Jan 08, 2026 Budget & Finance Commission

[00:00:04]

COULD WE HAVE A ROLL CALL, PLEASE? COMMISSIONER MARIN?

[A. CALL MEETING TO ORDER]

READY? I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA.

AND TO THE REPUBLIC FOR WHICH IT STANDS. ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL.

COULD I HAVE A MOTION TO APPROVE THE ORDER OF AGENDA?

[D. APPROVE ORDER OF AGENDA]

AYE. BLUE FOLDER ITEMS. WE HAD AT LEAST ONE. HAVE WE HAD, DO WE HAVE MORE THAN ONE?

[E. BLUE FOLDER ITEMS - ADDITIONAL BACK UP MATERIALS]

OKAY. AND COULD I HAVE A MOTION TO APPROVE THE CONSENT CALENDAR?

[F. CONSENT CALENDAR]

ARE THERE ANY EXCLUDED CONSENT CALENDAR ITEMS? I DON'T THINK THERE ARE. MOVING ON TO H. DO WE HAVE PUBLIC PARTICIPATION ON NON-AGENDA ITEMS?

[H. PUBLIC PARTICIPATION ON NON-AGENDA ITEMS]

GOOD EVENING EVERYONE. HAPPY NEW YEAR, YOU TWO.

MY NAME IS MARIA LARISSA YASOL. I'M A REAL ESTATE PROFESSIONAL.

I'M HERE TO TALK ABOUT THE CONCERNS FINANCE OF OUR CITY.

SO LET ME START. AS YOU ALL KNOW OUR CURRENT POPULATION IS OVER 68,075. OWNER OCCUPIED 15,233.

RENTER OCCUPIED 13,314. SO WE HAVE ABOUT 5347 SOME SORT OF CONSIDERED BALANCE? NOT REALLY. SO WITH THAT SAID, WHEN WE EVALUATE HOUSING THROUGH A FINANCE LENS, OWNERSHIP UNITS CONSISTENTLY OUTPERFORM RENTAL UNITS IN LONG TERM REVENUE STABILITY AND SERVICE EFFICIENCY.

A 2700 UNIT, RENTAL EXPANSION, ONLY RENTAL PRODUCES AN ANNUAL DEFICIT, WHILE THE SAME NUMBER OF OWNERSHIP UNITS GENERATES OVER 13 MILLION PER YEAR. THAT'S A LOT OF MONEY. SO OVER TEN YEARS, THAT DIFFERENCE SURPASSES $150 MILLION. THIS IS NOT ABOUT EMOTION OR IDEOLOGY, ITS BALANCE SHEET REALITY.

A FISCAL HEALTHY CITY MUST BALANCE RENTAL HOUSING WITH REAL OPPORTUNITIES FOR OWNERSHIP.

IS THERE ANY QUESTIONS? MAINLY, YOU KNOW, ONCE THE COASTAL LAND IS COMMITTED TO PERMANENT RENTAL, THE CITY FORFEITS ITS HIGHEST LONG TERM FISCAL POTENTIAL.

SO I URGE YOU TO BE PRO TITLE HOLDERS. WE NEED TO RAISE STAKEHOLDERS IN OUR COMMUNITY. IT BRINGS WEALTH, MONEY INTO OUR COMMUNITY.

IT DOESN'T TAKE IT OUT. SO LET'S KEEP IT. THANK YOU.

THANK YOU.

[00:05:06]

[J. ITEMS FOR DISCUSSION PRIOR TO ACTION]

SOLOMON, REDONDO BEACH CITY TREASURER. WE HAD PLANNED ON BRINGING THIS REPORT TO YOU A LITTLE BIT EARLIER.

YOUR AGENDA AND SCHEDULE BRINGS US TO TONIGHT.

THIS IS FOR THE FIRST QUARTER OF THE FISCAL YEAR 2025.

WALKING THROUGH PART OF THE PRESENTATION WITH US.

TONIGHT WILL BE RICK PHILLIPS, WHO'S ON THE LINE WITH US.

HE IS OUR REPRESENTATIVE FROM MEEDER ADVISORY.

AND I ALSO HAVE A NILESH MEHTA HERE WITH US TONIGHT TO HELP US GO THROUGH THIS REPORT.

SO AT THIS POINT, I'LL TURN IT OVER TO NILESH.

GOOD EVENING, COMMISSIONERS AND RESIDENTS. THANK YOU FOR JOINING.

RICK, CAN YOU HEAR US? JUST WANTED TO TEST. RICK, YOU SHOULD BE ABLE TO SPEAK NOW. CAN YOU HEAR ME NOW? YES, WE CAN HEAR YOU.

THANK YOU. ALL RIGHT. CAN YOU PRESENT THE POWERPOINT OR THE SCREEN TO THE.

PERFECT. THANK YOU. SO, YEAH, AS EUGENE MENTIONED, THIS IS FOR QUARTER ONE, WHICH IS JULY 2025 TILL SEPTEMBER 30TH, 2025. SO WE'RE A COUPLE MONTHS BEHIND. BUT WE'LL JUST GO OVER IT.

TODAY THE QUARTERLY ADMIN REPORT, WHICH IS INCLUDED IN YOUR PACKET, INCLUDES THE PORTFOLIO SUMMARY, THE INVESTMENT REPORTING GUIDELINES, THE REPORT BY MEEDER INVESTMENT, WHICH INCLUDES A PORTFOLIO SUMMARY, INVESTMENT POLICY COMPLIANCE, INVESTMENT ACTIVITY REPORT AND FINALLY, THE ECONOMIC AND MARKET UPDATES.

THE POWERPOINT PRESENTATION THAT WE'RE PRESENTING INCLUDES THE INVESTMENT REPORTING GUIDELINES AND OBJECTIVES, POLICY COMPLIANCE, QUARTERLY PERFORMANCE, CASH FLOW ANALYSIS, MATURITY, DISTRIBUTION, TRADING ACTIVITY, AND FINALLY, FISCAL IMPACT. AS YOU MAY HAVE ALL SEEN, THIS KEY INVESTMENT OBJECTIVES FOR MUNICIPAL INVESTING THE CITY TREASURER MAINTAINS THE CITY'S CASH FLOWS WHILE EARNING A COMPETITIVE RATE OF RETURN ON THE INVESTMENTS WITHIN THE CONSTRAINTS OF THE CITY'S INVESTMENT POLICY AND STATE LAW.

AS YOU KNOW, IT'S SAFETY, WHICH IS PROTECTION OF PRINCIPAL.

LIQUIDITY, WHICH IS PROVIDING NECESSARY LIQUIDITY TO COVER BOTH ONGOING AND UNEXPECTED CASH NEEDS.

AND FINALLY, YIELD, WHICH IS MAXIMIZING MAXIMIZING EARNINGS, RECOGNIZING NEED FOR SAFETY AND LIQUIDITY, AND SUBJECT TO RESTRICTIONS SPECIFIED BY STATE STATUTES AND LOCAL GOVERNING BODY.

ALWAYS REMEMBER WHOSE MONEY IT IS AND ACT ACCORDINGLY IN A RESPONSIBLE STEWARDSHIP CAPACITY.

AND INVESTMENT MANAGERS OBJECTIVE IS TO EARN A REASONABLE RATE OF RETURN ON THE CITY'S INVESTMENTS WHILE PRESERVING CAPITAL IN THE OVERALL PORTFOLIO.

IT SHOULD NEVER BE THE INVESTMENT MANAGERS GOAL TO EARN MAXIMUM RETURNS ON THE CITY'S PORTFOLIO, AS THIS WOULD EXPOSE THE CITY TO AN UNACCEPTABLE LEVEL OF RISK.

FAILURES IN PUBLIC INVESTING OCCUR WHEN POLICIES ARE NOT CLEAR, THEY'RE INAPPROPRIATE, THEY'RE NOT FOLLOWED, OR OVERSIGHT IS INADEQUATE. KEY QUESTIONS TO ASK IS, DO YOU REGULARLY REVIEW THE INVESTMENT POLICY? DO YOU UNDERSTAND THE INVESTMENT PROGRAM? DO YOU RECEIVE AND REVIEW INVESTMENT REPORTS? ARE THEY CLEAR, CONCISE AND READABLE? AND, DO YOU FULLY UNDERSTAND THEM? THIS SLIDE GOES OVER THE POLICY COMPLIANCE. AS YOU SEE ON THE FARTHEST RIGHT COLUMN, YOU'LL SEE THAT WE WERE IN COMPLIANCE, EXCEPT FOR ONE ITEM, WHICH IS THE CORPORATE ISSUER COMPLIANCE.

YOU'LL SEE THE POLICY LIMIT IS 5.0 AND THE ACTUAL VALUE IS 5.5.

I'LL HAVE EUGENE EXPLAIN THE REASON FOR THAT.

THANK YOU, NILESH. SO FOR MANY OF YOU, FOR MR. TURNER, THIS WOULD BE OUR FIRST REPORT TO YOU. BUT FOR MANY OF YOU SEEN THIS REPORT BEFORE.

THE INFORMATION CONTAINED IN THIS REPORT IS GENERATED BY A SYSTEM CALLED CLEARWATER.

AND CLEARWATER HANDLES THE MANAGEMENT OF ALL OF THESE ASSETS FOR THE CREATION OF THIS REPORT.

WHEN CLEARWATER SEES SOMETHING LIKE THIS, AND THIS IS SPECIFICALLY REFERRED TO A CORPORATE ISSUE THAT WE HAVE FOR, EXCUSE ME, A CATERPILLAR BOND IN THE AMOUNT OF $4 MILLION.

IT SHOWS NONCOMPLIANT BECAUSE OF THE BALANCE IN OUR TOTAL ASSETS UNDER MANAGEMENT.

BUT THE REAL GUIDELINE, THE RULE ACCORDING TO THE GFOA, ACCORDING TO OUR INVESTMENT POLICY, ACCORDING TO GOVERNMENT CODE, IS, ARE WE IN COMPLIANCE AT THE TIME OF PURCHASE? AND FOR THIS PURCHASE, WHICH WAS DONE IN AUGUST OF 2024, WE WERE IN COMPLIANCE WITH THIS

[00:10:03]

IT ONLY RECOGNIZES THE CONCENTRATION NOW IN OUR PORTFOLIO.

SO ACCORDING TO OUR INVESTMENT POLICY, ACCORDING TO GFOA, ACCORDING TO GOVERNMENT CODE, SINCE THIS THIS COMPLIANCE ITEM IS AT THE TIME OF PURCHASE.

THIS CONCENTRATION WE ARE IN COMPLIANCE. BUT CLEARWATER DOES NOT RECOGNIZE THAT AS AN OPTION WITHIN THEIR SYSTEM.

SO WE WANTED TO HIGHLIGHT THIS AND EXPLAIN TO YOU THE COMMISSIONERS AS TO WHY YOU'RE SEEING THAT AND LET YOU KNOW THAT WE DEFINITELY FLAGGED IT DEFINITELY LOOKED INTO THE REASON BEHIND IT. WE CONSIDERED THE IDEA OF PERHAPS DOING A SWAP, AND WE DID A SWAP ANALYSIS, THAT WOULD REAGGREGATE OUR CONCENTRATION.

BUT AFTER DOING THE SWAP ANALYSIS, IT WAS NOT IN THE BEST INTEREST OF THE CITY TO DO SO.

AND SINCE WE WERE IN COMPLIANCE, WE LEFT IT AS IT WAS.

BUT I WANTED TO HIGHLIGHT TO YOU AND EXPLAIN THIS ITEM TO YOU ALL.

DOES THE INVESTMENT POLICY STATEMENT ADDRESS THIS AND ALLOW THE OVERAGE TO CONTINUE IN A CASE LIKE THIS? IT DOESN'T SPECIFICALLY TALK ABOUT THE OVERAGE CONTINUING.

WE COULD CHANGE. IT'S A SECTION 21 OF OUR INVESTMENT POLICY.

IT SPEAKS TO THE CONCENTRATION AND THE TIMES OF PURCHASE.

SO IF WE WERE TO THINK ABOUT THE VAGARIES OF OUR INVESTMENT PORTFOLIO, THE ASSETS UNDER MANAGEMENT.

IF WE START TO CHANGE IN AND TRADE OUT AND START TO BECOME KIND OF ACTIVE TRADERS TO LADDER IN, IN A SITUATION LIKE THAT, IT MAY NOT WORK TO OUR BENEFIT.

WE REALLY WANT TO DO THAT WHEN IT'S IN THE CITY'S BEST INTEREST, OR WHEN WE'RE DOING THAT TO COMPLY WITH GOVERNMENT CODE AND INVESTMENT POLICY.

SO I'M TOTALLY COMFORTABLE WITH THIS. I WAS JUST CURIOUS ABOUT WHETHER THE INVESTMENT POLICY STATEMENT ADDRESSED IT.

STAYING, GETTING A HALF PERCENT OVER IN ONE OF THOSE FOR A SHORT PERIOD OF TIME DOESN'T BOTHER ME.

I DON'T THINK IT SHOULD BOTHER US. AND IN THE SECOND QUARTER WE'LL SEE THAT CHANGE.

WE GET PROPERTY TAXES THAT CAME IN HERE IN IN DECEMBER AND THAT THAT WILL CHANGE THE TOTAL ASSETS UNDER MANAGEMENT, WHICH WILL CHANGE THAT PERCENTAGE OF CONCENTRATION.

OH COUNCIL, EXCUSE ME, COMMISSIONER TURNER, YOU HAD A QUESTION FOR ME, PLEASE? IS THERE SOMEWHERE IN THE INVESTMENT POLICY STATEMENT THAT SAYS THE FREQUENCY OR HOW OFTEN OR WHEN REBALANCING WILL TAKE PLACE.

IS IT ON AN ANNUAL BASIS THAT WILL BE THAT WE WILL GO BACK WITHIN THE THE VALUE, THE ACCEPTABLE VALUE? I DON'T BELIEVE A REBALANCING OF PORTFOLIO IS CONTAINED WITHIN THE INVESTMENT POLICY.

THE INVESTMENT POLICY. TENANTS BEING SAFETY, LIQUIDITY AND YIELD DON'T REQUIRE US TO REBALANCE UNLESS WE ARE OUT OF COMPLIANCE FOR SOME REASON. AND IN THIS CASE, IF WE WERE, LET'S SAY THAT THE RULING, THE RULE ACCORDING TO THE CODE WAS IT'S AT NOT AT THE TIME OF PURCHASE, BUT AT ANY POINT YOU FIND YOUR CONCENTRATION TO EXCEED, THEN WE WOULD NEED TO REBALANCE.

SO I SUPPOSE FROM THAT PERSPECTIVE IT WOULD BE A REBALANCING REQUIREMENT.

OKAY. AT THE POINT OF WHICH WE FOUND OURSELVES TO BE OUT OF, IF WE EVER FOUND OURSELVES TO BE OUT OF COMPLIANCE.

RIGHT, SO MY UNDERSTANDING OF ALLOCATIONS IS THAT IT'S SUPPOSED TO ALIGN WITH A CERTAIN RISK TOLERANCE RIGHT, ASSOCIATED WITH WHATEVER THE CLIENT MAY BE. SO IF WE ARE WITHIN THE APPROPRIATE VALUES AT TIME OF PURCHASE, FANTASTIC. BUT IF AFTER THE FACT WE GROW TO BE OUT OF BALANCE AND THERE'S NO REBALANCING, DOESN'T THAT MEAN THAT WE'RE OVER TIME EXPOSING OURSELVES TO MORE UNNECESSARY RISK THAN WAS ORIGINALLY PLANNED OUT TO BE? WELL, EVERYTHING IS A MEASURE OF RISK, CERTAINLY.

AND IT'S A GOOD QUESTION AND A GOOD POINT. IN THIS CASE, THE RISK OF BEING BALANCED IN EXCESS CORPORATE CONCENTRATION IS ESSENTIALLY CREDIT RISK.

SO WE MANAGE THAT AGAINST OUR OTHER REQUIREMENTS, SAFETY OR LIQUIDITY IN TAKING THAT RISK OF YIELD AND BEING IN CORPORATES.

IT WOULD BE, THAT'S WHY WE PERFORM A SWAP ANALYSIS SO WE CAN IF WE'RE TAKING TOO MUCH CREDIT RISK, AS IT WOULD LOOK LIKE IN A SCENARIO LIKE YOU'RE DESCRIBING, THEN YES, WE WOULD CONSIDER REBALANCING.

WE DIDN'T CONSIDER IT TO BE ENOUGH OF A THAT GREAT A RISK IN THIS SITUATION.

ARE THEIR BUILT IN ACCEPTABLE MARGINS IN THE INVESTMENT POLICY STATEMENT THAT SAYS IF WE WERE TO GROW OUT OF BALANCE TO A CERTAIN PERCENTAGE, IT'S STILL CONSIDERED TO BE ACCEPTABLE, OR AT WHAT POINT DOES IT DRAW CONCERN? IT DRAWS CONCERN. WE DO HAVE PERCENTAGE REQUIREMENTS WITHIN THE INVESTMENT POLICY.

WE CAN ONLY INVEST UP TO 20%, I BELIEVE IT IS FOR CORPORATES.

[00:15:03]

GOT IT. OKAY. THANK YOU FOR EXPLAINING THAT. THANK YOU. YOU SAID YOU HAD DONE A SWAP ANALYSIS, RIGHT? YES, SIR. AND GO INTO THAT JUST A LITTLE BIT IF YOU WOULD, WHAT DID THE SWAP ANALYSIS? WHAT WE WOULD DO IN A SITUATION LIKE THAT IS WE WOULD CONSIDER SELLING OUT ALL OR A PORTION OF THAT SECURITY IN ORDER TO BRING OUR CONCENTRATION BELOW THAT 5%. SO WE GO OUT INTO THE MARKETPLACE AND SEE WHAT AVAILABLE COUPONS ARE OUT THERE, WHAT AVAILABLE PRODUCTS ARE OUT THERE, WHETHER THEY BE CORPORATES, WHETHER THEY BE TREASURIES, WHETHER THEY BE AGENCIES AND ANALYZE SELLING OUT OF THIS SECURITY, EITHER ALL OR IN PART EARLY. AND WHAT KIND OF IMPACT THAT WOULD REALIZE.

AND THAT'S WHAT WE DID IN THIS CASE. OKAY, THANKS.

SO THE FOLLOWING SLIDE GOES OVER THE COMPARISON OF INVESTMENT PORTFOLIO FOR FISCAL YEAR 25-26.

OBVIOUSLY THIS IS THE FIRST QUARTER. SO THERE ISN'T MUCH TO COMPARE WITH THE FOLLOWING QUARTERS.

BUT AS WE MOVE FORWARD THROUGH THE YEAR YOU'LL SEE THE COMPARISON.

JUST A LITTLE BRIEF OVERVIEW. CASH AT THE TIME, AT THE END OF THE FIRST QUARTER WAS ALMOST 12 MILLION.

WE HAD A MONEY MARKET BALANCE, WHICH IS THE US BANK MONEY MARKET, NOT THE CAMP, BECAUSE I HAD BEEN, THERE WAS A REQUEST TO SEPARATE THE TWO. SO HERE THE MONEY MARKET BALANCE SHOWS AS 9.3 MILLION AND THE FOLLOWING IS 12.4 MILLION, WHICH IS SPECIFICALLY IN CAMP. AND THEN YOU'LL SEE LOCAL AGENCY, INVESTMENT FUND 108,000 FEDERAL AGENCY ISSUES, ALMOST 25 MILLION. ZERO IN COMMERCIAL PAPER. MEDIUM TERM NOTES 10.5 MILLION.

AND ZERO IN BANK CDS. THE TREASURIES TOTALED ABOUT 16 MILLION FOR A TOTAL INVESTMENT PORTFOLIO OF 73 MILLION.

AT THE TIME, AT THE END OF SEPTEMBER 2025, THE WEIGHTED AVERAGE MATURITY WAS 0.75.

THE PORTFOLIO'S EFFECTIVE RATE OF RETURN WAS 3.23.

AT THE TIME LAIF YIELD WAS 4.21 AND THE YIELD ON THE BENCHMARK WAS 4.34.

YES, A COUPLE OF QUESTIONS ON THAT SHEET. YOU'VE GOT 73 MILLION AT THE END OF THE QUARTER.

THAT'S SUBSTANTIALLY DOWN FROM THE FIRST QUARTER'S FOR FY 23, 24 AND 25.

WHAT'S AT PLAY THERE? IS IT, WHY THE REDUCTION? THERE'S A NUMBER OF DIFFERENT FACTORS, AND IT'S SOMETHING THAT WE'VE BEEN DISCUSSING QUITE A BIT INTERNALLY WHERE SAY IN THE LAST FEW YEARS WE HAD FUNDS THAT WERE COMING INTO THE CITY VIA ARPA FUNDS.

