The meeting will come to order.

Our first item is approval of the minutes from business session of May 7.

Is there a motion?

So second.

Moved and second.

All in favor of approving the minutes from last time say aye.

Aye.

All opposed?

Motion passes.

Our first topic today is vacant land activation initiative.

Let's go.

All right.

Good afternoon, Mayor, City Council, City Manager.

Andy Setzum, Deputy Director for Neighborhood Services Department, and I'm here with Mary Owens, Deputy Director for the Housing Department.

Just speak.

And I'm Gunnar Hand, the executive director of the land bank in Kansas City, Missouri in the housing and community development department.

Okay.

So the purpose today is for us to present the vacant land activation initiative strategic plan.

And our hopes from project team is for uh council to review the plan and endorse the plan via resolution for adoption.

So some background on this.

The as a reminder, resolution 250396 was passed in May of last year, directing the city manager to develop policy recommendations to activate vacant land through both administrative and legislative approaches.

The resolution spelled out various short term, medium, and long-term deliverables, of which the strategic plan was one of the medium-term deliverables.

Now, one of the requirements of the resolution was also engaging the community.

And through a variety of methods, whether they were virtual meetings, community meetings, and/or use of the online speakeasy platform, we engage with over 50 organizations representing nonprofits, neighborhoods, and developers, to name a few, besides just activating or discussing with the external stakeholders for internal staff.

Now, what we have in this plan is actions, uh policy considerations, a budget, financial options for consideration, uh some of these things we'll discuss in the uh further part of the presentation.

Now, when we're talking about vacant lots, we're talking about 16,000 parcels, and that reference that represents about 8% of the total parcels in the limits of Kansas City.

Of the 16,000, 80% of those are privately held parcels, and of the 16,000, only about 14% of those have structures on those.

Now, where are these parcels located?

Well, if you look at the 16,000, we have about 90% of those are located within districts three, four, and five.

And unfortunately, district three carries the burden at about 60% of those vacant parcels.

Now, as you can imagine, there's a variety of different activation challenges, and we certainly don't expect all these parcels to be uh able to be activated based on various requirements.

But there are certainly several challenges to overcome.

Uh, one of those, of course, being environmental.

Uh, through some uh work going on now, we can expect somewhere around 50% of those vacant parcels to have some level of contamination related to lead andor other heavy metals.

Uh, carry that forward to remediation costs that can range anywhere from 30 to 60,000 per parcel.

Uh so besides the environmental, you also have location issues in terms of marketability, you've got the size of the lot, you could be grading issues, uh, and others uh to to contend with.

So I'm gonna get into some of the details of our strategic plan.

Um, but before I do, I wanted to acknowledge the wonderful staff that really were instrumental in putting this plan together.

Uh Samantha Bradfield, Morgan Pemberton, Casey Ice, and Annalissa Taylor.

Um, they did a phenomenal job.

Um, so in structuring the plan, uh, we really focused on the systemic vacancy cycle.

Uh, the systemic vacancy cycle illustrates how vacant properties are not isolated issues, but a self-reinforcing cycle that impacts entire neighborhoods.

And the way it works is when vacancy occurs, a property will become vacant, and property deterioration typically follows.

Uh, without maintenance, the property declines physically, and this impacts neighborhoods and the surrounding property values decline.

Um, as investment slows, uh, it also reduces market interest and developers and buyers start to avoid the area.

Increased concentration of vacancy happens once the market dries up and more properties become vacant, repeating the cycle.

When we develop this strategic plan, our goal was to address every stage of the cycle.

And it's important to note that private market alone cannot solve concentrated vacancy.

It requires active government intervention.

So in developing the plan, we have five priorities.

These priorities target activation areas, assemble land, increase accountability, greening properties, and building partnerships are the foundation of the plan.

Umsing the priorities just discussed, we are approaching vacancy through this full life cycle strategy.

These strategies work together as a system by improving how we identify, prevent, stabilize, and activate properties, we create a more effective and scalable approach.

This slide provides an overview of the strategic plan, and it is organized by strategic best practices and objectives that will have the most impact in changing the vacancy cycle.

Um it's important to note that most of the city's vacant land is in the third stabilization stage, highlighting the need for ongoing maintenance and strategic next steps toward activation.

Okay.

Uh again, Cunner Hand, the executive director of the land bank of Kansas City, Missouri.

Uh, my section, I'm gonna quickly go over how we're gonna apply these strategies through an like a high level example.

Um, so while this plan uh made the determination and did an analysis to come up with around approximately 16,000 vacant parcels in the city, of which again the land bank and homesteading authority control about a quarter or 3,500 of those.

We still uh haven't put eyes on all those parcels with this process and this strategy in mind.

So it's important that we um go out and identify what our approach is going to be.

Now we do know that that approach is potentially twofold and will cost money because a lot of these properties need to be clean, cleared, and quiet titled.

Um we can do that many different ways.

We can do that ourselves and get them to let's say shovel ready and then try to um figure out an activation for them, or we can work with our partners and do that work through the act of development.

Next slide, please.

So again, we have lots of staff out on the in the field every day.

Um they drive by, work on these properties on the regular.

Um, but moving forward, we have to put the tools into place so that they can then look at these properties through the lens of the information we need to conduct this assessment and leverage some of those resources as we do this work because 16,000 parcels is a lot of parcels.

The good news is the land bank has already kicked off our portion of this.

Um we are in the process of beginning our assessment by defining what those questions are and what those tools need to be to help uh do all this work with our with our staff.

Um, and it is under the way, but again, we have to do some level of triage uh to understand what this is.

We are talking about real estate and it is location, location, location.

Next slide.

And this is one sort of example about the decision tree that we're sort of thinking through of what it could end up.

Um again, once we get to the point where we're answering these questions through this decision factors, we can start to lead people in the right direction about what they want to do with a given property.

Um development can mean a lot of different things.

I would argue development is an urban agricultural project as well as an infill development project.

Um or we can leave it as open space which has its own um which has its own value as well.

Um but again, I think as we start to do uh our analysis as we start to do this assessment.

What we're really gonna kind of come up with is probably like two basic buckets, right?

The developable buckets and the undevelopable buckets.

We know some of these parcels for reasons previously given are not going to be able to be infilled developed, and we also know we have great needs elsewhere in the city, green infrastructure, right-of-way, um other things of that nature that could end up end up there.

But once we start to understand what these properties are, we can start to do a better job again, applying these strategies and making a difference and moving the needle.

Next slide.

We don't do this in a vacuum.

We know that the market economy only builds in certain certain locations and doesn't build in other locations and therefore intergovernment.

So as we go from strong development sort of potential to areas where there's been less historical development, we have to be intentional, right?

We have to be we have to apply strategy, we have to do different things in different areas, we have to be parcel-specific.

Next slide.

But the good news is to a degree, some of this is already happening.

Now it's not happening equally across all of our vacant land inventory.

But as a quick example here, um, I believe this is in the Wendell Phillips uh near the Washington Weekly neighborhood in 2020.

The homesteading authority sold the Habitat for Humanity about a few parcels, and we're starting to see what it looks like when you take a chunk of a block and start to do some infill.

It can transform a block.

Next slide.

This is also happening naturally in the private market without the purchase of land bank property and or homesteading authority property and or city-owned property.

Um this example, I believe, is in Ivanhoe, where we've seen other sort of again the private market acting in the same capacity where they're buying up private properties and infilling uh infilling our neighborhoods, but again, unequally.

