Audit Committee Meeting Summary for January 13, 2026

The Audit Committee convened on January 13, 2026, to approve minutes, consent for two internal audit reports, and review pre-solicitation briefings for four major projects: a district study and program manager for the Sports and Entertainment District, and two community center construction projects. Staff presented scopes, evaluation criteria, and aggressive timelines for all items, while committee members focused on enhancing evaluation criteria for experience, addressing public safety coordination, ensuring community engagement, and establishing performance-based fee structures.

Consent Calendar

• Minutes: The committee unanimously approved the minutes of the previous meeting following a motion and second.
• Internal Audit Reports: Two final internal audit reports regarding routine departmental operations were approved unanimously via the consent agenda.

Public Comments & Testimony

• No members of the public signed up to speak; the committee proceeded without public testimony.

Discussion Items

Item 4: Sports and Entertainment District Cost of Services Study

• Staff Presentation: Chief Financial Officer Troy Olaid presented a pre-solicitation briefing for a $350,000 study to analyze projected cost of services (traffic, security, fire/EMS, maintenance) and new revenue opportunities (sales tax from pop-ups/marketing) for the district, including the Alamo Dome, John Wood Courthouse, and a proposed MBA arena. The scope excludes bond repayment revenues.
• Chair Via Gran's Position: Chair Gran expressed support for the aggressive timeline and the dynamic, scalable nature of the study but emphasized the need to clarify the specific timeline covered (potentially through 2045) to account for inflation and competition, as well as rare event scenarios like government shutdowns or pandemics. She voiced a strong position that the evaluation team must heavily weight experience to ensure credible data for Council.
• Councilman White's Position: Councilman White expressed support for identifying new revenue opportunities, noting that experiences at venues outside the city often feature pre-entry revenue streams like concessions and pop-ups. He emphasized the need to maximize general fund revenue to support quality of life issues citywide.
• Councilwoman Mesa Gonzalez and Councilman Metcalf's Position: Councilwoman Mesa Gonzalez and Councilman Metcalf expressed the position that the evaluation team requires public safety specialists, not just finance experts, to accurately assess costs for mobilizing security and traffic management in a perpetually construction-zoned downtown. They requested a follow-up memo on incorporating public safety personnel into the evaluation team.
• Councilman Mesa Gonzalez (Additional): Added the position that the study must account for specific traffic and security costs related to parking scenarios, such as residents parking in yards for events, potentially requiring ordinance changes and permits. She also noted the need to consider the experience of vendors regarding local events like New Year's Eve and Dia de los Muertos.
• Ben Gorzell (Staff Response): Stressed that while the evaluation team is finance-focused, the selected consultant will be required to coordinate directly with Police, Fire, and Public Works to create accurate models.
• Chair Via Gran (Additional): Clarified that parking studies are intentionaly excluded from this scope to be handled in a separate, more complex feasibility study, though traffic scenarios must still be considered in the cost of services model.

Item 5: Executive Program Manager (EPM) for Sports and Entertainment District

• Staff Presentation: CFO Troy Olaid presented a briefing for a Request for Qualifications (RFQ) to hire an EPM at a total potential value of $10 million (approx. $2 million initial phase plus options). The EPM will oversee the coordination of multiple projects (arena, convention center, mixed-use) to minimize risk and maximize efficiencies, similar to the airport model.
• Chair Via Gran's Position: Chair Gran expressed full support for the program but argued for increasing the evaluation points for "Experience, Background, and Qualifications" and "Proposed Plan" to 80 points total (by reducing local preference points to 5), stating she does not want a "big zero" where local preference outweighs plan quality.
• Councilman White's Position: Councilman White expressed a strong position that the EPM contract must include performance-based pay structures (incentives or penalties) tied to on-time and on-budget delivery, citing that other firms are willing to accept such terms.
• Councilman White (Additional): Clarified that the EPM must be held ultimately responsible for district-wide progress, though the Council must retain oversight on contractor selection to ensure labor standards are met. He emphasized the need for a public accountability dashboard.
• Councilwoman Mesa Gonzalez's Position: Expressed a cautious position regarding the EPM's ability to pick contractors, stating she is not comfortable ceding Council oversight on contractor selection or labor pay parameters to gain programmatic speed. She wants the proposed plan to explicitly address how the EPM will work within Council constraints.
• Councilman White (Additional): Highlighted the critical nature of the EPM role in coordinating simultaneous construction projects within a small footprint to avoid creating competition among contractors for labor and materials.
• Buddy Vargas (Staff Response): Confirmed the vetting process is robust, including reference checks and financial solvency reviews, and noted that the first phase is strictly for planning and foundation setting, with the second phase (implementation) to be brought to Council with amendments and safeguards for incentives.

Items 6 & 7: Community Center Construction Projects (Kenwood & Father Roman)

• Item 6 (Kenwood - District 1): Assistant Director Christy Chapman presented a briefing for a $6.15M construction project to replace a 2024-demolished center. Councilman Pacheco expressed enthusiastic support for the District 1 project, emphasizing the need to remind Council members of the upcoming political contribution blackout period (Feb 13) to ensure compliance.
• Item 7 (Father Roman - District 3): Chapman presented a briefing for an $8.61M construction project to replace a facility deemed unusable due to soil conditions caused by climate and drought. Councilman Pacheco expressed support for the District 3 project, noting the hard work of the community in maintaining the site and the excitement to see it replaced.
• Councilman Pacheco's Position: Expressed support for both projects, acknowledging the community's desire to keep certain design elements (e.g., murals) during the design phase, and thanked the team for moving forward.

Outstanding Management Actions for Prior Audits

• Buddy Vargas (City Auditor): Presented a status update on prior audit recommendations. He clarified that "Verification Pending" (yellow) is due to departments requiring time to generate activity for sampling, not resource constraints. "Red" indicates exceptions where implementation has failed or documentation is missing. He confirmed no items are delayed due to audit team staffing limitations.
• Chair Via Gran's Position: Expressed the position that the committee should review the red and yellow items for trends regarding employee access controls and departmental manpower constraints, particularly as they relate to upcoming budget discussions.

Key Outcomes

• Consent: Approved Minutes and two internal audit reports unanimously.
• District Study (Item 4): Staff directed to revise the RFP to clarify the timeline (potentially through 2045) and consider adding public safety specialists to the evaluation team pending a memo; solicitation to release Jan 16.
• EPM (Item 5): Staff directed to: (1) Consult with City Attorney to adjust local preference points to increase weight on experience and proposed plan; (2) Explore performance-based pay structures (incentives/penalties) for the EPM contract; (3) Ensure community engagement and accountability dashboards are included in the scope; solicitation to release Jan 30.
• Kenwood Center (Item 6): Pre-solicitation briefing approved; solicitation to release Jan 30.
• Father Roman Center (Item 7): Pre-solicitation briefing approved; solicitation to release Feb 6.
• Audit Follow-up: Staff to monitor red/yellow status items for trends regarding IT access controls and staffing levels to address in future budget cycles.