[00:00:04]
ON ON ALL, THIS IS THE BOARD FINANCE COMMITTEE MEETING OF THE EAST BAY REGIONAL PARK DISTRICT.
WE ARE MEETING ON WEDNESDAY, OCTOBER 8, AND WE'RE BEGINNING THE MEETING AT 11:05.
WITH THAT, I'M GOING TO ASK OUR RECORDING,
[Roll Call]
DEBORAH FULLER, TO TAKE THE ROLE OF THE COMMITTEE.>> ASSISTANT GENERAL MANAGER SPAULDING.
>> TODAY'S MEETING IS BEING HELD PURSUANT TO THE BROWN ACT.
STAFF IS PROVIDING LIVE AUDIO AND VIDEO STREAMING.
MEMBERS OF THE PUBLIC WISHING TO MAKE A PUBLIC COMMENT MAY DO SO BY PROVIDING A COMMENT IN PERSON, JOINING LIVE VIA ZOOM WITH A LINK PROVIDED ON THE AGENDA LOCATED ON THE PARK DISTRICT WEBSITE.
IF THERE ARE NO QUESTIONS ABOUT THE MEETING PROCEDURES, WE WILL BEGIN.
FIRST ON THE AGENDA IS APPROVAL OF MINUTES. WE HAVE TWO.
[Approval of Minutes]
WE HAVE THE MINUTES PRESENTED FOR THE MEETING OF AUGUST 13 AND THE COMMITTEE MEETING FOR SEPTEMBER 10.IS THERE A MOTION TO APPROVE THESE TWO MINUTES?
>> SECONDED. ALL IN FAVOR SAY, AYE.
>> PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA ITEM 3, ARE THERE ANY REQUESTS TO SPEAK ON MATTERS NOT ON THE COMMITTEE'S AGENDA?
[Action Items]
>> ALL RIGHT. SO WE WILL MOVE TO ITEM FOUR ACTION ITEMS, THE FIRST ACTION ITEM BEING, RECOMMENDATION TO THE BOARD OF DIRECTORS TO ESTABLISH A DEFERRED COMPENSATION COMMITTEE AND ITS CHARTER.
>> GOOD AFTERNOON, DEB SPAULDING, AGM OF FINANCE AND MANAGEMENT SERVICES.
I AM GOING TO WALK YOU THROUGH BRIEFLY THE MATERIALS THAT WERE PROVIDED IN YOUR PACKET, STARTING BY GIVING YOU SOME HISTORY OF WHAT OUR DEFERRED COMPENSATION ADVISORY COMMITTEE IS.
THE DEFERRED COMP ADVISORY COMMITTEE WAS ESTABLISHED IN 2017, BUT WITHOUT FIDUCIARY RESPONSIBILITY.
IT IS COMPRISED OF FIVE MEMBERS, AND ONE MEMBER IS FROM AFSCME, ONE FROM THE POLICE ASSOCIATION, ONE RETIREE MEMBER, ONE FROM HUMAN RESOURCES, AND ONE MEMBER FROM THE FINANCE DEPARTMENT.
THAT COMMITTEE WAS ESTABLISHED, BUT FIDUCIARY RESPONSIBILITY HAS BEEN MAINTAINED BY THE BOARD SINCE THEN.
IN MARCH 2025, THE BOARD REQUESTED STAFF TO LOOK INTO OPTIONS TO DELEGATE THAT FIDUCIARY RESPONSIBILITY.
STAFF HAS DONE THAT AND HAS COME UP WITH A RECOMMENDATION, WHICH I'LL WALK THROUGH.
THEN WE HAVE AN ALTERNATE RECOMMENDATION FROM THE DEFERRED COMP ADVISORY COMMITTEE.
THE STAFF RECOMMENDATION IS THAT THE EXISTING DEFERRED COMP ADVISORY COMMITTEE WOULD BE EXPANDED TO ADD TWO ADDITIONAL MEMBERS WITH LEGAL AND EXECUTIVE EXPERTISE.
THE COMMITTEE WOULD HAVE A FORMAL CHARTER THAT WOULD ESTABLISH THAT FIDUCIARY RESPONSIBILITY BY PROVIDING CLEAR QUALIFICATIONS FOR MEMBERS, EXPLICITLY DEFINING THE GOVERNANCE STRUCTURE, DESIGNATING RESPONSIBILITIES FOR BOTH PLAN ADMINISTRATION AND INVESTMENTS, PROVIDING INDEMNIFICATION AND FIDUCIARY TRAINING FOR MEMBERS, AND THEN EXPLICITLY DESIGNATED [NOISE] POSITIONS BY JOB TITLE TO ENSURE THAT THEY HAVE THE EXPERTISE, AND ALSO TO ENSURE THAT WE HAVE CONTINUITY.
THIS RECOMMENDATION ALIGNS WITH NAGDCA BEST PRACTICES, AND NAGDCA IS THE NATIONAL ASSOCIATION OF DEFERRED COMPENSATION ADMINISTRATORS.
IT ALSO BALANCES REPRESENTATION, SO WANTING TO HAVE MEMBERS THAT ARE REPRESENTING THE FULL DISTRICT, ALONG WITH SUBJECT MATTER EXPERTISE.
IT REDUCES LEGAL AND OPERATIONAL RISK TO THE DISTRICT BY BRINGING MEMBERS ONTO THE COMMITTEE THAT HAVE THAT EXPERTISE.
THE RISK OR DOWNSIDE OF THIS RECOMMENDATION FOR SOME MEMBERS IS THIS PERCEIVED IMBALANCE OF POWER AND CONCERN THAT THE CURRENT VOTING MEMBERSHIP WOULD BE CHANGED.
THEN LIKE ANY CHANGE, TRANSITION CAN BE HARD AND CHANGE MANAGEMENT CAN BE HARD.
THAT'S ALSO A DOWNSIDE OR A RISK.
THE DEFERRED COMPENSATION ADVISORY COMMITTEE HEARD THE STAFF RECOMMENDATION,
[00:05:01]
AND THEY HAVE COME UP WITH THEIR OWN PROPOSAL, WHICH I WILL SUMMARIZE HERE, WHICH IS TO MAINTAIN THE EXISTING FIVE MEMBER VOTING STRUCTURE.THEY SAID ADDING THOSE TWO MEMBERS COULD BE DONE, BUT AS NON VOTING ADVISORY ONLY MEMBERS.
THEY WOULD LIKE TO PRESERVE THE EXISTING BYLAWS THAT THE COM HAS, AND THEY REALLY EMPHASIZE THE BENEFIT OF HAVING THIS REPRESENTATIONAL BALANCE.
THE BENEFIT, IT PRESERVES THAT REPRESENTATIONAL BALANCE.
THE DOWNSIDES OF THIS PROPOSAL IS THAT THE FIDUCIARY DECISIONS COULDN'T BE MADE WITHOUT THAT BINDING FINANCIAL AND LEGAL EXPERTISE.
THE CURRENT BYLAWS DON'T HAVE FULL FIDUCIARY PROTECTIONS AND DON'T HAVE ALL THE BEST PRACTICES, HIGHER EXPOSURE TO COMPLIANCE AND LEGAL RISKS.
THAT SUMMARIZES THE TWO COMPETING PROPOSALS YOU HAVE, AND OUR RECOMMENDATION FROM STAFF IS THAT THE FINANCE COMMITTEE RECOMMEND TO THE FULL BOARD OF DIRECTORS ADOPTING THE PROPOSED DEFERRED COMPENSATION COMMITTEE CHARTER AND ESTABLISHING A DEFERRED COMPENSATION COMMITTEE, AND THAT COMMITTEE WOULD HAVE THE FIDUCIARY RESPONSIBILITY FOR PLAN ADMINISTRATION.
I'D BE HAPPY TO TAKE QUESTIONS.
WE HAVE JESSICA ROMEO HERE AS WELL, AND SOME MEMBERS FROM THE COMMITTEE ARE HERE AS WELL.
>> JUST A QUESTION ABOUT YOUR RECOMMENDATION.
IF THE BOARD WERE TO APPROVE THE RECOMMENDATION, THAT WOULD BE THE VERSION THAT HAS TWO ADDITIONAL MEMBERS OF THE COMMITTEE, ONE FROM THE GMS OFFICE, AND ONE FROM THE LEGAL OFFICE?
>> OKAY. QUESTIONS TO THE COMMITTEE.
>> I GUESS WE CAN START WITH STAFF'S RECOMMENDATION, SO THAT RECOMMENDATION CALLS FOR A CHARTER INSTEAD OF BYLAWS.
THE CHARTER WOULD ADDRESS THE FIDUCIARY FUNCTION ISSUE, WOULD CORRECT THAT AND CHANGE IT TO SOMETHING MORE, I DON'T KNOW, FOR LACK OF A BETTER WORD DEFENSIBLE.
>> WE HAD OUTSIDE COUNSEL HELP US DRAFT THIS CHARTER SO THAT WE COULD HAVE CLEAR RULES BRINGING THAT FIDUCIARY RESPONSIBILITY CLEARLY INTO THE COMMITTEE.
>> WE COULD ALTER THE STAFF RECOMMENDATION TO PRESERVE THAT, BUT CHANGE SOME OTHER PART OF IT.
CHANGE THE COMMITTEE MAKEUP, POSSIBLY.
>> I THINK THAT'S A HARD QUESTION FOR STAFF TO ANSWER.
>> I DON'T WANT TO BE TOO SPECIFIC UNTIL THE OTHER COMMITTEE MEMBERS HAVE SPOKEN. THAT'S WHY.
>> I JUST WANT TO TAKE YOU BACK TO THE BEGINNING OF THE YEAR AT THE BEGINNING OF EACH YEAR.
WE'VE HAD OUTSIDE COUNSEL COME AND DO FIDUCIARY TRAINING AND ONE OF THE POINT THAT THAT LAWYER HAS EMPHASIZED IS YOUR DUTY OF RECRUITING NOMINATION.
THIS IS ONE OF THE THINGS THAT YOU WILL RETAIN YOUR FIDUCIARY OBLIGATION TO PRUDENTLY DELEGATE YOUR DUTIES.
I JUST WANTED TO POINT THAT OUT.
>> I DON'T THINK THAT WAS INCLUDED IN THE STAFFS.
>> I THINK I SUPPORT THIS, BUT I'D LIKE A LITTLE BACKGROUND.
I THINK THE MAIN POINT OF CONTENTION IS GOING 3-2 MAJORITY OF MEMBERS BEING UNION MEMBERS OR I THINK THE RETIREE ASSOCIATION PROBABLY COULD BE CONSIDERED UNION.
WE HAVE TWO MANAGEMENT, AND NOW WE'RE GOING TO CHANGE THE BALANCE TO A FOUR TO THREE. I DON'T HAVE A PROBLEM WITH THAT.
I'M WONDERING IS ANYTHING THIS CONTROVERSIAL IN THIS GROUP'S DELIBERATIONS.
I NOTICED THERE WAS A VOTE OBVIOUSLY TO MAKE THIS CHANGE TODAY. IT WAS THREE TO TWO.
I COULD HAVE GUESSED THAT, AND I COULD BET WHO THEY WERE.
IS THERE ANYTHING THAT CONTENTIOUS ABOUT THIS WHOLE DEAL?
>> I THINK THAT'S A GREAT QUESTION TO ASK.
THE RESPONSIBILITY OF THE MEMBERS OF THE COMMITTEE ARE TO BE RESPONSIBLE TO THE 457 PLAN ITSELF.
YOU'RE REALLY SUPPOSED TO BE LOOKING OUT FOR THE BEST INTERESTS OF ALL PEOPLE WHO ARE IN THE PLAN, ALL PLAN PARTICIPANTS.
ALTHOUGH YOU'RE COMING TO THE TABLE WITH YOUR BACKGROUND, WHETHER IT'S KNOWLEDGE OR WHETHER IT'S PEOPLE THAT
[00:10:03]
YOU WORK WITH THAT YOU HAVE THAT HISTORY WITH, YOU'RE BRINGING THAT TO THE TABLE.BUT WHEN YOU'RE AT THE TABLE, YOU'RE REPRESENTING THE BEST INTEREST OF THE PLAN.
YOU'RE NOT REPRESENTING A MANAGEMENT PERSPECTIVE OR A UNION PERSPECTIVE, YOU'RE LOOKING FOR THE BEST INTERESTS OF THE WHOLE PLAN.
I THINK THE SYMBOLISM IS WHAT'S MAKING PEOPLE CONCERNED ABOUT THE CHANGE, BUT FUNDAMENTALLY THE WORK OF THE COMMITTEE IS SUPPOSED TO BE TO MAKE SURE THAT WE HAVE THE BEST PLAN FOR THE DISTRICT FOR ALL EMPLOYEES TO BENEFIT FROM.
>> I WON'T SUGGEST IT IS THE FIRST TIME I'VE EVER EVEN HEARD ABOUT THIS COMMITTEE, BUT A COUPLE OF YEARS AGO, THERE WAS SOME CONTENTION OVER GOING FROM ICMA THAT WOULD EMPOWER.
>> THERE WAS CONTENTION AND QUESTION.
AS I READ THIS, EVEN YOUR PROPOSED WAY THE COMMITTEE IS GOING TO BE SET, ONLY GOING TO BE ADVISORY THAT THEY WOULD DEFINITELY NOT HAVE THE POWER TO GO.
WE DON'T LIKE EMPOWER NOW, WE WANT TO GO TO SOMEBODY ELSE.
>> JESSICA ROMEO, AGM OF HR. YES, AND NO.
SO ANY CONTRACT ENTERED INTO BY THE DISTRICT WOULD COME TO THE BOARD, AND SO YES, THEY WOULD BE MAKING THAT RECOMMENDATION AND SELECTING, AND THEN YOU GUYS WOULD BE APPROVING THAT JUST LIKE WITH ANY OTHER CONTRACT.
IT IS A LITTLE BIT DIFFERENT BECAUSE THEY WOULD BE MAKING THAT RECOMMENDATION BASED ON THEIR FIDUCIARY DUTIES.
AND SO WHEN BRINGING THAT TO YOU, IT WOULD BE DIFFICULT IF YOU GUYS DIDN'T APPROVE IT, BUT IT DOESN'T GIVE ALL OF THE POWER BACK TO YOU, ESSENTIALLY.
THEY WOULD STILL BE MAKING THE SELECTION, AND YOU GUYS WOULD JUST BE APPROVING IT.
>> [INAUDIBLE] IS IT WORKING OR ISN'T IT WORKING?
>> WE DID NOT BUILD THAT IN, BUT AS YOU HAVE THE POWER TO DELEGATE YOUR AUTHORITY, I BELIEVE YOU AT ANY POINT COULD TAKE BACK THAT AUTHORITY.
>> GREAT. THANK YOU VERY MUCH.
>> WHAT'S THE DOWNSIDE TO RETAINING THE FIDUCIARY ROLE IN THIS BOARD OF DIRECTORS? THE DISTRICT BOARD?
>> IF YOU CAN FLIP IT, WHAT'S THE ADVANTAGE OF HAVING THE ADVISORY COMMITTEE BECOME A FIDUCIARY?
>> I THINK FOR THE ADVISORY COMMITTEE TO BECOME A FIDUCIARY WITHOUT ADDING THE EXPERTISE, WE ARE OPENING OR EVEN ADDING THE EXPERTISE WITHOUT THE VOTING ABILITY.
WE ARE OPENING OURSELVES UP TO MORE LIABILITY BECAUSE IF THOSE TWO ADVISORY MEMBERS GAVE ADVICE AND IT WASN'T FOLLOWED, WE ARE THEN OPENING OURSELVES UP TO SAYING, WELL, THIS FIDUCIARY BOARD DIDN'T FOLLOW AND THEY BREACHED THEIR FIDUCIARY DUTY.
THAT WOULD OPEN US BACK. GO AHEAD THEN.
>> IF I MAY, I THINK CALLING THE QUESTION YOU'RE ASKING IS, WHAT IF YOU DISAPPROVE THE STAFF RECOMMENDATION AND THE DEFERRED COMPENSATION ADVISORY COMMITTEE RECOMMENDATION AND JUST KEEP THE FIDUCIARY DUTY WITH THE BOARD?
>> SO OUR OUTSIDE COUNSEL, AND THIS WAS BROUGHT UP A COUPLE, I THINK IT WAS IN 2022.
THE BEST PRACTICES THAT ARE SET OUT BY NAGDCA, THE NATIONAL ASSOCIATION OF GOVERNMENTAL DEFINED COMPENSATION PLANS, THEY ACTUALLY DON'T RECOMMEND THAT THE GOVERNING BODY OF THE AGENCY BE THE FIDUCIARY.
IT'S OKAY FOR YOU TOO, BUT IT'S NOT RECOMMENDED, AND THAT'S BECAUSE YOU ALL ARE ELECTED TO YOUR VARIOUS ROLES, NOT NECESSARILY BASED ON THE EXPERTISE AND LEGAL OR FINANCIAL THINGS, BUT FOR OTHER REASONS.
THERE'S OTHER REASONS WHY YOU'RE SELECTED.
IT'S NOT EXACTLY THE RIGHT COMPOSITION TO HAVE EITHER.
ALTHOUGH IT'S NOT IT'S NOT PROHIBITED, THAT'S ALSO NOT THE RECOMMENDED COMPOSITION.
THEN IF YOU CHOOSE THAT YOU WOULD LIKE TO CONTINUE DOING THAT, WE WILL NEED TO CONTINUE BRINGING FIDUCIARY TRAINING TO YOU EVERY YEAR.
>> ALSO, THE INVESTMENT PLAN LINEUP, THE INVESTMENT POLICY,
[00:15:02]
[NOISE] ALL THAT WILL REMAIN THINGS FOR YOU TO DO.>> TO ME, WE ALREADY HAVE ACCESS TO ALL THE EXPERTISE THAT WE THINK WE NEED.