Next slide, please.

So this illustration sort of talks to the tools we have in our toolbox today, right?

Um we can use the abandoned housing act to address uh private properties.

Um we have a side lot program and other disposition programs of land bank and homesteading to sell properties and develop properties, code enforcement, home repair, and so on and so forth.

Next slide.

We believe that this strategy is a representation of enhancing those programs and then adding to that toolbox so that we have a greater diversity of opportunities and to activate these properties again, focusing on things like transfer uh transit oriented development, excuse me, uh and using other programs that we're still discovering uh again with the land bank through its strategic planning process.

And then I'll hand it back over to that.

Okay, so um we are not starting from scratch.

Uh we have actually made multiple changes that have uh come out of the vacant land activation initiative.

Um we've made it easier and faster to build on vacant land by improving the city's development process.

We've reduced parking requirements, introduced pre-approved development plans, we've strengthened code enforcement and the nuisance definition, and we're currently exploring permitting updates to remove barriers for small scale developers.

Um we've also strengthened our internal capacity by uh hiring uh our land bank executive director, Gunnar Hand, um, as well as an environmental officer position to oversee the demolition and compliance uh for um demolition projects.

And we've also shifted uh the property maintenance uh of land bank properties to our land bank.

We've improved administrative processes, and we've also launched key initiatives.

Uh, one is uh Councilman Patterson Hasley's housing accelerator pilot program, which is revitalizing 45 lots in the Washington Weekly neighborhood, and another is our demolition to dwelling project, which is preserving structures when possible and converting them to affordable housing.

And this is all transpired in the last uh since the inception of this resolution.

Um, but we also are putting forth today a series of recommendations that we have not enacted, and I think the most critical one and the one we want to place the most emphasis on is the idea of a city-led housing development uh corporation.

Um so we are recommending in this plan that the city establish or partner with a housing development corporation, which would help us develop properties that the private market is very unlikely to address.

Um we have actually proposed a housing development corporation plan back in 2024.

This was through an ordinance that um Mayor Pro Tem had worked on previously for the anti-displacement plan, and we've provided that business plan here today, and we'd like for you to take a look at that.

We'd like to invest additional resources in environmental remediation, and combined existing funding resources like CDBG and other incentives to unlock properties that currently have barriers to redevelopment.

And finally, we're recommending the additional funding of staff in order to be more effective as the city is implementing this plan.

Next slide, please.

So we've proposed a budget, and we believe that the plan will cost 10 million dollars per year.

This will cover additional staffing, software and systems, environmental assessments, quiet title work, and property remediation.

But one of the other uh aspects of this plan is to identify potential funding sources outside of just the city, which we've done.

One option that we're wanting to explore is uh the HUD Section 108 loan, which the city uh has up to 35 million dollars in potential credit from the Department of Housing and Urban Development.

We'd also uh like to continue to work on our vacant registry and explore ways to uh produce revenue through that process, as well as engaging private and philanthropic organizations and and federal grants uh like the Brownfields, in order to continue to remediate properties, so for next steps, uh we are recommending that city council adopt this plan.

Um we would like to revisit funding after Q1 during the budget cleanup process, and we'd also like to encourage interdepartmental collaboration through an additional member of our team, which would be um a vacant land coordination position that would be um the lead point person on the plan's implementation.

And so that is uh the conclusion of this, and we'd like to open it up to questions.

Um questions from the council.

I'll first note Mr.

Hand.

Uh I'm not sure how many times yet you've done a presentation before the full city council, but welcome.

I know you've been with us for a while, and I think you've done maybe one or two, but still good to see you, and we're delighted to have you with us.

Thank you.

I was looking for some background information on how particularly as you talk about a housing development corporation.

One of the reasons the city um is out of that space is that we've had previous challenges, and I may actually lean on the city manager for those, and pulling ourselves out of different troubles when we were more involved in housing.

Um I think we what did we have?

A rehabilitation core, other such things.

How do we avoid perhaps some of the challenges when we were kind of in receivership and different housing efforts and others in building something new that's that's something I would be interested in in getting comfort of it, or what went wrong the last time?

Well, I think uh thanks for the question, Mayor.

The primary reason is that we sometimes don't establish these things with the mindset of these being a going concern, so they're temporary uh nature, and what we need is uh almost a profit, almost a for profit mindset that that thinks of these organizations as something that need to persist and survive the people that that get entrusted with them.

Um, the same way that mayors and councils um and managers you know transition in and out.

Um, we need to make sure that that doesn't happen with a with a development corporation.

That's the purpose I think of keeping it outside of City Hall, that it doesn't that it's not dependent on elected officials or management.

It is its own entity that manages itself with responsibility and again with the but with a mindset of going of it being a going concern.

Councilman Duck.

Thank you, Mr.

Mayor.

Uh, similar, and I'll continue on the threat.

I think uh city manager's absolutely right, and um I remember sitting down with uh Atlanta Mayor Dickens, chief of staff Josh Humphreys uh with Councilman Bonch and Gauvery, um talking about a housing development corporation, which entity in the city could do it and talking to them what was the how did they how did they set that up and what were the pitfalls and uh Mr.

Humphreys said that it's not necessarily I mean they've had had a lot of success with their housing development corporation but he said it's it's less about the name and uh more about who who you're actually plugging in for that and and city manager's absolutely right you need somebody with a developer mindset and a developer um uh type of for-profit um mindset and and that expertise in order for it to be successful um otherwise we'll be digging a hole for ourselves so I think the devil will be in the details of that but I think it's an exciting proposition one that we should pursue um I think um how we set it up and the structure of that and the governance of that's gonna be key.

If I may in the gunnerhand executive director of land bank Kansas Missouri do we have to do that every time no okay we did in my old job I'm sorry uh have it so one of the things we've been doing in our strategic planning process that the land bank with the homesteading authority uh Kansas City Missouri homesteading authority excuse me is uh really getting back to our roots homesteading authority was created in 1975 to do projects and we didn't really realize that because for a long time the homesteading authority's been basically doing the same thing the land bank has been doing in parallel that's very confusing for people you go through the same process but you ended a different board depending on who owns that property that day um we're in the process and in the spirit of walking and chewing gum just yesterday the land bank authorized to move all of its improved properties properties with some level of structure mostly houses on them to the homesteading authority as that being sort of their batch to start figuring out what their first project is in that sense I think when we think of a home when we think of a housing corporation there's a scale to that that comes up in people's minds that's reminiscent of say a housing authority what we're trying to do is maybe a different scale and learning kind of as we grow so our thought is at the homesteading authority if we can start by figuring out which houses we can keep selling which houses maybe we rehab which houses maybe we then add an ADU and the accessory dwelling unit in the backyard kind of starts to walk us into the idea of doing our portion of demonstrating how to do this at a very incremental development type in fill development situation which is ultimately I think the best way to be intentional about how we do that work.

So what we see through this plan and through our work on land bank and homesteading authority with those two boards is really demonstrating the solution to the vacant land activation issue.

May I ask one follow-up question just on cost um I see and we've had in the and I appreciate this in the housing and adjacent space and neighborhoods um expensive costs for programs but one understands it one gets that in the housing gateway program there may not actually be an opportunity for revenues to offset costs but to your point Mr hand there there is at least opportunity here so as you quote a a north of 10 million dollar potential annual cost is there a world in which we believe that through um conveyance of property other activities we were able to offset some of the substantial costs that we have help subsidize our programmatic efforts long term.

