All right, the time is now 10 a.m.

and uh we will begin uh on June 3rd, 2026 in the meeting of the audit committee is now called to order.

Madam Clerk, please call the roll.

Council member.

Councilmember Mesa Gonzalez.

Councilmember White.

Citizen Member Tynel.

Citizen Member Pacheco.

Chair Via Gran.

Here.

Chair, we have quorum.

Great.

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

Uh we'll we may go out of order.

We are waiting for uh one of our speakers.

So I think what we'll do is we'll take consent and then we will just we will hear um we will hear audit first and then hopefully that gives us time to get our speaker here.

Um, yes, uh so let's take the first item on the agenda.

Which is the approval of the minutes.

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

I've got a motion and a second.

All in favor say aye.

Aye.

All opposed say no.

Motion carries.

Madam Clerk.

Are there any members of the public signed to speak?

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

Great.

So we'll take the consent item first.

Uh and we have one audit to accept on the consent agenda.

Uh if no one wants to pull, can I get a um motion and a second to accept the audit on the consent agenda?

Motion to accept the audit on the consent agenda.

I have a motion and a second.

All those in favor say aye.

Aye.

All opposed say no.

Motion carries.

All right, there being no further discussion.

Um, I see our speaker is here.

So we'll take we'll take the order of the day.

So we'll start with the briefing on the release of solicitation for one contract.

Um so item number three, um, Madam Clark, please read the caption.

Item number three is a briefing on the release of a solicitation for one contract to provide the capital delivery department with construction services for the new fire station number 33, a 2022 bond project located at 2935 Castroville Road in Council District 5 for an estimated total value of 12 million 12 million sixty thousand three hundred and seventy-seven dollars.

Morning, madam chair and council members, um uh and committee members.

Sorry, uh I'm Mike Shannon.

I'm director of capital delivery, and we'll talk about uh pre-solicitation as mentioned.

So we would uh like to issue this uh request for competitive SEAL proposal.

It's actually for uh a bond project for fire station number 33.

It's a new uh fire station.

Um again it'll be a CSP proposal.

Uh the contract once awarded, it'll be about 400 days.

Uh we estimate it to be around 12 million dollars.

Uh and again, I mentioned it's from the 22 bond, so um, excited to get this one uh out in the street.

Uh, doing a lot of our normal outreach um to the codes identified there.

We'll have a evaluating committee made up of uh deputy city manager Maria Villa Gomez, certainly uh several of my team members and several a couple members from the fire department uh to evaluate uh the proposals.

Uh the evaluation criteria is going to be heavy on experience, background, and qualification, 35 points.

Uh certainly understanding the project and the proposed plan of 30 points.

Experience with San Antonio projects, the region and past performance on projects is important, so 10 points there, pricing at 15, and SBE prime uh for 10 points.

So additional some additional requirements on this one eight percent uh spayed subcontracting requirement.

Uh will be on this one, and uh we did do the sub-vailability analysis uh with our EDD team as outlined uh on the slide.

Our project timeline is listed above.

Um so we'd like to release this uh certainly this month, shortly after this meeting.

Uh we will uh be back at uh post-solicitation uh after the summer through the process of evaluating uh sometime in September, and hopefully for council consideration in October uh to get the project underway by the end of the year.

And that's uh short and sweet.

Happy to answer any questions.

Um thank you, Mike.

I appreciate the presentation.

I this is for briefing only.

The one thing that I would um as we transitioned to this new newish department, or we uh re-upping this department because I feel like we had it before with a different title.

Um, if you could just be in touch with the council member from this district simply because it is I I know her community is this is something they've desired and they've been asking for, so they're continually many projects in mind asking her questions on that.

So just keep her up to date and uh up to date on the process as we begin that, and then also as we we start the um blackouts, uh still not sure.

I know that's for I understand why it happens, but as we are not on the selection committee, I think I it's important that we communicate that to the council members because then it's it can become problematic for our local um locals that are um applying for this.

So yeah, I would just touch base if you can with councilman because councilwoman Castillo before uh, and give keep her update on this process.

Does anyone else have any other um questions?

Uh yes, Councilman Meskin's also.

Hi, just a quick question.

Um, is there any sort of kind of midway reporting that the construction uh will give back just to make sure that it's aligning with the bond schedule?

Yes, we'll once we once we go out and select a contractor, we'll bring it back to you all uh hopefully in October, if not a little sooner, to select a contractor.

Uh, then construction will start at the end of the year, and then during that construction of uh the fire station, like we are with the police station in district three and a couple other fire stations that are under construction.

Uh, we'll we'll give those updates uh to the council members uh not only individually but as a group when I do my updates to the either B session or to a uh committee.

Just want to make sure that there's community engagement for the surrounding area, you know, with that construction.

Yeah, I see what you're saying.

So yes, we do uh we do like pre-construction meetings and we give updates during construction and then we let them know when we think it's gonna be finished.

Thank you.

Thank you, Mike.

All right.

Uh, if there's any isn't any other questions, this was for uh briefing only, so we'll move on to items number four, five, and six.

We'll have Mike Shannon present on items four, five, and six, as they are all post-solicitation briefings for construction service contracts.

Can we get a staff presentation?

Yes.

All right, so I'll run through three.

Uh these are three good ones because we're actually um here to select contractors or bring it to council uh shortly after this to select contractors on three important projects.

Uh the first one is for the Father Roman uh community center.

Um, so again, this one was uh RFCSP, so competitive proposal uh to construct a new uh community center in district three.

Uh, this is replacing one in the same area, so uh excited to bring this one back.

Oh, I'm sorry.

Uh again, uh proposed term just over 400 days.

Uh we think it'll be about 7.7 million dollars.

This is not a bond, this is a non-bond uh issued from certificates of obligate obligation, and this will be a new contract.

So we actually had several uh vendors um submit uh for this.

We actually had um 13 submittals, uh four actually were deemed non-responsive.

So we did have a lot to score, uh, went through the evaluation process with members of the city manager's office, members of my team, uh, and parks and rec.

Uh through that process, we're able to score based on uh the experience, background, um, project plan, uh, etc.

You see there.

We had one vendor, um, vendor A listed there uh is is the one we're gonna select.

Their scores were higher than everybody else's significantly.

So we're gonna propose to move forward uh with with that vendor to full council.

Uh this is just some of the due diligence we we do uh for each of these.

So certainly a lot of the vendors notified.

Um we had several at the pre-conference.

Uh as I mentioned, we had 13 submitted before, were non-responsive uh for failing to meet the subcontracting requirement, but no material findings on any of those things we're looking for.

Red flags, um, you know, minimum requirements or due diligence, uh, financials, etc.

So our proposal will be to move that one uh that selection vendor A to uh city council after this meeting.

I'm gonna quickly go into the next ones.

You asked me to do all three at once, similar process.

Uh the next one will be for fire station number 21.

All right, so we did another competitive seal proposal uh process for this uh to provide construction for the new fire station 21 and district three.

Uh again, uh about 420 days is what we expect this to be built in.

This one just under 10 million dollars, and again, certificates of obligation were the funding source, uh, and it'll be a new contract.

Um, this one uh we're going to uh we actually had uh 11 submittals uh were submitted uh but we had uh seven of them that were deemed non-responsive for a few reasons, most of them not meeting the SBE requirements, and then one was uh not the right documentation.

However, we had four quality proposals.

We did do a selection uh scoring process uh again, deputy city manager myself, some team members uh on my team as well as uh the fire department uh evaluated the four vendors.

Uh we had two that clearly came out uh kind of neck and neck in round one.

Uh so we went on to interviews, uh, and then through the interview process uh after interviewing both of the top two firms, uh, we felt uh that one rose to the top, and as you can see the score there, uh vendor B on the list there.

Um so uh we'll be moving forward uh recommending that as the selection.

Uh some of the similar due diligence over 170 uh vendors notified.

We had uh 12 of them at the pre-conference.

Again, 11 were submitted, but several were non-responsive.

But we did have four quality uh proposals, uh, no material findings uh similar to the other one that caused any red flags.

Uh so we'll propose that vendor as a selection at City Council at the next next one we can.

And then finally, uh another community center, Kenwood Community Center in District One.

Um, similar process.

Uh again, we did an RF uh CSP for this, and um this is replacing um the existing Kenwood community center, but it's no longer existing, it's already been uh demolished and shut down.

So we want to build it back.

Um again, about 425 days.

This one's just under six million dollars is our estimated value.

Um and uh it was also through certificates of obligation.

We had a number of uh submittals on this one.

Uh 16 submittals uh came through, a few of them.

I think five were deemed non-responsive.

Uh but so again we had a large selection of vendors uh quality proposals.

Uh, valuation committee was again city manager's office, my team, uh human services department, uh, several members were able to score on this one.

Uh, through the scoring process, uh we were able to uh select the best one that really uh rose to the top uh on uh high experience background qualifications and understanding of the plan, etc.

Uh so we'll be uh recommending moving forward with vendor A on this list.

Again, similar 170 uh vendors notified, seven were at the pre-con.

