All right, okay.

The time is now 10 01 a.m.

on March 20th, 2026, and the meeting of the audit committee is now called to order.

Madam Clerk, please call the roll.

Councilmember Mesa Gonzalez.

Councilmember White.

Citizen Member Tayano.

Here.

Citizen Member Pacheco.

Chair View Garan.

Here.

Ma'am, we have a quorum.

Great.

I will be allowing the member speakers two rounds of comments per item with five minutes the first round and three minutes the second round.

The first item on the agenda is approval of minutes.

Are there any corrections to the minutes?

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

I'll make a motion.

I've got a motion.

I've got a second.

There's a motion and a second.

All in favor say aye.

Aye.

All opposed say no.

Motion carries.

Public comment.

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

One member, Carl Merkel.

Okay, Carl, you'll have three minutes.

Okay, I hope you're recording this.

I'm not today.

Um I have now given at least delivered 32 speeches to the city council.

Uh I didn't give the last speech.

I don't have a prepared speech for today, but I'm here to speak on agenda item number four concerning the audit.

I'm looking at some graphics that were posted on the city website.

It looks like it was prepared by whoever is presenting the audit findings.

And the graphic shows a number of findings starting back in 27.

Kind of 19 comments, 22 comments the following year, 15 comments and seven and down, and then since 2018 to 2025, there's been essentially no comments.

And I'll tell you from personal experience, um, I've been repeatedly pounding this message to the city council.

The city has received 12,500 in stolen property of mine.

Hasn't, you know, I've reached out to various parties.

There has been um no attempt to um, if you will mediate with me or do anything.

Um I've essentially threatened lawsuits.

We're getting close to that because at this point in time uh at the Supreme Court, there's what I call a monument to judicial incompetence and corruption, where under Texas state law, there's a criminal street gang of 22 federal judges that committed two first degree violent felonies against me.

They are aggravated kidnapping on December 6, 2021, and multiple aggravated robberies.

I've dealt with this with uh the San Antonio police.

Thanks a falling on deaf ears.

I've talked to my councilman Mark White.

Feels like it's fallen on deaf ears.

And so I'm telling you, I I know how the audits work.

I worked for Terry Britz uh some years ago on the CAFR audit for the city.

Um so I'm pretty familiar with our internal controls.

My complaint about the judicial system uh in the U.S.

court system is it lacks internal controls over compliance with laws and regulations.

So I'm gonna basically make an allegation here that the state is still lacks internal controls over compliance with laws and regulations, particularly as it relates to crimes that other government officials have committed against city residents.

I'll leave it at that.

Um they can give whatever report there is.

I don't need to sit around for this, but I want to make sure that you're aware that it just seems incredulous to me, given how crazy things have been since March 2020.

Time's up, thank you.

Thank you.

Uh I want to take a moment in public comment to uh take a point of personal privilege uh because March is colon cancer awareness month.

I saw my county commissioner Rebecca Clay Flores from Precinct One.

I know this is off topic, but point of personal privilege.

So just want to make sure that people understand that colonoscopy saved lives.

So make sure you get that on your calendar, and I want to thank y'all all for being there.

So with that, we've ended public comment and we will go on into our individual items.

Um items two and three are pre-solicitation briefings.

Uh, Madam Clerk, please read the caption for item two, and I believe we do have a staff presentation.

Item two is a briefing on the release of a solicitation for multiple contracts to provide the human resources department with temporary labor personnel services for an estimate total value of 30 million dollars for three years with two one year options to renew.

Renee, the floor is yours.

Good morning.

I'm Renee Frieda.

I'm the city's director of human resources, and I'll be providing the pre-solicitation briefing for our temp personnel services contract.

So we are seeking proposals from temporary personnel service firms to provide temporary uh employment personnel services for varying roles across the city for our varying city departments.

Examples of these roles could include administrative or clerical or general labor, but may also include specialty roles such as those in Metro Health, human services, and finance.

The proposed term is three years with two one year renewals, and the estimated value is six million per year with an approximate X with approximate uh uh contract value of 30 million over the term of the contract.

With this contract, we could award it to multiple vendors as we have in the past, um, and each department is responsible for paying for their temporary services through their allotted personnel budget.

Our current contract expires on December 21st of this year.

The outreach for this uh RFP includes the NIGP code for personnel services temporary.

The number of vendors to be notified from the central vendor registry is 148, and five will be targeted outreach.

Advertising will include TBSA, the COSA bidding and contracting web page, heartbeat, and SAPs.

Our voting members will include myself, HR Deputy Director Crystal Strong, our recruitment and staffing administrator, Sharon Fry, our HR project manager from recruitment, Vanessa Viejo, Galvon, as well as uh representatives from two of our highest using departments, um, Victor Oviven from Human Services and Vanessa Hemende Himenez from Neighborhood and Housing Services.

The evaluation criteria will be 40 points for experience, background and qualification, proposed plan 30 points, pricing 20 points, and SBE Prime Contract Program 10 points for this solicitation, the local preference program and the veteran-owned small business preference program are not applicable.

Because a variety of departments use these contract contracts for grant-funded positions, um there is a preclusion from being able to allow these specific preference points.

APIs will be supported based on this the opportunities for SBEs within the scope of work.

SBEs available in the central vendor registry and utilization of SBEs on historic projects of a similar nature.

