All right.

The time is now 10 a.m.

on December 3rd, 2025, and the meeting of the audit committee is now called to order.

Madam Clerk, please call the roll.

Councilmember Spears.

Here.

Councilmember White.

Citizen Member Tino.

Here.

Citizen Member Pacheco.

Chair Via Gran.

Here.

Chair, we have quorum.

Great.

I will be allowing members uh two rounds of comments per item with uh three minutes the first round and then three minutes the second round.

The first item on the agenda is approval of the minutes.

Are there any corrections to the minutes?

No.

Okay.

Can I get a motion and a second to approve the minutes?

I've got a motion and a second.

All right.

Uh all those in favor say aye.

Aye.

Motion carries.

All right.

Madam Clerk, are there any members of the public uh signed up to speak?

We have no members of the public signed up to speak for this meeting.

Okay.

All right.

So we'll move on to consent agenda.

Items two through five.

There are four final internal audit reports on the consent agenda.

Do any members wish to pull an item on consent for discussion?

And I don't believe Mark did either.

Okay.

So let's go ahead and um can I get a motion and a second to accept the audits on the consent agenda?

We'll make a motion.

I've got a motion.

Do I have a second?

I have a motion and a second.

All those in favor say aye.

Aye.

All opposed say no.

Motion carries.

All right, we're gonna move on to our individual items.

Um we have one item for individual consideration.

Madam Clerk, please read the caption for item six.

Item number six is approval to proceed with scheduling one contract for city council consideration for capital delivery department to construct a new animal care services veterinary hospital, a 2022 bond project and renovations to the existing clinic located in Council District 6 for an estimated total value of 15,322,500.

All right, great.

We have a presentation.

Mike, the floor is yours.

All right, good morning, uh committee chair and uh committee members.

My name is Mike Shannon.

I'm the director of the Capital Delivery Department, and I'm gonna present on uh post-solicitation briefing for a pretty exciting project uh at ACS for the new vet hospital.

Um, and so I'll go through it here.

So uh we did a uh competitive seal proposal uh on this project.

It's a 2022 bond project uh for a new animal care services vet hospital on the existing campus over there off of Highway 151 in Council District 6.

And uh we had uh oh, sorry, I'll go back a little bit.

Um and uh the project is uh pretty exciting.

Uh it's about a 14,000 plus square foot new vet hospital.

Uh and we would start uh shortly after this as we go to council, should be completed near the end of 2027 uh with an estimated value there of uh just over 15 million.

Uh as mentioned, it's a 22 2022 voter-approved bond project, and again, this would be a new contract for us.

Uh we did do a scoring uh panel.

Uh we looked at um certainly experience, backgrounds, qualifications, of course, um uh their proposed plan, uh past performance with us.

Uh we did have two responsive uh bidders uh out of seven that uh actually did did uh submit bids to us, but five were unresponsive.

I'll go over that.

But we had a clear favorite um uh a clear selected vendor A with a high score there of 83 uh.14, uh and we'll go over that here.

The the uh this project uh does have uh small business subcontractor requirements of 20 percent.

Uh so uh uh that's included with this contract.

So just uh looking at the overall um uh proposals and uh the submitted responses.

We did reach out to uh just over 340 vendors.

Uh we had 13 vendors uh come to our pre-submittal conference.

Uh we had seven of them uh uh uh respond uh and bid on the project, but five were deemed non-responsive.

They didn't meet the uh the uh small uh small business subcontracting requirements, uh no material findings for um minimum requirements or due diligent review.

I would just mention that this one uh we did actually uh this was our second time putting this out on the street uh due to some of the changes with the Sebeta ordinance uh that you are very aware of.

Uh so this was the second time we put it out, and this was um uh what we got back.

So we're excited about this one, and I can take any questions, but we're ready to move forward uh with the vendor selection.

I have uh ACS uh leadership here today if you have any questions on the project.

Great.