Uh 16 again submitted, but uh four were uh non-responsive, and one was non-responsive for uh didn't have the uh the full uh proposal uh documents.

So uh no material findings, another good one here uh for both of those.

And I know that was quick.

That's three uh good projects uh to build uh the community centers, fire stations.

So we're excited to get them uh selected and under construction, hopefully this summer.

Happy to answer any questions.

I thank you, and and I know that was quick and um and I am uh items number four and number five are in my district.

So they're a specifically concerned.

So as I speak to y'all today, and as as we consider this um consideration with the entire audit team, this is of course I want quality projects with high scores.

However, when I look at item D for when I look at D, selection D, for item four and five.

The differences between what we had, I'm gonna need an explanation on.

Because if you're telling me the top vendor, and we'll start with the Father Roman Center, the top vendor is um because I'm I'm putting my city council hat on where we represent a whole district that is looking at a budget shortfall.

When we get to the item with the recommended awards and we look at the price proposal, vendor A got 11 points, but vendor F got 15, and vendor E got 14, and the max is 15.

That says something to me in terms of I get the experience with the San Antonio region in past performance, we want that.

We want uh experience and background, but as we come to this, and I know this I know this area well in terms of Father Oman Center.

Um what I don't want to see is a bunch of change orders because I've got vendor A or vendor B that doesn't understand where they're building in, and that is my concern.

And it's the same thing with the fire station, uh 21.

Is there item?

There was a uh a gap between the price uh the the proposal, the item.

The 15 points.

Why aren't these why aren't our vendors A and B hitting the 15 points?

And how is it that a vendor F or G can do that?

And I think you you need to explain that to the council members before we get in, because I think it's gonna be a question as we head into where we are looking at budget and where we can find monies is why can't our vendor A the ones we choose meet the price proposal of that?

Is it because this is corporate and this is we we're gonna need an explanation because we're gonna need to answer.

So if we could if I could get a briefing on that uh before we head, and when when will this be going to A session?

June 18th.

I think we're trying to move these to uh before the break, so possibly maybe.

And I would love that before the break, but I need the explanation before that for for this too.

And just to kind of before Mike um kind of adds his his context, just from a process standpoint, when we're actually looking at these are our CSPs, the evaluation committee is charged with looking at um categories A, B, and C, experience background qualifications, understanding the project plan, and experience with the San Antonio region and past performance.

And so they score that from a process standpoint.

Once they have completed their scoring, we do not share with them the pricing because we're trying to not influence the evaluation committee based on price.

Their focuses on the quality of the proposal, the quality of the work, their past experience as they're looking at that, that should influence and get them comfortable with price once we disclose it.

So once they are comfortable, we disclose the price to them, and they do not have any ability to influence that until they get into the actual selection.

This is also an RFC as P.

Understate statute, there's also limited ability to negotiate these items because it's tantamount to a low bid, but you can also consider other factors like the experience background and qualifications.

We can certainly go back and look at, and I can ask Laura to comment on some of that as far as the statute piece, but um we can go back and look at do some comparisons between vendor A and those subsequent vendors on the price differential with Mike and his team to see if there is a noticeable difference.

But some of it may just be the quality of the work, the nature of the proposal.

I'll turn over to Mike if he wants to talk more about that.

Yeah, I think I'll just gotta echo a little bit.

Certainly when we're evaluating the top 75 points, right?

A, B, and C there, um, we go through those proposals pretty uh pretty thoroughly.

All committee members, we get a chance to score each section.

We have to justify our reasons for our scores, those type of things.

Uh when we get to the price, and councilwoman, when you see 15 on this screen, for example, vendor C, uh that indicates uh they were probably the the lowest price, so they were given the maximum points.

Uh whereas vendor D is the lowest score, um, they were probably the highest.

Okay.

Uh that being said, they're all they're all relatively close, 15 and 13 and 13 on those first three A, B, and C.

So that means their prices that they proposed were were pretty close to each other.

Um we didn't see a big significant difference, especially on vendors A and B.

Their price was very similar, as you can see.

Um, but again, I think it's a it's a combination of all that.

We're we're not these are not low bid contracts.

We're not looking for generally the lowest bidder, although we want a we want a price within our budget.

Um so that's how I think I explained it, but we could have more conversation.

Yeah, we're gonna need to have more conversations because I know this isn't low bid, and I've always I've been the biggest champion versus low bid versus uh best value, and it comes down to who's in the city.

But when for me it's who's local, but we can't do local, and it's hard for me to look at this and be like, oh, yeah, this this is local, they're gonna hire local.

I it just makes it just makes a huge difference because I don't want to see a bunch of change orders.

I don't want and you know, we know we've been doing you've been doing this long enough, we've been doing this long enough that who's going to come and who's gonna come with change orders.

The other thing is the this is why it's it's imperative that we communicate with the community and the council members.

I know I we had just rebuilt Father Raman Center in particular, geographically what is there, it is really hard to build there.

So I need to be confident in that the these builders know that we're gonna replace this center with something that's gonna withstand, because we the former councilwoman just put up the roof.

So I'm gonna need a little more information before we take this.

I'm gonna approve this now because I want, and because I don't see who vendor A is, it could be somebody that I'm like, oh, yeah, this person's gonna take care of it, great.

But I I uh but I will have the question of why can vendor F give us a lower price than vendor A.

And um, and if it's because vendor A is like, well, I don't do change orders, that's great.

But I'm gonna need more information because where we where we were in a position where we were we didn't we were like it's not low bid, we can take these into consideration.

We are now in a position financially where we need to look at what is most cost effective, and so um I look forward to having those conversations.

I look forward to moving this forward.

Uh same with the fire station.

I think what I see in Kenwood is um a choice, but again, talking with the the council member in District One, because it is our community is once the construction company is announced and who is going to go in, they're gonna they're gonna have even more questions and input for this.

So that's just as we move forward, uh it's and as we are audit committee me members, it's measuring what we need for our district versus what we need for the budget of the city, also.

So I look forward to hearing from my um other members on the uh audit committee.

Mark.

Just briefly.

Um the proposals are uh judged on their own, in other words, they're they're not compared to each other.

Is that right?

Like, in other words, you know, experience, background, qualifications, vendor C, you just are looking at vendor C in isolation for their experience background and qualifications to get that score of 22, not looking at them in relation to A and B.

Well, I would say it's a little bit of both, councilman, because when when we we get we get the four, we get the four proposals.

Uh-huh.

We we review each of them individually.

We certainly compare uh their experience that they're bringing, whether it's high, excellent versus someone else's, A, B, and C.

So it's a little bit of combination of both, because you know, their experience with San Antonio region and past performance, that's maybe that's a little more individual, but um maybe their proposed plan on the project compared to the other four, that might be a little bit more comparative.

But we're all in a room, we've all evaluated each into one individually, but then we talk about them.

Hey, vendor A's proposal is a little bit better than vendor C's proposal because of whatever those reasons are.

Well, that that makes me feel a little bit better then, I guess, because um I hate when I look at these things and I see such a disparity between the uh the different vendors because you know if if it wasn't like that, I would look at this and say, how the heck is it that only two vendors we could find can look look good, right?

Well, why only two?

But I guess what you're telling me is well, C and D were compared to A and B in this scoring, and so that's why the scores look lower because they just didn't measure up to the other two.

Yeah, and and to further explain then this particular slide, when we started with four, two were were very close, and two were you know uh maybe not as close.

So we we chose as a group to not not just go by the submitted proposals in writing.

We felt it was important to actually bring them in for a full interview to discuss their experience, their plan, how they're gonna make the job work successfully, things asking questions like what are your change order processes and and thoughts and those type of things, uh, and then we further went to one selection, which I think is the next slide, but maybe a few slides over.

Yeah.

Yeah, okay.

Well, it's important, and then whoever's doing this fire station in district three, I mean, they gotta know.

Councilwoman's gonna be all over them if it's not of the highest quality.

I'll be all over them because she'll be all over.

That's right.

Yeah, that's okay.

All right.

Thanks, Mike.

Councilman Mesigonzales.

Thank you.

Uh just a couple of questions, and I wish this said fire station 37, but one day we'll get it.

So that's my goal at least.

Um, I had a and kind of in that same vein as uh Councilman White, on the experience at San Antonio region, I feel like past performance should be its own box, especially if we're talking about change orders and the amount of change orders.

Where does that um where do change orders come in play in any of these?

A through E.

It I would say heavy on really B and C.

C is is one where we look at have they worked with us before on similar type projects, and what has our experience been with them?

So a lot of times one of my team members that has worked with them on a project, maybe at the project manager level, we know were they did they did they have a high number of change orders that were not warranted?

Did they did they did they submit everything on time?

Did they follow the contract requirements?

Did they deliver the project on time and under budget?

So all that's kind of rolled up in C, and some of it's in the in the proposed management plan in B, I'd say.

So it's a it's a heavy part of our conversation when we're evaluating these proposals.

Okay, and I guess the experience with San Antonio region is how how is that difference from A experience and background?