The RFP is scheduled for release on April 13th with a political blackout date starting April 28th.

We have a pre-submittal conference on May 5th with the deadline for questions of May 8th and the deadline for submissions of June 1st.

We expect that we will be negotiating a contract in July or in August with a post-solicitation briefing to happen on September 2nd.

The final phase includes city council consideration in September with a targeted uh contract start date of December 22nd.

Madam Chair and Committee members, this concludes our my presentation.

Thank you, Renee.

So this is for one vendor.

It can be awarded to multiple vendors.

Currently, we have four vendors.

Okay.

Um the four vendors we have, they're all eligible to reapply.

We're not going, there's no extension of the contract.

Okay.

Uh the one thing that I has been brought to my attention that background checks.

Do we require all some of our positions here in the San Antonio in in the city of San Antonio require background checks?

We need to make sure.

So are we going to have some vendors that specify with those that need to get background checks and they'll have a pool of employees that have that?

There will be a requirement that they perform similar background checks.

Okay.

And then the other aspect that I know one of my council women is going to ask about is those that have been just disinvolved.

And how we can try and find a way if if this is temp work and and it is you know, whether it's convention center, solid weight, something where a background check is not needed.

Are we going to uh kind of ask them about that or what they do there?

Because I feel like that may come up when we uh present this to the full council.

Of course.

Um, so we have a second chance hiring initiatives in place for the city, and that it is our expectation that they apply those same.

Great.

Just want to make sure that that we go over there.

Yeah, so I um as we look at our budget, as we look at what we can do, uh, while I want to be mindful of the fact that we need to make cuts, I also want to be mindful of the fact that the city continues to grow and we still need to provide uh quality service.

And again, that's one what we'll be talking about in this audit when we get a chance is the the customer service, the what reaction we're getting in terms of those points.

So if we can use that right now with our um temporary labor to really help us in the future make decisions of where we can hire for the city, where we make those hirings and where it's if I go back to my retail days, seasonal, uh we kind of do that.

So um thank you for putting that forward and just making sure that we're kind of covering all the the possibilities.

I'm I'm glad to see that uh the two of the departments that uh use a lot of temporary labor there.

I think we need to start looking at some of our other departments that may need to adjust um to having kind of seasonal uh labor temporary.

I think about solid waste and the um and and they're doing a great job, and I saw David McCarry in and then out because I know he oversees that department, but with that bulky item and with those days where we bring um more of the bulky item and the hazardous waste into our centers, that may be something where we're we look at temporary labor for that or seasonal labor for that uh as as it gets warmer or the days get longer, people tend to do that more and to make it um run smoothly.

There's some departments that we probably need to look at uh expanding this service to.

So those are all my comments.

I'd love to hear from my committee members.

Councilman White.

Thanks for the presentation.

Um six million dollars sounds like a lot of money to me.

Uh what are we spending this year on on temporary folks?

Yeah, we expect that we could spend as much up to uh 3.9 million.

We're at 945,000 year to date.

Okay, so 3.9 million perhaps this year.

Why do we need to increase to six?

The contract allows for up to six because it when the contract is opened up, we can't expect we can't anticipate what will happen over the course of the next five years.

If you look back to 2020, um, that was one of our highest use years and something we couldn't anticipate.

Um Councilman White, we have a lot of things in place to try to curb that spending.

Um so I think it was back in 2000.

We began making all, even though the the departments pay for the temps themselves, we started having them submit those temp requests through HR so we could evaluate the necessity.

Today um they have to go through VRC, just like if you wanted to fill a permanent position, right?

And so it's evaluated by a committee to say, is there truly a necessity for this?

Is there grant funding that's gonna pay for it?

Is there someone out on FMLA or disability that's in a vital position that we need to fill?

And does the department budget uh have sufficient funds to cover it?

Well well, I mean that was one of my next questions.

I guess we we look at if there is a necessity or or or whether or not some of our current temporary personnel couldn't cover some of these things, yes, sir.

And what's the average salary of one of these temporary employees?

I I don't know if we know the average salary.

Um we'd have to get back to you on that because it's a they are used for such a wide variety of positions.

You may have somebody coming in to finance in a professional position, but a lot of them are admin associates or or maintenance worker type positions.

So you know, with our extended hours in DHS, we're gonna have um supervisors um uh for the senior center, so it's it's a wide variety of positions.

Yeah, councilman, if you if you want some more information on that, I think we can probably break that out a little bit more.

I wouldn't I wouldn't do the average because of what Renee just talked about, because again, they do so many different roles, they're there to fill something on a temporary basis.

It just feels like a lot of people is why I ask.

Well, I mean, we're a big organization.

We got we got you know what's uh almost 70,000 civilian employees, so this is really again to fill those gaps.

Somebody's out on FMLA, uh, we've got uh a gap with somebody needing to take extended leave.

There's some new program coming in that we just need temporary staffing for.

But I think it really goes back to what Renee said.

Um, I think it was around 2020 when we made the change so that departments before could contact TIMP agencies on their own and ask for temps.

Now everything goes through HR, everything goes through the same process.

They've got to make the same justification as if they're hiring or adding a position in the budget process, they've got to have a business case for why they're doing it.

What about any of the work that has to be done?

You know, that we're thinking about needing temporary personnel.

What about AI?

Have we looked at whether I don't know which department it would be, but there's potential AI solutions as opposed to hiring temporary workers?

