETED A HUNDRED PERCENT VIRTUALLY.
THE CONTROLLER'S OFFICE IS RESPONSIBLE FOR THE PREPARATION OF THE CITY'S REPORT.
OUR OFFICE WORKS CLOSELY WITH THE LAWYER TO OBTAIN AN INDEPENDENT AUDIT OF THIS REPORT.
IF WE CAN ADVANCE THE NEXT SLIDE, PLEASE LISTED ON THIS SLIDE ARE THE REQUIREMENTS FOR AN ANNUAL AUDIT AND THE CITY HAS IN COMPLIANCE WITH EACH OF THESE REQUIREMENTS.
WE HAVE OUR INDEPENDENT AUDITOR, THE LAWYER AND TOUCHE LLP.
THEY'RE AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM.
AND THIS IS THE THIRD YEAR OF A FIVE-YEAR CONTRACT FOR AUDIT SERVICES.
THE REPORT WAS ISSUED WITHIN SIX MONTHS OF FISCAL YEAR END.
THE REPORT WAS PUBLISHED ON MARCH 19TH, 2021.
WE ARE REQUIRED TO PRESENT WITHIN 60 DAYS OF ISSUANCE.
THE LLOYD IS HERE TODAY ON APRIL 28TH, 2021, WHICH IS 40 DAYS AFTER ISSUANCE OF THE REPORT.
IF WE CAN MOVE ON TO THE NEXT SLIDE, PLEASE, I WOULD LIKE TO THANK THOSE LISTED ON THIS SLIDE FOR THEIR CONTRIBUTIONS TO THE COMPLETION OF THIS KEY FINANCIAL REPORT, INCLUDING THE MAYOR AND COUNCIL CITY MANAGEMENT AND THE CITY'S FINANCIAL STAFF FOR ALL OF THEIR WORK IN GETTING THIS REPORT COMPLETED.
UH, SO IF WE CAN ADVANCE THE NEXT SLIDE, PLEASE, NEXT WE HAVE THE DELOITTE PRESENTATION AND BREAM SUMMER WITH DELOITTE WILL NOW TAKE OVER.
WE WILL OPEN IT UP FOR QUESTIONS AT THE END OF THIS PRESENTATION.
SO IF WE CAN MOVE ON TO THE NEXT SLIDE, THAT SHOULD BE A, YEAH, THAT ONE.
GOOD MORNING, COUNCIL MEMBERS AND MAYOR.
AND, UH, THANK YOU FOR THE OPPORTUNITY TO PRESENT OUR YEAR AND RESULTS OF THE AUDITS TO TOGETHER.
UH, WITH ME ON THIS CALL OR BLAKE ROGERS, HE IS A PARTNER IN OUR AUDIT PRACTICE AND JANE SHEN SHE'S A SENIOR MANAGER.
UH, BLAKE WAS IN CHARGE OF OUR COMPLIANCE WORK, THE SINGLE AUDIT THAT WE PERFORMED FOR THE CITY AND JANE WAS A SENIOR MANAGER IN CHARGE OF THE AUDIT.
UH, YOU COULD, UH, MOVE TO THE NEXT SLIDE PLEASE.
UH, WE ARE HERE TO REPORT THAT WE HAVE COMPLETED OUR FINANCIAL STATEMENT AUDIT OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE CITY.
AND OUR AUDITOR'S OPINION IS INCLUDED IN THE FINANCIAL SECTION OF THE FINANCIAL STATEMENTS THAT YOU SHOULD HAVE RECEIVED IN YOUR PACKET OUT AUDIT WAS PERFORMED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS AND GOVERNMENT AUDITING STANDARDS.
WE'RE REQUIRED TO FOLLOW THE GOVERNMENT AUDITING STANDARDS BECAUSE YOU RECEIVE FEDERAL AND STATE FINANCIAL, UM, GRANTS.
UM, AND AWARDS, AS MARIA MENTIONED, OUR AUDITOR'S OPINION WAS ISSUED ON MARCH 19TH, 2021.
AS YOU ALL KNOW, THIS WAS A BIG YEAR, LIKE MARIA SAID THAT, UH, WE HAVE PERFORMED COMPLETED THE AUDIT COMPLETELY VIRTUAL.
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THE COOPERATION OF DIANA AND MARIA AND THE WHOLE TEAM IN THE CONTROLLER'S OFFICE AND TOGETHER WITH EVERYONE WITHIN ALL THE DEPARTMENTS.SO THIS WAS A CHALLENGE THAT, UH, EVERYBODY HAS MET.
WE HAVE RECEIVED THEIR FULL COOPERATION THROUGHOUT THIS ENGAGEMENT, UM, AND RECEIVED, UM, YOU KNOW, YOU KNOW, DURING THE MIDDLE OF THE AUDIT, UH, AND IN ADDITION TO THE PANDEMIC AND DEALING WITH CARE, ZACK FUNDING AND THE ISSUES AROUND THE ACCOUNTING AND COMPLIANCE RELATED TO THOSE, WE ALSO, UH, YOU KNOW, FACE THE STORM THAT THAT CAME INTO IT AND, UH, THE MIDDLE OF THE AUDITS, BUT W UM, MANAGEMENT AND STAFF WERE EXTREMELY HELPFUL IN HELPING US COMPLETE THIS AUDITS ON TIME AND BE ABLE TO SHOW OUR AUDITORS OPINION IF YOU CAN MOVE TO THE NEXT SLIDE, PLEASE.
UM, AS I MENTIONED, THE AUDIT WAS PERFORMED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS.
AND OUR OPINION IS UNMODIFIED, MEANING THAT THE FINANCIAL STATEMENTS THAT WERE PRESENTED BY MANAGEMENT DUTY PRESENT THE FINANCIAL POSITION OF THE CITY OF AUSTIN.
THIS WAS BASICALLY THE BEST RESULTS THAT YOU WOULD WANT TO HEAR FROM THE INDEPENDENT AUDITOR.
ONE THING TO NOTE IS THAT THERE ARE CERTAIN COMPONENT UNITS THAT ARE PRESENTED IN THE FINANCIAL STATEMENTS.
THOSE COMPONENT UNITS THAT ARE DISCREETLY PRESENTED WERE AUDITED BY OTHER AUDITORS, AND OUR OPINION BASICALLY REFERENCES THE OTHER AUDITOR'S OPINIONS.
IN ADDITION TO THE FINANCIAL INFORMATION, THAT'S INCLUDED IN THE FINANCIAL STATEMENTS THAT ARE SUBJECT OF INITIAL AUDIT, THERE ARE OTHER REQUIRED SUPPLEMENTARY INFORMATION INCLUDED, AND THAT BASICALLY IS THE MANAGEMENT DISCUSSION AND ANALYSIS, AND ALSO CERTAIN SCHEDULES THAT ARE REQUIRED FOR THE PENSION AND OPEC PLANS.
THOSE, UH, SCHEDULES AND THE MDS WERE BASICALLY NOT SUBJECTED TO THE AUDIT ITSELF, BUT WE READ THOSE AS REQUIRED BY OUR AUDITING STANDARDS AND TO DETERMINE THAT THEY WERE PROPERLY PRESENTED AND PREPARED IN ACCORDANCE WITH THE GOVERNMENT ACCOUNTING STANDARD SPORTS REQUIREMENTS.
WE DIDN'T HAVE ANY ISSUES WITH THAT PRESENTATION.
IN ADDITION, THERE ARE CERTAIN, UH, COMBINING SCHEDULES THAT ARE INCLUDED AS OTHER SUPPLEMENTARY INFORMATION IN THE FINANCIAL STATEMENTS.
THAT INFORMATION WAS AUDITED IN RELATION TO THE FINANCIAL STATEMENTS AS A WHOLE, AND WERE FOUND TO BE CONSISTENTLY PRESENTED IN ACCORDANCE WITH GAP.
THE OTHER INFORMATION IN THE CAFFER SUCH AS THE INTRODUCTORY SECTION AND THE STATISTICAL SECTION ARE NOT AUDITED, BUT ARE REQUIRED TO BE PRESENTED BY MANAGEMENT, UH, FOR, UH, TOP THING, THE GFI CERTIFICATES, OUR RESPONSIBILITIES AS AUDITORS', UH, WERE INCLUDED IN OUR ENGAGEMENT LETTERS, UH, WE'VE UH, INCLUDED ALSO, UM, UH, UH, A SUMMARY OF THOSE RESPONSIBILITIES IN APPENDIX A, OF THIS PRESENTATION.
I'LL BE HAPPY TO ANSWER QUESTIONS, BUT I WAS NOT GOING TO GO OVER THOSE SUPER DETAILED OUR RESPONSIBILITIES AT THIS POINT.
UH, COULD YOU MOVE TO THE NEXT SLIDE PLEASE? WHEN THE MANAGEMENT PREPARES FINANCIAL STATEMENTS, UH, THEY ADOPT ACCOUNTING POLICIES.
UM, THIS YEAR THERE WERE NO CHANGES IN ACCOUNTING POLICIES.
GATSBY IN FACT, HAS, UM, DELAYED THE IMPLEMENTATION OF SIGNIFICANT ACCOUNTING STANDARDS AS A RESULT OF THE PANDEMIC.
SO THERE WERE NO NEW ACCOUNTING STANDARDS THAT WERE ADOPTED OR ANY CHANGES IN ACCOUNTING POLICIES.
ALSO THE PREPARATION OF FINANCIAL STATEMENTS ENTAILS, UM, MANAGEMENT TO MAKE A CERTAIN ACCOUNTING ESTIMATES.
AND SO WE'VE DISCLOSED ON THIS SLIDE HERE, UM, THE MAJOR ACCOUNTING ESTIMATES OR THE SIGNIFICANT ONES, AND WE HAVE SUMMARIZED AND APPENDIX B, UH, BASICALLY IN THE, OF THIS REPORT AND HOW WE'VE ADDRESSED THOSE ESTIMATES, BUT, UH, ANY LIABILITIES RELATED TO PENSION, OPEB ASSETS, RETIREMENT OBLIGATIONS, AND THEN THE DIFFERENT AMOUNTS FOR REGULATED OPERATIONS ARE CONSIDERED ACCOUNTING ESTIMATES.
UH, MANAGEMENT HAS CONSISTENTLY APPLIED THE POLICIES AND METHODS OF CALCULATING THOSE ESTIMATES AND, UH, WE FOUND THEM TO BE PROPERLY PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
I'M GOING TO TURN IT ON TO JANE TO GO OVER, UH, THE SUMMARY OF UNCORRECTED, THE SAME AS THAT WERE NOTED DURING THE AUDITS AND THOSE THAT WERE CORRECTED GOOD MORNING, EVERYBODY.
UM, SO DURING THE COURSE OF OUR AUDIT, WE IDENTIFIED A FEW MISSTATEMENTS AND WE WANTED TO REMIND YOU THAT OUR AUDIT IS DESIGNED TO OBTAIN REASONABLE AND NOT ABSOLUTE ASSURANCE THAT THE FINANCIAL STATEMENTS ARE NOT MATERIALLY MISSTATED.
AND WE LIKE TO THINK ABOUT THE MISSTATEMENTS IN TWO CATEGORIES, UNCORRECTED AND CORRECTED UNCORRECTED MISSTATEMENTS ARE THOSE THAT WE, AND BOTH WE AND MANAGEMENT AGREED THAT THESE ARE NOT MATERIAL TO THE FINANCIAL STATEMENTS, AND THEREFORE THEY'RE NOT CORRECTED OR REFLECTED IN THE FINANCIAL STATEMENTS THAT WERE ISSUED.
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OF THESE UNCORRECTED MISSTATEMENTS IN APPENDIX C PRACTICE.THE STATEMENTS ON THE OTHER HAND ARE THOSE THAT WE IDENTIFIED AND THE MANAGEMENT AGREED TO CORRECT THEM.
SO THESE ARE INCORPORATED INTO THE FINANCIAL STATEMENTS THAT HAVE BEEN ISSUED AND MANAGEMENT DOES THIS BY WAY OF WHAT'S CALLED JOURNAL ENTRIES.
AND YOU CAN SEE HERE BELOW THAT THERE ARE FOUR JOURNAL ENTRIES THAT WE WANTED TO BRING TO YOUR ATTENTION.
THE FIRST ENTRY WAS IN THE AIRPORT FUND.
THE AIRPORT HAD ENTERED INTO AN AGREEMENT WHERE THE COUNTERPARTY WOULD LEASE LAND AT THE AIRPORT AND THEN CONSTRUCT VARIOUS BUILDINGS AND HANGERS.
ON TOP OF THAT LAND, THE CONTRACT WAS INTERPRETED SUCH THAT THE CONSTRUCTED ASSETS WITH THESE SESSIONS ESSENTIALLY DONATED TO THE AIRPORT ONCE CONSTRUCTION COMPLETED AND THEREFORE AIRPORT RECORDED CAPITAL CONTRIBUTIONS REVENUES, AND THEN REFLECTED THOSE ASSETS AS THEIR OWN.
HOWEVER, THE SOLE USE OF THOSE ASSETS REMAINED WITH THE COUNTERPARTY FOR 30 YEARS.
AND THEREFORE WE DETERMINED THAT THE CITY DOES NOT ACTUALLY CONTROL THOSE ASSETS AND REQUESTED THE ENTRY BE REVERSED.
THE SECOND ENTRY WAS THE, UM, IN THE WATER FUND.
SO THERE WAS, UH, SORRY, WAS THERE SOMEBODY WHO WANTED, OKAY, SORRY, I'LL GO WITH MY PROBLEM WITH MY MIC.
UM, THE SECOND ENTRY THAT YOU SEE ON YOUR SCREEN IS A WITH THE AUSTIN WATER FUND, THERE WAS A LARGE PROJECT WITH THE TEXAS DEPARTMENT OF TRANSPORTATION THAT REQUIRED AUSTIN WATER TO, UM, TAKE A WHOPPING $23.8 MILLION DEPOSIT.
AND THE DEPOSIT WAS ORIGINALLY CLASSIFIED AS A CONSTRUCTION IN PROGRESS.
BUT SEEING AS THE PROJECT HADN'T ACTUALLY BEGUN, WE'D REQUESTED THAT IT BE CLASSIFIED AS AN OTHER ASSET.
INSTEAD, THE THIRD AND FOURTH ENTRIES SHOWN, UM, WERE RELATED TO THE SPECIAL REVENUE FUNDS, WHICH ARE PART OF THE NON-MAJOR GOVERNMENTAL FUNDS.
THE THIRD ENTRY SHOWN HERE IS TO CORRECT THE PRESENTATION OF VARIOUS INTERFUND REIMBURSEMENTS AND TRANSFERS BETWEEN, UM, THE SAME SPECIAL REVENUE FUNDS.
SO THIS RESULTED IN A DECREASE OF REVENUES AND EXPENSES OF $54 MILLION AND INCREASES IN TRANSFERS OUT AND TRANSFERS IN BY, UH, $48 MILLION.
THE FOURTH ENTRY SHOWN HERE IS ALSO FRACTION OF A PRESENTATION ITEM.
LAND THAT IS HELD FOR SALE WAS PRESENTED AS AN EXPENSE RATHER THAN A CURRENT ASSET IN THE FUND FINANCIAL STATEMENTS.
SO HONESTLY IT CAN HAPPEN BECAUSE WITHIN A GOVERNMENTAL FUND PLAN THAT IS NOT HELD FOR SALE.
SO LAND THAT YOU CONTINUE TO USE IS CLASSIFIED AS AN EXPENSE ON THE FRONT FUND FINANCIAL STATEMENTS.
UM, SO, BUT, BUT IN THIS CASE IT WAS HELD FOR SALE.
AND SO THIS RECLASSIFICATION ESSENTIALLY RE UH, RESULTED IN A DECREASE IN EXPENSES AND INCREASE IN LAND, HELD FOR SALE FOR $10.3 MILLION.
SO I KNOW GAVE YOU A LOT OF DETAIL THERE.
ARE THERE ANY QUESTIONS? ALL RIGHT.
I THINK WE'LL, UH, WE'LL FINISH THE WHOLE PRESENTATION AND THEN WE'LL OPEN IT UP FOR QUESTIONS.
SO IF YOU'D LIKE TO, UM, CONTINUE TO NEXT SLIDE, PLEASE.
SO WE ALSO WANTED TO HIGHLIGHT, BUT WE HAD NO DISAGREEMENTS WITH MANAGEMENT, DIANA MARIA AND HER TEAM ARE JUST SOME OF THE SMARTEST FAMILIES, PEOPLE THAT WE WORK WITH.
UM, AND WE CAN TELL THAT THEY WANT TO DO THE RIGHT THING DURING THE YEAR.
THEY HOLIDAY, UM, DISCUSSION WITH THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD OR GATSBY, AND ON THE TREATMENT OF HER PAYMENTS TO BE MADE TO ONE OF ITS DISCRETELY PRESENTED COMPONENT UNITS.
AND AS YOU CAN SEE ON THIS SLIDE, WE ENCOUNTERED NO DIFFICULTIES DURING THE AUDIT.
WE RECEIVED THE FULL COOPERATION OF MANAGEMENT AND STAFF AND HAD UNRESTRICTED ACCESS TO THE CITY, SENIOR MANAGEMENT.
AND WE ALSO WANTED TO COMMEND DIANA MARIA AND THEIR TEAM FOR SO SEAMLESSLY TRANSITIONING, UH, WITH US TO A REMOTE WORKING ENVIRONMENT.
THEY WERE ALREADY FAMILIAR WITH SOME OF OUR, UM, YOU KNOW, INNOVATIVE COLLABORATION TOOLS, BUT THEY REALLY HELPED WITH THE TRANSITION BY MANAGING BEING SO AGILE AND COORDINATING ALL THESE MEETINGS, UM, OVER TEAMS AND JUST BEING VERY, VERY, UM, YOU KNOW, FORWARD THINKING AND HELPING US TRANSITION.
SO IT WAS DEFINITELY A CHALLENGING YEAR FOR ALL OF US WITH THE PANDEMIC AND THE ICE STORMS, BUT WE ALL GOT THROUGH IT SUCCESSFULLY TO BE ABLE TO PRESENT TO YOU HERE TODAY.
UM, AND SO WITH THAT, UM, WE ALSO WANTED TO LET YOU KNOW THAT MANAGEMENT IS REQUIRED TO MAKE CERTAIN REPRESENTATIONS TO US AS THERE AS, UM, YOUR AUDITORS.
YOU CAN FIND A COPY OF THOSE REPRESENTATIONS IN APPENDIX C AND FINALLY CONSISTENT WITH LAST YEAR, WE USE MONTEMAYOR BRITAIN AND BENDER AS A STAR, AS OUR SUBCONTRACTOR AUDITING FIRM TO COMPLETE OUR AUDIT.
SO WITH THAT, I'LL HAND IT BACK TO REIGN, UM, TO DISCUSS EACH TIME.
UM, SO IF WE CAN MOVE ON TO THE NEXT SLIDE, PLEASE.
UH, ONE THING TO NOTE, UH, COUNCIL MEMBERS IS THAT DURING THE AUDIT, WE OBTAIN AN UNDERSTANDING OF YOUR INTERNAL CONTROLS AND TEST THE DESIGN AND IMPLEMENTATION OF THOSE CONTROLS.
UH, WE DO NOT TEST THE OPERATING EFFECTIVENESS OF INTERNAL CONTROLS.
HOWEVER, IF WE IDENTIFY ANY WEAKNESSES THAT ARE CONSIDERED TO BE SIGNIFICANT DEFICIENCIES OR MATERIAL WEAKNESSES, WE ARE REQUIRED TO BRING THOSE, UM, RECOMMENDATIONS AND ISSUES TO YOUR ATTENTION.
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WE HAVE ISSUED A SEPARATE REPORT ON INTERNAL CONTROLS THAT IS INCLUDED.UM, I, I'M NOT SURE DIANA IF THAT WAS INCLUDED IN A SEPARATE PACKET OR IN THIS PACKET, BUT WILL BE PROVIDED AS PART OF THE SINGLE AUDIT ALSO AT, UH, AT THE END OF THE SINGLE AUDIT.
BUT IN THAT SEPARATE REPORT ON CONTROLS, WE HAVE IDENTIFIED ONE SIGNIFICANT DEFICIENCY, UH, THAT WE'RE REQUIRED TO BRING TO YOUR ATTENTION.
AND THE OTHER DEFICIENCY ACTUALLY RELATES TO THE ADJUSTING ENTRIES THAT JANE JUST MENTIONED.