Well, you may have you these are all commercial buildings, you know, not they're not housing, so they may they may have a lot of commercial experience in other areas of either you know the state of Texas and other areas of the country, they may have a lot of experience that's not necessarily uh they haven't worked with us yet, uh, but they can say that I worked with such and such owners or jurisdictions, and I was successful, and here's our um here's our experience with them, and we can do reference checks on those type of things.

So I think it's important, and that's why that's got the 35 has the highest you know number of points available, but we do think it's important to consider those that have done work with us and done it well in the past, right?

The proof is in the pudding, really.

Okay, and I guess on on Councilman White's point about just the, you know, very small amount of vendors that we get, you know, do we have the capacity even on the subcontractor side?

If we only have so many even applying for the full contractor RFP, do we have a capacity issue on the subcontractor side?

Well, it's always an issue that that it's a concern, and that and their proposed plan has to talk about how they're going to staff up to deliver the job in the time we want it.

So right now we don't believe there's a subcontractor problem on our current projects, and and I'm gonna include these on our future one.

So we we have constant communications with our general contracting groups, not only individual firms, but we meet regularly with associated building contractors, associated general contractors to ensure that they're staffed up to meet what we're putting out on the street.

Um so we believe we're okay right now, but it's a constant discussion with them.

Um but uh I don't think there'll be a problem with these projects.

And then does your department, I guess, have the sufficient capacity on the project management side to manage both of these simultaneously?

And everything come your way?

Yes, okay.

Thank you.

Those are all my questions.

Uh I just had uh I think this is more question on process, but number five, this is for the fire station 21.

Uh it looks like it's almost 10 million dollars, but uh vendor A and vendor B.

There was a difference in Section B of 0.20, right?

Uh, and then if you scroll down, it looks like this is when you interview them.

There's a significant difference, and it actually caused the vendor selection to switch, right?

So my question is: is there a reason?

Uh, if there's such a what almost a six-point disparity after the interview that we're not interviewing these vendors from the start, since that causes such a difference in uh turnout and scoring.

Well, I would just say this the interview the interpret the interview process is where the committee members uh that we get a proposal, we get a presentation from them generally, but then we get to ask very pointed questions and get get feedback as to how they're going to deliver the project.

So it might be you know similar to hiring someone for a job, right?

You get a resume, this tells you my excuse that we know are going to be difficult on a fire station.

A fire station is you know a little bit challenging of a project, it's got some technical things in there for the apparatus base, emergency rooms, those type of things, emergency uh equipment rooms, those type of things, so uh high exhaustive.

So I think the interview process does sometimes lower someone's score because we have more information.

Sometimes it increases someone's score because it answers some questions that we might have had by just reviewing their written plan.

So it's an important part of the process, especially when uh we were doing the initial review and it's so close, and you can see on this one uh they were really only a point apart if you look at that A through C, which led us to need an interview to kind of further vet them.

Okay, I think my question is more I guess just for us for process, right?

Depending on dollar amount, should that be a requirement if it was if it forced the selection of a vendor to essentially switch, right?

So that's just a bit concerning there.

I think it's just for clarification.

Are you um request are you suggesting that we interview all?

All of them from the start, um I would say depending on dollar amount, right?

To your to your analogy about an interview, if this is a significant amount of spin for our city taxpayers, we should possibly look into that to ensure that we're getting the full detail from these vendors because it sounds like once we interview them, it actually switches vendor selection, right?

No, I mean sometimes it after the interview, it could stay, you know, they were our top choice through the initial step, and they they might be the top choice at the after the interviews in this particular one.

Um I think there was enough information that the committee felt was hey their their score should be a little higher or their score should be a little lower, which caused the final score and the selection to switch.

So I I don't think we can say it's always one way or the other.

It just it's it's how that particular interview goes with that particular contractor.

This doesn't happen very frequently, but it does happen, and we do from time to time as we look at the evaluation as we work with the evaluation committee.

If there are, I guess, very high profile contracts, we will sit down with committee and we will interview all of them from the start.

But this has worked very successfully administratively.

It helps because we're not tying up staff time and interviews for extensive period of times, especially with the volume of contracts that Mike and his team work on.

So we shortlist and then we come back with the interviews.

In this case, the interviews reduced a change in the scoring and flip the flip the recommendation.

And we'll be we'll be forming a subcommittee for audit committee to discuss some of some of the procedures as we move forward and some of the ideas that have come out uh with you know the customer satisfaction where we move forward.

Troy and Ben will be a part of it.

I think right now what I'm waiting for is to get through the budget to see where we need to prioritize and see if there is a as I mentioned when I started this, if there is a desire for us as a council to start looking at those price proposals, are weighing those more heavily.

But I think that's a a council discussion after we come through budget and see where we have the cuts there.

We don't want to do everything on the low budget end, but we do need to set some kind of parameters about what we what we call best value.

And I think best would be getting our citizen, our audit committee members to help, and then also Ben and Troy to kind of lay down what what was done in the past.

I know when I first got here, everything was like low bid, low bid's the best, and then we we've kind of taken that and used that in different um aspects.

But we are we are wanting to make sure that we can we can save where we can, and I just want to say I appreciate the committee so much that um that looks over the criteria.

At no point do I want council members to do this.

This is just something else we don't want to do, but I appreciate it.

But I think it's important to understand that when it comes when everything is said and done, we take it back.

The it's the council members and the council office that takes it back into the community and gets them enthusiastic about this process.

So my question is do we need to take these one at a time as motions or can we take them all together?

Can we take them all together?

So can I get a motion where y'all someone motions for four, five, and six?

To move forward to council for the items for item five, nine and six to we've got a motion and a second, no further discussion.

All in favor say aye.

Aye, all opposed say no.

Motion carries.

Thank you, Mike.

All right, we're gonna move on, madam clerk.

Please read the caption for item seven.

Item seven is approval to proceed with scheduling one contract for city council consideration to provide the San Antonio police department with toxicology laboratory services for an estimated total value of five million six hundred thousand dollars for three years with two one-year options to renew.

All right, the floor is yours.

Thank you, councilwoman.

Uh good morning, chair and committee members.

My name is Rick Riley.

I'm the assistant director for the San Antonio Police Department, and today I'll present a post-solicitation briefing on SAPD's request for toxicology services.

So the department issued a request for proposal for a qualified agency to provide those toxicology laboratory services, the analysis of blood samples associated with DWIs, DUIs, intoxication assault, and the toxication manslaughter.

Uh you see there the proposed term is three years, uh, two one year options.

Uh estimated value per year is 1.12 million, not to exceed the 5.6 million, and the current contract that we're under expires in September of this year.

So uh we received two submittals to score, and as you can see from the score matrix on the slide, vendor A scored significantly higher in all categories, including the experience, background, and qualification, as well as the proposed plan.

Uh additionally, you'll notice that uh vendor A is uh a local uh received the local preference program points because it's a local business, and at the end of the day, uh 76 points for vendor A compared to 46 for uh vendor B.

Evaluation committee of deputy city manager Maria Villa Gomez uh SAPD leadership and a representative from the Bear County DA's office uh decided to select vendor A to move forward uh without interview.

We reached out to 66 vendors, uh, two vendors were at the pre-submittal conference.

We received responses from both of those.

In fact, no material findings on either the minimum requirements review or the due diligence review moving forward.

So the department would like to move this forward for full council consideration in August.

And I have representatives from SAPD's unit that deals with this type of stuff if you have any operational questions.

Thank you, Rick.

Can we get a motion and a second to continue discussion?

Second.

Okay.

We've got a motion second.

Thank you.

Uh very necessary.

I'm glad we were able to find somebody local to uh handle this process.

I don't have any questions.

I think I think this is something that's necessary, and uh I appreciate your due diligence.

But again, whenever I see that 66 people reached out and only two people responded, my economic workforce development side says, ooh, an opportunity to grow our ecosystem here in San Antonio.

So but they thank you for the presentation.

Is there any uh discussion among my committee members?

If not, if there's no more discussion, we have a motion and a second.

All those in favor say aye.

Aye.

All opposed say no.

Motion carries.

All right, we'll move on to the next item.

Item number eight.

Uh Madam Clerk, please read the caption for item number eight.

Item number eight is approval to proceed with scheduling multiple contracts for city council consideration to provide city departments with on-call marketing and communication services for an estimated total value of 23 million dollars for three years with two one-year options to renew.

All right, we have a staff presentation.

The floor is yours.

Thank you.

I'm Alana Reed, director of communications and engagement, and today I'm gonna be presenting the post-solicitation briefing for citywide on call marketing and communication service contracts.

The goal of the solicitation was to establish a centralized pool of qualified vendors to provide specialized communication services when needed.

These contracts improve consistency, efficiency, and resource management by providing departments with scalable support in advertising, marketing, graphic design, public relations, community engagement, and video production.

Some details on the solicitation.

We conducted a competitive request for proposals to establish multiple on-call contracts.

The proposed term is three years with two one-year renewal options.