>> I JUST WANT TO REMIND YOU THOUGH THAT IT'S NOT BASED ON WHAT THE COMPOSITION OF THE BOARD IS RIGHT NOW.
YOU'RE MAKING THESE DECISIONS, NOT KNOWING WHAT THE COMPOSITION OF THE BOARD IS GOING TO BE.
RIGHT NOW, YOU'RE RIGHT. YOU HAVE A COUPLE OF LAWYERS ON THE BOARD?
>> NO, I'M JUST TALKING ABOUT WE HAVE THE ABILITY TO RETAIN EXPERTS AS CONSULTANTS.
>> THAT TO ME MAKES UP FOR ANY DEFICIENCIES IN OUR PERSONAL RESUMES.
IF WE HAVE ACCESS TO EXPERTS THAT WE THINK ARE HELPFUL TO MAKING THESE DECISIONS TO US.
BY THE SAME TOKEN, THEN I'M THINKING THAT WE SHOULD MAKE AVAILABLE TO THE COMMITTEE IF WE CREATE THE COMMITTEE AS FIDUCIARY, TO AS MANY WHATEVER EXPERTISE THEY NEED AS MEMBERS OF THAT COMMITTEE.
THEY HAVE THAT ROLE. I IMAGINE WE HAVE SOME PUBLIC COMMENT BEFORE WE BRING IT BACK TO US.
>> THERE'S AN ADDITIONAL PRESENTATION. I SEE.
>> HOLD OVER OFFICER GRANT BOYSEN [OVERLAPPING].
>> CAN YOU VERIFY WHETHER THIS IS A PRESENTATION OR A COMMENT?
>> IS THIS PART OF OUR MANAGEMENT PRESENTATION, OR ARE YOU MAKING A PUBLIC COMMENT NOW?
>> I'M THE CHAIRPERSON OF THE DEFERRED COMPENSATION ADVISORY COMMITTEE.
>> CAN YOU BRING THAT MIKE IN A LITTLE CLOSER? I CAN'T HEAR YOU AT ALL.
>> YOU HAVE THREE MINUTES THEN.
>> I'LL GIVE YOU A LITTLE BIT INTRO, MY NAME IS GRANT BOYSEN.
I'M THE CHAIRPERSON OF THE DEFERRED ADVISORY COMPENSATION COMMITTEE.
>> THE DEFERRED COMPENSATION ADVISORY COMMITTEE VOTED THREE TO TWO AGAINST THE STAFF PROPOSAL.
THAT CONSISTED OF MYSELF, REPRESENTATIVE 2428 AND THE RETIREE REP DI RZERIO, FORMER BOARD MEMBER VOTED AGAINST THIS.
NOT FOR THE REPRESENTATIONAL BALANCE PER SE, BUT BECAUSE OF SOME OF THE OBSCURE CHANGES THAT ARE PROPOSED UNDER THIS NEW CHARTER.
I'LL JUST NAME A FEW OF THOSE THAT WE THOUGHT THEY WERE ODD.
THE NEW CHARTER INCLUDES THE REMOVAL OF COMMITTEE MEMBERS BY THE GENERAL MANAGER.
THE CHAIRPERSON CAN ONLY BE EXECUTIVE STAFF.
WITH THE ELIMINATION OF ALTERNATE MEMBERS, COMMITTEE MEETINGS CAN BE HELD WITHOUT NOTICE, AND THE DEFERRED COMPENSATION ADVISORY COMMITTEE WOULD HOLD THE ABILITY TO INVEST PLAN ASSETS.
THAT'S ALL VERBIAGE THAT'S LISTED IN THIS NEW CHARTER.
MOVING FORWARD, DO YOU KNOW THAT THEY TALK ABOUT EXPERTISE IN THIS DOCUMENT MULTIPLE TIMES AND THAT THIS DEFERRED OR THIS ADVISORY COMMITTEE LACKS EXPERTISE? ONE OF THE MEMBERS IS A FORMER STOCKBROKER THAT SITS ON THIS COMMITTEE.
I MYSELF HAVE A BUSINESS DEGREE IN BUSINESS ADMINISTRATION, AND WE HAVE A RETIRED BOARD MEMBER SITTING ON THIS COMMITTEE.
THE LACK OF EXPERTISE, I THINK IT'S A STRANGE TOPIC TO BRING UP TEN TIMES IN THIS PROPOSED STAFF RECOMMENDATION.
LASTLY, WE JUST CAME BACK FROM NAGDCA, THE ANNUAL CONFERENCE THAT THE BOARD SENDS US TO EVERY YEAR.
AT THIS CONFERENCE, WE LEARNED THAT THE ADVISORY COMMITTEE ALREADY HAS IMPLIED FIDUCIARY LIABILITY BECAUSE WE PROPOSE THINGS TO THE BOARD IF CHANGES ARE NEEDED.
IF WE SIT DOWN AND THE FUND LINEUP NEEDS TO BE CHANGED, WE BRING THAT TO THE BOARD AND SAY THIS IS WHY.
WE HAVE AN ANNUAL OR A QUARTERLY REVIEW BY EMPOWER, WHO ACTS AS OUR FIDUCIARY.
WE PAY THEM TO DO THIS FUND LINEUP.
THEY BRING THINGS TO US IF CHANGES NEED TO BE MADE.
WE'VE REVIEWED THAT AS A COMMITTEE, AND THEN WE BRING THAT TO THE BOARD ALREADY.
THAT'S ALREADY THE STANDARD PRACTICE FOR WHAT THIS COMMITTEE DOES.
LIKE I SAID, THERE'S A LOT OF CHANGES THAT THEY'RE PROPOSING IN THIS STAFF RECOMMENDATION, AND I'M NOT A DUMB MAN, I DON'T THINK, BUT IT JUST DOESN'T MAKE ANY SENSE TO ME.
WE ALREADY HAVE A COMMITTEE. WE ALREADY HAVE RULES AND BYLAWS, AND I'M NOT SURE WHERE THIS IS COMING FROM.
>> YOU'RE OKAY WITH THE COMPOSITION THAT'S BEEN PROPOSED.
WE WOULD ADD TWO NEW MEMBERS, ONE FROM THE LEGAL OFFICE, ONE FROM THE GM'S OFFICE?
>> THE STANCE OF THE COMMITTEE VOTED AGAINST IT.
THAT INCLUDED, LIKE I SAID, THE MEMBER FROM 2428 AND THE FORMER BOARD MEMBER WHO SITS AS THE RETIREE REPRESENTATIVE.
[00:20:03]
WE VOTED AGAINST THE STAFF RECOMMENDATION.>> I WAS GETTING THE IMPRESSION YOU HAVE THESE SPECIFIC POINTS YOU JUST OUTLINED THAT ARE, TO YOU, ODD, THAT ARE IN THE NEW CHARTER.
BUT DID THE REASON FOR THE NO VOTE ALSO INCLUDE THE PROPOSED COMPOSITION OF THE COMMITTEE?
>> THAT WASN'T THE MAIN REASON WE VOTED FOR THAT.
WE VOTED AGAINST IT WAS BECAUSE OF THE CHANGES THAT THEY PROPOSED IN [OVERLAPPING].
>> THAT'S WHAT I WAS TRYING TO ZERO IN ON.
>> THANK YOU. ANY OTHER? YOU WANT TO ASK A QUESTION?
>> FOR WHATEVER REASON, I THINK I'M GOING TO GO WITH THE STAFF PROPOSAL JUST BECAUSE I THINK THAT'S THE BETTER WAY TO GO.
BUT THE FOUR OBJECTIONS, OBSCURE CHANGES THAT YOU MENTIONED, YOU TALKED QUICKLY, AND VERY ARTICULATELY, BUT I DIDN'T REMEMBER THEM.
BUT TO SUGGEST, I MEAN, I JUST AS A HUMAN BEING, I'M THINKING THAT YOU FOLKS, IF WE VOTE FOR THE BOARD FINALLY VOTES FOR THIS, YOU'RE GOING TO LOSE SOME QUOTES AND I STILL DON'T KNOW WHAT THAT IS POWER.
BUT TO SUGGEST THE GENERAL MANAGER COULD REMOVE ANYBODY, I DON'T KNOW WHY WE NEED THAT.
I WOULD THROW THAT OUT IMMEDIATELY AND REMIND ME THE OTHER THREE.
>> YES. IN THIS PROPOSED CHARTER, SOME OF THE THINGS INCLUDE COMMITTEE MEMBERS COULD BE REMOVED BY THE GENERAL MANAGER.
THE CHAIRPERSON OF THE COMMITTEE CAN ONLY BE EXECUTIVE STAFF MEMBER.
THERE'S THE ELIMINATION OF ALTERNATE MEMBERS.
MYSELF I HAVE AN ALTERNATE MEMBER AS A FIRE CAPTAIN.
IF I'M NOT ABLE TO MAKE A MEETING, THE FIRE CAPTAIN SEAN ANDERSON CAN STEP IN AND TAKE MY PLACE.
THE NEW PROPOSED CHARTER ELIMINATES THE ALTERNATES.
ADDITIONALLY, MEETINGS CAN BE HELD WITHOUT NOTICE.
THE DEFERRED COMPENSATION ADVISORY COMMITTEE HOLDS AUTHORITY TO INVEST PLAN ASSETS.
>> THE FIRST FOUR YOU MENTIONED, I'M WONDERING DOES I DON'T WANT TO PUT ANYBODY ON THE SPOT, BUT DOES MANAGEMENT HAVE A REASON WHY YOU WOULD WANT THE GENERAL MANAGER TO HAVE THE ABILITY TO ELIMINATE SOMEBODY, OR DO YOU HAVE-
>> LET'S COME BACK TO THAT. WHEN WE FINISH THE PUBLIC COMMENT, AND THEN ASK FOR RESPONSES.
>> GOOD AFTERNOON. MY NAME IS MEDO DARCY, AND I'M A REPRESENTATIVE OF ASM LOCAL 2428.
I AM CURRENTLY AN ALTERNATE ON THE DEFERRED COMP ADVISORY COMMITTEE.
I JUST BECAME AN ALTERNATE RECENTLY, TRYING TO PASS THE BATON ONTO THE NEXT GENERATION.
BUT I HAVE BEEN ON THIS COME SINCE ITS INCEPTION IN 2017.
AS YOU MAY KNOW, I'VE COME BEFORE YOU BEFORE, AS DENNIS MENTIONED, [INAUDIBLE] SEEMED TO COME UP IN THIS COMMITTEE.
I WANT TO BE CLEAR THAT THE [INAUDIBLE] THAT COME UP IN THIS COMMITTEE ARE NOT FROM THE COMMITTEE ITSELF.
IT SEEMS TO BE FROM OUTSIDE STAFF.
WE HAVE HAD A CONSISTENT PATTERN OF OUTSIDE STAFF WANTING TO REVISE BYLAWS, CREATE A CHARTER, ESTABLISH A NEW COMMITTEE.
ALL OF THESE OUTSIDE INFLUENCES, WE HAVE INVITED TO ATTEND THE COMMITTEE MEETINGS ON A REGULAR BASIS.
WE HAVE INVITED THEM TO ATTEND THE NAGDCA CONFERENCE, WHERE YOU GET TRAINING.
THOSE STAFF MEMBERS HAVE NOT COME TO THOSE TRAININGS.
WE RECENTLY WENT TO NAGDCA, AND A QUESTION WAS ASKED IN ONE OF OUR SMALL GROUPS WAS ABOUT HOW MANY OF YOU HAVE LEGAL ON YOUR COMMITTEE, AND SEVERAL OF THEM RAISED THEIR HAND.
HOW MANY OF YOU HAVE LEGAL AS A VOTING MEMBER, AND NONE OF THEM RAISED THEIR HAND AND THERE WAS SNICKERING IN THE ROOM, AND THE PERSON SITTING NEXT TO ME WAS AN ATTORNEY.
I SAID, ARE YOU A VOTING MEMBER? SHE SAID, ABSOLUTELY NOT. ARE YOU KIDDING ME? SHE GOES, HOW AM I SUPPOSED TO HAVE MY FIDUCIARY RESPONSIBILITY AND PUT THE NEEDS OF THE PARTICIPANTS FIRST AND THE NEEDS OF MY AGENCY FIRST.
SHE SAID, MY FIRST OBLIGATION IS FOR THE LIABILITY OF THE DISTRICT OR OF THE AGENCY.
AGAIN, I'M GOING TO ECHO WHAT GRANT SAID.
UNFORTUNATELY, I DON'T KNOW WHY HE WAS RELEGATED TO PUBLIC COMMENT.
WE WERE TOLD AT THE DEFERRED COMMITTEE MEETING THAT HE WOULD BE ABLE TO PRESENT THE DEFERRED COMPENSATION COMMITTEE'S RECOMMENDATION TO THE BOARD AND THAT HE WOULD NOT BE LIMITED TO THE THREE MINUTES, BUT UNFORTUNATELY, THAT CHANGED.
I REALLY THINK IT'S IMPORTANT THAT THE BOARD LISTEN TO THE COMMITTEE.
I WANT TO MAKE A COMMENT ABOUT THIS UNION VERSUS MANAGEMENT.
[00:25:04]
AS YOU KNOW, SOME OF YOU HAVE SEEN ME COME UP HERE BEFORE.I'VE BEEN VERY PROUD OF THIS COMMITTEE.
ALL OF THE PEOPLE ON THE COMMITTEE HAVE ALWAYS PUT THE PARTICIPANTS FIRST.
NUMBER 1, THERE WAS NO DISCUSSION ABOUT LABOR AND MANAGEMENT, ANY OF THAT.
THAT ALL SEEMED TO COME FROM THE OUTSIDE.
WHEN I WAS CHAIR, I REMEMBER BEING ASKED TO SPEAK WITH, I FORGET THE STAFF MEMBER, I THINK IT WAS THE CFO AT THE TIME, AND IT WAS LIKE, WHY DOES ASBE WANT THIS? WHY DOES, AND I'M LIKE, I DON'T KNOW WHAT YOU'RE TALKING ABOUT? I'M JUST THE CHAIR. LIKE, I'M NOT ASKING.
I'M JUST THE CHAIR OF THE COMMITTEE.
IT'S ALWAYS COME FROM THIS OUTSIDE INFLUENCE THAT IT'S ABOUT LABOR VERSUS MANAGEMENT.
WE'RE TRYING TO MAINTAIN THAT THIS IS A COMMITTEE FOR THE PARTICIPANTS.
IF YOU HAVE THESE OUTSIDE PEOPLE COMING IN THAT DON'T ATTEND THE TRAINING, DON'T EVEN ATTEND THE MEETINGS, DON'T EVEN WANT TO LISTEN, HOW ARE YOU GOING TO BE ABLE TO TRUST THAT INFORMATION? THE COMMITTEE VOTED AGAINST IT.
IT WASN'T ON THE UNION OR MANAGEMENT LINES.
IT WAS SIMPLY PEOPLE VOTING FOR THE PARTICIPANTS.
>> NO, WE DIDN'T RESTRICT GRANT.
THAT'S WHY WE ALLOWED SOME DIALOGUE TO GO BACK AND FORTH.
>> SURE. IT WASN'T NOTED AS PUBLIC COMMENT.
>> NOW I KNOW. I JUST WAS LIKE WANTING TO MAKE THAT CLEAR THAT THAT WAS NOT TOLD TO US.
>> IT WAS JUST ME, AND I WASN'T BEING RESTRICTIVE.
>> HELLO MEMBERS, BOARD. THANKS FOR THE TIME.
I AM THE 2428 APPOINTEE TO THE DEFERRED COMPENSATION ADVISORY COMMITTEE.
I HAD MANY OF THE SAME POINTS ALREADY EXPRESSED BY MEDO AND GRANT REGARDING THE STAFF PROPOSAL AND NEW CHARTER.
WE ARE CONCERNED ABOUT THE LANGUAGE THAT SAYS THAT THE DEFERRED COMPENSATION ADVISORY COMMITTEE WOULD INVEST PLAN ASSETS.
AS FOLKS MENTIONED, IT IS IRREGULAR TO HAVE LEGAL COUNSEL BE A VOTING MEMBER BASED ON OUR CONVERSATIONS AND REVIEW OF BEST PRACTICE DOCUMENTS THAT WE PERFORMED AT NAGDCA.
WE'RE CERTAINLY CONCERNED ABOUT THE AUTHORITY THAT IT PROVIDES THE GM TO REMOVE APPOINTED REPRESENTATIVES AND THE DECREASE IN TRANSPARENCY WITH THE ALLOWING OF SNAP MEETINGS AND EMAIL VOTING.
I TAKE VERY SERIOUSLY MY DUTIES AS A FIDUCIARY, AND I CENTER THE PARTICIPANTS AND ALL THE DECISIONS THAT I MAKE.
THAT WAS WHERE THE ADVISORY COMMITTEE'S VOTE CAME FROM.
WE DO NOT THINK THE STAFF RECOMMENDATION IS IN THE BEST INTEREST OF PLAN PARTICIPANTS.
THE TEST OF WHETHER SOMEBODY IS A JUDICIARY IS BASED ON THE ACTIONS THAT THEY ARE PERFORMING.
WE DO MANY OF THOSE ACTIONS ALREADY.
THE COMMITTEE WOULD FACILITATE, PROMOTE BENEFITS OF THE PLAN AMONG EMPLOYEES, DESIGN THE INVESTMENT MENU, AND MONITOR THE INVESTMENT OPTIONS, APPROVE ADMINISTRATIVE AND INVESTMENT POLICIES, APPROVE CHANGES IN SERVICES AND FEATURES OF THE PLAN, ESTABLISH COMMUNICATIONS AND EDUCATION PLANS.