Do you want to I'll take that one?

So that so I think we can continue to evaluate that, Councilman.

I think we're gonna come to y'all in June and talk about our AI policy and how we kind of evaluate that.

I'm not aware of anything when we look at currently how we're using these temps, everything from field workers to you know some of the gaps that we're filling that I see that yet, but that is a good point.

That is something we should keep our eye on going forward.

But I don't I don't I'm not aware or anything, I can't think of anything right now where that would fit.

Thanks, Chair.

Thank you.

Committee member uh Trisha.

Thanks, Chair.

Um question I have based on the vendors um that you've had uh before or currently what are some of the criteria you look at to ensure they're meeting our scope.

I'm sure there's there's um project scope information, but what are some of the criteria you your office looks at to ensure that's the right vendor for us?

Yeah, there's a variety of factors.

You know, uh in our most recent contract, one of the things we wanted to make sure of is that um the employees that they hired, uh not only were they vetted um appropriately and consistent with the city, um, that they um were offering these employees similar or benefits to what the city offers.

So that they they it may not be our same level of benefits, but are they offering vacation and medical and and those types of things?

So we we looked for vendors who offered that who who um offer comparable wages to what we are offering and who have that breadth of um of candidates that would be beneficial to us.

And if you weren't if this wasn't funded the full six million, like say it was less than that, what type of impact to our daily operations would that cause to the city?

Yeah, it it would have a huge impact.

You know, the the 35 million spent over the the course of the last contract, more than 20 million of it was was funded by grants, and so that grant work would not be being performed.

Also, when we have when you look through and you see there's um the extended services, uh extended day services at our senior centers, we wouldn't be able to perform that work because we wouldn't have staff to do it.

Um they're used in like vet tech positions and things like that when people are out on FMLA, so it would have an impact to the operations in the animal care services department.

Um so it it would it would have a tremendous impact to each individual department, and as you look across departments, it really is spread across the entire city.

There's not huge numbers in any one department.

Um back at our high in COVID, we had about 450 temps at any time.

Um when they looked at the end of January, we had 75 across the entire city.

So it you know, we we are doing a good job of of containing that and curbing it and making sure that we're only hiring those temps in the case where it would have an impact if we didn't.

No, that makes sense, thank you.

And last question, I promise.

Um concurrent to this procurement, are you also um I guess executing a strategy to increase bench strength for some of those critical positions that are one deep to maybe prevent in the future having to source outside?

Yeah, and and that is part of what we do.

So individual if we have somebody at a higher level position that is out on FMLA or disability, we have special assignment.

So oftentimes there is somebody on the bench who's pulled up to do that higher level work, and we're back filling with the temp for that lower level work.

Yeah, Ben, did you want to share anything?

All right, thank you.

That was great insight.

Uh thank you, committee members.

I think we uh you know we are all kind of holding our breath, making sure that we get the funds that we need for some of the grant positions.

We understand if we if we do not that it is going to mean more work for our current our full-time city employees, and it's going to look like you know, more temp work, and uh the one thing that does count down it is hours of service.

And so when we when we talk about um and David, I'm back glad you're back because I was using it as an example, but when we talk about our um our spots where people can drop off their bulky items and um and they can drop off their hazard waste material.

If we if we are not getting funded and we have to cut, that means maybe we're not open every Saturday.

Maybe we we're not open for as long as the hours, and then you know, our residents, the city's customers start to feel neglected, or trash starts to build up in their yards again, and we want to make sure that we're we're addressing that same thing with Metro Health in terms of the clinics.

We've got one on the south side, and right now it's working with the programming.

We understand that that could change to where we are looking for how to program that building because we're still paying, we're still paying the light bill and the energy bill, so we want people in there, but if we don't have the staff to uh administer those programs and and fill those those food pantries, what do we do?

So uh lots of things to come, but we want to make sure that we're fully prepared in the event that um we have another um we have another national crisis where we need to to do that, and and that's where we are right now.

So thank you for that uh briefing.

Uh we'll move on to the next I mean item three is a briefing on the release of a solicitation for up to six contracts to provide the San Antonio public library with print materials, cataloging and processing services for an estimated total value of 24,500,000 for five years with two one year options to renew.

Yes, good morning, madam chair, committee members, uh, city staff.

I'm happy to be here.

Dale McNeill, one of the assistant directors at the library.

And this is the pre-solicitation for as you heard, print materials, cataloging.

Oh, thank you, David.

Cataloging and processing services.

So this is to um issue a request for competitive SEAL proposals for qualified vendors to provide print materials.

So that's primarily books.

Um in English and Spanish primarily, but other languages as needed, along with processing services and electronic ordering.

That is in other words, the books are ready to be used at the library, and these materials support all the uh San Antonio public library locations.

This is for a proposed term of five years with two one-year renewal options, the estimated value $3.5 million annually, the total 24.5 million dollars.

Our current contract status, the contract expires in October of this year.

There's some complexity behind that that I'm happy to talk about.

Um solicitation overview.

Um these uh show the um NIGP codes that were identified, that there were 83 vendors and notified the normal sort of advertising.

The evaluation voting members would be um Mr.

McCarry, um, who's the city manager, of course, assistant city manager over the library, the library director, Sukrit Goswami, myself, Adam Zaby, who's here today, the library services administrator, Heidi Novotney, uh Library Services Manager, Troy Hoyles, who's over our collection strategy, and Jamie Flowers, who's the person who's um over the the people who are ordering the actual books.