And the total contract authority is 23 million across all categories and departments, representing about 4.6 million annually.

Funding will be department specific and may include grant funding when appropriate.

The solicitation generated very strong market interest, resulting in 65 proposals across five service categories.

Eight firms were determined to be nonresponsive or were disqualified.

Fourteen firms are recommended for award across the various service categories, and this includes five who were awarded in multiple categories, giving you that 19 total.

The recommended vendor pool reflects a diverse mix of qualified firms, including both small, medium, and large businesses, ranging from one to 36 employees.

We'll start with advertising and marketing, which was category A.

Advertising and Marketing had 15 proposals that were submitted.

The evaluation committee members reviewed the qualifications, experience, project approach, and pricing.

And seven firms are recommended for award.

We'll move on to the next category, which was category B for graphic design.

Graphic design proposals were evaluated based on creative capabilities, municipal experience, and the capacity to support our city projects.

Two firms are recommended for award.

Public relations firms were evaluated on strategic communications experience, media relations experience, and campaign management capabilities.

Three firms are recommended for award.

Category D is engagement.

Community and engagement services are critical to ensuring that residents have meaningful opportunities to participate in city initiatives.

Firms were evaluated on outreach strategies, public participation methods, and experience serving diverse communities.

And three firms are recommended for award.

Category E, video production, it generated the largest response with 16 proposals submitted.

And due to the competitive field, seven firms were shortlisted for interviews.

The interviews provided the evaluators an opportunity to assess their technical expertise, production capabilities, and project management approaches.

And following those interviews, final scores were calculated, and four firms are recommended for award in this category.

27 vendors attended the pre-submittal conference and due diligence reviews conducted by both finance and the city auditor identified no material findings.

All recommended firms successfully met the city's minimum requirements.

Again, this solicitation provides departments with access to qualified communications professionals and is going to enhance our ability to deliver high quality communications engagement and marketing services citywide.

Thank you.

And I'm available for any questions that you have.

I'll put it back to the slide.

All right.

Can we get a motion and a second to begin discussion?

All right, we've got a motion and a second.

Thanks, Alana.

So you will have, I'm very excited about this.

I it is important that we get our message out there in a number of ways.

But you are going to have you are going to put forward the requirements of that's what's required, is specifically our logo logo that if they use the city colors, that is the correct colors.

And are y'all approving any colors that departments are using that do not align with the so that's the beauty of this contract is communications and engagement will help with the intake and also reviewing the products and working with the departments to make sure that whatever is produced is in line with our branding and our best practices.

Yeah, because you know, 42 departments, and I've seen some stuff come out of departments that I know they use their budget to hire someone to help, and I've seen stuff come out where they assigned it to somebody that struggled.

So I really want to make sure that we have that this helps them kind of take that off their plate with that.

And do we have is the so 19 vendors?

Is there a guarantee of what sort of business minimum they're getting, or it just depends on their reputation and their work with the departments?

So we're gonna have an intake process using our smart sheets, and it'll be on a rotating basis, whichever vendor comes up just to help promote that equity with each of the vendors and make sure that they're getting the best products.

But there is no guarantee.

Okay, there's no guarantee.

Because the other thing I would like is as a council member when something's done really well with the um with the outreach.

If there is if we could streamline the way about our, you know me, I call you and I tell you, oh, look what this person look with this department did.

And I'm gonna give a shout out to sustainability uh reliability and sustainability because they've they've done really good work lately uh with their calendar and their you know impact report.

So um is there gonna be a way we can tell you that or you can remind us to kind of go in and give you that information?

Um, some another thing is some people do really good with the um bilingual advertisements that they do when we when we drop it at the doors with door hangers, and some of them not so much.

I get complain I I have educators that call me and we're like they they didn't phrase this right.

So I want to be able to communicate that on also as we move forward.

So if we could just find a way that we as the council office can do that, that way we're not interacting we're not trying to you know find out who the vendor is.

It's just something that you guys can take care of.

I'd appreciate that.

Yes, ma'am.

Okay.

Uh is there any other uh discussion from yes?

Councilman Meskinzals.

Thank you.

Um, appreciate the presentation.

Um, I think it's I mean, this is a huge contract, so um making sure that our residents have the confidence that we are cost effective and equitable along each of those areas.

Um, I think is important, um, especially with the challenging budget year.

Uh can you help me understand um why some of the categories had seven uh what is it uh different proposals versus the other ones had you know two or two to four?

Yes, absolutely.

So the determination on the selected number of vendors was based on previous spending patterns and percentage of use.

So for example, in advertising and marketing, that was on spending patterns and percentage of use.

So an example is an advertising and marketing.

That's 79% of the of this current spending goes towards advertising and marketing, so therefore we have seven vendors like the most in those categories, again, just based on um our patterns.

And I guess what's the difference between advertising and marketing and graphics, which happen in advertising and marketing and PR that happen I I guess I'm just trying to understand, seems like a more general advertising and marketing, but then there's specific that I imagine even the most the smallest firm would have a graphic designer or I don't know.

So advertising and marketing would be more like uh like a larger campaign for something for a project or an initiative, and a design project might be just you need a um a flyer or a postcard.

23 million is this on top of what doesn't every department have a CNE budget or a CNE no person?

No, they don't.

We we have a um a liaison with communications and engagement, but not every department has their own graphic designer or communications staff.

Yes, councilwoman, just and Alana's already said this, but I just want to make sure it's clear.

So what her team did was go look at everything that the city organization is spending on these five services, and based the budget is based on that, but it's only contract capacity.

None of this money is being awarded.

Departments have to have that funding themselves.

They could get it from a grant, they could get it during the budget process, what have you.

Um, and we also looked at what departments are needing and advertising and marketing, as Alana said, is the biggest one.

Those are those sort of full service campaigns, but departments also from time to time need graphic design work done.

And yes, an advertising marketing firm can do that, but we might rely on a smaller graphic designer to knock out a small project and a full service firm to do a big citywide campaign for a department.

So all it is doing is saving the departments of the work of soliciting this every time they need support, and Alana's team will manage it in line with all of our guidelines and brand standards and so forth.

This is the first time we've done on call for CNE.

This is like the who has the airport has an on-caller who has they do, right?

Okay, that's what I'm talking about.

Public works also for infrastructure projects.

But to your point with the savings, there might be opportunities.

So for example, with graphic design, communications and engagement does have in-house graphic designers.

So if it's a small postcard or something, a flyer that we can easily do and we have the capacity, we can certainly look at doing it in-house, and there might be savings there as well.

And what metrics are you using to determine the effectiveness of any of this?

I mean, well, hopefully we'll see some savings as far as staff time and the procurement process.

I think that's like the lowest hanging fruit, but then also for those projects where that we can do in-house, I think there might be savings there as well.

Are there certain projects though that um I'm wondering, like the advert the whether it's a postcard or a text message?

Is text messaging in here at all?

No, right?

Anyway, it might be part of the advertising if it's part of a larger campaign.

Um I was curious, I don't know if uh Troy can answer this, but is there a way that we could include uh Sabata certified subcontracting firm?

Is there a requirement in there that we could put in?

No, this is the solicitation has been completed by now.

Um there was the Sebata requirement at a prime level, but there was I don't believe there was any Sebeta subcontracting.

Yeah, and that's a good point.

Um we do have some limitations because of grants and others, so we cannot do that.

We can certainly, when you're working with the firms, if there is a subcontract needed to fulfill some of this, we can work with them from that angle.

Okay, okay, thank you.

Appreciate the question.

Councilman White.

Yeah, I think the councilwoman hit hit a lot of of my qu my questions.

I I thought that was great, but just explain to me again.

So this is work that we can't do in-house.

This is work that is traditionally outsourced to these vendors.

Um I would say that half of our departments have their own communication staff, and the other half of the departments rely on communications and engagement staff, and we have limited resources.

Okay.

Um have we looked at whether AI, I mean, there's cities across the country are are in their in their marketing efforts, we looked at it, are using AI to help with some of this stuff and and really reduce costs.

Are we looking at any of that?

Well, hold on, I'm gonna stop.

Uh, before you answer Alana or any of the city managers, we currently do not have an AI policy within the city of San Antonio, so anything she she she can't speak to that.

That that's a decision we need to direct Eric on regarding how the city uses AI, and we've talked about it, but we don't have anything formalized.

You can't speak to whether or not our our CNE department is using AI on any marketing efforts.

You you you can't we do not have we currently do not have an AI policy.

So that is that is the one thing is I would I wouldn't even not do it.

Again, that is a that's a city manager recourse that is not a as a city that's not an audit committee recourse.

So let's just um you can put can we use AI and then she can answer we could use AI, but we need to talk.

Using AI.

Can I ask that?

Yeah, you can ask that.

Have we looked at using AI to help with some of these campaigns or whatever it is we're thinking about doing here to reduce costs?

We are certainly open to that, and we have been talking with ITSD on what the city's AI policy is and how we can leverage that to help with these projects.

I also want to note that when I'm talking about limited resources in the city, the city only has between eight and ten graphic designers across the whole city of San Antonio.