Can I get a motion in a second to approve the item so we may begin discussion?

I've got a motion.

Do I have a second?

All right, we have a motion and a second.

Um Mike, thank you very much for the presentation.

I think this is one that we uh understood as we made the changes to Sebeta that we we would need to kind of go out and see what that happened.

I I am glad that so many people um that we had people interested in that seven put their names forward.

I'm a little disappointed in the the failure to meet the 20 percent, but I think that's a conversation we need to have, maybe as a council or an economic workforce development about how we help uh groups make that um small business, because we have the the changes have been very significant to make that.

But it looks like you have two uh two groups that move forward.

Um I think uh vendor A.

Seems like they have the um experience and uh the price.

So if they had gotten the 10 points, they would have been at a 93.

Correct.

And and I just just to look at that one.

That there was points allocated if the prime uh respondent was a small business as well, but the requirement for just to be responsive has to do with uh subcontractors as well.

So vendor A is not a small business as a prime, uh, but they will uh they will meet the small business subcontracting goals.

Uh vendor B was, but that didn't push them uh close enough to be selected uh based on the other criteria.

Yeah, uh uh and I think I think that's where um uh I'm I'm looking forward to seeing who these two groups were because I think uh it's it's dealing with that where we wait the experience in the project and proposed management.

But I know a lot of my colleagues are very passionate about this, so we want to get it done right, and uh I look forward to hearing from them.

So thank thank you for the work and the effort.

Uh we have a motion and a second.

Do uh does anyone else want to uh chime in on this issue?

No.

All right, okay.

Then we have a motion and a second.

All those in favor, please say aye.

Aye.

Uh no opposed.

Motion carries.

All right.

Let's move on to item number seven.

Madam Clerk, please read the caption for item number seven, and then uh please read the caption for item seven.

Item number seven is acceptance of the office of the city auditor report AU 24-007 audit of CSF Visit San Antonio contract.

Thank you.

Can we get a staff presentation?

Hi.

Hello, good morning.

My name is Michael Gutierrez.

I was the audit manager assigned to this project, and I'll be presenting the results for the CSF audit of the visit San Antonio contract.

The objective of the audit was to determine if CSF is adequately monitoring the visit essay contract for compliance with key terms.

Overall, we concluded CSF is monitoring the visit essay contract.

However, improvements could be made in a couple of areas.

First, in monitoring the outstanding accounts receivables uh for hosting obligations, and second, for um obtaining document support to validate the data presented and the quarterly performance metrics report and the key metrics for events managed by visit SA.

Um our testing also determined visit SA is in compliance with the key terms of the contract.

In addition, the hotel occupancy tax and tourism public improvement district payments made monthly to visit SA are approved and accurately recorded in SAP.

Um also expenditures for from visit SA are reasonable, and lastly, access to the event planning software used by CSF is appropriate.

We did make a couple of recommendations to the CSF team.

The first one is regarding hosting obligations.

Um CSF is not uh adequately monitoring the accounts receivables due for hosting obligations.

Um recommendation is for CSF to ensure the outstanding accounts receivables are properly monitored and tracked in accordance with AD 8.4 uh financial management of accounts receivable.

Um second and final recommendation is regarding the quarterly performance metrics report.

Uh CSF is not obtaining document support to validate the accuracy of the data provided in the quarterly performance metrics reports or key metrics provided uh by visit essay for the events managed.

Our recommendation here is to ensure they periodically obtain and review uh relevant and sufficient source documentation to validate the existence, the accuracy, and the completeness of the data and key metrics provided by visit SA.

Uh CSF management have agreed with these recommendations and already provided an action plan uh which was completed in October.

And uh this concludes my presentation.

CSF management is available to answer any questions you may have.

Thank you.

Um thank you.

Uh can I get a motion and a second to accept the audit so we may begin discussion?

Uh I have a motion.

Do I have a second?

All right.

Um the only thank you for the presentation.