These are the um evaluation criteria that um would be applied, and you can see the points there 25 points or experience, background and qualifications, 55 for proposed plan and 20 for pricing.

And uh local preference uh not applicable, and the same with the veteran-owned small business in Sebeta was waived.

This is because it takes a very large company to be able to provide these services.

The uh timeline is here, you know, starting obviously with today with this pre-solicitation briefing with the um restriction on communication and release date starting April 10th.

And evaluation complete June of this year, post solicitation briefing August 5th, and hopefully city council consideration September of this year.

And I am, of course, ready to answer any questions that you may have.

Thank you.

Thank you, Dal.

I understand this is very specialized work, and we knew the current economic crisis was going to hit the print material and what we need for the library.

So I think it's it's key that we move forward.

I don't know if you want to explain a little of why it's it's expiring in October or um Yeah, I'd be happy to.

So there are a very small number of vendors in this market.

One of the largest ones was a company called Baker and Taylor, been in business for 125 years, and was one of kind of really the two largest such companies.

Almost immediately, we would place orders and they would cancel half, a third random, just random amounts of of items they or they wouldn't cancel them and they just wouldn't fulfill them.

So then we worked together with the finance department, we identified alternative vendors through uh state cooperative contract.

The city manager approved a contract with Ingram Library Services, another big player in this in this market in November 2025 with a one-year term with one renewal.

Um that was really just to fill in the gap.

So as the one vendor canceled orders, we would place them with that vendor.

But then Baker and Taylor just completely went out of business with essentially no notice.

Like they just the company just ceased to exist.

So we've been, you know, doing what we can with the other vendor and working closely with procurement and the city attorney's office to make sure you know we're staying in the lines, but that's why we need to come for another procurement at this point, so we can actually go back to doing business in a normal way after this, you know, really unexpected development with the Baker and Taylor going out of business.

Thank you, Dal.

And though the one thing is this was all happening, and of course, our library services were continuing to be stellar.

Uh, and that's the one thing that we wanted to continue.

Is um this did not impact our community, and we want to continue to do that, but we need to come as an audit committee and kind of move forward with this.

Um, because I when I when this was presented to me, I was like, we just did this.

Sure.

And um but it's it's one of kind of the unfortunate things that that happens uh currently in this economic crisis that we're in.

So I'm glad we're moving forward.

I think we just need to just continue to be creative and then have those plan B's.

I mean, 125 years in service, we could have never seen this, but um as you know, we're all watching the news daily and know what's going on.

So uh as long as our residents aren't missing a beat and able to get those best seller uh books and check them out, which my um my chief of staff is an avid uh library user, and he's he's he's there waiting for his notification that his book is ready.

So I'm very excited that it we've continued to to provide quality service, and I'm sure we're gonna get great reviews at budget time too.

So thank you for that information, and we'll we look forward to seeing what we can move forward with.

Uh any committee members like to share?

Yes, Councilman White.

Yeah, just briefly.

Um see a lot of libraries now turning to digital resources, right?

Ebooks, online platforms, um, and the rest of it.

How does I mean I assume we're just doing some of that too, and oh, absolutely.

How does that affect the size of a contract like this that is dealing with print?

Sure.

So we are carefully always considering we do have another contract, separate contract for electronic books and for magazines and um also for movies.

So we we were one of the first uh public libraries for sure in Texas, and one of the first nationally to begin circulating, circulating because you you borrow them and then they automatically come back to the library, which is kind of a cool thing about it.

But electronic books, we continue to do that.

Our usage is getting closer and closer to 5050.

What we found is there's kind of three groups of library patrons.

One group use those electronic resources exclusively, may not even come in the library, and you know, you can probably think of yourself or someone you know that's that that's what they prefer.

The second group are people who only want to use print books.

Maybe they have access to electronics, but they just choose to read the print book.

Uh that I'm in that category.

I feel like I read enough email all day.

I don't want to read, I don't want to read for pleasure on a screen, while I certainly have the ability to.

And then there's a third group, I think that like if I get a cookbook, I want a physical book, but if I read a novel, I want an ebook.

So not necessarily that exactly, but what I mean is they use both.

So what we're always doing each year, each month is kind of evaluating how how much do we want of electronic.

Of course, during COVID, we bought mostly um electronic books because you know that's what people really wanted then.

So we always are trying to adjust the the other simple reality in this market for libraries is that this is this is a place where what was traditional for libraries is sort of upside down.

So I started working in public libraries in 1980.

The the idea is the cost of a print book is less to a library than to another person than to in the retail market for electronic books, it's exactly the opposite of that.

What you can buy for 999 from Amazon costs the library 50, 60, 100, and isn't perpetual use in most cases.

So that's the other thing we're balancing is what's the best value for the taxpayer.

And the same book may be offered with three, four, five pricing strategies.

So you can't just decide to buy the book, you also have to think about is the right one the one with five uses, is the right one the one that expires in a year.

You know, we have to think about that, and we do, because we really want to make sure we're using you know that uh money the best way that we can.

So that's a long answer to a short question.

I apologize for that.

Now you haven't seen any decline in the demand for print materials?

Yes.

You have.

Yes, there has definitely been some decline.

