Audit Committee Meeting Summary: June 3, 2015 - SERS, Lifeguard, Airports Reports
STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE
Audit Committee Meeting Summary: June 3, 2015 - SERS, Lifeguard, Airports Reports
The San Diego Audit Committee met on June 3, 2015, to receive reports from the City Auditor and SD SERS. The committee reviewed audit findings on lifeguard workforce planning and concession fees, as well as planning and operational deficiencies at the city's two general aviation airports. All reports were accepted and forwarded to the City Council, with a follow-up on the lifeguard audit scheduled for November.
Public Comments & Testimony
- Mr. Harris (Lifeguard union representative): Expressed concern that the lifeguard workforce planning issues have been known for 17 years and lack funding. He noted that 97% of those eligible to retire are boat operators, and that training programs have been cut. He urged the committee to refer the report to the Public Safety and Livable Neighborhoods Committee for ongoing oversight.
- Mr. Clive Richard (Ninth Council District resident): Supported the audit findings and urged the committee to ensure concrete results, emphasizing the importance of lifeguard services to public safety and the local economy.
Discussion Items
- City Auditor Monthly Activity Report: Mr. Luna reported two audit reports issued (Fire Rescue Lifeguard Services and Real Estate Assets Airports Division), four reports in progress, and a fraud hotline poster being distributed. The risk assessment for the annual audit plan is underway.
- SD SERS Report on Plan Sponsorship Contributions: Internal auditor Lee Paravano presented findings that from 1994–2013, the City discounted employee offset contributions based on an actuarial assumption that some members would withdraw before retirement. This practice, though approved early on, was later deemed improper by SD SERS’s new actuary. The estimated net amount unpaid as of June 2014 was $23 million, but SD SERS board took no action after closed session, as the amount is already being paid through the unfunded actuarial liability (UAL). A second finding noted a single employee receiving multiple certification pay without proper MOU documentation, based on an unsigned 2001 memo.
- Fire Rescue Lifeguard Services Audit: Audit manager Chris Kime presented findings highlighting a critical skills gap: 40% of full-time lifeguards are eligible to retire within five years, and Lifeguard 3 positions (boat operators) are most affected. It can take an average of 13 years to achieve all certifications. Lifeguard Services also lacks a formal workforce plan and has not maximized concession fee rates (currently 10% of gross revenue, while similar cities charge 12–15%). Recommendations include developing a workforce plan, increasing diversity outreach, and reviewing concession fees when contracts expire. Management agreed to implement recommendations by November 2015.
- Real Estate Assets Airports Division Audit: Presented by Matt Helm and Shanet. The audit found that insufficient planning and oversight have resulted in missed development opportunities and revenue. Master plans for Brown Field (expired 2001) and Montgomery Field (expired 2004) are outdated. The division lacks a business plan, has no written internal policies, has leases held over an average of 10 years, and has not adjusted fees since 2003. Recommendations include developing a comprehensive business plan and operational procedures. New Deputy Director Rod Probst outlined a 12-month plan to address these issues, including new RFPs and runway threshold changes at Montgomery Field.
Key Outcomes
- SD SERS Report: Motion to accept the report passed unanimously.
- Lifeguard Services Audit: Motion to accept the report, forward it to City Council, and bring a follow-up to the Audit Committee in November passed unanimously.
- Airports Division Audit: Motion to accept the report and forward it to City Council passed unanimously.
- All audit recommendations were agreed to by management with specific implementation timelines for workforce planning (lifeguards by November 2015) and business planning (airports within 12 months).
Meeting Transcript
All right. Welcome everybody. I think we'll get this thing started here. A couple minutes beyond start time as it is, so welcome to the June 3rd, 2015 meeting of the audit committee. Council Member Zapp should be joining us shortly. We have committee members Carly Schreiner and Tom Hebrink with us. Motion by Mr. Hebrink, second by Ms. Shriner. All in favor? That motion approved goes on unanimously. And we see we have no non-agenda public comment to deal with today, so we'll get right into it. Any com any comment from any of the members here on the committee? Welcome, Ms. F. Um. With that being since nobody has anything to say, I just wanted to make a couple comments. So congratulations. I mean, this is a very prestigious award. It's one of the highest awards you can get for what you're doing, and it's uh great to see that you guys are putting out the good work along with our city auditor that you know it wasn't too long ago that the city was in pretty dire financial problems and had a lot of issues to tackle. And with your staff and the auditor staff, I think we're well on our way to fixing a lot of these problems, so we're we're getting much much closer. And congratulations again on the award, very well deserved. No, but seeing none, we're all good to move on to our agenda. And first will be report from our city auditor and monthly activity report. Mr. Luna, the floor is yours. Certainly. Good morning, Mr. Chairman, members of the audit committee at Warta Luna, City Auditor. I'm here to present a brief update on our activities since our last meeting. Since we've last met, we have issued two audit reports, both of which will be heard um later this morning. This includes the fire rescue department, Life Guard Services Audit, and also includes the Real Estate Assets Department, Airports Division Audits. We have four audit reports are in progress. And these are being written and developed. This includes the citywide other special funds, the annual mission bay fund audit, uh, the city's fiscal sustainability and financial condition, business improvement district audits as well. These are reports again, the field work has completed. We're in the report writing stage and we expect to issue them at least drafts, if not final this fiscal year. In addition, we have audits that are in progress in terms of field work. Um this includes the code enforcement division. Just for the record, this was shown previously as neighborhood code compliance, but there is a change in name, so we're referring this to the code enforcement division audit. Also the San Diego Police Department property and evidence room. Um just um to note earlier in the week, the grand jury issued a report on property evidence room, uh, which is a little bit of a conflict, but we're meeting following up with the police department next week to see um uh if there's areas we could um cover that wasn't covered by the grand jury report. In addition, uh we've started the public utilities overhead rate report, and also um our starting the annual central stores audit for fiscal year 2015. That's being done by MGO, our outside accountant. And then also I'd just like to bring to the committee's attention other issues. Um we've been focused um on the month of May and also the this past week on developing our risk assessment that we do each year to develop our annual audit work plan. So our goal is to finish that and report it out this month. In addition, uh we followed up on the recommendation follow-up based on direction from the audit committee. Um it's our focus has been on the 20 reports or 20 recommendations that we were issued in fiscal year 2009 to 2011. We're expecting to report those out to the committee in July.
openpublica.com