IF YOU NOTICED THAT WHERE THERE WERE FOUR SIGNIFICANT ADJUSTING ENTRIES THAT WERE IDENTIFIED DURING THE AUDIT, ALL THOSE ENTRIES, WE FELT THAT HAD ONE, ONE THING IN COMMON, WHICH IS COMMUNICATION OR COORDINATION WITH THE DEPARTMENTS WHEN THEY DEAL WITH UNIQUE, UM, TRANSACTIONS.
SO IF A DEPARTMENT IS DEALING WITH A UNIQUE TRANSACTION, THEY ARE REQUIRED TO IDENTIFY, UM, BASICALLY THE PROPER ACCOUNTING AND REPORTING OF THOSE TRANSACTIONS.
AND IF THOSE TRANSACTIONS ARE NOT TIMELY COMMUNICATED WITH THE FINANCE OFFICE OR THE CONTROLLER'S OFFICE, THERE'S A RISK THAT THOSE TRANSACTIONS WILL NOT BE PROPERLY ACCOUNTED FOR ON THE RECORD.
SO WE MADE THE RECOMMENDATION OF, UH, BETTER TRAINING FOR THE DEPARTMENTS TO TIMELY COMMUNICATE WITH THE CONTROLLER'S OFFICE, AND ALSO TO PROBABLY AT THE, AT THE END OF THE YEAR TO, UH, PREPARE SOME SORTA ANALYTICAL REVIEW TO COMPARE CURRENT YEAR TRANSACTIONS TO PRIOR TRANSACTIONS.
BECAUSE WHEN YOU DO THAT, SOMETIMES YOU IDENTIFY, UM, YOU KNOW, UM, CHANGES THAT WOULD RAISE QUESTIONS THAT WOULD LEAD FOR YOU TO, UM, IDENTIFY THOSE TRANSACTIONS AND PROPERLY RECORD THEM TIMELY.
SO BASICALLY, UH, WE ARE RECOMMENDING A PREVENTATIVE CONTROL IF YOU WILL, WHICH IS FAMILY COMMUNICATION, AND THEN A DETECTIVE CONTROL THAT YEAR AND FOR SOMEBODY TO DO THOSE COMPARISONS, UM, THAT'S, UH, THE DETAIL OF, UH, THE ACTUAL, UH, FINDING AND RECOMMENDATION ARE INCLUDED IN APPENDIX D AND MANAGEMENT'S RESPONSE IS ALSO INCLUDED IN THAT APPENDIX TOO.
UM, SO I WAS JUST GOING TO STOP THERE AND SEE IF MANAGEMENT WANTED TO, UM, RESPOND TO ANYTHING RELATED TO THE FINDING.
I KNOW THAT YOU HAVE INCLUDED YOUR RECOMMENDATION OR YOUR CORRECTIVE ACTION AND THE RECOMMENDATION, RIGHT.
UM, SO MEMBERS OF THE COMMITTEE, I WANTED TO LET YOU KNOW THAT MANAGEMENT HAS CONCUR, UH, CONCURRED WITH, UH, DELORES RECOMMENDATION.
UH, THE CONTROLLER'S OFFICE IS GOING TO BE SCHEDULING, UH, REGULAR MEETINGS WITH KEY DEPARTMENTS TO MAKE SURE THAT WE'RE STAYING APPRISED OF ANY DEVELOPMENTS, UM, AND ANY NEW TRANSACTIONS THAT MIGHT BE UNIQUE OR UNUSUAL FOR, UM, THEIR DEPARTMENT.
THAT WAY WE CAN, UM, MAKE SURE THAT WE'RE APPLYING THE APPROPRIATE ACCOUNTING TREATMENT GOING FORWARD.
UM, THE DEFINITION OF SIGNIFICANT DEFICIENCY OR MATERIAL WEAKNESS ARE ALSO INCLUDED IN APPENDIX D FOR YOUR REFERENCE.
UM, THERE, I WANTED TO ALSO HIGHLIGHT THREE OTHER REPORTS THAT WILL BE ISSUED OR HAVE BEEN ISSUED AT THIS POINT.
UH, THE SINGLE AUDIT REPORT IS IN PROGRESS.
AND, UM, I WILL, UH, GIVE BLAKE AT THE END A COUPLE OF MINUTES TO KIND OF GIVE YOU AN UPDATE OF WHERE WE ARE ON THAT ONE.
AND WE HAVE ALSO ISSUED OUR REPORT ON THE PASSENGER FACILITY CHARGES.
THESE ARE THE CHARGES THAT ARE RECEIVED BY THE AIRPORT.
UH, THERE ARE COMPLIANCE REQUIREMENTS THAT THE CITY IS REQUIRED TO COMPLY ON THE SPENDING OF THOSE, UH, CHARGES.
UH, WE COMPLETED THAT AUDIT ISSUED THE REPORT ACTUALLY LAST WEEK AND THE AUDIT WAS CLEAN, MEANING THAT WE FOUND OUT THAT THE CITY COMPLIED WITH ALL THE REQUIREMENTS RELATED TO THE PASSENGER FACILITY CHARGES.
UM, IN ADDITION, THERE'S ANOTHER AGREED-UPON PROCEDURES REPORT, UH, THAT THE CITY IS REQUIRED TO FILE WITH THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY.
UH, THAT'S REPORT HAS BEEN COMPLETED ALSO WITH NO FINDING.
SO WITH THAT, I'M GOING TO TURN IT TO BLAKE TO JUST GIVE US AN UPDATE ON THE SINGLE AUDIT.
GOOD MORNING, BLAKE ROGERS, LOU DELAY.
SO LIKE I'M ON A CELL PHONE COMMERCIAL, UH, APOLOGIES.
UH, WE ARE IN THE PROGRESS OF COMPLETING OUR SINGLE AUDIT AT THIS POINT.
WE HOPE TO BRING THAT TO THIS COMMITTEE AND OUR NEXT MEETING RIGHT NOW.
UH, WE ARE AUDITING NINE PROGRAMS, FIVE FEDERAL PROGRAMS, AND FOUR STATE PROGRAMS, UH, NOT SURPRISING THAT THIS IS A LARGE YEAR FOR COMPLIANCE AUDITS AS THE CITY RECEIVED SIGNIFICANT FUNDING AS A RESULT OF THE CORONAVIRUS AID RELIEF AND ECONOMIC SECURITY ACT OR THE CARES ACT, WHICH MAKES UP A BULK OF THE FUNDS THAT WE WILL BE AUDITING AND COMPLETING OUR WORK ON AND HOPING TO PRESENT TO YOU NEXT MONTH.
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BLAKE.UM, THIS CONCLUDES OUR PART OF THE PRESENTATION.
WE WILL BE HAPPY TO ANSWER ANY QUESTIONS YOU WANT TO HAVE.
I APPRECIATE, UM, THE PRESENTATION.
I JUST WANTED TO CLARIFY ONE THING BEFORE WE GO TO QUESTIONS.
SO QUESTIONS AND CONCERNS THAT WE MIGHT HAVE, YOU KNOW, TO MAKE SURE THAT WE WERE HANDLING, UM, THAT WOULD, THAT INFORMATION WILL COME TO US IN THE SINGLE AUDIT, WHICH WE WILL HEAR IN MAY.
COUNCIL MEMBER POOL LOOKS LIKE YOU HAD YOUR HAND UP.
I WANTED TO JUST ASK STAFF, UM, MAYBE MS. THOMAS TOO, UM, GIVEN THE UNIQUE NATURE OF THOSE CONTRACTS THAT WERE FOUND TO HAVE SOME EXCEPTIONS ON HOW THEY WERE, UM, UH, JOURNALED.
AND I DON'T KNOW IF I'M USING THE TERM RIGHT, BUT COULD YOU CHECK THE OTHER CONTRACTS THAT WE HAVE THAT ARE UNIQUE, THAT ARE ALONG THE SAME LINES AND WHAT, WHAT TRIGGERED IT FOR ME WAS HOW WE ARE COUNTING THE LAND THAT WE OWN IT AT, UH, UM, THE CALLA PLACE, BECAUSE IT HAS A NEW USE.
AND I WANT TO MAKE SURE THAT WE'RE TRACKING HOW THAT'S ASSIGNED APPROPRIATELY IN LIGHT OF THE FINDINGS FROM THE AUDIT, UH, IN THE CAFE OF COURSE, COUNCIL MEMBER, ANNA THOMAS, INTERIM, DEPUTY CHIEF FINANCIAL OFFICER, UH, JUST REALLY QUICKLY WHEN WE SEE TRANSACTIONS THAT ARE UNIQUE, UM, LIKE THE MCCALLA PLACE TRANSACTION, WE SIT DOWN WITH THOSE DEPARTMENTS THAT ARE INVOLVED IN THAT TRANSACTION AND WE GET ALL THE INFORMATION THAT WE CAN FROM THEM, INCLUDING ALL CONTRACTS AND AGREEMENTS.
AND THEN WE GO BACK AND LOOK AT THE ACCOUNTING STANDARDS TO MAKE SURE THAT WE'RE APPROPRIATELY, THAT WE'RE APPROPRIATELY REFLECTING THOSE TRANSACTIONS IN THE FINANCIALS.
I KNOW THAT WE'VE LOOKED VERY CLOSELY AT MCCOLLOUGH.
IT WAS ALL OVER THE NEWSPAPER.
AND OF COURSE, A BIG CONVERSATION IN, IN, IN CITY, UH, YOU KNOW, AMONGST CITY STAFF ABOUT WHAT ALL WAS GOING ON.
SO WE WANTED TO MAKE SURE THAT WE GOT THAT ONE, RIGHT? SOME OF THE ONES THAT WERE IDENTIFIED HERE ARE, ARE UNIQUE IN A DIFFERENT WAY.
YOU KNOW, A LOT OF TIMES WHEN WE MAKE A PAYMENT TO TXDOT, FOR EXAMPLE, THE WORK HAD STARTED RIGHT AWAY.
AND IT REALLY IS JUST PART OF A CONSTRUCTION PROJECT THAT WE'RE A PART OF.
AND THIS PARTICULAR INSTANCE, THE PROJECT DIDN'T GET STARTED RIGHT AWAY.
AND SO THE MONEY WAS REALLY JUST SITTING WITH TXDOT, UM, YOU KNOW, FOR US TO USE LATER, UH, YOU KNOW, FOR THEM TO USE LATER ON THE PROJECT THAT WE'RE PARTICIPATING IN.
SO I THINK IN THAT CASE, THERE'S A LOT OF THOSE ACTIVITIES, BUT WE ARE FINDING, UM, THAT VERY INNOVATIVE AND CREATIVE ORGANIZATION, AND WE LIKE TO DO A LOT OF NEW AND INNOVATIVE THINGS.
AND SO WE NEED TO MAKE SURE THAT WE'RE INVOLVED IN THOSE CONVERSATIONS SO WE CAN MAKE SURE THAT WE ACCOUNT FOR THEM CORRECTLY.
AND THAT'S REALLY WHAT CAME OUT OF THIS THIS YEAR WAS THAT WE HAD SEVERAL UNIQUE TRANSACTIONS THAT OCCURRED, UM, THAT WE NEED TO DO A BETTER JOB OF REACHING OUT.
NOW WE DO ASK EVERY YEAR IN A SIGNIFICANT, UM, ITEMS, QUESTIONNAIRE THAT WE SEND TO DEPARTMENTS, HAVE YOU DONE ANYTHING UNIQUE AND SPECIAL THIS YEAR SO THAT WE CAN MAKE SURE WE ACCOUNT FOR IT CORRECTLY, BUT THESE JUST, I THINK IN THE MIDST OF EVERYTHING THAT WAS GOING ON, KIND OF FELL BY THE WAYSIDE AND REALLY DIDN'T GET PULLED UP TO OUR ATTENTION LIKE THEY SHOULD.
SO WE'RE GOING TO CREATE SOME MEETINGS THAT WE HAVE WITH KEY DEPARTMENTS WHO HAVE THE TENDENCY TO HAVE MORE OF THESE UNIQUE TRANSACTIONS TO MAKE SURE THAT WE'RE GETTING THAT INFORMATION THAT WE NEED.
THAT SEEMS LIKE THE PROCEDURES, THE PROCESSES THAT WE HAVE IN PLACE ARE ACTUALLY WORKING, INCLUDING THE OVERSIGHT AND THE SCRUTINY AND THE CORRECTIONS WHERE WE FIND THAT WE'VE SORT OF MISSED SOMETHING.
ANY OTHER QUESTIONS, COLLEAGUES, THANK YOU TO OUR CONTROLLERS OFFICE AND TO OUR AUDITORS.
UM, YOU KNOW, THIS IS THE AUDIT AND FINANCE COMMITTEE, AND ONE OF OUR RESPONSIBILITIES IS TO HEAR THESE REPORTS ON THE AUDITS AND TO REVIEW, UM, THE MATERIALS.
UM, THIS IS THE FIRST OF, I THINK TWO THAT WE GENERALLY HEAR IN THE SPRING IN MAY, WE WILL HEAR, UM, THE SINGLE AUDIT, WHICH TAKES PARTICULAR PROGRAMS AND DIVES A LITTLE DEEPER INTO OUR COMPLIANCE WITH RESPECT TO, UM, THOSE PROGRAMS. UM, WE HAVE EXCELLENT, UM, FINANCIAL STAFF AND, AND, UH, GOOD FINANCIAL STANDING AND, UM, YOU KNOW, THAT WORK, THAT YOU'RE OUT, UM, YOU KNOW, THAT OUR FINANCE STAFF DOES IS PART OF WHAT HAS HELPED US TO WEATHER THE PANDEMIC.
UM, AND SO I JUST WANT TO PAUSE HERE AND, YOU KNOW, RECOGNIZE AND THANK OUR STAFF, UM, UNDER THE LEADERSHIP OF OUR CHIEF FINANCIAL OFFICER HAD BEEN, YOU KNOW, FOR REALLY, YOU KNOW, AGAIN AND AGAIN, PUTTING US IN A POSITION WHERE WE ARE ABLE TO NAVIGATE, UM, TRICKY WATERS, UM, EFFECTIVELY, UM, YOU KNOW, UM, AN AUDIT DOES OFTEN PROVE THAT THERE ARE SOME THINGS THAT YOU
[00:30:01]
NEED TO, TO FIX, BUT THAT'S WHAT THAT PROCESS IS INVOLVED IN.THOSE ARE ALL, UM, CORRECTED AND WITH A $4 BILLION BUDGET.
UM, THIS, THESE ARE RELATIVELY, UM, MINOR CORRECTIONS, UM, BUT ONES THAT WE NOTE AND WE CAN, WE CAN LEARN ON LEARN FROM MOVING FORWARD.
UM, MR. YOU, DID YOU WANT TO SAY SOMETHING BEFORE WE CONCLUDE IN HERE WHERE YOU JUST SHOWING YOUR FACE? SO YOU KNEW THAT, UH, UM, I WAS HEARING YOU AND REALLY APPRECIATE ALL THAT HELPED WITH EVERYTHING.
THANK YOU TO, UM, OUR AUDITORS AS WELL.
[5. Update on the MBE/WBE/DBE Disparity Study and MBE/WBE Program (Small and Minority Business Resources Department)]
UM, WE ARE NOW GOING TO MOVE TO ITEM, UM, FIVE, UM, WHICH IS NOT ITEM FIVE IN THE ORDER.WE'RE DOING IT TODAY, BUT THAT IS THE UPDATE FROM THE MB EWB W E E DISPARITY STUDY AND THE F AND B WBE PROGRAM PRESENTED BY THE SMALL MINORITY BUSINESS RESOURCES DEPARTMENT.
I BELIEVE MR. COMPOST IS ON THE LINE IS WE CAN MOVE HIM OVER.
GOOD MORNING, MR. COMPOSTS, ARE YOU PRESENTING FOR US VR? I AM GOOD MORNING COUNCIL MEMBERS.
I DO HAVE SOME COLLEAGUES HERE THAT SHOULD BE BROUGHT OVER AS WELL.
TAMELA SAW TANYA AND ELTON PRICE.
SEE ELTON AND I SEE TAMALA TILA.
AND IF WE COULD HAVE CITY HALL BRING UP THE PRESENTATION AND WE DO APPRECIATE YOU BRINGING US BACK TO PRESENT.
SO AS SOON AS THEY HAVE YOUR PRESENTATION UP, YOU CAN PROCEED.
SO, UM, THANK YOU FOR HAVING US.
I AM THE INTERIM DIRECTOR FOR THE SMALLER MINORITY BUSINESS RESOURCES DEPARTMENT.
SALDANIA OUR COMPLIANCE OFFICER, ALSO OUR PROJECT MANAGER FOR OUR DISPARITY STUDY THAT SHE'LL GET TO IN A LITTLE BIT.
AND I'M JOINED BY OUR CERTIFICATION DIVISION MANAGER, ELTON PRICE.
AND WE'LL BE PROVIDING YOU SOME INFORMATION RELATED TO, AS I SAID, THE DISPARITY STUDY, AS WELL AS SOME INFORMATION ON OUR CERTIFICATION NUMBERS AND SOME INITIATIVES THAT WE'RE WORKING ON.
AND AT ANY TIME, PLEASE STOP US.
OR WE CAN TAKE QUESTIONS THAT IF I COULD HAVE CITY HALL, BRING UP QUESTIONS AT THE END.
IT SOUNDS LIKE, UM, CTM, YOU HAVE YOUR PRESENTATION IS WHAT I'M SEEING, UM, FROM THE FOLKS AT CITY HALL.
WE SENT IT TO THEM SEVERAL TIMES.
I'M NOT SURE CAN THEY MAKE IT SO THAT YOU CAN SHARE YOUR SCREEN THAT AN OPTION THAT IS AN OPTION.
WE'RE NOT SEEING ANYTHING ON OUR SIDE.
SO YOU BOTH YOU OR ONE OF YOUR STAFF HAVE THAT, THAT YOU COULD SHARE IT ON YOUR SCREEN.
TECHNOLOGY IS A WONDERFUL THING UNTIL IT'S NOT, UM, SEE TIM, I KNOW THIS WAS, I'M PRETTY SURE THIS ONE WAS IN OUR BACKUP.
IS THAT POSSIBLE FOR YOU TO PULL THAT UP FROM THERE? YES, WE'RE WORKING ON THAT.
UH, ONCE AGAIN, MY NAME IS EDWARD CAPLESS.
IF YOU CAN GO INTO THE SLIDE VIEW, THEN IT'LL MAKE IT BIGGER FOR
[00:35:01]
ALL OF US AT WORK.UM, IT'S NOT SLIDE VIEW, BUT IT WORKS.
SO I'LL MOVE OVER TO OUR COMPLIANCE DIVISION.
TOMMO SALDANIA WILL TAKE THE LEAD ON DISCUSSING ISSUES RELATED TO OUR COMPLIANCE SECTION, AS WELL AS PROVIDING AN OVERVIEW ON WHERE WE ARE AT WITH OUR DISPARITY STUDY TAMLA, SAY A WORD.
SO BANYA, I AM THE COMPLIANCE OFFICER WITH THE SMALLER MINORITY BUSINESS RESOURCES DEPARTMENT.
I AM EXCITED TO SHARE WITH THE COMMITTEE, UM, SOME OF THE MILESTONES AND WHERE WE ARE WITH OUR DISPARITY STUDY.
UH, WE HAVE BEEN WORKING HARD, UM, WITH OUR DISPARITY STUDY CONSULTANT.
WE HAVE RETAINED COLETTE HOLT AND ASSOCIATES, A NATIONALLY, UH, NATIONAL RENOWNED, UH, DISPARITY CONSULTANT, LEGAL ATTORNEY, UH, WHO IS ASSISTING US THROUGH THIS PARTICULAR PROCESS.
UM, THE DISPARITY STUDY, WE HAVE, UH, SUBMITTED ALL OF OUR CONTRACT DATA TO OUR CONSULTANT, AND I AM PROUD TO SAY THAT WE HAVE REPORTED A 96% RESPONSE RATE FROM FOUR VALIDATION OF OUR CONTRACT DATA BY THE CONTRACTING COMMUNITY.
AND I WILL LET YOU GUYS KNOW THAT THIS IS ALMOST UNHEARD OF.
UH, TYPICALLY, UH, YOU ARE GETTING A RESPONSE RATE AT ABOUT 60%, UH, AND OUR COMMUNITY CONTRACTING COMMUNITY CAME IN WITH 96% WITHOUT ME SENDING ANY THREATENING LETTERS OR, UM, HAVING MULTIPLE REQUESTS OVER AND OVER AGAIN.
SO I'M REALLY, REALLY EXCITED AS A PROJECT MANAGER FOR THAT.
UM, WE DID A SERIES OF STAKEHOLDER MEETINGS.
UM, ONE IN WHICH IS ALSO, UM, SHOULD BE NOTED.