AFTER COVID, WE HAD LEASE REVENUE BOND WHEN WE REFINANCED OUR DEBT IN 2021 TO PAY OFF OR PAY UP TO OUR PENSION OBLIGATIONS.

WE HAD ADDITIONAL MONIES AFTER THAT IN SURPLUS, IT WAS ABOUT $13 MILLION.

WE HAD OTHER GRANT FUNDS AND OTHER FUNDS THAT CAME IN TO THE CITY.

SO THOSE FUNDS HAVE BEEN SPENT ON A VARIETY OF DIFFERENT THINGS, INCLUDING CIP PROJECTS, WHICH YOU'VE DISCUSSED AT LENGTH HERE AT THE COMMISSION LEVEL.

AND YOU'LL BE DISCUSSING AGAIN TONIGHT. SO WHEN WE SPEND DOWN THOSE ARPA FUNDS, WHEN WE SPEND DOWN THOSE OTHER FUNDS THAT CAME IN THAT WERE ONE TIME FUNDS, AND WHEN WE SPEND DOWN CIP PROJECTS AND WE'RE FUNDING THOSE, THEN YOU SEE THE TOTAL ASSETS UNDER MANAGEMENT BEGIN TO REDUCE.

THERE IS A COMPONENT OF THIS THAT WE'RE ANALYZING RIGHT NOW, WE'RE WORKING WITH THE CITY FINANCE DEPARTMENT AND CREATING A MORE ROBUST, I SHOULDN'T SAY, MORE ROBUST MORE CASH FLOW ANALYSIS TO SEE WHERE OUR REVENUES AND EXPENDITURES ARE AND SEE WHERE THE DELTAS AND THE POSITIVES ARE COMING IN. BUT AGREE WITH YOU. THIS IS THE LOWEST POINT WHERE WE'VE BEEN IN OUR FIRST QUARTER ASSETS UNDER MANAGEMENT SINCE 2013-2014. AROUND THERE. AND WHEN YOU CONSIDER THE IMPACT OF INFLATION THEN IT'S AN EVEN BIGGER DELTA.

SO THAT IS DEFINITELY SOMETHING THAT HAS RAISED OUR CONCERN IN OUR OFFICE.

AND WE'VE BEEN IN COMMUNICATIONS WITH THE CITY MANAGER'S OFFICE AND THE FINANCE OFFICE IN TRYING TO DETERMINE WHAT EXACTLY IS HAPPENING WITH THOSE BALANCES AND MONITORING IT VERY CLOSELY. AND TO YOUR POINT, COMMISSIONER, I'VE INCLUDED THE 24-25 FISCAL YEAR PERFORMANCE,

[00:20:01]

THE INVESTMENT PORTFOLIO WAS AT 93 MILLION. AND THEN, OF COURSE, YOU'LL SEE AT THE FOURTH QUARTER, JUST THE QUARTER BEFORE THIS ONE, IT WAS AT ALMOST 91 MILLION.

OKAY, IF THERE'S ANY I'M SORRY. GO AHEAD COMMISSIONER MARIN. 20 MILLION DELTA YEAR OVER YEAR.

WHAT? I GUESS WITH YOUR ANALYSIS, WHAT WAS DRIVING IT? WAS IT OUR EXPENDITURES BASED ON FUNDS WE HAD IN CIP PROJECTS, OR WAS IT REVENUES COMING IN THAT WERE SHORT? NO, I THINK A LOT OF IT WAS THOSE ONE TIME FUNDING APPROPRIATIONS FROM ARPA AND FROM THE LEASE REVENUE BONDS.

BUT WE COMPLETED A LOT OF CIP PROJECTS AND A LOT OF THAT COMES THROUGH.

THERE ARE SOME OTHER THINGS THAT IMPACT THIS THAT ARE AFFECTED BY A FEW MILLION DOLLARS HERE OR THERE.

WE'LL HAVE A LAWSUIT JUDGMENT THAT COMES IN AND WE'LL HAVE TO PAY IT OUT.

WE MIGHT GET REIMBURSED FOR THAT. SO CURRENTLY WE HAD A LAWSUIT THAT WAS PAID OUT, THE CITY PAID OUT, AND WE'RE AWAITING REIMBURSEMENT. THERE ARE TIMES WHERE WE WILL SPEND FUNDS IN SUPPORT OF A CIP, AND THE GRANT FUNDING NEEDS TO BE RECOVERED. THERE ARE DIFFERENT FACTORS IN THAT.

WE HAVE FLUCTUATIONS AND WE HAD CHANGES IN WHEN WE PAID THINGS.

SO IN THE PAST WE MIGHT HAVE BILLS THAT WERE DUE IN SEPTEMBER OR OCTOBER, OR WE MIGHT HAVE BILLS THAT WERE DUE IN MAY AND JUNE.

AND SOME OF THOSE HAVE RECONFIGURED. THAT'S A FEW OF THE DIFFERENT REASONS OVER THE YEARS WHY YOU MIGHT SEE FLUCTUATIONS IN THAT.

BUT I THINK IT'S THE CIP AND SOME OF THOSE ONE TIME APPROPRIATIONS.

SO IS THE 73 MILLION CURRENTLY IN LINE WITH WHAT I GUESS YOU WERE BUDGETING FOR OR EXPECTING THE FIRST QUARTER TO END UP AT, OR IS IT BECAUSE, AGAIN, THERE'S YEAR OVER YEAR DIFFERENCES AND THERE'S WHAT YOU KNEW WAS GOING TO COME, YOU KNEW WHAT WAS GOING TO BE SPENT OR WHAT REVENUES WERE GOING TO COME IN. LIKE, IS IT IN LINE OR IS IT IS THERE A DELTA THERE AS WELL? I LOOK AT IT HISTORICALLY. AND SO LOOKING HISTORICALLY, IT'S LESS THAN I WOULD ANTICIPATE.

I WOULD EXPECT US TO BE IN A BETTER POSITION IN THAT WAY.

BUT I ALSO LOOK AT IT IN THE SENSE OF, WHAT ARE WE CONTRIBUTING AS THE TREASURER'S OFFICE TO THE GENERAL FUND FOR THAT? SO BACK TEN YEARS AGO, THE RATE OF RETURN THAT WE WERE SEEING WAS UNDER 1%, AND NOW IT'S OVER 3%. SO INSTEAD OF CONTRIBUTING PERHAPS A 100,000 OR A COUPLE HUNDRED THOUSAND DOLLARS TO THE GENERAL FUND OUR FIRST QUARTER CONTRIBUTION WAS $575,000, ALL IN GENERAL FUND AND THE POOLED FUNDS, I GUESS, ARE YOU FORECASTING FUTURE QUARTERS IN TERMS OF WHAT YOUR EXPECTATIONS ARE, IN TERMS OF WHAT OUR PORTFOLIO VALUE WILL BE? THAT'S WHAT WE'RE CREATING, THE CASH FLOW ANALYSIS WE FORECAST.

AND WHEN YOU ALL DISCUSS IT WITH THE FINANCE DIRECTOR ON THE REPORTS THAT COME FORWARD, YOU'VE SEEN WHERE OUR REVENUES ARE.

ARE WE PLUS OR MINUS WHERE WE HAVE BEEN. SO WE WORK CLOSELY TO MONITOR THE TOT, UUT.

SO IT'S MORE OF IT'S MORE A FUNCTION OF WHICH IF ANY OF THOSE REVENUE STREAMS ARE WE LOOKING AT THAT MIGHT PERHAPS UNDERPERFORM OR OVERPERFORM.

AND WE'VE BEEN RELATIVELY FLAT WITH MOST OF THOSE REVENUE STREAMS. SO. THE SIGNIFICANT ONE BEING OUR PROPERTY TAX, WE WERE SLIGHTLY HIGHER AND WHEN IT CAME TO OUR TOT A SMALL DELTA.

THOSE REVENUE STREAMS WERE CLOSE TO BUDGET, SO WE SHOULDN'T VIEW THIS AS A NEGATIVE NECESSARILY.

EVEN THOUGH THE THE AMOUNT IS DOWN BY 20 MILLION OR SO FROM THE FIRST QUARTER LAST YEAR.

THIS IS MORE A FACTOR, A FUNCTION OF, AS YOU SAID, LARGER PROJECTS THAT HAVE COME AND GONE.

THAT'S OUR ANALYSIS RIGHT NOW. YES. AND YOU LET US KNOW IF THAT CHANGES.

YES, SIR. OKAY. AND THEN BACK TO THAT FIRST SLIDE YOU SHOW PORTFOLIO EFFECTIVE RATE OF RETURN OF 3.23. I KNOW THAT AS YOU SAY, WE'RE NOT TRYING TO MAXIMIZE RETURN IN THIS PORTFOLIO.

WE'RE NOT TAKING EXCESSIVE RISK. HAVING SAID THAT, AMONG THE INVESTORS WHO LOOK AT THIS AS NOT SOMETHING WHERE THEY'RE TRYING TO MAXIMIZE RETURN.

WHERE DO WE STAND IN THAT GROUP? IF YOU CATCH MY DRIFT.

THERE ARE HIGH RISK, HIGH RETURN INVESTORS. THERE ARE MEDIUM RISK AND LOW RISK.

I ASSUME WE'RE IN THE MEDIUM RISK, BUT ARE WE AT THE TOP END OF THAT MEDIUM RISK OR THE LOW END OF THE MEDIUM RISK? AND HOW DO YOU ARRIVE AT A COMFORT WITH 3.23 AND SAY, OKAY, WE'RE DOING A PRETTY GOOD JOB OF INVESTING? I WOULD VIEW US AS, AS ON THE LOW END OF RISK, WHERE THE PRIMARY FUNCTION OF OUR RESPONSIBILITY IS PRESERVATION OF CAPITAL

[00:25:07]

SO I WOULD CHARACTERIZE US AS LOW END OF RISK.

THERE ARE SOME FACTORS THAT COME INTO PLAY THAT AREN'T READILY APPARENT WHEN YOU PULL BACK SOME OF THE LAYERS.

YOU'LL SEE THAT WE HAD SOME AGE SECURITIES. WE STILL HAVE SOME AGE SECURITIES ON BOOK THAT ARE PAYING LESS THAN 1%.

AND AS THOSE MATURE AND WE ROLL THOSE INTO BETTER, BETTER YIELDS THAN WE'LL SEE, AND WE HAVE SEEN OVER THE COURSE OF THE LAST SEVERAL QUARTERS THAT EFFECTIVE RATE OF RETURN IMPROVE ONCE THAT ONCE THOSE AGE OUT I WOULD EXPECT US TO BE CLOSER TO BENCHMARK. BUT I DON'T KNOW THAT WE'LL EVER BECAUSE OF THE CHANGES AND BECAUSE OF THE LIQUIDITY NEEDS BE ABLE TO BE RIGHT AT BENCHMARK, I THINK WE'D ALWAYS UNDERPERFORM A LITTLE BIT.

I'D LIKE TO TRY AND KEEP UP, AT LEAST WITH INFLATIONARY PRESSURES.

IT LOOKS LIKE OUR AVERAGE MATURITY IS PRETTY MUCH THE LOWEST IT'S BEEN IN YEARS AS WELL.

IT IS. IS THAT BECAUSE OF OUR LIQUIDITY NEEDS? YES. AND JUST TO REMIND US, THE YIELD ON BENCHMARK, THE BENCHMARK IN THIS CASE IS, WHAT? 0 TO 5 YEAR, 0-TO-5-YEAR TREASURY, IF I REMEMBER CORRECTLY.

CORRECT. 0-TO-5-YEAR TREASURY. AND RICK'S ONLINE IF YOU HAVE ANY QUESTIONS RELATED TO THE BENCHMARK AS WELL.

RICK, DID YOU WANT TO. YEAH, COMMISSIONER I MEAN, THE BIGGEST THING THAT EUGENE TOUCHED ON AND YOU ASK IS WE'VE HAD TO SHORTEN MATURITIES DRAMATICALLY OVER THE YEARS TO PROVIDE THAT LIQUIDITY.

AND SO WE HAVEN'T BEEN ABLE TO INVEST LONGER TERM TO LOCK IN THOSE RATES.

AND SO THAT'S COMPARATIVELY AGAIN SAFETY AND LIQUIDITY ARE 1 IN 1A AND THE YIELD AND RETURN IS THE THIRD PERSPECTIVE.

IT'S ALWAYS BENEFIT, AS EUGENE MENTIONED A LOT MORE INTEREST INCOME THAN A FEW YEARS AGO.

BUT THAT'S BEEN THE BIGGEST DRIVER IS JUST BEING ABLE WE'VE HAD TO SHORTEN THE MATURITIES TO PROVIDE THAT LIQUIDITY.

I GUESS WHAT I'M SEARCHING FOR, I USED TO MANAGE PORTFOLIOS AND WE WERE LOOKING AT EQUITY.

SO IT WAS A TOTALLY DIFFERENT THING. BUT IN THIS CASE, THE QUESTION WOULD BE YOU'VE GOT A 3.23 RETURN.

AND OUR OTHER. I BROKE THE RISK RETURN SPECTRUM DOWN INTO LOW MEDIUM AND HIGH. SO GRANTED WE'RE IN LOW.

BUT WHAT ARE THE ARE OTHER INVESTORS LIKE US.

ARE THEY GETTING SOMETHING CLOSE TO THAT? THREE AND A QUARTER. THREE, SAY 3 TO 3 AND A HALF RETURN OR ARE THEY GETTING SOMETHING HIGHER? THAT'S THE QUESTION. IT'S. OR DO YOU HAVE ANY WAY OF COMPARING THAT? YOU MAY NOT HAVE THE DATA THAT WOULD ALLOW YOU TO ANSWER THAT QUESTION.

I THINK THE LATTER PART OF YOUR STATEMENT IS THE POINT IN THAT.

IT'S NOT NECESSARILY THAT WE DON'T HAVE THE DATA, IT'S THAT EVERY PORTFOLIO IS A LITTLE BIT DIFFERENT, AND THE NEEDS OF EACH CITY ARE DIFFERENT. THE REVENUES OF EACH CITY ARE A LITTLE BIT DIFFERENT.

THE FISCAL LIQUIDITY OF EACH CITY. SO OTHER CITIES THAT MAY BE SIMILARLY SIZED MAY HAVE LESS IMPACTFUL SPENDING NEEDS AND ARE ABLE TO INVEST THAT LONGER TERM LOCK IN HIGHER RATES. SO THE BENCHMARK THAT WE FOCUS ON, AND I'M APPROPRIATING A COMMENT FROM A GENTLEMAN NAMED BEN FINKELSTEIN WHO SPOKE AT JIOA.

THE BENCHMARK STARTS FOR US WITH PRUDENT FINANCIAL MANAGEMENT, ARE WE IN LINE WITH OUR PRIORITIES? AND, ARE WE IN LINE AS A GOOD STEWARD OF THE PORTFOLIO? THOSE COMPARING ONE CITY TO ANOTHER IS DIFFICULT TO DO BECAUSE OF THE DIFFERENT NEEDS AND REVENUES AND EXPENDITURES OF EACH CITY.

WE INCLUDE THE BENCHMARK BECAUSE WE NEED TO BENCHMARK SOMETHING THERE, IN PART.

BUT MORE IMPORTANTLY, THE BENCHMARK IS STEWARD HAS BEEN, AND WE VIEW IT AS OR I VIEW IT AS STEWARDSHIP, I AGREE WITH MR. FINKELSTEIN. HE'S PRETTY EXPERIENCED IN THESE MATTERS.

IS THE STEWARDSHIP OF THE FIDUCIARY RESPONSIBILITIES AND FINDING OURSELVES IN COMPLIANCE.

AND ANYTHING THAT WE CAN GET THAT CONTRIBUTES TO THE GENERAL FUND AND TO THE CITY'S OVERALL INTEREST WE LOOK AT AS A BONUS.

YEAH. OKAY, THANKS. AND THEN FOR THE PURPOSES OF FULL TRANSPARENCY, WE'VE ALSO INCLUDED THE QUARTER-BY-QUARTER COMPARISON, FISCAL YEAR 23 AND 24 HERE. SO AS EUGENE MENTIONED, WE'RE WORKING ACTIVELY TO IMPROVE OUR CASH FLOW ANALYSIS.

BUT FOR THE TIME BEING YOU'LL SEE THAT WE HAVE MET THE CASH FLOW NEEDS OF THE CITY FOR THE QUARTER AND EXPECT TO MEET THE REQUIREMENTS FOR THE UPCOMING PERIOD.

YEAH, SO AS I MENTIONED, HERE'S A BRIEF OVERVIEW OF THE SECTOR ALLOCATION.

[00:30:01]

LOCAL GOVERNMENT INVESTMENT, WHICH IS THE LIQUID PORTION OF IT, 17.16.

CORPORATE BONDS, 14.57. AND THEN MONEY MARKET FUNDS, 12.8.

THIS SLIDE GOES OVER THE MATURITY DISTRIBUTION OF THE ENTIRE PORTFOLIO.

YOU'LL SEE THAT 30% OF OUR PORTFOLIO IS IN FULLY LIQUID ASSETS, ALMOST 30% IN 0 TO 1 YEAR, 34% BETWEEN 1 AND 2 YEAR, AND THEN ABOUT 7% OF THE PORTFOLIO IN 2 TO 3 YEAR MATURITY.

THIS CHART IS A HISTORICAL BOOK VALUE OF OUR PORTFOLIO GOING BACK TO FISCAL YEAR 22, MONTH BY MONTH.

AND YOU'LL SEE THE COMPARISON, AS WE HAD DISCUSSED IN DETAIL JUST NOW.

THE FISCAL IMPACT TO THE CITY, INTEREST EARNED YEAR TO DATE IS 575,653.

WE CONTRIBUTE APPROXIMATELY 60% OF THAT TO THE GENERAL FUND, WHICH IS ABOUT 345,000 BUDGETED CONTRIBUTION.

FOR THE INTEREST TO THE GENERAL FUND FOR THE ENTIRE FISCAL YEAR IS 1.5 MILLION.

SO THAT'S THE GOAL. AND THAT CONCLUDES OUR PRESENT.

RICK, DID YOU HAVE ANYTHING ELSE TO ADD? I DO NOT.

OKAY, GREAT. JUST FOR THE FOLKS WHO CAME ON THE COMMISSION IN THE LAST YEAR OR SO, WHEN YOU SEE GENERAL FUND CONTRIBUTIONS, 60%, THE OTHER 40% GOES TO POOLED FUNDS THAT WE HAVE WITHIN THE CITY.

SO OUR GENERAL FUND IS THE 1.5 MILLION GENERAL FUND ALLOCATION.

AND THEN OVER AND BEYOND THAT WOULD GO TO THESE OTHER FUNDS THAT SERVICE THE CITY.

AND THAT CONCLUDES OUR PRESENTATION. THANK YOU SO MUCH. FURTHER QUESTIONS FROM THE TREASURER OR STAFF.

OKAY. THANKS. THANK YOU, COMMISSIONERS. THANK YOU.

THANKS. ITEM J.2. DID YOU DO PUBLIC COMMENT? YEAH.

OH, YEAH. OKAY. THERE WERE NO PUBLIC COMMENTS OR ECOMMENTS.

OKAY, THANKS. ITEM J.2. MOTION TO FILE THAT CHAIR.

I'M SORRY. DID YOU HAVE A MOTION TO RECEIVE AND FILE? WE SHOULD. YES. DO I HAVE A MOTION TO RECEIVE AND FILE? COULD I GET A MOTION TO RECEIVE? MOTION TO RECEIVE AND FILE.

SO I'M HERE. I'LL GET THE HANG OF IT SOON. ALL IN FAVOR? AYE. GOOD. OKAY, NOW MOVING ON TO J.2. CAPITAL IMPROVEMENT PROJECT SUBCOMMITTEE QUESTIONS. YOU SAID THAT THERE WAS A BLUE FOLDER ITEM ON THIS.

I DID NOT SEE THAT. I HAVEN'T SEEN IT YET. YES, THERE WAS, SHOULD BE INCLUDED AT THE END OF THE PACKET, IS IT NOT? IF IT'S ALL RIGHT, I WOULD LIKE TO READ FOR THE PUBLIC. I ALSO RECEIVED IT. OKAY. SINCE HE'S NOT HERE, I READ IT AND IT HAD REALLY GOOD POINTS.

SO THIS IS FROM JIM MUELLER WHO'S A RESIDENT IN REDONDO BEACH.

SO HE STARTS, IT'S A SHORT, VERY WELL WRITTEN LETTER.

YOUR COMMISSION HAS BEEN INVESTIGATING THE COST OF CHANGE ORDERS ON CURRENT FISCAL YEAR CIP PROJECTS, 10 PROJECTS OUT OF 22 SCHEDULED FOR THIS YEAR.

