Budget and Audit Committee Meeting - November 8, 2018
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Budget and Audit Committee Meeting - November 8, 2018
The Sacramento Budget and Audit Committee met on Thursday, November 8, 2018, at 2:02 p.m. in the City Hall Council Chamber. The meeting was chaired by Mayor Darrell Steinberg, with Members Rick Jennings and Jay Schenirer present; Member Angelique Ashby was absent. The committee approved a consent calendar, discussed auditor reports, and reviewed a resolution for new fees and staffing for the Vacant Lot Program, as well as the 2019 Sacramento Housing and Redevelopment Agency (SHRA) budget. The meeting adjourned at 2:27 p.m.
Consent Calendar
- Item 1: Approved the Budget and Audit Committee Meeting Minutes dated September 4, 2018.
- Item 2: Accepted the City Auditor’s Activity Report for the 4th Quarter of Fiscal Year 2017/18 and forwarded it to the City Council.
- Item 3: Accepted the City Auditor’s Activity Report for the 1st Quarter of Fiscal Year 2018/19 and forwarded it to the City Council.
All consent items were passed by a single motion with unanimous support (3-0).
Public Comments & Testimony
- No public comments were made on matters not on the agenda or on any agenda items.
Discussion Items
- Item 4 – City Auditor’s Recommendation Follow-Up Report for the Six-Month Period Ending June 30, 2018: City Auditor Jorge Oseguera presented the report, noting significant progress on recommendations from the audit of medical marijuana dispensaries, including collection of $33,000 in additional business operation tax. The committee accepted the report and forwarded it to the City Council.
- Item 5 – City Auditor’s Whistleblower Hotline Activity Report for the April to September 2018 Period: The auditor reported that since inception, the hotline has received nearly 1,000 tips, with 85 new tips in this period and six substantiated cases involving fraud, nepotism, compliance issues, and misuse of city resources. The committee accepted the report and forwarded it to the City Council.
- Item 6 – New Fees and Additional Staffing for the Vacant Lot Program: Carl Simpson, Code and Housing Chief, presented a resolution to establish two new fees and add 2.0 FTE (a Customer Service Specialist and a Customer Service Representative) to administer the new Vacant Lot Program. Over 6,000 vacant lots exist citywide, with 4,200 privately owned requiring registration. The $90,000 budget amendment will be covered by fee revenue. The committee voted unanimously to forward the resolution to the City Council for adoption.
- Item 7 – Review of 2019 Sacramento Housing and Redevelopment Agency (SHRA) Budget: Russ Robertson, SHRA Finance Director, presented the proposed $X budget (actual figure not stated but described as status quo with 1.1% increase from 2018). He noted that 89% of funding comes from the federal government, and 52% is allocated to housing assistance payments. Mayor Steinberg and Councilmembers Schenirer and Jennings discussed the need to better coordinate SHRA’s budget cycle with the city’s budget process and to schedule workshops in spring 2019. The committee also noted the one-time 50% increase in public housing capital funds from the 2017 Tax Cuts and Jobs Act. The item was for review and comment only; no vote was taken.
Key Outcomes
- All motions passed unanimously (3-0) for items on the consent calendar and discussion items 4, 5, and 6.
- Forwarded to City Council: Items 2, 3, 4, 5 (for final approval) and Item 6 (for adoption).
- Vacant Lot Program: The committee supported the new fees and staffing, with implementation starting in spring 2019, including a grace period for registration.
- SHRA Budget Coordination: The committee requested that SHRA be included in the city’s budget calendar to align planning, with a workshop tentatively scheduled for late April or early May 2019.
- Auditor Office: City Auditor Jorge Oseguera thanked the council for passing Measure K (which expanded the auditor’s role) and announced the recent hiring of two additional staff, bringing the office to full strength at nine FTEs. He also congratulated staff member Chow Gao for earning the Certified Internal Auditor designation.
Meeting Transcript
Good afternoon, everyone. The uh city council's budget and audit committee will come to order. Let's uh call the roll, please and establish a quorum. Thank you. Councilmember Jennings. Here. Councilmember Shaneer. Mayor Steinberg. And for the record, Councilmember Ashby will be absent. All right. Thank you very much. Members and members of the staff and members of the public. We do have several items today. And let us begin with the city auditors' recommendation follow-up report for the six-month period. Is there a consent calendar? Yes. Move the consent calendar, please. Okay. All in favor, please say aye. Aye. Opposed abstain. Okay, now we go. Let's go with the city auditors' recommendation. Go ahead. Mayor. I was gonna suggest that you combine the two items that are left for my office for one motion. And we can move through a little more quickly. Uh-huh. Good afternoon, Mayor Steinberg and members of the budget and audit committee. Jorge Osquera, your city auditor. Before we go over the items that are before you, I wanted to express my sincere appreciation and gratitude for the council having placed Measure K on the ballot. I would also like to thank you for entrusting our office with the responsibilities assigned to the independent budget analysts. My office and I would like to thank you for your support and express our commitment to serve you and the public to the best of our abilities. With the combined resources, the auditor's office and the independent budget analysts, the auditor's office will be better able to continue to promote honest, efficient, effective, transparent, and accountable city government. I would also like to take this opportunity to acknowledge a recent and notable achievement by one of my staff, Chow Gao, who has been with our office for over two years, recently passed all three exams to become a certified internal auditor. Congratulations, Chow. Congratulations to you. That that is that is fabulous. Thank you. I would also like to inform you that we are in the process of hiring two new employees. These two hires uh will total our office resources at nine full-time equivalents, which will put our office at full strength. With that said, the recommendation uh that is before you are to pass a motion accepting both the recommendation follow-up report and the whistleblower hotline activity report, and to forward both reports to the full city council for final approval. The recommendation follow-up report details the implementation status of all outstanding recommendations. For example, our status report on the audit of the city's medical marijuana dispensaries details that since our last report, the Office of Cannabis Policy and Enforcement and the Revenue Administration has made great progress in addressing the auditor's recommendations. The Office of Cannabis Policy and Enforcement implemented a review process of the dispensary's financial documents to identify instances of underreporting of gross receipts. We are pleased to report that staff finalized their review of the 2016 renewal application process and collected $33,000 in additional business operation tax. The whistleblower hotline report shows that since inception, the office has received almost 1,000 tips. Investigating these tips have provided the city with an opportunity to take corrective action and deter inappropriate city uh employee activity. For this reporting period, we received 85 new tips and substantiated six related to potential fraud, nepotism, compliance with city code, and inappropriate use of city resources. We have referred all substantiated cases to the appropriate city departments for review and potential corrective action.
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