Uh Michael.

Um so may I um could we have staff just come to come up like we typically do an audit and just provide a high level overview of the response to the findings in the audit.

Okay, Patricia Muski scan to our director, just kind of go over at a high level our response to the uh findings that were identified in the audit report.

Okay, thank you, Tricia.

Good morning, everyone.

Yes, uh, so we did accept um the findings.

Um we provided a management response.

I can tell you for the first um finding uh we have been uh provided payment for those uh four accounts that were uh delayed.

Um just a little bit of background.

The TPID hosting obligations were implemented in January of 2024.

So when the auditors uh came in, we were just implementing that process of how we were gonna go about accepting um the TPID hosting obligations.

We've had a process in place for um the hosting obligations, you know, that we have the two and a half million or three million dollar uh funding uh source, um, and that's been in place, you know, for several years.

But again, when when the auditor came in, we were just implementing um that process to be able to utilize hosting obligations from the TPIT fund.

Um, like I said, we're monitoring those closely.

We have received payment uh for all of those four um events or accounts that were identified in the audit.

As far as the second finding on the key metrics, um staff has begun validating, you know, all of the um those those uh APIs and that are in those reports.

Um by the end of this uh um by the end of this calendar year, we would have validated all of fiscal year uh 25.

And just to give you a little bit of background also, um, we meet with visit San Antonio um very you know, throughout uh the month.

I am involved most of um on a monthly basis.

I am present at a monthly meetings that we have to discuss all of this information that is on the KPI uh report or on this performance measures report, and then a staff or sales director meets uh with visit San Antonio staff going over all of the leads, uh lost business, you know, um anything that is uh definite events um on a weekly basis and sometimes even on a daily basis to discuss that.

So we're very familiar with those um with that data.

Um, but now based on the information that has been received from the auditor's office, we will be getting and we are getting now spreadsheets with all of the information, and I can tell you that what's been validated, it's consistent.

It it's accurate.

Um, you know, um, and um we haven't found any any errors on the information that was submitted now that we have validated it.

I'm available to answer any other questions you may have.

No, no, thank you, Patricia.

And um I sit on the board now, part of the executive board with Visit San Antonio.

I worked for Visit San Antonio.

I'm familiar with the the CRM they use uh to monitor some of this, and and it is it is cumbersome and they make you pay for everything, and any time you want to make a change.

So I know that some of our sales team and holds on to things, especially when they're trying to when they're in a very competitive um negotiation regarding hosting obligations before they enter it because if they have to enter it again, they charge.

So I I appreciate that.

I do want to make sure that and I want to thank Buddy and the team, Michael, for your efforts, because I do want to make I think the audit helps us make sure that we are we and Visit San Antonio and uh Patricia that y'all are remaining competitive with those hosting obligations and making sure that we uh are able to compete, and we've we've seen the reports uh uh as a council that we are able to compete as Austin comes back online with their convention center as um Dallas and Houston make changes too.

So I think it's it's really important that we we uh we take what was found, we we make the adjustments, but we also look at how we can use this in terms of uh what if if and what we need to come back regarding hosting obligations as they change in the future.

So um I appreciate that.

I think um I think you you know tourism we know is is one of the the uh one of the economic generators here for the city of San Antonio, and so uh I'm I'm glad that we have uh uh action plan to move forward and adjust the issues.

Uh do any of my colleagues have any?

Yes, Mark.

Thank you, Chair.

Um thank you for for the audit.

Um this was very informative.

You know, I sometimes when I see these things though, I I go back to really what I think about all the time, which is how are we best spending taxpayer money and are we doing it in a way uh that's transparent and and accountable uh to our citizens?

And so when I when I looked at this report and um saw that you know, we don't have oh, I'm just reading a line from it.

CSF does not obtain supporting documentation for the metrics included in visit essays quarterly performance metrics report.

You know, that that's the the kind of thing that that begins begins to worry me because there is a lot of taxpayer money that goes to VSA to uh perform a very important task, right?