I HAVE DONE SOME ANALYSIS AND INVESTIGATION RELATED TO MATTER USING THE SPREADSHEET OF PROJECT ESTIMATES AND ACTUAL YEAR TO DATE THAT IS PART OF THE COMMISSION'S PUBLIC RECORD. SO THIS IS THE NOW THE GOOD PART.

MY INVESTIGATION, SO AGAIN THIS IS FROM JIM MUELLER.

MY INVESTIGATION SHOWS THE COMMISSION IS RIGHT TO BE CONCERNED ABOUT THE LEVEL OF CHANGE ORDERS ON THESE CONTRACTS, YEAR TO DATE CHANGE ORDER NUMBER AS A PERCENT, DOLLAR NUMBER, AS A PERCENT OF THE ENGINEER'S ESTIMATE IS 19%, WHICH IS A LEVEL CONSIDERED IN MUNICIPAL CONSTRUCTION CONTRACTING TO BE A PROBLEMATIC HIGH-RISK LEVEL.

THIS LEVEL SUGGESTS, BUT DOES NOT PROVE, ONE OR MORE OF THE FOLLOWING, POOR PRE-BID INVESTIGATION, CHANGE ORDERS USED TO FIX DESIGN ERRORS, SCOPE CREEP AFTER CONTRACT AWARD.

THERE IS CONSIDERABLE VARIANCE AMONG INDIVIDUAL CONTRACTS, BUT ONLY 2 OF 10 CONTRACTS FOR WHICH THERE ARE NUMBERS ARE UNDER 10% CHANGE ORDERS TO ESTIMATE. SO, 8 OUT OF 10 IS OVER 10%.

CONTRACT AWARDS TO ESTIMATE IS 128%, AND THE AWARD TO FINAL COST IS 118%, WHICH I BELIEVE JUSTIFIES A SERIOUS INVESTIGATION

[00:35:10]

SPECULATING ON THE POSSIBLE CAUSES OF VARIANCE BESIDES POOR ESTIMATING MIGHT BE VOLATILE MATERIALS PRICES, SHORTAGES OF LABOR, WEATHER PROBLEMS, UNFORESEEN PROBLEMS WITH THE ENVIRONMENT AROUND THE PROJECT CAUSING EXTENSIONS.

I HOPE THIS INFORMATION IS VALUABLE. SINCERELY, JAMES MUELLER.

THANK YOU. SO I WANTED TO READ BECAUSE HE HAD REALLY GOOD POINTS AND HE HAD ACTUALLY DONE A LOT OF WORK.

I AGREE. COMMENTS ON THAT INPUT AND OTHER COMMENTS ON THE ISSUES WE'VE BEEN DISCUSSING WITH CIP. AND WE TALKED LAST WEEK ABOUT THE POSSIBILITY OF, ONE SUGGESTION WAS TO HIRE AN AUDITOR TO AUDIT THIS. IT SEEMS TO ME, BASED UPON THE COMMENTS IN THAT LETTER, WHICH WAS VERY WELL PUT, THAT THE NEXT STEP SHOULD BE HAVING THE DIRECTOR OF PUBLIC WORKS PRESENT TO US WITH THAT LETTER IN MIND AND THOSE OPTIONS. I THINK I THINK HE SHOULD ADDRESS THOSE.

WE NEED TO HAVE THE DISCUSSION ABOUT ITEMS LIKE THAT BEFORE WE RECOMMEND GOING TO THE EXPENSE OF HAVING AN AUDITOR.

THOUGHTS ON THIS? THE LAST TIME, THAT'S EXACTLY WHAT WE SAID, AND YOU WANTED TO HAVE THE PUBLIC WORKS DIRECTOR OR SOMEONE A REPRESENTATIVE FOR PUBLIC WORKS, TO COME AND ANSWER QUESTIONS.

THEY WERE HERE NOT THAT LONG AGO. JESSE WAS HERE.

I THINK HE'S THE MANAGER FOR CIP PROJECTS, AND HE WAS HERE AND HE ANSWERED A LOT OF QUESTIONS, SO WE AGREED LAST TIME IS THAT THE SUBCOMMITTEE WAS GOING TO GET TOGETHER AND WRITE QUESTIONS DOWN.

WHAT QUESTIONS, AND THEN WE CAN. RIGHT. SO DO WE HAVE THOSE QUESTIONS? CAN SOMEONE READ ME THE QUESTIONS? I HAVE NOT SEEN THOSE QUESTIONS.

WE DON'T HAVE. YOU WHERE PART OF THIS SUBCOMMITTEE. SO, I THINK I WAS AS WELL.

AND WE DON'T HAVE THEM COMPLETED AT THIS TIME.

IT'S SOMETHING THAT'S STILL IN PROCESS OF GETTING DONE.

OKAY. SO, WHAT QUESTIONS DO YOU. CAN WE WRITE THEM DOWN RIGHT NOW? WHAT QUESTIONS DO YOU HAVE THAT YOU WANT THE PUBLIC WORKS DIRECTOR TO ANSWER FOR YOU? WAS IT SOMETHING WE WANT TO ADDRESS IN THE NEXT MEETING? YEAH.

SO I THINK I WAS AWAY FOR THE VACATION AS WELL.

AND SO I THINK IT WOULD BE WISE FOR US TO GET TOGETHER AND TALK ABOUT IT AND COME UP WITH A LIST OF QUESTIONS.

I THINK THAT SHOULD BE THE PLAN. AND I THINK I DROPPED THE BALL THIS LAST MONTH, UNFORTUNATELY.

OKAY. SO YOU STILL WANT TO WORK WITH THE SUBCOMMITTEE? YES. I THINK THE SUBCOMMITTEE THAT WE ARRANGED IS SUFFICIENT.

I THINK IT WAS JUST UNFORTUNATELY, POOR TIMING WITH THE HOLIDAYS.

OKAY. BUT YEAH, I THINK THAT I THINK THE RIGHT GROUP IS IN PLACE TO BE ABLE TO TAKE CARE OF THIS.

OKAY. WE NEED TO HAVE EITHER A PHONE CONVERSATION OR MEET PERSONALLY THREE OF US SO WE CAN DIG A LITTLE BIT DEEPER INTO THIS. I CAN UNDERSTAND BECAUSE OF THE HOLIDAYS, AND WE WERE NOT ABLE TO DO MUCH.

BUT I HAVE, AGAIN, GONE OVER ALL THE INFORMATION THAT STEPHANIE HAD PROVIDED US, AND THE MORE I THINK ABOUT IT, THE MORE I FEEL THAT THIS ISSUE IS BEYOND SIMPLY CIPS.

I THINK THE ROOT CAUSE OF THE PROBLEM, AS I SEE IT, IS POOR PLANNING AND THE WAY THE CIP PROJECTS ARE MANAGED, AND AS I SAID LAST MONTH AT THE MEETING. IF THE SUBSEQUENT APPROPRIATIONS ACCOUNT FOR 80% OF THE TOTAL MONEY WE SPENT ON THE CIPS THAT'S A HUGE AMOUNT, $47 MILLION.

AND I THINK THE PROBLEM, THE WAY I SEE IT, BECAUSE I HAVE DUG A LITTLE BIT DEEPER INTO SOME INDIVIDUAL PROJECTS, IS THAT THE, SUBSEQUENT APPROPRIATIONS, THE CHANGE ORDERS, THEY ARE PROCESSED WITHOUT ANYONE EVER QUESTIONING OR ASKING FOR MORE INFORMATION.

[00:40:05]

SO THAT LEADS TO POOR PLANNING. AND THE ONE THING THAT SURPRISED ME WAS I BROUGHT THIS UP, EXCUSE ME, WITH OUR REPRESENTATIVE FROM DISTRICT 2 PAIGE, AND I CAN'T PRONOUNCE HER LAST NAME.

AND WHEN I MENTIONED THIS TO HER, SHE WAS JUST AS SHOCKED AS I WAS WHEN I SAW THE NUMBERS INITIALLY.

AND THEN, ACCORDING TO HER WHEN THESE CHANGE ORDERS ARE PRESENTED TO THE COUNCIL.

THEY ARE RUBBER STAMPED APPROVAL. I HAD WRITTEN A LETTER TO THE MAYOR ALMOST SIX MONTHS AGO, ABOUT FIVE DIFFERENT THINGS, AND CIPS WAS ONE OF THEM.

AND HIS RESPONSE WAS, I FIND IT CONFUSING. SO WHAT IS HAPPENING IS THAT THE WHOLE SETUP, THE WHOLE ENVIRONMENT, THE WHOLE PROCESS THAT THE PLANNING AND THE MANAGING, THE CIPS, IT HAS NOT CHANGED IN, I DON'T KNOW HOW MANY YEARS, MAYBE 50 YEARS IT HAS NOT CHANGED.

AND I'M. PLANNING AND I'M A PROCESS ORIENTED PERSON.

I'VE SPENT 30 YEARS IN THREE DIFFERENT COMPANIES, AND THIS IS WHERE THE ORIGINAL TQM CONCEPT, TOTAL QUALITY MANAGEMENT COMES FROM. AND I'VE MENTIONED THIS MANY TIMES IN THE PAST, THE CITY OF FORT WAYNE WHERE I LIVED IN EARLY 2000, WAS THE ONE CITY, AND IT STILL IS AFTER 25 YEARS, IT IS CONSIDERED AS ONE OF THE TOP TEN BEST MANAGED CITIES IN THE COUNTRY FOR 25 YEARS, BECAUSE THE 25 YEARS AGO THE MAYOR WHO WAS ELECTED, HE BELIEVED IN TQM. HE IMPLEMENTED THAT SYSTEM AND WITHIN TWO YEARS THEY SAVED CLOSE TO $3 MILLION.

AND I'VE SEEN THAT PERSONALLY IN THE PRIVATE SECTOR IN THREE DIFFERENT COMPANIES.

SO I'M A FIRM BELIEVER OF IT. AND THE MORE I SEE WHAT'S HAPPENING HERE, THE MORE I BELIEVE THE PROBLEM IS THE WAY THE CHANGE ORDERS ARE A PROCESS WITHOUT ANY QUESTIONS, WITHOUT ANY COMMENTS, WITHOUT ANY FURTHER DATA ANALYSIS.

SO THAT IS THE EASIEST ROUTE TO GET GOING. SO WHY BOTHER TO SPEND MORE TIME ON DOING THE INITIAL PLANNING AND INITIAL ESTIMATING. AND SO THAT HAS BECOME THE NORM.

AND IF YOU'RE SPENDING 80% OF THE MONEY WITHOUT GETTING ANY DIALOG OR ANY ANALYSIS OF COURSE, THAT'S THE WAY TO GO FOR THE ADMINISTRATION.

THE THING THAT WORRIES ME THE MOST IS IF THIS IS NOT CHANGED, WE HAVE A HUGE PROBLEM FACING US, AND IT IS THE $93 MILLION, THE BOND THAT WAS APPROVED BY THE VOTERS IN NOVEMBER 24TH.

AND BASED ON WHAT I READ IN EASY READER AND BEACH REPORTER.

IT LOOKS LIKE IT'S ALREADY IN TROUBLE. I DON'T KNOW IF YOU READ THE ARTICLE THAT APPEARED ON DECEMBER 4TH IN EASY READER, IT SAYS PLANS FOR FIRE AND POLICE STATIONS MOVE AHEAD SIZE QUESTIONED.

AND RIGHT NOW IT LOOKS LIKE THEY STILL HAVE NO IDEA, WHAT THIS $93 MILLION WAS BASED ON? AND WHEN YOU ASK VOTERS TO AGREE TO PAYING HIGHER TAXES FOR ALMOST FOREVER, 30 YEARS IS FOREVER, AS FAR AS I'M CONCERNED.

AND THEY HAVE PLACED ENORMOUS FAITH AND CONFIDENCE IN THE CITY ADMINISTRATION.

AND I'M AFRAID AT THE RATE THAT THINGS ARE GOING, AND IF YOU READ THAT ARTICLE, YOU WILL SEE SOME ALARMING SIGNALS. FOR INSTANCE THIS IS WHAT THE ARTICLE SAYS, MIKE WITZANSKY, THE CITY MANAGER, AND HE SAID, HE WAS ASKED WHETHER THE 93 MILLION CAME FROM HE SAID,

[00:45:08]

IF WE HAD, WE REALLY NEEDED ANOTHER $5 MILLION MORE.

BUT WE THOUGHT THAT THAT MAY AFFECT THE MINDSET AND PEOPLE MAY NOT VOTE FOR IT.

SO WE PICKED $93 MILLION. NOW THAT'S A HECK OF A WAY TO PLAN AND PRESENT THE NUMBERS WITHOUT ANY SUBSTANTIAL NUMBERS OR SOME OUTLINE OF WHERE THE MONEY IS GOING TO SPEND WHAT THESE NUMBERS ARE BASED ON AND WHAT IS THE BEST WAY TO BUDGET THE WHOLE THING. AND THE ONE THING THAT IS REALLY SHOCKING AND ALARMING AS FAR AS I'M CONCERNED, THIS IS WHAT MIKE SAID. HE SAID WE CHOSE THE SMALLER SCOPE BECAUSE FROM A PRUDENT CALCULATION, WE THOUGHT THAT'S WHAT RESIDENTS WOULD SUPPORT.

IN AN IDEAL WORLD, WE WOULD HAVE ANOTHER $50 MILLION TO PLAY WITH.

AND THIS JUST SHOCKED ME BEYOND BELIEF. SO THE CITY MANAGER IS SAYING HE WANTS 50, AND I HOPE THAT'S A TYPO, MAYBE IT'S 5 MILLION, I DON'T KNOW. BUT EVEN 5 MILLION IS A LOT OF MONEY.

IF THE CITY MANAGER IS EXPECTING $50 MILLION TO PLAY WITH.

OBVIOUSLY, THERE IS REALLY NO PLAN, NO ANALYSIS OR NO FEEDBACK FROM OTHER SOURCES TO GET SOME IDEA HOW MUCH THE TWO FIRE STATIONS AND NEW POLICE HEADQUARTERS IS GOING TO COST.

YOU JUST PICK A NUMBER IN AIR AND SAY, THAT'S WHAT WE ARE GOING TO GET.

THAT'S NOT GOING TO REALLY INCREASE THE LEVEL OF CONFIDENCE THAT THE VOTERS HAVE ON THIS PROJECT.

AND THIS IS GOING TO BE A DISASTER UNLESS SOMETHING IS DONE SOON.

AND I THINK, YOU KNOW, YOU CAN MEET ALL DAY. WE WANT TO TALK ABOUT IT ALL DAY.

WE WANT IT REQUIRES A COMPLETE, MAJOR OVERHAUL OF THE PLANNING PROCESS IN MY OPINION.

IF WE DON'T DO THAT, THIS PROJECT, THE $93 MILLION PROJECT IS IN JEOPARDY.

AND THAT'S REALLY GOING TO RUIN THE REPUTATION OF THE CITY ADMINISTRATION.

THAT'S ALL I HAVE TO SAY. VIJAY, YOU BRING UP TWO VERY IMPORTANT ISSUES.

ONE IS THE NORMAL WORK ORDER CHANGE TO PROJECTS.

AND IT'D BE INTERESTING THERE IF, YOU KNOW HOW DOES FORT WAYNE HANDLE THIS? I ASSUME EVERY CITY HAS THE SAME PROCESS. THE BETTER MANAGED ONES OBVIOUSLY DO IT DIFFERENT THAN WE DO IT.

BUT HOW DO THEY DO IT? I, I DON'T KNOW, I DID NOT GO INTO DETAILS AT THAT TIME AND YEAH, WE NEED TO LOOK AT BEST PRACTICES. BUT THERE ARE ENOUGH CONSULTANTS WHO CAN WHO HAVE THE EXPERTISE IN TQM AND IF THEY SEE THE PROCESS THAT WE ARE FOLLOWING, THAT WE ARE USING I THINK THEY CAN POINT OUT SOME WEAKNESSES AND SOME ISSUES. BUT RIGHT NOW IT LOOKS LIKE THERE IS, IF THERE IS ANY PLANNING, IT'S EXTREMELY POOR AND THERE IS NO INCENTIVE TO DO ANYTHING DIFFERENT BECAUSE THINGS ARE GOING WELL.

AND THE OTHER ISSUE I HAD EVEN BEFORE THE BOND ISSUE WAS APPROVED WAS THAT THIS CITY HAS HAD IT PRETTY EASY FOR THE LAST. I DON'T KNOW HOW MANY YEARS WE HAVE HAD NO EARTHQUAKES, NO FLOODING, NO FIRES. KNOCK ON WOOD. SO IT HAS BEEN EASY GOING.

EVEN DURING THE COVID PANDEMIC, MONEY POURED IN THE STATE AND THE FEDERAL GOVERNMENT JUST THREW MONEY AT US SO WE DIDN'T HAVE TO WORRY ABOUT IT. AND THE STATE HAD BUDGET SURPLUS.

NOW WE GOT $18 BILLION DEFICIT FOR THE STATE.

THE FEDERAL GOVERNMENT IS OUT OF PROPORTION. WE'RE NOT, AND ESPECIALLY WITH THE DEMOCRATIC GOVERNMENT IN THIS STATE AND THE REPUBLICAN PRESIDENT, WE'RE NOT GOING TO GET EASY ACCESS TO ANY MORE FUNDING.

SO WE HAVE TO TIGHTEN OUR BELTS. AND THIS IS SOMETHING THAT HAS BOTHERED ME FOR THE LAST SIX MONTHS,

[00:50:01]

AND AT THE SAME TIME, WE WERE ASKING FOR INCREASED WHAT IS THE APPROPRIATE TERM FOR THAT, WE SAID WE NEED SOME RESERVES. WE HAVE SOMETHING LIKE ONE MONTHS BUDGET AS A RESERVE. AND SOME CITIES HAVE TWO MONTHS OR 20% EVEN MORE THAN THAT.

AND THAT WAS TURNED DOWN BY THE CITY COUNCIL, ACCORDING TO THE MAYOR.

SO INSTEAD OF THAT, NOW WE ARE RAIDING THE PENSION FUNDS JUST TO FINANCE THE CITY'S BUDGET THIS YEAR. AND THERE IS NO, APPARENTLY NO CONCERN ABOUT TRY TO SAVE MONEY AS MUCH AS WE CAN BECAUSE WE ARE IN A DEFICIT RIGHT NOW.

AND I DON'T KNOW WHAT THE FIRST QUARTER RESULTS WERE, BUT THE LEAST WE COULD HAVE DONE WAS TO FREEZE HIRING.

BUT WE'RE STILL HIRING. STEPHANIE JUST HIRED A PRETTY HIGH LEVEL ASSISTANT JUST ABOUT THREE MONTHS AGO.

SO WE'RE TALKING ABOUT $76,000 FOR A NEW SIGN THAT MOST OF THE RESIDENTS ARE OPPOSED TO.

AND THIS GOES ON AND ON. I MEAN, THE OUR CITY COUNCIL MEMBER, SHE OBJECTED TO A LOT OF THINGS AND MADE A LOT OF SUGGESTIONS. BUT IN THE END, SHE VOTED WITH ALL THE OTHER COUNCIL MEMBERS TO UNANIMOUSLY APPROVE THE BUDGET RESOLUTION.

SO THERE IS NO SERIOUS EFFORT TO MANAGE THE CITY'S BUDGET IN A PRUDENT IN A CONSERVATIVE WAY. AND NOW WHEN YOU LOOK AT THE CIPS, IT'S EVEN WORSE.

AND NOW WE GOT THE $93 MILLION AHEAD OF US. SO I JUST DON'T FEEL VERY COMFORTABLE WITH IT.

I'M NOT ABOUT TO CRY WOLF OR TALK ABOUT THE DOOMSDAY, BUT THIS IS WHAT I'VE SEEN IN MY LIFE HAPPENING WHEN PEOPLE JUST DON'T SHOW TOO MUCH CONCERN.

AND I THINK IT HAS BEEN, YOU KNOW, GOING PRETTY WELL FOR THE LAST SO MANY YEARS, SO WHY BOTHER? AND THEN ALL OF A SUDDEN YOU GET SOME SHOCK. SO IT'S A MUCH DEEPER ISSUE, MUCH MORE SERIOUS ISSUE.

AND THREE OF US WE CAN MEET AND TALK ABOUT IT ALL DAY WE WANT.

BUT THAT'S NOT GOING TO REALLY HELP US. THE SECOND QUESTION YOU BROUGHT UP IS SPECIFICALLY TO THE FIRE AND POLICE BOND ISSUE, AND THE CONSTRUCTION OF THOSE TWO FIRE STATIONS AND THE IMPROVEMENT TO THE POLICE STATION.