From um land banking homesteading authority property uh situation I think there's it's important that we level set these are the least desirable properties in Jackson County right so they went through the tax sale nobody wanted them at the tax sale they end up with the land so in that sense it's not really a market economy right the last property in the land bank is not going to be the most expensive property in the land bank it's gonna be the least expensively susitable property in the land bank so with that I do think there's opportunities to offset but I haven't seen a world where we're gonna break even or make money.

Thank you.

Um thank you so much and thank you Mr Hamm for your leadership you bring a really bright spot you and your team for um the hard work uh the deliberative work and the leadership that it's gonna take to um do things differently.

I'm um wondering about your recommendations, and when we talk about the private market, oftentimes the city of Kansas City engages with the private market through subsidies through tax incentives.

And one of the things that I'm always reminded of uh say what you will about Funkhauser, but he said, give me a TIFF east of Truth, and I will support it.

And I find that this body oftentimes when we give incentives and all the goodies to the places that are more desirable, then people are going to go to those places, right?

Because we're giving them incentives to develop parcels that really are not blighted by you know layman's standards.

And so as you're developing your recommendations, what are your recommendations regarding policies around incentivizing the private market to address some of these most least desirable properties?

Our plan has really taken a focus on remediating properties in the most blighted areas and using the subsidies that the city has as a tool to incentivize that development.

And so we are proposing to focus on our public resources in those areas that have the highest levels of blight, and part of our project was to assess 16,000 parcels through Tolemay, which is a software and identify and create factors of which parcels are the most difficult to develop, and we're recommending in this strategic plan to focus public resources on those neighborhoods and those communities.

Yeah, and so with all due respect, um, when you have 3,000 3,600 parcels and they're coming, you know, every tax sale, and then when you look at the which I believe is going to be an avalanche of properties based off of the property tax assessment debacle that people are faced with, yes, it's a three-year lagger because you have to be, you know, delinquent on your taxes for three years, but have you all been doing any modeling on how we're going to, if we have a huge influx of uh properties that that don't get bought up through the sale, what we're going to do?

And what are you doing with and coordinating with our EDC?

Because if you have private philanthropic, you talk about city investment, unless we do something drastically different different regarding city investment, we're not going to be able to make the inroads that we want.

So if you can talk about EC collaborations, yes, that's the that is the concept of the housing development corporation.

Okay, we would want to partner with an incentive agency like the EDC or the housing authority that has bond authority or has tax authority, and that's really what will move the needle most significantly because they're they will have the incentives and be able to do it at a scale where we'll see real significant impact.

The city does not currently develop property, and so we need to think differently.

You know, this plan has several proposals and recommendations on what we can currently do with the tools that we have, but in order for us to make a significant difference, I think a housing development corporation and partnering with incentive agencies is the best approach.

Okay.

And then just quickly, can you talk about these are spaces that people have to live next door to daily?

And I understand we have a departmental shift in terms of maintenance, but if these lots are in disrepair, again, if you have speculators or people that want to do something good with these parcels, how are we maintaining them in a way that doesn't lead to further deterioration and blight?

The goal I think of of transferring Mowen Bill to the land bank is for us to consolidate um all of the um goals of land bank into one central group.

And so we're hoping that with the MOAM bill transferring to land bank, we'll be able to make sure to ensure that those properties are maintained um because we are the entity that is uh responsible for those um do you have the technology needed do you have a dashboard the technology needed to make sure that those parcels are up to par yeah I mean all of that is incorporated into a software that's called mowen bill it was created for the city and then with local software developers and we still work with them uh currently so it does have all of that built into its functionality whether it's a dashboard or triggering public works to come pick stuff up on the corner so all that's sort of an integrated and built in I don't think that's necessarily the issue I think we just have an issue of um one we are we've a program moved over to it to us and so we're working to transition and try to fill the staff that's needed to monitor and manage that.

Well I mean I just will push back to say um I think that technology is an answer and it is an issue because if we know that Mrs.

Jones has a land bank property next to her I mean with today's technology we should know how many times that lot has been cut and maintained.

And we shouldn't be guessing we had a program with our uh folks that did mowing where they were sending in pictures of you know before and after we know how many times we all know how many times our grass needs to be cut every year.

So we know that we get the bills we understand that and so we need to also have that same level of technology usage and understanding that you know we're going to have 24 mowing cycles I'm making up a number my final question is about the quarter one funding request you have a million dollars worth of staffing in here I'm certainly supportive of certainly getting a vacant land coordinator position going as soon as possible.

So can you just share with us what that would look like for quarter one if I don't I don't think we have 10 million dollars laying around but what would that what would that look like to get that position and move in this direction.

Well first we we do anticipate that there could be approximately 4.8 million dollars in registration fees that could be generated from this plan.

But one of the things that we're really wanting to do is in enhance our inspectors so currently land bank has has two full-time inspectors um this plan would recommend increasing that number so that we are better tracking and able to respond to the 311 calls that we're getting about overgrowth and abatement issues um would you like to speak to the neighborhoods?

Sure yeah so part of the registration program that's in consideration has a function where we need it more active proactive enforcement um so as part of registration there's a fee associated with that and whether it's uh commercial or residential so those those details around a res registration program would be kind of hashed out but that is to help kind of offset the additional enforcement proactive enforcement uh that neighborhoods can do versus currently where we are more reactive based on 311 cases.

So part of the registration is a more proactive approach.

And that will be an ordinance or how do what's how do you operationalize that it's on the table currently is one of the ordinances that the mayor's office is presented.

Okay great awesome thank you thank you uh councilman o'Neill you had a question before I think I make maybe making it up sorry you're good right thank you um one thing I didn't see in here that I would encourage you all to take a look at is well maybe it wasn't here I didn't see it state statute 821025 are you familiar it provides property owners and neighborhood associations with um standing to bring an action for damages against a property commercial or residential within 1200 feet um if it has negatively impacted the property values of the person suing and so a great example of how this was used was Northland neighborhoods filed a lawsuit against a property owner that was problematic tons of nuisance activity and the relief they were granted was the judge gave the property to Northland neighborhoods.

Now that's not built into the statute but what this does is it empowers neighborhood associations to sue a negligent property owner and get some kind of relief for nuisance properties or some other requirements they have to meet.

The city does not have standing but I always thought there was a role for the city to play in legal education or resources for neighborhoods to utilize that statute.

So something to take a look at and and understand how we empower neighborhoods with it.

I shared this with uh old Briar Cliff several months ago as they were navigating a property owner who had like 18 um neglected dilapidated properties in the neighborhood and there were some attorneys on the neighborhood association that started moving forward with an action and then that landlord passed away and they're getting it all figured out but it's a pretty powerful tool if folks know how to use it and it doesn't involve anything from the city.

Yeah actually um we agree and um on page 33 of the plan we have our strategic code enforcement strategies um and we would like to incorporate neighborhood level participation with code enforcement um so I we think that's a great idea councilman and we are wanting to pursue that as well what page did you say uh 33 33 30 okay thank you thank you i won't make you take the time now but I'm really interested in maybe this comes to committee later on silos because while I I'm very interested in and even if we were looking at a housing development corporation during all my time in office I start to sometimes have concerns when there aren't too many sources of solutions perhaps to Mr.