So, you know, when we're looking at some of these projects, uh with all 40 plus departments, that's that's stretching people very often.

Well, that that raises another question.

I mean, A, I think potentially AI can reduce our costs here, but B, how many graphic designers you said?

Between eight and ten.

Eight and ten.

So maybe it would be more cost efficient uh to hire another couple of people in lieu of spending some of this money on this.

Well, these are the again.

This is this contract is based on what we're currently spending.

And I think the opportunity is for us to when we're receiving these projects.

Now they're going through communications and engagement, so we can decide internally.

Is this something that we have the capacity to do in-house, or do we need to spend money outside to hire or use one of these spenders?

Yeah, and and my point is is not to I'm not trying to nitpick or criticize, I just think that that this is a lot of money, as the councilwoman said, and and is this the most efficient way to get these services that we're looking for.

Uh the funding source in the contract says various, including possible grant funds.

Before we get to full counsel, are we gonna be able to know or get a clear breakdown of how much uh of the 23 million is expected to come from general fund versus grants?

I think we sources.

I think we can show you historically where we have spent the money.

I think going forward, and I don't know if Alana has a good idea of what we're doing going forward, but it's a capacity contract.

So as departments come forward with a need, it'll funnel through her department and she'll I she'll um determine the funding sources for it.

So I don't know if we have a good look going prospectively or into the future, but we can certainly go back historically and tell you where we spent money.

The one thing and you mentioned various grants, and just wanted to kind of highlight why that is worded like that, is this is a contract that had local preference, abeta and other preference programs in it.

Some grant programs don't allow those considerations, so we may not be able to use this contract because of the way it was procured with local, and we may have to do separate procurements for those specific things like the airport and FAA.

So I just wanted to point that since you mentioned that.

But we can certainly go back historically and show you where the money has come from because we did that analysis.

But are we budgeting 23 million?

No.

So how are we doing that?

No, so that that's what I want to get up and answer again.

It's it's contract capacity.

So we are awarding, I mean, we are uh authorizing to spend up to that amount, but all the spending would be subject to the department's budgets.

So we may not spend any of it, frankly.

If all the staff can do everything we need in-house, we don't have it.

But historically, we can't do all of it in-house, and departments have hired professional firms to provide support and use their budgets.

The grant for that in the general fund.

Say it again.

How do we budget for that in the general fund?

It's part of individual departments' budgets.

So and the grant example is a perfect one.

So a grant, we may get a grant from a state or federal agency for a public education campaign around X issue.

The department historically has then had to go out, do an individual solicitation, hire a firm, route that grant money.

This is bringing everybody in, and if we get that grant at some point, we've got folks ready to go who can help us execute.

And also on the, you know, the AI piece.

AI can't do media buying for us, you know, buy a bunch of ads in a in it for a campaign.

They can't do it can't do community engagement, it can't do video production.

These are services that we, when we need to supplement what we can do in-house, these firms would be able to do that.

But again, only subject to the budgets that departments uh have authorized through the budget process.

Okay.

Thank you all.

Thanks.

Thank you.

Uh, Representative Pacheco.

Any questions?

Uh just feedback.

As someone who uh is big on process and uh procedure, this definitely makes sense, right?

Because it allows the communications and engagement team to provide that oversight.

Um just my question, I guess going more to the budget and these questions about the finances.

So if a specific department has funds, they would be spending it, but you all would be providing additional oversight on that spend, or how does that work out?

That's correct.

So it'll be coming through us, and we will kind of work with the departments and the vendors to make sure that they're getting everything that they need at the most reasonable.

Perfect.

And then what's the process cycle after the deliverable is completed?

Do you review that and then the department has to approve it or then we are also going to add a feedback process in that to make sure that everybody is happy with the final results and to get feedback that we can then provide with those vendors in the future and also from the vendors when we're working with the departments?

Cool, thank you.

All right, thank you.

Any other discussion?

If not, we have a motion and a second.

All in favor say aye.

Aye.

All opposed say no.

Motion carries.

All right.

We're moving along to our next item, which is, oh, the fun items.

Uh item number, we have two items.

Uh item number nine is the um final internal audits.

Uh it is the audit of CS, this the convention center uh facilities janitorial.

Buddy, can we get a staff presentation?

All right.

The floor is yours.

Oh, thank you.

Uh my name is Michael Gutierrez.

I was the audit manager over this project, and I'll be presenting the results of CSF's audit of the janitorial services contract.

The objective of the audit was to determine if CSF is effectively managing and monitoring the janitorial services contract for the Alamo Dome and the Convention Center.

Uh overall, we concluded uh CSF is not effectively managing and monitoring uh the contracts for these facilities.

Uh we cite the department has insufficient policies, procedures, and controls to properly monitor the contract for compliance.

Um our first recommendation involves pre-employment screening.

For screening, this involves background checks, drug screenings, and federal employment eligibility verification through the federal I-9 form.

Uh we concluded that the prime contractor and the subcontractors are not performing these screenings on their contractual employees prior to performing services at these facilities, as it's required by the contract.

Also through testing, we became aware of three additional subcontractors performing work at the Alamo Dome that the CSF team was not aware of and did not monitor for pre-employment screening.

Our recommendation is for the director to review and revise the existing controls in place to ensure the prime contractor and the subcontractors are properly performing these screenings to be in compliance with the uh with the contracts.

Um our next recommendation uh is referring to staffing levels at both facilities.

Uh we concluded CSF is not appropriately reviewing the records of attendance for the contractual employees that are working at both facilities.

Uh for records of attendance, we reviewed sign-in sheets at both facilities.

Um at the Alamo Dome, the sign-in sheets are not maintained, so we were not able to determine if staffing levels were met at the convention center.

Uh, they are maintained.

We observed a few days where the staffing levels were not uh were not met.

At those times, the prime contractor also did not notify the convention center team within 48 hours that they would not be able to meet the required levels.

Uh, that's a contract requirement only for the convention center, not not for the Alamo Dome.

Um, we were not able to determine if the convention center team was addressing these discrepancies as uh they were not able to provide any support of uh any communications taking place between parties.

Our recommendations are for the director to uh develop procedures to monitor the employees present at both facilities to ensure that the required levels are met.

Also to create policies and procedures to properly document communication taking place between managers and supervisors whenever staffing levels are not met, uh whenever a 48-hour notification is not provided, and also whenever there's any changes to any uh levels made.

And then lastly, to ensure consistency of the contract provisions for both facilities were appropriate.

Um our next recommendation is over custodial and conversion work.

Uh, we concluded CSF is not appropriately reviewing the work that is being performed at both facilities to ensure they're being performed to an acceptable standard.

Um at the Alamo Dome, the work that is being performed is uh it's inspected and monitored in real time.

However, the results are not recorded.

Um they do use a form at the convention center.

There is an inspection form that is used.

Um, however, the forms are not consistently completed or maintained.

Um so our recommendation is for the director of CSF to develop written policies and procedures and controls uh that include the current practices at both facilities to ensure the services are being performed as required.

Our next recommendation is over the accuracy of invoices.

Uh, we concluded CSF is appropriately monitoring the invoices for accuracy at the convention center.

Um, however, uh they are not appropriately requesting maintaining and validating the records of attendance at the Alamo Dome.

Our recommendation is for the director to establish uh monitoring procedures at the Alamo Dome to validate the actual hours that are worked to ensure the invoices are complete and accurate uh prior to them being paid.

Um our next recommendation is regarding access to both facilities.

We determine physical access to the Alamo Dome is not appropriately approved by the CSF team.

The current policies and procedures are not in written form, but at the time of testing, the team was asking contract employees to fill out application forms in order for a batch to be issued.

When we review these forms, we notice uh we notice some of some approvals missing.

At the convention center, they do have written access procedures, however, we observe administrative improvements that could be that could help with the sign-in sheets, such as uh such as making sure all signatures are obtained and all work dates are recorded.

Our recommendation here is to uh create written policies and procedures for the authorization of issuing badge access to the Alamo Dome, also to ensure controls for ensuring the proper authorization is provided prior to the badge being issued, and lastly, to establish uh consistent written policies and procedures to ensure uh proper access and the proper maintenance of records, and our final recommendation comes with contract compliance.

Uh we concluded the subcontractors are not meeting the insurance requirements for both contracts, and we recommend the director ensure the existing procedures for preparing a cap and for the proper monitoring of key provisions at the appropriate times are executed.

The CSF team has agreed with our recommendations and already developed an action plan with an anticipated completion date of June of 2026.

This concludes the presentation.

The CSF team is available to answer any questions you may have.

Thank you.

All right.

And a second to accept the audit presented by uh the audit committee, yes.

I have a motion and a second.

Great, we can begin uh.

I right after I want to move forward with the motion in a second because I do want to say a few words and then we'll uh I'll call you up uh Patricia, to come and speak.

So um I do want us to remind us that this is you know, audit's job is to come and tell us what was wrong.

We we send these committees here because we want to make sure that we are looking at this and prioritizing this.