WE WERE TOLD AT THE TIME THAT A SUBSTANTIAL AMOUNT OF PLANNING HAD GONE INTO SIZING THAT BOND ISSUE, BUT APPARENTLY BASED ON WHAT YOU WERE READING NOT AS MUCH.

THIS IS WHAT HAS BEEN MENTIONED HERE. THIS IS WHAT MIKE SAID, THESE ARE HIS WORDS ACCORDING TO THIS ARTICLE. SO, WE CHOSE THE SMALLER SCOPE BECAUSE FROM A PRUDENT CALCULATION, I DON'T KNOW WHAT THAT CALCULATION MEANT OR WHAT IT WAS ABOUT, HE SAID.

WE THOUGHT THAT RESIDENTS WOULD. THIS IS WHAT RESIDENTS WOULD SUPPORT.

AND THEN HE WAS ALSO LOOKING FOR SOME MONEY TO PLAY WITH.

A $50 MILLION IS A LOT OF MONEY TO PLAY WITH.

WE CAN REALLY HAVE A LOT OF FUN, GO TO VEGAS AND SPREAD IT ALL AND SEE IF WE CAN TURN THAT INTO 100 MILLION.

I'M NOT SURE. I'M NOT SURE IF THE WORD PLAY WAS HIS INTENT.

I MEAN, AGAIN, I DON'T KNOW IF THAT'S THE WORD.

THERE'S WORDS AND THEN THERE'S INTENT. SO I THINK THERE WAS THE LARGER SCOPE WHICH WAS A LARGER. I KNOW WHAT IT MEANS, BUT. STEPHANIE, DO YOU WANT TO USE THAT. FOR A CITY MANAGER TO SAY I NEED MONEY TO PLAY WITH.

THAT MEANS HE'S ALREADY PLAYING WITH 80% OF THE MONEY THAT YOU'RE SPENDING ON THE CIPS, BECAUSE THERE'S NO BIDS FOR THOSE. YEAH. STEPHANIE, DO YOU KNOW WHAT THE PROCESS IS LOOKS, LIKE NOW, AS FAR AS DETAILED PLANNING ON THE FIRE AND POLICE CONSTRUCTION PROJECT? YES.

SO THE CITY ENGAGED GRIFFIN AS OR OWNER'S REPRESENTATIVE TO KIND OF HELP US MANAGE THE WHOLE PROCESS AND KIND OF

[00:55:06]

JUST WENT TO COUNCIL, I BELIEVE DECEMBER WITH A BETTER KIND OF IDEA OF THE PHASING OF THE PROJECT.

IN THAT TIME, THEY'VE WORKED VERY CLOSELY WITH OUR POLICE AND OUR FIRE AND OUR CITY MANAGER'S OFFICE TO IDENTIFY THE LOCATIONS, TO SEQUENCE THE PROJECTS, AND TO SPEND A LOT OF TIME LOOKING AT THE SCOPE AND LOOKING AT COSTS.

GRIFFIN IS A VERY WELL RESPECTED FIRM. THEY'VE DONE THIS IN MANY OTHER CITIES WITH SIMILAR OR LARGER PROJECTS SUCCESSFULLY. AND I WILL TELL YOU THAT THEY, WE EVERY MEETING THAT WE ARE IN, WE ARE LOOKING AT THAT NUMBER AND SAYING WE WILL NEVER GO OVER THIS NUMBER. EVERY MEETING WITH OUR FINANCIAL ADVISOR FOR THE BOND, WE ARE 100% NOT GOING TO GO OVER THAT NUMBER AND NO ONE IS.

WELL, I THINK THAT, YOU KNOW, PEOPLE OCCUPYING THESE NEW FACILITIES AND PROBABLY ALL OF US WOULD LOVE TO HAVE 100 MILLION, $200,000 MILLION, 500 MILLION. WE ARE VERY, VERY, VERY COMMITTED TO THIS NUMBER, THE BOND PROCEEDS.

THIS IS WHAT WE'RE AIMING FOR. SO WE'RE GOING THROUGH THE PROCESS.

WE ARE, NOW BECAUSE WE HAVE A LITTLE BIT BETTER IDEA OF THE SCHEDULING, WHICH I THINK IS OVER ABOUT 18 MONTHS, MAYBE A LITTLE LONGER. ARE NOW GOING TO LOOK AT THE SEQUENCING OF WHAT IT MAKES SENSE TO ISSUE THE BONDS.

BUT THAT'S WHERE WE ARE IN THIS PROCESS. STEPHANIE, EXCUSE ME.

I'M JUST LOOKING AT THE THAT PARTICULAR LINE ITEM HERE, AND IT LOOKS LIKE THAT THE ESTIMATE OR.

PARDON ME, THE APPROVED AMOUNT WAS $150,000 FOR THEIR CONSULTING.

THEY'VE LIQUIDATED $94,000. SO THEY'RE 60% OF THE WAY THROUGH THE ALLOTMENT.

AND THEY ONLY HAVE $55,000 OR. PARDON ME. YES, $55,000 LEFT TO GO.

SO WHAT WILL HAPPEN WITH, PARDON ME, THAT CONSULTING AGREEMENT ITSELF? WILL DEFINITELY AMEND THAT CONSULTING AGREEMENT. AND AGAIN, WE WE PUT IN THIS 150,000 AS A PLACEHOLDER WHEN WE, YOU KNOW, BEFORE WE ENGAGE THE CONSULTANT. THESE ARE COSTS THAT WILL BE RECOVERABLE FROM BOND PROCEEDS.

BUT WE HAD PUT IN A PLACEHOLDER NUMBER AS AN ESTIMATE BECAUSE WE DID NOT HAVE THEM ON BOARD AT THE TIME THAT WE WERE PUTTING THE BUDGET TOGETHER.

WELL, IN THE SAME ARTICLE, MIKE TALKS ABOUT NOT MAKING THE POLICE HEADQUARTERS ANY LARGER THAN WHAT IT IS RIGHT NOW. SO IT IS EXACTLY THE SAME SQUARE FOOTAGE.

IF THAT'S THE CASE, WHY BOTHER TO BUILD ANOTHER BUILDING? WHAT'S THE SENSE? IF YOU HAVE SAME SQUARE FOOTAGE.

IT JUST DOESN'T STRUCTURE. THE BUILDING WAS STARTING TO FALL APART, WASN'T IT? OR WAS IT THE FIRE DEPARTMENT? I GOTCHA.

THIS IS POLICE HEADQUARTERS WE'RE TALKING ABOUT. AND WATER LEAKS IN THE ROOF.

SO THERE WERE LOTS OF ISSUES WITH THE CURRENT BUILDING.

AND TO THE POINT OF THE. WE MENTIONED A COUPLE OF TIMES THAT WE'VE HAD THE DIRECTOR OF PUBLIC WORKS HERE TO ANSWER QUESTIONS.

I DON'T RECALL THE QUESTIONS BEING AS POINTED AND AS SPECIFIC.

WHEN HE WAS HERE BEFORE, WE WERE TALKING ABOUT THE BUDGET AND SPECIFIC ITEMS TO THE BUDGET, BUT NOT, AS I RECALL, TO THE OVERALL HOW WE HANDLE WORK ORDERS.

AND THIS QUESTION OF WHETHER THE THE PROJECTS GROW AND, AND SIZE AFTER THE INITIAL BUDGET IS PUT IN PLACE. SO I WOULD STILL THINK THAT THE ONCE WE GET THE SUBCOMMITTEE COMES UP WITH THE QUESTIONS, THOSE QUESTIONS IN COMBINATION WITH THE LETTER FROM MR. MUELLER. THEN GIVE US SOMETHING TO RAISE SPECIFICALLY WITH THE DIRECTOR OF PUBLIC FINANCE, SORRY, WITH PUBLIC WORKS. AND I THINK THAT HAS TO BE OUR NEXT STEP.

I GUESS WHAT I WOULD JUST REQUEST FROM A STAFF SIDE, WHICH I THINK IS WHAT WE'VE DISCUSSED, IS THAT WE DO HAVE A COMPREHENSIVE LIST OF THE QUESTIONS THAT ARE VERY TARGETED BECAUSE, YOU KNOW, WE HAVE BEEN HERE A FEW TIMES. I THINK THE JESSE, THE PUBLIC SAFETY MANAGER AND THE PUBLIC WORKS DIRECTOR HAVE EXPLAINED OUR CAPITAL BUDGETING PROCESS SEVERAL TIMES. SO WE JUST WANT TO MAKE SURE WE KNOW EXACTLY WHAT OUR SPECIFIC AREAS OF INTEREST.

[01:00:07]

AND SO THAT, YOU KNOW, WE'RE ABLE TO MAKE THE BEST USE OF HIS TIME AND MAKE SURE WE GET TO WHAT? GET TO WHAT THE COMMISSION IS LOOKING FOR. YEAH.

UNDERSTOOD. IS IT, WOULD IT BE POSSIBLE, PERHAPS, TO SET UP A GROUP OF QUESTIONS FOR THE DIFFERENT ROLES WITHIN THAT PROCESS? RIGHT. BECAUSE I SHARE YOUR CONCERN, RIGHT. LIKE LOOKING AT THE CIP PROJECTS AND THAT REPORT, IT'S VERY APPARENT THAT THERE'S A LEAK SOMEWHERE, RIGHT.

AND IN ORDER TO FIND WHERE THE LEAK ORIGINATES FROM, YOU REALLY HAVE TO TEST ALL THE VALVES, RIGHT? SO FROM THE VERY BEGINNING OF THE PROJECT, THE ENGINEER'S ESTIMATE, THAT'S ONE CERTAIN NUMBER.

I'D BE VERY INTERESTED TO KNOW WHAT PROCESS GOES INTO ARRIVING AT THAT NUMBER, BECAUSE THAT NUMBER SEEMS TO BE WILDLY, SIGNIFICANTLY FAR AWAY FROM WHAT THE ENDING COST OF THAT PROJECT IS.

SO I THINK IF WE WERE ABLE TO DISCOVER OR BETTER UNDERSTAND WHAT THE INITIAL PROCESS OF WHAT HE GOES THROUGH TO PUT TOGETHER THAT BID.

THAT WOULD GIVE US A GREAT FOUNDATION TO THEN BE ABLE TO BETTER UNDERSTAND WHAT WOULD BE THE CAUSE BEHIND THE CHANGE ORDERS, RIGHT. WHAT WERE THESE NOT THOUGHT OF ORIGINALLY? WAS THIS NOT PART OF IT? ARE WE JUST UPGRADING FOR SHINIER FIXTURES? WHAT IS THE PROBLEM? BUT I AGREE WITH YOU. THIS PROCESS AND PROTOCOL RIGHT NOW IS CLEARLY, FOR LACK OF A BETTER WORD, BROKEN. AND NOW, KNOWING THAT WE'VE GOT A $93 MILLION PROJECT AHEAD OF US, AND WE'VE GOT A BROKEN PROCESS THAT WE'RE PLANNING ON PUTTING TO USE FOR, THIS DOESN'T MAKE ME FEEL VERY GOOD.

RIGHT. AND IF YOU KNOW YOU'RE SAYING THAT IN THESE MEETINGS, YOU'RE SAYING WE'RE NOT GOING TO GO OVER THIS DOLLAR AMOUNT, I'M CERTAIN THAT SOME OF THESE OTHER CIP PROJECTS, SIMILAR STATEMENTS WERE MADE.

BUT THEN WHEN THE CHANGE ORDERS COME IN, WHAT ARE YOU GOING TO DO WHEN YOU'RE HALFWAY THROUGH THE PROJECT? JUST SAY, NO, WE'RE NOT GOING TO COMPLETE THIS.

I MEAN, IN THE CASE OF THIS ONE, THE BOND AMOUNT IS THE TOTAL AMOUNT THAT THE CITY HAS AVAILABLE TO SPEND ON THE PROJECT.

SO UNLESS, YOU KNOW, WE GET A WINDFALL OF SOME OTHER MONEY FROM SOMEWHERE ELSE.

I MEAN, IF WE DO HAVE OTHER AVAILABLE FUNDING AND THE COUNCIL SAYS, LOOK, YOU KNOW, WE'VE COMPLETED THE PROJECTS WITH THE BOND MONEY, WE WOULD LOVE TO DO SOMETHING ELSE. THAT'S COUNCIL'S DECISION, RIGHT, WITH AVAILABLE FUNDING.

SO. I'M SORRY TO CUT YOU OFF. GO AHEAD, PLEASE FINISH.

NO, SO. I GUESS THE DIFFERENCE THAT I'M POINTING OUT IS THAT IN DESIGNING AND COMPLETING THESE PROJECTS, WE AIM TO COMPLETE THEM, AS YOU KNOW, OR AS WE COMMITTED TO THE VOTERS WHEN THEY VOTED FOR THIS WITHIN THE WITHIN THE BOND AMOUNT.

THAT'S NOT THE SAME SITUATION THAT WE HAVE TO, YOU KNOW, REPAVE A ROAD OR BUILD A BUILDING BECAUSE WE'RE REALLY CONSTRAINED.

I UNDERSTAND. I DEFINITELY UNDERSTAND, BUT I THINK THAT IT IS A LITTLE BIT OF THE SAME REGARDLESS OF THE FUNDING SOURCE, BECAUSE WE HAVE AN INTENDED BUDGET FOR WHAT THIS PROJECT IS GOING TO COST, JUST LIKE THE OTHER CIP PROJECTS.

AND THEN THE END TOTAL COST EXCEEDED THOSE NUMBERS ON WHAT WAS IT, 10 OUT OF 22 PROJECTS, RIGHT? REGARDLESS OF THE FUNDING, I'M JUST SAYING THIS IS WHAT WE SAY THIS PROJECT IS GOING TO COST.

AND THEN FROM WHAT OUR ORIGINAL ESTIMATE WAS VERSUS WHAT THE FINAL COST WAS, THERE WAS A VAST DIFFERENCE.

SO AGAIN, THERE ARE MULTIPLE REASONS FOR THAT THAT WE HAVE DISCUSSED IN THE COURSE IN THE COURSE OF THESE MEETINGS.

I WOULD DISAGREE RESPECTFULLY WITH THE NOTION THAT THERE BEING A DIFFERENCE BETWEEN THE STARTING AND THE ENDING AMOUNT SPENT MEANS THAT THERE'S SOMETHING, YOU KNOW, SYSTEMATICALLY WRONG WITH THE CITY'S PROCESSES.

YEAH. LET'S FOCUS ON THAT POINT BECAUSE MUELLER'S LETTER POINTS OUT THAT WHILE THERE MIGHT BE SOMETHING WRONG WITH THE PROCESS, HE LISTS 4 OR 5 REASONS WHY THOSE COSTS HAVE BEEN HIGHER.

SO HE LAYS THE GROUNDWORK FOR THERE BEING NOTHING IMPROPER ABOUT IT.

THERE ARE ISSUES THAT CAUSE IT. AND THAT'S WHAT WE NEED TO FIND OUT THERE.

YOU PROBABLY CAN GO THROUGH A LIST OF 10 PROJECTS AND FIND 1 OR 2 WHERE THERE MIGHT HAVE BEEN SOMETHING DONE INCORRECTLY AND THERE MIGHT HAVE BEEN. I HAVE SOME LEVEL OF CONFIDENCE WITH THE PEOPLE IN PUBLIC WORKS, SO I DON'T THINK THAT'S HAPPENING TO EVERY PROJECT.

SOME THERE. MY GUESS IS WE'LL FIND THAT SOME HAVE COULD HAVE BEEN DONE BETTER, AND OTHERS IF CERTAINLY,

[01:05:05]

IF THERE'S NOT ANYTHING WRONG WITH THE PROCESS AND THE ISSUES HAVE TO DO WITH THE ECONOMY, THE ENVIRONMENT THE WAR IN UKRAINE, WHATEVER THE ISSUES ARE, LET'S IDENTIFY THOSE.

SO WE'RE NOT AT THIS POINT, WE'RE NOT CASTING ASPERSIONS ON THE DEPARTMENT OF PUBLIC WORKS.

WE'RE SAYING THAT THERE'S THE POSSIBILITY THAT SOMETHING IS WRONG.

WE'VE SEEN SOME DATA THAT SUGGESTS THAT. AND WE NEED TO PURSUE THE DATA AND SEE WHETHER THERE IS SOMETHING WRONG.

THAT WOULD MAKE SENSE IF YOU ARE GETTING COMPETITIVE BIDS.

IF ALL THE BIDS GO UP 10%, THEN YOU HAVE ALL THESE VARIABLES, ALL THESE FACTORS THAT THEY CANNOT CONTROL.

BUT WHEN YOU DO NOT HAVE COMPETITIVE BIDS, SOMEBODY HAS THE JOB AND THEN YOU GIVE HIM A BLANK CHECK AND SAY, OKAY, THE NEXT THREE CHANGE ORDERS, YOU ARE GOING TO DO IT.

WHAT INCENTIVE DOES HE HAVE TO GIVE YOU A LOW PRICE? HE'S GOING TO MAKE MONEY ON IT. THOSE ARE SEPARATE THOUGH RIGHT? CIPS AND THEN THOSE WERE PROFESSIONAL SERVICES.

PROFESSIONAL SERVICES ARE THE ONES THAT ARE NOT TAKEN TO COMPETITIVE BID, IS THAT RIGHT? BUT THE CIPS ARE IN FACT COMPETITIVELY BID. THEY ARE ALL COMPETITIVELY BID.

AND ALL OF OUR CHANGE ORDERS ALSO FOLLOW THE CITY'S ESTABLISHED CHANGE ORDER POLICY, WHICH, YOU KNOW, THERE'S A SPECIFIC THRESHOLD WHERE STAFF HAS LEEWAY.

BUT BEYOND THAT, COUNCIL ALSO APPROVES EVERY SINGLE ONE OF THESE.

SO WE'LL TALK ABOUT WHAT WE NEED TO GET BACK TO THAT.

AND YOU KNOW WE'LL TALK ABOUT THAT BECAUSE THERE'S ANOTHER LETTER THAT SAYS EXACTLY WHAT OUR MUNICIPAL CODE REQUIRES. AND THEY DO NOT REQUIRE ANY BIDDING.

SO WE'LL GET BACK TO THAT. BUT I DO WANT TO JUST SUMMARIZE THAT THERE IS A PROBLEM WITH PLANNING, WITH RFP NOT BEING WRITTEN THE WAY IT SHOULD BE WRITTEN, THAT'S WHY WE'RE NOT GETTING THE ENTIRE SCOPE OR OPTIONS.

THERE'S A LEADERSHIP OVERSIGHT PROBLEM. THERE'S POLICY PROBLEM.

CHANGE ORDERS ARE THEY BUDGETED WHEN THEY'RE.

80% OF THE PROJECTS HAVE MORE THAN 10% INCREASE OF CHANGE ORDERS.

SO WE, THERE IS AN ISSUE, WE JUST WE NEED TO GET TO THAT.

YOU SAID THAT THERE'S DOCUMENTED PROCESS OF THE CHANGE ORDER, WOULD WE BE ABLE TO TAKE A LOOK AT WHAT THAT PROCESS IS? YES, DEFINITELY. I ACTUALLY HAVE IT RIGHT IN FRONT OF ME AND I CAN SHARE IT.

I CAN SEND THIS TO THE COMMISSION AS WELL. THAT'D BE.

I THINK THAT'D BE HELPFUL FOR OUR SUBCOMMITTEE. CERTAINLY. THANK YOU. YES.

YES. CHANGE ORDER ITSELF CAN COMPLY WITH THE PROCESS.

THAT'S NOT THE ISSUE. THE ISSUE IS WHEN YOU ISSUE A CHANGE ORDER, WHY CAN'T YOU GET THE BIDS? THAT'S THE BOTTOM LINE. THAT'S THE KEY ISSUE HERE.

SO. YOU CAN AND I HAVE I'VE GONE THROUGH TWO OF THESE COMPLETED PROJECTS, AND I SAW NO REASON WHY THEY COULD NOT GO FOR COMPETITIVE BIDDING. THE RFP ISSUE THERE IS DEFINITELY AN RFP.

I JUST WANT TO MAKE SURE I'M UNDERSTANDING WHAT YOU'RE SAYING. SO IT'S ALMOST LIKE GIVING A BLANK CHECK TO THE CONTRACTOR WHO GOT THE JOB FOR THE 10 OR 20% OF WHAT HE HAS DONE.

AND NOW WE ARE SAYING, DO MORE. AND HERE IS THE BLANK CHECK, YOU PUT THE AMOUNT IN AND.

ONCE THEY START WORKING, THERE IS NO BIDDING PROCESS.

I THINK THAT'D BE THE NEXT. YOU AWARD THE CONTRACT TO THAT CONTRACTOR, RIGHT.