UH, IT IS A LEADING, UM, IN, IN, IN THE INDUSTRY, OUR STAKEHOLDER MEETINGS, UH, WE HAD OVER 600 PARTICIPANTS, UH, FROM A VARIETY OF, UH, GROUPS TO INCLUDE INTERNAL WORKING GROUPS FOR THE CITY, OUR DEPARTMENT STAFF WHO WORK AND HELP US AND ASSIST US ADMINISTER THOSE PROGRAMS, THIS MWB PROGRAM, AS WELL AS THEY CALL THE GROUPS THAT WE WENT OUT TO, TO THE SMALLER MINORITY BUSINESS COMMUNITY CERTIFIED AND UNCERTIFIED, UH, OUR PRIME CONTRACTOR COMMUNITY, BUT ALSO OF COURSE, OUR INDUSTRY PARTNERS TO INCLUDE THE MINORITY CHAMBERS, THE, THE LARGER CHAMBERS, OUR MTAS.
WE ALSO DID A SPECIFIC SESSION WITH OUR MWB ADVISORY GROUP.
OUR STAFF ALSO ENGAGED THE QUALITY OF LIFE, UM, UH, COMMISSIONS AS WELL, TOO.
UM, AND DID, UH, A SERIES OF INTRODUCTION MEETINGS.
UH, WE ALSO DID A STET STAFF SESSION, UH, INTERNAL TO SMER.
AND SO WE HAVE EXTENDED A LARGE AMOUNT OF INPUT ABOUT OUR PROCESSES, ABOUT THE BARRIERS, ABOUT, UM, RECOMMENDATIONS FROM OUR STAKEHOLDERS.
UM, IN JANUARY I ASKED THE CONSULTANT TEAM TO GO BACK AND LOOK AT SOME OF THE TRENDS THAT WERE COMING IN FROM THE QUALITATIVE DATA AND DO A BUSINESS SURVEY, AND THEY HAVE ENGAGED IN THAT BUSINESS SURVEYS WITH THE CONSULTANT, WITH THE CONTRACTOR AND CONSULTANT COMMUNITY.
AND, UM, THAT DID EXTEND SOME OF THE, UH, TIMELINE THAT WE INITIALLY HAD AGREED UPON.
BUT OUR, UM, STAKEHOLDER INPUT SESSIONS, UM, WERE SUBURB.
AND I'M EXCITED TO SAY THAT WE HAD A LARGE GROUP OF INPUT ON A LOT OF INPUT INTO THAT PROCESS.
HERE'S JUST AN ANTICIPATED PROJECT LINE.
AS I STATED BEFORE, WE HAVE ALREADY SUBMITTED IN FEBRUARY, UM, BACK IN FEBRUARY OF 2020, THE QUALITATIVE CONTRACT DATA, UM, WE AND MARCH AGAIN, STARTED OUR INTERNAL STAKEHOLDER MEETINGS, WHERE AGAIN, WE WENT IN EDUCATED, UH, THE DEPARTMENTS AND OUR STAKEHOLDERS, UH, INTERNAL, EXTERNAL ABOUT THE DISPARITY STUDY, WHAT IT MEANS LEGALLY, ET CETERA, AND P GOT A SIGNIFICANT AMOUNT OF QUALITATIVE DATA ABOUT THEIR CONCERNS AND THEIR NEEDS.
UM, WE DID SEVERAL, UM, CONSULTANT, UH, CURRENTLY WHERE WE ARE NOW IS THAT OUR CONSULTANT IS DOING THE DATA ANALYSIS OF BOTH THE QUALITATIVE AND QUANTITATIVE DATA.
NOW THIS PORTION, AS YOU CAN IMAGINE, PRODUCE A 450 PAGE DOCUMENT.
AND SO NOW WE'RE KINDA IN A HOLDING PATTERN, UH, AS THEY DEVELOP AND ANALYZE THE DATA AND DEVELOP THE RECOMMENDATIONS, UM, FROM, FROM NOW UNTIL ABOUT APRIL,
[00:40:01]
WHAT WE ARE EXPECTING, UM, BECAUSE WE DID PUSH BACK AND ASKED FOR AN ADDITIONAL QUALITATIVE DATA COMPONENT.UH, WE ARE NOW EXPECTING THAT THE DATE, UH, DISPARITY STUDY WILL BE FINALIZED IN JULY OF 2021.
UH, AND SO WE HOPE TO COME BACK, UH, TO COUNCIL SOMETIME, SORRY.
MAYBE SOMEBODY CAME IN, UM, WE'RE HOPING TO, UH, COME TO, UH, BEFORE COUNCIL IN THE FALL OR WINTER OF 2021, UM, WITH AN NRCA FOR ADOPTION OF OUR DISPARITY STUDY, NEXT SLIDE.
AND AT THIS POINT, EDWARD WOULD TALK ABOUT THE CITY RESOLUTION AND, UH, COUNCIL RESOLUTION AND WHAT WE'RE DOING AND WORKING TO DO WITH INCLUSIVE PROCUREMENT WORKING GROUP.
SO AS YOU RECALL, IN MARCH OF 2020, COUNCIL DID PASS A RESOLUTION, ASKING THE MANAGER TO PUT TOGETHER AN INCLUSIVE PROCUREMENT WORKING GROUP.
THERE WAS A MEMO THAT WAS SENT OUT IN NOVEMBER OF 2020, UH, IN RESPONSE TO THAT RESOLUTION WHERE WE OUTLINED, UM, THE FOUR AREAS THAT WE WOULD BE LOOKING AT AS PART OF THIS WORKING GROUP CERTIFICATION PRACTICES, BEST PRACTICES IN GENERAL COMMUNICATION AND TRANSPARENCY ISSUES AND OVERALL RESOURCES TO OUR MINORITY AND WOMEN OWNED BUSINESSES.
WE ALSO PUT TOGETHER A LIST OF MEMBERS TO THAT IT, TO THAT WORKING GROUP THAT INCLUDED CITY STAFF, IT INCLUDED, UH, OUR KEY AND BDB STAKEHOLDERS TO INCLUDE THE MINORITY TRADE ALLIANCE MEMBERS, MINORITY CHAMBERS PRIME, AND SUBCONTRACTOR ORGANIZATIONS, AS WELL AS FOLKS IN THE COMMUNITY THAT ARE BUSINESS OWNERS AND ARE VERY WELL VERSED IN THE LOCAL PROGRAM AND UNDERSTAND THE INTRICACIES OF THE PROGRAM.
SO THAT WILL MAKE UP OUR, OUR WORKING GROUP.
AS SOON AS WE GET THE FINAL VERSION OF THE DISPARITY STUDY, WE'RE LOOKING AND TARGETING AN AUGUST OR SEPTEMBER A START DATE FOR THIS WORKING GROUP, A LOT OF WORK TO BE COMPLETED IN A SHORT AMOUNT OF TIME.
OUR ORDINANCE DOES EXPIRE OR SUNSET IN MARCH OF 2022.
SO WE WOULD LIKE TO HAVE THAT WORK COMPLETED FROM THE WORKING GROUP, AS WELL AS A NEW ORDINANCE, UH, FOR COUNCIL CONSIDERATION, UH, BY MARCH OF THAT DATE, IF THERE ARE ANY ISSUES SURROUNDING THAT TIMEFRAME WE WILL, OF COURSE, COME BACK TO COUNCIL FOR AN EXTENSION.
I'M GOING TO TURN THIS OVER NOW TO MR. ELTON PRICE.
HE'S OUR CERTIFICATION DIVISION MANAGER.
UM, GOOD MORNING COUNCIL MEMBERS.
UM, I'M GETTING, MY NAME IS ELTON PRICE.
I WORK AS A CERTIFICATION DIVISION MANAGER FOR A SMALLER MINORITY BUSINESS RESOURCES OFFICE.
AND SO, UH, TALKING SPECIFICALLY ABOUT CERTIFICATION AND THE REQUIREMENTS, FIRST THING, VENDORS WHO ARE APPLYING FOR CERTIFICATION, THEY MUST BE REGISTERED AND OFTEN FINANCE ONLINE AS A BUSINESS FOR PROFIT.
THE CITY OF AUSTIN ONLY CERTIFIES FOR PROFIT BUSINESSES.
AND THESE ARE THE FIVE MAJOR COMPONENTS THAT WE LOOK AT WHEN WE RECEIVED THE CERTIFICATION APPLICATION.
FIRST AND FOREMOST, THE BUSINESS MUST BE SMALL IN ANY, ANY CERTIFICATION STANDARDS THAT RELY ON, UH, SIZE.
UH, WE ADHERE TO THESE, UH, SBA GUIDELINES.
AND SO THAT COULD BE, UH, GROCERY SEATS BASED ON A THREE YEAR AVERAGE, WHICH WILL INCREASE TO A FIVE-YEAR AVERAGE IN JANUARY OF 2022.
AND OF COURSE THE NUMBER OF EMPLOYEES, IF YOU'RE IN ANY WHOLESALE OR SELLING ANY TYPE OF GOODS OR COMMODITIES, UM, AS IT RELATES TO YOUR INDUSTRY, UH, THE APPLICANT MUST, UH, BE IN ONE OF THE SOCIALLY DISADVANTAGED PRESUMED GROUPS.
THE CITY OF AUSTIN DOES NOT, UM, NOT ACCEPT APPLICATIONS.
I THINK ANYONE CAN APPLY FOR THE CITY OF ALL STUDENTS PROGRAM.
UH, BUT THEY MUST ALSO, IF, IF APPLYING AND NOT IN THESE PRESUMED GROUPS, THEY MUST SHOW THAT THEY, UH, THEN BIASED AGAINST, AS IT RELATES TO, UH, SOCIAL AND ECONOMIC DISADVANTAGE AND, UM, AND THE AMERICAN SOCIETY, I WOULD SAY, UM, THE PERSONAL NET WORTH OF ECONOMIC DISADVANTAGE IS DETERMINED BY THE CONSUMER PRICE INDEX OR THE SOUTHWEST.
UH, WE JUST INCREASED IT IN JANUARY AND WENT FROM 1.5, SIX, 5 MILLION TO 1.58, 3 MILLION FOR THE M AND WBE PROGRAM.
DVD PROGRAM IS SET AT 1.3, TWO NOON.
UM, THAT IS A DISADVANTAGED BUSINESS ENTERPRISE AND AIRPORT CONCESSION DISADVANTAGED BUSINESS ENTERPRISE, UH, THAT
[00:45:01]
PARTICULAR CRITERIA, OR WHEN WE'RE REVIEWING THE PERSONAL NETWORK, THERE ARE EXCLUSIONS, UH, THE PERSONAL RESIDENCE OF THE APPLICANT ALONG WITH, UH, THE ASSETS OF THE BUSINESS THAT SEEKING CERTIFICATION IS EXCLUDED.AND WE ONLY LOOK AT THE APPLE PERIOD.
UH, TEXAS IS A COMMUNITY PROPERTY STATE, BUT THE APPLICANT ONLY NEEDS TO PROVIDE, UH, ASSETS AND LIABILITIES THAT ARE SPECIFICALLY TO THE APPLICANT.
SO AN EXAMPLE WOULD BE IF, YOU KNOW, THERE, THERE, IF IT'S A SHARE, UH, ASSET BASED ON A COMMUNITY PROPERTY, AND THAT IS NOT LISTED, UH, AS FOR AS A A HUNDRED PERCENT, THAT COULD BE LISTED AT 50%, IF THE APPLICANT ACTUALLY IS AN OWNER OF THAT ASSET.
UH, WE ALSO LOOK AT OWNERSHIP MANAGEMENT AND CONTROL.
UH, THE OWNER, THE APPLICANT OWNER MUST HAVE AT LEAST A 51% OWNERSHIP OF THE COMPANY BE INVOLVED IN THE MANAGEMENT AND CONTROL OF THAT.
UM, WE DO NOT CERTIFY, UH, APPLICANTS THAT ONLY INVEST IN BUSINESSES AND NOT INVOLVED IN THE DAY-TO-DAY, UH, BUSINESS PROCESS OR THE DAY-TO-DAY MANAGEMENT OF THAT, UH, MUST HAVE EXPERIENCED DIRECTLY RELATED TO THE FIELD THAT THEY'RE SEEKING CERTIFICATION.
UH, IT IS VERY IMPORTANT THAT, UH, PART OF THE EXPERTISE THAT GOES INTO, UH, VERIFYING THAT THE OWNER, UM, QUALIFIES FOR THE PROGRAM IS THAT THEY HAVE THAT DIRECT EXPERIENCE, NOT JUST MANAGEMENT OF THE COMPANY OR THE PERSON THEY ARE.
IT HAS TO BE A PART OF A PART OF THE RESUME, THE SITE AUDIT WE CAN, UH, CONTRACTS.
WE LOOK AT, WE LOOK AT A LOT OF DIFFERENT THINGS TO VERIFY THAT THE QUALIFIED APPLICANTS HE IS INVOLVED IN THE DAY TO DAY OPERATION AND CONTROLS THAT BUSINESS.
SO AS OF JANUARY SIX OF 2020, THE CITY OF AUSTIN, UH, MOVED TO A CERTIFICATION AND COMPLIANCE SYSTEM.
WE PROPERLY CALL THAT CCS NOW, BUT IT IS THE, UH, THE, UH, CITY OF AUSTIN WAS ONLINE APPLICATION FOR THEM.
AND SINCE THE, UH, LAUNCH OR THE ONLINE APPLICATION FOR, UH, THESE ORDER NUMBERS THAT, UH, RELATES TO THE NUMBER OF APPLICATIONS APPROVED FOR THEM.
NOW, THE NUMBER OF APPLICATIONS IS APPROVED FOR THE M AND WB PROGRAM.
AND THE DBE, THE BD PROGRAM IS IT MAY BE A LITTLE BIT DIFFERENT BECAUSE WE CAN STILL ACCEPT, UH, BD APPLICATIONS, UH, THROUGH PAPER BECAUSE THE FEDERAL REGULATIONS, YOU KNOW, THEY DON'T, UM, ALLOW, OR DON'T ALLOW US TO STRICTLY, UH, HAVE DB APPLICANTS OR ACDB APP.
WE CAN SUBMIT THROUGH AN ONLINE PORTAL.
SO THESE ARE THE NUMBER THAT RELATES TO THE NUMBER OF FIRMS THAT HAVE A NUMBER OF APPLICANTS THAT HAVE SUBMITTED ONLINE SINCE THE INCEPTION OF THE, UH, ONLINE APPLICATION CCS.
AND THESE ARE THE NUMBER, THE TOTAL NUMBER OF APPLICATIONS APPROVED BY STAFF SINCE JANUARY OF 2020.
SO ALL OF THESE ARE, WERE NOT NEW APPLICATIONS.
THESE WERE APPLICATIONS THAT WERE BD ANNUAL REVIEWS, FOR EXAMPLE, CERTIFICATION, AND ALSO INCLUDED NEW APPLICANTS AS WELL.
AND SO I WANTED TO, UH, THIS PARTICULAR SLIDE, I WANTED TO GIVE US A SNAPSHOT OF A PAPER COMPARE TO THE ONLINE PORTAL.
UH, WE LOOKED AT, UH, THE PAPER APPLICATIONS FROM JANUARY ALSO 2019 TILL THE END OF THE YEAR.
AND WE ALSO MADE THAT, YOU KNOW, THE COMPARISON TO THE ONLINE PROCESS AND THESE NUMBERS REFLECT, UH, THE INCREASE IN THE NUMBER OF APPLICATIONS RECEIVED VIA THE ONLINE PORTAL, UH, SINCE ITS INCEPTION, UM, IN JANUARY OF 2020.
AND SO, AS YOU CAN SEE THE NUMBER OF APPLICATIONS, STAFF AS HANDLED THROUGH THEIR ONLINE FOR THE INCREASED DRASTICALLY ALSO, UH, WE ARE, UH, ALSO THE, THE NUMBER OF DENIALS ALSO.
UM, WE ARE LOOKING AT, UM, A WAY TO RIGHT NOW, TO, UH, FOLKS, TO RECERTIFY AN ANNUAL REVIEW.
WE SEND THEM 60 DAY NOTICES PRIOR
[00:50:01]
TO THEIR ANNIVERSARY FINISHES.AND SO WE'RE LOOKING AT AN ADDITIONAL STEP TO TRY TO RETAIN FOLKS BECAUSE MOST OF THE FOLKS YOU SEE DECERTIFIED THE 71 NUMBER ARE BASED ON FOLKS WHO ARE NOT RECERTIFY WITH THOSE FOUR DAYS.
YOU KNOW, THEY MAY HAVE WITHDRAWN OR SOLD A BUSINESS OR SOMETHING OF THAT NATURE, BUT FOR THE FIRMS THAT ARE NOT JUST WITH US AND ARE GIVING US THE DOCUMENTS, UM, TO THEM TO CONTINUE THEIR ELIGIBILITY, WE'RE LOOKING AT AN ADDITIONAL STEP OF NOT ONLY THE 60 DAY NOTICE, BUT ALSO CONTACTING THEM AT 30 DAYS VIA PHONE CALL, EMAIL TO SEE IF WE CAN GET THOSE BOATS TO CONTINUE IN THE PROGRAM.
AND IF NOT, UH, FINDING OUT THE REASON THAT THEY DECIDED NOT TO CONTINUE PROGRAMS. SO, UH, THOSE ARE THE NUMBERS AS OF, UH, WE PULLED THESE NUMBERS AS OF THE END OF MARCH.
AND SO, UH, AGAIN, I'LL BE AVAILABLE IF YOU HAVE ANY QUESTIONS.
AND WE'LL TALK A LITTLE BIT ABOUT SOME STRATEGIC INITIATIVES.
I APPRECIATE YOUR COMMENTS ON THE CERTIFICATION NUMBERS.
SO WE HAVE BEEN WORKING ON A COMPLIANCE MODULE, AS ELTON MENTIONED, UH, AND, AND TABLA MENTIONED AS WELL, UH, LOTS OF WORK STILL TO CONTINUE.
THIS COMPLIANCE MODULE WILL HELP US MOVE AWAY FROM SOMETHING THAT IS VERY PAPER-DRIVEN.
UH, MAJORITY OF OUR PROCESSES ARE PAPER DRIVEN, AND WE'RE TRYING TO WORK WITH, UH, OUR INTERNAL SYSTEMS, UH, OUT OF THE FINANCIAL SERVICES DEPARTMENT TO TRY TO GET THESE, UH, AS ONLINE SUBMISSIONS, THINGS LIKE OUR REQUESTS FOR CHANGE.
WHENEVER THERE'S A CHANGE TO A CONTRACT IN WHICH THERE IS A MINORITY OR WOMAN OWNED BUSINESS INVOLVED, THIS PROCESS, WE HOPE WILL BE CHANGED TO AN ELECTRONIC PROCESS, UH, THE SAME FOR CONTRACT CLOSEOUTS, AND AS WELL AS, UH, WHAT WE CALL SUB-K OR PARTICIPANT SUBCONTRACTOR PARTICIPATION FORMS. WE GET THOUSANDS OF THOSE A YEAR, UH, BETWEEN 3000 TO 5,000.
THOSE ARE ALL PAPER, UH, PROCESSED, WHICH THEN MY STAFF HAS TO GO IN AND MANUALLY ENTER THOSE INDIVIDUAL, UM, FORMS. AND SO IF WE CAN MAKE THIS A ONLINE SUBMISSION THAT WOULD CUT DOWN ON, ON STAFF TIME, UH, AND MOVING THEM TO OTHER, UH, UH, OTHER AREAS THAT WE NEED TO CONCENTRATE ON.
WELL, SOME OF THE SUPPORTIVE SERVICES PARTNERSHIPS THAT WE'VE BEEN WORKING ON, AND ONE OF THE ONES THAT I'M REALLY PROUD OF AND EXCITED TO LAUNCH, AND WE'LL BE LAUNCHING THIS IN THE NEXT COUPLE OF WEEKS.
THERE'S AN ONLINE EDUCATION PORTAL FOR OUR CERTIFIED VENDORS.
SOME OF THE THINGS WE'VE HEARD IS THERE'S STILL A LACK OF EDUCATIONAL OPPORTUNITIES FOR OUR CERTIFIED MINORITY AND WOMEN OWNED BUSINESSES.
SO WE ARE GOING TO BE LAUNCHING A PARTNERSHIP WITH A FIRM CALLED GARBOLOGY WHERE OUR CERTIFIED VENDORS WILL BE ABLE TO LOG IN TO
AND WE FEEL THAT THIS WILL AGAIN, ALLOW OUR FIRMS TO GET MORE EDUCATION ON HOW TO DO BUSINESS WITH NOT ONLY THE CITY OF AUSTIN, BUT OTHER ENTITIES AS WELL.