Which is uh as the chair said, tourism is is key to our um economy here in San Antonio.

You know, how do we how do we get more of it?

And is VSA you know, using using the taxpayer dollars as efficiently as possible to make that happen.

So it it looks to me like the um the source documentation, I guess, isn't getting to our maybe not to VSA in a timely manner, and then certainly not over not over to the city.

And and the recommendation says um the CSF director ensures department periodically obtains reviews and analyzes the relevant source documentation.

We're getting the source documentation, but just not early enough.

Is that fair?

Um well, there's there's two.

Um for the TPID hosting obligations, the concessions that are that utilize those concessions, um, there's a delay uh getting the information because usually when a client is provided a TPID hosting obligation, it's based on room pickup.

And so visit San Antonio, we're having to wait on visit in San Antonio.

Visit San Antonio is having to wait on the hotels to basically obtain that information.

So there's a delay um in that.

That's one.

As far as the KPIs, the second finding on the quarterly performance measures report, um, we were getting all of the the KPIs and the data.

We're meeting with them on a very regular basis.

And so we're very familiar with that.

It was that we were just not getting spreadsheets to say, look, these are all of the number of leads.

Now we are.

Um there is like 87 leads on a particular month saying these were all of the events leads that um that basically are associated with this number.

But because we meet on a regular basis and we review all of that information, we're very familiar with it.

It's just that we weren't getting the backup information to say this the 87, these this is the list of events, if that makes sense.

So what's the plan?

The plan is now we are getting those spreadsheets to say this is the list of events that you know that corresponds to this number of leads or definite events or you know, whatever else the the measure is.

So this line here that says without original source documentation, CSF cannot validate the accuracy of the metrics within the quarterly performance metrics report.

The spreadsheet now we are getting that spreadsheet.

We are getting it.

Okay.

So that's taken care of.

All right.

The next paragraph here um says events managed by um VSA are not properly supported.

Well, what actually does that mean?

I think some um areas in the simple view um software that they use to record all of the information might have not had maybe attendance um information like that, and that information um it's sometimes hard to get uh from the meeting planner if they don't provide it at the end, you know, they're they're in a hurry to basically leave town to get to their next, you know, um event, and they might not get you know um the the actual attendance for the meeting or might not get uh you know information that they're waiting on that meeting planner to obtain.

And so um, you know, it might be or it might be like Mario explained to me um you know earlier was that it might have been in another uh page, but maybe the auditor didn't identify that or didn't you know didn't uh find it um in the software system that they have.

So this is just a matter of the information wasn't plugged into this simple view system, correct.

Okay, and and eventually it gets there, or it might be in in you know, in another area in that system, but you know, once the auditors reviewed it, they didn't identify that.

But and yes, those those would be the two um two different you know scenarios.

Mario, I see you jumping up.

Yeah, I could probably give a little bit more context if that's okay.

Sure.

So the way our simple view CRM uh functions is there's three major areas where you can enter this information for the audit actually focused on was in the lead portion of the CRM, which is the infant stages of the sales negotiation.

So typically a meeting planner at that point is giving you very basic information, basically looking for uh date availability, uh number of a hotel rooms, and space.

And that's the minimum amount of information you need to start the sales process.

That's what gets loaded into the lead portion, if you will, of the CRM.

Uh now there's multiple fields in that CRM to councilwoman Big Ran's very knowledgeable understanding of our CRM.

Uh, there's like maybe 40 other uh fields that you can enter.

Typically, a meeting planner is busy, they're not going to give you, we'll ask, because we're trying to get as much information as possible to better understand the business opportunity, but they're just giving you the basics.

As you move through the life side uh the life cycle of the sales process, you then get into the contract stage.

Now we're not just considering San Antonio, we are definitely looking at San Antonio.

That area of the CRM gets more populated with some of the information that was missing as pertained to the audit from the lead portion.