AND THEN AS YOU'RE GOING THROUGH THE SCALE OR SCOPE OF WORK AND YOU'RE CONTINUING TO BUILD, SOMETHING OCCURS, RIGHT? SOMETHING IS BROUGHT.

OH, WE FOUND OUT THAT WE. BUT THERE'S TOO MANY OF THOSE THAT ARE HAPPENING.

THAT'S WHY I THINK IT'S THE RFP SHOULD THAT THEY DIDN'T SCOPE OUT THE PROJECT CORRECTLY.

RIGHT, SO MY QUESTION TO YOU IS YOU'RE SAYING THAT WHEN THE CHANGE ORDER COMES UP AND THEN THERE'S A, ULTIMATELY A NEW ORDER FOR, FOR WORK THAT WASN'T A PART OF THE INITIAL PROPOSAL, YOU'RE SAYING TO TAKE THAT NOW TO A COMPETITIVE BID AS WELL, TO THE POINT OF MAYBE BRINGING IN A NEW CONTRACTOR TO FINISH THE SCOPE OF WORK, OR.

IT SHOULD BE CONSIDERED AS AN EXTENSION OF THE PROJECT OR A COMPLETELY NEW PROJECT, BUT THERE IS NO REASON WHY YOU CANNOT GO OUT FOR BIDS. THAT'S THE POINT I'M TRYING TO.

RIGHT. WELL, THAT MIGHT BE PART OF THE SUBCOMMITTEE FOR YOU GUYS TO PUT THE QUESTIONS TOGETHER OF. HOW DOES THE RFP PROCESS WORK? IS IT APPROPRIATE?

[01:10:06]

BECAUSE IF YOU GET A COMPETITIVE BID AND BRING ANOTHER CONTRACTOR IN, THAT PROCESS HAS THERE'S A COST TO CHANGING CONTRACTORS IN THE MIDDLE OF THE PROJECT.

NOW YOU CAN OVERDO THAT, OBVIOUSLY, AND THE QUESTION IS DOES THAT HAPPEN ON RARE OCCASIONS OR DOES IT HAPPEN ON MANY OCCASIONS. AND THAT'S WHY I HAD SUGGESTED LAST MONTH THAT WE GET AN OUTSIDE CONSULTANT TO DIG INTO EACH AND EVERY PROJECT AND FIND OUT EXACTLY WHAT THE REASON IS.

TO ME, IT SOUNDS LIKE, THE ONES I LOOKED AT ARE, IT WAS INITIALLY THE ENGINEER WAS NOT GIVEN ALL THE INFORMATION, SO HE PREPARED HIS SPECIFICATIONS FOR THE BIDS.

AND TWO JOBS THAT I LOOKED AT THE CITY THOUGHT SINCE THEY WERE GETTING SOME ADDITIONAL FUNDING GRANTS FROM THE METRO PROJECT OR WHATEVER, THEY ASKED THE SAME CONTRACTOR.

BY THE WAY, WE GOT SOME MORE MONEY. SO WE WOULD LIKE YOU TO DO THIS, THIS AND THIS.

BUT AGAIN, THE CONTRACTOR HAS ALREADY GOT THE JOB.

THERE'S NO REASON WHY YOU COULDN'T GO OUT FOR BIDS AND GET SOME OTHER BITS.

I UNDERSTAND YOU'RE SAYING AFTER THE INITIAL SCOPE OF WORK, WE'RE ADDING ADDITIONAL NEW THINGS TO IT.

YEAH, I'M SAYING THAT SHOULD BE TAKEN DOWN. CITY. THE CITY.

CITY KNEW THAT THEY WERE GETTING THE FUNDING.

SO WHY WAS IT NOT PART OF THE ORIGINAL? YEAH.

AGREED. BECAUSE IT IS SO EASY TO GET THE CHANGE ORDERS PROCESS.

NOBODY QUESTIONS IT. IT'S ALL RUBBER STAMPED, SO WHY BOTHER? I AGREE WITH YOU. I THINK THAT IF THE INITIAL, YOU KNOW, THE ENGINEER'S PROPOSAL WAS AND THAT SCOPE OF WORK WAS COMPLETED, AND THEN WE DECIDE TO IMPROVE FURTHER THAN THAT.

YES. ABSOLUTELY. RIGHT. THAT SHOULD THERE SHOULD BE SOME KIND OF A BID PROCESS.

WHAT I'M MORE CONCERNED ABOUT WITH THESE CHANGE ORDERS IS IN DURING THAT SCOPE OF WORK, SOMETHING UNFORESEEN POPS UP THERE.

YOU KNOW, THE CRACK IN THE PIPE IS LARGER THAN WHAT WE ANTICIPATED.

I LOOKED AT THE. SECOND FLOOR. FORGIVE ME, MY EXAMPLES, I ONLY HAVE EXPERIENCE IN THE PRIVATE SECTOR, BUT I THINK THAT THERE HAS TO BE SOME KIND OF A PROCESS PUT INTO PLACE, IF NOT ALREADY THERE.

AND I DON'T KNOW THAT IF THERE IS OR ISN'T, BUT WE'VE GOT TO BE ABLE TO FIGURE OUT THAT IF THE CONTRACTOR IS EGREGIOUSLY OVERCHARGING BECAUSE HE KNOWS THAT HE'S THAT WE'RE STUCK. LIKE, AS YOU SAID, IT WOULD BE TOO COSTLY TO CHANGE HORSES IN THE MIDDLE OF THE STREAM, RIGHT? SO PURPOSEFULLY AND IT'S NOT ALL THAT UNCOMMON.

THERE ARE CONTRACTORS THAT WILL PURPOSEFULLY UNDERBID CONTRACTS, KNOWING THAT THEY'RE GOING TO HAVE EVERY GREEN LIGHT TO GO AHEAD AND DO CHANGE ORDERS IN THE FUTURE THAT ARE NOT GOING TO BE QUESTIONED.

AND THEN THAT'S WHERE THE CONTRACTOR IS GOING TO MAKE THEIR REVENUE. SO WE JUST AND AGAIN, THIS IS NOT, I'M NOT MAKING ACCUSATIONS BY ANY MEANS, BUT WE WOULDN'T BE DOING OUR PRUDENT JUSTICE IF WE WEREN'T JUST LOOKING AT THE PROCESS TO MAKE SURE THAT THESE THINGS ARE NOT TAKING PLACE, RIGHT? SURE, AND I THINK THESE ARE GREAT QUESTIONS TO ADD TO YOUR LIST.

SO FOR EXAMPLE, WE COULD INCLUDE A VERY DETAILED DISCUSSION OF HOW CHANGE ORDERS WORK AND HOW, YOU KNOW, THE PUBLIC WORKS TEAM ARE MAKING DECISIONS KIND OF IN THE MIDDLE OF THESE PROJECTS.

BEAUTIFUL. GREAT. I LOOKED AT THOSE TWO. THE ENGINEER HAS THE AUTHORITY TO APPROVE UP TO $25,000.

IF THERE IS SOMETHING THAT IS UNEXPECTED OR SOMETHING THAT HAPPENS IN A PIPE BURSTS OR THEY.

I THINK THERE ARE SOME SPECIFIC EXAMPLES. THE ENGINEERS USED THAT AUTHORITY TWICE, AND IT WAS DONE IN A VERY PRUDENT, VERY RATIONAL MANNER. SO THERE IS NO ISSUE THERE.

AND SO YOU'RE RIGHT. THE FUNDING WHERE IT IS AVAILABLE, THAT WAS NOT CONSIDERED IN THE INITIAL APPROBATION REQUEST.

AND THAT'S WHERE I THINK THIS PROBLEM STARTS, THE CHANGE ORDERS.

THAT ISN'T NICE TO DO. THIS ISN'T, WOULD BE WONDERFUL TO DO THAT BECAUSE WE'VE GOT THE MONEY AND THEN WHY STICK WITH THE

[01:15:05]

THE DIFFERENCE BETWEEN THE LOWEST BID, WHO GOT THE JOB, AND THE HIGHEST BIDDER WAS 7.5%.

SO IF INSTEAD OF 80% OF THE MONEY GOING INTO CHANGE ORDERS, IF WE CAN LIMIT THAT EVEN 10%, WHERE THERE ARE SOME UNAVOIDABLE CIRCUMSTANCES, WE'RE STILL PROBABLY GOING TO SAVE AT LEAST $2 MILLION IN MY ESTIMATION, JUST BY GETTING THE BIDS, BECAUSE THE CONTRACTOR KNOWS HE'S GOT SOME COMPETITION AND WE DON'T HAVE TO CHANGE THE CONTRACTOR.

MOST PROBABLY HE WILL AGAIN BID LOW BECAUSE HE WANTS TO CONTINUE.

YEAH, BUT IF WE DON'T DO THAT, THEN WHAT INCENTIVE DOES HE HAVE TO.

RIGHT. SO IT'S. THE WHOLE OBJECTIVE BEHIND BIDDING IS TO KEEP EVERYONE HONEST.

RIGHT. SO I DON'T THINK THAT YOU'RE ASKING SOMETHING OUTRAGEOUS. AND THAT'S.

TAKE A LITTLE MORE TIME. THAT MINDSET, THAT MENTALITY IS NOT GOING TO CHANGE UNLESS THE PUSH COMES FROM THE TOP.

WE CAN SUGGEST A LOT OF THINGS, BUT NOTHING IS GOING TO HAPPEN.

I WAS GOING TO SAY, IS THERE ANY PROTOCOL ALREADY IN PLACE FOR, YOU KNOW, ADDITIONAL WORK BEING ADDED ON TO THESE PROJECTS AFTER THE ORIGINAL SCOPE OF WORK WAS COMPLETED? I MEAN, IS THAT SOMETHING THAT NEEDS TO BE VOTED ON AND APPROVED PRIOR TO THEM GETTING THE GREEN LIGHT TO DO THESE THINGS.

YES. THE COUNCIL. COUNCIL. COUNCIL. COUNCIL APPROVES EVERY SINGLE ONE OF THESE ACTIONS.

OKAY. BUT MIND YOU, YOU KNOW COUNCIL, THEY'RE NOT CONSTRUCTION WORKERS.

THEY'RE NOT CONSULTANTS. THEY'RE JUST COUNCIL PEOPLE WHO TRUST STAFF.

WHATEVER STAFF RECOMMENDS THEM TO SIGN, THAT'S WHAT THEY SIGN.

I MEAN, AGAIN, ANYTIME THAT WE PROVIDE THIS INFORMATION TO COUNCIL FOR THEM TO MAKE A DECISION, STAFF DOES PROVIDE THE RATIONALE. THEY PROVIDE THE PRICING, THEY PROVIDE THE DISCUSSION.

THE INFORMATION IS THERE FOR COUNCIL TO REVIEW AND SAY YOU GUYS SHOULD MAKE A DIFFERENT DECISION.

FROM MY EXPERIENCE AND TALKING TO THE PUBLIC WORKS DIRECTOR, COUNCIL IS VERY INTERESTED IN MANY OF THESE PROJECTS AND THEY LOOK AT THEM CLOSELY.

I'M JUST CURIOUS WHAT THIS MIGHT BE A LOADED QUESTION HERE, BUT WHAT IS WHAT IS THE COUNCIL'S OPINION OF THE CURRENT STATE OF THESE PROJECTS IN THE BUDGETS AND BEING OVER? ARE THEY. I DEFINITELY CANNOT SPEAK TO THAT.

I THINK THAT IS. A CONCERN THAT THEY'RE BRINGING UP OR DO THEY SHARE IN OUR CONCERNS OR IS THIS NORMAL FOR THEM OR? NO. I'M JUST CURIOUS. I WILL SAY THE ONLY PLACE THAT I HAVE HEARD THESE QUESTIONS IS FROM THE COMMISSION.

I WILL SAY INTERNALLY, WE ARE ALWAYS LOOKING TO, YOU KNOW, SPEND AS LITTLE AS POSSIBLE.

AND COMPLETE CAPITAL PROJECTS MORE EFFECTIVELY.

STAFF IS VERY AWARE OF OUR SPENDING LIMITATIONS.

THE OTHER THING I WILL SAY IS THAT THE MAYOR HAS EXPRESSED INTEREST AND THE CITY MANAGER HAS DIRECTED PUBLIC WORKS.

AND MY TEAM TO WORK TOGETHER ON THE PRESENTATION OF CAPITAL PROJECTS IN THE BUDGET BOOK.

WE THINK THERE'S A LOT OF ROOM FOR IMPROVEMENT THERE.

SO WE'RE LOOKING WORKING WITH THE CITY MANAGER, WITH THE MAYOR TO KIND OF REFORMAT THAT.

SO THAT'S ONE AREA WHERE, YOU KNOW, COUNCIL IS INTERESTED.

THEY'RE LOOKING FOR YOU KNOW, THEY'RE LOOKING FOR SOME CHANGES THERE.

OKAY. THANK YOU. THERE IS ONE MEETING. AND REMIND ME, STEPHANIE, HOW OFTEN THE STRATEGIC MEETING IS IT ONCE A YEAR? YES. SO WE HAVE A STRATEGIC PLANNING MEETING ONCE A YEAR.

ONCE A YEAR. THANK YOU. SO THE REASON I ASKED IS THAT'S A REALLY GOOD MEETING THAT I THINK ALL COMMISSIONERS, ALL FINANCE COMMISSIONERS SHOULD ATTEND, BECAUSE THAT'S WHEN YOU'LL SEE WHAT COUNCIL IS THINKING.

THAT'S WHEN WE CAN ASK THEM QUESTIONS. THEY HAVE PUBLIC COMMENTS ALLOCATED TO TO SPEAK FOR ATTENDEES.

SO THAT'S A REALLY GOOD TIME FOR US TO BE ABLE EVEN TO INFLUENCE IF WE CAN NEXT TIME.

IF I ATTENDED ONLY ONE AND I WAS SITTING THERE, I REMEMBER AND THINKING, I WISH WE WERE ALL THERE BECAUSE THIS, THAT WAS THE TIME THAT WE COULD INFLUENCE THEM.

HOW MUCH THEY COULD SPEND ON TREE TRIMMING VERSUS TRAFFIC.

YOU KNOW, ALL THOSE THINGS. BUT THAT'S. IS THAT A MEETING HELD DURING THE BUDGET PROCESS OR? IT'S GENERALLY OVER THE SUMMER. IT'S REALLY ALL A BLUR, BUT IT'S MORE TOWARDS KIND OF THE START OF THE YEAR AND THEN STAFF SETS

[01:20:07]

BUT IT'S A STRATEGIC PLANNING SESSION. I DID INCLUDE A NOTE ABOUT IT IN THE AGENDA FOR THE COMMISSION TO SEE IF THE COMMISSION WANTED TO SEND ANY YOU KNOW, INFORMATION OR STATEMENTS TO, FOR COUNCIL TO CONSIDER AT THE STRATEGIC PLANNING SESSION.

SO THAT'S SOMETHING YOU CAN DO FOR NEXT TIME AS WELL.

SO THAT'S COMING UP PROBABLY IN ABOUT SIX MONTHS.

I WANT TO SAY I THINK SO. SO THAT WOULD BE A REALLY GOOD ONE FOR US TO ATTEND.

AND I WOULD ALSO SAY I DON'T KNOW, I DON'T KNOW IF THIS KIND OF DISCUSSION OR LEVEL OF DETAIL COMES UP IN THE ACTUAL PUBLIC WORKS COMMISSION MEETINGS, BUT WE DO HAVE A PUBLIC WORKS SUSTAINABILITY AND SAFETY COMMISSION THAT MEETS REGULARLY.

IF ANYONE IS INTERESTED IN ATTENDING THOSE MEETINGS.

AND, YOU KNOW, PERHAPS THIS IS AN ISSUE OF CONCERN THAT EITHER THEY HAVE OR DO NOT HAVE.

YOU KNOW, I THINK THAT'S THAT'S AN INTERESTING SOURCE AS WELL.

THIS COMMISSION WILL HAVE A JOINT MEETING WITH THE COMMISSION AROUND THE BUDGET TIME.

IT'S GENERALLY VERY FOCUSED ON THE BUDGET. SO I DON'T KNOW IF THAT'S THE BEST TIME TO BRING UP SOME OF THESE ISSUES, BUT THIS IS, JUST WANT TO PUT THAT OUT THERE. THIS IS ABOUT PLANNING FOR THE BUDGET AND PLANNING FOR OPERATIONS THAN IT IS BUDGET.

LET'S DECIDE WHAT WE'RE GOING TO DO WITH THIS.

I STILL THINK SUBCOMMITTEE MEETS ADDS THOSE QUESTIONS.

WE COMBINE THOSE WITH THE LETTER FROM MUELLER.

YOU SEND THOSE TO PUBLIC WORKS FOR THEIR THEY'LL TAKE A LOOK AT THEM.

AND AT SOME POINT WE DO NEED AFTER THEY'VE HAD THE CHANCE TO LOOK AT THEM.

WE STILL NEED, I THINK, THE DIRECTOR OF PUBLIC WORKS TO OR SOMEONE IN HIGH RANKING IN THAT DEPARTMENT TO COME BACK AND TALK WITH US ABOUT THOSE QUESTIONS.

I HAVE A FEELING ONCE HE READS THOSE QUESTIONS AND SEES WHAT'S GOING ON IN OUR MIND, HE'S GOING TO RUN TO US TO TALK TO US.

OKAY, BEFORE WE START MAKING PUBLIC ACCUSATIONS AND LETTERS TO COUNCIL.

MAKE CLEAR FOR THE RECORD, WE'RE MAKING NO ACCUSATIONS AT THIS POINT.

WE DON'T HAVE EVIDENCE THAT ANYTHING IMPROPER HAS TAKEN PLACE.

THERE ARE POLICIES IN PLACE THAT LEND THEMSELVES TO THE POSSIBILITY THAT THAT CAN HAPPEN, AND WE JUST WANT TO MAKE SURE THEY DON'T HAPPEN OR IF THEY ARE HAPPENING THAT WE STOP THEM. SO THIS IS STILL AN INVESTIGATIVE PROCESS.

AND WE'RE TURNING OVER STONES. SO DOES ANYONE DISAGREE WITH THAT APPROACH.

SO MOTION TO BRING THIS ITEM BACK. EXCUSE ME.

I BELIEVE WE HAVE ONE PUBLIC COMMENT. OKAY. HI.

LARISSA, AGAIN. LET'S SEE. I LOST MY NOTE. SO LET'S SEE.

I WORKED FOR A SUCCESSFUL GLAZING CONTRACTOR SERVING REDONDO BEACH, MANHATTAN BEACH, HERMOSA BEACH FOR MANY YEARS.

IN PROFESSIONAL CONSTRUCTION, UNFORESEEN SHOULD NOT BE ROUTINE.

MOST OF THE TIME, IT'S CARELESS PLANNING. NOT SURPRISED CONDITIONS.

CITY CONSTRUCTION JOBS HAVE BECOME WHAT THEY CALL DAIRY FARM, NOT BECAUSE OF NECESSITY, BUT BECAUSE OF WEAK OVERSIGHT, PREDICTABLE CHANGE ORDERS AND FRAGMENTED ACCOUNTABILITY ALLOWS COSTS TO BE MILKED LONG AFTER THE CONTRACT IS SIGNED.

SO MY SUGGESTION IS TOTAL CONTRACT INSTALLED.

PERIOD. NO CHANGE TO ORDER. YES, THERE ARE, YOU KNOW, UNFORESEEN THINGS.

IT'S VERY RARE, THAT'S ALL. SO KEEP AN EYE ON IT.

THANK YOU. OKAY. THANK YOU. AND I AGREE WITH EVERY WORD SHE SAID.

SHE TOOK IT STRAIGHT OUT OF MY HEAD. [LAUGHTER] SO THAT WAS.

IT SHOULDN'T BE THAT UNFORESEEN OR TOO MANY UNFORESEEN.

SHE HIT THE NAIL RIGHT ON THE HEAD. AND THIS IS WHAT I'VE BEEN SAYING.

IT TOOK US TWO YEARS JUST TO GET THE DATA THAT STEPHANIE WAS FINALLY KIND ENOUGH TO PROVIDE.

THEY FOUGHT TOOTH AND NAIL FROM THE CITY MANAGER ALL THE WAY DOWN TO THE LOWEST LEVEL.

THEY DID NOT SHOW ANY INTEREST OR DESIRE TO DIG DEEPER.

NOW THAT WE ARE ABLE TO DO IT BECAUSE OF THE INFORMATION THAT STEPHANIE HAS GIVEN US, ALL WE ARE GOING TO GET IS A BRICK WALL AND WE CAN KEEP HITTING OUR HEAD ON IT.

[01:25:03]

NO MORE CHANGE ORDERS. CREATE A NEW CONTRACT.

NOW, THERE WOULD BE SOME EXCEPTIONS, BUT THAT'S IF THAT'S THE CASE.