THESE ARE AGAIN, TAILORED TO OUR MBE, WBE AND DBE FIRMS, UM, GOVERNMENT PROCUREMENT TRAINING.
AND WE JUST FEEL THAT THIS IS GOING TO GIVE THEM AN OVERALL BETTER STANDING, UH, AS THEY DO AND PROGRESS IN THEIR BUSINESS.
AND AGAIN, GROWING CAPACITY FOR OUR MINORITY FIRMS. NEXT SLIDE, PLEASE, WE'VE ALSO ENGAGED SOME CUSTOMER SERVICE, UH, SURVEYS.
UH, WE'VE HEARD THAT, UM, SMER TENDS TO BE A LITTLE DOGMATIC IN THEIR APPROACH.
AND SO WE WANT TO MAKE SURE THAT WE ARE HEARING FROM OUR CUSTOMERS, BOTH INTERNAL AND EXTERNAL.
SO WE'VE LAUNCHED A SERIES OF CUSTOMER SURVEYS.
I BELIEVE YOU'VE HEARD MR. PRICE MENTIONED US REACHING OUT TO THOSE CERTIFIED VENDORS THAT ARE NO LONGER WITH THE PROGRAM.
WE WANT TO RETAIN ALL OF OUR VENDORS.
AND IF THERE'S A WAY THAT WE CAN WORK WITH THOSE VENDORS THAT HAVE CHOSEN NOT TO REAPPLY FOR CERTIFICATION TO BRING THEM BACK INTO OUR CERTIFICATION ROLES.
UH, OUR, OUR SURVEY IS ONE WAY TO DO THAT AS WELL.
SO WE ARE INCREASING OUR OUTREACH AND FOCUS TO OUR, OUR CUSTOMER BASE.
THAT CONCLUDES OUR, OUR PRESENTATION.
UH, WE ARE READY TO, UM, ADDRESS ANY QUESTIONS YOU MAY HAVE.
UM, AND IF WE CAN REMOVE THE PRESENTATION SO I CAN SEE FOLKS THAT WOULD BE GREAT.
UM, COLLEAGUES, ARE THERE ANY QUESTIONS, MAYOR
[00:55:01]
ADLER? I JUST WANT TO SAY THAT I REALLY APPRECIATE THIS PRESENTATION AND THE, AND THE OUTLINE AND THE BREADTH OF THE WORK THAT'S BEING DONE.UH, WE HAD A LOT OF CALLS FROM, UH, FOLKS, UH, AROUND THE CITY THAT HAD GOTTEN USED TO THE REGULARS COUNCIL COMMITTEE THAT WAS DOING REGULAR, UH, INTERACTIONS WITH, UH, WITH THE DEPARTMENT AND, AND, AND, AND FOLKS THAT FELT LIKE THEY WERE BETTER UP TO SPEED WITH WHAT WAS HAPPENING AND HAVING THE ABILITY TO BE ABLE TO COMMENT.
UH, SO I APPRECIATE, UH, CHAIR YOU, UH, PUTTING THIS ON THE AGENDA SO THAT, UH, UH, WE COULD GET THIS OUT, OBVIOUSLY, A LOT OF WORK BEING DONE, A LOT OF PROGRESS BEING MADE, UH, AND IT GIVES, UH, ME NOW SOMETHING THAT I CAN CIRCULATE AND SEND TO THE FOLKS THAT, UH, FEEL LIKE THEY'RE NOT BEING ENGAGED ENOUGH SO THAT THEY CAN KIND OF RAISE ISSUES.
SO I JUST APPRECIATE THE EFFORT.
AND WHEN WE, UM, UH, MOVED AWAY FROM THAT STANDING COMMITTEE, WE HAD TALKED ABOUT HAVING, UH, SOME MEASURE OF REGULAR BRIEFING QUARTERLY OR SOMETHING THAT WOULD KEEP TRACK OF THE ACTIVITY AND THEN THE STATUS.
AND, AND I JUST APPRECIATE THIS BEING PUT ON THE AGENDA.
UM, ARE THERE ANY OTHER QUESTIONS I HAVE TWO QUICK ONES, IF I MIGHT, UM, ABOUT CERTIFICATION MORE BROADLY WHILE YOU'RE HERE.
UM, WE HAD TALKED, I FEEL LIKE AT ONE OF OUR LAST BRIEFINGS, PERHAPS, OR PERHAPS IT WAS AN INDIVIDUAL MEETING ABOUT ALTERNATIVES THAT WE COULD PURSUE, UM, THAT WOULD ALLOW ADDITIONAL BUSINESSES TO BECOME CERTIFIED, FOR INSTANCE, ADOPTING, ALLOWING IF YOU WERE STATE CERTIFIED FOR ALLOWING YOU TO QUALIFY AT THE CITY LEVEL, UM, I'M CURIOUS WHAT THE STATUS OF THOSE ARE AND HOW WE'RE PURSUING THOSE ALTERNATIVES.
AND THEN I ALSO WANTED TO KNOW WHAT THE POSSIBILITY OF AN LGBT PLUS CERTIFICATION IN THE CITY.
SO I'LL TAKE THOSE AND I'LL DEFER TO MR. PRICE.
UH, WE DO ALWAYS CONSTANTLY LOOK AT WAYS THAT WE CAN HAVE SOME RECIPROCITY WITH AGENCIES THAT ARE CLOSELY ALIGNED TO THE REQUIREMENTS THAT THE CITY OF AUSTIN HAS IN TERMS OF CERTIFICATION.
UH, AT THIS POINT, UM, COUNCIL MEMBER, WE HAVEN'T FOUND A, AN ENTITY THAT IS AS RIGOROUS AS WE ARE IN, IN TERMS OF WHAT WE LOOK AT.
I THINK MR. PRICE HAD AN EXCELLENT JOB OF COVERING, UH, AND A HIGH LEVEL.
SOME OF THE FIVE AREAS THAT WE LOOK AT, UH, CERTAINLY THAT SOMETHING THAT MAKES US UNIQUE, UH, IN THE STATE OF TEXAS IS THE FACT THAT WE DO AS A, AS A MUNICIPALITY, HAVE A PERSONAL NET WORTH LIMIT, UH, OTHERWISE KNOWN AS AN ECONOMIC DISADVANTAGE, UH, DEFINITION OR STATUS.
AND SO THAT IS SOMETHING THAT OTHER ENTITIES SIMPLY DO NOT HAVE, UH, AND AS PART OF THEIR LOCAL ORDINANCE, UH, WHAT WE DO HAVE THOUGH IS WHEN WE HAVE A FIRM THAT COMES TO US FOR CERTIFICATION, THAT WE KNOW MEETS THE HUB REQUIREMENTS, WE DO SEND THEM OVER, UH, AND, AND, AND LET THE, UM, THE HUB DIRECTOR KNOW THAT THEY ARE ELIGIBLE FOR HUB CERTIFICATION.
SO WE DO HAVE A RECIPROCITY AGREEMENT, UH, WITH THE STATE HEALTH PROGRAM, UH, BUT IT COMES FROM US TO THEM, NOT THEM TO US.
AND WE ARE CURRENTLY WORKING WITH, UH, MS. CANNON, UH, WITH THE LGBT CHAMBER, UH, AND THE, UH, PURCHASING OFFICE OUT OF THE FINANCIAL SERVICES DEPARTMENT TO CAPTURE DATASETS.
UM, IN ORDER FOR US TO IN, UH, IN THE FUTURE, UH, INCLUDE LGBT COMPANIES AS PART OF A DISPARITY STUDY, AS YOU KNOW, TO MAKE ANY SORT OF CHANGE IN, IN TERMS OF INCLUSION FOR OUR LOCAL ORDINANCE, WE HAVE TO HAVE, UH, DATA.
AND SO THAT IS OUR FIRST ATTEMPT TO TRY TO COLLECT THAT DATA.
UM, AND SO WE HAVE HAD TWO MEETINGS SO FAR WITH MS. CANNON AND THE PURCHASING OFFICE, AND, UH, MORE TO COME ON THAT, UH, IN YOUR STEP.
YEAH, I LOOK FORWARD TO, ARE YOU ABOUT THAT? UM, IF THERE ARE NO MAYOR ADLER, DID YOU WANT TO, WE CAN'T HEAR YOU MAY, ARE YOU ON MUTE? THANK YOU.
UH, MR. CAMPO, SO THAT I UNDERSTOOD THE QUESTION ABOUT WHY WE DON'T USE THE, THE TEXAS HUBS STANDARD IS BECAUSE OUR, UH, QUALIFICATION STANDARDS ARE STRICTER, UH, WITH RESPECT TO, UH, UH, THAT WORTH, UH, FILTER.
IS THAT CORRECT? MR. MERRITT? WE, THEY DO NOT HAVE A, AN ECONOMIC DISADVANTAGE, UH, DEFINITION OR, OR TEST IF YOU WILL.
AND THAT WOULD, THAT WOULD THEN TRANSLATE TO OUR PERSONAL NET WORTH REQUIREMENT.
I WONDER IF THERE'S A WAY TO DO THE HUB AND THEN REQUIRE THEM TO DO THAT PARTICULAR TEST RATHER THAN GO THROUGH THE WHOLE OTHER PROCESS, BUT I'M SURE YOU WILL.
AND I BELIEVE THAT, UM, THERE IS A SENATE BILL MAKING ITS WAY THROUGH THE
[01:00:01]
PROCESS, UH, CURRENTLY THAT IS REQUESTING A PERSONAL NET WORTH LIMIT FOR THE HUB PROGRAM.SO THAT MIGHT MAKE IT MIKE, IT MAKE IT EASIER.
AND I APPRECIATE YOUR PATIENCE IN IT, TAKING US A LITTLE WHILE, AS YOU CAN SEE, WE DEAL WITH SOME BIG ISSUES, UM, FOR MANY, MANY DEPARTMENTS THAT WE'RE JUGGLING.
SO THANK YOU FOR YOUR PATIENCE.
UM, SO COLLEAGUES, WE ARE NOW GOING TO MOVE TO ITEM THREE, WHICH IS DISCUSSING ISSUES SURROUNDING ACE.
UM, AND I WILL JUST ASK, UM, MY VICE CHAIR, WHO I'M GONNA INVITE UP TO LEAD THIS DISCUSSION TO TRY AND MAKE THIS AS BRIEF AS POSSIBLE SO THAT WE CAN END ON TIME WITH THE TECHNICAL DIFFICULTIES EARLIER.
WE'RE A LITTLE BIT BEHIND WHERE WE WERE HOPING TO BE AT THIS POINT.
UM, BUT I THINK, UM, I THINK WE SHOULD STILL BE ABLE TO GET EVERYTHING DONE BY 1130.
[3. Discuss issues surrounding ACE, LLC, and their operations, management, and financials of the downtown Hilton Hotel (Part 1 of 2)]
POOL, IF YOU'D LIKE TO INTRODUCE OUR SPEAKERS AND THIS ITEM, PLEASE.AND I SEE THAT DAVID DUSTIN, WHO IS THE COUNSEL FOR ACE INC, IS I SEE HIS SQUARE.
AND WE ALSO INVITED THE PRESIDENT, UH, THE CHAIR AND THE TREASURER, PHILLIP SCHMANCY, AND JOEL SMITH THOMAS TO COME AND TALK BE HERE WITH US TODAY.
AND I KNOW MS. THOMAS WAS GOING TO KIND OF WALK US THROUGH A HIGH LEVEL, UH, DISCUSSION ABOUT ACE INC.
UM, I ASKED THEM TO GIVE US AN OVERVIEW OF WHAT WE WANT TO WELCOME THEM AND INTRODUCE, UH, THE MEMBERS TO, UH, THE AUDIT AND FINANCE COMMITTEE AND GIVE THEM A CHANCE TO TALK ABOUT ANY UPDATES OR ISSUES OR CONCERNS THAT THEY HAVE.
WE'RE LOOKING TO ESTABLISH A FRAMEWORK FOR REGULAR REPORTING FROM ACE ON THE CITY ASSET AND ITS FINANCIAL ASSET, AS WELL AS THE NEED FOR COUNCIL AS A WHOLE TO GET TIMELY NOTIFICATIONS ON IMPORTANT NEWS LIKE LAYOFFS OR MAJOR CHANGES IN THE FINANCIAL STATUS OF THE ASSETS.
WE CAN DO THAT THROUGH THE AUDIT AND FINANCE COMMITTEE.
AND THEN, UM, WE KNOW THAT THERE ARE VACANCIES THAT NEED APPOINTMENTS, UH, TO THE ACE BOARD, AND THAT WILL BE WORK FOR, UM, UH, THIS COMMITTEE THROUGH THOSE CITY MANAGER AS WELL.
I SEEN IS THAT MR. DAWSON HAS MS. THOMAS JOINED US.
SHE HAD A, SHE SHANNON, UH, MR. DAWSON IS THE ONLY ONE WHO'S JOINED US.
I TALKED WITH MS. THOMAS LAST NIGHT AND SHE WAS PREPARED TO MOVE HERE UP HERE.
DO YOU KNOW HOW MUCH LONGER BEFORE I AM ADMITTED? SO, UM, GOOD.
ALL TECHNICAL DIFFICULTIES CHECKING TO SEE IF IT FALL DOWN.
I'M LOOKING TO SEE IF I SEE HER, OR I MAY SEND YOU HER CELL PHONE NUMBER, SO YOU GUYS CAN CALL AND HOOK HER UP.
[01:05:08]
ALL RIGHT? I THINK SHE MAY BE ON THE WRONG.COREY, I'M SENDING YOUR GROUP CONTACT.
MEANWHILE, MR. DAWSON, UM, EITHER WE CAN, UH, TALK WITH MR. DAWSON SO WE DON'T GET FURTHER DECLINED OR, UM, COUNCIL MEMBER ALTER, IF YOU WANT TO TAKE, UH, TAKE UP ANOTHER TOPIC.
I THINK THAT WOULD BE, UM, MAYBE A GOOD IDEA.
I'M GOING TO LEAVE IT TO TECH TO GET IN TOUCH WITH MS. THOMAS AND I'VE SENT HER CELL PHONE OVER TO OUR CITY AUDITOR TO MAKE THAT CONNECTION.
SHE SAYS SHE'S BEEN WAITING SINCE NINE 30.
I JUST SENT THAT INFORMATION TO, UM, THE PERSON FROM MY OFFICE WHO IS SITTING WITH CTM.
IT LOOKS LIKE SHE DIDN'T PUNCH THE JOINT EVENT.
IT LOOKS LIKE SHE DIDN'T PUNCH JOIN EVENT
[6. Identify items to be discussed at future meetings.]
WHILE SHE'S DOING THAT.MAYBE WE CAN, UM, JUST QUICKLY TAKE UP, AT LEAST THE, SINCE THAT DOESN'T SOUND LIKE IT'LL TAKE TOO LONG, LET'S JUST TAKE UP, UM, IDENTIFYING ITEMS TO BE DISCUSSED AT FUTURE MEETINGS QUICKLY.
UM, SO COREY, IF YOU WANT TO SPEAK TO THAT BRIEFLY, CERTAINLY, UM, AT THIS POINT I CAN'T, I CAN'T NAME EXACTLY WHAT'S COMING IN MAY VERSUS JUNE.
UM, WE HAVE A COUPLE OF ITEMS AUDIT ITEMS THAT MAY BE READY, NOT FOR ME, BUT FOR JUNE AND MAY.
UM, WE DISCUSSED HAVING, UH, THE WILDFIRE AUDIT FOLLOW-UP RELATED TO THE, UM, OR REALLY THE, THE DEPARTMENTS INVOLVED IN THE WILDFIRE AUDIT FROM 2019, COME BACK AND PROVIDE AN UPDATE.
I BELIEVE YOU HAD ALSO REQUESTED A PROCUREMENT, UM, UPDATE FROM, FROM FINANCIAL SERVICES.
UM, WE MAY HAVE THE SINGLE AUDIT OR THAT MAY BE IN JUNE.
UH, FINANCIAL SERVICES WILL KNOW BETTER ON THAT ONE.
UM, AND I BELIEVE THAT IS THE IS LIST.
UM, I CAN DOUBLE CHECK THAT, BUT THANK YOU, COREY.
IT LOOKS LIKE MS. THOMAS IS ON.
SO I'LL JUST ADD ONE LAST THING TO THIS LAST ITEM, WHICH IS THAT, UM, I MAY BE INTERESTED IN LOOKING AT, UH, HOMELAND SECURITY AND EMERGENCY MANAGEMENT, DEPENDING ON HOW OUR CONVERSATIONS GO IN OUR OTHER WORKING GROUPS.
UM, I THINK THERE'S A LOT TO DIVE IN THERE AND I DON'T KNOW WHETHER WE WILL GET TO ENOUGH OF IT, UM, DURING OUR OTHER WORK SESSIONS AND SOME OF OUR TO-GO DID YOU WANT TO SPEAK TO FUTURE ITEMS? OKAY.
BECAUSE I THINK YOU MOVED THE WINTER STORM AUDIT TO FUTURE ITEMS AS WELL.
AND I JUST WANTED TO COMMENT THAT I THOUGHT THIS SCOPE LOOK GOOD, AND IF WE NEEDED TO, I DON'T THINK WE NEED TO APPROVE THAT TODAY, BUT I JUST WANTED TO PROVIDE THE AUDITOR WITH THE FEEDBACK THAT, THAT LOOKS, THAT LOOKS LIKE AN APPROPRIATE, UM, AN APPROPRIATE AVENUE OF EXPLORATION.
AND I WOULD JUST ADD THAT I'M HOPEFUL TOO, THAT YOU ARE GOING TO LOOK AT COMMUNICATIONS AMONG LEADERSHIP AND, UH, NOT JUST CITY LEADERSHIP AT ALL, NOT JUST THOSE INVOLVED IN THE EOC, UH, DIRECTLY, BUT ALSO COMMUNICATIONS WITH COUNCIL.
I DIDN'T MEAN TO MOVE THAT OFF.
IF WE HAVE TIME, WE WILL STILL, UM, DISCUSS THAT BRIEFLY.
UM, AT THE END, I MIGHT'VE SAID THE WRONG NUMBER, CAUSE I'M BOUNCING ALL OVER.
I DEFINITELY HAD TO SAY ABOUT IT, SO I'M OKAY.
UNLESS ANYBODY ELSE HAS SOMETHING TO SAY, WE CAN HAVE SOME OF OUR KELLY WE'RE TALKING ABOUT FUTURE ITEMS, CORRECT? I HAD TO STEP OFF.
I WOULD LIKE TO MOVE THAT PURCHASING BRIEF US AT AUDIT AND FINANCE COMMITTEE MEETING ON THE WORK THAT THEY'RE DOING TO ADDRESS EXEMPTIONS ALLOWED BY APH FOR PURCHASING ORDERS AND HOW THOSE RULES AND EXEMPTIONS PROVIDED ARE BEING CLARIFIED TO APH STAFF.
I THINK THAT WOULD BE HELPFUL FOR US, RIGHT? SO COUNCIL MEMBER, KELLY, MAYBE YOUR STAFF CAN WORK WITH MY STAFF AND WE CAN FASHION THAT INTO SOMETHING THAT WE CAN HAVE THEM COME SPEAK ON.
AND, UM, WE WILL BE HAVING SIMILAR STAFF COME TALK TO US ABOUT THE PROCUREMENT POLICY AND IT MIGHT BE GOOD.
WE CAN COMBINE THOSE TOGETHER.
UM, SO MAYBE WE CAN COMBINE THOSE.
SO IT LOOKS LIKE MS. THOMAS IS HERE.
THANK YOU SO MUCH FOR JOINING US.
SORRY ABOUT THE TECHNICAL DIFFICULTIES.
IT SEEMS TO BE JUST ONE OF THOSE DATES, UM, FOR THIS COMMITTEE AS WELL AND EVERYONE ON IT.
ALL OF THE, UM, THE BOARD DIRECTORS WHO ARE HERE WITH US FOR YOUR SERVICE ON THIS BOARD, I KNOW IT'S A LOT OF WORK AND WE REALLY APPRECIATE IT.
[3. Discuss issues surrounding ACE, LLC, and their operations, management, and financials of the downtown Hilton Hotel (Part 2 of 2)]
GOING TO LET A COUNCIL MEMBER FOOL TAKE IT FROM HERE.AND WE ALREADY RECOGNIZE MR. DAWSON,
[01:10:01]
WHO IS LEGAL COUNSEL UP TO ACE, INC.AND DO YOU HAVE ANY OTHER MEMBERS OF THE BOARD? I BELIEVE PHILIP IS HERE AND HE'S IN THE WAITING ROOM.