IN THE CURRENT SETUP AND EVEN IN THE EXISTING CHARTER, THE COMMITTEE PERFORMS THOSE ACTIONS AND MAKES RECOMMENDATIONS TO THE BOARD, SO THERE WILL STILL BE BOARD FIDUCIARY RESPONSIBILITY.
THE IMPORTANCE IS ON THE DOCUMENTATION OF THE PROCESSES AND THAT WE ARE FOLLOWING A PRUDENT PROCESS.
THE ALLUSIONS TO ADDITIONAL EXPERTISE, I THINK, ARE OVERSTATED BY STAFF.
THERE'S NOTHING IN ANY OF THE JOB DESCRIPTIONS THAT ARE MENTIONED IN THE STAFF RECOMMENDATION THAT REQUIRE ANY EXPERTISE AROUND DEFERRED COMPENSATION ADVISORY PLANS.
ADDITIONALLY, IT DOESN'T EVEN REQUIRE THAT ANYBODY WHO'S ON THE BOARD AS A PARTICIPANT IN THE PLAN, AS IT IS NOW REQUIRED.
FOLKS THAT ARE ON THE COMMITTEE HAVE BEEN GETTING THE EDUCATION SO THAT THEY CAN MAKE RECOMMENDATIONS AND MAKE DECISIONS IN THE BEST INTEREST OF THE PLAN.
>YOUR TIME IS AT ROSS. THANK YOU.
>> THANK YOU, ROSS. ANY OTHER PUBLIC COMMENT?
>> I'M SORRY. WE HAVE SEAN ANDERSON.
[00:30:07]
MORNING.MY NAME IS SEAN ANDERSON. I'M A FIRE CAPTAIN HERE FOR 18 YEARS.
I WAS RECENTLY APPOINTED TO BE THE ALTERNATE FOR THE POLICE OFFICERS' ASSOCIATION WHEN LIEUTENANT GUZMAN WAS PROMOTED TO MANAGEMENT.
I FOUND MY PARTICIPATION IN THE ADVISORY COMMITTEE VERY INTERESTING, EDUCATIONAL AND GAVE ME SOME DEPTH THAT I OTHERWISE WOULDN'T HAVE.
I WAS VERY FORTUNATE ABOUT TWO WEEKS AGO TO ATTEND NAGDCA DOWN IN SAN DIEGO.
WHILE I SERVED AS AN ALTERNATE, I RECOGNIZED THE EXPERTISE IN EDUCATION THAT'S NEEDED TO BE ON THAT BOARD.
I WAS ALSO JOINED BY OFFICER BOYSEN, MEDO, AND ROSS.
WHAT I'D LIKE TO POINT OUT IS EVEN THOUGH THE RECOMMENDATION POINTS OUT EXPERTISE AND USES THAT TERM QUITE FREQUENTLY, THE ONLY PEOPLE THAT WERE ATTENDING WERE REPRESENTATIVES FROM THE POLICE OFFICERS' ASSOCIATION 2428.
I WOULD LIKE TO PERSONALLY SEE THOSE OTHER PEOPLE THAT MAY BE ON THE BOARD OR MIGHT BE INTERESTED IN PARTICIPATING TO ATTEND THAT CONFERENCE ANNUALLY, RECEIVE THAT TRAINING, SO THEY'RE MOST UP TO DATE ON BEST PRACTICES.
>> NO MORE PUBLIC COMMENT. WE'LL BRING IT BACK TO THE BOARD.
IS THERE SOME CLOSING TO YOUR PRESENTATION AT THIS POINT?
>> I THINK THAT DAN, CAN YOU ADDRESS? I KNOW THAT THERE HAVE BEEN MANAGEMENT COMMITTEE MEMBERS WHO'VE ATTENDED NAGDCA, MAYBE NOT EVERY YEAR.
I DON'T THINK IT'S A REQUIREMENT THAT ANYBODY GO TO NAGDCA EVERY YEAR, BUT CAN YOU ADDRESS THAT?
>> SURE. I ATTENDED NAGDCA WHEN I WAS ON THE COMMITTEE.
KATIE, WHO'S THE CURRENT FINANCE COMMITTEE MEMBER, HAS ALSO ATTENDED NAGDCA.
YEAH, WE HAVE HAD THE OTHER MEMBERS ATTEND, BUT WE HAVE NOT ATTENDED EVERY YEAR.
I'M NOT SURE IT'S NECESSARY TO ATTEND EVERY YEAR.
>> ADDITIONAL QUESTIONS, OR ARE WE READY TO MAKE SOME COMMENTS AND RECOMMENDATIONS?
>> I'M VERY INTERESTED IN WHY IT'S IN THERE THAT THE GENERAL MANAGER HAS THE ABILITY TO ELIMINATE MEMBERS.
>> MY UNDERSTANDING IS THAT THAT IS A CONTROL TO MAKE THIS A TRUE FIDUCIARY COMMITTEE SO THAT WE HAVE AN ABILITY TO ENSURE THAT MEMBERS ARE FULLY RESPONSIBLE FOR THE WORK THAT THEY'RE DOING AND THAT WE HAVE CONSISTENCY IN ATTENDANCE AND THAT IF WE NEED TO REPLACE A MEMBER, FOR SOME REASON, WE'RE ABLE TO DO THAT.
>> THERE'S NO WAY FOR THE COMMITTEE TO DO THAT?
>> THESE ARE, I DON'T WANT TO SAY BOILER PLATE, BUT THERE RECOMMENDATIONS FOR THE CHARTER FROM LEGAL COUNSEL.
IF THERE ARE THINGS THAT YOU WOULD RECOMMEND CHANGING WITHIN THE CHARTER, WE CAN CERTAINLY DO THAT.
>> MY PROPOSAL TO ELIMINATE THAT ABILITY.
IF THERE'S A PERSON ON THE COMMITTEE DOING SOMETHING WRONG, I WOULD ASSUME THE COMMITTEE MEMBERS WOULD HAVE THE ABILITY TO THROW THEM OFF, AND, IN FACT, MANAGEMENT WILL HAVE THE MAJORITY.
I THINK EVERYBODY IS WORKING TOGETHER.
I DON'T THINK YOU'RE GOING TO SAY, I'M GOING TO DEFEND THIS PERSON THAT'S DOING WRONG BECAUSE THEY'RE IN MANAGEMENT OR VICE VERSA.
LIKE ROSS SAID, ALL THOSE COMMITTEE MEMBERS TAKE THEIR FOOT SHARE OF RESPONSIBILITIES SERIOUSLY.
THEN AN ALTERNATE? I DON'T GET THAT. WE HAVE PROBLEMS WITH COMMITTEES.
AS THE BOARD PRESIDENT, I REMEMBER, I WOULD BEG PEOPLE TO BE ALTERNATES TO COMMITTEES.
IF YOU HAD SOMETHING GOING, WHICH EVERYBODY'S GOT SOMETHING GOING OR GET SICK, YOU GOT TO HAVE AN ALTERNATE SO WE CAN HAVE A MEETING.
I DON'T UNDERSTAND ELIMINATING ALTERNATES ON THIS.
IT WOULD SEEM TO BE TOTALLY INEFFICIENT.
>> SURE. I THINK FROM OUR PERSPECTIVE, HAVING CONSISTENCY ON THAT BOARD BECAUSE OF THE DECISIONS THEY'RE MAKING IS VERY IMPORTANT.
OR THAT COMMITTEE, SORRY, IS VERY IMPORTANT.
IF YOU WERE TO MISS A MEETING AND YOUR ALTERNATE WAS THERE, WE CAN'T BE SURE THAT YOUR ALTERNATE FILLED YOU IN ON EVERYTHING THAT WAS HAPPENING OR THAT YOU WILL BE ALIGNED IN YOUR DECISION MAKING.
THOSE DECISIONS THEN BECOME INCONSISTENT.
>> I WOULD LIKE TO POINT OUT THAT WHEN THE BOARD BACK IN 2017 ORIGINALLY ESTABLISHED THE DEFERRED COMPENSATION ADVISORY COMMITTEE, I DID NOT PROVIDE FOR ALTERNATES FOR THE COMMITTEE.
[00:35:05]
I THINK THERE'S ONLY THREE OF THE MEMBERS WHO HAVE ALTERNATES ON THAT COMMITTEE.>> THAT HAS BEEN TRUE HISTORICALLY, BUT THE BOARD DIDN'T ESTABLISH THAT.
IT WAS SOMETHING THEY ESTABLISHED FOR THEMSELVES.
THE REASON FOR NOT HAVING ALTERNATE COMMITTEE MEMBERS IS IF YOU NEED TO RESCHEDULE A MEETING OF THIS COMMITTEE, YOU JUST RESCHEDULE THE COMMITTEE SO THAT EVERYBODY COULD BE THERE.
IT'S NOT AS COMPLICATED AS WITH YOU BOARD MEMBERS WHO HAVE MUCH MORE BUSY SCHEDULES.
>> THERE ARE PROVISIONS, I BELIEVE, EVEN IN THE BYLAWS NOW FOR QUORUM SO EVEN IF A MEMBER COULDN'T BE THERE, THERE WOULD STILL BE THE ABILITY TO CONTINUE WITH BUSINESS, JUST LIKE A BOARD MEETING.
>> SOMEBODY HELP ME UP. I'M ON 203, NOT NOTICING MEETINGS.
>> AGAIN, I'D HAVE TO LOOK BACK AT THE CHARTER, BUT IF IT'S SOMETHING THAT YOU DON'T WANT IN THE CHARTER, WE CAN DEFINITELY AMEND THAT.
>> LET ME MAKE A SUGGESTION BECAUSE I SHARE YOUR CONCERN ABOUT THESE CHARTER PROVISIONS, BUT I DON'T FEEL ADEQUATELY PREPPED EITHER IN MY OWN NOTES OR WITH A GIVE AND TAKE HERE.
WE'RE BEING ASKED TO RECOMMEND THIS TO THE FULL BOARD.
WE COULD ASK GRANT ON BEHALF OF THE COMMITTEE TO PROVIDE US THAT LIST, AND WE CAN SHARE THAT WITH THE FULL BOARD, AND ASK QUESTIONS ABOUT IT IN THE INTERIM. DOES THAT MAKE SENSE?
WHAT I'D REALLY LIKE TO SEE HAPPEN HERE BECAUSE IT'S LIKE THIS IS GETTING REALLY CONFUSING NOW, AND THIS IS REALLY IMPORTANT.
THESE MEMBERS THAT ARE ON THIS COMMITTEE, WE KNOW THEY'RE LEARNING SOMETHING.
WE KNOW THAT THEY'RE REALLY ENTHUSIASTIC ABOUT IT, BUT THEY'RE REALLY IMPORTANT AND SO WE NEED TO RESPECT HOW THEY FEEL ABOUT BEING ON COMMITTEE AND HOW THEY THINK IT SHOULD RUN.
WHAT I THINK SHOULD HAPPEN IS, GO BACK AND HAVE EVERYBODY AGREE ON A CHARTER.
START OVER AGAIN AND ACCOUNT THE STUFF THAT THEY DON'T.
COME TO CONSENSUS AND THEN BRING IT BACK TO US.
>> SORRY. MAY I ADD ONE THING TOO? I JUST WANT TO BRING TO YOUR ATTENTION THAT IN ATTACHMENT A TO YOUR BOARD MATERIAL, IT'S ON PAGE 15 LOOKS LIKE.
THERE IS A MEMORANDUM FROM OFFICER BOYSEN AS CHAIR.
HE DOES LIST THE THINGS THAT HE'S CONCERNED ABOUT IN THE SECOND PARAGRAPH.
REMOVAL OF THE COMMITTEE MEMBERS BY THE GENERAL MANAGER, THE CHAIRPERSON TO BE EXECUTIVE STAFF ONLY, ELIMINATION OF ALTERNATES, MEETINGS HELD WITHOUT NOTICE, AND THE ADVISORY COMMITTEE HOLDING THE ABILITY TO INVEST PLAN ASSETS.
I THINK WITH THE EXCEPTION OF ALTERNATES AND THE ABILITY TO INVEST PLAN ASSETS, EVERYTHING IS SOMETHING THAT STAFF IS TOTALLY FINE.
COMING TO SOME CONSENSUS WITH THE ADVISORY COMMITTEE MEMBERS ABOUT HOW TO ADDRESS THE CHARTER DIFFERENTLY.
THE ABILITY TO INVEST PLAN ASSETS, THAT IS ACTUALLY THE FUNDAMENTAL A DUTY THAT YOU ARE DELEGATING TO THIS NEW COMMITTEE.
AS COLIN NOTED, OR DIRECTOR COFFEY NOTED, YOU WOULD BE DOING THAT POTENTIALLY WITH THE HELP OF AN INVESTMENT ADVISOR.
YOU THE COMMITTEE CAN DECIDE WHAT IT NEEDS IN ORDER TO PRUDENTLY IMPLEMENT ITS DUTIES THERE.
BUT THAT IS SOMETHING THAT IF THE COMMITTEE DOESN'T DO IT, THAT HAS TO THEN COME BACK TO THE BOARD AND YOU WOULD BE DOING IT AND YOU WOULD BE HAVING TO DO THOSE INVESTMENT REVIEWS ON A QUARTERLY BASIS, ETC.
THAT ONE IS ACTUALLY AN IMPORTANT DUTY FOR THE COMMITTEE TO RETAIN.
>> I'M SORRY. I MISSED THAT PARAGRAPH.
I DIDN'T NOTICE IT HAD A SEPARATE.
THANK YOU FOR POINTING THAT OUT.
ARE YOU SUGGESTING LYNNE THAT DIRECTOR MERCURIO'S SUGGESTION WOULD BE JUST FINE? CAN WORK OUT ON THOSE ISSUES?
>> I JUST WANT CLARIFICATION THAT THE RECOMMENDATION IS TO ADD THE VOTING MEMBERS AND WORK OUT THE CHARTER WITH THE CURRENT COMMITTEE, OR IS IT A COMBINATION OF THE RECOMMENDATIONS BEING PRESENTED?
>> WE HAVEN'T DECIDED THAT PART OF IT.
WE GOT HUNG UP ON THIS CHARTER THING.
>> FOR ME, I'M GOING TO VOTE FOR THIS.
I THINK IT MAKES SENSE, BUT I THINK SOME OF THESE THINGS WERE IT SEEMS TO ME LIKE PILING ON,
[00:40:02]
IN MY OPINION, JUST TO HAVE THE GENERAL MANAGER HAVE THE ABILITY TO THROW SOMEBODY OFF THE BOARD.TO SUGGEST THAT THERE ARE NO ALTERNATES.
THAT'S A FAIRLY DECENT ARGUMENT, BUT AS LONG AS MEETINGS AREN'T HELD, AND GROUPS CAN'T COME OR PEOPLE CAN'T COME, SOUNDS LIKE DO YOU HOLD THE MEETING IF THERE'S A QUORUM, OR DO YOU SAY, WE'RE GOING LIKE IT WAS IMPLIED? WE HAVE PLENTY OF TIME TO MEET ANYTIME, SO WE'LL JUST FIGURE OUT A DATE WE CAN ALL MEET.
I DON'T EVEN KNOW HOW OFTEN YOU GUYS MEET. QUARTERLY?
>> IT WAS ORIGINALLY QUARTERLY.
EVENTUALLY WE'D GO BACK TO A QUARTERLY MEETING, AND IT HAS BEEN A VERY COOPERATIVE PROCESS OF FIGURING OUT THE MEETING DATES.
>> IF THAT WORKS, I'M FINE WITH THAT.
MEETINGS COULD BE HELD WITHOUT NOTICE.
I DON'T KNOW HOW THAT WORKS WITH THAT LAST ONE, BUT I WOULD ELIMINATE THAT.
THAT DOESN'T MAKE A LOT OF SENSE.
ARE THESE BROWN ACT MEETINGS? QUASI?
>> THEY ARE NOT BROWN ACT MEETINGS.
I APOLOGIZE, ANNA STAFF FOR NOT NOTICING THAT.
IT SAYS NO MEETINGS SHOULD BE HELD WITHOUT NOTIFYING THE COMMITTEE MEMBERS IF THERE'S GOING TO BE A MEETING.
>> WE'LL ELIMINATE THAT OUT OF THE DOCUMENT.
THEN THE ONLY THING I REALLY HAVE A QUESTION ABOUT IS HAVING THE GENERAL MANAGER ELIMINATE BOARD MEMBERS AND THAT'S IT.
I AGREE. I KNOW SOMETIMES I COME AS AN ALTER AND JUST GO, WHAT'S HAPPENING HERE? I'M JUST OCCUPYING A SEAT.
IN THE SPIRIT OF THE WHOLE THING, WE DON'T HAVE MEETINGS WITHOUT FOLKS BEING HERE.
THEN I'M OKAY IF WE CAN REMOVE THAT GENERAL MANAGER HAS THE ABILITY TO REMOVE.
THAT DOESN'T A WHOLE LOT OF SENSE TO ME.
I WANT TO GIVE THE COMMITTEE THE AUTHORITY TO DO THAT.
>> I THINK THERE'S AN IMPORTANT FUNCTION THOUGH OF AN ALTERNATE, AND IT HAPPENS IN MANY DIFFERENT BODIES ALL OVER.
THE ALTERNATES ARE THE FARM TEAM, SO TO SPEAK.
THEY GET INTRODUCED ON A GRADUAL BASIS, AND THEN WHEN YOU HAVE A VACANCY VERY OFTEN THE ALTERNATE IS THE ONE WHO'S INTERESTED IN FILLING IN, AND EVERYBODY ON THE COMMITTEE ALSO IS IN FAVOR OF THE ALTERNATE BECAUSE THEY KNOW THE PERSON AND THE PERSON IS MORE UP UP TO SPEED THAN SOMEBODY JUST THAT JUST COMES IN FROM THE COLD.