So um, so this gives us the capacity, of course, but if that decline were to precipitously decrease, then of course we would you know shift our spending to more electronic.

But right now, I think for a while it's been pretty steady, kind of around half and half.

And I think last time we had a presentation on on the libraries, I talked about that library of things model that's sort of gaining traction in some places, and it just occurred to me looking at this if the demand for prints going down and there was more money available, maybe looking at some of that could sure and it's it's definitely a thing that well I I didn't mean the you know the overlapping of the word thing, but it's something I have thought a lot about.

I'm definitely familiar with the way I will say at the central library, it's very small, but we do participate in Texas Parks and Wildlife Fishing Equipment loaning programs.

So at the central library, you could borrow a uh rod and reel and other equipment to go fishing.

Um that's something that that we do uh with the state of Texas.

A lot of those things that can the where the item can be circulated, um, there's a lot of complexity to what you do when they're returned.

Um I've worked in libraries that circulated sewing patterns, that maybe well, I don't know, maybe coming back, who knows.

But there's a lot of like reviewing and making sure all the pieces are there.

Um a lot of libraries circulate cake pans, but there's a lot of cleaning you have to do, but it's definitely something we're continually thinking about, and of course, electronic devices as well.

Thank you.

Thanks, Chair.

Thank you.

Chisha.

How many San Antonians have a library card?

Just curious.

I have one and I'm in love with it, but just curious.

I'm gonna see if Adam has a four hundred two hundred and fifty thousand people roughly.

Okay.

Are there are there any just curious, are there any plans to increase marketing strategy for it?

Because I myself just got a library card, and I was astounded at you know the of all the things that came with Libby and in person.

Right.

So one of the things that we're going, we're continually looking at marketing and advertising and staff doing outreach and so on.

One of the things that we're going to be doing in some of the libraries that have the least what we call market penetration, in other words, the least percentage of people in that census tract have library cards is actually working with Solid Waste, and I don't even know if we've told David this, but of adding information about the library to door hangers when there's going to be bulky trash pickup and so on.

So one of the things I think is to sort of meet people where they are and not only just you know digitally or social media or whatever.

Because a lot of those people already have access to the library, so that's why we think things like door hangers.

We've also just done door to door knock on the door and let people know about library services, and we continue to do that.

And then also really meeting with so we really do a lot of outreach and letting people know, for example, at senior centers, um at park camps, um wherever people are interacting with a city service, we often let them know about the library, and that's you know, they're already wanting to use services and that we do get a lot of cards that way.

So we are continually thinking about how do we let people know you know what a great service that they that they've already paid for, you know, so they might as well use it.

Uh thank you.

And this these items are for uh briefing only.

So thank you so much, Dell.

I think you've you've got the charge in terms of what we need to go move forward.

Uh as people look for more economical things to do.

I think we're gonna see more people head to the library, make that choice whether do I purchase that book or do I check it out?

We're gonna see a lot more people check out books.

So we want to make sure that our what we're providing is still the quality service people expect from the San Antonio Library.

Thank you.

Absolutely.

Thank you all.

All right.

Well, next item, uh, Madam Clerk, please read the caption for item four.

It's a staff brief staff briefing resulting of the fiscal results of the fiscal year 2025 external financial audit presentation of related reports.

Good morning, Chair, members of the committee.

My name is Victoria Rader.

I'm the deputy finance director, and I'm here with Amanda Eves.

She's a partner with our external auditors, Forvis Mazars, and we're here to go over the results of the 2025 external audit and some required communication.

So internal audits differ than external audits.

Internal audits, you know, that's led by Buddy and his team.

They take charge from this committee.

Their audits are more specific in nature and more programmatic.

While external audits, that's required by our city charter.

It's also required by a state statute.

Um, it ensures that our federal and our state grants, that they are fairly presented, and that they're also in compliance with the grants requirements.

Um, it also ensures that our financial statements are excuse me, our true and fair value of the city's financial position, and they're free of any material misstatements, and they are follow the accounting principles and standards.

Additionally, this past September of 25, we had a new Senate bill that passed and a bill 1851, and that put a new requirement on us.

It requires that our audit be completed within 180 days of the fiscal year and close.

If we do not comply with that, we can be at risk of our with our property tax rate.

We cannot adopt a property tax rate higher than our no new revenue tax rate.

Um as I mentioned, For Vist Mazars is our auditor.

This is a contract we have with them.

It's a three-year term with two separate one-year extensions.

We have one more year left on that extension on that, and it was gonna be for our 2026 audit.

There are different deliverables that come out of the external audit.

You can find them on the city's financial transparency website.

The first one to be the annual comprehensive financial report, followed by the report on federal and state grants.

There's also a report that's required by the FAA, it's our for our PFC program, and then you can find also another report that's required by TCQ.

It's an agreed-upon procedure report.

If there are any internal control findings, you can also find our management letter on there.

This next table shows the last 19 years of internal control findings and also the severity of the findings.

I am happy and proud to announce for the eighth year in the row, the city has no internal control findings.

This is really a difficult task to do.

I mean, we um we are such a large city.

Um we have a lot of different departments, and it's ensuring that every department is doing is following the policies and procedures we have in place so we can get to no internal control findings.

And we look back on this year and we look at what's to come.

You know, we have accounting standards that we've implemented, we have more coming down the pipeline.

They're becoming, they're more and more complex, they're not always easy.