And then certainly when the uh the life cycle has come to now it's meeting in San Antonio, it's actualized in San Antonio.

Now all that information that wasn't in the lead portion of the CRM is definitely in the uh pickup portion or the actualized portion of the CRM.

At that point, it's complete, uh, and that's the information that that final life cycle is what we use to create uh economic impact reports.

So that's that was the disconnect.

The the uh the lead portion is always gonna probably have not the most available information only because we haven't received it yet from the meeting planner.

Okay.

Yeah, I appreciate that.

And and you know, just mm moving forward, I think from a from a staff perspective, and as we monitor this this contract going forward, uh, and Mari and I talked about it the other day.

What I think the citizens care about is is the return on investment, right?

And and we need to be able to see a direct line from the dollars being spent to the business and the economic impact um that's being generated by by the work that that BSA does.

And so this information I think um is important because it helps round out that picture.

And so um again, I I I appreciate the audit.

Mario, I certainly appreciate everything um you you've uh you've been doing since uh since you've been in the top spot.

And uh just want to make sure that we're we're adequately monitoring this so that we can get the most out of um the dollars that VSA uses.

Thanks, Chair.

Thank you.

Thank you.

And I just uh want to remind while you're there, Mario, is this is uh hotel occupancy tax, correct?

That visit San Antonio works through.

We don't have a line item for them currently.

And the other aspect is uh I think from what we hear today is as we go and we look at the audit because I know it's very important within the industry that the numbers if we just give heads and beds numbers and the meeting planner finds out we're putting this forward is what we do, they don't like that.

They want to be in control of what the what their attendance was for their conference.

So there's that line that we have to walk walk.

So I think when we talk about return on investment, do we have that conversation of it's just heads and beds hosting obligations with the hotels because we know now people are using Airbnb, they're staying in other locations.

Um so we want to make sure that we uh what the meeting planner gives us isn't necessarily reflective of what is is what we want to need, which is that heads and beds.

You're right, sort of yeah, the the meeting planner, it's it behooves them not to give you as much information as possible because they're trying to uh negotiate the best deal that they can.

So typically, like on uh in that lead section, you might not have average daily rate put in there because they don't want to tell you what the maximum that their attendee can pay.

They want you to come back with your best available rate.

So that's uh an example of this type of conversation.

So thank you.

Uh uh Councilmember Spears.

Thank you, Chair.

Um just a couple of questions.

Uh I love Isit San Antonio, and so I'm really interested in this audit.

I think it came out really well.

Are you happy with uh simple view?

How long have we been using it?

You like it?

It's basically it's basically the industry standard in terms of uh destination marketing organizations.

Um for all its faults, it's as good as it you can get.

There's other Salesforce uh applications, but simple view is probably the most recognized.

In addition to it has a very um very functioning economic impact calculator.

Um that's a part of that platform that you need when you're evaluating the business to make sure to councilman uh White's point that we're getting the best ROI for the investment that we're making.

So it's not perfect, but it's as good as you you have in the marketplace right now.

Okay.

I saw where you're in the recommendations.

The meetings will include the use of a shared reporting mechanism, tracker or continuous where balances and due dates are reviewed.

What is that?

What do you mean?

And so just to give a little bit of context on the on the annual reporting that we submit also to the city of San Antonio, obviously, uh through Patricia's office.

Um what we have been sharing is an executive overview on NXL worksheet that pulls all the data uh from these reports, the source uh data that we've been utilizing.

Um it's cumbersome, it's a lot, right?

Um so when you're going through that, but we also through our checks and balances, and as uh councilwoman McViegan pointed out, when we're reporting this also to our board and to our executive committee, we're going through that source data, and it's always there.

Um to Patricia's point earlier, too.

In addition to why we've always just shared the executive overview, is because we're in constant communication.

Um we probably talk more than once a week, feels like every other day at least.

So we've always had that given and take on that information.