AND SO, UM, I'M REALLY HAPPY THAT YOU GUYS ARE HERE TODAY TO TALK ABOUT ACE AND A CHANCE TO MEET THE MEMBERS OF THE AUDIT AND FINANCE COMMITTEE.
UM, UH, YOU CAN TELL US A BIT ABOUT ACE.
IT'S A REALLY VALUABLE CIVIC ASSET.
YOUR ROLE IN IT AS A MEMBER OF THE APPOINTED BOARD IS EQUALLY IMPORTANT AND WE REALLY VALUE YOUR WORK FOR US.
UM, AS VOLUNTEERS WITH THE CITY, UM, WE'RE INTERESTED IN SUPPORTING THE WORK THAT YOU ALL ARE DOING.
UM, WE'D LIKE TO KNOW THE STATUS OF THE BOND, UH, HOW THAT DEBT IS GOING, HOW YOU'RE DOING FINANCIALLY AND OPERATIONALLY WITH REGARD TO COVID AND COMING OUT OF COVID.
AND, UM, UH, I THINK WE'LL TALK A LITTLE BIT ABOUT SETTING UP REGULAR COMMUNICATIONS WITH COUNSEL BY WAY OF THIS COMMITTEE AND HOW GRATEFUL WE ARE FOR YOUR PARTICIPATION.
AND THEN MOST IMPORTANTLY, I NEED FOR COUNCIL TO APPOINT TWO NEW BOARD MEMBERS TO ASSIST YOU WITH THE HEAVY LIFT THAT IS THE BOARD WORK THAT YOU DO.
WHEN I SAY ALL MY HAPPY WORDS RIGHT NOW.
SO I JUST WANT TO THANK YOU ALL SO MUCH FOR, INCLUDING US IN THIS MEETING.
AND I WANT TO APOLOGIZE FOR MY TECHNICAL INTERRUPTION.
IT SEEMS, I DIDN'T KNOW HOW TO CLICK THE BUTTON JOIN MEETING.
I'VE BEEN WAITING HERE FOR OVER AN HOUR WHAT'S GOING ON.
UM, SO I JUST WANT TO APOLOGIZE IN ADVANCE, UM, CLEARLY.
AND IT'S FUNNY CAUSE I USE WEBEX ALL THE TIME FOR WORK, EXCEPT IT'S JUST LIKE RIGHT THERE.
SO I THINK IT'S BECAUSE I ACTUALLY TRY TO JOIN IT.
MY WORK WEBEX AND BACK BUTTON WORKS, SO THAT'S FINE.
AND, UM, TALK TO US A LITTLE BIT ABOUT THE WORK OF THE BOARD, RIGHT? WELL, I WANT TO SAY THANK YOU AGAIN.
UM, YOU KNOW, IT'S BEEN A GREAT AND LEARNING EXPERIENCE FOR ALL OF US.
UM, PHILLIP SHERRY, AND I HAD NOT KNOWN EACH OTHER AT ALL BEFORE WE, UM, ALL ACCEPTED THE REQUEST FROM COUNCIL FOR US TO JOIN THE BOARD.
AND IT'S BEEN WONDERFUL TO GET TO KNOW THEM, LEARN MORE ABOUT THE ASSET.
UM, I THINK WE'VE ALL WE ALL ENTERED INTO THE ROLE, UM, WITH, YOU KNOW, VERY LIMITED INFORMATION, UM, BUT A STRONG DESIRE TO HELP AND SUPPORT OUR COMMUNITY AND THE BEST WAY THAT WE COULD.
ALL OF US CLEARLY HAVING A VERY GOOD UNDERSTANDING ABOUT FIDUCIARY RESPONSIBILITIES AND RECOGNIZING THAT THIS IS A CITY ASSET.
SO FOR US THERE WERE SOME PRIMARY, UM, THINGS THAT WERE ABOUT MOST IMPORTANT FOR US.
UM, ONE WAS WITH REGARDS TO TRANSPARENCY, TWO WAS WITH REGARDS TO PROTECTION OF THE ASSET AND UPHOLDING OUR FIDUCIARY RESPONSIBILITIES.
UM, WE WERE THREE VOLUNTEERS ALL JOINED, UM, AT THE BEQUEST OF CITY COUNCIL, UNFORTUNATELY AT THE START OF OUR TENURE.
UM, THE, THE LEGACY PEOPLE THAT HAD BEEN ON THE BOARD UNFORTUNATELY RESIGNED DUE TO, UM, CIRCUMSTANCES THAT EXISTED.
SO WE CAME IN FRESH, CLEAN WITHOUT MUCH INFORMATION.
I WANT TO SAY, THANK YOU, ESPECIALLY TO OUR CONSULTANTS AND STAFF, TO BE ABLE TO HELP BRING US ON BOARD, GIVE US THE INFORMATION IN ORDER TO BE EFFECTIVE LEADERS.
I ESPECIALLY WANT TO THANK PHILIP FOR HIS LEADERSHIP AS OUR CHAIR.
I'VE BEEN SERVING AS A SECRETARY TREASURER.
UM, AS I THINK SOME OF Y'ALL KNOW, UM, I SERVE ON A COUPLE OF OTHER COMMITTEES, A COUPLE OF COMMISSIONS OF BOARDS FOR THE CITY, AND THIS HAS DEFINITELY BEEN LIKE THE HEAVIEST LIFT, UM, IN TERMS OF JUST HAVING TO GET IN THERE, HAVING SUCH A REGULAR CADENCE AND MEETINGS AND REALLY BEING ON POINT.
UM, BUT IT'S BEEN AN EXCITING OPPORTUNITY.
UM, I BELIEVE OUR STAFF SHARED WITH YOU A POWERPOINT PRESENTATION.
THAT INFORMATION IS ALSO ON THE ACE WEBSITE.
I DON'T KNOW IF YOU ALL KNOW ABOUT THE ACE WEBSITE, BUT THAT WAS ONE OF THE THINGS THAT WE AS A BOARD, ESPECIALLY WANTED TO MAKE SURE THAT EVERYTHING WE WERE DOING WAS TRANSPARENT FOR ANYBODY OUT IN THE PUBLIC TO BE ABLE TO SEE THE DOCUMENTS, SEE THE MINUTES, SEE WHEN WE'RE MEETING, JOIN US FOR MEETINGS AND IT WOULD BE LOVELY TO HAVE FIRST, YOU KNOW, SO TO THINK COMMUNICATION, WE, WE, WE, WE KEEP HOPING EVERY MEETING THAT WE GET SOMEBODY TO JOIN IN AND PARTICIPATE.
UM, SO FAR IT HASN'T HAPPENED YET, BUT HOPEFULLY BABY, WITH THIS FORM, IT'LL ENCOURAGE OTHERS TO ENGAGE AND PARTICIPATE WITH US BECAUSE, YOU KNOW, WE ALL ACTUALLY GENUINELY ENJOY THAT.
UM, SO JUST FOR YOUR INFORMATION, THE WEBSITE IS WWW DOT AUSTIN, CONVENTION, ENTERPRISES.COM.
AND THEN IF YOU WANT TO GET TO ANY OF THE CORPORATE DOCUMENTS YOU JUST DO SLASH CORPORATE DASH DOCUMENTS.
AND THAT'S WHERE YOU'LL FIND A LOT OF THE HISTORY ABOUT ACE ITS ROLE IN SUPPORTING THE TOURISM INDUSTRY AND THE CONVENTION CENTER.
AND IT'S ALSO, WE PUT ALL OF OUR UPDATES.
UM, EVERYTHING THAT WE'VE SENT TO THE COUNCIL FOR THE LAST 12 MONTHS HAS BEEN POSTED.
[01:15:01]
OR BOND INFORMATION.ALL OF THAT INFORMATION IS ON THE WEBSITE.
SO OUR ROLE AS BOARD MEMBERS, OUR PRIMARY ROLE IS TO PROTECT THE ASSET, TO SET THE FINANCIALS AND CAPITAL RENEWAL POLICY TO APPROVE ALL CONTRACTS.
AND AS OF OUR JUNE, 2020 BYLAWS AMENDMENT TO HIRE A PRESIDENT, UM, ACE HANDLES THE FINANCIAL AND ADMINISTRATIVE ASPECTS OF THE PROJECT, BUT WE DON'T ACTUALLY MANAGE THE HOTEL OPERATIONS.
WE HAVE A HOTEL MANAGEMENT AGREEMENT WITH HILTON.
SO THEY'RE THE ONES MANAGING THE HOTEL AND MANAGING THE DAY-TO-DAY OPERATIONS.
WE'RE MORE CONCERNED ABOUT THE WHOLE ASSET AND THE WHOLE BUILDING.
UM, W IT, UH, WE ALSO HAVE AN INDEPENDENT TOURISM INDUSTRY CONSULTANT THAT WORKS WITH US TO ENSURE, AND THAT WORKS WITH US AND THE HILTON TEAM TO ENSURE THAT THEY'RE MEETING ALL THEIR OBLIGATION UNDER OUR MANAGEMENT AGREEMENT.
AND AS, AS IS REQUIRED BY THE BOND AND VENTURE, AS YOU KNOW, YOU KNOW, THE BOND CAME INTO BEING THE HOTEL, CAME INTO BEING IN 2000 AND IT'S BEEN IN EXISTENCE SINCE, UM, THE EIGHT BOARD.
WE DO NOT EXIST TO ADVISE COUNSEL ON POLICY LIKE THE COMMISSIONS THAT I SIT ON, LIKE, YOU KNOW, WITH CIVIL SERVICE, WE DO RULINGS WITH MY CONSTRUCTION ADVISORY COMMITTEE.
WE PROVIDE ADVICE TO THE DEPARTMENTS, TO COUNCIL ON WHERE WE THINK, YOU KNOW, IMPROVEMENTS COULD BE MADE OR, YOU KNOW, GIVE ATTABOYS TO, TO THE GREAT STAFF, UM, THAT ARE DOING AMAZING WORK FOR OUR CITY.
UM, WE'RE HERE TO PROTECT THE, THIS PUBLIC ASSET THROUGH A NONPROFIT FOR-PROFIT ENTITY, WHICH IS LEGALLY DISTINCT FROM THE CITY.
UM, YOU'LL NOTICE THAT SOME INFORMATION ABOUT THIS ON PAGE SLIDE OF THE PRESENTATION.
WE ACTUALLY A NONPROFIT PUBLIC FACILITY CORPORATION.
SO IT'S NOT LIKE A DEPARTMENT OR COMMISSION OF THE CITY OF AUSTIN.
IT WAS CREATED BY THE CITY AS A BANKRUPTCY REMOTE ENTITY.
SO WHAT THIS MEANS IS, IS THAT GOOD TIMES THIS PROPERTY IS ABLE TO GENERATE AN EXCESS OF, YOU KNOW, EXCESS REVENUES OVER AND ABOUT $2 MILLION A YEAR.
2 MILLION IS THE MAXIMUM DEFINED, UM, IN THE BOND DENTURE PRE PANDEMIC, THE ACE BOARDS HAD PRISONER OF THE EXCESS REVENUES OVER 2 MILLION.
AND THAT HAS BEEN A HUGE REASON AS TO WHY WE'VE BEEN ABLE TO WEATHER THIS PANDEMIC SO SUCCESSFULLY, YOU KNOW, THE PANDEMIC HAS BEEN HARD.
IT'S HIT THE HOTEL INDUSTRY SIGNIFICANTLY.
UM, AND IT'S NOT JUST HERE LOCALLY.
YOU NOT JUST IN THE STATE NATIONALLY, WORLDWIDE.
UM, SO UNLIKE OTHER CITY ASSETS, THE ACE BOND INDENTURE DOES, IT'S NOT BACKED BY THE DEBT OF ANY CITY FUNDS FROM ANY CITY DEPARTMENTS.
EIGHT ACE IS ACTUALLY UNIQUE AND THAT IT OPERATES ALSO WITH A CONDO ASSOCIATION ADDING AN ADDITIONAL LEVEL OF COMPLEXITY, UM, TO THE ADMINISTRATION OF THIS PROJECT.
YOU'LL FIND MORE INFORMATION IN THE SLIDE DECK ON PAGE 10, THAT HAS THE ACE STRUCTURE INFORMATION IN IT.
PAGE 11 GIVES YOU MORE INFORMATION ABOUT THE CONDO STRUCTURE.
AND THEN PAGE 12 ACTUALLY IDENTIFIES THE DISCLOSURE LANGUAGE REGARDING OUR SERIES 2019 SEVEN BONDS, WHICH WILL NEVER BE CONSIDERED INVENTIVENESS IN THAT HIS DEATH, SORRY, MY ENUNCIATION SKILLS ARE NOT ON POINT THIS MORNING, PROBABLY CAUSE I RAN OUT OF WATER WAITING.
UM, BUT THERE'S ALSO NO GENERAL OBLIGATION TO THE CITY.
ALL LIABILITIES ARE WRAPPED IN THE INDENTURE.
SO IT'S ALL SELF-CONTAINED WITHIN THAT BOND AND VENTURE.
UM, NEITHER OF THE GOOD FAITH AND CREDIT OR THE TAXING POWER OF THE CITY IS PLEDGED IN ANY WAY TO THE PAYMENTS OF THIS BOND, DEBT OR INTEREST.
UM, ALSO, AND YOU CAN FIND THAT INFORMATION ON SLIDE 12 OF THE PRESENTATION.
MY CAMERA'S HERE CAUSE Y'ALL SPACES ARE OVER HERE.
I'M TRYING TO MAKE EYE CONTACT AGAIN, THE WONDERS OF TECHNOLOGY.
AND I WISH WE WERE ALL IN PERSON, BUT YOU KNOW, ONE DAY WE'LL GET BACK TO THAT.
UM, YOU'LL ALSO FIND ON PAGE SLIDE 23, YOU'VE GOT SOME INFORMATION ABOUT THE PANDEMICS IMPACT ON THE ASSETS PERFORMANCE, ESPECIALLY FROM THE FULL DURATION OF TIMELINE.
THOSE WHO MAY NOT HAVE THAT IN FRONT OF US.
COULD YOU JUST GIVE US A LITTLE BIT OF DETAIL ON THE IMPACT OF COVID ON YOUR FINANCES? CLEARLY JUST LIKE ALL THE OTHER HOTELS, YOU KNOW, OUR, WE, OUR REVENUES WERE GOING REALLY, REALLY WELL.
NOW THE GOOD THING IS WE'VE ACTUALLY, AS OF OUR LAST BOARD MEETING, THERE'S BEEN A SLIGHT INCREASE BACK.
THERE WAS SOME IMPROVEMENT WITH MY HOLIDAY TOPICS.
[01:20:01]
SPRING BREAK, UM, CAUSED A HEADACHE.UH, WE'VE SEEN MORE IMPROVEMENT.
AT LEAST THE HILTON HAS SEEN MORE, ESPECIALLY ON THE WEEKEND AND LIKE STAYCATION TRAVEL, MORE DRIVING RATHER THAN FLYING.
WE HAVEN'T SEEN THE RETURN TO THE BUSINESS TRAVELERS YET, AND WE'RE HOPING THAT'LL CONTINUE AS REC PARK CONTINUES TO INCREASE.
UM, BUT YOU CAN ALSO FIND THE POWERPOINT PRESENTATION ON THE WEBSITE AS WELL.
AND I CAN MAKE SURE THAT OUR STAFF GETS IT TO Y'ALL, BUT ESSENTIALLY IT'S BEEN LIKE THIS ROLLER COASTER AND IT WAS LIKE A STEEP DECLINE IN THAT 2019 ERA.
UM, BUT SLIDE 23 PROVIDES YOU THAT INFORMATION ABOUT THE IMPACT WITH REGARDS TO THE CURRENT STATUS OF THE BOND.
AND SORRY IF Y'ALL HAVE ANY QUESTIONS, FEEL FREE TO INTERRUPT ME THE QUESTIONS AT THE END.
I'VE JUST GOT TO GO IN OFF MY LIKE BULLET POINT LIST OF THE THINGS I WANTED TO MAKE SURE I COVERED.
SO GET OUT, Y'ALL HAVE AS MUCH INFORMATION AS I CAN PROVIDE YOU.
SO WE HAVE BEEN ABLE TO CONTINUE TO MEET ALL OF OUR BOND OBLIGATIONS THROUGH THE PANDEMIC.
SO DESPITE THE DEVASTATION TO THE HOTEL AND TOURISM ENTRANCE FEE, WE'VE STILL BEEN ABLE TO RIDE IT.
WE DID A LOT OF FIDUCIARY RESPONSIBILITY TO MAKE SURE WE DID.
UM, AS THE TREASURER, I WAS ESPECIALLY INVOLVED WITH REGARDS TO OUR BUDGET AND MAKING SURE THAT WE DID A VERY CONSERVATIVE BUDGET BECAUSE WE WANTED TO MAKE SURE AGAIN, WE'RE PROTECTING THE ASSETS.
THE BIGGEST LIKE HEARTACHE AND ANGUISH FOR US IS TO MAKE SURE WE PROTECT THIS ASSET BECAUSE WE, AS CITIZENS OF THE CITY OF AUSTIN KNOW OUR FIDUCIARY RESPONSIBILITIES, UM, YOU'LL FIND ON SLIDE 16, A CURRENT UP-TO-DATE AS OF YESTERDAY WHERE THE CURRENT LEVELS ARE WITH REGARDS TO OUR RESERVES.
SO ALL OF THE FINANCIALS ARE RIGHT THERE ON SLIDE 16, FUTURE LOOKING FINANCIAL SCENARIOS HAVE BEEN PREPARED AND WE PUBLISHED THEM, UM, TO THE MSRB, UM, BY OUR AES PRESIDENT, UM, WHICH WERE REVIEWED BY STANDARDS IN CORES, AS WELL AS THE INVESTMENT HUMANITY AND HAVE MAINTAINED A RELATIVELY SPEAKING POSITIVE OUTLOOK, WHICH WE'RE REALLY PROUD ABOUT, UM, POSTING TO MSRV IS A REQUIREMENT OF THE BOND AND A FEDERAL REGULATION.
SO FOR US, WE DID OUR POSTINGS.
WE DID, WE DO OUR EMMA POSTINGS AS WELL.
UM, SHERRY'S REALLY OUR BOND EXPERTS.
WHAT'S REALLY GOOD ABOUT THIS AMAZING TEAM THAT Y'ALL ASSEMBLE AS YOU GOT SHERRY.
WHO'S LIKE THIS BOND EXPERT, YOU'VE GOT MYSELF FROM THE CONSTRUCTION BACKGROUND AND REALLY A MORE FIDUCIARY, UM, MONEY TYPE OF LOOK.
AND THEN YOU'VE GOT PHILIP WHO'S HANDLING LIKE THE LITIGATION AND, UM, THE HEAVY ENTANGLEMENT AND STUFF.
SO I DID JUST WANT TO APPLAUD Y'ALL FOR LIKE FINDING THE RIGHT VOLUNTEERS TO STEP UP INTO THIS ROLE, BECAUSE I DON'T THINK ANY OF US COULD HAVE DONE THIS ON OUR OWN WORK CHART, BUT THIS WAS A GOOD TEAM.
CLEARLY WE STILL NEED TWO MORE PEOPLE.
SO I AM BEGGING Y'ALL TO PLEASE FILL THOSE SEATS TOO, WITH OTHER ADDITIONAL ASKS, UH, RESOURCES THAT CAN HELP ROUND OUT OUR, UM, SUBJECT MATTER EXPERTISE.
SO THEN WE'RE EACH KIND OF TACKLING ONE THING AND THEN THAT BURDEN IS A, NOT ANY ONE OF US AS BEING THE PERSON WITH THE MOST KNOWLEDGE ABOUT IT.
THAT'S REALLY, THAT'S A REALLY IMPORTANT POINT.
AND I'LL, I POINT OUT TO MY COLLEAGUES THAT WE HAVE HAD, UM, WHAT WE DON'T HAVE NOW AS A, AS A MEMBER OF THE BOARD, BUT WE DID PREVIOUSLY WITH SOMEONE FROM STAFF WITH FINANCIAL AND OR BUDGET EXPERTISE.
AND, UM, I THINK THAT WILL ALSO, IF, IF WE'RE ABLE TO FILL, UM, ONE OR BOTH OF THEIR SLOTS TO FROM STAFFED, KIND OF MAKE UP THAT EXPERTISE, THEN WE WILL ALSO, UH, BE ABLE TO RECONNECT THE COMMUNICATIONS BETWEEN THE BOARD WITH IT AND ITS OVERSIGHT OF THIS ASSET DIRECTLY BACK TO OUR OPERATIONS HERE, BECAUSE WE'LL HAVE THAT STAFF LIAISON AND, AND EXPERIENCE.
