Special Audit Committee Meeting - November 18, 2022
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Special Audit Committee Meeting - November 18, 2022
This special meeting of the Audit Committee was held on Friday, November 18, 2022, via teleconference under California Government Code Section 54953E. Present were Vice Chair Moreno, Committee Member Halpern, and Committee Member Tabshuri; Chair Whitburn presided. Committee Member Mafia was absent. The committee approved prior minutes, reviewed a performance audit of the city's towing program, received the auditor's monthly activity report, and held a closed session for the performance evaluation of the City Auditor.
Consent Calendar
- The committee unanimously approved the committee actions of October 12, 2022. No public comment or discussion.
Public Comments & Testimony
- No public comments were offered for any agenda item, including the consent calendar, non-agenda public comment, item 1 (towing audit), item 2 (monthly activity report), or item 3 (closed session).
Discussion Items
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Item 1: Performance Audit of the City's Towing Program
- City Auditor Andy Hannow, Principal Performance Auditor Nathan Otto, and Senior Performance Auditor Megan Jaffrey presented the audit, requested by Chair Whitburn to examine financial, equity, and transparency issues.
- Key findings:
- SDPD has strong internal controls but has not presented a comprehensive program report to council since 2013.
- Towing decreased 39% from fiscal year 2017 to 2021, but parking complaints increased.
- The city's towing and storage rates are the lowest among benchmarked cities.
- The top towing reasons (expired registration over six months, 72-hour parking violations, five or more unpaid citations) are three to five times more likely to result in a lien sale compared to other tows.
- Nearly 32,000 vehicles were sold at lien between July 2016 and March 2022.
- Council Districts 4 and 8 had significantly higher rates of disproportionate impact tows; these districts have the two lowest median household incomes.
- The city subsidizes the program by approximately $2 million annually due to low cost recovery and losses from lien sales. Lien sales recover less than 50% of accrued fees; for the top two tow reasons, the average sale price recovers only 25% (e.g., average fees owed $2,200 vs. sale price $524 for 72-hour violations).
- SDPD agreed to two of three recommendations (comprehensive reporting and updating council policy) but disagreed with the third (compiling information on alternative policies). The auditor encouraged the council to request that information.
- Committee discussion:
- Vice Chair Moreno expressed concern about disproportionate impact on low-income residents, noted the $2 million subsidy could be redirected to other programs, and supported exploring alternatives such as a "text before tow" system, booting instead of towing for expired registration, and income-based payment plans. She offered a friendly amendment to the motion to include the Chief Operating Officer, SDPD, Office of Race and Equity, and other departments.
- Committee Member Tabshuri noted that working poor and military members are disproportionately affected and suggested towing should be a last resort with notification.
- Committee Member Halpern questioned the trade-off between cost recovery and social equity; the auditor clarified that eliminating lien sales could reduce losses but may be constrained by state law.
- Chair Whitburn thanked SDPD for strong controls.
- Motion: Chair Whitburn moved to accept the report, request a presentation at a full City Council meeting, and direct Council District 3 to work with stakeholders to explore impacts and bring recommendations. The motion was amended to include the COO, SDPD, Office of Race and Equity, and other relevant departments. The amended motion passed unanimously (4-0).
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Item 2: City Auditor's Monthly Activity Report
- City Auditor Andy Hannow reported that since the last meeting, one report was issued (towing audit). Audits in progress: IT audit of Fire-Rescue 911 system (exit conference held, expected December 2022), homeless services contracts, CIP program, classified employee hiring; one in planning (fire prevention); eight not started. One topic selected for re-review: pedestrian safety (originally audited in 2016). Since FY23 start, eight reports issued with 25 recommendations. The office will undergo peer review by ALGA in December 2022.
- This item was informational; no motion required.
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Item 3: Closed Session – Public Employee Performance Evaluation (City Auditor)
- The committee adjourned to closed session to evaluate the City Auditor’s performance under California Government Code Section 54957. No reportable action was announced. The next regular meeting is scheduled for Wednesday, January 25, 2023 at 9:00 AM.
Key Outcomes
- Unanimous approval of previous meeting minutes.
- Unanimous adoption of the motion to accept the towing audit report, present it to the full City Council, and direct a multi-departmental effort to develop policy changes to address impacts on vulnerable populations and improve program transparency.
- The City Auditor's monthly activity report was received and acknowledged.