So remember it's it's uh it's Patricia, and she's gonna come up and tell us.

And if you look at your slide presentation, uh on slide 15 begins the um the recommendations and then the action plan that they have if y'all have any questions.

So if you're looking to refer to that or Patricia may come up and refer to that in terms of the action plans with the uh questions.

So Patricia, if I can have you come up and uh uh talk a little about the audit before we begin discussion.

Thank you.

Yes, good morning, madam chair and audit committee members.

Patricia Muskiscantor, director of convention and sports facilities department.

So like Michael um alluded, um, we have accepted, we provided a management response.

Um we have reinforced the monitoring on both of these contracts.

I can also report that although the implementation was June of 2026, we have implemented all of the action plans that are described in the management response.

And I can say with confidence that the prime contractors subcontractors are now um doing all of the pre-employment screenings that are required.

Um we've updated forms, we've also updated our um contract administration plans, uh implemented several policies that will help us better monitor these contracts in the future.

Um and also our contract staff with the assistance of the cities, the finance compliance and resolutions have um, you know, um gone through additional uh contract administration uh training.

Thank you, Patricia.

Um so uh the one thing was was surprised um that there were there were so many findings, but again, I am at the convention center, and I am at the um Alamo Dome whenever I'm invited.

You all know I'm there.

I've been to the monster truck also, and I know that with each client that comes in, there's a different set of rules.

So uh, you know, my can I I think I was there for the monster truck rally and they they blocked off an area, and I was talking to the staff there, and they were like, Yeah, not even we that work there could go in the back.

Their security was so tight because they didn't want people near the trucks that they were like, we can't even go back there to use the bathroom because this is what they contracted with you.

Um, is that oh you had to have this special access pass?

And so I think that's one of the things we need to understand when we consider as we move forward is just the amount of um asks, and I'm not even gonna get started with the performers that you know want the special things and people can't look at them right in the face if they walk through the hall.

So I know that it is difficult to do, especially in the dome and what you have, but I think it's important that I'm glad that you're addressing the issues, and I think that this is something that maybe we need to get back to in terms of the importance because if it starts, if it starts sliding here, does it start siding in other aspects?

And so uh I I appreciate y'all moving forward again.

As I talked about economic ecosystems within the janitorial services, is making sure that um if we have a subcontractor here that they're using supply essay that they're using the resources to get the certifications and the and the um the background checks that they need because we're providing that opportunity here.

So I think working within our ecosystem of what we have available with small businesses to make sure that the the prime contractor when he's saying we just we don't have enough subcontractors or that we are like no, we have we have them here.

You just need to go look for them, and here they are.

So uh making sure they meet up with the qualifications.

So um thank you for that.

I I think um I'll be going to events all summers to see how it's going and making sure everything is clean.

So thank you.

Thank you for presenting.

This this was concerning, but I I'm confident that you'll be taking care of the issues, and I think you've communicated to the contractor that we're contracting with is if they don't take care of the issues, what our next steps will be.

So uh look forward to hearing some conversation from my committee members.

Uh would anyone like to volunteer to go first?

Councilman White.

Thank you, Chair.

Uh I'm gonna be brief.

Um, this is concerning.

Uh as is the report we're gonna get on the next one on the short-term rentals uh primarily because uh I think that potentially we are we are we're losing revenue um as a city.

So uh just just as a as a reset here, this is a over a 10 million dollar contract, and um what what we've seen here, the highlights are that we are, you know, this group is not appropriately approving physical access to the Alamo Dome, and we're also not uh they're not conducting the appropriate drug screenings, but criminal background checks on individual performing uh on the individuals performing services, uh nor are we checking that that all persons that are that are working for these companies are legally authorized to work in the United States.

So again, potentially um, well, I'm I'm not gonna go there, but but it's not good.

Now on the financial side, um it looks like this audit, and thank you for the audit, by the way.

I mean, this is this is really valuable work both here here and the next one, because it can help us get better and it can help us, I think, with some of these revenue problems.

So my question is it looks like a sample was done of employees on uh on for 76 work orders, and we determined that 24 work orders were not fulfilled with the correct number of subcontractor employees.

So that and then it goes on to say the department does not have effective procedures in place to monitor the number of contractual employees present at the Alamo Dome or the convention center to ensure proper staffing levels are met.

My question is this um well, let me let me just continue here.

We looked at a sample of 50 invoices, right?

Totaling five hundred and fifty-three thousand dollars for hours worked by the con contracted employees at the Alamo Dome.

Were we potentially paying for individuals who the contractor says was working at the Alamo Dome, but maybe they actually weren't there working?

Um councilman uh councilman um we don't believe so, um, but we do not have um you know sign-in sheets for that.

Since then we have implemented uh the contractor, prime contractor has implemented a new system where um employees clock in, it's being witnessed by an Alamo Dome employee, that will be utilized to reconcile the invoices moving forward.

Sure.

So we we just don't have the accurate information or complete information to be able to know for sure.

But but what it sounds like from what I'm reading in here, we could have been paying for people to be doing work where those people were actually never there doing work.

And it goes on to hear and says of the 37 invoices reviewed for the Alamo Dome, the prime contractor could not provide SIS for 20 invoices.

As a result, we were not able to determine if the billing for those the billing for services on these invoices were accurate.

So that's what you're basically referring to there, right?

That is correct.

Is we don't know we were getting billed the accurate amount, thus we could have been paying for services we did not receive.

That could have been the situation.

We don't believe so.

Uh we worked very closely, the operations manager at the Alamo Dome works very closely uh to determine the number of people that they need.

Sometimes they don't get all of the staff that is requested.

Um but they work very closely.

The job did get done.

Um, whatever was requested, the conversion or the cleaning of the facility, whether it was before the event, during or after the event, got done, and usually they have a good sense of how how many people are required for that, but can we say, you know, they all work this many hours?

We cannot at this point, but we have remedied that.

And I'm not accusing anybody of anything, but of course, you know, one of these vendors could say, Well, we need 100 people to do this, thus, you have to pay us X when really they're only getting it done with 70 people, and so we're we're really paying too much.

And so that's my concern.

Um, I appreciate this audit.

It really it highlights the need for for proper documentation so we can button this up further, because again, it may result in in cost savings down the line.

So thank you, Chair.

Thank you.

Councilman Messian.

Thank you.

Uh thank you for the presentation.

I I share that sentiment.

Um this is very concerning.

Uh some failures, I think, on two of our most prominent public venues with the convention center and the Alamo Dome.

And I help me understand the reason that it sounds like the two facilities facilities are operated by the same department, but have very different monitoring practices.

They do they're different facilities.

They function, you know, very uh differently.

Um, an event, you know, the stadium versus the convention center, they're they're they're very um they're very different.

Um the spaces are different.

I understand physically they're different, obviously, but I just I'm trying to understand how they are on the monitoring side.

The needs are similar though, in the sense of especially in janitorial services, after big events, there's cleanup and there's uh prep before the big event, and so why are they monitored differently?

The difference, one of the big differences is that whereas the convention center has you know uh full-time staff that does the conversions, does the cleaning only requires supplemental uh labor uh to assist during major events?

The Alamo Dome doesn't have that.

We require um this you know contractor to provide the employees to do the cleaning to help with the conversion because we have limited staff at um the Alamo Dome.

Um but now we have implemented forms policies that are very similar.

Again, depending on the operation, they might you know differ a little bit, but we're trying to keep them consistent uh for both facilities as much as possible.

Can you say now that we have a standard I guess operating process for both, or uh on this?

Could you say that with confidence?

Yeah, I can say that with confidence that you know uh depending on the operation, we do have policies and procedures as far as you know how we sign in people, how they access the facility to make uh ensure that um you know everybody has a badge or everybody you know has been processed to enter uh the facility.

And uh I had a question too on this 550, where is it the 553,000 dollars?

Um you all have not yet determined if overpayment occurred, or did you determine that no?

Um at this point because there were no sign-in sheets that were available to reconcile with you know the invoices, we were not able uh to determine that, but we do have already um you know a process in place where we will where Alamo Dome employees are witnessing the clocking ins.

We have those reports that will be reconciled with the invoices once they we receive them.

Would the city be able to pursue any sort of recovery on that $553,000?

We don't believe, councilwoman, that uh we overpaid um again going back to you know the period and those invoices that were reviewed.

Um the job did get done.

They did produce, you know, employees.

We just can't with accuracy say that the number of hours that were built were you know the ones that were received.

Okay, thank you.

Um appreciate your comments.

Thank you.

Representative Pacheco, yeah.

Just a quick question, not so much on the contracts, but uh feedback mechanisms for these two venues.

Do we know if we um check in with attendees to ask if they thought it was cleanly?

And I know like if sometimes you go to airports, they have the little button where you can say it was clean, it wasn't.

Do we do that?

We do, sir.

Okay, and how are those?

Are those uh most of the time?

Yeah, we get really good results when it comes to you know whether it's the parking, whenever they arrive to the facility, when they're in the facility, um, as far as I guest experience, they're really high scores.