Our city is continuing to grow, making things more difficult, um, complicated, I should say, as far as accounting goes.

Um, and even with these challenges, you know, we're able still to accomplish no internal control findings.

And I don't want to end this presentation without giving special thanks to the department, the section that works really hard to get us here that works really close with Forvus Mazars, and that's our controllers division.

Um, and if we can maybe stand up, I want to especially thank Elizabeth Druyard, our city controller, um, the three managers, Elizabeth Garcaminko, Ignacio Mariscal, and Jerry Gabia.

Also, every department has a DFA, a department fiscal administrator that helps lead us here.

They're not all here today, but we also want to give a special things to that group that help us get here.

And with that, I'm going to turn it over to Amanda so she can go over the required communications.

Thank you, Vicky, and I want to say thank you to the city and the committee.

We appreciate the opportunity to work with the city.

Um, you have a uh truly professional finance and accounting team here, and you know, the the audit does take a while.

We start like in July, and it it goes, you know, pretty much until March when the report's issued.

So we appreciate their help over all you know all of those months.

We're not working consistently that entire time, but we do preliminary planning work and then year-end work as well.

So we appreciate their help and assistance through the audit.

Um we also appreciate our teaming partners, and I believe we have someone from each of the firms here today, which is really good.

Um, we have Robert Williams, Debbie Frazier, Terry Brittz, Chris Carmona, and Charles Marshall.

So a full group today.

We really appreciate their help.

They're involved, you know, throughout the audit from planning through execution and here today to deliver results.

Um, so I'm happy to report that we have issued unmodified or clean opinions on your financial statements.

Um, that's an opinion that your financial statements are properly stated in all material respects.

Um, the highest level of assurance that we can provide on your financial statements.

We didn't identify any material weaknesses or significant deficiencies.

Um we had no proposed audit adjustments this year.

There were no scope limitations.

We had access to all of the information that we requested and needed to conduct the audit, and again, open and effective communication with management and the city's team.

Um Vicky already touched on these deliverables, so I'm not going to go over those again.

Um, you will see in your report that the city has a lot of moving parts.

Um you have what are called component units, so they are other other entities that are included within the city's financial statements.

And so we did want to point out that there are three fiduciary component units in the financial statements.

We audit one of those, but two of those are audited by other auditors.

And when we say that those other auditors have they perform their their own audits of those uh components, we do correspond with them, get a copy of the report, have discussions with them about their audits as a part of our audit, but we're not performing the audit of that specific component unit.

Um there are three discreetly component units, those are all audited by other auditors, and then there are five that are blended, four of those we audit, and then there's one firm that audits one of them.

Uh, when Vicky talked about single audit for federal and state, so these are the five major programs that we were required to audit this year.

Listed those there under federal and state for you.

Again, no findings to report over compliance for those single audits.

So the scope of our audit is really to obtain reasonable assurance over the financial statements.

In other words, we're not testing every transaction.

And our audit, of course, does not relieve the committee of their responsibilities for oversight and responsibilities for oversight of the financial statements.

Group audit refers to the fact that there were other auditors involved for again for some of those components.

And we are independent of the city.

So your significant accounting policies are included in note one to the financial statements.

So we would point you to that note as a really critical note to understanding what's presented in your financial statements.

We noted no unusual policies or methods.

Of course, the assumptions related to your pension and OPEB liabilities, and then your self-insurance liabilities.

So as far as financial statement disclosures, we would point you to those notes that talk specifically about those estimates.

Also your notes related to subsequent events that discloses anything that has occurred subsequent to your end.

And regarding the quality of the city's accounting principles, we noted nothing that was alternative or unusual again.

Everything was in accordance with accounting standards, generally accepted accounting standards.

In the appendix, we provided a listing of all of your component units.

Stay tuned for further discussion on those going forward.

But again, there's all there's always something new.

There's always a change to look forward to.

The firm has recently issued a public sector report.

It's our first report related to public sector priorities, and these are the priorities that we're seeing around the firm with you know with clients and and other governments that we have discussions with.

So we just would invite you to take a look at that when you have some time.

And that is my the end of my presentation.

So I'd be happy to answer any questions.

All right.

Yes.

Trisha, go ahead.

Thank you for the presentation.

Um on the slide where you have the results of the audit, just for my definitional knowledge.

Uh, when you say unmodified clean opinions, can you kind of talk to what what that means exactly and how you ensure it's clean or I'm guessing unbiased or objective?

Yes, so an unmodified if if there were something in your financial statements that we had determined was not in accordance with generally accepted accounting principles, we would add potentially a paragraph saying that it was not in accordance with GAAP, and that would be a modified opinion.

So we had no everything we looked at, um the city's financial statements are properly stated, so there would there's nothing that's not in accordance with GAAP.

Does that yes that answer?

Yeah, that's thank you.

And and then um last question, um, the fifth piece on the results of the audit, open and effective communication with management.

What defines effective communication?

Does that tie into mitigation?

Does that tie into follow-up?

Like what what's involved in the effective uh I guess gauge there for you?

So really um when we ask questions, we get you know immediate responses or maybe follow-up questions.

There, there's an ongoing conversation throughout the audit, but but not there were no cases where management was not open and willing to have those discussions or provide us information.

Councilman White.

Yeah, um, thanks for the presentation.

Um obviously I think it is significant that that there's no audit findings, so so that is a great achievement for for our folks.