Hand's point right what does homesteading authority do distinct from land bank EDC the city itself the housing authority which had a whole big shebang about their engagement in this space and how are they working in an ecosystem that is efficient for our taxpayers and ultimately the solutions we seek you don't have to answer that's a core question of government but maybe we can think about that as we process.

Councilman Patterson has it thank you um honorable mayor my recommendation is that you would pick projects ahead of time so let's say you did the the housing corporation the housing development corporation um it would be my recommendation for you to look at a map where the problems are persistent and you know that are least likely to be handled by the private market and just forecast what those projects are in my in this I mean I've seen that the development community is driving where the projects need to be happening instead of policy makers.

And so we're providing the incentives and all of that and then they're just kind of doing whatever they want to do and it's not led to a coordinated um dense improvement like you can't really feel the improvement because it's scattered and so I think you should just have a list of priority projects and be willing to say no to the ones that don't meet the priorities and also please consider um mixed income as a requirement as it relates to housing um maybe 60% is the floor but require up to the 120 AMI in the project so that we can move to our mixed housing mixed income housing.

Thank you councilwoman French thank you and thank you Mr.

Handon and the housing team for all your work on this has been a very well started out thought out strategic approach and being a member of the homesteading authority and involved in a lot of these conversations so to my um colleagues' point those conversations are happening within the homesteading authority and as we look at possibly moving towards more of a project-based initiative within the homesteading board.

We are looking at those areas and looking at them holistically, going to look at like a map and and looking at those properties and those priorities and whether, yes, it is contacting certain developers, working with incremental developers, the small developers um taking them through a certain process or a certain program, contacting them with contractors in the area, being able to kind of make not necessarily a package deal, but kind of looking towards that kind of initiative on how we can all work together in synergy to accomplish those those goals.

Councilman Curls.

Thank you, Mr.

Mayor.

Thank you for the presentation.

I know that the third and the fifth has a lot of vacant lands in it and properties, and so I just want to make sure that we are looking at it from a uh larger perspective as opposed to any one particular area.

Yeah.

I would just note that I think that through the development of this plan, of which I was only here for about half of it because I started a little over six months ago now.

Um I think I saw the group struggle with this a lot.

Um I think we talked about what it would take to say put together an evaluation criteria because we know we don't have enough resources to do it all at once, that if we were to do a strategy that say pick the neighborhood, we didn't want to get into that situation because we're picking neighborhoods, right?

Um so I think that we tried to develop a strategy in this plan that was kind of a both-and situation where we're intentional about the properties we do have control over, i.e.

land bank and homesteading, which typically are in the middle of a neighborhood, right?

They're in the core of the neighborhood, so working on the inside out.

If you look at market trends, you know, they really want to build density on commercial corridors, right?

So we're trying, I think part of implementing this plan is identifying that evaluation criteria that will inform you all to make that decision for us, right?

Um we can put together the approach, which is what we talked about kind of in my section.

We still have to go out there see the properties development approach.

But at the end of the day, I do think it would be up to let's say city council to help us point in the direction about where that is, or approve that list, if you will, once we kind of inform that.

So I think there's work still to be done before we get to the point where we're saying this is the corridor or this is the neighborhood, or this is the project area, or this is a series of projects, but I think it definitely requires y'all's input because at the end of the day we just don't have enough resources to be I'll say equitable.

Because equitable requires us to do all of it all at once.

Yeah, understood.

And I I know that if you get into a situation that I don't know if you know, that is what comes about where we kind of decide or or make those recommendations that no matter what you do, somebody's not gonna feel like they've been included or been left out.

Sure, right?

Uh I hear that from my constituents all the time about the city doesn't pay attention to the fifth district in South Kansas City.

And we're trying to make some changes in order to make those residents feel like they are being paid attention to, but I I just want to make sure that whatever the strat strategy is, is that you are trying to look at it from a larger picture as opposed to a smaller subset, right?

And then one last question I have.

Uh dealing with um uh landowners that uh live out of state.

Have you guys looked at how you're gonna be able to address those individuals and what's gonna happen or how you're gonna be able to deal with those individuals?

So I would just say that I think that's part of the um philosophy around the registration program.

Uh through the being kind of required to go online to complete a form to kind of identify maybe what your plan is for that site.

Um there's uh potential to identify in particular uh some software that we've been piloting, can really hone in on who that ownership is, how we can track them down.

We've even seen where it can, if you select a specific owner, it identifies all of the properties they actually own in Kansas City.

So we've been kind of playing with some um of a pilot project of that.

Um, but I think the registration program should help us address who they are, um, how we can go after them, and and then you know, we're still working through details again with the mayor's office on some of these ordinances that were proposed and that we're uh of course in some of your open houses that you've had.

Um so not all the details are there yet, but I think that's I think that's the pathway we're looking at.

All right, thank you.

Councilwoman Patterson has it.

I think thank you, honorable mayor.

I think the example that you used with um developing on the outskirts on the outside of the neighborhood where the transit corridor is where you know it's really in my mind for people that are just kind of passing through, and so you want it to look good for the people that are driving by and may stop and patronize, but then they're going somewhere, like they're leaving, and so the advantage that you have is um developing policy that puts residents first that live there and not the passers by.

We care about the people passing by, but when you go to decide where you're gonna buy a house, you go stand in in that neighborhood and then you look across the street.

And do you want to look at what you see across the street?

And so I think we need to re um tool our focused, our focus to the people that have to look across the street and have to look next door because that's how you actually attract people to want to live in your city, which is what we're trying to do.

And so that's why my recommendation was to work inside out to attract people to come and stay and then take care of their stuff.

So, Councilman Robinson.

Um, thank you, and I appreciate um everything that my colleagues have shared um today.

Um, Mr.

Han, I I'm uh you picked my interest when you talked about your definition of equity.

Can you repeat that?

So when we were having these conversations, and I don't technically have a definition of equity, so I'll do my best.

But the as we were having these conversations in the development of this plan, we heard a lot of people from the neighborhood say from the community say my neighborhood deserves first.

I don't disagree with that, right?

We don't have the resources to do every neighborhood at the same time first.

So picking that neighborhood, I think is very contentious.

It's very difficult to ask staff to do, quite frankly.

Um, so from an equity standpoint, if we wanted to say pick an area, you would go to the most in disenfranchised, most in like uh, what's the word I'm looking for?

The census tracts they call them disadvantaged census tract and like start there, right?

That's one approach.

The other approach is we could go to where the market is currently building, um, and try to use that sort of momentum and energy to leverage off of and kind of spill over effects, right?

Well, that's not very equitable either, right?

So somewhere in there is the strategy because we're trying to do both things.

We have to rely on the market economy to do its job, we have to create the policies to shift that market economy to where we want because we don't because we live in a mixed economy in the United States of America, right?

And then from there, I think it becomes a question of, it's still a question of where.

Okay, thank you, and I appreciate that clarification.

Um, and so while this is a very adaptive problem, you know, addressing this issue, very adaptive problem.

But Mr.

City Manager, the definition of equity is technical, it's not fuzzy, it's not gray, it's not, yeah, that's a strategy to look at the areas that are doing well and have spillage.

That's not equity, and so um I was very interested in your comment because oftentimes our staff have very different um definitions of equity, and I think that that does as a disservice.

Um, and so I would encourage us to be on the same page.

If we're going to take an equitable approach, then we have to be clear about what that definition is.