Good to hear.

Well, thank you.

Yeah, and uh Patricia and the team over at uh the convention in the Alamo, I think that is as we go into our subcommittee, Daniel, and um and talk about customer feedback, that's one thing we want to be able to see is how the different departments are are taking that feedback.

I think the one concern you hear, and and I'll just put it out there is and as I mentioned before.

I'm at I'm at the Alamo Dome for the concerts, I'm at the convention center for things.

There are people constantly cleaning the bathrooms.

I think the concern here is, is it possible that they and and they they're not city employees, they're subcontractors or contractors.

Are they taking on more than they should?

And are they getting paid equitably?

Again, to Councilman Whites, if if they're like, hey, we can do this with 70 people and we'll and but they're working 10 12 12 hours because it's it's a comic con and they're there all day.

That's not fair to them, but that's between them and their employers.

And I think with us, it's is if we have that monitoring, if we have the sign-in sheet, if we have the clock in sheet, we can see if our our uh janitorial services are being um kind of worked to the brink by by their contractors or their subcontractors.

So I think that's one thing we kind of want to see and why we want to monitor that now.

If if they're like, oh, I agree, they give me overtime, they give me this extra pay, that's one thing, but we want to make sure that we're following the rules and that we stand by what our principles are is that we are we are equitable and we are not working people to the point where they're they don't want to come back or they have a 12-hour day.

But again, that's that's uh a choice.

Some people do 12-hour days, some people do um, you know, and then take the rest of the time off, but we want to make sure that they're getting compensated uh equitably for that, and not like as as councilman white said, you know, they're doing it with 70 and then pocketing.

We didn't say pocketing, but you know, we're like, where's where's the other money for the other 30?

Are they sharing it with the employees, or is that going back to the contractor?

So but uh what uh what we've seen is that it I've seen that it is clean, I've seen that they have been making uh strides, and and I think as we talk about um just because we want background checks, but just because you were justice involved doesn't mean you you don't deserve a second chance and can't have this job.

We just need to know it.

I think is is one of the other things we're saying, uh, or or at least that I'm saying.

So thank you for the presentation.

Yes, Councilman Meskinzals.

Thank you, Chair.

Uh just a quick question was the Office of Municipal Integrity involved in any of this after the findings of the report?

Um, not on not of no, not on this, uh not on this one, no.

Would there be a benefit to them being involved, or is this not in their capacity?

Maybe someone can help me answer that.

I, you know, uh municipal integrity, usually um, if there's some kind of um inappropriateness, you know, from um an employee a city employee, we don't um believe so.

I think that you know what happened is you know, a combination of things.

Um, you know, it was training, um, it was um uh, you know, we were coming back from COVID, um, so a lot of turnover also within certain, you know, areas.

Um, one thing that I want to emphasize we've put in, you know, protocols, uh procedures in place to remedy all of this, and we feel that moving forward, uh we feel confident that the city will not be, you know, we won't feel that we're in a position that we're saying, hey, we've overpaid for something.

Um, there's clear uh procedures in place now to correctly monitor um you know these contracts.

No, I was just gonna add I and I can't say for certain that OMI was not involved, but we can certainly I can visit with Renee and we come back and confirm that for you.

All right, we've got a motion and a second.

Uh can we get a uh all those in favor say aye?

Aye.

All opposed say no.

Nay.

Ayes have it.

Motion carries.

We'll move on to our next item.

We're about to lose one of our council members here soon.

So let's go ahead.

The floor is yours.

Thank you.

Good morning.

My name is Abigail Esteves, and I was the audit manager for this project.

I'll be presenting the results over the audit of finance and development services short-term rentals.

Our overall audit objective was to determine if finance and development services were adequately monitoring for compliance with the hotel occupancy tax ordinances for short-term rental properties or STRs.

We determined that finance and development services were not adequately monitoring for compliance with these properties.

At the time of the audit, policies, procedures, and monitoring controls over this program either did not exist or were not sufficient.

Specifically, we identified issues with property identification, revenue reporting, revenue collections, and contract monitoring efforts.

So to begin with some background, effective fiscal year 2019, operators of short-term revenue properties became required to obtain a permit and then pay a hot tax based on reported revenue.

So an SDR is classified as a property that either rents out a portion or all of its residents for a time period between 12 hours and 30 days.

So again, at the time of the audit, operators were required to self-report the revenue that they were generating on a monthly basis and then pay a 10.75% hot tax based on that revenue.

Finance and development services are both involved in program execution.

Development services is responsible for researching potential STRs operating without a permit, as well as for handling the overall permitting process, while finance is responsible for revenue and contract monitoring.

Our first recommendation was over property identification.

We determined that STR identification by Avenue was not monitored, and Avenue is a contractor that was engaged to help with overall program execution, and part of their responsibilities included identification efforts for properties.

So we reviewed a sample, and while the documentation in a SALA concluded that a sample of these were not indeed operating as short-term rental properties.

Lastly, we determined that documentation maintained within a CELA did not support the results of the research efforts performed for some of these properties that were potentially operating as unpermitted short-term rentals.

Therefore, we recommended that development services collaborate with finance to establish monitoring procedures and that they ensure properties are adequately researched and that supporting documentation requirements are defined to help support the conclusions reached.

We determined that Avenue was not providing non-reporting notices to these short-term rental properties that were not keeping up with reporting revenue on a monthly basis.

Again, this is a significant control as at the time this revenue was self-reported by these you know individuals, companies that are operating these short-term rental properties.

And lastly, we determined that there was a lack of controls to collect past due hot revenue.

So an example would be a property is now a permitted short-term rental property.

However, previously they were operating without a permit.

So therefore there would be back hot tax due for however many months they operated without a permit.

So therefore, we recommended that finance develop controls to ensure that these notice letters are sent out, not only to encourage revenue reporting, but also to allow for permit revocation where necessary.

However, at the time of our audit, a CAP had not been developed.

Therefore, we recommended that a contract administration plan be developed and that moving forward monitoring procedures be developed to help ensure that avenue is operating in compliance with contract requirements.

Both finance and development services agreed with our recommendations and have since developed action plans to address the issues that we've identified, with the latest completion date being in June of 2026.

That concludes my presentation, but I believe finance has also prepared some slides to speak on their management action plan.

All right, if we could get finance, let's see, present.

Troy, is that you?

Okay.

And just for brevity purposes, I'm not gonna go through the entire presentation.

It's you've heard a lot from Abigail as she's walked through it.

But there's a couple things I would like to kind of mention, especially during the audit period.

But first of all, you know, thank you to Buddy and Abigail.

We work very closely with them as a finance department to your point councilman.

We embrace these audits, and I think it makes us better as we evaluate these and implement these from a finance department and from a city perspective.

This is an area that has evolved very quickly since 2018, as Abigail mentioned when the original ordinance came into place.

We had to stand up these things very quickly, working with um Mike Shannon at the time, and now I mean to put the platform in place, the processes in place, and then we got hit with the pandemic.

During the pandemic, we paused the majority of our activities, and we're still kind of pulling out of that.

And I think one of the things we agree, you know, one of our major areas in this is making sure that there's compliance and that we are getting in the most revenue that the city is due.

And during the period of the audit, we were focusing as well as with DSD with a very large stakeholder group to on that very issue.

How do we enforce compliance?

How do we generate revenue?

Matter of fact, the results of that effort actually went into effect in February of 2025, which is really the ending of this audit period, and we started receiving revenue as a result in March, but specifically in working with that stakeholder group and working with DSD, we focused on compliance in terms of how do we generate increased compliance and generate that revenue.

And so council passed the ordinance at that time with a with specific compliance issues or specific focus on revenue generation and compliance.

So that amendment approved a requirement in all platforms that collect state hot in the city to directly remit to the state on behalf of our short-term rental hosts.

When you look at those hosts that that's referring to, being Airbnb and VRBO, they are the majority of our collections through those platforms in excess of 80 to 90 percent.

So by putting this in place, this change ensures that we have a hundred percent compliance for the collection of our hot when an operator uses Airbnb and home away, previously VRBO that run an STR.

This requirement was effective in February of 2025 in Airbnb and home away.

We began collecting hot directly from those short-term rental hosts and remitting those directly to the city.

So, in terms of compliance, we were going directly, it was a those STRs had to actually remit those on their own.

There was no compliance.

We had that issue, we had to follow up.

This ensures direct and 100% compliance.

As a result, and this was our focus area during that time period, our short terminal hot collections for uh fiscal year 2025 from March forward.

We increased those results by 71 point 72.1% in total 9.6 million dollars for um in revenue for fiscal year 25 with approximately 4,370 STRs are operating in San Antonio.

So just for comparative purposes, going back to as and this is fiscal year 2025 revenue.

Every month since March of 24, we have doubled our revenue as a result of this effort.

So I want to mention that because I think that's additional context.

This during that audit period, this is where our focus was.

We 100% agree with Buddy and Abigail's um audit findings.

We were putting those in place, but during that time, this was our main focus to make sure that we were getting that compliance.