THEN MAYBE THERE SHOULD BE 10% OR 80%. I AGREE.

THAT'S ALL I'M SAYING. I THINK WE'RE DOING THE. SOMETIMES YOU HAVE TO FORCE THE ISSUE BECAUSE IF YOU DON'T WE CAN TALK ABOUT IT.

WE CAN GO TO THE MEETINGS AND WE CAN DISCUSS IT UNTIL YOU KNOW, THE DOOMSDAY.

BUT NOTHING IS GOING TO CHANGE. I DON'T DISAGREE, I THINK THAT WE'RE TAKING THE RIGHT INITIAL STEPS, AND I THINK THAT IF WE DO OUR DUE DILIGENCE AND WE DO OUR JOB IN ASKING THE RIGHT QUESTIONS, I THINK THAT WE WILL, IF FIND ANYTHING, BE ABLE TO PUT UP A COMPELLING ENOUGH ARGUMENT AS TO DEMAND CHANGE IF WE FIND THAT IT NEEDS TO BE DONE.

SO I THINK WE'RE DOING THE RIGHT THING. AND THE COMPLETION OF OUR WORK IS WILL BE A REPORT AND RECOMMENDATIONS TO CITY COUNCIL.

YEAH. ONE OF THE QUESTIONS CAN YOU GUYS ADD IS WHERE DO THEY ADVERTISE FOR BIDS.

I WANT TO MAKE SURE THAT THEY DO HAVE A PLATFORM TO ADVERTISE.

AND WHAT IS THE AVERAGE NUMBER OF BIDS THAT THEY RECEIVE FOR CIPS.

BECAUSE THAT MIGHT BE ONE OF THE ISSUES THAT THEY'RE JUST NOT ADVERTISING IN A PLACE WHERE THEY CAN GET VARIETY OF.

AN AVERAGE NUMBER OF BIDS BEING RECEIVED. OKAY.

OKAY. SO WE WANT TO BRING THIS BACK TO THE NEXT MEETING. WHO'S ON THE SUBCOMMITTEE? AND OKAY. THREE OF YOU. THERE'S THREE. THREE.

YEAH. YOU CAN'T HAVE MORE THAN THREE. OKAY. THE MOTION TO BRING THIS ITEM BACK.

PARDON THE INTERRUPTION AGAIN. I JUST HAVE TO SAY, THERE'S NO PUBLIC COMMENTS ON ZOOM OR ECOMMENTS.

THANK YOU. THANK YOU. CAN I HAVE A MOTION TO PUT THIS ON THE AGENDA AND BRING IT BACK? MOTION TO PUT ON THE AGENDA AND BRING IT BACK.

SECOND. ALL IN FAVOR? AYE. OKAY. MOVING ON TO J3 PROFESSIONAL SERVICES PROCUREMENT DATA FROM STAFF.

STEPHANIE, ARE YOU GOING TO? YES. SO J3 CAN BEFORE STEPHANIE PRESENTS I THERE IS A LETTER AGAIN FROM MR. JIM MUELLER. OKAY. I DO WANT TO? NOT ALL OF IT, BUT I HIGHLIGHTED SOME POINTS I WANT TO IF IT'S OKAY TO READ.

PLEASE GO AHEAD. SO THIS IS AGAIN FROM JIM MUELLER WHO IS A RESIDENT IN REDONDO BEACH.

MY GLASSES. THE COMMISSION INITIATED AN INVESTIGATION OF PROFESSIONAL SERVICES PROCUREMENT FOR THE CITY OF REDONDO BEACH. THIS CATEGORY OF SPENDING IS SUBSTANTIAL, OVER $10 MILLION PER YEAR, AND USUALLY 8% OF THE CITY'S GENERAL FUND BUDGET.

SINCE PROCUREMENT CAN BE TRICKY FOR GOVERNMENT ORGANIZATIONS WHEN THESE ORGANIZATIONS SPECIFICALLY ALLOW SOLE SOURCE PROCUREMENT OF BROAD CATEGORIES OF SERVICES LIKE THE REDONDO BEACH MUNICIPAL CODE, CHAPTER TWO, TITLE 2-609 AND TEN DOES SO.

IT SAYS PROFESSIONAL SERVICES OF ENGINEERS. THIS IS THE MUNICIPAL CODE, PROFESSIONAL SERVICES OF ENGINEERS, ARCHITECTS, ACCOUNTANTS, ATTORNEYS, DOCTORS AND OTHER PROFESSIONAL CLASSES ARE HEREBY DECLARED TO BE NONCOMPETITIVE AND BIDS NEED TO BE AND BIDS NEED NOT BE RECEIVED.

SO THAT'S IN OUR MUNICIPAL CODE. AND SOMEONE CAN CONFIRM VERIFY TOO HIGH VISIBILITY CASES ARE CANNABIS SURVEY SERVICES CONTRACT AND FM3 AND ARTESIA REAL ESTATE CONSULTING CONTRACTS.

I'LL SKIP THAT ONE. ANOTHER ISSUE WITH SERVICES CONTRACT IS AUTOMATIC EXTENSIONS FOR MULTIPLE YEARS.

SOME CITY SERVICES CONTRACTS INCLUDE THIS PROVISION.

IN OTHER CASES, THE EXTENSION ARE PART OF THE COUNCIL CONSENT CALENDAR, WHICH TENDS TO GET LESS VISIBILITY, DISCUSSION AND PUBLIC COMMENT. THE PROBLEM WITH AUTOMATIC EXTENSIONS AND QUICK EXTENSIONS IS THAT IT SUBVERTS THE ANNUAL BUDGET PROCESS, THESE CONTRACTS AND THE RATES THEREIN OUTLIVE THE ANNUAL BUDGET REVIEW PROCESS.

HIS RECOMMENDATION IS THAT STRICTER DISCIPLINE TO CREATE AND REVIEW SOLE SOURCE JUSTIFICATION, ELIMINATE AUTOMATIC CONTRACT EXTENSIONS, AND MAKE REQUESTS FOR EXTENSIONS, BE ACCOMPANIED BY A REVIEW OF ALTERNATE SOURCES FOR SERVICES

[01:30:04]

SINCERELY, JAMES MUELLER. AGAIN, I WANTED TO READ BECAUSE HE HAD A COUPLE OF VERY IMPORTANT POINTS.

AND THE MOST IMPORTANT WOULD BE WHAT DOES OUR MUNICIPAL CODE SAY ABOUT PROFESSIONAL CONTRACTS.

OKAY. THANK YOU. WE COULD ALSO. JACOB, DO WE HAVE IT WE COULD PUT IT UP ON THE SCREEN AS WELL BECAUSE WE DID SUBMIT THESE BOTH AS BLUE FOLDER ITEMS EARLIER. YES. JUST AS A CLARIFICATION.

COMMISSIONER ALLEN WERE YOU ASKING WHAT'S IN THE TO ME TO CONFIRM WHAT'S IN THE MUNICIPAL CODE? IS IT EASY FOR YOU TO FIND IT RIGHT NOW UNDER MUNICIPAL? IT'S VERY EASY. IT'S RIGHT THERE. IF WE CAN JUST LOOK AT IT AND SEE WHAT EXACTLY IT SAYS THAT WAY.

BECAUSE I HEARD THE COMMISSIONERS OVER AND OVER ASKING, WHAT IS THE CODE? SO I WANT ALL OF US IN THIS MEETING TO LOOK AT THE CODE.

SO WE'RE NOT ARGUING WITH OR NOT AGREEING OR WE HAVE A QUESTION.

SO WHAT IS THAT CODE PRESENT MODE. BECAUSE MR. MUELLER DID QUOTE THE MUNICIPAL CODE. AND IF YOU'RE SAYING THAT'S NOT ACCURATE.

NO, I'M SAYING THAT IS ACCURATE. IT IS ACCURATE. I WAS JUST ASKING IF YOU WANTED ME TO CONFIRM IT. OH OKAY IT IS ACCURATE. IT'S 100% ACCURATE. IT'S VERY EASY TO FIND. YEAH, I CAN I CAN PULL IT UP. NO, IT'S OKAY IF YOU'RE SAYING IT'S ACCURATE IN A PUBLIC MEETING, THEN IT'S ACCURATE.

AND SO I'M GOING TO READ THAT IF YOU DON'T MIND AGAIN.

AND I'M GOING TO PUT ON MY GLASSES TO MAKE SURE I'M READING IT.

SO OUR MUNICIPAL CODE SAYS PROFESSIONAL SERVICES OF ENGINEERS, ARCHITECTS, ACCOUNTANTS, ATTORNEYS, DOCTORS AND OTHER PROFESSIONAL CLASSES ARE HEREBY DECLARED TO BE NONCOMPETITIVE AND BIDS NEED NOT BE RECEIVED. SO IT'S NOT REQUIRING ANY BIDDING OR ANY COMPETITION.

THAT'S WHAT THE CODE SAYS. RIGHT. SO ONE OF OUR RECOMMENDATIONS LATER CAN BE THAT WE CHANGE THE CODE.

AND THE CODE IS EASY TO CHANGE. IT'S JUST IT ALL IT DOES IS REQUIRES COUNCIL APPROVAL.

ARE THOSE CODES REGULARLY BENCHMARKED? RIGHT.

LIKE REVIEWED TO SEE IF CHANGES ARE APPROPRIATE.

IS THAT DONE ON AN ANNUAL BASIS OR? YES IT'S PART OF IT AS NEEDED? FROM MY EXPERIENCE IT'S AS NEEDED. DEPARTMENTS SOMETIMES COME AND SAY WE HAVE AN ISSUE.

LET'S WE NEED TO FIX THIS OR WE NEED TO ALSO COMPLY WITH THE STATE CODE.

OUR CODE DOESN'T, A LOT OF TIMES THEY COME BECAUSE THEY CHANGE IT BECAUSE IT DOESN'T COMPLY WITH THE STATE CODE.

STATE CHANGES SOMETHING. SO THEY NOW THEY HAVE TO CHANGE THE CITY'S CODE.

BUT THAT WOULD BE A BIG DEAL TO COMING FROM THE FINANCE.

I MEAN THAT'S OUR JOB. THAT'S WHERE THAT CHANGE WILL COME FROM, IS FROM THE COMMISSION.

IS THERE A RECORD OF THE LAST TIME THAT THE CODE WAS REVIEWED OR ANY SIGNIFICANT CHANGES WERE MADE? SO WE MADE, THE CITY MADE A PRETTY SIGNIFICANT CHANGE.

I THINK IT WAS ACTUALLY A CHARTER CHANGE TO THE PUBLIC WORKS PURCHASING SECTION OF THE CITY CODE.

AND I BELIEVE WE UPDATED PURCHASING THRESHOLDS FOR OTHER GOODS AND SERVICES IN 2014 OR 2015.

SO APART FROM THE PUBLIC WORKS SECTION IN THAT ONE, WE HAVEN'T UPDATED THE SECTION OF THE CODE FOR A NUMBER OF YEARS.

I DID MENTION TO THE COMMISSION DISCUSSING THIS BEFORE THAT THE CITY IS LOOKING AT JUST REVIEWING OUR NON PUBLIC WORKS PROCUREMENT.

THIS IS SOMETHING THAT'S JUST STARTING THIS YEAR IN JANUARY.

SO COMMISSIONER ALLEN'S RIGHT. SOMETIMES CODE CHANGES WILL COME INTERNALLY.

WE'LL FIND SOME PROCESS OR, YOU KNOW, CONSISTENCY WITH STATE LAW.

SOMETIMES IT'S DIRECTED BY COUNCIL OR THE CITY MANAGER.

AND CAN I ALSO JUST VERIFY CONFIRM ONE THING, SINCE WE HAVE A LOT OF NEW MEMBERS.

SO THERE IS A CHARTER AND THERE'S THE MUNICIPAL CODE, THE CHARTER THAT WAS CHANGED, THAT THE CHARTERS CAN ONLY BE CHANGED BY THE VOTERS.

YES. BUT THIS IS MUNICIPAL CODE. THAT'S WHY I WAS SAYING.

OH, IT'S EASY BECAUSE IT'S NOT A CHARTER WHEN YOU HAVE TO TAKE SOMETHING TO THE VOTERS. THAT'S CODED BY A DIFFERENT STATUTE.

BUT THE MUNICIPAL CODE THAT WE'RE TALKING ABOUT FOR THIS PARTICULAR ISSUE, THAT CAN BE DONE BY COUNCIL, WE DON'T HAVE TO GO TO THE VOTERS. WHAT IS THE PROCESS TO MAKE A CHANGE? JUST RECOMMEND A CHANGE. YOU JUST TAKE IT TO COUNCIL.

AND THEN THE COUNCIL VOTES ON WHETHER OR NOT THE CHANGE THEY WANT TO CHANGE IT OR NOT.

IT'S JUST A RESOLUTION THAT THE CITY COUNCIL TAKES UNDER ADVISEMENT AND VOTES UP OR DOWN.

IT'S LIKE ANY MOTION. WHAT'S THE OTHER ONE? RESOLUTION, NOT A RESOLUTION.

[01:35:03]

I MEAN, GENERALLY, I'M SURE THERE WOULD BE SOME DISCUSSION WITH CITY COUNCIL.

YOU KNOW, TO UNDERSTAND IF THIS IS SOMETHING THAT CITY COUNCIL WANTS TO DO BECAUSE THEY DIRECT STAFF.

YOU EXPLAIN IT TO THEM. YOU KNOW, I MEAN, YOU DON'T JUST TELL THEM, OH, CHANGE IT.

YOU GIVE THEM A REASON, A HISTORY, A BACKGROUND.

STEPHANIE, A QUESTION ON THE FIGURE OF OF 10 MILLION THAT YOU MENTIONED IN THE BUDGET THAT WAS FOR THE SORT OF THESE SORT OF EXPENDITURES. DOES THAT INCLUDE OUTSIDE ATTORNEYS? SO I DON'T KNOW WHERE THAT I DON'T KNOW WHERE HE GOT THE NUMBER FROM BECAUSE HE DID NOT CALL ME TO TALK TO ME ABOUT IT.

SO I WOULD HAVE TO TAKE A LOOK IF HE'S JUST LOOKING AT THE CONTRACTUAL PROFESSIONAL SERVICES LINE ITEM IN OUR BUDGET IT WOULD PROBABLY INCLUDE SOME ATTORNEY'S FEES, BUT NOT ALL, BECAUSE I BELIEVE WE ALSO HAVE A CODE FOR ATTORNEY FEES, SO I WOULD HAVE TO I WOULD HAVE TO LOOK AT THAT IN MORE DETAIL.

AND AGAIN LOOK AT THE NUMBER. I DON'T KNOW EXACTLY WHAT HE BASED THAT ON.

AND I JUST ORDINANCE. THAT'S THE WORD I WAS LOOKING FOR.

IT'S NOT A RESOLUTION BUT IT'S AN ORDINANCE THAT THEY APPROVE.

ORDINANCE CREATED BY. YES. THE RESOLUTION PASSED BY CITY COUNCIL.

AND THE ATTORNEY SIGNS THE CLERK SIGNS AND THEN THE COUNCIL.

SO IF THE OPINION OF THIS COMMISSION WAS THAT AN UPDATE OR AMENDMENT TO THIS WAS NECESSARY, WHAT WOULD BE THE FIRST STEP FOR US TO DO TO START MAKING.

RESOLUTION BY THIS COMMISSION AND A LETTER TO CITY COUNCIL, I THINK.

WOULD IT MAKE SENSE TO PERHAPS PUT SOME EVIDENCE BEHIND WHAT, LIKE THE VALUE OF CHANGING THIS, WHAT IT MIGHT LOOK LIKE FOR US IN A MONETARY VALUE, LIKE IF WE WERE TO PUT THIS INTO A BIDDING, UPDATE THIS TO A BIDDING PROCESS, THIS MIGHT BE SOME OF THE POSITIVE OUTCOME FROM IT.

AND THEN THAT MIGHT PROVIDE A LITTLE BIT MORE STRENGTH IN OUR ARGUMENT AS TO WHY WE SHOULD PERHAPS ENTERTAIN THE IDEA OF MAKING THIS CHANGE.

I THINK THAT'S A GOOD POINT. AND I THINK THAT'S WHAT STEPHANIE IS PUTTING TOGETHER, IS WHAT THE DATA, WHAT DATA WE CAN GET TO TRY TO COMPILE THE EVIDENCE AND SEE WHAT YOU KNOW, WHAT THE SAVINGS COULD POTENTIALLY BE.

SOUNDS LIKE ANOTHER SUBCOMMITTEE IS ABOUT TO COME OUT OF HERE. BUT AGAIN, IN PULLING THAT DATA TOGETHER THAT'S WHY I RAISED THE QUESTION ABOUT LEGAL FEES, BECAUSE THERE ARE YEARS IN WHICH WE SPEND A LOT OF MONEY FOR OUTSIDE ATTORNEYS.

MAJOR COURT CASES, AND THAT ALL THE OTHER EXPENDITURES IN THAT CATEGORY MAY PALE IN COMPARISON TO 1 OR 2 BIG LEGAL FEES. SO WE NEED TO DIFFERENTIATE. SO WE DEFINITELY CAN DO THAT.

GOING THROUGH IF YOU WOULD LIKE TO TAKE A LOOK AT THE IF YOU'D LIKE TO PULL UP THE, THE DATA EXAMPLE THAT WE SHARED ALONG WITH THE REPORT.

I CAN SHOW YOU WHAT WE'RE. IS THIS EVERYTHING, OR JUST BECAUSE IT DIDN'T LOOK LIKE JUST PROFESSIONALS.

IT IS NOT EVERYTHING. SO IF YOU'LL SEE IN YOUR PACKET, I INCLUDED A SHORT, VERY SHORT COVER REPORT.

JUST SAYING THAT THIS INCLUDES A PORTION. SO THIS IS.

SORRY ARE THESE PROFESSIONAL SERVICES OR OTHERS.

THESE ARE ALL PROFESSIONAL SERVICES. ALL OF THE EXAMPLES THAT I PROVIDED.

SORRY. YES THEY ARE. OKAY. THEY'RE ALL PROFESSIONAL SERVICES. HOWEVER THEY DO NOT ENCOMPASS THE TOTALITY OF ALL THE CITY'S PROFESSIONAL SERVICES, IF THAT MAKES SENSE. YEAH IS BECAUSE I DIDN'T.

THERE'S TREE TRIMMING HERE, AND I DIDN'T THINK TREE TRIMMING WAS A PROFESSIONAL SERVICE OR TRASH WAS A PROFESSIONAL SERVICE. YEAH. THAT'S WHY I GOT.

I SEE, I SEE I WILL. THERE WERE QUITE A FEW OF THOSE.

PAGE NUMBER ON THE TOP. J3 ON THE AGENDA PACKET.

OKAY. THANKS. THERE. I'D HAVE TO LOOK AT THAT.

OKAY. THANK YOU. YEAH. LIKE THE FIRST PAGE THAT'S FINE.

BUT THEN ON THE SECOND PAGE GUARD. SO PROPERTY SERVICES TRANSPORTATION CONCEPT FOR $4 MILLION. THOSE ARE PROFESSIONAL SERVICES I BELIEVE THOSE ARE PROFESSIONAL SERVICES.

YEAH, I WILL DOUBLE CHECK. I MEAN, SOME OF THESE, LIKE, DEFINITELY THE ATHENS CONTRACT.

WE DEFINITELY BID THAT OUT. I WILL DOUBLE CHECK AND MAKE SURE THAT THESE ARE ALL PROFESSIONAL SERVICES.

OKAY. THIS IS WHAT. THE ATHENS CONTRACT IS FOR PER BID, RIGHT?

[01:40:04]

THAT'S OUR MONEY. LOOK, I'M ACTUALLY JUST PULLING UP THE MANHATTAN BEACH MUNICIPAL CODE ON THIS, AND THEY. THEIRS IS EXEMPT FROM BIDDING AS WELL, EXCEPT IT HAS THRESHOLDS AROUND IF IT'S OVER $25,000 THE CITY MANAGER APPROVES IF IT'S OVER $75,000 CITY COUNCIL APPROVES. SO AT LEAST THEY HAVE SOME METRICS AROUND DOLLAR VALUE FOR APPROVAL.

WELL, SO JUST TO BE CLEAR. YES. DO WE HAVE THAT AS WELL? YES. SO AND ACTUALLY REDONDO BEACH HAS VERY LOW THRESHOLDS COMPARED TO MOST MOST CITIES.

WE'RE PULLING TOGETHER THIS COMPARATIVE DATA AGAIN TO LOOK AT THESE BECAUSE WE WANT TO LOOK AT WHAT NEIGHBORING CITIES DO.

IF ANYTHING, IT'S PROBABLY SIGNIFICANTLY MORE EFFICIENT FOR US TO INCREASE OUR BIDDING THRESHOLDS.