So I like your first version though, but I think it's incumbent upon the manager to set the standard, and so that every director and every division manager and everybody in this institution, if we're going to focus on equity, because when we look at our business plan, that's what it says.

We need to be addressing equity.

We talk about it and we talk about it, but it needs to be operationalized and we have to look to the manager to do his job in the area.

Thank you.

Councilman Curls.

One more question that thought of Mr.

Mayor.

Thank you.

Could you tell me why it's necessary to move the land bank property maintenance out of public works and then ask for more money when we've already got a way of using uh public works with the uh budget that they have?

So when the Moen Bill contract was transferred to um the land bank, with that, it comes to land bank's resources, and so we have two uh less inspectors, then we're we're working on uh these issues under public works, and so we need additional inspectors in order to maintain the standard that we currently have for our maintenance of land bank properties, and in addition to that, um we're trying to understand um how much uh abatement dollars that we will need um to ensure that we're again maintaining the same level of of um due diligence and uh care that we have been under public work.

So we're working out those details.

The program was just transferred to our department a couple weeks ago.

Um so we're just wanting to make sure that we're we're managing it efficiently and and to the best of our ability.

Well, I would hope that we would try to if we've already doing something and it's working as opposed to trying to create something else and incur more expense that we try to make sure that what we're doing now can work in concert with what you're trying to do, as opposed to putting more burden on us as a body to come up with more money.

Yeah, certainly.

We are just wanting to uh make sure that we have the same level of service that we had previously.

Okay, all right.

Thank you.

We still have an audit discussion, we'll bring up the city auditor next.

I'll be able to use it.

No, no, I'm sorry.

Mr.

Shaw, just wait one moment.

We've got a crew coming in.

Appears to be everyone, I think this will be a little more hopefully too.

They do have a rules.

All right, why don't you go ahead?

Okay, thank you.

Honorable mayor, members of the city council, Mr.

City Manager, good afternoon.

My name is Mark Shaw.

And by the way, one second.

I don't love it when we save seats, and it's this reason.

If y'all need to sit in the public work seats, which I think are being reserved for later, you can sit there and to the staff teams.

We can't block out three rows of seats in a public meeting in advance, just so ladies.

And I get that more is to come later, but we gotta be nicer to our guests.

Please proceed.

Okay.

Go ahead.

Okay, thank you.

I'm here today with three of my colleagues, Dr.

Bailey Keller, and Fortney, and Mr.

Clint Pullum, all of whom I have introduced to this body before.

Thank you for the opportunity to appreciate.

They still can't hear you.

So the next thing we're gonna do is ask our friends outside.

Do you just ask everybody outside to be a 10 quieter for us?

Pull your mic up, Mr.

Schmidt.

This is going to be my pitch again for the 10th floor committee room.

The way we used to do them before COVID.

But fun fact while we get quieter, we will be kicked out of this room for the month of June due to renovations.

Multibatement, which sounds even worse.

I'll tell y'all our nose does not lie.

So we will test a whole different world.

I'm recommending we do council in your community and go to other locations around the city and all that.

There we go.

Or Whitney's library.

Count uh count.

Uh, auditor Shaw and just speak into the mic.

Okay, thank you for the opportunity to present and discuss the audits we conducted, the parks and recreation department.

I also would like to extend my thanks to the Parks Board, the Director of Parks and Recreation, and his staff and partner organizations for their cooperation throughout the process of compiling information to write this report.

You all should have received a copy of the report itself.

What I would like to do today is briefly summarize the audit objectives and our findings and recommendations.

At the conclusion of our presentation, my colleagues and I would welcome the opportunity to respond to your questions.

With that introduction, we will get started.

The City Auditor's Office conducted this audit to evaluate two issues.

First, we sought to determine whether the Parks and Recreation Department complied with its own policies when it established entry fees for community and aquatics centers.

Second, we evaluated whether the Parks and Recreation Department properly administered and monitored its facility use agreements.

For reference, facility use agreements are legally binding contracts that outline the terms and conditions under which an external party is permitted to use a specific space, building, or equipment owned by the parks and recreation department.

Before we delve into the substance of our findings and recommendations, I'd like to clarify what we do.

I know council is aware, but for the public, it's worth stating.

Charter requires the city auditor's office to carry on a continuous investigation of the work of all city departments and report the results of those investigations to council.

We operate independently of the operations of the city management.

We are non-partisan.

Our role and our responsibility is to compile, analyze, and report data in a manner consistent with U.S.

government accountability office standards, and we employ vigorous methods to ensure the product is fully supported by evidence.

That said, we have three findings and three recommendations that resulted from this particular audit.

Our first finding was that the Parks and Recreation Department has not established financial controls to ensure decisions are made based on accurate financial records and information, or that all fees and revenues owed to the department are collected.

The department's leadership demonstrated weaknesses in understanding and employing financial principles, adhering to internal controls, and keeping adequate records, which could undermine leadership's ability to effectively budget and make effective decisions.

Understanding the department's bottom line is the foundation to effective budget management and execution.

Parks leadership reported to us an inaccurate FY 2026 annual budget figure of $33 million dollars.

Its actual FY 2026 budget was in excess of $100 million dollars.

For perspective, we did a bit of digging to gauge how a $100 million dollar budget compares to other U.S.

cities.

We evaluated data from the National Recreation and Park Association, the accrediting agency for parks department for the Parks Department.

This data showed that KC Parks and Recreation is well into the top quarter of best funded parks departments per capita for large U.S.

cities.

Despite this, parks leadership repeatedly suggested its budget was insufficient.

In part, department leadership attributed its deferred maintenance backlogs to budget shortfalls.

However, they could not provide an accurate figure for the backlog, citing various numbers ranging from $80 million to $400 million.

Leadership cited inaccurate financial data throughout the audit process, which may be attributable to the finance division's internal organizational structure.

Roles and responsibilities in the finance division were unclear.

Staff were not aware of financial policies and standard operating procedures.

And oversight of the department's financial systems was inadequate.

The finance division's leadership itself expressed confusion to us over the entity within the parks department charged implementation of financial policies.

These weaknesses led to accounting inaccuracies, including misreported expenses, unreconciled transactions between financial systems, unrecorded revenues, and misapplied corrections.

The department also failed to regularly track accounts receivable to invoices and monitor payments for facility use agreements, which may have resulted in missed or undercollected revenues.

We, in fact, identified multiple instances of non-payment or underpayment by contractors using department facilities.

In other words, the finance division at times could not explain how much partner entities owed the department.

Collectively, these deficiencies left leadership without reliable financial information, limiting its ability to assess the department's financial health or make informed operational and resource allocation decisions.

Our full recommendation for this finding is detailed in the report.

But in short, we recommend the Parks Department strengthen financial management and internal controls to improve cost recovery, reduce the risk of fee and revenue loss, and increase operational efficiency.

Contracting out a full financial audit represents a significant cost, but in this case, we believe it is necessary.

So this recommendation includes contracting with an external party to conduct a full financial audit to assess the accuracy and completeness of financial records, accounting practices, and internal controls.

Our second finding is that the Parks and Recreation Department did not establish fees in accordance with its own policies.

The department's revenue and pricing policy and master plan emphasize both cost recovery and equity and access regarding cost recovery.

Although the department stated cost recovery was one of its primary objectives, it did not employ an effective strategy to recover costs.

For example, the department imposed fees for youth to enter community centers.