AND I WOULD ALSO APPRECIATE IF YOU COULD BRING ON SOMEBODY WITH SOME HOTEL EXPERIENCE SO THAT WAY THEY CAN RELATE IT TO US AND EXECUTIVE SESSION, IF WHAT WE'RE HEARING IS RIGHT OR NOT, UM, JUST CAUSE, YOU KNOW, WE DON'T EACH HAVE THAT EXPERTISE.
SO IT'S NICE WHEN WE, ESPECIALLY IN EXECUTIVE SESSION, LIKE WE CAN BRING IN OUR OUTSIDE KNOWLEDGE TO BE LIKE, OKAY, YEAH, THAT RINGS TRUE.
EVERYTHING I'M SEEING IT RINGS TRUE TO WHAT THEY JUST PRECINCT.
IT JUST, IT HELPS US TO MAINTAIN THAT LEVEL OF REASSURANCE THAT YES, WE'RE DOING THE RIGHT THING.
WE'RE ABLE, WE'RE, WE'RE LOOKING AT IT, NOT JUST ON A GRANULAR INDIVIDUAL LEVEL BY TOPIC, BY TOPIC, BUT ALSO LOOKING AT THE ASSET HOLISTICALLY.
UM, BECAUSE I THINK THAT'S, WHAT'S BEEN REALLY NICE
[01:25:01]
ABOUT THIS BOARD EXPERIENCE BECAUSE WE'VE GOT SO MANY GREAT TALENTS WITHIN THE BOARD MAKEUP THAT HELP OFFSET, YOU KNOW, IT AGAIN, IT'S BEEN A LITTLE BIT OF A HEAVY LIFT.I'LL JUST BE CANDID WITH SOMEBODY WITH THAT.
AND WHEN YOU SAY THAT, THANK YOU SO MUCH.
UM, I WANTED ABOUT 10 MORE MINUTES FOR THIS ITEM TO LEAVE TIME FOR COUNCIL MEMBERS WHO MAY HAVE SOME SPECIFIC QUESTIONS AND ALSO AN OPPORTUNITY FOR BOTH THE CHAIR MR.
I DO HAVE A FEW MORE, UM, ITEMS THAT I JUST WANTED TO REPORT BACK TO Y'ALL IF THAT'S OKAY.
BUT IF YOU HAVE QUESTIONS AGAIN, FEEL FREE TO INTERRUPT.
I KIND OF HAVE DIARRHEA OF THE MOUTH.
SO YEAH, GO AHEAD AND FINISH UP THEN.
WE'RE JUST TRYING TO STAY ON TIME.
YEAH, NO, I, I APPRECIATE THAT COMPLETELY.
UM, IF YOU KNOW ANYBODY THAT'S CIVIL SERVICE SERVICE COMMISSION, THEY WILL TELL YOU.
UM, SO AGAIN, WE ALSO DO PUBLIC POSTINGS, INCLUDING OUR QUARTERLY FINANCIALS, WHICH ARE ON THE ACE WEBSITE, GIVEN THE RESERVES AND THE BETTER THAN EXPECTED OCCUPANCY THAT'S ALREADY HAPPENED.
WE'RE ACTUALLY VERY CAUTIOUSLY OPTIMISTIC INDUSTRY ANALYSTS HAVE AGREED THAT OUR EIGHT TIER BONDS ARE VERY SECURE, EVEN IN NEARLY A WORST CASE.
SCENARIOS ONLY ARE B TIER BONDS ARE AT RISK AND EVEN THEN NOT UNTIL JULY OF 2022 AND EVEN MONETARY ECONOMIC RECOVERY ELIMINATES THAT RISK.
AND FROM OUR LAST BOARD MEETING, IT APPEARS THAT THE HOTEL INDUSTRY IS REALLY BOUNDING WITH THE REST OF OUR DATA THAT WE'VE RECEIVED, HOW WE'RE DOING OPERATIONALLY DURING COVID CLEARLY 2020 WAS THE WORST YEAR, BUT IT STARTED TO TURN AROUND.
YOU'LL FIND IN SLIDES, 20 OUR REVENUE AND OPERATING INCOME FROM 2008 UNTIL 2020 ON SLIDE 21, YOU'LL FIND THE PANDEMIC IMPACT ON THE HOTEL INDUSTRY BROADLY.
AND THEN ON SLIDE 22, YOU'RE GOING TO FIND THE HISTORIC 12 MONTH HOTEL REF PARK ROAD.
OUR HOTEL OPERATOR HILTON, UH, HAS A GREAT INDUSTRY LEAD FOR A PROTECTION PROGRAM THROUGH THEIR FRATERNITIES DAY AND EVER READY PROGRAMS. I'VE ACTUALLY STAYED AT OTHER HILTON PROPERTIES AND EXPERIENCED IT.
AND I HAVE TO SAY IT'S VERY REASSURING, UM, VISIT AS A TRAVELER.
UM, ADDITIONALLY, THE LAYOFFS AND FURLOUGHS THAT OCCURRED IN 2020, UM, THERE WERE LAYOFFS THAT OCCURRED, UM, BUT IT LOOKED AND THAT'S ALSO WHAT TRIGGERED, WHY WE CAME TO Y'ALL ASKING FOR, UM, CONSENT WITH AN ARTS AND THE PPP LOANS.
I DO WANT TO ADVISE ALL OF Y'ALL THAT OUR BOND HOLDERS APPROVED IT IN APRIL AND WE ACTUALLY RECEIVED FUNDING IN THE BANK THIS WEEK.
SO WE STILL ARE ALL, WE'RE GOING TO BE USING A HUNDRED PERCENT OF THOSE DOLLARS TO BRING BACK OUR, OUR FRONTLINE HOTEL WORKERS.
AND THE HOTEL HAS ALREADY BEEN GIVEN THAT NOTICE ABOUT THE FUNDS BEING RECEIVED.
SO THEY'RE ALREADY WORKING THROUGH THAT PROCESS OF BRINGING BACK THOSE EMPLOYEES.
AGAIN, THE PRIMARY THING I WANTED TO JUST REMIND YOU ALL IS WE HAVE, UM, FOR THE THREE OF US, IT WAS REALLY IMPORTANT TO BE TRANSPARENT AND TO HAVE THAT INFORMATION AVAILABLE TO EVERYBODY, IF IT WOULD HELP, UM, THIS COMMITTEE, I CAN ALSO MAKE SURE THAT WHEN STAFF DOES THE POSTING TO OUR WEBSITE, THEY ALSO SEND A COPY TO Y'ALL.
SO THAT WAY YOU HAVE IT, AND THEN YOUR STAFF DOESN'T HAVE TO GO TO THE WEBSITE.
IT JUST KIND OF SAVES YOUR STAFF A LITTLE BIT OF TIME BECAUSE MY STAFF IS ALREADY DOING POSTING.
Y'ALL AN EMAIL TOO AT THE SAME TIME.
AND THAT MIGHT HELP, UM, REASSURE Y'ALL ABOUT WHAT WE'RE DOING ON THE CITY'S BEHALF.
SO AGAIN, THANK YOU AGAIN FOR JOINING ME IN THE PEOPLE FOR TWO ADDITIONAL BOARD MEMBERS, PRETTY PLEASED.
UM, SHE, YOU KNOW, WE, WE, WE, WE WOULD LOVE THE HELP.
I WOULD LOVE NOT TO BE STRESSED OUT ABOUT THIS.
SO, UM, BEFORE QUESTIONS, UH, MR. DAWSON, MR. SMITH, DO EITHER OF YOU HAVE ANYTHING YOU WANT TO ADD BRIEFLY, UH, THANK YOU ALL FOR THE OPPORTUNITY TO BE HERE.
THE ONLY ONE THING I WANT TO ADD IS THANK YOU JOEL SMITH FOR A TERRIFIC PRESENTATION, UH, AND FOR TAKING THE SHOW WHILE I WAS HAVING MY OWN TECHNICAL PROBLEMS. SO THANK YOU FOR INTRODUCTION.
IT HAS BEEN A GREAT BOARD EXPERIENCE, REALLY ENJOYED WORKING WITH JOLSON AND SHERRY.
IT'S BEEN A FANTASTIC OPPORTUNITY AND I CAN ONLY, I GO WHAT SHE SAID.
AND JOLSON, AND I GET TO TALK BECAUSE OF THE OPEN MEETINGS ACT.
SO I FEEL WE'LL TALK TO TULSA.
THAT IS THE ONE THING ALSO WITH ONLY THREE OF US BEING ON THE BOARD, WE CAN'T EVER TALK TO EACH OTHER INDIVIDUALLY, AND IT'S ONLY DURING THE EXECUTIVE SESSION.
SO IT'S JUST, IT'S NICE TO ADD.
AND CLEARLY WE'RE IN A PANDEMIC, SO NOBODY'S HANGING OUT.
[01:30:01]
TO BE ABLE TO BUILD RELATIONSHIPS WITH OTHER MEMBERS OF OUR COMMUNITY BECAUSE SHARING PHILLIP AND I HAD NEVER MET EACH OTHER BEFORE.AND IT'S JUST SO NICE THAT IT IS AN OPPORTUNITY.
UM, MR. DAWSON, WAS THERE ANYTHING KNOW? I, I REALLY DON'T HAVE ANYTHING TO ADD.
I THINK JOSEPHINE DID A FANTASTIC JOB OF DESCRIBING THE HISTORY AND THE CURRENT ISSUES THAT WE'RE FACING.
I'M HAPPY TO ASK QUESTIONS ON THE MORE TECHNICAL OR, OR, OR LEGAL NATURE.
UM, UH, OTHER THAN THAT, UH, UH, I'M GOOD.
I THINK, UM, UH, MAYOR ADLER MAY HAVE A QUESTION, MAYBE COUNCIL MEMBER KELLY, AND, UH, OKAY.
WE'LL JUST, AND I SEE THAT COUNCIL MEMBER TOVO AS WELL.
SO WE'LL START WITH THE MAYOR JUST REAL FAST.
I JUST WANT TO THANK YOU GUYS FOR, FOR THIS SERVICE.
THIS IS NOT AN EASY BOARD TO BE ON AND AN INCREDIBLY HARD TIME TO BE ON THIS KIND OF A BOARD.
UH, AND YES, IT'S INCUMBENT UPON US TO, TO GET YOU, UH, THE COUNSELOR GETS YOU HELP AND ASSISTANCE.
I JUST WANT TO SAY, UH, THANK YOU.
AND I THINK YOU GUYS ARE DOING A REALLY GOOD JOB.
KELLY, DID YOU HAVE ANY QUESTIONS? I JUST HAD A COUPLE OF REMARKS.
I WAS PUTTING ICE IN MY DRINKS.
I APOLOGIZE FOR THE DELAY THERE.
I JUST WANT TO SAY I'M THANKFUL TO BE PART OF THE GREAT WORK THAT THIS SPOT IT AND FINANCE COMMITTEE DOES.
OUR CITY DESERVES TO HAVE TRANSPARENCY AND THE GOVERNMENT'S ACTIONS IN DEFICIENCY AND THEIR SPENDING.
SO TODAY I WELCOME THE COLLABORATION WE'RE EMBARKING ON AND THE FUTURE REGULAR REPORTING WILL BE RECEIVING.
AND OF COURSE, I ALSO WANT TO SAY, I APPRECIATE THE BOARD MEMBERS AT ACE AND THE WORK TOWARDS THEIR GOOD HEALTH AT THIS PUBLIC ASSET.
THAT WAS A GREAT PRESENTATION AND OVERVIEW, AND I REALLY APPRECIATE, I APPRECIATE THE INFORMATION.
I ALSO APPRECIATE THE FACT THAT THE MINUTES AND OTHER MATERIALS ARE NOW ONLINE.
I HAVEN'T LOOKED AT THEM WE'LL IN A MONTH, BUT, BUT, UM, HAVE LOOKED AT THEM AND THE TIME THAT YOU'VE GOTTEN THEM UP THERE AND THAT'S REALLY A GREAT RESOURCE, I'M NOT SURE WHO, MY QUESTION, WHO THIS PARTICULAR QUESTION IS, IS REALLY BEST ADDRESSED TO, IN SOME WAYS IT'S ALSO A QUESTION FOR OUR CITY STAFF, BUT MS. THOMAS, SINCE WE TALKED A LITTLE BIT ABOUT THE HISTORY, YOU MAY HAVE AN ANSWER TO THIS.
I DO HAVE ANY SENSE IN LOOKING BACKWARD AT THE ORGANIZATION, WHY, WHY THE BOARD WAS CREATED, UM, YOU KNOW, IN SOME, AND YOU'RE PROBABLY AWARE FROM YOUR EXPERIENCE AT THE CITY ON DIFFERENT COMMISSIONS, THAT IN SOME CASES, THE CITY COUNCIL IS ACTUALLY THE BOARD OF DIFFERENT CITY ASSETS, UM, INCLUDING LIKE THE AUSTIN HOUSING FINANCE CORPORATION.
UM, I FORGET THE NAME OF WHATEVER THE INDUSTRIAL CORPORATION IS AND THE AIRPORT AND SOME OF THE OTHER, THE MUELLER BOARD.
UM, SO I'M NOT, I'M NOT ENTIRELY SURE YOU GUYS ARE, ARE, ARE DOING A FABULOUS JOB AND I'M GLAD YOU'RE THERE PROTECTING THE FINANCIAL, UH, UM, THIS FINANCIAL ASSET.
I'M NOT UNDERSTANDING KIND OF, AS WE LOOK AT THESE DIFFERENT KINDS OF BOARDS, STRUCTURES, AND COUNCIL MEMBER POOL, I KNOW YOU'RE INTERESTED IN THAT KIND OF LOOKING AT THE CONSISTENCY ACROSS THEM ALL.
I'M JUST WONDERING MS. THOMAS, IF YOU HAVE AN UNDERSTANDING OF WHY, WHY THIS BOARD WAS SET UP, UM, IN THE WAY IT WAS.
SO FROM WHAT I UNDERSTAND, AND I WILL JUST BE CANDID WITH YOU ALL, YOU KNOW, WE JOINED AT THE END OF 2019.
AND SO FIRST THING, UH, PHILLIPS JERRY AND I DID WAS LIKE, OKAY, DAVID, CAN YOU GIVE US A BINDER WITH ALL THIS INFORMATION SO WE CAN LEARN, UM, THE PRIMARY THINGS.
I THINK THAT ANSWERED THAT QUESTION ARE ONE WE'RE NON-PROFIT PUBLIC FACILITY FOR OPERATION.
SO WE'RE NOT AN ENTITY UNDER THE CITY OF AUSTIN.
AND WE WERE CREATED BY THE CITY AS A BANKRUPTCY, REMOTE ENTITY AGAIN.
SO THAT MEANS NO CITY ASSETS, NO CITY LIABILITIES, NO USE OF THE CITY'S GOOD FAITH AND CREDIT WERE APPLIED FOR THIS.
SO I THINK THAT'S WHY THE CITY COUNCIL ISN'T ON IT, BUT INSTEAD APPOINTS THE BOARD MEMBERS.
SO IT'S, IT'S LIKE A QUASI GOVERNMENTAL ENTITY AND THAT WE'RE, WE'RE ENTRUSTED TO PROTECT THIS ASSET TO CONTINUE TO BE A GOOD REVENUE STREAM FOR THE CITY.
UM, AND AT WHATEVER POINT Y'ALL WANT TO GET RID OF, I WOULD NOT RECOMMEND NOW CAUSE WE WOULD NOT DO WELL WITH IT.
UM, BECAUSE YEAH, UH, BUT IT'S A, IT'S A, IT IN GOOD TIMES, IT'S A VERY PROFITABLE ASSET, BUT IT JUST ENSURES A NICE DADDY'S BREAM OF CASH THAT THEN THE CITY CAN USE FOR ITS PURPOSES.
UM, BUT I THINK IT'S BECAUSE OF THAT TECHNICALITY AND DAVID CAN PROBABLY SPEAK MORE TO THAT IN DETAIL.
UM, BUT YOU'LL FIND THAT INFORMATION ON SLIDE EIGHT OF THE PRESENTATION.
AND AGAIN, I WANT REMIND YOU THAT THE DISCLOSURE LANGUAGE WITH REGARDS TO THE BOND IS ON
[01:35:01]
SLIDE WELL OF THE PRESENTATION.AND YOU CAN FIND THAT ON THE AUSTIN CONVENTION ENTERPRISES, UM, WEBSITE SLASH BACK CORPORATE DASH DOCS DOCUMENTS, UM, YOU'LL FIND THE POWERPOINT PRESENTATION ON THE WEBSITE WITH THOSE SPECIFIC PATIENT NUMBERS, BUT IT'S GOT THE LANGUAGE IN THERE.
SO I THINK THAT MIGHT HELP ANSWER YOUR QUESTION AND IF YOU'VE GOT FOLLOWUP, I MEAN, I DON'T KNOW IF YOU REALLY WANT TO RECEIVE, BUT WE CAN PROBABLY SEND YOU A COPY OF IT.
CAUSE IT WAS A PUBLIC DOCUMENT INSTEAD OF DENSE READING.
I ACTUALLY HAVE IT IN MY, IN MY FILE HERE, BUT YEAH.
AND THEN LET'S SEE YOU HAD ANOTHER, SO BACK WHEN WE DID THE QUESTION AND ANSWER FOR THE LOAN IN OUR COUNCIL, UM, AGENDA, I HAD THIS INFORMATION, BUT NO LONGER DO I, CAN YOU REMIND ME HOW MANY, HOW MANY EMPLOYEES AT THE HILTON WERE FURLOUGHED WAS HUNDREDS, AS ON A RECALL, THERE'S DEFINITELY HUNDREDS.
I DON'T REMEMBER THE EXACT NUMBER.
UM, BUT I'M STILL, OR THE HILTON TO GIVE ME THAT.
I CAN, I CAN FIND THAT IN MY RECORDS.
DO YOU HAVE A SENSE WITH THE LOAN? HOW MANY WILL BE ABLE TO COME BACK ON ONBOARD? I ANTICIPATED PRETTY MUCH MOST OF THEM THAT ARE WANTING TO COME BACK WOULD BE COMING BACK.
THAT'S VERY HELPFUL BECAUSE THAT, THAT WAS KIND OF THE INTENT BEHIND GETTING IT WAS TO ENSURE THAT WE COULD GET, UM, BRING BACK BETTER FORCE AND, AND TO CONTINUE TO COMPENSATE THE ONES WHO WERE STILL ON STAFF, RIGHT? YES.
AND THEN ABOUT PROBABLY QUESTIONS, BUT I KNOW, I KNOW WE'RE AT, WE'RE PROBABLY AT TIME, SO I THINK I'LL LEAVE IT THERE FOR THE MOMENT.
UM, CHERYL, THANKS, CATHERINE.
DID YOU HAVE ANYTHING THAT YOU WANTED TO ASK? HOW'S MY WORLD.
UM, NO, I, I DON'T HAVE ANY QUESTIONS.
I JUST WANT TO, AGAIN, THANK OUR BOARD MEMBERS.
UM, I DO ACTUALLY HAVE A QUESTION FOR YOU THOUGH.
UM, WE ARE NOT POSTED TO TAKE ACTION, BUT I WAS WONDERING IF YOU WANTED TO PROVIDE ANY DIRECTION TO STAFF WITH REGARD TO THE TWO OPEN APPOINTMENTS, THEY COULD THEN COME BACK TO THE FULL COUNCIL WITH I WILL.
I THINK I SAW KELSEY MEMBER, MAYOR PRO TEM, UM, HARPER MADISON'S HAND UP.
DID YOU HAVE A QUESTION? OKAY.
ANYBODY ELSE HAVE ANY QUESTIONS FOR THIS? SO TO THE STAFF, UM, WE WOULD LIKE TO AMPLIFY AND EMPHASIZE THE NEED TO FILL THE TWO SPECIFIC VACANCIES THAT ARE ON THIS BOARD.
AND TO THAT END, IF WE COULD ENGAGE THE CITY MANAGER IN THAT DISCUSSION AND, UM, ALSO THE, OF, UH, OUTSIDE, UH, UH, CANDIDATE POSSIBILITIES, THAT WOULD BE REALLY GREAT.
AND AS SOON AS POSSIBLE, THAT WOULD BE THE ACTION.
IT'S NOT A VOTE, OBVIOUSLY THAT IMPACTS FOR STEPH AND THANK YOU FOR THE TIME.
AND I JUST WANT TO SAY THANK YOU AGAIN FOR GIVING US THIS OPPORTUNITY.
HONESTLY, IT'S JUST NICE SEEING PEOPLE'S FACES.
WELL, THANK YOU ALL FOR JOINING US.