WE HAVE A LOWER BUDGET THAN SURROUNDING CITIES.

SURE. SOME OF THEM, SOME OF THEM. BUT SO ANYTHING OVER $5,000 REQUIRES A PURCHASE ORDER.

EVERYTHING OVER $35,000 GOES TO COUNCIL. AND OUR SORT OF SHORT ITEM, AND ANYTHING ABOVE $35,000 IS A STANDALONE ITEM THAT COUNCIL APPROVES, AND THE MAYOR SIGNS EVERY SINGLE CONTRACT.

GOTCHA. WHICH IS NOT. I DO NOT BELIEVE IS VERY COMMON IN OTHER CITIES.

IF YOU'RE INTERESTED. HOLD ON MY PURCHASING MANAGER.

OKAY, SO IT SAYS THE LIST INCLUDES SERVICE CONTRACTS AND PROFESSIONAL SERVICES CONTRACTS RELATED TO PO'S.

OKAY. IF YOU'RE INTERESTED IN TAKING A LOOK AT THE DATA, OR ARE THERE OTHER QUESTIONS BEFORE I PULL THAT KIND OF SAMPLE OF DATA UP? CAN YOU PUT THAT ON THE SCREEN? THE FIRST PAGE, OR I CAN ACTUALLY GO AND OPEN IT UP.

LET ME SEE HERE. I'LL JUST I'LL JUST OPEN UP THE LETTER THAT YOU WERE WRITING.

SERVICE AGREEMENT. OH, THAT'S NOT IT. KIND OF LOOK AT THE ITEM.

THIS ONE OR WHAT WERE YOU LOOKING FOR? YEAH. THAT LETTER.

OKAY. SO WHAT DID IT SAY ON IT? ATTACHES THE PROVIDES A SUMMARY OF DATA AVAILABLE FROM CITY'S FINANCIAL SYSTEM RELATED TO CITY'S PURCHASING IS DISCUSSED.

INCLUDES THIS REPORT. SAMPLE PURCHASE ORDERS.

CATEGORY OF PROFESSIONAL SERVICES FROM CURRENT FISCAL YEAR.

OKAY. SO IT DOES SAY IT'S PROFESSIONAL SERVICES.

YES. SO IF WE LOOK THROUGH HERE. SO THIS IS JUST AN EXAMPLE OF JUST A VERY SIMPLE EXPORT FROM OUR FINANCIAL SYSTEM OF THE TYPE OF DATA THAT IT'S PRETTY EASY TO GET OUT.

SOME OF THESE ARE ITEMS THE COMMISSION SPECIFICALLY REQUESTED, LIKE A DEPARTMENT.

WE HAVE THE TOTAL. WE HAVE THE VENDOR, OBVIOUSLY THE TOTAL ORDERED, WHICH IS THE TOTAL VALUE OF THE CONTRACT, TOTAL LIQUIDATED, AND THEN THE BALANCE REMAINING ON THE CONTRACT.

AND THEN WE ALSO HAVE A DESCRIPTION HERE. YOU CAN SEE THAT SOME OF THESE ARE MORE DETAILED THAN OTHERS.

BUT IN ALL CASES WE WOULD HAVE SOME LEVEL OF DESCRIPTION HERE THAT WOULD MAKE IT POSSIBLE FOR US TO IDENTIFY THE ASSOCIATED SERVICE. SO ACCORDING TO OUR MUNICIPAL CODE, NONE OF THESE JOBS, ALTHOUGH SOME OF THEM HAVE BEEN COMPETITIVE BIDS.

BUT ACCORDING TO OUR MUNICIPAL CODE, THEY DIDN'T HAVE TO.

SO I'M JUST CLARIFYING ON SOME OF THESE LARGER CONTRACTS.

SO FOR ATHENS IT'S CONSIDERED A SERVICE CONTRACT.

SO IT'S NON PROFESSIONAL, BUT IT IS 100% SERVICE.

SO THAT'S WHY IT KIND OF FALLS IN THIS CATEGORY.

I AM JUST CLARIFYING WHETHER WE CONSIDER THEM EXEMPT BECAUSE I THINK WE WOULD NOT BECAUSE IT'S NON PROFESSIONAL.

SO SO SORRY. THESE ARE SERVICE AGREEMENTS. RIGHT? YEAH. ANYTHING THAT IS SPECIFICALLY A PROFESSIONAL SERVICE.

SO FOR EXAMPLE, YOU CAN SEE HERE CLIFTON LARSON ALLEN, THOSE ARE OUR AUDITORS WHO WE HAVE HERE.

I THINK WHITMAN'S PROBABLY 100% PROFESSIONAL SERVICES.

HOW CAN WE DISTINGUISH OR IS THERE A WAY THAT YOU CAN MARK, MAYBE FOR NEXT TIME WHICH ONES ARE THE PROFESSIONALS? SURE. YEP, I THINK SO. SO BUT AGAIN, YOU'RE CORRECT IN SAYING THAT FOR THE ITEMS THAT ARE STRICTLY PROFESSIONAL

[01:45:06]

AS I MENTIONED, WE FREQUENTLY DO AS A BEST PRACTICE.

AND BECAUSE WE ARE INTERESTED IN GETTING THE BEST POSSIBLE SERVICE FOR THE CITY BUT THE MUNICIPAL CODE CURRENTLY DOES NOT REQUIRE THAT. SO ONE QUESTION THAT COULD BE HELPFUL.

ONE PIECE OF DATA THAT COULD BE HELPFUL IS TO IDENTIFY WHICH ONES OF THE PO'S THAT YOU BID FOR AND WHICH ONES YOU DID NOT. SO WHICH ONES DID YOU PLACE OUT FOR BID AND WHICH ONES? YOU WOULD, I GUESS YOU EXERCISE YOUR DISCRETION.

THAT WOULD BE ONE THING THAT COULD BE HELPFUL, I THINK, IS THAT DO YOU KEEP TRACK OF THAT OR THAT'S? WE THAT WOULD BE MORE DIFFICULT TO GET IF IT GOES TO COUNCIL.

THAT'S INFORMATION THAT WE WOULD NORMALLY INCLUDE IN THE ADMIN REPORT.

SO IT'S DATA WE COULD FIND. IT'S JUST NOT READILY AVAILABLE.

WE ARE TALKING HOWEVER ABOUT, YOU KNOW, AGAIN, AS PART OF A PROCESS TO LOOK AT PROFESSIONAL SERVICES MORE BROADLY, TALKING ABOUT WAYS THAT WE CAN ADD KIND OF FUNCTIONALITY TO THE DATA THAT WE'RE PUTTING INTO OUR FINANCIAL SYSTEM.

SO WE'RE ABLE TO GET SO WE'RE ABLE TO PULL THAT MORE EASILY.

SO I GUESS THE HYPOTHESIS AND YOU TELL ME, YOU KNOW, IF THIS IS A CRAZY THING.

SO THE HYPOTHESIS IS WHEN YOU PLACE A CONTRACT OUT TO BID THE PRICE IS MARKED TO MARKET AT THAT POINT.

AND SO YOU GET A COMPARATIVE PRICE. BUT IF A CONTRACT IS NOT FREQUENTLY PLACED FOR COMPETITIVE BIDDING, THEN IT'S POSSIBLE THAT THE PRICE GETS STALE AND GOES UP.

AND SO THAT WOULD ALLOW YOU TO THEN DETECT THE INERTIA IN PRICING AND GIVE YOU SOME SENSE AS TO WHETHER IT MAKES SENSE TO BID THESE THINGS.

BECAUSE THE CONCERN THAT I HAVE IS IF YOU TRY TO BID EVERYTHING, THE TRANSACTION COST IS SO HIGH THAT THE SAVINGS IS SO MINIMAL THAT IT'S A WASTE OF EVERYBODY'S TIME. SO IF YOU COULD IDENTIFY THE SUBSET OF THINGS THAT MAKE SENSE, THEN THAT WOULD BE, I THINK, THE MOST EFFICIENT WAY TO PROCEED.

AND SO IF YOU HAVE THAT KIND OF DATA AND YOU HAVE IT IN EXCEL, IT'S NOT THAT DIFFICULT.

I'M HAPPY TO HELP. IT'S NOT THAT DIFFICULT TO TABULATE AND DO SOME BASIC THINGS TO COME BACK WITH WITH SOME KIND OF A MEASURE.

YEAH, I AGREE I THINK THE ISSUE WILL BE GETTING THE DATA, BUT ONCE YOU HAVE IT YES.

FORGIVE ME IF YOU SAID IT EARLIER AND I MISSED IT, BUT IS THERE SOME KIND OF DEFINING CRITERIA BEHIND WHICH ONES YOU ARE SENDING TO BIDDING AND WHICH ONES YOU AREN'T? YOU MEAN THAT STAFF BIDS KIND OF AS A MATTER OF.

WHY WOULD YOU SEND THIS ONE TO BIDDING VERSUS THIS ONE. AS THE BEST PRACTICE? SO I WOULD PROBABLY HAVE TO TAKE KIND OF A SURVEY OF THE, YOU KNOW, PEOPLE LEADING CONTRACTING OR PEOPLE DOING THIS IN THEIR VARIOUS DEPARTMENTS.

I MEAN, I CAN SPEAK FOR MY DEPARTMENT. I MEAN, I LOOK AT HOW LONG IT IS, HOW LONG IT'S BEEN SINCE WE'VE HAD A NEW PROVIDER.

I WOULD LOOK AT THE COST. I'D. SO IF IT'S, YOU KNOW, A HIGH DOLLAR, POTENTIALLY A HIGH DOLLAR, HIGH VISIBILITY PROJECT, THAT'S SOMETHING I WOULD LIKE TO BID OUT OR GET QUOTES FOR AND I THINK I HAVEN'T LOOKED AT THIS SO MUCH, BUT TIMING CAN ALSO BE A FACTOR. SO SOMETIMES IT'S MORE IMPORTANT TO GET SOMEONE ON BOARD EXPEDITIOUSLY THAN TO, YOU KNOW, GO THROUGH A WHOLE PROCESS THAT MAY TAKE 6 TO 8 WEEKS AND RESULT IN POTENTIALLY NOT A LARGE, LARGE AMOUNT OF SAVINGS. SO WE DON'T HAVE WRITTEN WE DON'T HAVE WRITTEN PROCEDURES FOR THIS, BUT THESE ARE SOME OF THE FACTORS THAT THAT I USE.

AND I THINK OTHERS ARE USING AS WELL. THE REASON FOR MY QUESTION IS, I WOULD AGREE WITH YOU, I THINK THAT IF WE WERE TO JUST BLANKETLY SAY ALL THINGS NEED TO BE NOW SENT TO BID.

YEAH, IT'S A GIANT WASTE OF TIME. CAN I CLARIFY? SO WHEN WE SAY BID, I THINK WE'RE USING THE WORD VERY GENERALLY.

SO THERE ARE TRADITIONALLY YOU WOULD SAY BIDDING IS WHEN YOU ADVERTISE AND THERE IS YOU, YOU GO THROUGH THE PROCESS.

OKAY. BUT FOR IT TO BE COMPETITIVE, YOU DON'T HAVE TO GO THROUGH THAT TRADITIONAL BIDDING.

[01:50:02]

SO YOU KNOW WHAT I MEAN. SO, SO SOME REALLY COMMON THINGS THAT OTHER CITIES DO.

AND AGAIN WE'RE COLLECTING THIS TO BENCHMARK IS AT A CERTAIN DOLLAR THRESHOLD DIFFERENT LEVELS ARE REQUIRED.

AND THIS IS WHAT WE DO WITH WITH GOODS AND SERVICES.

SO YOU HEARD TWO QUOTES THREE QUOTES FORMAL BID.

YEAH. SO I USED TO WORK FOR PUBLIC WORKS AND THAT'S WHAT WE DID TO A CERTAIN AMOUNT.

WE WOULD I THINK IT WAS UP TO $25,000. WE WOULD JUST GET THREE QUOTES.

AND THEN IF IT WAS OVER $50,000 AND I DON'T REMEMBER WHAT WE DID BETWEEN 25 AND 50, BUT IT WAS IF IT WAS OVER 50, THEN WE WOULD DO MORE OF AN OFFICIAL. OR IF WE DIDN'T HAVE THE TIME, THEN IT HAD TO BE.

IT WAS A SPECIAL CASE AND IT HAD TO BE SPECIAL SIGNED THAT.

I THINK WE'RE GOING DOWN THE SAME PATH HERE. WHAT I WAS GOING TO SAY, I LIKE THE THINGS THAT YOU TAKE INTO CONSIDERATION WHEN, HEY, WE SHOULD SEND THIS FOR COMPETITIVE BIDS OR NOT.

SO PERHAPS THE BETTER PLAN OF ACTION IS RATHER THAN CHANGING THE CODE TO SAYING AGAIN A BLANKET STATEMENT, ALL PROJECTS NEED TO BE SENT TO BIDDING. MAYBE WE CAN DEVELOP SOME SORT OF UNIVERSAL CRITERIA THAT SAYS IF IT HASN'T BEEN SENT TO BIDDING IN A CERTAIN PERIOD OF TIME, THEN IT'S REQUIRED TO BE BID. IF IT'S OVER A DOLLAR THRESHOLD, THEN IT'S REQUIRED TO BE BID.

AND WE CAN SET UP A BOOK OF RULES TO FOLLOW, RATHER THAN JUST SAYING EVERYTHING NEEDS TO BE SENT TO BID BECAUSE AGAIN, IT'S A GIANT WASTE OF TIME. IF WE'RE SENDING SOMETHING TO BID FOR A $50.

YOU NEED AT LEAST THREE QUOTES FOR. RIGHT, BUT AGAIN, IF IT MEETS THE CRITERIA THAT THAT HAVE BEEN AGREED UPON AND THE THREE QUOTES AREN'T, THE PROCESS ISN'T THE PROBLEM.

I'M JUST SAYING SOMETIMES IT'S NOT WORTH THE TROUBLE IF IT, YOU KNOW, IF IT DOESN'T MEET CERTAIN CRITERIA THAT ARE ESTABLISHED.

YEAH. STEPHANIE THESE THE TOTAL ORDERED CATEGORY.

THIS IS SOME OF THESE ARE MULTIYEAR CONTRACTS.

YES. SO THE BETTER ARGUMENT WOULD, WOULD BE TO COME UP WITH A FIGURE OF HOW MUCH IS SPENT ON AN ANNUAL BASIS. SO IF IT'S A THREE-YEAR CONTRACT SOME MASSAGING OF THE DATA TO COME UP WITH. AN ANNUAL. YEAH. I'M ONLY CURIOUS FOR COMMUNITY DEVELOPMENT. SURE. THEY HAVE VERY LARGE CONTRACTS FOR PLAN CHECK AND CONSULTING SERVICES.

DO WE HAVE A COMMUNITY DEVELOPMENT DEPARTMENT, OR? YES. IS IT. BECAUSE SOMETIMES THERE ARE DEPARTMENTS THAT THEY'RE VERY SMALL AND THEY JUST OUTSOURCE EVERYTHING, IS IT ONE OF THOSE? WE DON'T OUTSOURCE EVERYTHING, BUT WE DO OUTSOURCE QUITE A BIT OF THE PLAN CHECK.

AND THAT'S BEEN A STRATEGIC DECISION THAT COUNCIL'S BEEN VERY SUPPORTIVE OF OVER THE PAST FEW YEARS.

WE'VE HAD DIFFICULTY RECRUITING SOME OF THE POSITIONS THAT WOULD HELP US TO COMPLETE PLANS MORE EXPEDITIOUSLY.

SO WE HAVE PRESENTED COUNCIL, AND COUNCIL HAS BEEN VERY HAPPY ABOUT HAVING CONSULTANTS DO SOME OF THESE PLANS WITH, OF COURSE, YOU KNOW, STAFF'S OVERSIGHT TO SPEED UP THE PLAN CHECK PROCESS.

OKAY, WHAT DO WE DO FROM THIS POINT? YOU'RE GOING TO MASSAGE THE DATA SOMEWHAT FOR THE NEXT MEETING? WELL, I GUESS MY, THAT'S ALSO MY QUESTION IS WHAT MAKES SENSE TO GO FROM HERE? MY UNDERSTANDING IS I WAS PROVIDING THIS AS KIND OF AN EXAMPLE OF WHAT IS AVAILABLE AS A STARTING POINT TO SEE, YOU KNOW, WHAT YOU'RE INTERESTED IN AND WHAT GOES NEXT.

WELL, I THINK WHAT WE WOULD LIKE TO SHOW, WHAT I THINK WE WOULD WANT TO SHOW AS CITY COUNCIL IS, THIS IS THE ANNUAL AMOUNT SPENT ON CONTRACTS THAT DO NOT GET A COMPETITIVE BID.

SO A THREE YEAR CONTRACT DO A THIRD OF THAT TOTAL THAT WHAT PERCENT OF THE TOTAL BUDGET? IS THIS, IS IT SIGNIFICANT? AND IT WILL BE SIGNIFICANT.

BUT HOW SIGNIFICANT IS IT? A THOUGHT? YEAH, NO, I THINK THAT'S RIGHT.

I THINK. GO AHEAD. NO, I WAS JUST GOING TO AGREE.

I THINK THAT'S RIGHT. YEAH. I THINK THAT'S A THAT'S A GOOD STARTING POINT.

I GUESS I'M, I'M JUST TRYING TO THINK THROUGH A COUPLE OF STEPS THAT THE INITIAL CONCERN OR THE INITIAL QUESTION WE

[01:55:03]

SO I'M JUST TRYING TO THINK THROUGH, GIVEN THE DATA WE HAVE, HOW COULD WE ADVISE THE COUNCIL ON WHETHER THE DATA ARE REASONABLE? RIGHT. WHAT WOULD BE THE TEST THAT WE COULD COME UP WITH TO SAY THAT THE CURRENT PROCESS LOOKS LIKE IT'S A REASONABLE ONE.

THE CURRENT PROCESS LOOKS LIKE IT'S POTENTIALLY SOMETHING THAT CAN BE MADE BETTER.

SO I'M, ASIDE FROM COMPARING THE BID NON BID CONTRACTS, I'M DRAWING A BLANK AS TO WHAT ELSE.

THE OTHER POSSIBILITY IS LOOKING AT THE FREQUENCY OF THE OF THE OF THE PROVIDER AND ASKING, DO WE SEE LIKE IS GRIFFIN STRUCTURES CONTINUALLY SHOWING UP IN THE SPREADSHEET? AND DO WE SEE THAT THE, THE BIDS OR THE CONTRACT AMOUNT GROWS AT A MUCH FASTER RATE THAN SOMETHING ELSE? THAT COULD ALSO BEGIN TO TELL US THAT MAYBE THE PRICING IS OFF.

BUT I DON'T HAVE A GOOD SENSE. I'M OPEN TO THOUGHTS.

SO I THINK YOUR BASIC POINT IS RIGHT, THAT IT DOES MAKE SENSE, AT THE MINIMUM, TO TRY TO DOCUMENT THE SIZE OF THE PROCUREMENT THAT'S NOT PUT OUT FOR COMPARATIVE BIDDING. I GUESS I'M ASKING WHAT ELSE SHOULD THERE BE? BEYOND THAT TABULATION? SO I WANT TO KNOW WHICH ONE OF THESE ARE PROFESSIONAL SERVICES.

RIGHT. WE CAN DO THAT, AND MY APOLOGIES FOR HAVING THESE BOTH IN HERE.

I DID CLARIFY THAT ANYTHING THAT IS NONPROFESSIONAL DOES FOLLOW OUR BIDDING REQUIREMENTS.

SO, FOR EXAMPLE, DEFINITELY ATHENS. THESE AGAIN, THESE ARE INCLUDED BECAUSE THEY'RE TECHNICALLY SERVICE BECAUSE THERE'S PARTS OF BOTH.

BUT WE'RE JUST TALKING ABOUT PROFESSIONAL RIGHT NOW. EXACTLY.

SO AN IDEA I HAVE WOULD IT MAKE SENSE PERHAPS TO USE ONE OF THESE EXAMPLES ON THE PROFESSIONAL SERVICE AND THEN JUST SIMPLY GO OUT AND COLLECT QUOTES OR BIDS. AND THEN, I MEAN, THAT WOULD BASICALLY GIVE US A PRETTY CLEAR CUT IDEA AS TO WHETHER OR NOT THE PRICE THAT WE'RE CURRENTLY PAYING IS COMPETITIVE OR NOT.

IT WOULD BE DIFFICULT, RIGHT, BECAUSE SOME OF THESE CONTRACTS ARE CUSTOMIZED AND SO IT MIGHT BE DIFFICULT.