Um what does this mean for for the folks that are watching?

A true and fair view of the city's financial position.

What does that mean?

A true and fair view of the city's financial position.

Yeah.

Um can you be more specific, Councilman White?

Uh in terms of when you say what does that mean?

Do you like uh are you are you discussing something specific within it?

And I just I don't know what that statement means.

Um I think I think councilman, I'll try to and Amanda can can fill in, but I think what it means is that when you look at our financial statements, one they're accurate that the the people who are reviewing our financials and relying on our financials, they they can rely on them.

We have investors that look at the financial health of the city.

We have citizens looking at our programs, and I think it gives them some comfort that they can rely on those financials in terms of the accuracy in terms of what they're representing.

Right.

Uh but I mean what whether the city's in a good financial position or not, I mean that really wasn't the charge, right?

It was just determining whether the accuracy of the numbers correct.

So our opinion is reporting on whether the financial statements are telling the true story.

Right.

Right, right.

And and that's the the distinction because you you weren't charged with saying, oh, we're in a great financial position or we're not.

Correct.

Just looking at whether or not the numbers as presented by the city were accurate.

Correct.

Right.

Okay.

Um y'all highlighted on slide 20.

Um hyper automation and AI as an emerging public sector priority.

Is our I don't know if in your review is our is our finance department exploring any of those tools to help accuracy, or are we using any any automation or AI tools right now to ensure that our numbers are accurate?

That is probably more of a question for the city.

I would say it's not um it is something we're discussing more with clients, but it's not really a part of our audit for us to kind of look for that.

Councilman, currently, in terms of the finance department, we're not using I AI in the development or of our financials or in the accounting for that results in our financials.

One of the things that um we are doing, and we'll be coming back to the full council in April with and talking a little bit more about our upgrade and SAP, our financial system.

As we walk through the implementation of the new what we're calling S4 HANA and Ariba, we will be exploring opportunities to use AI and leverage AI in our day-to-day activities.

So that will be coming.

All right, that's all I got, Chair.

Thanks.

All right.

Uh any other comments or anything before I uh uh speak or and see if Eric wants to come up and share uh Troy.

Uh thank you, Chair, and I just wanted to say and appreciate my my thanks to the team.

This is um I can't tell you how proud I am of this team.

We talk about the results, and I don't think it's something we should take lightly when you look at it, and this year is especially different because not only is it eight years that have we have gone without audit findings on the financial audit, but we do not have any findings on the single audit.

There's actually a third category that we're not talking about today, but typically when working with the auditors, they will actually propose adjustments.

Now, as they review our financials, they'll say you need to tweak this number.

There were no financial adjustments offered this year as well, so extremely proud.

We um it is not getting any easier.

I mean, we talk about you know, Amanda's talking about GASB and standards, gasby continues to issue new standards that we have to implement.

So our accounting industry is becoming increasingly more complicated.

The state's taking an interest in the timeliness of our audits, and so now I think Vicky may have mentioned it.

We have to produce an audit within 180 days, and we're a large complex city, and so it's a lot of moving parts, and so working with Amanda and her team to make sure that we can timely deliver that audit to this team.

It's somewhat challenging.

Matter of fact, I think in the evenings, I'm leaving about eight or nine in the evening.

This team is still sitting there with their heads down working on this to make sure that we can deliver this timely accurately to this committee and to the full council.

So just wanted to say that.

If you um if you ever have an interest, this document is out there on the web page, it's available for our citizens as well.

It's um good night reading.

Um but um just wanted to kind of tell you and kind of set the stage.

I am extremely proud of this team and everything they accomplished.

Thank you, Chair.

Betty.

Yes, I just want to um kind of reiterate uh the message.

Um there's a reason I'm on this side of the table, not on man and troy's side of the table.

It's extremely difficult to come out with an audit like this with these results.

In addition, there's constant changes in standards.

For example, I'm aware of GASB.

I'm not in my purview, I don't really have to adhere to GASBY, but it's it's very difficult to get in front of GASB standards.

Sometimes there are significant changes in standards, and we need to get in front of that from a financial statement audit perspective.

Um Troy, uh, their team, Elizabeth, I'm not trying to leave anybody out, but Vicky, Elizabeth, Melanie, Margaret.

Um, they work very closely, and in the internal audit perspective.

Um, I don't necessarily get a chance to give good news all the time.

Um, but we work very well together, and and um, I'm not surprised with these results based off the team that we work with.

Thank you.

Um Benjamin So, Chair and Committee members, I'll be brief, but I also want to extend my thanks to the entire team, Troy, Vicky, Elizabeth, the entire finance group.

Um, I mean, they do tremendous work.

I mean, again, I think uh Troy said it well.

I mean, we are a large complex organization, so when you think about sometimes other entities and you talk about their financial statements, sometimes the financial statements are like a couple of pages.

It's one set of financial statements that's a no disclosure.

We are a company of companies.

And um, well, you might not want to read the entire document if you go out there and look at the website and you look at that.

That that is a lot of work to put together and underpinning that is all of this accounting standards, regulations, uh, things that we've got to follow to get to a point where we can say our financial statements are fairly presented.

And I'll touch on Council White, which you said a minute ago.

Um, this is really a key piece for us, right?

We've got to be in a position where when we're talking about our audits and what we're reporting, that they're fairly presented because that becomes a foundation for everything that we do.