However, we found irregular and inconsistent application of youth entry fees and the absence of an effective mechanism to track the revenues generated from those fees.

Despite having imposed a fee for youth entry at community centers, data we reviewed revealed that cost recovery overall for community centers was lower than it was prior to the imposition of such fees.

For example, in FY 2025, the total fees collected from community centers for all admission, including adult and youth and rentals in FY 2025 was approximately $1.5 million dollars, or 2.6% of the department's 58.7 million dollars in total revenues.

In FY 2019, prior to the imposition of youth entry fees, parks collected 1.7 million dollars.

As mentioned, the department's revenue and pricing policy and master plan emphasize both cost recovery and equity and access.

Therefore, the department must strike a balance between the two.

But the department's focus on cost recovery may not have appropriately balanced equity and access, which is spelled out in the department's mission statement.

Imposition of youth entry fees was reportedly unpopular with patrons and may have disproportionately affected lower income communities.

One community center employee commented, quote, I don't want to put a grandma or a parent in a position to choose between buying medicine or paying for access to a community center, unquote.

Separately, facility use agreements also deviated from the department's established fee schedules with no systematic tracking of cost recovery or revenue losses.

For example, in some facility use agreements, the partner is expected to pay a portion of the revenue generated from its programming to the department in exchange for field use.

However, the department did not collect that revenue, leaving money on the table in the process.

Our recommendation in response to finding number two is for the Parks and Recreation Department to consistently apply its board-approved revenue and pricing policy across all programs and facilities to ensure fees are equitable, aligned with the department's mission, and financially fair to the city.

Our third finding was that the parks and recreation department did not effectively administer or monitor some facility use agreements, thereby increasing the risk of fraud.

The department did not consistently administer or monitor facility use agreements, relying heavily on informal practices rather than documented policies, structured oversight, or competitive processes.

We found that the department has re-entered an agreement with an external partner that had repeated violations, unauthorized activities, late or incomplete payments, and has used the facilities without an active contract.

For example, we identified an adult softball league operating at a park, although the corresponding facility use agreement only authorized youth sports.

The agreement also prohibited sub-leasing without explicit board approval.

Department leadership characterized that league as a quote, rogue league, unquote, despite our evidence that linked the external partner with that adult league.

The league continued to operate even after we brought it to leadership's attention.

Some external partners got better facility use agreement deals than others, as facility use pricing and revenue sharing terms were applied inconsistently across similar activities and locations.

This was a deviation from parks board approved policies.

For example, we observed 1585 fee splits, whereby the parks department collects 15% of revenue and the external partner collects 85% of revenue in one part of town, but 4060 splits in other parts of town.

While it was not our role to evaluate whether a 1585, 4060 or any other split represents a fair deal to the city, it was within our audit scope to determine if contract administration and monitoring followed the department's own set policies.

We found that monitoring was largely reactive, staff failing to obtain the required documentation to verify payments or compliance, making it impossible to confirm whether revenues owed to the department were fully collected.

To illustrate the impact of these inconsistencies, we want to walk through one specific agreement in more detail.

In this case, the department entered into a facility use agreement that included both a reduction in expected revenue and the elimination of a standard board-approved maintenance-related fee.

Under the agreement, the partner received a 25% reduction in what would otherwise be owed to the department.

At the same time, the department waived the fee set by the pricing policy for a range of maintenance activities, including mowing, debris removal, field preparation, and restroom upkeep.

The structure of the agreement led to the partner independently setting prices for third-party users, despite the contract explicitly prohibiting subleasing of the facility.

In this instance, the partner increased those prices for public use and retained the additional revenue.

Taken together, reduced revenue to the department while increasing the financial benefit to the external partner.

This example highlights how inconsistent application of pricing and fee policies can create arrangements that are not aligned with the city's financial interest and are not applied uniformly across partners.

Here's another example.

The department was entitled to a 20% of concession profits, but the department did not receive the concession records from the external partner, so they could not independently calculate or validate the amounts on the records.

Department staff acknowledged that the amounts collected appeared to fall below the contracted amounts.

In addition to issues related to facility use agreements, we found an example in which an external partner effectively exercised exclusive control over public facilities, subleased fields, and collected fees without authorization or remittance to the department, creating heightened risks of fraud, revenue loss, and restricting public access.

According to one parks official, over the years, the department could have missed collecting millions of dollars.

Our third recommendation is for the Parks and Recreation Department to improve development, implementation, and oversight of facility use agreements to improve consistency and accountability.

In summary, our audit found that weaknesses in financial controls, inconsistent fee practices, and insufficient oversight of facility use agreements have increased the risk of revenue loss and reduced transparency.

While it is our view that we have a wonderful resource in our 222 parks, the amenities offered and the resources with which our community has endowed the parks, the issues we identified limit the department's ability to ensure decisions are consistent, equitable, and aligned with policy.

Addressing these findings will strengthen accountability and help ensure public resources are managed in a way that best serves Kansas City residents.

Our parks are important components of the fabric of our city.

That includes all of our parks, all the way north to all the way south, and all the way east to all the way west.

This concludes our formal summary.

Before we take questions, I would like to note that the parks director highlighted in his response that our report, quote, provided findings that were inaccurate or not revelatory, end quote.

The director also made claims in his response that we believe to be misleading, inaccurate, or false.

To clarify the issues the director raised, we took the unusual step of replying to some of those statements.

You will find our reply to the director's response in appendix B.

Mr.

Fortney, Dr.

Keller, William and I would welcome any questions you might have at this time.

All right.

There's a lot there, and just for planning purposes, we'll do the following consistent with how we typically do things.

But I just think, in fairness, and I was asked by a member of the council who I know is also very interested in the wage equity audit.

Yes.

Just in the interest of time and to uh permit adequate discussion here.

The next thing that we'll often do in these presentations is present an opportunity for the director uh to share some comment.

If the director is present, he would come to the lectern to share some comments with us, and then uh you'll all be available for questions from the council.

Director Cotton is available.

Thanks, sir.

Good afternoon, and thank you for the opportunity to speak after the presentation by City Auditor Mark Shaw.

There are over 10,000 park and recreation departments in the United States.

Less than 300 are nationally accredited.

We are one of the back up just as midge.

Yeah, or you could even maybe switch with one of them and speak on those.

Those seem to be get better volume.

Sure.

The auditors giving you a seat.

All right.

Sorry.

Is that better?

Yeah.

All right.

Good afternoon, and thank you for the opportunity to speak after the presentation by City Auditor Mark Shaw.

There are over 10,000 parks and recreation departments in the United States.

Less than 300 are nationally accredited.

We are one of those 300.

We've maintained our accreditation through hard work, and we went through the stringent reaccreditation process, and we are commended on the improvements we have made since the last accreditation audit, which predated the entire current parks administrative staff.

We have rewritten SOPs, rebuilt divisions that hadn't existed in decades, and created new ones.

Maintaining our national accreditation was no easy task, and we were commended on our for our efforts by being recognized at the National Parks Conference as being the best of the best.

Director Shaw makes mention of the department not knowing our actual deferred maintenance total and mentions many different numbers.

The fact of the matter is that over the past few years, we have worked diligently at the request of Mayor Lucas to get a firm grasp on our issues.

Since that time with Mayor Lucas, we have finished a parks master plan, an aquatics master plan, a community center study, a city of found study, an evaluation of all of our equipment assets, multiple park specific master plans, can tell you that as today, as of today, our unfunded issues total 408,339,508 dollars.