What we are now providing is now all that cumbersome stacks of paper that whether it be through the CRM or through printed, it'll go along with the executive overview for their auditing as well.

Okay, good.

Thank you.

Then my last question is about the TPID delay.

Um is that should we just expect?

I mean, I understand with that sort of thing, there could be an expected delay in process in payment.

I love that question.

Um it's a source of doing business, it's a function of doing business.

As much as much as um we would love for business to be nice and neat and fit in this comfortable box and follow uh the terms of an audit, that's just not how the business functions, right?

Uh to Councilwoman Via Gran's point uh earlier in Patricia's comments, the um a lot of what you're dealing with is you're waiting on the customer to wrap up their audit, right?

For their payment, which is now the good news is uh any type of uh hotel incentive uh program that we have, any type of hosting obligation uh program we have is is uh directly correlated to the performance of the group.

The group's not going to get a dollar from us uh that's not negotiated ahead of time within the uh the DBA, the uh booking agreement that we have with them, and it's always tied to the room night pickup.

Okay, so it behooves them to go through and count every single room that's meeting in the city of San Antonio.

That takes time, especially when you're talking about a citywide that has 20,000 room nights associated with it.

They're reaching out to 20 different hotels, they're waiting for that report pickup.

So by function, there's times where as much as we would like to uh consolid uh rectify the the books, we're still waiting on data from the meeting planner.

I don't know if we'll get ever fixed that completely, full transparency, but we have a plan in place to at least improve on it because we understand that it's also important to the process.

Okay, I understand.

Great.

Thank you so much.

Thank you.

Yes.

So I think this question may be more for the audit team, but um I'll defer to you guys.

So when you when you do the audit, um, do you consider if these are discrete um things that you've caught or if there has been a reoccurrence in the past?

And in this case, have we seen uh lack of controls in the past around um accounts receivables or or the metrics that they spoke of?

Is it or is this the first time we've seen this?

Okay, in this case, this is the first time we've audited visit SA.

Okay.

So to answer your question from a reoccurrence perspective, we wouldn't be able to answer that question.

Uh but when we do the follow-up work, we'll be able to validate some of the work they're doing to correct and improve these processes.

Perfect.

And would that be included in the text of your report?

It'll actually be on the follow-up uh matrix that we present.

We're planning on presenting that probably the next month.

Perfect.

Um so it'll be a status audit-wide for all the recommendations up to a certain point in time.

Perfect.

Thank you.

Yeah, and again, I want to I want to thank the audit team because this was you know, I'm very familiar with the industry, very familiar with Simple View.

So uh I know that it it it doesn't work as easily because they are no longer a city department.

We this is we contract with them, and I think uh what's interesting to see as we move forward with audits where we're auditing something that we're in a partnership or we contract with, are we going to see that?

And I think this is a good kind of test because I think as we move forward, we're gonna see more of these or uh kind of situations where we're waiting on the business and industry side and it's not gonna fit within our um what what our expectations of the audit are, but it's important that we stick with what our standards are and what our expectations are within the city.

So uh Ben, do you want to share anything or all right?

We've got a motion and a second.

All those in favor?

Aye.

All any opposed?

Motion carries.

All right, that comes.

We are at the end of our meeting.

Oh I had just one other uh not related item.

I just wanted to mention that our next, if you look at the agenda that says our next meeting date is January 7th.

I think we're gonna canvas your calendars and see if we can push that a little bit just so that we can meet posting requirements and you've got enough time to look at information before we meet.

So we may slide that a week or two, but we'll work with your your staff to get that rescheduled.

So the next meeting right now is looking at the second or third week of January.

It'll be a special meeting.

I uh we will eventually get this guy's where we're consistent, but uh it is it will be after the new year, and we do want to make sure that we're posted, uh we're posting and following the rules that we have for open meetings acts.

The time is now 10 33 a.m.

and the meeting is now adjourned.

Thank you.