We build off of that, we make decisions off of that, we make recommendations to you all about our financial position and what's happening with the economy.

But it starts from do we know where we're actually at?

And if we don't know that, and we have issues here, decision making and making recommendations become so much more difficult.

So uh really proud of the team for the work that they do.

Um, it gets included every time we go out and issue bonds, whether it be a geo bonds or we're gonna do an airport bond issue later, pieces of this financial report get included in offering documents to bond investors who are making decisions about buying our bonds.

Um we've talked about the fact that from a general obligation bond rating perspective, we've got I think still the highest rating of any top 10 city by population.

We've got two triple A bond ratings and a uh double A plus from Fitch.

Um that's great too, because at the end of the day, all this stuff ties together, and if we can use it to leverage every dollar that we get to do something better for the community, that's what we want to do, and that's that's where this work really fits in.

And it's um technical, it can be a little complicated, it can be a little boring depending upon your perspective.

But they stay with it, they do a great job, they're passionate about it, they get it done, uh, and I can't thank them enough.

Very proud of the work that they do.

So thank you.

Thank you, Ben.

And uh, I'm surprised that we don't have media clamoring to get this report.

I'm always amazed that media doesn't come to this meeting.

But uh thank you to those who did the audit.

Uh thank you for your hard work and your effort.

I really appreciate it.

Uh, this is one key tool we need in order to move forward within our budget session.

Um I have chaired this committee for two years, uh, been involved in watching how the city works their budget for years after that.

I am extremely proud of this moment and what we've done.

I think it key it speaks to our uh city manager and his leadership.

Uh the fact that we have 42 departments, and that we have we we hone in on them that we need accountability.

And while councilman White and I will disagree on how we spend the money, we can trust that the money that the numbers are true and fair, and that this is the budget we have to move forward with.

So thank you to all of you who came to enjoy this day.

I wish there had been that on the comptrollers.

I wish there had been more media here to do this because this this is a testimony to who we are as a city of San Antonio.

We have come out of a pandemic that threw all sorts of grant funding to you.

You we came out of Mark's idea with a zero balance budget hybrid, and somehow I was like, this isn't gonna work.

The city manager and your team made it work so that we're here and we're being more conscious in terms of where we prioritize, and to end with this that there that this is a clean report, and that we've done this eight years in a row, I think is a testimony to not just um the city's team, but also how you work with the leadership.

And and Trisha, I'm so excited you're here because you asked such thoughtful questions so that as we move forward, and we know we face deficits, and we know we face challenges as we look at our our our budget, that we are going to continue to move forward and strong, and that the rest of the state and the nation is gonna look to San Antonio and says how are they prioritizing and how are they working together?

So thank you for being a great example of Team San Antonio and uh City Manager Wallace, would you like to come in and share a few words about how great your team was on this?

Well, I don't come down to the audit committee off very often, but this is a pretty significant um issue, and and I won't repeat everything that Amanda and Troy and Ben said, but it is the underpinning for and our foundation for everything we do.

Um, and it is a big deal, and we will be bringing it to the city manager's report uh on April 2nd to be able to recognize and share this with the rest of the council.

Hopefully, the media in the back of the room pick it up.

Um I want to thank the entire team, um Elizabeth and and Melanie and Victoria and all the staff, and and uh Vicky mentioned it.

It's not just the staff in the finance department, but it's our decentralized uh department of fiscal administrators that are dealing with Chief McManus or Mike Shannon or you know, all the departments, and making sure that we're consistent and and as Ben said it as a company of companies and that we have those processes in place, and uh it continues to be a challenge because we're so large and we get we we have our own revenue, we have state and federal grants, um we have um other agencies that we're related to as Amanda uh talked about.

It's a challenge, and and I'm super proud of the team for all the work they've done in terms of effective communication with management.

Uh, when they start, uh Amanda comes and meets with me.

Um, and and she ends with me.

And and so um that communication within our organization goes all the way through the finance department uh to me at the top.

And um it's uh it's a critical piece.

I always get nervous because we are so large, but uh have a lot of faith in the in the in the organization and and really the employees that make sure that we are um uh uh aligning with those uh those accounting practices and ensuring that the rest of the organization is doing what it needs to do.

So thank you.

Thank you.

Uh thank you, Eric, for that.

So this item was for briefing only.

Um the time is now our next meeting is to be determined.

Oh, yes, yes, like I just mentioned that um the next meeting we're gonna reschedule it was scheduled for April 1st.

Uh, we're targeting the week of April 13th.

So um staff will be reaching out to you all for that week to see if we can get something scheduled.

We've got a couple of procurements that we're working on that we're trying to wrap up and would like to bring to that meeting.

We need a little bit more time.

So uh with your indulgence, we'll shoot for that week of April 13th to get that meeting rescheduled.

Yeah, and I want to thank you for your flexibility.

Yes, Tricia.

For those of us that get the packet emailed to us, usually a week ahead.

I know there's been some staffing changes with Ashley moving out.

How can we ensure to get that earlier than the day before in the future for the next one with the staffing changes?

So um Nia is sitting right behind me.

She's a new Ashley, so she'll make sure you get it a week ahead of time.

We'll get that posted.

We'll make sure you get all the information ahead of the meeting.

Thank you so much.

All right, thank you.

So the time is now uh 11 05, and this meeting is adjourned.

Thank you.