We are currently doing the hard work of ranking these unfunded issues in order to have a better plan of addressing these needs.

This is not true at all.

Through the diligence of Terrence Williams, our fiscal officer, we've been able to save money to address a myriad of underfunded projects, with 42% being used in district three and 54% being used in district five, historically marginalized parts of town.

Terrence and I meet almost daily to discuss our budgetary issues.

In addition to those projects, the renovation of the Southwest community, Southeast Community Center pool, the historic renovation of the Ninth and Van Bruns Soccer Complex, replacing all the fitness equipments at the 10 community centers, five million dollars being moved to Starlight Theater by the City Council to cover those renovations, two million towards the existing swoke pool, two million for the renovation of Yvonne Stark Wilson's Park.

In total, we have been able to address over 36 million dollars in necessary improvements to the park system because we've been budget conscious.

Through our approach, we have fully funded and equipped park ranger division, have reinstated an aquatics division, rebuilt an athletics program, reformed the Brush Creek cleanup team, begun to bring in qualified staff to help address the development of more concentrated revenue streams in the recreation division.

For over a decade before the current administration came to be, there was little to no qualified oversight of the community centers and no understanding of how to build cost recovery.

We were reminded, we are reminded at almost every turn by the city finance department that we need to find ways to increase revenues.

All of you have seen a slide in the recent budget presentation that shows by the next budget cycle, the parks department would depend on the general fund for some of our operational capacity.

Page 24 of the ULI report that was written before any of the current administration was in place points out that, and I quote, the sales tax does not provide Kansas City Parks with the sufficient revenue to pay for operations and maintenance as well as deferred maintenance at that time estimated to be 60 million dollars.

Finally, the panel found that the fee service fee for service KC Park offerings do not pay for themselves because of the aggregate 28% cost recovery for field rentals, golf concessions, and so on.

Some of these areas cover their costs, golf, but greater opportunity exists to revise objectives downward for net revenue to be generated.

The fact that the golf division is currently operating in the black is due to the diligence of Doug Schroeder.

It is our goal to do our very best to ensure that we do not become dependent on the general fund again for a large part of our operations.

The auditors may claim that we don't follow or know our own cost recovery policy.

This is also an inaccurate statement.

There had been no policy prior to 2022 when the current administration wrote the policy and had the policy passed by the park board that was in place at that time.

Deputy Director Brad Clay is one of the finest minds in the Midwest when it comes to recreation operations, and he has steadfastly been introducing staff to cost recovery since the approval of the policy.

Brad built legendary recreation programs for the city of Olatha and Blue Valley Recreation before coming to Kansas City Parks and Rec and is working on the same here.

The 2013 Parks and Recreation Community Facilities Operation Plan covers many of the aspects that Director Shaw seems to believe they have uncovered.

The fact of the matter is we have been working on these all along and have self-reported many of the items that are being made mention of.

In this audit, I have been accused of instigating youth fees for use of community centers without park board approval.

This is a false statement, and former park board president Jack Holland and former park board president, park board member, and city council member Scott Wagner will both attest to this fact.

Likewise, they take issue with the statement that they cannot corroborate that as the former center director of Mary Williams-Neal Community Center, I had approval to charge for youth day passes in the 1990s.

I have documentation from the former director of community services that not only did I have approval, that I was encouraged to do so.

Documentation from Jack Hollins, Scott Wagner, and former community center division head Pam Sloan, a member of today's parks and recreation recreation accreditation review committee, sent in documentation that was turned over to the auditors to support this.

We believe that all should have access to the community centers, and the park board has approved a robust scholarship policy that allows those youth in need access to the community centers.

Another inaccurate claim is that we are losing millions upon millions of dollars in recreation operation revenues.

The fact of the matter is, if we are running a recreation component that made millions upon millions, we would have millions upon millions of expenses to go with those operations.

The audit team is quick to point this out, but fails to mention the expense that comes with the revenues.

This showcases a basic lack of understanding on how parks and recreation programming works.

Additionally, we've been taking a task about the manner in which contracts are administered.

Mark Shaw takes great pride in pointing out some issues with the Northam Sports Alliance contract and adult softball, but nowhere does he mention the battle that took place to take back the operations of the Ninth and Van Brunt Soccer Complex.

He doesn't mention the contentious meetings as staff tried to unravel the truth about what was going on, and he certainly doesn't mention the fact that the beloved park board member and former city council member passed away due in large part of the stress brought on by this fight.

Mary Williams Neal died in our office building fighting this very fight.

Today we are nationally recognized for our efforts to bring equitable soccer free.

Hold on, one second.

Hold on, one second.

I mean, I'm gonna go slight judge on this, and I do want facts that are that are in dispute in some way with it.

And what I may ask, there are a few ways that we can address this, and I'm and I appreciate it.

One of which is that it seems like you are reading, so City Council always welcomes a writing.

Uh, and if you wish to share the entirety of your uh testimony, that would be one way that uh we can convey it.

What I'll ask you to do now, because I imagine my colleagues will have some questions, is uh understanding the general tenor and direction.

If you might be interested in wrapping, then we'll have questions available for you and the city auditor.

I just have three more short paragraphs.

Yes, sir.

Thank you.

Has there been some disconnect between our financial component and the rec in the recreation division?

Absolutely, there has.

And it was something the administration recognized four years ago and has been working to clean up ever since.

Brad Pearson is an incredible employee.

He oversees the management of over 500 contracts for our recreation division of the department.

He is thorough and diligent in his approach and has been tasked with helping us clean up a division that has been in turmoil for decades.

The work to clean this up began as a result of the 2013 recreation facilities plan, which pointed out, and I quote develop more contractor related classes with the 6040 split in revenue back to the department.

The Kansas City Parks and Recreation Department has made great strides in the past few years with the development of multiple master plans to find out what really needs to be addressed.

We've maintained our national accreditation and continue to do the hard work to rebuild the department that was fractured by the past administration practices.

Can we improve?

But to be clear, there is no missing money, there's no embezzlement, no unscrupulous deeds being performed.

There's only a dedicated staff working to do the hard work to continue to put forth our national prominence.

Our detailed resources, detailed responses to these accusations are also attached to the final audit for your review.

We look forward to discussing with you at another time.

Thank you.

Okay.

I will say the obvious, and probably the city auditor, if you want to replace one of the folks who's there, you should be present too, because we will make sure you're available for questions.

You know, the auditors provided us a fairly thorough writing.

I will note that it is um unique in my decade of service and and some of the um clearly articulated concerns.

That doesn't mean that we're not interested in in hearing responses from them, but I would suggest that the director of Parks and Rec, perhaps a writing to city council that conveys these points may be the most efficient way for us.

And I might even suspect that city council likely will be interested in taking up this issue again in the future to get more clarity.

With that, we'll um address some questions.

Councilman O'Neill.

I have about a hundred of them.

And I'm sure all of us do.

I would suggest, in the case of time, those of us with so many questions would request a meeting with the director and maybe the auditor to address these.

Yeah.

I I think I would I echo that request, and I'll just look to the interest of the body because this probably warrants its own business session.

Yeah, um, where we have more time to I think delve into that, and I would recommend it probably at our next business session three weeks from now.

Councilman Willard.

Yeah.

Uh thank you, Mr.

Mayor.

I think when the audit started off talking about the size of budget, but we didn't talk about the size of our assets compared to other municipalities.