Quite honestly, this has created some other challenges for us in terms of validating, but working through that as well.

So, in terms of the audit recommendations, as I mentioned, we're working through these.

DSD has um addressed theirs, and we're going to make sure that these are corrected and moving forward.

So, with that context, we're available for any questions.

I mean and I.

Great.

Can I get a motion in a second and then we could uh all right?

Uh Councilman White.

Thank you, Chair.

Um, again, buddy, great great work here.

Uh disturbing results, though, I'd have to say again, 921 STRs operating without a permit.

Um Troy just put up 4370 total STRs.

Are those permitted or not?

Or are those total?

Because if it's 921 out of the four, three, seven, zero STRs that didn't have a purpose, that would mean about 21% of our STRs don't have permits.

Good morning.

Um we have 3350, 3,350 permitted STRs today.

So 3350 are permitted.

We have 4300 total.

So there's a hundred that are not permitted.

Sorry, 33, they're 1,000 is yeah, 1,000 not permitted.

Okay.

Um, so that's something I'm assuming we're going about correcting.

Um the revenue reporting, right?

Not having not being STR revenue reported by operators is not validated for accuracy.

So I guess that was that was was that that was prior to this um ordinance change, or do we still have that issue?

It we um that was prior to the ordinance change.

This um the ordinance change quite candidly has created some additional challenges that we're working through.

Uh-huh.

Um, so the challenge still exists, it's just different now.

Okay.

If that makes sense.

But we're on the path to making sure this is this revenue is getting reported correctly.

I mean, this this hot tax is goes to fund a lot of a lot of things.

Um, chair knows knows better than me on some of that.

Um, so I guess my question is on the past hot revenue that we haven't collected.

Do we have any idea how much did the audit show us how much that is?

And if it's a significant enough figure, are we doing something to try to go back and get it?

We are gonna go, we are gonna go back and try to get as much as we can.

The audit did it was on a sample basis, so I don't think they have the full population, right?

We need to work with our contractor to go back based on what was reported and how this is actually estimated is we get reports from STRs, we compare those reports to what the platform says was actually rented, or our our contractor.

We compare, and that's where we have a compliance team, we have our contractor avenue that can also go after these um amounts that have not been remitted.

Yeah, and I guess we've got four years to do it.

We do, right?

Um, okay.

Well, uh Chair, thanks for for letting me get in because I do have to run, but you know, I want to say in a time where we have these budget issues, in a time where we're talking about, you know, raising taxes on the citizens to me before we even look at raising taxes on the people, we got to be doing this kind of work to figure out where are we not collecting the revenue that we should be, because all these budget deficits and shortfalls and things like that are probably or are for sure would not be as great as they are if we were collecting some of this revenue.

So, Chair, I do have to be excused, and thank you for letting me get in.

Thank you.

Councilmanskins.

Thank you.

Thank you for the presentation.

Yeah, I would say this is uh concerning, especially given the dependence on the hot revenue that we have on that hot revenue tax.

So I appreciate the audit report and the work that you did, buddy and your team.

Um, do we have a specific um how much revenue?

I guess do we have this answer?

How much revenue is estimated to have gone uncollected or unverified during the audit period?

Um so we were unable to determine before we were unable to answer that question as first we would have had to be able to quantify how many properties were indeed operating without a permit, right?

And we'd identified issues there.

So frankly, we were unable to quantify what that amount might be.

Can we now quantify it?

We can come up with an estimate, but it's still gonna come back to that detailed research with the reconciliation piece I just mentioned to Councilman White.

Okay, and do you know if Avenue is collecting information on how many the uh how many of the short-term rentals have any covenant or deed restrictions?

That is not I don't believe that is part of their contract, but two things for you.

We I don't have an exact number.

Uh we certainly advise customers that they should be checking to see if their community has codes, covenants, and restrictions.

We can't enforce that, but we want to make sure they're aware that they need to look into that.

Uh if I can, real quick to your previous question.

So we have um when we did update the ordinance and adjusted fees, one of the one of the benefits we got was a dedicated code enforcement officer for STRs.

And uh Yolanda, you know, she works tirelessly, hits about 75 properties a week that lack a permit.

When we identify properties that are operating without a permit, they don't get a permit until they pay their past due hotel occupancy tax.

So the at the contract we have with Avenue not only tells us who's operating without a permit, but it tells us what their nightly rate is, it tells us how many nights per month they rented, so we're able to work with finance department to make sure those folks pay up.

Thank you.

Uh short-term rental.

Um, I had a hundred kids in the short-term rental three weeks ago.

Literally a hundred kids, I'm not making that up.

Um, a lot of phone calls were made to PD that day or that night.

So it's a it's a serious issue.

I understand that um this is a growing segment of our population, but you know, those permits exist for a reason, right?

To ensure the health and safety of the guests that are there, but also to keep um tabs on these um, making sure that short-term rentals are good neighbors, um, and that the residents um feel safe.

And so I think it would be important too that we assign a clear lead department responsible for this.

I know finance has some of this and DSD has some of this, but I think a clear lead just so we know as uh council members, too, to who to go to, most of us go to DSD, but that's important.

Um, and I think in the application process, I know that acknowledging the uh deed restrictions and it's up to the tenant or up to the uh the owner, but I think if there's any requ anything we can do for a stronger acknowledgement in that, because right now in the uh permit application, it's just an important notice.

It's on the bottom that um responsibility of the property owner to verify the existence of any covenants.

If there can be some sort of checkbox, something small or significant, uh, so that we know um, and also the operator knows their limitations, right?

In the neighborhood or not, but that is something that comes up, especially because a lot of these Airbnb uh folks are looking for neighborhoods that have uh either no HOAs or voluntary HOAs.

District 8 specifically, four of my largest neighborhoods are voluntary HOAs, so there is more uh short-term rentals in those neighborhoods because of that.

Um, and so if there's any stronger acknowledgement that we could put in the permit uh application, again, just that checkbox or something, uh, that would be helpful.

And we'll we'll work with the city attorney's office to get as close to the line of CCNRs as we can.

And I do appreciate your comments.

We we certainly take the community safety very seriously.

Yeah, absolutely.

Whether it's for hot delinquency or problems like the ones you've described, we've revoked over 3100 permits since this program came into being.

So we'll continue to do that.

Yeah, and I think you know, we just had a uh conversation about a communications uh what is it the marketing and I mean that to me is like communications, right?

Like, and so how we communicate other big projects that we're working on as a city is important, obviously, but even stuff like that um is so important to our neighborhoods to for them to know that what we are doing, right?

And we are revoking permits and um it helps us too to share that message if there's any sort of template or graphic that we could put on our newsletter, um, because I mean Airbnb's come up constantly um in my HOE meetings, constantly.

So uh just how we can connect all of that, I think is important.

Yeah, absolutely.

I don't want to go ahead and we just started to do this here.

We're working with the San Antonio Short Term Rental Association, uh Shelley Galbraith, who runs that organization.

We've started quarterly newsletters that we get out to permit holders.

So if we see trends where there's lack of compliance or issues popping up, we can use that to communicate as well, but great idea.

Thank you.

Uh thank y'all so much for this presentation.

Uh I was there in 2022 or 2023 when this all unveiled, and I forget what I think I was in planning committee.

Uh Troy, when you first brought this to us, and I knew that there were going to be growing pains because this was all new for what we were doing.

So I thank you, buddy, and the audit team for getting this.

Abigail did a great job because I knew this was gonna happen because we didn't we we did not have a starting point.

We did not know.

We knew we had uh short-term rentals, we didn't know where they, we didn't know where all of them were, we didn't know what they were doing, how they were advertising, and so they this has given us kind of our baseline, and where we move from here is really important.

So, what I think the one thing that we're hearing is as we approve this audit, but what we need to go back to, and um Amin and Logan and John in the department is there may be new ordinances or policies coming from this.

So we do need to have some conversations with the council members that this is impacting them.

We know that for hot tax, that is basically my arts and culture budget right there, in addition to visit San Antonio.

So, how we can bring them in to help with this process is fine.

I think as much as I love Troy and Ben, this really is a DSD conversation when it comes to working with the council members.

Um they're just gonna go collect my money and make sure we've got it in the thing.

So we do need to talk about how we roll this out to our community members and how we roll this out to the different um neighborhood associations.

And I I'm all for new policy, new ordinances, but again, this council needs to be a solid six when we get in there and we start having these conversations, and I think that that is where we want to make sure that we continue and maintain.

So thank you again for the this is exactly what audit's supposed to do.

They're supposed to come and present and say this is what we found and um for we can take that from here and uh again the customer satisfaction on STRs Daniel that's gonna be the committee that you're part of and how we how we make sure that's implemented department wide with our different um kind of touch points with the community so with that we have a motion and a second all those in f if there's it isn't any other discussion all those in favor say aye all aye all those opposed motion carries all right uh we are hold on let's I gotta get the adjournment because I don't know if we're going to uh that is all the business for today the time is now 11 50 and the meeting is adjourned thank you