I THINK, UM, WE HAVE ABOUT 15 MORE MINUTES.
WE'RE GOING TO MOVE ON WITH THE REST OF OUR MEETING.
UM, COLLEAGUES, WE HAVE TWO ITEMS LEFT THE, UM, SCOPE OF, FOR THE DISASTER RESPONSE AUDIT AND THE CONVENTION CENTER, FINANCIAL REVIEW QUESTIONS.
[2. Discussion of scope for disaster response audit (City Auditor's Office)]
THE SCOPE FOR THE DISASTER RESPONSE AUDIT FIRST.AND THEN, UM, COUNCIL MEMBER TOVA CAN ASK ANY QUESTIONS WE HAVE IN OUR REMAINING TIME WITH RESPECT TO THE CONVENTION CENTER.
UM, THERE WAS BACKUP FOR THIS SCOPE.
I DON'T KNOW IF WE NEED A PRESENTATION.
DOES ANYONE WANT THAT PRESENTATION PROVIDED? OKAY.
UM, COUNCIL MEMBER TOOK, WE SPOKE EARLIER THAT SHE WAS COMFORTABLE WITH THE AUDIT APPROACH AT THIS TIME.
I'LL LET THE AUDITOR SPEAK BRIEFLY, UM, TO THAT AS WELL.
ALSO ONSCREEN IS, UM, IS MARIA STRAW.
I'VE COMPLETELY FORGOTTEN WHERE HE IS LAST NAME FOR A MINUTE, EVEN THOUGH WE'VE WORKED TOGETHER FOR STUFF WE UNDERSTAND.
UM, SO, UM, BUT UM, REYES DROPPED THIS YEAR.
SHE'S THE LEAD ON THIS AND KATIE, HOUSTON'S NOT ON SCREEN, BUT LISTENING TO US, SHE IS THE, UM, MANAGER OF THIS.
UM, JUST SO YOU MAY HAVE ALREADY HAD CONTACT WITH THEM, UH, JUST SPELL YOUR NAME, WHO OUR TEAM IS.
UM, IN TERMS OF THE PRESENTATION THAT THE SLIDES PRETTY MUCH COVER IT.
YOU DID COUNCIL MEMBER TOBO YOU MENTIONED THE PIECE ABOUT, UM, BASICALLY, UH, ARE WE COVERING WHAT COMMUNICATIONS ARE WE PLANNING TO COVER? AND WHEN WE GO THROUGH THE LAUNDRY LIST, UM, YES, WE DEFINITELY PLAN TO COVER COMMUNICATIONS WITHIN THE CITY WITH COUNCIL, WITH EXTERNAL ENTITIES,
[01:40:01]
UM, INCLUDING THOSE COMING THROUGH COUNCIL OFFICES.WE'RE HAPPY TO ANSWER OTHER QUESTIONS.
I THINK I DON'T REMEMBER ALL THREE OF THEM MUTED.
DOES KATIE OR MARIA WANTS TO SAY ANYTHING WE'RE NOT TRYING TO, WE'RE NOT TRYING TO, TO KEEP YOU FROM SPEAKING ABOUT YOUR POWERPOINT WAS PRETTY STRAIGHTFORWARD AND, AND, UM, JUST IN THE INTEREST OF TIME, BUT I DID WANT TO GIVE YOU IF THERE'S ANYTHING ELSE YOU WANTED TO SHARE WITH US.
UM, FOUR 95 SLIDES LOOKED GOOD.
UM, DOES ANYONE ELSE HAVE ANY QUESTIONS, COMMENTS, OR CONCERNS ON THIS ITEM? THAT'S ABOUT OCTOBER, JUST A THANK YOU.
I THINK THIS IS GOING TO BE REALLY IMPORTANT WORK AND I APPRECIATE YOU TAKING IT ON AND, AND WORKING TO COME UP WITH A SCOPE THAT IS GOING TO BE, I THINK, EXTREMELY VALUABLE, UM, AND ALSO MANAGEABLE.
UM, CAUSE THEN WE WILL NOW MOVE TO OUR, I BELIEVE OUR
[7. Question and answer about the Convention Center Financial Review Special Report (April 2021).]
LAST ITEM, WHICH IS THE CONVENTION CENTER, UM, FINANCIAL REVIEW, SPECIAL REPORT, UH, WHICH WAS ORIGINALLY REQUESTED BY COUNCIL MEMBER POOL AND COUNCIL MEMBER KITCHEN.UM, AND COUNCIL MEMBER TOVO REQUESTED THAT WE PUT THAT ON OUR AGENDA SO THAT SHE COULD ASK SOME QUESTIONS AND OBVIOUSLY IF ANYONE ELSE HAS QUESTIONS, UM, THEY ARE WELCOME TO JOIN US.
I, IT LOOKS LIKE TRISH TEATRO IS MOVING OVER AND RODNEY GONZALEZ, UM, AND IT LOOKS LIKE KATIE MEZ, NICK IS HERE AS WELL.
UM, SO KATHY, DID YOU WANT TO JUST ASK QUESTIONS OR DID YOU WANT THEM TO, YEAH, I JUST HAVE QUESTIONS AND I KNOW PROBABLY, UM, SOME OF MY COLLEAGUES DO TOO.
AND SO I, I CAN JUST START, UM, A COUPLE OF THESE I THINK ARE FOR THE CONVENTION CENTER AND SOME ARE FOR THE AUDITOR, BUT I THINK THEY'RE ALL QUICK ONES.
UM, SO I'M GONNA RAPID FIRE THEM.
CAN SOMEONE PLEASE TELL ME WHAT CAN YOU PLEASE, UH, DESCRIBE THE DIFFERENCE BETWEEN CONTRACTOR REVENUE AND FACILITY REVENUE QUICK INTRO FROM MY TEAM THEY HAVE SHARMAN WAS ALSO ON.
SO IF IT'S AN AUDITOR QUESTION, NATHAN IS PROBABLY THE PERSON TO ANSWER THAT.
OR IF IT'S A CONVENTION CENTER QUESTION, RIGHT.
UM, MY GUESS IS YOU ALL COULD ANSWER THAT QUESTION? JUST I CAN'T, BECAUSE I DON'T UNDERSTAND WHAT THE DIFFERENCES BETWEEN CONTRACTOR REVENUE AND FACILITY REVENUE, UH, COUNCIL MEMBER.
SO OUR CONTRACTOR REVENUE IS THE REVENUE THAT IS GENERATED FROM OUR FOOD AND BEVERAGE.
UM, AND ALSO FROM, UM, OUR FREEMAN CONTRACTS WHO ARE BRINGING IN LIGHTING CONTRACTS AS WELL.
AND SO THEY, THOSE HAVE RESTRICTIONS AROUND THEM, UM, AS PART OF THE NEGOTIATED CONTRACTS THAT WE HAVE AND THEN THE FACILITY REVENUE RELATES TO, UM, THE ACTUAL RENTAL OF THE BUILDING, UM, WHEN EVENTS COME IN.
THAT MAKES, THAT MAKES GREAT SENSE.
UM, JUST, THIS IS A JUST REARED QUESTION, BUT THE SCRAP SALES, DO YOU HAVE A SENSE OF HOW MUCH THAT AMOUNTS TO IT'S INCLUDED WITHIN THE OTHER? AND I'M JUST WONDERING ONE, WHAT THOSE ARE AND TWO, HOW MUCH THAT AMOUNTS TO, AND YOU CAN GET BACK TO ME IF YOU DON'T HAVE AN ANSWER FOR THAT NOW, BUT I'M THINKING LIKE IF IT'S TABLES AND CHAIRS AND THINGS LIKE THAT, UM, ARE THOSE ARE THOSE BEING MADE AVAILABLE TO THE REST OF THE CITY? SO THAT'S JUST A, THAT'S NOT A TREMENDOUSLY RELEVANT QUESTION TO THE BIGGER PICTURE HERE.
I'M JUST INTERESTED IN KNOWING IF YOU CAN FOLLOW UP, IF YOU DON'T HAVE ANSWER RIGHT NOW.
AND I'M JUST QUICKLY LOOKING AT OUR FUND SUMMARY.
IT LOOKS LIKE IT WAS ABOUT $2,500 COUNCIL MEMBERS, TYPICALLY MATERIALS THAT ARE LEFTOVER FROM SOME SHOWS THAT ARE NOT RECYCLABLE OR THEY'RE RECYCLABLE THROUGH SCRAP METAL.
UM, IT'S RATHER INSIGNIFICANT.
AND IT'S, UH, AND IT LOOKS LIKE THERE WASN'T A DOLLAR FIGURE ATTACHED TO IT IN THE AUDIT.
SO I WASN'T SURE HOW MUCH THAT ACCOUNTED FOR.
SO THE PARKING FEES, UM, IDENTIFIED ON THE PIE CHART IN THE SUMMARY UNDER THE, WHAT WE'VE LEARNED ARE INDICATED AT FORD ARE LISTED AS 4% OF THE TOTAL REVENUE.
AND ARE THOSE PARKING FEES, ARE YOU ABLE TO TRACK HOW MUCH OF THOSE PARKING FEES ARE ATTRIBUTABLE TO NEVERMIND THAT QUESTION FOR NOW? OKAY.
I THINK THE BIGGER QUESTIONS I HAVE ARE DEAL WITH THE FUND AND LET ME JUST THANK THE AUDITOR FOR HELPING AND THANK THE CONVENTION CENTER.
I HAVE SAT WITH ALL OF YOU ON THIS CALL FROM THE CONVENTION CENTER MULTIPLE TIMES, TRYING TO UNDERSTAND THE DIFFERENT FUNDS AND FUND SUMMARIES AND THE FLOW OF FUNDS.
[01:45:01]
CONFUSING.SO SOME OF THE QUESTIONS I'M ASKING, I'M SURE ARE ONES YOU'VE COVERED AND I WILL JUST APOLOGIZE IN ADVANCE FOR NOT HAVING IT EMBEDDED IN MY BRAIN IN A WAY THAT ALLOWS ME TO ALWAYS, UM, FOLLOW IT COMPLETELY.
SO I THINK THINGS ARE QUESTIONS FOR THE AUDITOR ON PAGE FOUR, YOU'VE INCLUDED SOME HELPFUL HIGH CHARTS AND THEN SOME HELPFUL CHARTS LATER THAT SHOW THE FLOW OF FUNDING.
AND I WANT TO BE SURE I'M JUST UNDERSTANDING YOUR ASSERTIONS HERE.
SO WE'VE GOT $559 MILLION, UM, OF OUTGOING FUNDS.
WHAT YOU'RE DESCRIBING AS OUTGOING FUNDS AND TRANSFERS TO OTHER FUNDS RANGED FROM 71 TO 106 MILLION.
CAN THE AUDITOR WHO DID THIS EXPLAIN WHETHER THE 71 TO ONE OH SIX IS IN ADDITION TO FIVE, FIVE, NINE, OR IS A SUBSET OF FIVE, FIVE, NINE, ANYHOW, WE CAN'T HEAR YOU.
FIVE, FIVE NINE IS THE TOTAL FUND PER MONTH, TOTAL FUND FOR SIX YEARS.
AND THAT IT'S RANGE BETWEEN 71,000,206 MILLION.
SO IT PROVIDES THAT INFORMATION OF THIS RANGE IN THE REPORT.
I READ THAT SENTENCE PROPERLY.
AND SO, AS I UNDERSTAND THE CHART, AND I THINK YOUR CHART REALLY HELPED IS SUPER HELPFUL IN SHOWING THAT ALL WITH REGARD TO THE REVENUE THAT COMES IN, IT ALL EVENTUALLY FLOWS TO THE CONVENTION CENTER CAPITAL FUND.
SO TO THE EXTENT THAT THERE ARE, I MEAN, FROM THE BULK OF IT COMES FROM THE HOTEL MOTEL OCCUPANCY TAX, BECAUSE IN EFFECT WE DON'T COVER THE EXPENSE OF PUTTING ON CONVENTIONS WITH CONVENTION CENTER REVENUE.
FROM WHAT I REMEMBER FROM PREVIOUS CONVERSATIONS.
THIS REPORT IS ONLY FOR AUSTIN CONVENTION CENTER AND WE EXCLUDED THE OTHER FUNCTIONS OR THE REP SERVICES OF THE AUSTIN CONVENTION CENTER DEPARTMENT, WHICH INCLUDES LIKE PARKING GARAGES.
AND, UH, ALSO, UM, IS ONE MORE OKAY.
AND ALSO LIKE APARTMENT EVEN CENTER.
SO WE SCOPE THAT IT DOWN AND THE APARTMENT EVEN CENTER THE CENTER.
SO WE SCOPE IT OUT AND WE JUST FOCUSED ON THE CONVENTION CENTER AND WHAT THE REVENUE FLOWS THROUGH THAT.
BUT I WANT TO BACK UP REAL QUICK ON YOUR QUESTION, YOU MENTIONED THE CAPITAL FUND, IS THAT RIGHT? I SAW KATIE SHAKING HER HEAD.
IF I LOOK AT PAGE NINE, IT LOOKS LIKE, UM, THE CONVENTION THAT ALL OF, ALL OF, ALL OF THE, UM, IN ADDITION TO THE REVENUE FROM HOT GOING TO THE CONVENTION CENTER, I MEAN, ALL OF THEM EVENTUALLY FLOW.
IF THERE ARE EXCESS FUNDS ALL FLOW TO THE CONVENTION CENTER CAPITAL FUND, THERE'S A DIRECT LINK FROM THE CONVENTION CENTER OPERATING FUND THERE'S TRANSFERS TO THE CAPITAL FUND AS NEEDED THE CONVENTION CENTER TAX FUND GOES TO THE RENU PROJECT FUND, WHICH THEN THE BALANCE IS TRANSFERRED TO THE CAPITAL FUND.
SO IT SORT OF ALL FUNDS, IT LOOKS LIKE FLOW TO THE CONVENTION CENTER, CAPITAL FUND FUND BALANCES.
IF THERE ARE ANY, AT THE END OF EACH FISCAL YEAR WE'LL YES.
FLOW TO THE CAPITAL FUND, WHICH WAS CREATED BY THE, THE CITY COUNCIL IN 2018.
THAT IS CORRECT, BUT IT IS NOT ALL REVENUES.
IT IS JUST WHATEVER THE, WHATEVER IS THE FUND BALANCE IN THOSE FUNDS AT THE END OF EACH FISCAL YEAR.
UM, AND SO IN THE CASE OF THE OPERATING BUDGET, IT WOULD JUST BE HOTEL TAX.
SO I THINK MY BIG QUESTION IS, IS THE ONE THAT THE AUDITOR NOTED, UM, ON PAGE AND BY THE WAY, THANK YOU, COUNCIL MEMBER, UM, POOL AND COUNCIL MEMBER KITCHEN FOR, FOR REQUESTING THIS AUDIT BECAUSE IT, IT REALLY DOES, I THINK PRESENT THE INFORMATION IN A SLIGHTLY DIFFERENT
[01:50:01]
WAY THAN WE'VE HAD IT BEFORE.AND THANK YOU TO THE AUDITOR'S OFFICE, UM, FOR DOING IT ON PAGE SIX, THE CONCLUSION THAT, UM, THAT THE AUDITOR CAME TO, OR THE, THE INFORMATION THEY PROVIDED IS THAT, THAT OUR CONVENTION CENTER, UM, DOES NOT SEPARATE OR, OR SPENDS UNRESTRICTED REVENUE FIRST BEFORE RESTRICT, BEFORE SPENDING THE RESTRICTED REVENUE.
AND I GUESS I REALLY, THIS IS REALLY A QUESTION FOR THE CONVENTION CENTER.
WHY WOULD WE DO THAT WHEN SO MANY, SO MUCH OF THE FUNDING THAT COMES TO THE CONVENTION CENTER IS RESTRICTED AND HAS, YOU KNOW, PRETTY STRINGENT RESTRICTIONS.
AND I THINK THIS IS GOING TO GET TO THE QUESTION THAT I HAVE MORE GENERALLY ABOUT THE LEGACY HISTORIC PRESERVATION FUNDING THAT EXISTED WITHIN THE CONVENTION CENTER RESERVES.
AND WE'VE BEEN GOING BACK AND, UH, YOU KNOW, WE'VE HAD, UH, VARIOUS CONVERSATIONS WITH THOSE OF YOU AT THE CONVENTION CENTER ABOUT, ABOUT WHY THAT WAS SPENT FIRST IN ESSENCE.
AND I, I THINK THIS MAY GET TO THE ANSWER ABOUT WHY THAT IS SO CONVENTION CENTER STAFF, COULD YOU HELP US UNDERSTAND WHY YOU WOULD, WHY YOU WOULD SPEND THE UNRESTRICTED REVENUE FIRST WHEN YOU HAVE, IT'S SUCH A SMALL PORTION OF YOUR BUDGET, UH, IN TERMS OF REVENUE COMING IN.
SO YES, AND WE ACTUALLY DO NEED TO PROVIDE A POINT OF CLARIFICATION ON THAT AS WE WERE KIND OF DOING OUR REVIEW.
UM, IT SEEMS LIKE THERE WERE SOME THINGS GOT LOST IN TRANSLATION AS THERE WERE A BUNCH OF DIFFERENT FOLKS WHO TOUCHED THIS ON THIS ITEM.
SO WHEN, WHEN, WHEN WE WERE FIRST GOING THROUGH THIS, UM, OUR DEPARTMENT INTERPRETED UNRESTRICTED AS NON-HOTEL TAX REVENUE.
AND SO THAT'S WHAT SORT OF FOLLOWED THROUGH ON THE CHART.
AND SO, BECAUSE OF THE WAY THAT THE HOTEL TAX COMES IN, UM, AND THE FLOW OF FUNDS ASSOCIATED WITH OUR BOND COVENANTS, WE CAN, THE, THE HOTEL TAX MUST BE SPENT ON THE DEBT SERVICE FIRST.
THEN IT GOES TO MAINTAIN AND FUNDS THE RESERVES ASSOCIATED WITH THE DEBT.
AND THEN IT CAN BE SPENT ON CONVENTION CENTER USES NOT COVERED BY OTHER REVENUES.
SO IT IS NOT THAT WE'RE SPENDING OUR UNRESTRICTED REVENUE FIRST IT'S TECHNICALLY THAT WE'RE SPENDING OUR NON HOTEL TAX REVENUE FIRST, JUST BECAUSE OF THAT FLOW OF FUNDS.
UM, SO WE, AND AGAIN, IT KINDA GOES BACK TO THE FEE PER COST OF SERVICE OR THE COST OF SERVICE AND OUR FEES THAT WE CHARGE.
SO THE FACILITY, RENTAL CONTRACTOR REVENUE, ALL OF THOSE THINGS, THAT'S, WHAT'S SPENT FIRST, WHICH WHILE YOU ARE CORRECT ALL OF OUR REVENUE, THE VAST MAJORITY OF OUR REVENUE IS INCREDIBLY RESTRICTIVE.
IT JUST HAPPENS TO BE DIFFERENT LEVELS OF RESTRICTIONS THROUGHOUT.
UM, AND SO THAT WAS, UM, YOU KNOW, I THINK THAT CREATED SOME CONFUSION AND WE DO APOLOGIZE FOR THAT, BUT, UM, WILL YOU FOLLOW WHAT THE ACCOUNTING PRINCIPLES OF THE CITY REQUIRE? UM, AND, AND DIANA CAN PROBABLY SPEAK TO THAT IF, IF WE NEED, IF WE NEED ANY MORE CLARIFICATION.
I, I DO NEED MORE CLARIFICATION ON THAT, BECAUSE AGAIN, I THINK THOSE RENTAL, THE RENTAL FEES THAT ARE COMING IN, THOUGH, THEY'RE NOT ENOUGH TO COVER THE COSTS ARE UNRESTRICTED FUNDS IN ESSENCE, RIGHT? SO ARE THEY'RE, THEY'RE NOT, THEY'RE STILL RESTRICTED.
UM, BECAUSE WE, THEY ARE A FEE THAT WE CHARGE.
UM, AND, AND I THINK A LOT DEPARTMENT MIGHT BE, I THOUGHT THEY WERE GETTING ON ONBOARD PUPPY.
WE WERE ALLOWED TO CHARGE THE FEE, BUT WE CAN'T CHARGE THAT FEE.
THEN USE THE REVENUE FROM THAT FEE, WHICH WOULD BE THE FACILITY RENTAL REVENUE AND USE IT FOR SOMETHING.
IT HAS TO GO BACK TO THE THING FOR WHICH YOU CHARGED THE FEE.
UM, AND I THINK THAT THAT'S BEEN COMMUNICATED IN LEGAL MEMOS, AND WE CAN GET BACK WITH A LOT OF APARTMENTS THAT HAVE THAT KIND OF RECAP FOR YOU IF YOU'D LIKE.