That's kind of where I kind of lost a little interest of this, but definitely some great questions to be asked.

I agree with Councilman O'Neill and would like a time set aside.

We can't we're not gonna be able to solve a lot of I think actually we might with such a short period of time.

I think we might leave actually a little bit more upset than actually solving some of our questions.

So I would like it noted in the minutes that he agrees with me.

That was more than you think.

Councilman Patterson has it.

Thank you, Honorable Mayor.

Um, I I agree that we need more time to dive into uh what what just happened here um in session, but I I do want to make the point for the record that the auditor um is the function of the city council.

The auditor's job is to report to us to uncover things that we need to know.

Um we have not had an auditor that has presented us with this type of evidence before, so I understand that it can be confrontational toward whatever department is directed at.

Um but um having said all that, the auditor is becoming one of my favorite positions because it's difficult to figure out what is going on in City Hall, what is going on in departments, and how our policies are being followed or not.

And I think that it's incumbent upon the manager to talk with his staff about the appropriate way to engage the auditor.

And I think that this engagement was completely inappropriate.

So I I would expect that the manager has conversations across the leadership of this institution, that we do have an auditor.

I believe the auditor position is older than the city manager.

The auditor does not report to the city manager, the auditor is is reports to us, and so we need to create an environment in which the auditor can do his job, and so that we can all be better.

Thank you, Councilwoman Patterson.

I may just note may I address that.

I'll just say succinctly.

This is one city employee in the hierarchy who doesn't report to the city manager.

That is something that will likely need to be raised with the board of parks and recreation commissioners and ultimately the mayor, who's the appointing authority.

Councilwoman Robinson.

Yeah, I too have a lot of questions, but we do employ the auditor, and so I mean, for the record, I just want to apologize to the auditor for um the personal attacks.

It's not necessary.

Um we have findings here.

Let's speak to the facts, let's speak to the findings.

There's no reason to go personal here.

Um, and I'm quite embarrassed.

And I want to apologize to you as one of the 13 members this board or of this council as to how you were addressed.

And I don't, where is the parks board um chair?

Where where is where is the chair?

I don't believe she's here.

Not here.

So, councilman curls.

Uh thank you, Mr.

Mayor.

There's a lot to unpack here, man.

I tell you what.

Um that's uh whoo.

Uh but I agree with my colleagues, and that is is that uh whereas my colleague from the first district has a hundred questions, I probably have five hundred questions.

Uh but in um, you know, consciousness of time, I think that another business session would be in order as opposed to all of us kind of trying to uh have all of our questions answered at this particular time.

Uh and I know that the third and the fifth districts were kind of called out there, and I really have some concerns about that as well.

So look forward to having further conversation.

Mayor Pro Tem and Councilman Ray.

Thank you.

Uh, I concur with uh the rest of the body.

Uh one of the things I would like to to request though is the uh details on the accreditation.

Uh, as someone who has worked to accredit different entities in health care, there is a difference between accreditation and and being passing accreditation and then being uh fiscally responsible.

But I would like to see the information if that can be sent to the council so that uh as we come back in another uh business session, we will be able to evaluate the accreditation that was referenced by uh Director Cotton.

Thank you.

Councilman Ray.

Thank you, Mr.

Mayor.

Uh Mr.

Auditor, thank you for the presentation.

Um words that stood out to me in the audit were fraud and misreporting.

Uh, and maybe I'm thinking of those strictly in terms of a prosecutor and statutory meaning that would be assigned to those words and how powerful that can be.

I don't know if there's any findings of actual fraud or misreporting.

I'm not asking you to answer that right now, but what I would like is in communication to the council how you are defining fraud and if that is pursuant to how a state statute defines it, or is it uh some other auditing principle for what that means, and I would just like some clarity on um how you're defining that for the purposes of the audit.

That's it.

Thanks.

Councilman Duncan.

Sorry.

Yeah, councilman Duncan.

Thank you, Mr.

Mayor.

Uh, Mr.

Auditor, thank you for your report.

Um, Director Cotton, I appreciate uh the response.

Um I think I do have many questions.

When we have an upcoming business session, um, given the unique nature of the parks department in relation to the parks board, I would request Mr.

Mayor that at the very least the Parks Board Chair is present to uh speak to this audit and its findings as well.

Um I think most egregious and what sticks out to me is the finances, which I think it's is incumbent upon our finance department to make heads or tail of of exactly uh how much money exists, where it's going, and how it's being utilized.

Um, we have a lot of um issues uh and uh maintenance.

Um we have a lot of requests out of our of our parks department.

I am often told that there is not money to do those things, uh and so to find out that there could be um you know tens of millions of dollars um that are unaccounted for is is deeply concerning for me.

Sir, may I just follow up?

I just want to distinguish in the audit, we distinguish between the finance department, which is under the city manager's purview and the finance division, which is under parks, and so today we are talking specifically about the finance division.

Right, I understand that I I want our finance department to look into the finance division to give us a better understanding because I don't have the expertise to understand.

Councilman Ray.

Thank you, Mr.

Mayor.

And actually, I want to follow up and on Councilman Duncan's um questions because I think the seems like the overarching purpose of the audit was to determine whether or not there is um a lot of money being left on the field.

Are we uh imposing fees and not collecting fees?

And I get other operational elements about how that's being assessed and and if it's being done equitably across the board.

Um, just from the presentation, it looked like the most detail that was given in the extent to which we are not collecting fees was quoting someone in leadership that said it could be in the millions.

Is there not a more specific finding around how what level of funding is not being collected in fees?

Because the lack of records we were not able to identify the amount that was not collected.

Is there an estimate based on the extent to which our facilities are being used and the fees that we are collecting?

We could not assess that based on the records that we were provided.

I don't have any further questions.

Alright.

This is what we'll ask for going forward from you all.

Um Mr.

Cotton and the parks department to the request at issue.

We'll plan to re have this issue.

So the exact docket item for the clerk will actually be the same thing we did today.

It'll be the audit report.

If there is to be a written response, you'd like us, and that would be on Thursday, July 11th at uh at least 1 p.m., we may decide that we need more time.

Sir, our responses are included in the report.

One moment and then we would look to have a if you have a responsive writing uh director or the parks, honestly, the parks board chair at this point would be the one uh and the board who would ultimately make that decision.

We would like to have that responsive writing, I would assume at least one week prior to the meeting.

So that would be by Thursday, June the 4th, so that we can review whatever other items perhaps it's responsive to Councilman Raya's question and others, for example, that relate to uh Councilman Ray.

Can I ask a follow-up question?

I sure I wanted to think through that exchange um, sir.

If you could please come back up.

Uh the the impression that the presentation gives, is that it is certainly a large number associated with fees not being collected.

I think that's the purpose of including the quote from leadership about it could be in the millions.

Um if we if because of the lack of documentation we are not able to determine a specific amount, are we able to say whether it's a large amount and what's the basis of that opinion?

Because I think including that comment certainly gives the impression that we're talking about a large amount of money, but what you're telling me is that we don't know what the amount is, and so how do we know it's large?

Otherwise, what would be the purpose of including that comment?

To give the full context of the comment, it would be over the course of a facility use agreement.

Some of these agreements have existed with partners for decades.

So over the course of an agreement, over the course of decades, um, the context would be that it could be in the millions.

Over a in within a single year, that would likely not be an accurate estimate.

Okay.

So we're not tal