I'M GOING TO STAND PRETTY FIRM ON THIS.
I'M NOT GOING TO VOTE FOR THIS GOING ANY FURTHER UNLESS THE CHARTER IS REDONE BY CONSENSUS WITH EVERYBODY AT THE TABLE.
I JUST DON'T FEEL COMFORTABLE DOING THIS.
I'M ACTUALLY NOT IN FAVOR OF ADDING THE TWO MEMBERS EITHER.
THEY COULD BE ADVISORY. THAT WAS THE THING THAT WAS OFFERED, RIGHT?
>> THAT WAS THE COMMITTEE'S PROPOSAL, YES.
>> THEY COULD BE ADVISORY, AND THEY WOULD SERVE A VERY USEFUL PURPOSE IN THAT REGARD.
THEY'D BE VERY WELCOME ON THAT COMMITTEE IN MY MIND, BUT WORD SMITH IN THIS THING BACK AND FORTH LIKE THIS, I DON'T FEEL COMFORTABLE DOING THAT.
>> I AGREE. I ALSO AGREE WITH THE VIEW THAT HAVING THESE TWO ADDITIONAL PEOPLE AS VOTING MEMBERS ISN'T NECESSARY, THAT THEY CAN HAVE AN ADVISORY ROLE, AND JUST AS WE GET ADVICE AND EXPERTISE, THEY CAN PLAY THAT ROLE AS CAN OUTSIDE CONSULTANTS.
I'M UNCOMFORTABLE WITH THAT COMPOSITION, THAT ADDING SOMEONE FROM LEGAL AND ADDING SOMEONE FROM THE GM'S OFFICE AS A VOTING MEMBER, I WOULDN'T SUPPORT THAT.
I AGREE WITH DIRECTOR MERCURIO THAT THESE PROPOSED REVISIONS, AS SUGGESTED BY DIRECTOR WAESPI OUGHT TO BE WORKED ON WITH THE GROUP. THAT'S WHERE WE'RE AT.
>> IF I UNDERSTAND CORRECTLY, YOU GUYS ARE SUGGESTING THE BOARD RETAIN FIDUCIARY RESPONSIBILITY, OR ARE YOU SUGGESTING DELEGATING THE FIDUCIARY RESPONSIBILITY TO THE COMMITTEE AND BRINGING BACK A CHARTER TO YOU?
>> I THINK WE SUPPORT THE DELEGATION OF FIDUCIARY ROLES TO THE DEFERRED COMP COMMITTEE.
>> WITH THE ASSUMPTION THAT A NEW CHARTER WILL BE BROUGHT BEFORE YOU?
>> YEAH. THAT'S EXACTLY RIGHT.
>> I DO WANT TO JUST POINT OUT THAT WE'VE JUST DISCUSSED THAT IF YOU DO THAT, YOU HAVEN'T DONE IT ACCORDING TO BEST PRACTICES AND THAT'S A RISK THAT YOU'RE GOING TO BE ASKING THE DISTRICT TO BE TAKING.
>> YEAH. I THINK WE'RE COMFORTABLE WITH THAT.
>> IT FEELS LIKE FOR THIS PARTICULAR SITUATION IN THIS PARTICULAR AGENCY, WITH THESE PARTICULAR FOLKS,
[00:45:02]
AND WITH ME, ANYWAY, I SPEAK FOR MYSELF, I'M COMFORTABLE DOING IT THAT WAY.>> I THINK WE NEED A VOTE FOR DIRECTION.
>> I'M STILL A LITTLE UNCOMFORTABLE WITH THAT.
BUT ONLY MAKE DECISION WE'LL BRING THAT UP.
>> IT'S ULTIMATELY GO INTO THE BOARD.
WE'RE JUST TRYING TO GET A LITTLE CLOSER TO SOMETHING.
WHY DIDN'T YOU MAKE THAT MOTION?
>> THE MOTION IS WHAT? TO SEND IT BACK?
>> TO SEND IT BACK AND WITH DIRECTION THAT THE ADDITIONAL MEMBERS BE ADVISORY.
>> THE MOTION IS TO REEXAMINE THE EXACT WORDING OF THE CHARTER AND ARRIVE AT A CONSENSUS BY EVERYONE INVOLVED, BUT ALSO TO INCLUDE THE TWO NEW MEMBERS AS ADVISORY ONLY.
>> THAT'S THE MOTION. I'LL SECOND IT.
>> BEFORE YOU TAKE A VOTE, I JUST WANT TO BE CLEAR THAT THIS ITEM IS GOING TO THE FULL BOARD SO WHAT YOU'RE SENDING TO THE FULL BOARD IS THAT THEY ADOPT A RECOMMENDATION THAT THIS GO BACK TO THE COMMITTEE WITH ALL OF THIS.
IT WON'T GO BACK TO THE COMMITTEE BEFORE IT GOES TO THE FULL BOARD.
>> NO. WE'RE ASKING THAT IT COME BACK TO THE COMMITTEE.
>> YEAH. MY INTENTION WAS TO DO THIS.
DON'T GO TO THE FULL BOARD UNTIL THIS HAS BEEN DONE AND THEN COME BACK TO US AND THEN WE'LL PUT IT OVER TO THE BOARD. THAT'S WHAT I THOUGHT.
>> GO BACK TO THE DEFERRED COMPENSATION ADVISORY COMMITTEE?
>> THE VOTING MEMBERS WILL VOTE ON THE CHARTER AND CHANGES TO THE CHARTER, AND YOU WOULD LIKE THAT RETURNED TO YOU FOR RECOMMENDATION.
>> YEAH. I THINK THAT MAKES SENSE.
>> I THINK THE PART THAT I'M CONFUSED ABOUT IS THAT THE FULL BOARD NEEDS TO WEIGH IN ON THIS IDEA THAT THE TWO NEW MEMBERS OF THE COMMITTEE FROM THE GENERAL MANAGER OR GENERAL COUNSEL OFFICE WOULD BE NON-VOTING.
>> THEY'RE STILL GOING TO DO THAT WHEN WE SEND IT OVER THERE AGAIN.
>> WE'LL SEND IT TO THE FULL BOARD.
OUR RECOMMENDATION WILL BE AT LEAST TWO, DENNIS SEEMS MORE COMFORTABLE WITH HAVING THEM VOTING, BUT IT WILL BE A MERE RECOMMENDATION FROM THE COMMITTEE.
>> SORRY FOR MY CLARIFICATION.
WE ARE NOT GOING TO THE BOARD NOW WITH THIS RECOMMENDATION, WITH YOUR GUYS' MOTION OR RECOMMENDATION THAT WE RETURN TO THE COMMITTEE, YOU WOULD LIKE US TO RETURN TO THE COMMITTEE, COME BACK TO YOU AND THEN GO TO THE BOARD WITH OUR RECOMMENDATION AND THAT NEW CHARTER.
>> BECAUSE WE'RE UNCOMFORTABLE MAKING THESE CHANGES ON OUR OWN.
>> I JUST WANT TO GET THE SERIES.
>> IT'S A VERY GOOD SUGGESTION. A MOTION AND A SECOND.
THERE MAY BE DIFFERENTIAL VOTES. CALL THE ROLL.
>> MY MIND WAS TEMPORARILY CHANGED BECAUSE WE'RE GOING TO CONTINUE THE CONVERSATION.
>> THAT WORKED OUT VERY WELL, AND I FEEL VERY WELL INFORMED. THANK YOU TO ALL.
ITEM 4B, RECOMMENDATION TO THE BOARD OF DIRECTORS TO AWARD AND EXECUTE CONTRACTS WITH WORKDAY AND STRATA IN THE AMOUNTS PRESENTED ALONG WITH SOME VARIOUS OTHER TECH COMPANIES AND SOFTWARE PIECES, SO GO WITH IT.
>> GREAT. GOOD, ALMOST AFTERNOON, DIRECTOR OF, MEMBERS OF THE FINANCE COMMITTEE, KATIE DIGNAN, ASSISTANT FINANCE OFFICER, HERE TO PRESENT TO YOU OUR RECOMMENDATION TO AWARD, AUTHORIZE, AND EXECUTE CONTRACTS AND AMENDMENTS, AND TRANSFER AND APPROPRIATE GENERAL FUNDS FOR OUR EXCITING REPLACEMENT OF THE PARK DISTRICT'S ENTERPRISE RESOURCE PLANNING SYSTEM.
THE PARK DISTRICT HAS BEEN USING THE CURRENT ERP SYSTEM CENTRAL SQUARE SINCE 2000 FOR FINANCE AND 2002 FOR HR AND PAYROLL OPERATIONS.
IN SEPTEMBER OF 2022, THE PARK DISTRICT ENGAGED CLIENT FIRST TECHNOLOGY TO DEVELOP THE INFORMATION TECHNOLOGY STRATEGIC PLAN FOR THE DISTRICT.
IN NOVEMBER OF 2023, A DRAFT IT STRATEGIC PLAN WAS DELIVERED AND RECOMMENDED THAT THE PARK DISTRICT SORRY,
[00:50:05]
I GUESS THIS ISN'T CLOSE ENOUGH, IS THAT BETTER, AND RECOMMENDED THAT THE PARK DISTRICT ENGAGE A CONSULTANT TO INSIST IN EVALUATING THE EXISTING ERP SYSTEM.AFTER A PUBLIC RFP PROCESS IN SEPTEMBER OF 2024, THE PARK DISTRICT ENGAGED SDI PRESENCE TO PERFORM AN ASSESSMENT OF THE ERP SYSTEM.
THE SDI TEAM CONDUCTED 29 WORKSHOPS WITH OVER 100 PARK DISTRICT EMPLOYEES AND SUBJECT MATTER EXPERTS WITH REPRESENTATIVES FROM ALL DIVISIONS TO OBTAIN AND UNDERSTAND AND GAIN INSIGHT INTO THE PEOPLE, PROCESSES AND TECHNOLOGY ISSUES THAT WE ARE AND CHALLENGES ASSOCIATED WITH THE CENTRAL SQUARE SOFTWARE SOLUTION.
STAFF ACROSS THE ORGANIZATION, EXPRESSED CONSIDERABLE DISSATISFACTION WITH MANY ASPECTS OF CENTRAL SQUARE, AND IT WAS RECOMMENDED THAT THE PARK DISTRICT PROCURE AND IMPLEMENT A NEW ERP.
IN FEBRUARY, THE PARK DISTRICT ISSUED AN RFP FOR AN ERP SYSTEM AND IMPLEMENTATION SERVICES.
OVERALL, AS PART OF THE ASSESSMENT, SDI COLLECTED EVERYBODY'S FEEDBACK AND WE CAME UP WITH THE FOLLOWING OBJECTIVES OF WHAT WE WOULD LIKE OUR ERP SYSTEM TO DO.
FIRST, WE'D LIKE A CONSOLIDATION TO A SINGLE SYSTEM THAT CONNECTS BOTH FINANCIAL AND NON FINANCIAL DATA.
WE WANT TO USE AUTOMATION TO STREAMLINE AND IMPROVE OUR BUSINESS PROCESSES.
WANT TO MAKE SURE IT'S USER FRIENDLY AND INTUITIVE AND HAS A SUCCESSFUL USER INTERFACE.
WE WANT TO REDUCE AND ELIMINATE REDUNDANCY DATA ENTRY.
OUR CURRENT SYSTEM REQUIRES DATA TO BE ENTERED ACROSS MULTIPLE SCREENS, RESULTING IN INEFFICIENCIES AND INCREASED RISK OF ERRORS.
WE WANT TIMELY ACCURATE AND EASY TO ACCESS INFORMATION FOR DECISION MAKING.
WE WANT TO REDUCE MANUAL INPUT FOR FINANCIAL DOCUMENTS.
WE WANT TO IMPROVE AND PROVIDE BETTER REPORTING AND ACCESS TO DATA THROUGH INQUIRY AND DURAL DOWN CAPABILITIES.
MANY REPORTS IN THE CURRENT SYSTEM ARE ONLY AVAILABLE IN PDF FORMAT, MAKING ANALYSIS AND REVIEW TIME VERY TIME CONSUMING.
WE WANT AN INTERFACE THAT CONNECTS WITH OUR THIRD PARTY SOFTWARE SYSTEMS THROUGH APIS AND OTHER DATA EXCHANGES.
WE WANT TO PROVIDE APPROPRIATE SECURITY MEASURES, IMPROVE SERVICES TO STAKEHOLDERS, COMPLY WITH STATE AND LOCAL STATUTORY REQUIREMENTS, AND ALSO PROVIDE PROFESSIONAL SERVICES TO ENSURE SUCCESSFUL IMPLEMENTATION.
ON APRIL 15, THE PARK DISTRICT RECEIVED PROPOSALS FROM SEVEN VENDORS FOR BOTH AN ERP SOLUTION AND IMPLEMENTATION PARTNER.
THE EVALUATION COMMITTEE CONSISTED OF EIGHT MEMBERS FROM FINANCE, MANAGEMENT SERVICES, INFORMATION SERVICES, HUMAN RESOURCE AND THE BENEFITS DEPARTMENT.
AN INITIAL ADMINISTRATIVE REVIEW WAS CONDUCTED OF ALL PROPOSALS, AND IT WAS DETERMINED THAT THREE PROPOSALS DID NOT MEET THE MINIMUM REQUIREMENTS.
THE DISTRICT THEN MOVED FORWARD WITH A DETAILED EVALUATION AND SCORING OF THE REMAINING FOUR PROPOSALS IN THE AREAS OF COMPANY EXPERIENCE AND BACKGROUND, PROPOSED SOLUTION, IMPLEMENTATION, APPROACH, AND SCHEDULE, ONGOING SUPPORT, PRICING, SOFTWARE, AND MAINTENANCE AGREEMENTS, AND SYSTEM REQUIREMENTS.
THE COMMITTEE SHORT LISTED TO TYLER TECHNOLOGIES AND WORK DAY STRATA AND INVITED EACH OF THE VENDORS TO PROVIDE A FIVE DAY PROOF OF CAPABILITIES DEMONSTRATION.
OVER 30 PARK DISTRICT STAFF FROM MULTIPLE DEPARTMENTS, ATTENDED THE WORKSHOPS AND PROVIDED FEEDBACK TO THE EVALUATION COMMITTEE MEMBERS.
REFERENCE CHECKS WERE CONDUCTED FROM SIMILARLY SIZED CALIFORNIA LOCAL GOVERNMENT AGENCIES ON BOTH VENDORS.
AFTER REVIEWING ALL FACTORS, THE EVALUATION COMMITTEE UNANIMOUSLY DETERMINED THAT THE WORKDAY SOLUTION MEETS THE PARK DISTRICT'S OPERATIONAL AND STRATEGIC NEEDS.
>> BEFORE YOU GO OFF AT THIS SLIDE.
WHAT IS A FIVE DAY PROOF OF CAPABILITY WORKSHOP? SOUNDS WONDERFUL.
>> BASICALLY WE ASKED FOR EVERY COMPONENT IN THE SYSTEM TO GIVE US A LIVE DEMO OF HOW IT WORKS.
WE COULD SEE HOW DO YOU PROCESS AN INVOICE? SHOW US HOW PROJECTS ARE SET UP.
HOW DOES THE GRANT MODULE WORK? HOW DO YOU PERFORM A BANK RECONCILIATION? REALLY IN REAL TIME GOING THROUGH, SHOWING US EACH OF THE STEPS THAT ARE REQUIRED AND HOW THE SYSTEM WOULD BE SET UP.
>> YEAH, FIVE DAYS. IT WAS A VERY EXTENSIVE AGENDA.
WHEN I GO INTO THE MODULES, YOU'LL SEE ALL THE DIFFERENT ONES THAT WE REVIEWED.
BUT FIVE DAYS, THAT'S LIKE A FESTIVAL.
>> STAFF HAD TO DO IT FOR TWO WEEKS STRAIGHT.
>> YES. AFTER REVIEWING ALL THE FACTORS, LIKE I SAID, WE'RE RECOMMENDING WE GO WITH WORKDAY AND THE WORKDAY MODULES THAT WILL BE IMPLEMENTED AS PART OF THE PROJECT ARE FINANCE, HUMAN RESOURCES, PAYROLL, AND ANALYTICS AND REPORTING.
SOME OF THE NEW FEATURES WE'LL BE ADDING THAT WE DON'T
[00:55:02]
CURRENTLY HAVE ARE GRANTS MANAGEMENT.RIGHT NOW WE'RE HAVING TO USE AN ACCESS DATABASE TO TRACK ALL OF OUR GRANTS.
NOW THIS WILL MOVE ALL OF OUR GRANT INFORMATION INTO OUR ERP SYSTEM.
WE'LL ADD EXPENSES TO SUPPORT EMPLOYEE EXPENSE REIMBURSEMENT.
WE'LL HAVE PROCUREMENT AND STRATEGIC SOURCING TO ASSIST WITH OBTAINING ITEMS, PRODUCTS AND SERVICES THROUGH A CENTRALIZED FUNCTION, TO ESTABLISH MASTER CONTRACTS THAT THE ENTIRE DISTRICT WILL BE ABLE TO PURCHASE AGAINST.
WE'LL ALSO HAVE CONTRACT LIFECYCLE MANAGEMENT TO MANAGE CONTRACTS FROM CREATION THROUGH SIGNATURE, WHICH WILL PROVIDE A LOT EASIER REPORTING FOR US TO SHOW SPECIFICALLY HOW MANY CONTRACTS THE DISTRICT HAS EXECUTED, WHAT THE SERVICES ARE FOR, AND ALL THE VENDORS INFORMATION.
