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HomeMy WebLinkAbout06.07.2023 SP Minutes @6:30H SAA f 77 J CALL TO ORDER ROLL CALL AGENDA REVIEW No changes. MINUTES SPECIAL MEETING MEASURE W CITIZENS' OVERSIGHT CONMUTTEE CITY OF SOUTH SAN FRANCISCO REMOTE PUBLIC COMMENTS No public comments made. Wednesday, June 7, 2023 6:30 p.m. IN -PERSON MEETING Chair Del Rosario called the meeting to order at 6:39 p.m. Chair Del Rosario, present Vice Chair DeGuzman, present Committee member Zemke, present Committee member Brosnan, present Committee member Rey, absent. WELCOME AND INTRODUCTIONS Finance Director Karen Chang briefly went over the agenda for the evening. MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes from the meeting January, 23, 2023 and April 5, 2023. Motion — Committee Member Zemke/Second — Chair Del Rosario: To approve the Minutes from the meeting January, 23, 2023 and April 5, 2023, by roll call vote: AYES Committee member Brosnan, Committee member Zemke, Vice Chair DeGuzman, Chair Del Rosario NAYS: None; ABSENT: Committee member Ray; ABSTAIN: None. Motion passes unanimously. 2. Presentation to the Measure W Citizen's Oversight Committee regarding Roles and Responsibilities. Assistant City Attorney Ali Wolf gave a brief introduction to her presentation. She stated it was important to revisit so Committee members can reestablish the purpose of the Measure W roles and responsibilities. Vice Chair DeGuzman asked if she would be stating the legislative intent, and Assistant City Attorney Wolf answered that it would be included in the presentation. She explained that Measure W was approved by the voters by a half cent sales tax. It was approved November 3, 2015, and the tax went into effect April 1, 2016. Assistant City Attorney Wolf stated the intent was that it would be a general tax. There are two different taxes that could be adopted: general tax and special tax. Voters approved the general tax, which essentially establishes the way in which the city can spend the tax dollars. In the case of Measure W, the tax dollars may be spent for any legitimate government purpose, even though there are certain priorities that were listed in the tax that was adopted. Vice Chair DeGuzman stated that the government purpose is very broad language, and anyone can define it. For a governmental purpose, it is broad, and it includes certain priorities of what the funds could be spent on. Vice Chair DeGuzman asked if the Committee is supposed to go down the expenditure list and go through each line item to see if they are for government purposes. Assistant City Attorney Wolf responded that there are challenges in understanding the role of committee vs the role of staff members. It's the role of staff member to spend funds on an individual project in a way that's consistent with the Measure W Tax Measure that voters approved. It's not necessarily the role of the Measure W committee to go line by line through project expenditure and spending to determine whether each individual expenditure was a government purpose. The purpose is to get an overall understanding of the revenues that come in from the tax, the expenditures that have been made on projects, and if that is consistent with the Measure W tax. It's to ensure the independence of the Measure W committee and staff that are doing the day-to-day operations to ensure that the funds are being spent in the way that the City Council has directed. Vice Chair DeGuzman asked if the City Council budgeted for the specific expenditure, then is it already covered as a government purpose. Assistant City Attorney Wolf confirmed. Vice Chair DeGuzman then asked if it's up to the City Council to analyze if the expenditures are for governmental purposes. Assistant City Attorney Wolf explained that the City Council does not approve every single expenditure because there are different levels of spending authority throughout the City. For example, department heads and city managers have different spending authority, if the spending meets a certain amount, then the City Council would have to approve it. Line -by-line is generally left to the staff to ensure how a project is supposed to proceed and is managed by the department head/manager. All revenue and expenditure are brought forth by the finance director, so the Measure W committee is able to see what the City has been spending Measure W funds on. Chair Del Rosario was under the impression that the Committee is supposed to go line by line through expenditures. She thought they were missing something because they don't have all the details. Assistant City Attorney Wolf explained that while the Committee has the right to access detail records, it would not be considered as part of the role of the Committee to go line by line through each spending item. The role of the committee is partially reviewing the audit results. Committee member Brosnan asked if there was an inappropriate use of funds, how would the Committee see that? Finance Director Chang stated that each project manager will review and approve the vendor invoices, then finance will review the invoices again to make sure that there's enough supporting documents and issued payments. Committee member Brosnan explained that he was playing devil's advocate since they are the Committee that provide oversight. Committee member Brosnan does not agree that they do not get the detailed information. Committee member Zemke expressed his opinion that what he is asking to do is different than what the auditors do. Finance Director Chang informed the Committee that she would invite the auditors back in the Fall to explain the audit process. Committee member Brosnan asked how he could evaluate the audit results. Finance Director Chang stated that based on the auditor's presentation and if there's any issues, auditor will issue audit findings. Committee member Brosnan asked if he gets the detailed revenue and expenditure report, will he be able to see the revenue income and see that there are expenditures by month? Assistant City Attorney Wolf stated that part of what the voters approved is for the Committee to see how Measure W funds are being spent towards City projects. The Committee's role is to ensure the money is spent on those expenditures approved by the Council. Vice Chair DeGuzman asked if something is presented to them and they have some questions about the MEASURE W COC SPECIAL MEETING MINUTES June 7, 2023 PAGE 2 numbers or the expenditure, can they have a talk with the auditors about it? Assistant City Attorney Wolf stated that communications with the auditor is the responsibility of staff. The Measure W committee would be able to talk to the auditor in a public meeting or through staff regarding any questions. Finance Director Chang stated that there was a hierarchy of City staff reviewers. If someone has a question, they should go to the Finance Director first and then the City Manager. 