- The committee entered closed session for the performance evaluation of the City Auditor; no reportable action was announced.
Meeting Transcript
Well, good afternoon, everybody, and welcome to today's special meeting of the audit committee. Thank you for being with us. For the record, committee member Mafia will not be joining us this afternoon. Until further notice, committee meetings will be conducted pursuant to California government code section 54-953E, which allows the city to use teleconferencing and to provide the public an opportunity to address the committee via a call-in option or an internet-based services option. This meeting is being televised and live streamed on the city's website, and the committee liaison will help the public to comment using the Zoom webinar feature. Members of the public who wish to provide testimony via a call-in or internet-based services option must enter the virtual speaking queue within five minutes after the conclusion of in-person public testimony or before the virtual speaking queue is exhausted, whichever occurs first. This will allow for better meeting management between the two platforms, and it will ensure that the committee is able to manage and conduct city business. As we go forward, I'll go over the specifics on how to join the webinar and we'll give details on how people can offer public testimony today. At this time, I will call to order the special audit committee meeting of Friday, November 18, 2022. And I will now call the role. Vice Chair Moreno. Moreno present. Committee member Halpern. Halpern present. And committee member Tabshuri. Tab Shuri present. Very well. As we mentioned, uh committee member Mafia will not be joining us today. I'm Stephen Whitburn, so we have a quorum. This committee is also fortunate to have several attendees who will contribute to our efforts. City Auditor Andy Hannow, City Attorney Mara Elliott, Chief Compliance Officer Christiana Gagger, and Amy Lee from the Office of the Independent Budget Analyst. Thanks to each of you for being here this afternoon as well. Members of the public who wish to provide a comment here in person, please complete a speaker slip located at the entrance of chambers and place it in the box indicated at the speaker's lectern at the front of the room. Please do so in a timely manager uh manner to ensure proper meeting management. Members of the public can also join uh the webinar by computer, tablet, or smartphone by accessing the link, which is listed on the online section to the preamble language of the agenda or on the city's web page. To join the Zoom webinar by telephone, you may dial either 1669-254-5252 or 1646-828-7666. And when prompted, input webinar ID 161-700-3853 Pound. And that information is also available on the agenda. The public may view the meeting on City TV, and that is Channel 24 for Cox Communication and Spectrum, or Channel 99 for ATT Uverse, or you may view the meeting online by going to the City Council Committee's homepage at Sandiego.gov and selecting the City TV Live Webcast blue button on the right hand side of the page. Please note that if you are watching City TV uh online, uh there may be a delay. Uh please participate via the audio on your phone and mute your TV or computer when it is your turn to speak. Uh as always, thank you to our City TV staff for broadcasting our meeting today. If you're in person, please come up to the reserve seats at the front of the room when your name is called and be prepared to come up to the lectern in the order called. If you join the webinar electronically, you will receive a pop-up notice to select to unmute your device. If you've called into the meeting by cell phone or landline, press star six on your phone to unmute yourself. Please wait until the item to wish you which to speak has been called before raising your hand to speak. If you raise your hand during a non-comment period, your hand will be lowered. When I introduce the item you would like to comment on, please raise your hand by either tapping the raise your hand button on your device or by pressing star nine on your phone. When our committee manager, Tyler Birch indicates that it's your turn to speak, he'll call you by your name or he will read out the last four digits of your phone number. At that time, please unmute your phone by tapping the unmute button on your device or by pressing star six on your phone. Also, please mute the volume on your TV or computer before you begin to speak. We will now take up the approval of the committee actions of October 12th, 2022. Tyler, please proceed with public comment. Thank you, Chair Whipburn. The public comment period for the committee actions of October 12, 2022 is now open. If you are in person, please be sure to have your speaker slip submit and come up to the reserve seats at the front of the room when your name is called and be prepared to come up to the lectern in the order called. Members of the public who wish to provide testimony via a call-in or internet-based service option must enter the virtual speaking queue within five minutes after the conclusion of in-person public testimony or before the virtual speaking queue is exhausted, whichever occurs first. If you've already joined the Zoom webinar online or by phone, please raise your hand if you wish to speak. If you're watching on C T V or the live stream online and would like to call into the meeting, please call 1669-254-5252. If you're watching on C T V or the live stream online and would like to call into the meeting, please call 1669-254-5252 and when prompted, input webinar ID 161-700-3853 pound.
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