UM, BUT IT IS NOT UNRESTRICTED REVENUE.
SO I WAS ALSO COMING AT THIS KIND OF FROM, FROM YOUR PERSPECTIVE OF COUNCIL MEMBER OF KNOWING, JUST KNOWING THAT THIS IS A CONFUSING AREA.
AND REALLY MY TEAM WAS ABLE TO DIG IN A BIT AND, AND THE CONVENTION CENTER STAFF WERE SUPER HELPFUL HELPING US UNDERSTAND THIS.
UM, BUT I GUESS THE SIMPLEST EXPLANATION TO ME THAT I THINK HELPS A LITTLE BIT WITH THIS RESTRICTED UNRESTRICTED AND KATIE, PLEASE, PLEASE CORRECT ME IF I'M INCORRECT ON THIS, BUT IS THAT BEFORE IT GETS TO THE CONVENTION CENTER OPERATING FUND, WE TRACK ALL THE MONEY AND INTO DIFFERENT POTS, RIGHT? WHATEVER THAT MONEY, WHATEVER THAT SOURCE OF THE MONEY IS, IT'S WHEN IT GETS INTO THE CONVENTION CENTER OPERATING FUNDS, THAT THAT TRACKING IS NOT, LET'S SAY AS EVIDENT OR NOT TIED MAYBE TO A SPECIFIC EVENT.
UM, AND SO IT'S HARD TO TEASE OUT ONCE IT GETS INTO THAT, ONCE IT GETS INTO OPERATIONS, ANY, WAS THAT A YEAH, I MEAN, WE, IT HAS THE, WHEN IT ENTERS OUR OPERATING BUDGET, IT IS ALLOWED TO BE SPENT ON THE OPERATIONS OF THE CONVENTION CENTER.
AND SO THEREFORE, AND DIANA, PLEASE JUMP IN AS WELL.
UM, AS I AM NOT AN ACCOUNTANT, UM, THERE IS, YOU KNOW, IT'S, UH, IT WOULD CREATE COMPLEXITIES FOR US TO SEPARATE IT OUT IN THAT WAY.
UM, AND WE KIND OF LOOKED AT SOME OF THE BUDGETS OF THE OTHER CITIES AND, AND DIDN'T REALLY SEE THAT THEY WERE REPORTING OUT ANY DIFFERENTLY THAN WE WERE, UM, FROM THEIR OPERATING BUDGET.
[01:55:01]
IT'S JUST THAT IF EACH OF THESE CITIES IS A LITTLE BIT DIFFERENT, YOU KNOW, SAN ANTONIO HAS THE ALAMODOME.UM, AND SO THEY'VE GOT, THEY'RE STILL SEPARATING, BUT, UM, COREY IS CORRECT.
WE TRACK OUR RESTRICTED REVENUE IS TRACKED SEPARATELY.
IT'S JUST AT THE BOTTOM OF THE FLOW OF FUNDS WHEN IT ENTERS THE, UM, CONVENTION CENTER OPERATING BUDGET THAT WE PUT ALL TOGETHER, BECAUSE IT IS ALL GOING TOWARD THE OPERATIONS OF THE CONVENTION CENTER.
I HAVE A QUESTION ON THAT IF I GO AHEAD, THANKS.
UM, AND NOT, AND THEN WE GO BACK TO COUNCILMEMBER TOBO OF COURSE, BUT I WANT TO DIG IN ON THAT BECAUSE THE FUNDS ARE DIFFERENTIATED BEFORE THEY ARE COMING OLD IN OPERATIONS.
SO MY QUESTION, WHAT ARE THE DIRECTIONS SURROUNDING THAT MONEY THAT PUTS THEM INTO THE OPERATIONS BUDGET? CAN THEY BE USED FOR MUST THEY BE ASSIGNED TO THE OPERATIONS BUDGET ONE DAY WHEN THEY FIRST ENTERED INTO THE ACCOUNTING SYSTEM FOR CONVENTION CENTER? SO I CAN, I THINK THIS IS DIANA THOMAS, INTERIM, DEPUTY CHIEF FINANCIAL OFFICER.
I CAN SPEAK A LITTLE BIT TO THE FLOW OF FUNDS.
SO WHEN WE RECEIVE THE HOTEL OCCUPANCY TAX FROM THE CUSTOMERS, WE ALLOCATE THAT BASED ON THE CITY'S ORDINANCE.
SO WHATEVER THAT ORDINANCE SAYS AT THAT TIME, YOU KNOW, BEFORE WE IMPLEMENTED THE 2%, UM, EXPANSION, WE HAD, YOU KNOW, 9% THAT WAS BEING COLLECTED IN TOTAL 2% WAS ASSOCIATED WITH THE VENUE.
SO WE BREAK THAT UP BASED ON THE WAY THE ORDINANCE TELLS US TO DISTRIBUTE THOSE FUNDS.
AND SO AT THAT POINT, AND NOW WE GIVE FOUR AND A HALF CENTS AS DESCRIBED IN THE PRESENTATION TO THE CONVENTION CENTER AND THAT FLOWS INTO THEIR TAX BOND.
THEN IT'S UTILIZED, AS KATIE MENTIONED TO MEET THE BOND REQUIREMENTS BEFORE IT MOVES INTO THE CONVENTION CENTER OPERATING FUND.
SO IT WAS THE ANSWER THEN YES, ORDINANCE REQUIRES THAT PARTICULAR REVENUE STREAM TO BE DEPOSITED INTO THE OPERATIONS.
I HAVE TO GO BACK AND REVIEW THE ORDINANCE, TELLS US HOW TO SPLIT IT.
IT TELLS US WHAT AMOUNT TO PUT INTO THE CONVENTION CENTER TAX FUND AND FROM WHICH SOURCES.
SO THAT, AND I CAN TAKE THIS OFFLINE.
I, YOU KNOW, RE WE'VE SEEN A NUMBER OF DIFFERENT FLOW CHARTS AND WE'VE GOTTEN DIFFERENT INTERPRETATIONS.
I I'M A LITTLE CONCERNED THAT THE INTERPRETATION OF RESTRICTED VERSUS UNRESTRICTED WAS NOT CAUGHT BEFORE NOW, SO THAT IT COULD BE MESSAGED OUT INTO THE COMMUNITY BECAUSE THERE WAS SOME PRESS, SOME RECENT PRESS COVERAGE ON THE RESTRICTED AND UNRESTRICTED.
AND WE, I DON'T THINK WE'VE REACHED THEM ON THAT.
UM, SO IT FEELS LIKE THAT QUESTION SHOULD HAVE BEEN ADDRESSED BEFORE, UH, THE SPECIAL AUDIT ROYCE WAS SENT BACK OUT TO US, BUT I'M HAPPY TO TAKE THE, THE FINANCE FLOW QUESTIONS OFFLINE, BECAUSE LIKE SOME OF MY COLLEAGUES ON THE DICE, I'M STILL NOT CERTAIN HOW IT'S WORKING.
I'VE SEEN A NUMBER OF DIFFERENT, UH, SCHEMA ON IT AND NEED TO GET A LITTLE BETTER CENTERING ON THAT.
AND THEN I'LL HAND IT BACK TO COUNCIL MEMBER TOVA THANKS FOR LETTING ME JUMP IN.
OH, I DIDN'T WANT TO MONOPOLIZE IT CAUSE I KNOW OTHERS HAVE QUESTIONS TOO.
UM, I THINK I ALSO NEED TO TAKE SOME OF THIS OFF THE DIETS, BUT EVENTUALLY IT HAS TO BE BACK ON THE DIETS.
I'VE REQUESTED AN EXECUTIVE SESSION THAT WE'VE HAD TO POSTPONE, UM, SEVERAL TIMES, BUT THE, I JUST WANT TO HIGHLIGHT, UM, HIGHLIGHT SOMETHING HERE.
WE'VE ALL TALKED TOGETHER, UH, AND PROBABLY INDEPENDENTLY ABOUT THE LEGACY FUNDING FOR HISTORIC PRESERVATION.
THIS AUDIT DOESN'T, DIDN'T REALLY LOOK AT AT, UM, THAT ELEMENT OF THE CONVENTION CENTER FUNDING THE LAST TIME.
IT'S MY UNDERSTANDING FROM MY CONVERSATIONS WITH THE CONVENTION CENTER FUNDING, THAT SOME OF THAT LEGACY FINDING THE MONEY THAT WE COULD HAVE PUT INTO HISTORIC PRESERVATION.
IF WE HAD DONE THAT, IF WE, IF, IF YOU LOOK AT A FULL 15% FOR THOSE PAST YEARS, UM, I HAVE RECEIVED WORD THAT THAT FUNDING IS NO LONGER AVAILABLE BECAUSE THE CONVENTION CENTER USES A FIRST IN FIRST OUT FUNDING MODEL, WHICH MAY OR MAY NOT RELATE TO THIS CONVERSATION AROUND UNRESTRICTED AND RESTRICTED FUNDING.
I, I CAN'T MAKE IT MATCH UP IN MY HEAD, BUT BASICALLY SOME FUNDING THAT, THAT, THAT, UM, IN MY OPINION, SHOULD BE AVAILABLE FOR HISTORIC PRESERVATION FUNDING AND, AND THUS ACQUISITIONS WE ARE BEING TOLD IS NOT AVAILABLE FOR SUCH, BECAUSE IT'S BEEN SPENT BECAUSE THEY SPENT, THEY USE AN ACCOUNTING PRINCIPLE TO SPEND THAT MONEY THAT COMES IN FIRST.
SO I THINK IT IS A QUESTION I'M JUST GOING TO HIGHLIGHT IT.
I DON'T THINK WE HAVE TIME TO GET INTO IT, BUT, UM, IT IS A QUESTION FOR OUR WHOLE DIOCESE BECAUSE IT IMPACTS THE AMOUNT OF
[02:00:01]
HISTORIC PRESERVATION DOLLARS THAT WE HAVE AVAILABLE TO US FOR ACQUISITIONS.AND I THINK WE HAVE A REAL NEED FOR ACQUISITIONS FUNDING RIGHT NOW.
SO THAT, THAT ACCOUNTING PRINCIPLE IS ONE THAT I THINK WE NEED TO TAKE UP AS A MATTER OF POLICY.
AGAIN, IT MAY OR MAY NOT RELATE TO THIS.
I CAN'T MAKE IT MATCH UP COMPLETELY IN MY HEAD.
I THINK THESE ARE IMPORTANT QUESTIONS.
UM, AND COUNCIL MEMBER PULL, YOU MAY BE THE LAST QUESTION HERE SO THAT WE CAN END THIS MEETING.
UM, SO I WANT TO JUST TO GET A QUICK ANSWER EITHER FROM DIANA THOMAS OR OF ANY NEW WHO I KNOW IS ON HERE WITH US, UH, SOMEONE FROM FINANCE TO ADDRESS HOW EASY OR HOW HARD IT MIGHT BE TO TRACK RESTRICTED AND UNRESTRICTED FUNDS THROUGH THESE ACCOUNTS.
SO I THINK IN GENERAL REALLY QUICKLY, WHAT WE WOULD LOOK AT IS AS THE MONEY FLOWS INTO THE CONVENTION CENTER, WE WOULD LOOK TO SEE, ARE THERE ANY ITEMS THAT HOTEL OCCUPANCY TAX CANNOT COVER? IS THERE ANY EXPENDITURES THAT ARE SITTING IN THE CONVENTION CENTER OPERATIONS THAT CAN'T BE COVERED BY HOTEL TAX? IF THERE ARE, THOSE WOULD BE COVERED BY THOSE OTHER REVENUES THAT KATIE MENTIONED EARLIER, BUT EVERYTHING ELSE WOULD THEN BE ELIGIBLE TO BE PAID FROM HOTEL TAX, UM, AS, AS A MATTER OF COURSE, BECAUSE IT MEETS THE REQUIREMENTS UNDER STATE STATUTE, AND THEN BEYOND THAT, HOW, HOW, WHEN IT FLOWS TO THE BOTTOM LINE, HOW IT'S HANDLED, WE WOULD NEED TO GET SOME ADDITIONAL GUIDANCE FROM LAW, I THINK, TO FULLY ADDRESS YOUR QUESTIONS.
AND I WOULD ONLY ADD TO THAT, THAT I, UM, I WANT TO MAKE SURE EVERYBODY COMFORTABLE WITH THE FACT THAT WE DO TRACK RESTRICTED UNRESTRICTED FUNDS.
IF YOU THINK ABOUT THE AIRPORT, ALL KINDS OF RESTRICTIONS ON THOSE FUNDS.
AND WE TRACK THOSE INDEPENDENTLY SO THAT WE KNOW THAT ALL AIRPORT FUNDS ARE BEING USED WITHIN THE BOUNDARIES OF THE AIRPORT, ALL KINDS OF RESTRICTIONS ON HOTEL TAXES.
AND WE FEEL WE CAN TRACK THAT WE HAVE DIFFERENT FUNDS FOR HISTORIC PRESERVATION AND CULTURAL ARTS, WHICH IS BY CITY ORDINANCE THAT SAYS HOW WE'RE GOING TO ALLOCATE THOSE DOLLARS AND CAN TELL YOU WITH ABSOLUTE CERTAINTY, HOW MUCH MONEY IS GOING INTO THE BUCKET.
AND IT'S BEING USED, UM, WITH THE RESTRICTIONS THAT HAVE BEEN PLACED UPON IT, NOT ONLY THE RESTRICTIONS COUNCILS SET UP, BUT ALSO STATE LAW RESTRICTED.
I THINK HERE IT'S REALLY A MATTER OF GRANULARITY.
AND I WOULD REALLY LIKE TO HAVE THE TIME TO SPEAK TO SOME OF THE FOLKS AT SAN ANTONIO AND FORT WORTH, AND EACH BIN THAT THE AUDITOR SPOKE TO TO BETTER UNDERSTAND THE GRANULARITY, THEY'RE TRACKING THEIR DIFFERENT RESTRICTIONS.
AND IF THERE'S SOMETHING WE CAN LEARN FROM THAT AND DO DIFFERENTLY, WE CERTAINLY WOULD LIKE TO, THAT SOUNDS GOOD TO ME.
AND THEN JUST THE LAST POINT THAT I'D LIKE TO MAKE, UM, OUR INTERNAL POLICY AROUND SPENDING UNRESTRICTED FUNDS BEFORE RESTRICTED FUNDS.
UM, I DON'T KNOW IF YOU CAN JUST QUICKLY EXPLAIN WHY POLICY IS PREFERRED, HOW WE NORMALLY HANDLE THINGS, AND I GUESS THAT WOULD BE IT.
I THINK THAT, THAT THERE'S A MISCOMMUNICATION IN HOW WE HANDLE THINGS BECAUSE IN GENERAL, AS WE STAYED IN OUR END REPORT IS A SPENDS ITS MOST RESTRICTIVE FUNDS FIRST BECAUSE WE HAVE TO MEET ALL THE REQUIREMENTS AND THE RESTRICTIONS THAT ARE INVOLVED AND THEN WE MOVED TO UNRESTRICTED.
BUT I THINK AS YOU LOOK AT THE VARYING STAGES OF RESTRICTIONS THAT THE CONVENTION CENTER IS LOOKING AT IN REVENUE STREAM, I THINK THEY WERE LOOKING AT WHAT'S ABSOLUTELY LEFT AT THE VERY END.
MAYBE I COULD SPIT FIRST BECAUSE IT'S, AGAIN, THOSE, THOSE, UM, REVENUES ASSOCIATED WITH THE EVENTS THEMSELVES.
AND SO THOSE, THOSE MONIES ARE GETTING SPENT WHEN THE EVENTS WERE BEING HELD.
UM, AND WHEN THOSE FUNDS WERE COMING IN, BUT I I'M ONLY SPECULATING AS TO THE EXPLANATION AND RATIONALE FOR THAT.
BUT THE CITY AS A WHOLE DOES LOOK TO SPEND ITS RESTRICTIVE MONIES FIRST, SO THAT WE'RE, DON'T HAVE TO WORRY ABOUT HAVING MONEY THAT NOW WE HAVE NO WAY OF MEETING THE SPENDING REQUIREMENTS OF THAT MONEY AND THE MONEY THAT'S COMING IN DURING ANY EVENT IS HELPING TO MOVE THE, UM, THE BALANCE SHEET FOR THAT PARTICULAR EVENT FROM THE RED INTO THE BLACK, BECAUSE MY UNDERSTANDING IS WE, UH, CARRY A DEFICIT IN OPERATIONS FOR THE CONVENTION CENTER EVERY YEAR.
AND WE'VE BEEN DOING THAT, UM, FOR A SIGNIFICANT NUMBER OF YEARS.
I THINK THAT IT'S THE BUSINESS MODEL OF CONVENTIONS, CONVENTION CENTERS ACROSS THE NATION.
I, THAT I WANT TO, I JUST WANT TO HIGHLIGHT THAT BECAUSE THAT HAS BEEN AN ISSUE OF CONCERN PEOPLE IN THE COMMUNITY.
THEY DON'T UNDERSTAND THAT MODEL.
AND TO THE EXTENT THAT WE CAN ADJUST THAT OR FIX THAT OR DO SOMETHING ABOUT THAT, I THINK THAT WOULD BE HELPFUL TO HELP WITH THE SUPPORT AND TRUST FOR CONVENTION CENTER ACTIVITIES IN THE COMMUNITY.
I GET THAT THAT'S HOW THE INDUSTRY OPERATES, BUT THAT'S NOT A GOOD ENOUGH ANSWER, HONESTLY, BECAUSE IT'S A CLOSED SYSTEM AND YOU DON'T GET ANY
[02:05:01]
FRESH IDEAS IN IF YOU JUST KEEP DOING IT, HOW EVERYBODY ELSE IN THE SAME CATEGORY HAS BEEN DOING IT ALL ALONG AND COUNCIL MEMBER, IF I MAY, IT'S NOT, YOU KNOW, IT ISN'T SIMPLY THAT IT'S JUST, BUT EVERYBODY ELSE IS FEELING.IT ALLOWS US TO REMAIN COMPETITIVE IN AN INCREDIBLY COMPETITIVE MARKET.
UM, WE LOSE BUSINESS, YOU KNOW, A LOT, UM, TO SOME CITIES THAT
UM, THE OTHER PIECE OF IT IS THAT THE ANALYSIS THAT GOES INTO IT SEEKS TO MAXIMIZE HOTEL TAX, WHICH BENEFITS MORE THAN THE CONVENTION CENTER, RIGHT? IT, IT MAKES THE, IF WE CAN INCREASE HOTEL TAX COLLECTIONS, THAT MEANS THIS WORD PRESERVATION GETS MORE, IT MEANS CULTURAL ARTS GETS MORE, IT MEANS LIVE MUSIC GETS MORE.
SO THAT'S, THAT'S REALLY WHAT THE CRUX OF OUR BUSINESS MODEL SEEKS TO DO IS TO ALLOW US TO REMAIN COMPETITIVE AND TO MAXIMIZE THE HOTEL TAX COLLECTIONS IN THE CITY OF AUSTIN.
AND WE JOINED YOU IN THAT MISSION IN THAT EVENT, THAT INTEREST.
AND I THINK AT THIS POINT, FOR ME, IT'S A MATTER OF CLARITY AND MESSAGING AND, UH, WHAT THOSE FLOWCHARTS THINKS.
HOPEFULLY, UM, STAFF CAN CONTINUE TO WORK WITH, UH, COUNCIL MEMBERS PULL AND TOW VOTES.
I GET, UM, THIS PRESENTED CLEARLY, AND IF WE NEED TO PUT AN ADDENDUM TO THAT SPECIAL PROJECT, SO WE DON'T MISREPRESENT THINGS, THEN IF THAT'S APPROPRIATE, IF THAT'S AN APPROPRIATE STEP, WHICH IT MIGHT NOT BE WITH AUDITING STANDARDS, THAT, UM, IF IT IS APPROPRIATE, WE SHOULD CONSIDER THAT.
UM, WE PACKED IN A LOT TODAY AND I APOLOGIZE FOR THE TECHNICAL DIFFICULTIES, BUT HOPEFULLY STAFF WILL MAKE SURE THAT IN THE FUTURE, ALL OF OUR COLLEAGUES HAVE THE RIGHT, UM, LINKS.
AND MAYBE IF WE'RE HAVING GUESTS, WE CAN PROVIDE, UM, AN EXTRA INFORMATION ABOUT TAKING THE NEXT STEP TO CLICK.
UH, THIS IS THE AUDIT AND FINANCE COMMITTEE.
I OVERHEARD A CONVERSATION ONE SUMMER AFTERNOON.