WE'LL ALSO HAVE ABSENCE MANAGEMENT TO SUPPORT REQUEST FOR TIME OFF AND LEAVE OF ABSENCES.
THIS WILL ENABLE EMPLOYEES TO REQUEST TIME OFF THROUGH THE SYSTEM, THE SUPERVISOR WILL APPROVE, AND THEN IT ENABLES EMPLOYEES TO ALSO VIEW FUTURE BALANCES OF THEIR LEAVE.
THIS INFORMATION ONCE APPROVED WILL THEN AUTOMATICALLY BE GENERATED ON THE TIME CARD, SO IT SHOULD SAVE TIME FOR EVERYONE.
THE PROPOSED TIMELINE FOR PROJECT IMPLEMENTATION IS IF THE BOARD APPROVES THE CONTRACT EXECUTION, WE WILL BEGIN IN LATE NOVEMBER, AND IT'S ESTIMATED TO BE COMPLETED WITHIN A YEAR.
A DETAILED IMPLEMENTATION SCHEDULE, WHICH IDENTIFIES THE STAFFING RESOURCES WILL BE FINALIZED FOLLOWING EXECUTION OF THE CONTRACT WITH STRATA.
THEN STAFF, MYSELF, WILL RETURN TO YOU ALL TO PRESENT AN UPDATE ON THE PROJECT AND THE DETAILED STAFFING PLAN.
NOW I'LL MOVE INTO THE RECOMMENDATIONS.
THE TOTAL PROJECT BUDGET INCLUDES A TOTAL OF FOUR CONTRACTS THAT YOU CAN SEE ON THE TABLE IN THIS SLIDE.
FIRST, WE HAVE STRATA, WHO IS GOING TO BE PERFORMING OUR IMPLEMENTATION SERVICES, INTEGRATED TESTING, CHANGE MANAGEMENT, REPORTING, AND DATA CONVERSION.
THEN THEY ALSO HAVE TRAVEL EXPENSES.
THEN WE HAVE WORKDAY, THEIR SUBSCRIPTION FEES AND TRAINING THROUGH 2027.
THEN CAN/AM TECHNOLOGIES IS GOING TO BE PROVIDING OUR CASHIERING SOLUTIONS, SO WE'LL BE ISSUING A CONTRACT TO THEM FOR IMPLEMENTATION SERVICES.
WE'LL NEED TRAVEL EXPENSES WHEN THEY COME TO HELP WITH IMPLEMENTATION.
WE'LL BE PURCHASING NEW HARDWARE AND OUR SUBSCRIPTION FEES THROUGH 2027.
THEN WE HAVE SDI PRESENCE WHO WILL PROVIDE PROJECT MANAGEMENT AND SUPPORT.
THEN WE'RE ESTIMATING ABOUT THREE MILLION FOR STAFF BACKFILL AND SUPPORT.
I'LL GO INTO DETAILS LATER ON IN THE SLIDES.
THEN WITH A 15% CONTINGENCY THAT PUTS OUR TOTAL PROJECT COST AT 8,538,184.
THERE'S CURRENTLY 500,000 OF FUNDING IN PROJECT 564,800 FOR THE REPLACEMENT OF THE SOFTWARE, AND WE'RE REQUESTING 8,038,184 OF GENERAL FUND UNASSIGNED BALANCE FOR THIS PROJECT.
AS KAREN WILL COVER IN THE NEXT PRESENTATION ON THE ACFR, ON PAGE 68 OR PACKET PAGE 158, THE FUND BALANCE IS AT 95.1 MILLION.
IN ACCORDANCE WITH POLICY 6.0 GENERAL FUND RESERVES, 32% OF ANNUAL BUDGETED REVENUE MUST BE HELD IN RESERVE, WHICH IS ABOUT 72.2 MILLION, LEAVING AN AVAILABLE BALANCE OF 22.9 MILLION.
OF THIS AMOUNT, 13.5 WAS APPROVED IN THE 2025 BUDGET, RESULTING IN A BALANCE OF 9.4 MILLION.
WE ALSO BASED ON YEAR TO DATE EXPENDITURES AND THE FACT THAT WE HAVE OVER 80 VACANT POSITIONS.
WE FORECAST THAT THERE WILL BE MORE THAN SIX MILLION IN SALARY AND BENEFIT SAVINGS FROM POSITION VACANCIES FROM 2025.
THIS WILL ALLOW FOR SUFFICIENT FUNDING TO SUPPORT THE REQUESTED APPROPRIATION OF THE 8 MILLION FOR THIS PROJECT, AS WELL AS 6.5 MILLION TO SUPPORT THE CONTRACT AMENDMENTS AND CHANGE ORDERS FOR PARAL TO OAKS NORTH CONSTRUCTION.
AFTER DEPLOYMENT, THE ONGOING SUBSCRIPTION FEES FOR WORKDAY AND CAN/AM WILL BE FUNDED OUT OF ANNUAL APP OPERATING BUDGET APPROPRIATIONS BEGINNING IN 2028.
JUST TO RECAP, THIS PROJECT IS ONLY FOR THE SUBSCRIPTION FEES UP TO 2027.
THE NEXT RECOMMENDATION IS TO AWARD AND EXECUTE A MASTER SERVICES AGREEMENT WITH WORKDAY, WHICH INCLUDES A 10 SUBSCRIPTION QUESTION ABOUT TO THAT ONE.
>> WHEN I LOOK AT THE STAFF REPORT HERE, THERE'S AMOUNTS IN THE TITLE.
I ADD THOSE ALL UP AND THEY DON'T LOOK LIKE THOSE NUMBERS THERE.
>> SEEING THOSE NUMBERS. I'M SORRY, I CAN'T HELP MYSELF, BUT I GOT TO ADD THEM UP.
>> WHEN I TAKE ALL THE NUMBERS THAT ARE AND THE SOME MORE VALUES DOWN BELOW, IT COMES OUT TO 12.3 MILLION THE WAY I SEE IT.
THIS IS 8.538, I SEE 8.038 HERE. I'M A LITTLE CONFUSED.
[01:00:08]
>> YES, THAT'S THE LAST BULLET POINT I'VE GOT HERE, WHICH IS FOR YEARS 3-10 OF THE WORKDAY CONTRACT, WHICH IS ABOUT 4.2 MILLION.
THEN FOR YEARS 3-5 FOR CAN/AM SERVICES, WHICH IS ABOUT 629,000, THOSE WILL BE COVERED IN FUTURE OPERATING.
WHAT'S THE CAPITALIZABLE EXPENSE WILL BE THE INITIAL PROJECT EXPENSES FOR IMPLEMENTING.
>> THE VALUES IN THE TITLE ARE NOT JUST THE CAPITAL PROJECT?
>> THAT'S CORRECT. YOU'RE GOING TO AUTHORIZE THE APPROVAL OF A 10 YEAR CONTRACT FOR WORKDAY AND A FIVE YEAR CONTRACT FOR CAN/AM.
HOWEVER, PART OF THOSE COSTS ARE GOING TO BE COVERED IN OUR ANNUAL OPERATING BUDGET.
LIKE WORKDAY, WHAT'S BUILT IN THE ANNUAL BUDGET RIGHT NOW IS FOR CENTRAL SQUARE.
IT'S ACTUALLY MORE RIGHT NOW THAN WHAT WORKDAY IS GOING TO CHARGES FOR THE FIRST YEAR.
SO THOSE COSTS WILL JUST SHIFT ONCE WE CUT OFF THE CENTRAL SQUARE AS PAY WORK DAY.
[OVERLAPPING] THEN FOR AN CAN/AM, RIGHT NOW, WHAT'S HAPPENING WITH ACTIVE NET AND IT COMES OFF OF THE FEES THAT WE'RE CHARGING TO PARTICIPANTS.
NOW WE'LL BE RECEIVING ADDITIONAL REVENUE THAN WHAT WE WERE BEFORE BECAUSE IT WON'T BE CUT OFF THE TOP WHEN WE COLLECT FEES.
ANY OTHER QUESTIONS ON THAT SLIDE BEFORE I MOVE ON?
>> NEXT IS AWARDING AND EXECUTING A MASTER SERVICE WITH WORKDAY, WHICH INCLUDES A TEN YEAR SOFTWARE SUBSCRIPTION FEE AND TRAINING IN THE AMOUNT OF 5,056,758.
THE KEY BENEFITS OF IMPLEMENTING THE WORKDAY SOLUTION INCLUDE PROCESS IMPROVEMENTS AND EFFICIENCY GAINS, ENHANCED REPORTING AND ANALYTICS, FLEXIBILITY AND SCALABILITY, AND OVERALL IMPROVED USER EXPERIENCE.
FOR EXAMPLE, TO ADDRESS TIMELY PAYMENT OF INVOICES, WORKDAY HAS A VENDOR MANAGEMENT PORTAL WHERE SUPPLIERS ARE GOING TO BE ABLE TO DIRECTLY UPLOAD THEIR INVOICES, AND THEN IT WILL START ROUTING FOR APPROVAL THROUGH THE PARK DISTRICT.
THE SYSTEM ALSO HAS OPTICAL CHARACTER RECOGNITION TECHNOLOGY AND UTILIZES AI DRIVEN TOOLS TO EXTRACT AND VALIDATE DATA, THEN ROUTES INVOICES FOR APPROVAL.
THIS WILL ALLOW STAFF TO FOCUS THEIR TIME ON VALIDATING INFORMATION RATHER THAN MANUALLY HAVING TO ENTER EVERY INVOICE THAT THE PARK DISTRICT RECEIVES.
THIS WILL CONTRIBUTE TO REDUCTION IN ERRORS AND ALSO IMPROVE PROCESSING TIMES.
THE NEW SOLUTION WILL BE INTEGRATED WITH OUR BANK OF MONTREAL AND ASSIST IN AUTO RECONCILING BANK TRANSACTIONS WITH SUGGESTED MATCHES, SO THAT STAFF WILL NO LONGER AGAIN HAVE TO MANUALLY ENTER AND CAN ALSO SEND FOR REVIEW AND APPROVAL VIA A WORKFLOW.
THIS FEATURE WILL REDUCE THE TIME REQUIRED TO PREPARE AND REVIEW BANK RECONCILIATIONS.
WORKDAY SOLUTION HAS OVER 500 PRE ESTABLISHED BEST PRACTICES THAT CAN BE MODIFIED TO MEET THE PARK DISTRICT'S REVIEW AND APPROVAL WORKFLOW REQUIREMENTS.
THE AUDIT FUNCTION IS ALWAYS ACTIVE.
THEREFORE, AT ANY TIME, THOSE WITH APPROPRIATE SECURITY CLEARANCES CAN RESEARCH TRANSACTION HISTORY, AND THE BUSINESS PROCESS WORKFLOWS WILL ADDRESS PREVIOUS AUDIT FINDINGS RELATED TO DOCUMENTED JOURNAL ENTRY TRANSACTION, REVIEW AND APPROVAL.
THE WORKS DAY SOLUTION WILL PROVIDE POINT IN TIME AND REAL TIME REPORTING AND ANALYTICS WITH DRILL DOWN CAPABILITIES, WHICH WILL ALLOW MANAGEMENT TO EASILY ACCESS STATUS OF PAYMENTS, VACANCY RATES, POSITION CONTROL PROCESSING, ACCOUNTS RECEIVABLE STATUSES, BUDGET TO ACTUAL REPORTS, AND MUCH MORE.
EMPLOYEES WILL HAVE ACCESS TO A NEW AND IMPROVED MOBILE EMPLOYEE SELF SERVICE APPLICATION TO SUBMIT LEAVE REQUESTS, TIME TRACKING, UPDATE DIRECT DEPOSIT INFORMATION, AS WELL AS SUBMIT THEIR EXPENSE REIMBURSEMENTS.
WORKDAY WILL SIGNIFICANTLY ENHANCE THE DISTRICT'S BUSINESS PROCESSES, IMPROVE OPERATIONAL EFFICIENCY, AND PROVIDE POWERFUL ANALYTIC CAPABILITIES TO SUPPORT INFORMED DECISION MAKING AT ALL LEVELS OF THE ORGANIZATION.
ANOTHER BENEFIT FOR WORKDAY IS THAT THEY ARE HEADQUARTERED IN OUR DISTRICT IN PLEASANTON, CALIFORNIA.
>> THE PROPOSAL SUBMITTED IN RESPONSE TO THE RFP WAS FOR STRATA AS THE PRIMARY INTEGRATOR AND IMPLEMENTER FOR THE WORKDAY SOLUTION.
WE'RE RECOMMENDING AWARDING AND EXECUTING A PROFESSIONAL SERVICE AGREEMENT CONTRACT WITH STRATA US PROFESSIONAL SERVICES FOR IMPLEMENTATION SERVICES TO CONFIGURE AND DEPLOY THE WORKDAY ERP PLATFORM IN THE AMOUNT OF 2,132,989.
STRATA HAS OVER 30 YEARS OF PUBLIC SECTOR EXPERIENCE, FIRST PARTNERING WITH WORKDAY IN 2008.
THEY SUCCESSFULLY COMPLETED OVER 1,000 WORKDAY DEPLOYMENTS.
[01:05:02]
THEIR SERVICES INCLUDE IMPLEMENTATION.THEY HAVE A PROJECT HUB FOR TIMELINE AND DELIVERABLE STATUS TRACKING.
THEY PROVIDE A REQUIREMENTS DESIGN GUIDE.
THEY'LL HAVE INTEGRATED TESTING AUTOMATION, CHANGE MANAGEMENT, AND END USER TESTING, CUSTOMIZED REPORTING, DATA CONVERSION AND INTEGRATION WITH OTHER SOFTWARE SOLUTION PROVIDERS AND REPORTING ENTITIES, SUCH AS OUR BANK OF MONTREAL, ESRI, CALPERS, NEOGOV, AND OTHER BENEFIT PROVIDERS.
THE NEXT RECOMMENDATION IS THE WORKDAY SOLUTION DOES NOT INCLUDE A POINT OF SALE MODULE FOR CASHIERING.
WORKDAY HAS PROPOSED CAN/AM TECHNOLOGIES AS AN INTEGRATED PARTNER TO PROVIDE THIS FUNCTIONALITY.
WE'RE RECOMMENDING AN AWARD AND EXECUTE A SERVICE AGREEMENT WITH CAN/AM TECHNOLOGIES FOR CASHIERING FUNCTIONS WITH COSTS FOR SUBSCRIPTION, IMPLEMENTATION, AND EQUIPMENT IN THE AMOUNT OF 1,448,041.
CAN/AM HAS OVER 20 YEARS OF EXPERIENCE WITH LOCAL GOVERNMENT CLIENTS.
CAN/AM'S TELLER CASHIERING SOLUTION SPECIALIZES IN ENTERPRISE PAYMENTS FOR GOVERNMENT AGENCIES AND OFFERS A PROVEN PLATFORM THAT WILL SEAMLESSLY INTEGRATE WITH WORKDAYS ERP SYSTEM.
THIS INTEGRATED APPROACH WILL ALLOW THE DISTRICT TO REPLACE THE CURRENT ACTIVE NET POS SOLUTION WITH A MORE MODERN, SECURE, FLEXIBLE, AND FULLY INTEGRATED PLATFORM THAT COMPLIMENTS THE BROADER WORKDAY ERP IMPLEMENTATION.
AGAIN, THIS IS ANOTHER INSTANCE WHERE RIGHT NOW, WHAT WE'RE HAVING TO DO IS PULL INFORMATION OUT OF ACTIVE NET AND THEN MANUALLY ENTER IT INTO THE CENTRAL SQUARE SYSTEM.
THE CAN/AM SOLUTION WILL BE DIRECTLY INTEGRATED INTO WORKDAY, THEREFORE ELIMINATING MANUAL PROCESSES BY THE ACCOUNTING TEAM.
>> WOULD THIS BE APPLICABLE TO A KIOSK? WOULD IT HELP US WITH THAT FUNCTION?
>> CORRECT. THIS WOULD BE THE NEW PORTAL THAT THE KIOSK WOULD BE USING FOR POINT OF SALE.
>> THEN LASTLY, OUR RECOMMENDATION IS TO AMEND THE EXISTING PROFESSIONAL SERVICES CONTRACT WITH SDI PRESENCE, LLC TO PROVIDE CONTINUITY OF OVERSIGHT AND COORDINATION THROUGHOUT THE PROJECT AND THE AMOUNT OF 687,000.
SDI PRESENCE HAS BEEN SERVING AS A CONSULTANT TO THE PARK DISTRICT THROUGHOUT THE ERP ASSESSMENT AND SELECTION.
THROUGHOUT THE PROCESS, SDI HAS DEMONSTRATED ITS ABILITY TO PROVIDE VALUABLE PROJECT MANAGEMENT SUPPORT, COMPLETING DELIVERABLES AND ENSURING THE PROJECT REMAIN ON TRACK.
BASED ON THEIR PERFORMANCE, WE'RE CONFIDENT IN THEIR ABILITY TO GUIDE THE PARK DISTRICT THROUGHOUT THE COMPLEX IMPLEMENTATION PHASE AND RECOMMEND AMENDING THEIR CONTRACT TO CONTINUOUS PROJECT MANAGER.
THE ERP PROJECT WILL BE CARRIED OUT PRIMARILY BY EXISTING PARK DISTRICT STAFF FROM A RANGE OF DEPARTMENTS, LEVERAGING INSTITUTIONAL KNOWLEDGE AND EXPERTISE TO ENSURE SUCCESSFUL IMPLEMENTATION.
THROUGHOUT THE COURSE OF THE PROJECT, PARK DISTRICT PERSONNEL ASSIGNED TO THE PROJECT WILL ALLOCATE THEIR LABOR HOURS TO THE PROJECT FOR ACCOUNTING AND CAPITALIZATION PURPOSES.