3. Presentation and Discussion on Measure W Financial Update and FY 2022-23 Audit Calendar Finance Director Chang gave a brief overview of the Financial Status as of April 30, 2023. As of today, June 7, 2023, the City has received revenue of about $10 million instead of $8 million. The City is on track in terms of revenue projections. The City is projecting higher revenue next fiscal year if the economy continues. For the debt .service payment, $8.2 million covers two bonds. If the City starts to pay 2022A bond debt service payment, the total will be about $13 million. Committee member Brosnan asked as they move on from the completed projects, is there a line item that speaks specifically to maintenance, to these assets for the next 30 years? Finance Director Chang stated that that was a good point, and if there is excess money, they'll be sure to mention that the concern regarding maintenance to staff. Committee member Brosnan expressed that there were not enough parking for the PD Building. As the Police Department building was completed, Finance Director Chang responded that she's not sure what else can be done in terms of parking. On the audit calendar, there are two times scheduled for when the Committee will meet with the auditor. One time will be during the interim audit. The purpose of this is for the auditor to come in and check the internal controls, i.e. whether there might be any weakness that is susceptible to fraud. The auditor will pick the samples more closely related to the identified weakness. There is a time lag, and the auditors will not come and audit until they have everything. Therefore, the auditors will come at the end of the review process when everything is entered. Sometimes they focus on fixed assets. Based on Finance Director Chang's previous experience with auditor, she stated that each year auditor will have a slightly different focus for their audit based on information that auditors received during the interim audit questionnaire. Member Brosnan stated that it's their understanding that Committee hasn't been meeting with auditor during the last few years. Finance Director Chang responded that she hoped that the process that the Committee experienced last year was a good process. The auditor will review the end result of the audit with the Committee members, staff will help to draft a report for the Committee to present to the City Council. Chair del Rosario would like the auditor to come in to discuss before she has to sign anything. Staff should schedule a time for the Committee to meet with the auditor during a regular meeting of the Measure W Committee. Chair del Rosario asked if the Committee would have an opportunity to see the report prior to the meeting. Finance Director Chang explained that the draft audit will be in November or December, so the meeting in October would be the auditor explaining the process, not the results. The auditor is able to provide the Committee with preliminary results of the audit. Chair del Rosario inquired whether the auditor is performing the audit in person or remotely. Director Chang stated that they conduct the audit remotely. There is a portal for the requested backup and supporting documents to be uploaded for the auditor's review during audit. The City can request the auditor to work on the premises during audit, however, it seems more efficient for the auditor to work remotely. 4. Consider and Move to Approve Measure W Committee Regular Meeting Schedule Change to Quarterly Regular Meetings Finance Director Chang stated that the Committee approved bi-monthly meetings in 2016. Finance Director Chang explained that there is currently only one type of revenue at the end of each MEASURE W COC SPECIAL MEETING MINUTES June 7, 2023 PAGE 3 quarter. It is more meaningful to make the meeting quarterly. Committee members asked whether there is any legislative intent that says that we have to meet bi-monthly? Assistant City Attorney Wolf responded that the Committee established regular meetings for every even number month. It is up to the Committee to amend the regular meeting schedule. Committee member Zemke stated that they seemed to just choose every two months. Committee member Brosnan explained how the process has changed over time. He spent many meetings talking about how that has changed, and then COVID-19 hit. Now they are back to meeting in person, and he thinks they have a group that wants to be active. Finance Director Chang stated that she could still send out the quarterly reports. It's just a lot of information. If the Committee prefers, staff can run the report on a regular basis and continue meeting every two months. Chair Del Rosario stated they think they saw a report that was slightly more detailed with the civic campus paving program and debt service. Committee member Brosnan wants to see the individual invoice. Finance Director Chang asked whether everyone else wants to see that so much detail as well? Finance Director stated that it is not difficult to run the report but it's not the Committee's role to review each individual expenditure. Finance Director Chang suggested a review of what documentation other oversight committees get. The Committee wants to meet regularly. When the pool is done, there will not be a lot of activity. There will not be a lot of funds coming out of Measure W. Finance Director Chang can reach out to the Director of Capital Projects Gilchrist to set up a tour of the LPR since Chair del Rosario missed the last one. Committee member Zemke asked what would fit best? The Committee must review the audit process, so maybe the Committee should have a staggered schedule and always have the option to call a special meeting. Finance Director Chang will bring the item back in a few months and revisit the question of changing the meeting schedule. They will report back to the Committee in August. A Brown Act training will be provided, and staff will bring back the status and examples of other City's oversight committees. ADJOURNMENT Being no further business, Chair Del Rosario adjourned the meeting at 8:00 p.m. Submitted by: F-M�-L•l`r,Secretary Approved by: Del Fsario Chair Approved by the Measure W Citizens' Oversight Committee: 5417368.1 MEASURE W COC SPECIAL MEETING MINUTES June 7, 2023 PAGE 4