IT WOULD BE HARD TO COMPARE, I WOULD IMAGINE I COULD BE WRONG, BUT IF WE JUST CALLED, YOU KNOW, A CONSULTING COMPANY TO ASK THEM, WHAT WOULD YOUR FEE BE FOR X AND Y? I THINK IT MIGHT BE DIFFICULT TO HAVE A COMPARISON THAT'S REASONABLE.

IF THE CONTRACT THAT THE MAYOR HAS OR THE COUNCIL HAS IS MUCH MORE CUSTOMIZED, RIGHT? IT WOULDN'T BE A FAIR COMPARISON. SO WE CAN BORROW THAT CONTRACT.

I MEAN, IF YOU WANT TO DO THAT, WE. IT'S POSSIBLE.

IT IS POSSIBLE FOR US TO DO THAT IF YOU'RE WILLING TO, YOU KNOW, LOOK AT THEIR CONTRACT AND THEN SEND OUT AN EMAIL TO THREE OF THESE COMPANIES AND ASK THEM TO GIVE YOU A QUOTE. INFORMATION WAS PROVIDED TO THE TO THE COMPANY THAT WAS AWARDED THE CONTRACT.

YEAH, IT'S ALL PUBLIC INFORMATION. YOU CAN, IF STAFF REFUSES TO GIVE IT TO YOU, WHICH I DON'T THINK THEY WILL.

YOU CAN ASK THE CLERK. NO, WHAT I'M SAYING IS THAT WHEN WE'RE FIRST ASKING FOR HELP FOR A SPECIFIC TASK, WE HAVE TO PROVIDE THE COMPANY WITH SOME KIND OF INFORMATION OR SOME KIND OF SCOPE OF WORK THAT WE'RE REQUESTING.

SO CAN WE PROVIDE THAT SAME PROPOSAL TO A DIFFERENT COMPANY AND JUST SEE WHAT THEY COME BACK? WILL THE VENDOR ACTUALLY DO IT IF THERE'S NO ACTUAL WORK, IF THERE'S NO JOB TO BE HAD, ARE THEY GOING TO SPEND THE TIME EITHER DOING THE WORK, GETTING A COMPETITIVE BID? HOW ARE THEY GOING TO KNOW? THAT'S WASTING THEIR, IT'S THERE'S ALSO AN ETHICAL THING ABOUT WASTING SOMEONE'S TIME TO SAY, HEY, HERE'S A POTENTIAL PROJECT WE HAVE THAT DOESN'T EXIST.

IT'S ALREADY BEEN AWARDED TO ANOTHER. I WOULD JUST BE CONCERNED ABOUT THAT BECAUSE THEN THAT COULD, YOU KNOW, OR IF THEY FIND OUT AND THEY'RE JUST IF THEY PROPOSE SOMETHING DYNAMICALLY LOWER JUST TO GET IN THE DOOR. IS IT.

I DON'T KNOW, I MEAN, YOU COULD IF. I THINK IT'S ILLEGAL.

IT'S NOT ILLEGAL, IT'S ETHICAL OR. OUR BASIC SUPPOSITION.

THAT HAPPENED, WE DO THAT ALL THE TIME. IN AT WORK WE DO THAT ALL THE TIME, EVEN BECAUSE FIRST WE WANT TO SEE I'VE DONE IT JUST BECAUSE I WANTED TO GET AN IDEA. OF WHAT IT WOULD COST IN ORDER TO GO PROPOSE IT.

YEAH. YEAH. VERSUS THIS IS SOMETHING WE'VE ALREADY APPROVED, HIRED ANOTHER CONTRACTOR FOR.

THEY'RE DOING THE WORK. WE JUST WANT TO SEE IF WE GOT A GOOD ONE.

WELL WE'RE GOING TO DO THIS WORK. THAT WOULD BE MY CONCERN.

AND THEN IF WE'RE GOING TO DO, THIS IS KIND OF A WORK THAT WE DO.

LET'S SAY WE HAVE A TRASH CONSULTANT. YEAH. WELL WE'RE GOING TO STILL HAVE TRASH YEARS TO COME.

[02:00:02]

IF THAT'S, I GUESS IF WE'RE. I MEAN, WE DO THAT.

IF AGAIN, IF THE INTENT IS TO GO LOOK FOR A REPLACEMENT OR TO EVALUATE WHERE WE'RE AT.

AND IF HE DOES FIND SOMEONE BETTER, YES, WE WILL REPLACE HIM.

AND THEN, IF THAT'S THE INTENT. I MEAN, WE WOULD RECOMMEND HIM.

I MEAN, WE'RE NOT GOING TO REPLACE HIM, BUT. I THOUGHT IT WAS A DIFFERENT INTENT, WHICH WAS JUST TO SAY, WELL, WE HAVE COMPETITIVE. IT CAN BE BOTH. YEAH.

I THINK THE PRICING CAN BE STALE. RIGHT. THE PRICING THAT YOU'RE GETTING MAY BE DIFFERENT THAN THE MARKET PRICE AT THE TIME THE CONTRACT WAS TENDERED. AND SO EVEN THE COMPARISONS THERE CAN BE TRICKY.

I'M NOT SAYING DON'T DO IT. I'M JUST SAYING THAT ASIDE FROM THE ETHICS, THE COMPARABILITY COULD BE SORT OF, YOU KNOW, DIFFICULT TO ESTABLISH BECAUSE OF THE TIME.

ONE QUESTION ON THE TABLE IS, DO YOU KNOW THE DISTRICT IN WHICH THE SERVICE IS PREDOMINANTLY BEING DONE IN? IS THAT SOMETHING THAT'S AVAILABLE LIKE DISTRICT ONE? DISTRICT. OH, PROBABLY ONE. NO, I DON'T I DON'T THINK SO.

IT'S NOT SOMETHING THAT YOU'VE TRIED, RIGHT? DEFINITELY NO.

THE DISTRICT ONE HERE IS ANYONE. YOUR DISTRICT ONE.

IT'S NOT SOMETHING. WE DO NOT KNOW. THAT WOULD BE.

THE BASIC SUPPOSITION, THE REASON WE'RE LOOKING AT THIS IS THE IDEA THAT THINGS THAT ARE NOT COMPETITIVELY BID OVER TIME CAN BECOME TOO EXPENSIVE. SO WE'RE NOT REALLY, IN THIS PART OF THE PROJECT.

I DON'T THINK WE'RE CONCERNED ABOUT GETTING A COMPETITIVE BID, EXCEPT IF WE'RE JUST SHOWING THAT THERE IS X AMOUNT OF THE BUDGET ON AN ANNUAL BASIS THAT IS SPENT WITHOUT COMPETITIVE BIDDING.

SO LOGIC WOULD TELL US THAT MONEY CAN BE SAVED IF IT IS COMPETITIVELY BID.

I THINK IN THE PROCESS OF GETTING THESE BIDS, IT WOULD GIVE OUR ARGUMENT STRENGTH AS TO WHY A CHANGE IS NEEDED.

THOUGH WE CAN SHOW THE SAVINGS, THE POTENTIAL SAVINGS.

IT WOULD BE. EVEN IF YOU JUST SHOW THE VARIETY.

IT WOULD IF WE COULD GET COMPETITIVE BIDS ON ALL OF THIS.

BUT I THINK THAT'S MORE INTO THE WEEDS THAN WE NEED TO BE.

WE SIMPLY NEED TO BE ABLE TO SHOW CITY COUNCIL THAT THERE'S A VULNERABLE POSITION RIGHT HERE.

AND WE'VE GOT DOLLAR FIGURES ON AN ANNUAL BASIS.

SO YOU'RE VULNERABLE TO SOME DEGREE. WE DON'T KNOW HOW MUCH.

AND WE YOU CAN'T KNOW HOW MUCH UNLESS YOU GO TO EVERY ONE OF THEM AND GET AND GET A COMPETITIVE BID, WHICH WE'RE NOT, WE'RE NOT GOING TO DO, I DON'T THINK.

CAN WE CREATE A SAMPLE, THE SAMPLE SIZE AND JUST PICK 1 OR 2? I DON'T KNOW IF MAYBE IF. I'LL GO FOR IT. BECAUSE I THINK THE PROCESS OF COLLECTING THESE BIDS, I THINK THAT THERE IS A POTENTIAL BENEFIT FOR THE FOR THAT VENDOR.

WELL, I'M. OR IF THEY KNOW, THEY KNOW THAT THEY'RE NOT THE ONLY ONE WE'RE ASKING.

EVEN IF THEY JUST KNOW THAT THERE ARE TWO OTHER PEOPLE WE'RE GOING TO ASK FOR MONEY, FOR QUOTE.

WHEN WE TALK WITH PUBLIC WORKS, WOULDN'T THAT BE A LOGICAL QUESTION TO BE ASKING? RUN US THROUGH A BIDDING PROCESS, SAY, FOR A PARTICULAR PROJECT.

LET'S TAKE A LOOK AT THE BIDS YOU GOT BACK IN, AND YOU'D LITERALLY GET THE SAME INFORMATION YOU'D GET IF YOU INITIATED THE PROCESS YOURSELF WITHOUT HAVING TO GO THROUGH THE WORK.

AND THEN THEY CAN EXPLAIN WHAT THE CRITERIA WAS FOR MAKING THE SELECTION, THEN ALSO TALK THROUGH WHAT THE CHANGE NOTICES WERE, COMBINED WITH THE QUESTIONS THAT YOU'RE, THAT THIS SUBCOMMITTEE IS COMING UP WITH.

I, I THINK WE CAN GET A BETTER PICTURE OF WHAT THE POTENTIAL OF FOR MAKING THESE MAKING A POTENTIAL CHANGE IN THE CODE WOULD BE AGAIN, I DON'T THINK. I'M CONCERNED WITH THE DETAIL AND ACTUALLY GOING OUT AND DOING THE ACTUAL BIDDING PROCESS OURSELVES AS A COMMISSION.

I DON'T THINK THE COMMISSION SHOULD BE INVOLVED IN GETTING COMPETITIVE BIDS.

I THINK WE SHOW CITY COUNCIL YOU'RE VULNERABLE.

CITY COUNCIL THEN GOES TO THE, THEY PASS AN ORDINANCE AND SAYING, WE'RE GOING TO GET COMPETITIVE BIDS AND PUBLIC WORKS GETS THE COMPETITIVE BIDS. IT WOULD BE MOSTLY NOT PUBLIC WORKS IN THIS CASE.

YEAH, RIGHT, BECAUSE IT'S THE. WHOEVER. IF SOMEBODY GETS COMPETITIVE BIDS.

AND I KNOW WE'RE GOING TO IF THE DOLLAR AMOUNT IS SUBSTANTIAL ON AN ANNUAL EXPENDITURE BASIS, WE'RE GOING TO WE'RE GOING TO REALIZE SAVINGS.

I DON'T KNOW HOW MUCH THEY'RE GOING TO BE. AND IF WE COULD IDENTIFY AHEAD OF TIME THE 2 OR 03,

[02:05:02]

BUT I DON'T KNOW HOW TO DO THAT. AND I DON'T KNOW ANYBODY ON THIS COMMISSION THAT KNOWS HOW TO DO THAT. AND I THINK IT'S A WASTE OF OUR TIME TO TRY.

OUR SALE IS TO CITY COUNCIL. THIS IS WHAT YOU SHOULD BE DOING.

AND THEN CITY COUNCIL WILL DECIDE WHETHER TO TELL US TO GO DO SOMETHING ELSE OR WHETHER THEY WOULD DO IT.

YEAH. OH, JUST IGNORE US. NOT JUST IGNORE US.

THAT'S THEIR CHOICE. AND WE CAN BE ON PUBLIC RECORD. YEAH.

IN MY OPINION, I THINK THE EASIEST WAY TO GO ABOUT TRYING TO OFFER RESOLUTION IS TO COME UP WITH SOME KIND OF CRITERIA AS TO WHEN THINGS SHOULD BE TAKEN TO BID AND WHEN THINGS SHOULDN'T. IF THERE'S A RULE BOOK, PEOPLE ARE FORCED TO FOLLOW THE RULE.

I LOVE THE THINGS THAT YOU TAKE INTO CONSIDERATION IN YOUR DEPARTMENT.

AND WHY CAN'T WE JUST SIMPLY CREATE RULES SIMILAR TO THOSE CONSIDERATIONS FOR ALL THINGS, ALL PROFESSIONAL SERVICES? ULTIMATELY, THE REASONING BEHIND IT IS BECAUSE IT'S THE PRUDENT THING TO DO, RIGHT.

LIKE WE'RE HOLDING PEOPLE ACCOUNTABLE. SO IN FINANCE DEPARTMENT, WHEN DO YOU GO, WHEN DO YOU GET LIKE THREE QUOTES VERSUS GOING OUT ON A BID. SO, FOR PROFESSIONAL SERVICES AGAIN BASICALLY WHAT I.

YEAH, BASICALLY WHAT I SAID EARLIER, I JUST LOOK AT HOW MUCH TIME DO WE HAVE TO WORK WITH.

WHEN IS THE LAST TIME WE BID THIS OUT? AND, YOU KNOW, SOMETIMES I'LL, I'LL GO TO OUR CSFMO JOB BOARD OR NOT JOB BOARD, THE DISCUSSION BOARD OR SOMETHING ELSE AND SAY, HEY, WHAT DO OTHER CITIES USE? DO YOU HAVE ANY RECOMMENDATIONS? SO I TRY TO IDENTIFY ARE THERE OTHER PEOPLE OUT THERE? HOW LONG IS IT SINCE WE BID? DO WE REALLY HAVE TIME TO BID? SO IT'S. I THINK THAT'S A MUCH EASIER WAY TO GO ABOUT IT.

WELL THEN WE DON'T NEED TO CHANGE ANYTHING IF THAT'S.

WELL, I THINK THAT I THINK THAT ESTABLISHING A UNIVERSAL CRITERIA WOULD BE A BETTER WAY TO DO IT.

OKAY. WHAT DO WE DO TONIGHT? BRING THIS BACK WITH SOME MASSAGING OF THE DATA SHOWING, TRYING TO COME UP WITH AN ANNUAL AMOUNT. YEAH. FOR PROFESSIONAL SERVICES.

NOT, WITH NOT COMPETITIVELY BID. LET'S BRING THAT BACK AT THE NEXT MEETING AND SEE WHAT WE.

I'LL SEE IF WE CAN GET IT AT THE NEXT MEETING.

IT MAY TAKE SOME TIME BECAUSE AGAIN, IT'S NOT.

A FUTURE MEETING. A FUTURE MEETING. AND WE'LL TAKE A, LOOK AGAIN.

I THINK THIS IS SOMETHING WE'RE INTERESTED IN FOR THE PROCESS WE ARE ALREADY WORKING ON.

SO, YEAH, VERY, VERY HAPPY TO DO THAT. OKAY. DO I HAVE A MOTION THAT WE BRING THIS BACK AT A FUTURE MEETING? PARDON ME? NO ONE ON ZOOM AND NO ECOMMENTS.

THANK YOU. OKAY, WE HAVE A. OH, SORRY. ONE COMMENT.

SO ENJOYABLE SUBJECT FOR ME. SO LET'S SEE. YOU KNOW, WORKING FOR A REPUTABLE GLAZING CONTRACTOR, I'VE WORKED WITH A LOT OF DEVELOPERS IN THE NEIGHBORHOOD.

ARCHITECTS MAJOR SUBCONTRACTORS. LET ME SEE. BIDDING IS USUALLY, YOU KNOW, YOU IT'S PRICE COMPARISON, RIGHT? APPLES TO APPLES.

AND I'M LOSING MY NOTES HERE. SO WHAT HAPPENS IS, WHEN THE SCOPE OF WORK HAS TO BE REALLY STRONG AND CLEAR. SO THAT'S WHERE THE BREAKDOWN HAPPENS.

WHEN YOU DON'T HAVE A SCOPE OF WORK, THEN EVERYTHING KIND OF FALLS APART.

SO BASICALLY, LET ME FIND MY NOTES HERE. SO CHANGE ORDERS USUALLY THAT CANNOT BE EXCEED 5% TO 10% OF THE TOTAL CONTRACT. SO YOU CAN CAP THE CHANGE ORDER IF THERE'S ANY CHANGE ORDERS. LET'S SEE. AND ALSO, YOU KNOW, IT'S NOT ABOUT THE LOWEST PRICE. IT'S ABOUT THE RESPONSIBLE WORK.

IT'S YOU DON'T ALWAYS GET THE LOWEST BID. YOU HAVE TO HAVE THE RESPONSIBLE BID.

YOU KNOW, THAT'S ALL. THANK YOU. THANK YOU. OKAY, DO I HAVE A MOTION TO BRING THIS BACK AT A FUTURE MEETING? I MAKE A MOTION TO BRING IT BACK ON OUR AGENDA NEXT TIME.

AND IF WE DON'T GET TO DISCUSS, WE DON'T DISCUSS.

[02:10:02]

MOTION TO BRING IT BACK NEXT TIME. SECOND. SECOND.

SECOND. ALL IN FAVOR? AYE. OKAY, I THINK WE'RE FINISHED.

KAY. COMMISSIONER MEMBER ITEMS AND FUTURE COMMISSION AGENDA TOPICS.

[K. COMMISSION MEMBER ITEMS AND FUTURE COMMISSION AGENDA TOPICS]

SO WE HAVE SO WE'RE GOING TO HAVE THE CIP COMMITTEE QUESTIONS AND THEN WE'LL HAVE THIS ITEM AND WE DO NOT HAVE ANYTHING ELSE.

IS THERE ANYTHING ELSE WE WANT TO BUDGETS OR QUARTERLIES.

WHAT DO WE HEAR ABOUT CALPERS, ARE THEY GOING TO TALK TO US THIS YEAR? I HAVE NOT BEEN ABLE TO SECURE SOMEONE TO TALK TO US THIS YEAR.

HOWEVER, MY SUBSTITUTE IDEA WAS TO GATHER MY PROJECTIONS USING THEIR VERY HELPFUL PENSION TOOL AND YOUR QUESTIONS, AND KIND OF VET THOSE THROUGH OUR ACTUARY AND BRING THAT BACK TO YOU.

THAT'S, THAT'S THAT'S MY SUBSTITUTE IDEA FOR, FOR THE YEAR.

I DID INCLUDE IN A FEW MEETINGS AGO, I DID DO ONE OF THESE PROJECTIONS USING THEIR PENSION TOOL, AND IT SHOWED SOME FAIRLY POSITIVE, FAIRLY POSITIVE RESULTS INCLUDING THE PRIOR YEAR'S GOOD RETURN. SO I CAN INCLUDE THAT AND HAVE OUR ACTUARY KIND OF GO THROUGH.

AND DOES THAT ALLOW YOU TO ESTIMATE WHAT OUR UAL ACTUALLY IS AT THE, WITH THE DATA? SO IT'S A PRETTY COOL TOOL I'M GOING TO HAVE, I'M GOING TO HAVE JACOB PLAY WITH IT A LITTLE BIT AS HE'S FAR MORE BETTER DATA THAN I AM.

BUT SO YOU CAN ENTER YOU CAN PLAY WITH THE ASSUMPTIONS AND YOU CAN DO SOMETHING LIKE GENERATE RANDOM RETURNS.

SO YOU CAN YOU CAN PUT IN DIFFERENT RETURNS, YOU CAN GENERATE RANDOM RETURNS AND YOU CAN BUILD IN OTHER KIND OF, YOU CAN CHANGE OTHER ASSUMPTIONS LIKE LONGEVITY OR INFLATION OR VARIOUS THINGS AND JUST SEE WHAT IT DOES AND IT WILL CALCULATE OUR UAL.

WELL, IF THEY IF THEY MAKE THE 6.8%, THE UAL SHOULDN'T CHANGE.

I'M JUST INTERESTED IN THAT. WE HAD A GOOD YEAR IN THE LAST FISCAL YEAR.

AND IT'S BEEN FOUR YEARS SINCE WE DID THE BOND ISSUE.

SO I WOULD LIKE TO BE ABLE TO SEE AN ESTIMATE OF WHAT UAL IS IF WE COULD BRING IT UP TO JUNE 30TH OF 2025. SO THAT IS WHAT, THIS, THAT IS WHAT THIS TOOL WILL DO.

AND I BELIEVE I HAD THAT IN OUR, THIS ONE I RAN, BUT I CAN SHARE THAT.

I'LL RUN THAT FOR THE NEXT MEETING. YES. OKAY.

YEP. THERE WE GO. IT'LL BE ON THE AGENDA. ANYTHING? NOTHING. YOU DON'T HAVE ANYTHING? OKAY. DO I HEAR A MOTION TO ADJOURN? MOTION TO ADJOURN. SECOND. SECOND. ALL IN FAVOR? AYE. WE'RE ADJOURNED. THANK YOU.

* This transcript was compiled from uncorrected Closed Captioning.