HOWEVER, TO MAINTAIN REGULAR FINANCE, PAYROLL, AND HR OPERATIONS, AND MAINTAIN EFFECTIVENESS AND EFFICIENCY, STAFF WHO ARE DEDICATED TO THE ERP PROJECT WILL NEED TO BE TEMPORARILY BACK FILLED.
WE'RE PROPOSING THAT THIS BE ACCOMPLISHED THROUGH A COMBINATION OF REASSIGNMENTS WITHIN DEPARTMENTS, TEMPORARY HIRES, OVERTIME, AND WHERE APPROPRIATE SUPPLEMENTAL CONSULTING SUPPORT.
WE CURRENTLY ESTIMATE THAT THE APPROXIMATELY WILL NEED ABOUT EIGHT FULL TIME EQUIVALENT POSITIONS AND WILL REQUIRE BACK FILLING, AND AT LEAST SIX TEMPORARY POSITIONS ACROSS FINANCE, HR, AND INFORMATION SERVICES IN ORDER TO SUSTAIN ESSENTIAL OPERATIONS THROUGHOUT THE PROJECT TIMELINE.
THE PROJECT WILL BE IMPLEMENTED IN FOUR STAGES; PLANNING, ARCHITECT, AND CONFIGURE TEST, AND DEPLOY.
STAFF TIME COMMITMENTS FOR SYSTEM IMPLEMENTATION WILL FLUCTUATE BASED ON THE PHASE AND MODULE BEING DEPLOYED.
AS I HIGHLIGHTED EARLIER, WE'LL RETURN TO THE BOARD FINANCE COMMITTEE IN JANUARY WITH A DETAILED IMPLEMENTATION SCHEDULE THAT COVERS STAFFING REQUIREMENTS.
WE'RE RECOMMENDING THAT WE APPROPRIATE THREE MILLION TO PROVIDE FOR STAFFING BACK FILLS AND TEMPORARY STAFFING SUPPORT TO SUSTAIN CORE OPERATIONS.
LASTLY, WE'RE REQUESTING APPROVAL TO AUTHORIZE THE GENERAL MANAGER OR DESIGNEE TO APPROVE CONTRACT AMENDMENTS UP TO 15% OF THE TOTAL CONTRACT PRICE FOR EACH OF THE FOUR CONTRACTS COVERED IN THE PRESENTATION.
WITH THAT, I'LL OPEN IT UP TO QUESTIONS.
>> I'M NOT LOOKING FOR A DETAILED EXPLANATION HERE, BUT I DO HAVE A QUESTION IN GENERAL.
I DIDN'T SEE IT IN HERE, BUT REGARDING CAPITAL PROJECTS, DOES A SYSTEM HAVE THE ABILITY TO HANDLE MULTI YEAR CAPITAL PROJECTS AND MULTI GRANT FUND CAPITAL PROJECTS?
[01:10:03]
>> YES, IT DOES. IT'S ACTUALLY A VERY ROBUST, IT'S GOING TO ALLOW US TO DEVELOP DIFFERENT BUDGET TEMPLATES BASED ON OUR DIFFERENT TYPES OF PROJECTS.
WE'LL BE ABLE TO REPORT OUT AND HAVE AN ACTUAL CIP AS PART OF OUR ADAPTIVE PLANNING BUDGET MODEL THAT WILL ALSO BE IN THERE, AND THEN WE'LL HAVE ITS OWN GRANTS MODULE, WHICH WILL BE TRACKING GRANTS AND FUNDING SOURCES AND AWARD DETAILS, AND I'LL JUST BE A LOT MORE ROBUST AND ALL INTERCONNECTED.
>> MULTI PHASE PROJECTS TOO CAN ALL BE TRACKED?
>> YES. MULTI PHASE, MULTI YEAR, MULTIPLE FUNDING, IT GOES DOWN INTO EVERY LEVEL THAT WE CAN POSSIBLY IMAGINE.
IT ALSO GREATLY ASSIST BECAUSE RIGHT NOW, ONE OF OUR BIGGEST PAIN POINTS IS STAFF TIME TRACKING.
THE SYSTEM DOES NOT ALLOW US TO SPLIT UP STAFF TIME.
THIS WILL ALLOW US TO ALLOCATE.
IF WE DO KNOW CERTAIN PERCENTAGE OF A STAFF TIME IS ALLOCATED TO THIS PROJECT, THEN WE'LL BE ABLE TO AUTOMATICALLY EMBED THAT IN THE PROJECT BUDGET, OR STAFF CAN STILL BE ABLE TO CODE THAT ON THEIR TIME CARD.
WE HAVE MULTIPLE OPTIONS OF HOW TO HANDLE IT.
>> YEAH, WHAT I'VE HEARD OUT THERE IS THAT THAT'S NOT TYPICAL THAT CAPITAL PROJECTS ARE LIKE, WHAT? MORE THAN ONE YEAR? GRANTS, WHAT? THE FACT THAT YOU HAVE BEEN ABLE TO SCORE THIS, WE SCORED IT IS A GREAT THING.
I'M SURE THE FOLKS THAT DO THOSE CAPITAL PROJECTS OUT THERE ARE GOING TO BE VERY HAPPY ABOUT THIS WHEN THEY LEARN ABOUT IT.
>> AS WE GO THROUGH THE IMPLEMENTATION PHASE, I'M GOING TO LEAN HEAVILY ON THE IMPLEMENT.
THE PROJECT MANAGERS TO HELP US DEVELOP WHAT THESE TEMPLATES ARE GOING TO BE FOR WHAT INFORMATION WE WANT TO CAPTURE ON ALL OF THESE PROJECTS AND THEN PROVIDE THAT TO YOU AS THE BOARD IN REPORTING.
>> YEAH. THIS SOUNDS LIKE IT'LL DO EVERYTHING.
I'M SURE IT WAS SOLD AS SAVING TIME AND YOU'VE MENTIONED SAVING TIME, SAVING DATA.
DO YOU ANTICIPATE LOSING POSITIONS IN THE FINANCE DEPARTMENT OR ANYWHERE ELSE?
>> NO. I THINK THAT AT THE END IN TALKING AND TALKING TO OTHER ENTITIES THAT HAVE IMPLEMENTED THESE SYSTEMS, IT JUST SHOWS THAT STAFF TIME IS NEEDED IN ANOTHER AREA PARTICULARLY BECAUSE YOU GET USED TO GETTING SOME CERTAIN ANALYTICAL REPORTS THAT YOU WANT TO DIVE IN MORE DETAILS ON THAT, AND THAT'S WHEN YOU ACTUALLY NEED STAFF TO BE FOCUSING ON THOSE AREAS.
>> THE AUTHORIZATION OF THE GENERAL MANAGER TO EXECUTE FUTURE CONTRACT AMENDMENTS IS UP TO 15%, WHICH IS A $1.13 MILLION.
TELL ME IF THAT'S NORMAL, I UNDERSTAND ANYTHING OVER $50,000 SHOULD COME TO THE BOARD.
THIS COULD BE OVER I THINK $50,000 DEALS WITHOUT TELLING ANYTHING TO THE BOARD, I'M A LITTLE FUZZY ABOUT THAT ONE.
IF THERE'S THAT MANY CHANGE ORDERS THAT OCCURS, I THINK SOMETHING'S GONE WRONG, AND I'D LIKE TO KNOW ABOUT IT WHILE IT'S OCCURRING.
IS THAT IN VIOLATION OF ANYTHING WE'RE DOING HERE AS A PARK DISTRICT SAYING THAT ANYTHING OVER $50,000, AND I DON'T KNOW IF THAT APPLIES TO CHANGE ORDERS. I MEAN, WE DON'T.
>> FIRST, THE 15% CONTINGENCY ACTUALLY USED TO BE PART OF APPENDIX E BEFORE WE MOVED THE PROCUREMENT POLICY INTO A DISTRICT POLICY.
WHAT WE HAD IN THERE BEFORE WAS THAT THE GENERAL MANAGER DID HAVE THE AUTHORIZATION FOR ANY BOARD APPROVED CONTRACT TO APPROVE UP TO 15% CONTINGENCY ON THAT CONTRACT.
NOW SINCE WE'VE TOOK APPENDIX OUT OF THE BOARD OPERATING GUIDELINES, AND IT'S NOW OUR OWN POLICY, WHENEVER WE BRING ITEMS TO THE BOARD, WE'RE BRINGING IT WITH A RECOMMENDATION FOR HOW MUCH CONTINGENCY WE THINK WE NEED AND ASKING FOR APPROVAL IF THAT'S OKAY.
IF THERE IS ANY INDIVIDUAL AMENDMENTS TO THAT CONTRACT, THAT THE BOARD AUTHORIZES US TO GO UP TO 15%.
>> I WANT TO MAKE SURE I'M UNDERSTANDING THE APPROPRIATION HERE.
WE'RE STARTING WITH A BUDGET THAT HAS ONLY HALF A MILLION DOLLARS IN IT FOR THIS PARTICULAR PROJECT?
>> THAT CAUSES YOU FOLKS TO LOOK AROUND THE EXISTING BUDGET AND FIGURE OUT WHERE THE MONEY IS THAT CAN BE USED TO FUND THE ENTIRE PROJECT OUT OF THIS EXISTING BUDGET.
MY QUESTION IS, IN USING UNFUNDED.
[01:15:01]
>> GENERAL FUND BALANCE THE WORD.
>> YES. THE UNASSIGNED FUND BALANCE.
ARE WE IMPACTING WHAT WE WERE WORKING ON WITH NEXT YEAR'S BALANCE BECAUSE THAT MEANS THAT MONEY WILL NOT BE THERE TO CARRY OVER BECAUSE IT'LL ALREADY BE APPROPRIATED.
HOW MUCH OF AN IMPACT HAS THIS HAD ON OUR BUDGETING? I GUESS, IS MY QUESTION.
>> I'M GOING TO LET DEB CHIME IN.
>> YEAH. WE THOUGHT YOU MIGHT HAVE THIS QUESTION.
IT'S OBVIOUSLY A VERY LARGE PRICE TAG, AND WE'VE ALREADY BEEN TALKING TO YOU ABOUT OUR STRUCTURAL DEFICIT SITUATION.
WHAT WE'RE PROPOSING TO DO IS USE ONE TIME FUNDS FOR THIS.
FUNDS LEFTOVER FROM THE PRIOR YEAR 2024 AND 2025.
NORMALLY, YOU WOULD SEE IN OUR BUDGET IN 2026 PROPOSED BUDGET, WE'RE PROPOSING TO USE ONE TIME FUNDS FOR CAPITAL PROJECTS, WE ARE PROPOSING TO USE IT FOR THIS PROJECT.
>> WE USED TO GET THOSE REQUESTS IN JUNE.
>> WE USED TO DO MID YEAR BUDGET.
>> YES. THIS IS COMING TO YOU OFF CYCLE BECAUSE WE NEED TO MOVE FORWARD NOW.
THE IDEAL IMPLEMENTATION IS TO GO LIVE WITH THE START OF A NEW FISCAL YEAR.
WE ARE WANTING TO GET STARTED NOW SO THAT WE CAN GO LIVE JANUARY 1, 2027.
IT GIVES US A LITTLE MORE THAN A YEAR TO GET THIS ALL DONE.
I KNOW IT'S FUNNY TO BE DOING IT OFF CYCLE AND ASKING FOR SUCH A LARGE AMOUNT, BUT THE TIMING WAS SUCH THAT WE NEEDED TO DO THAT. IS THAT ANSWERED?
>> YEAH, AND YOU'RE NOT FINANCING THIS.
>> THE IMPLEMENTATION COSTS ARE ENORMOUS.
THE ONGOING COSTS WE EXPECT ARE GOING TO BE LESS THAN OUR CURRENT SYSTEM COSTS WHICH MUCH HIGHER FUNCTIONALITY.
>> I'M JUST AWARE OF A LOT OF ORGANIZATIONS DEBT FINANCE THESE SYSTEMS.
>> THAT'S TRUE, AND WE'RE NOT DOING THAT.
>> THAT'S A GOOD SIGN, I THINK THAT YOU'RE NOT DOING THAT.
ANYTHING ELSE? THAT BRINGS US TO THE RECOMMENDATION, BUT I SHOULD ASK ANY PUBLIC COMMENT.
>> I WANT TO MAKE SURE WE COME UP WITH A MOTION THAT IS INCLUSIVE OF EVERYTHING BEING RECOMMENDED HERE.
WE HAVE SEVEN SLIDES WITH VERY SPECIFIC RECOMMENDATIONS, WE ALSO HAVE AGENDA LANGUAGE THAT REFERS TO FOUR DIFFERENT CONTRACTS AND THE APPROPRIATION.
BUT IT DOESN'T INCLUDE THE AUTHORITY TO THE GM OR THE SPECIFIC $3 MILLION ALLOCATION.
OUR AGENDA LANGUAGE FOR A MOTION IS A BIT INCOMPLETE, I THINK.
>> I'LL TALK ABOUT TALKING ABOUT THE TITLE.
IF WE JUST READ THE TITLES, I DON'T THINK THAT IT'S NOT ALL INCLUSIVE.
>> WHICH IS PROBABLY RIGHT HERE, SAME THING.
>> YES, AND IN THE SCRIPT, I'M WONDERING IF IT'S OKAY.
IF INSTEAD THE MOTION SIMPLY INCORPORATES THE SEVEN SLIDES PRESENTED TO US, EACH WITH ITS OWN RECOMMENDATION, I THINK THAT'S MORE INCLUSIVE THAN THE AGENDA LANGUAGE.
>> IN THAT CASE, THE MOTION WOULD BE TO THE COMMITTEE THAT WE ARE APPROVING THE RECOMMENDATIONS AS PRESENTED IN THE SLIDES ON PAGE 51 THROUGH PAGE 57 OF OUR PACKET. DOES THAT WORK?
ANY FURTHER COMMENT? ALL IN FAVOR? SAY, AYE.
>> ANY OPPOSED, ANY ABSTENTIONS.
WE WANT TO BE AT THE PARTY. NEXT ITEM.
>> I'M SORRY, DIRECTOR COFFEY.
>> MY MATH WAS THAT WAS SEVEN SLIDES.
EACH WITH ITS OWN RANGE OF RECOMMENDATIONS.
WE'RE AT 4C, RECOMMENDATION TO THE BOARD OF DIRECTORS TO ACCEPT
[01:20:05]
THE 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT AND AUDITORS COMMUNICATION.CARREN SIKAT ASSISTANT FINANCE OFFICER OF FINANCE AND MANAGEMENT SERVICES, AND I'LL BE PRESENTING SOME KEY FINANCIAL HIGHLIGHTS FROM THE 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT DRAFT OR THE ACFR.
I'VE BEEN UNDER THE WEATHER, SO I'LL MAKE IT SHORT.
BUT BEFORE I DIVE INTO THE DETAILS, I'D LIKE TO TAKE THE MOMENT TO EXPRESS MY DEEPEST GRATITUDE TO THE CORE MEMBERS OF THE ACCOUNTING TEAM WHO ARE INSTRUMENTAL IN COMPLETING THIS REPORTS.
A SPECIAL THANKS TO KIM BALINGIT, WHO'S HERE TODAY, OUR ACCOUNTING MANAGER, DAVID SUMNER, INTERNAL AUDIT MANAGER, AND ALL THE PARK DISTRICT STAFF WHO CONTRIBUTED TO THE COMPLETION OF THIS REPORT.
ONCE WE RECEIVE THE FINANCE COMMITTEE'S ACCEPTANCE OF THE ACFR, WE WILL BE PRESENTING THIS TO THE PARK ADVISORY COMMITTEE ON OCTOBER 27, AND WE WILL SEEK FINAL APPROVAL OF THE BOARD ON NOVEMBER 4TH.
I WOULD ALSO LIKE TO ACKNOWLEDGE THE PRESENCE OF AMY MAYER FROM MAY'S ASSOCIATES, WHO'S OUR AUDIT PARTNER THIS YEAR.
SHE WILL BE PROVIDING FURTHER INSIGHTS INTO THE YEAR END AUDIT PROCESS.
SOME KEY HIGHLIGHTS FROM THE ACT FOR THE SINGLE AUDIT AND THE OTHER RELATED REPORTS RIGHT AFTER MY PRESENTATION, AND WE'LL ADDRESS ANY QUESTIONS YOU MAY HAVE AT THE END.
I WANT TO START OFF MY PRESENTATION WITH THE AUDIT RESULTS.
WE ARE EXPECTING TO RECEIVE AN UNMODIFIED AUDIT OPINION, WHICH IS OFTEN REFERRED TO AS THE CLEAN OPINION.
THIS SIGNIFIES THAT OUR FINANCIAL STATEMENTS ARE FREE FROM MATERIAL MISSTATEMENTS AND CAN BE RELIED UPON FOR DECISION MAKING.
ADDITIONALLY, WE ARE PROUD TO SHARE THAT FOR THE 24TH CONSECUTIVE YEAR, WE'VE EARNED THE CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING, WHICH IS ISSUED BY THE GFOA FOR OUR 2023 ACFR.
THIS CONSISTENT RECOGNITION DEMONSTRATES THE PARK DISTRICT'S STRICT ADHERENCE TO THE GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR GAAP.
NOW LET'S TAKE A CLOSER LOOK AT OUR TOTAL NET PENSION.
WE'VE REPORTED FOR 2024 1.12 BILLION, WHICH IS A 5% INCREASE FROM LAST YEAR.
OUT OF THIS TOTAL, 70% OF IT IS TIED TO OUR NET INVESTMENT IN CAPITAL ASSETS.
AS YOU CAN SEE ON THIS CHART, THE INCREASE FROM LAST YEAR WAS NOT REALLY MUCH.
IT'S JUST LIKE 1%, AND IT'S PRIMARILY DRIVEN BY THE CAPITAL ASSETS, THE NET CAPITAL ASSETS INCREASE, WHICH IS AT 7.5 MILLION.
HERE YOU WILL SEE A SUMMARY OF OUR STATEMENT OF NET POSITION.
LET'S START OFF WITH OUR ASSETS.
YOU CAN SEE HERE ON THE CURRENT AND OTHER ASSETS, IT HAS INCREASED BY 51.9 MILLION FROM PREVIOUS YEAR, AND IT'S PRIMARILY DRIVEN BY THE INCREASE IN OUR CASH AND INVESTMENTS OF 67.9 MILLION AND ALSO DUE TO OUR REVENUES EXCEEDING OUR EXPENDITURES BY 56.8 MILLION.
NOW, LET'S GO TO THE LIABILITY SIDE.
TOTAL LIABILITIES INCREASED BY 4.4 MILLION, AND IT'S PRIMARILY DUE TO THE IMPLEMENTATION OF A NEW ACCOUNTING STANDARD CALLED COMPENSATED ABSENCES.
BUT ALSO ON THIS SCREEN, YOU WOULD SEE THAT WE HAVE A SHIFT IN OUR LIABILITIES IN TERMS OF INCREASE IN THE CURRENT PORTION AS WELL AS A DECREASE IN THE LONG TERM LIABILITIES, AND IT'S JUST BASICALLY A RECLASSIFICATION OF OUR CURRENT PORTION BEING DUE FROM THE LONG TERM LIABILITIES, WHICH IS NORMALLY OUR BONDS.
LASTLY, OUR RESTRICTED NET POSITION SAW A 63.3 MILLION INCREASE.
THIS IS JUST PRIMARILY DUE TO THE ISSUANCE OF OUR 2024 PROMISSORY NOTES, WHICH ABOUT 35 MILLION, WHICH IS RESTRICTED FOR THE RENOVATION OF OUR ADMIN BUILDING, WHICH IS THE PERALTA OAKS NORTH.
OUR UNRESTRICTED NET POSITION STANDS AT 173.4 MILLION, WHICH REPRESENTS THE RECEIVABLE AMOUNT AVAILABLE FOR USE, BUT IT HAS DECREASED BY 23.5 MILLION,
[01:25:02]
WHICH IS BASICALLY TO SHOW YOU THAT THE AVAILABLE RESOURCES ARE USED TO SUPPORT OUR CAPITAL PROJECTS.MOVING ON TO THE STATEMENT OF ACTIVITIES.
OUR TOTAL REVENUES HAVE BEEN BROKEN DOWN BETWEEN PROGRAM REVENUES AND THE GENERAL REVENUES.
A FEW KEY HIGHLIGHTS FROM THIS, OUR PROPERTY TAXES, WHICH REMAINS OUR LARGEST SOURCE OF REVENUE HAS INCREASED BY 4% COMPARED TO LAST YEAR.
WHILE OUR GENERAL OBLIGATION BOND PROPERTY TAX HAS DECREASED BY 26 MILLION, AS IT'S DIRECTLY TIED TO THE DEBT PAYMENTS, WHICH WAS LOWER LAST YEAR.
ON THE EXPENDITURE SIDE, YOU'LL NOTICE THE INCREASE ACROSS VARIOUS DIVISIONS ARE PRIMARILY DUE TO THE FILLING OF THE VACANT STEP POSITIONS THAT WERE BUDGETED IN THE PREVIOUS YEARS.
NOW LET'S TAKE A LOOK AT OUR GENERAL FUND PERFORMANCE AS COMPARED TO THE BUDGET.
AS YOU CAN SEE HERE, WE DO HAVE THE ORIGINAL BUDGET AND THE AMENDED BUDGET.
FOR OUR REVENUES, WE'VE REPORTED A POSITIVE VARIANCE OF 16.7 MILLION, AND IT'S PRIMARILY DUE TO THE INTEREST AND INVESTMENT EARNINGS OF 11 MILLION, WHICH ARE CURRENTLY NOT BUDGETED DUE TO THE MARKET VOLATILITY.
WE ALSO HAVE THAT INCREASE PREVIOUSLY MENTIONED OF 4.7 MILLION IN OUR PROPERTY TAXES AND ASSESSMENTS.
ON THE EXPENDITURE SIDE, WE ALSO HAVE A POSITIVE VARIANCE OF EIGHT MILLION.
THIS IS JUST REALLY BECAUSE OF OUR CAPITAL EXPENDITURES BEING BUDGETED IN 2024, BUT WE DIDN'T ACTUALLY SPEND IT AT THE END OF THE YEAR.
I WANT TO ALSO BRIEFLY HIGHLIGHT OUR PENSION AND OTHER POST EMPLOYMENT BENEFITS LIABILITIES.
WE'LL START OFF WITH THE EBRPD PLAN, WHICH IS BASICALLY THE PLAN THAT THE DISTRICT WAS INTO PRIOR TO MOVING TO CALPERS.
FOR THIS YEAR, WE HAVE SHOWN POSITIVE RESULTS WITH A NET PENSION ASSET OF 3.2 MILLION FOR OUR GENERAL EMPLOYEE PLAN.
THIS IS ACTUALLY AN INCREASE OF 1.9 MILLION FROM THE PREVIOUS YEAR.
WHILE OUR SAFETY PLAN IS ALMOST CLOSE TO FULLY FUNDED, WE ONLY HAVE $100,000 LIABILITY, WHICH WAS DOWN BY $200,000 FROM LAST YEAR.
WE'RE DOING REALLY GREAT WITH OUR EBRPD PLAN.
WELL, AS OF CALPERS PLAN, AS YOU ALL KNOW, WE'RE STILL MAKING PROGRESS, THERE'S STILL NEED SOME WORK TO BE DONE TO REDUCE THE NET PENSION LIABILITY.
AS OF DECEMBER 31ST, 2024, OUR NET PENSION LIABILITY FOR MISCELLANEOUS STILL STANDS AT 1.24 MILLION, WHICH IS BASICALLY DOWN BY FOUR MILLION AS COMPARED TO LAST YEAR, SO THAT'S GREAT.
OUR SAFETY PLAN, WE REPORTED 31 MILLION IN THAT PENSION LIABILITY, WHICH WAS ACTUALLY AN INCREASE OF NINE MILLION AS COMPARED TO LAST YEAR.
I DO WANT TO POINT OUT THOUGH THAT IF YOU WOULD RECALL, WE MADE A SIX MILLION ADDITIONAL DISCRETIONARY PAYMENT BACK IN DECEMBER.
BECAUSE THE CALPERS REPORTING IS ON A FISCAL YEAR BASIS OF JUNE 30TH, SO THAT PAYMENT HAS NOT BEEN REFLECTED YET IN HERE.
WE DO EXPECT TO SEE SOME IMPROVEMENT IN OUR NUMBERS IN 2025 ASSUMING WE HAVE STILL GREAT INVESTMENT EARNINGS IN 2025.
ON A POSITIVE NOTE, WE ALSO REPORTED OPEB ASSET OF 12.1 MILLION, MARKING AN INCREASE OF 4.3 MILLION FROM LAST YEAR.
THIS IS ACTUALLY WHY CALPERS TOLD US TO NOT MAKE ANY CONTRIBUTIONS ANYMORE, SOMETIME THIS YEAR BECAUSE WE'RE ALREADY CONSIDERED SUPER FUNDED.
THIS IS A VISUAL PRESENTATION OF OUR FUNDING PROGRESS SINCE 2015.
I'LL START OFF WITH CALPERS, AND AS YOU CAN SEE HERE, WE'RE AT 73.6% FUNDED, AND WE HOPE TO REACH 80% HOPEFULLY IN THE NEXT YEAR AS WE CONTINUED MAKING THOSE CONTRIBUTIONS.
IF YOU WOULD RECALL, WE ALSO IMPLEMENTED THE FRESH START FOR 14 YEARS, SO THAT SHOULD ALSO HELP IN REDUCING OUR NET PENSION LIABILITY.
EBRPD PLAN, WHICH IS DEFINITELY PERFORMING WELL.
THE GENERAL FUND IS FULLY FUNDED.
THAT'S WHY WE HAVE AN ASSET ISLE IN MY PREVIOUS SLIDE.
WHILE SAFETY PLAN IS ALMOST FUNDED AT 92.1%.
LASTLY, OUR OPEB PLAN, WHICH IS 117.4% FUNDED, WHICH IS EXCELLENT.
AS YOU CAN SEE HERE FOR THE OPEB, WE'VE BEEN 100% FUNDED SINCE 2021.
[01:30:04]
BEFORE WE CONCLUDE, I'D LIKE TO MENTION THAT ALONG WITH THE 2024 ACFR, WE ALSO ISSUED A FEW IMPORTANT REPORTS.WE DO HAVE THE AUDITORS COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE.
THE SINGLE AUDIT REPORT, WHICH IS OUR REPORT FOR FEDERAL GRANTS COMPLIANCE, AND THE GANN APPROPRIATIONS LIMIT LETTER.
AMY FROM MAY'S ASSOCIATES, WILL BE PRESENTING THIS ADDITIONAL REPORTS AND PROVIDING FURTHER INSIGHTS INTO THE YEAR END AUDIT PROCESS.
WITH THIS, I REQUEST THAT THE BOARD FINANCE COMMITTEE RECOMMEND THAT THE BOARD OF DIRECTORS ACCEPT THE 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT DRAFT.
WITH THAT, I'LL NOW TURN IT OVER TO AMY FOR HER PRESENTATION. THANK YOU.
>> MAYBE I SHOULD GO UP ON THAT, IS THAT BETTER? I'VE NEVER BEEN PROVIDED A STOOL.
WILL IT POP UP HERE OR DO I NEED TO DO SOMETHING? GOOD AFTERNOON. HERE WE GO.
I'M AMY MAYER WITH MAYSON ASSOCIATES.
I'M THE ENGAGEMENT PARTNER ON THE PARK DISTRICT'S AUDIT.
YES, I'M HERE TO PRESENT THE RESULTS OF THE AUDIT, AS WE KEEP SAYING IT'S A DRAFT AUDIT, I'LL EXPLAIN WHY IN A FEW SLIDES.
THESE ARE THE TOPICS WE'RE GOING TO TALK ABOUT TODAY.
AN AUDIT IS AN INDEPENDENT VERIFICATION OF THE PARK'S DISTRICT THAT THE PARK DISTRICT'S FINANCIAL STATEMENTS ARE MATERIALLY CORRECT OR FAIRLY PRESENT THE FINANCIAL POSITION OF THE PARK DISTRICT'S FUNDS.
WE OPINE ON THE PARK DISTRICT AS A WHOLE IN THE STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES, WHICH BRING ALL OF THE BALANCE SHEET ITEMS TOGETHER, ALL OF THE ASSETS AND LIABILITIES AS YOU SAW ON KAREN'S EARLIER SLIDES.
WE ALSO OPINE ON THE MAJOR FUNDS INDIVIDUALLY AND NON MAJOR FUNDS IN THE AGGREGATE, AND I'LL REFER IT TO YOU TO SOME PAGES IN A MINUTE.
AUDIT WAS CONDUCTED IN ACCORDANCE WITH AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA, AS WELL AS GOVERNMENT AUDITING STANDARDS.
IF YOU HAVE ANY QUESTIONS ALONG THE WAY, JUST LET ME KNOW.
THE REPORTS WE'RE PRESENTING, AS KAREN MENTIONED, ARE THE ANNUAL COMPREHENSIVE FINANCIAL REPORT.
WE AUDIT THE PARK DISTRICT AS A WHOLE, AS I MENTIONED, WHICH IS INCLUDED IN THE ANNUAL COMPREHENSIVE FINANCIAL REPORT.
IN THE ACFR, I'M GOING TO REFER TO AS THE ACFR HOPEFULLY THE REST OF THE TIME.
WE AUDIT THE BASIC FINANCIAL STATEMENTS, WHICH ARE IN THE MIDDLE OF THE REPORT, WHICH START WITH OUR AUDIT OPINION ON PAGE 1.
THEY'RE PRECEDED BY AN INTRODUCTORY SECTION, AND THEN IN THE BACK OF THE REPORT A STATISTICAL SECTION, WHICH WE DO NOT OPINE ON THOSE PORTIONS OF THE AUDIT, JUST THAT MIDDLE PART, WHICH IS THE BASIC FINANCIAL STATEMENTS.
THEN THERE'S ALSO THE SINGLE AUDIT, WHICH I'LL EXPLAIN THAT IN A BIT, A FEW SLIDES OF THE AUDIT OF THE FEDERAL AWARD PROGRAMS, AND THEN THE OTHER REPORT, WHICH IS THE APPROPRIATIONS LIMIT AGREED UPON PROCEDURES REPORT, AND THEN WE'RE GOING TO GO OVER THE REQUIRED COMMUNICATIONS AS WELL.
THE DRAFT RESULTS. INDEPENDENT AUDITORS REPORT AND I DON'T KNOW IF YOU'RE USING A PDF COPY ON YOUR SCREEN OR THE HARD COPY IN FRONT OF YOU.
I DIDN'T UPDATE THEM TO IF IT'S THE PAPER COPY.
PAGE 88 IS THE PDF REFERENCE, 90 IS THE REFERENCE IN THE BOTTOM RIGHT CORNER OF THE PDF BECAUSE THEY WERE OFF A COUPLE OF PAGES.
WE PROPOSE TO ISSUE AN UNMODIFIED OR CLEAN OPINION THAT THE FINANCIAL STATEMENTS ARE FAIRLY STATED IN ALL MATERIAL RESPECTS, IN CONFORMITY WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN UNITED STATES OF AMERICA.
OUR AUDIT OPINION, AGAIN, CLEAN OR UNMODIFIED IS THE TERM.
WE USE UNMODIFIED, BUT THE COMMON TERM IS CLEAN OPINION IS WHAT WE PROPOSE TO ISSUE.
I'LL USE PROPOSE AND DRAFT THROUGHOUT THE PRESENTATION.
THAT'S BECAUSE WE DON'T EXPECT THE PARK DISTRICT'S NUMBERS.
OUR AUDIT OF THE PARK DISTRICT PROPER IS COMPLETE.
WE HAVE NO MORE OPEN ITEMS, THE AUDIT IS COMPLETE.
BUT ONE OF THE CHANGES THIS YEAR WAS TO INCORPORATE THE REGIONAL PARKS FOUNDATION AS A DISCRETELY PRESENTED COMPONENT UNIT OF THE PARK DISTRICT.
[01:35:01]
>> THAT YOU'LL SEE ON THE STATEMENT OF ACTIVITIES IN THE STATEMENT OF NET POSITION.
ACCOUNTING RULES CHANGED A FEW YEARS AGO.
WHEN WE WALKED DOWN THE PATH AS THE NEW AUDITORS LOOKING AT HOW OR IF THE REGIONAL PARK FOUNDATION SHOULD BE REPORTED IN THE PARK DISTRICTS ACFR, WE CONCLUDED THAT IT SHOULD BE REPORTED AS A COMPONENT UNIT.
THEN THE ACCOUNTING STANDARD SAY BECAUSE IT'S A NONPROFIT, IT SHOULD BE REPORTED WHAT'S CALLED DISCRETELY, AND THAT'S WHY IT'S IN THAT SEPARATE COLUMN ON THE STATEMENT OF ACTIVITIES AND THE STATEMENT OF NET POSITION.
ONCE THEIR AUDIT IS COMPLETE, THEY ALSO HAVE NEW AUDITORS THIS YEAR AND THAT AUDIT IS STILL IN PROCESS, AND THEY HAD SOME CHANGES.
WE WERE CLOSE. THEN THEY HAD SOME CHANGES AND SO IT'S GOING TO THEIR BOARD.
ONCE THEY ISSUE THEIR REPORT, THEN THAT'S WHEN WE CAN ISSUE OUR REPORT, BECAUSE OUR AUDIT OPINION CANNOT BE PRIOR TO THEIRS BECAUSE WE'RE INCORPORATING IN WHAT WE CALL BY REFERENCE.
WE'RE NOT AUDITING THE REGIONAL PARKS FOUNDATION.
WE'RE RELYING UPON THAT OTHER AUDIT.
ONCE IT'S COMPLETE AND ISSUED, THEN WE CAN OPINE ON THE PARK DISTRICTS AUDIT AS A WHOLE.
THAT'S WHY YOU'VE GOT THE HIGHLIGHT ON OUR OPINION FOR THE PERCENTAGES JUST IN CASE THEIR NUMBERS CHANGE, BUT AGAIN, WE DON'T ANTICIPATE.
WE'RE DONE AUDITING YOUR FINANCIAL STATEMENTS.
OTHER ITEMS, THAT'S WHY YOU'LL SEE THE EMPHASIS OF A MATTER RELATED TO THAT RESTATEMENT, THEY REFER BACK TO NOTE 8F ON PAGE 158.
THEN ANOTHER EMPHASIS OF A MATTER IS CHANGE IN ACCOUNTING PRINCIPLES, AS KAREN MENTIONED, GOVERNMENTAL ACCOUNTING STANDARDS BOARD PRONOUNCEMENT 101 FOR COMPENSATED ABSENCES WAS EFFECTIVE THIS YEAR.
DOESN'T CHANGE ANYTHING AS FAR AS HOW YOUR MOUS, HOW COMPENSATED ABSENCES ACTUALLY ARE ON A DAY-TO-DAY BASIS, BUT HOW THEY'RE REPORTED IN THE FINANCIAL STATEMENTS.
IT CHANGED HOW THE LIABILITY IS DETERMINED OR CALCULATED.
IT'S NO LONGER JUST BASED ON THE MOU PROVISIONS.
IT'S BASED ON EXPECTED USAGE OVER TIME.
THAT'S WHY THE LIABILITY WAS INCREASED.
BECAUSE EMPLOYEES ARE NOT LEAVING TOMORROW, THEY'RE NOT CASHING OUT OR NOT CASHING OUT, GETTING SOMETHING OR GETTING ZERO.
IT'S WHAT'S THE LIKELIHOOD OF THE USAGE OVER THE FUTURE PERIOD? THE INTENT OF THE STATEMENT IS TO GET THE LIABILITY AND THE EXPENSE INTO THE PERIOD IN WHICH IT WAS EARNED.
THAT'S THE CHANGE IN ACCOUNTING AND WHY THAT CHANGE WAS REQUIRED THIS YEAR.
AGAIN, IT DOESN'T CHANGE YOUR DAY-TO-DAY TRANSACTIONS AND HOW COMPENSATED ABSENCES, AND COMPENSATED ABSENCES BEING THINGS LIKE VACATION SICK LEAVE AND OTHER TYPES OF LEAVE, IT PRIMARILY AFFECTED THE SICK LEAVE CALCULATION.
ALSO, INCLUDED IN THE ACFR IS MANAGEMENT'S DISCUSSION AND ANALYSIS.
WE PREPARE THE ACFR FOR THE PARK DISTRICT, BUT WE PREPARE IT BASED ON THE INFORMATION PROVIDED BY THE PARK DISTRICT.
THE MANAGEMENT'S DISCUSSION AND ANALYSIS, WHICH IS AFTER OUR AUDIT OPINION, SO IT'S WITHIN THAT WORLD OF THE AUDITED AREA, BUT IT IS FULLY PREPARED BY FINANCE STAFF.
INTRODUCES THE BASIC FINANCIAL STATEMENTS AND PROVIDES A GOOD ANALYTICAL OVERVIEW OF THE PARK DISTRICT, COMPARING LAST YEAR TO CURRENT YEAR AND REASONS FOR INCREASES OR DECREASES.
ALTHOUGH AS YOUR AUDITOR, I WANT YOU TO READ THE ENTIRE REPORT, IT'S A GREAT PLACE TO START. GO TO THE MDNA.
IT GIVES YOU A GOOD OVERVIEW OF WHAT HAPPENED AND WHY THE FLUCTUATIONS AND GIVES YOU THAT OVERALL VIEW OF IT.
IT'S A GREAT PLACE TO START IN THE REPORT BEFORE YOU READ THE WHOLE REPORT, OF COURSE.
THEN THE BASIC FINANCIAL STATEMENTS, THEY START ON PAGE 104 OF YOUR PACKET, INCLUDES THE FINANCIAL ACTIVITIES, AS I MENTIONED, THE RPF, REGIONAL PARKS FOUNDATION, LEGALLY SEPARATE, BUT A DISCRETE COMPONENT UNIT THAT'S INCORPORATED.
LET'S SEE. I'VE GONE OFF MY NOTES HERE.
THEN THE NOTES TO THE BASIC FINANCIAL STATEMENTS.
THOSE DESCRIBE AND EXPLAIN AND ANALYZE THE BALANCES.
SIGNIFICANT BALANCES TALK ABOUT THE DEBT, PENSION, CAPITAL ASSETS, AND SHOWING THE ACTIVITIES.
IT'S ALSO ANOTHER REASON WHY I WANT YOU TO READ THE WHOLE REPORT, AND THEY TIE THINGS OUT.
EMPHASIS OF THE MATTER IN THE AUDIT OPINION, AS I MENTIONED, RESTATEMENTS AND ADJUSTMENTS.
THERE'S A TABLE THAT'S INCLUDED IN NOTE 8F ON PAGE 158 OF YOUR PACKET, AND THAT EXPLAINS THE RESTATEMENTS FOR THE FISCAL YEAR, AS I MENTIONED, THE CHANGE IN REPORTING ENTITY TO BRING IN THE REGIONAL PARKS FOUNDATION, CHANGE IN ACCOUNTING PRINCIPLE FOR GASB 101, AND THEN THREE OTHER RESTATEMENTS.
ONE WAS RELATED TO THE BOREL PROPERTY.
WHEN WE WERE WORKING ON THE AUDIT, WE DIDN'T FIND THIS ONE.
FINANCE STAFF DISCOVERED THAT BACK A NUMBER OF YEARS AGO WHEN THE BOREL PROPERTY WAS DEDICATED TO THE PARK DISTRICT, NOT ALL OF THE ACREAGE WAS RECORDED IN THE CAPITAL ASSET RECORDS, BECAUSE APPARENTLY WE UNDERSTAND THAT MAYBE A PORTION WAS EXPECTED TO BE SOLD, BUT IT DIDN'T GET SOLD UNTIL THIS YEAR, UNTIL FISCAL 24, AND SO THAT'S WHEN IT WAS DISCOVERED THAT IT HADN'T BEEN RECORDED.
IT WAS RECORDED, RESTATED, AND THEN RETIRED WITH THE SALE.
THE REASON IT WAS IMPORTANT IS BECAUSE IT AFFECTED, IN THE FINANCIAL STATEMENTS, THE GAIN OR LOSS ON THE SALE OF PROPERTY.
THAT'S WHY IT WAS IMPORTANT TO MAKE THE RESTATEMENT, EVEN THOUGH AT THE END OF THE YEAR, THE CAPITAL ASSETS WERE AS THEY WERE AT THE END OF LAST YEAR.
THEN THERE WERE TWO OTHER RESTATEMENTS THAT IN NET AMOUNTS WERE NOT MATERIAL,
[01:40:02]
BUT THE REASON THEY WERE INCLUDED AS RESTATEMENTS IS BECAUSE THE GROSS AMOUNT OF THE SUBSCRIPTION BASED INFORMATION TECHNOLOGY ARRANGEMENT, INTANGIBLE ASSETS, AND LEASE INTANGIBLE ASSETS, AND THE ASSOCIATED LIABILITIES IN GROSS AMOUNTS WERE LARGE, BUT THE NET EFFECT ON NET POSITION WAS NOT MATERIAL.YOU CAN SEE THE DETAILS AND EXPLANATIONS OF THOSE ON PAGE 158.
ANY QUESTIONS ON THE ACFR BEFORE I ROLL INTO THE NEXT REPORT? GOOD. THE NEXT REPORT YOU HAVE IS THE SINGLE AUDIT.
IT IS THE AUDIT OF THE DISTRICT'S FEDERAL AWARD PROGRAMS. BECAUSE IT DOESN'T MEAN YOU'LL HAVE ONE EVERY YEAR, IT'S REQUIRED IN ANY YEAR IN WHICH YOUR FEDERAL AWARD EXPENDITURES ARE 750,000 OR MORE AT THIS MOMENT.
THAT THRESHOLD IS GOING TO CHANGE.
I FORGET IF IT CHANGES FOR YOU NEXT YEAR OR THE YEAR AFTER.
IT'S GOING TO INCREASE TO A MILLION, BUT AS OF 12/31/24, THE THRESHOLD WAS $750,000.
THE REASON IT'S CALLED A SINGLE AUDIT IS WAY BACK WHEN BEFORE THAT RULE CAME INTO PLACE, INDIVIDUAL GRANTORS WOULD COME IN AND COMPLETE AUDITS OF THEIR OWN INDIVIDUAL GRANT.
THEN A LAW CHANGED AND RULES WERE BROUGHT TOGETHER BY THE OMB TO CREATE A SINGLE AUDIT, ONE AUDIT OF THE FEDERAL AWARD PROGRAMS WITH DIFFERENT RULES THAT TELL US WHICH PROGRAMS NEED TO BE AUDITED FOR THAT YEAR.
THERE'S A MATHEMATICAL AND A RISK BASED ASSESSMENT THAT TELL US WHICH PROGRAMS NEED TO BE TESTED AS WHAT'S CALLED A MAJOR PROGRAM FOR THAT YEAR.
THE OVERALL OBJECTIVE OF THE FEDERAL AWARD AUDIT WERE EXPENDITURES IN ACCORDANCE WITH THE GRANT LIMITATIONS AND ONLY SPENT ON ALLOWABLE ACTIVITIES, WAS REPORTING ACCURATE AND TIMELY, WERE PROCUREMENT STANDARDS FOLLOWED, WERE SUB-RECIPIENTS.
YOU DIDN'T, BUT IN THE EVENT, IF YOU PASSED THAT FUNDING THROUGH TO ANOTHER AGENCY, WAS DID YOU MONITOR THEM TO MAKE SURE IT WAS SPENT PROPERLY? THAT REPORT STARTS ON 288 OF YOUR AGENDA PACKET? IN FISCAL 2024, THE PARK DISTRICT EXPENDED JUST OVER $2 MILLION ACROSS SIX PROGRAMS. YOU CAN SEE THAT IN THE SCHEDULE OF EXPENDITURES OR FEDERAL AWARDS OR SEFA, AS AUDITORS, WE LOVE ACRONYMS. SEFA, WHICH IS ON PAGE 294.
AS FAR AS OUR AUDIT, WE TESTED ONE MAJOR PROGRAM.
AGAIN, THE MATH TOLD US TO TEST, AND IT WAS ASSISTANCE LISTING NUMBER.
THAT'S A FEDERAL IDENTIFICATION NUMBER 15.614 WAS FOR THE COASTAL WETLANDS PLANNING PROTECTION AND RESTORATION PROGRAM, AND WE HAD NO COMPLIANCE FINDINGS OUT OF THAT WORK.
INCLUDED IN THE SINGLE AUDIT REPORT, THERE ARE TWO AUDIT OPINIONS, YOU'LL SEE.
ONE TELLS YOU WHETHER WE HAD ANY FINDINGS ON THE FINANCIAL STATEMENTS AS A WHOLE, THAT SEFA OR SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS IS CONSIDERED A FINANCIAL STATEMENT.
THE ACFR'S FINANCIAL STATEMENTS, BUT ALSO THE SEFA IS CONSIDERED A FINANCIAL STATEMENT.
AN INTERNAL CONTROL OVER FINANCIAL REPORTING ON COMPLIANCE AND THEN COMPLIANCE OVER EACH MAJOR PROGRAM AND ON INTERNAL AND COMPLIANCE.
AGAIN, WE DIDN'T HAVE ANY COMPLIANCE FINDINGS WITH THE SINGLE AUDIT WORK.
THE OTHER DOCUMENT IN YOUR PACKET IS THE REQUIRED COMMUNICATIONS.
THAT'S WHERE WE ARE REQUIRED TO COMMUNICATE CERTAIN MATTERS TO YOU.
THEY INCLUDE WHETHER THERE WERE ANY CHANGES IN ACCOUNTING POLICY.
IF THERE WAS A SIGNIFICANT CHANGE IN AN ACCOUNTING POLICY, IT'S REQUIRED TO BE COMMUNICATED TO YOU.
THERE WERE NONE OTHER THAN THAT IMPLEMENTATION RELATED TO GASB PRONOUNCEMENT 101 FOR COMPENSATED ABSENCES.
THEN ALSO ANOTHER GASB 100, ACCOUNTING CHANGES AND ERROR CORRECTIONS, IT CHANGED.
THAT'S WHY THERE'S THE TABLE IN FOOTNOTE 8F RELATED TO THE RESTATEMENTS.
IT REQUIRES A TABLE AND DISCUSSION FOR ANY RESTATEMENTS, WHICH IS SOMETHING WE WOULD NORMALLY DO, BUT NOW IT'S PART OF THE ACTUAL REQUIREMENT.
OTHER ITEMS WE'RE REQUIRED TO COMMUNICATE, WHETHER THERE WERE ANY UNUSUAL TRANSACTIONS OR CONTROVERSIAL OR EMERGING AREAS. THERE WERE NONE.
ALSO, WHETHER THERE WERE ANY SIGNIFICANT ESTIMATES INCLUDED IN THE FINANCIAL STATEMENTS.
YOU HAVE TO REMEMBER THE FINANCIAL STATEMENTS ARE ALL OF THE ACTIVITY THROUGH THE FISCAL YEAR, AND THEN AT DECEMBER 31ST, IT'S AT FROZEN POINT IN TIME.
THERE ARE A NUMBER OF SIGNIFICANT ESTIMATES TO COME UP WITH THE ASSETS AND LIABILITIES THAT ARE INCLUDED IN THE FINANCIAL STATEMENTS, EASY EXAMPLES, PENSION AND OPEB LIABILITIES.
THOSE INCLUDE ACTUARIAL ESTIMATES PROJECTING FORWARD.
THOSE ARE THE TWO BIG EASY ONES.
OTHER EXAMPLES ARE THE FAIR VALUE OF INVESTMENTS.
THAT'S THE FAIR VALUE OR THE MARKET VALUE OF YOUR INVESTMENTS ON THAT DATE.
OBVIOUSLY, IT COULD CHANGE ON JANUARY 1, BUT THERE IS NO ACCOUNTING REQUIREMENT THAT THE CHANGE BE PULLED BACK TO 12/31.
IF THE MARKET FELL APART ON JANUARY 1ST, THERE MIGHT BE A DISCLOSURE, BUT YOUR NUMBERS WOULD STILL BE BASED ON THE 12/31/24 MARKET VALUE.
OTHER SIGNIFICANT ESTIMATES INCLUDE DEPRECIATION OF CAPITAL ASSETS.
THAT'S THE ESTIMATE OF THE USEFUL LIVES OF YOUR INVESTMENTS, COMPENSATED ABSENCES, AS WE TALKED ABOUT, CLAIMS PAYABLE.
[01:45:04]
LEASES RECEIVABLE, AND SUBSCRIPTION ASSETS AND LIABILITIES ARE ALSO OTHER ESTIMATES, AND POLLUTION REMEDIATION LIABILITIES.YOU DO HAVE SOME POLLUTION REMEDIATION LIABILITIES THAT ARE DISCLOSED IN THE FINANCIAL STATEMENTS.
THOSE ARE THE ESTIMATE OF THE FUTURE COST BECAUSE IT'S NOT GOING TO TAKE PLACE TODAY, BUT THE ACCOUNTING RULES SAY YOU HAVE TO ESTIMATE THE FULL AMOUNT OF THE COST AND BOOK IT AS LIABILITY TODAY.
WE'RE PLEASED TO SAY THAT WE HAD NO DISAGREEMENTS WITH MANAGEMENT, AND THERE WERE NO MATERIAL ADJUSTMENTS TO REPORT.
WHAT'S CALLED UNCORRECTED MISSTATEMENTS, WE DEEMED THEM TRIVIAL.
AS WE GO ALONG THE AUDIT, THERE MIGHT BE OTHER LITTLE DIFFERENCES THAT WE NOTE IN THE FINANCIAL STATEMENTS, AND WE'RE REQUIRED TO DOCUMENT THEN ACCUMULATE THEM TO MAKE SURE THEY DON'T BECOME MATERIAL.
WE HAVE NONE TO REPORT TO YOU.
THE FINAL REPORT IS THE AGREED UPON PROCEDURES REPORT FOR THE GANN LIMIT.
IT'S ON PAGE 304 OF THE PACKET.
WE HAD NO EXCEPTIONS TO THE ACTUAL CALCULATION OF THE LIMIT.
WE HAVE ONE EXCEPTION YOU'LL SEE IN OUR REPORT JUST RELATED TO THE TEXT OF THE RESOLUTION BECAUSE ONE OF THE STEPS THAT WE GO THROUGH THE AGREED UPON PROCEDURES IS TO MAKE SURE THAT THE PRICE AND POPULATION FACTORS WERE ADOPTED BY RECORDED VOTE OF THE BOARD, AND THE TEXT OF THE RESOLUTION DIDN'T SAY WHICH POPULATION FACTOR WAS SELECTED.
IT WAS INCLUDED IN THE CALCULATION.
AGAIN, WE DIDN'T HAVE AN EXCEPTION IN THE CALCULATION, BUT THE WORDS WERE NOT IN THE RESOLUTION.
THAT CAN BE ADDED NEXT TIME YOU DO THE ADOPTION OF THE 26 LIMIT.
WITH THAT, I WANTED TO THANK THE FINANCE STAFF.
THEY WERE GREAT TO WORK WITH FOR THIS FIRST YEAR, ESPECIALLY FIRST YEAR AUDIT.
WE ASK A LOT OF QUESTIONS EVERY YEAR, BUT THE FIRST YEAR AUDIT, WE ASK A LOT OF EXTRA QUESTIONS.
I REALLY APPRECIATE, THEY'RE ALWAYS VERY RESPONSIVE, AND WE APPRECIATE ALL THE HELP ALONG THE WAY.
WE'RE HAPPY TO ANSWER ANY OTHER QUESTIONS YOU MAY HAVE.
>> THANK YOU, AMY. I WANTED TO LET DIRECTOR WAESPI KNOW THAT PRIOR TO THIS MEETING, JOHN, AS PRESIDENT OF THE BOARD, AND I, AS CHAIR OF THIS COMMITTEE, SPENT SOME TIME WITH AMY GOING OVER HER MEMORANDUM ON THE EFFECTIVENESS OF INTERNAL CONTROLS.
THAT WAS VERY HELPFUL AND GENERALLY POSITIVE.
WE ALSO GAVE AMY AN OPPORTUNITY TO MEET WITH JUST THE TWO OF US IN CASE THERE WAS ANYTHING SENSITIVE.
>> I REMEMBER WHEN THAT STARTED.
>> YEAH. IT'S A GOOD PRACTICE, AND HAPPILY NOTHING SENSITIVE.
WITH THAT, DO YOU HAVE ANY QUESTIONS?
>> NO. JUST THANK YOU FOR ALL OF THE HARD WORK THAT'S BEEN DONE AND CONGRATULATIONS ON THE GFOA AWARD AT THE 250TH YEAR IN A ROW OR WHATEVER IT'S BEEN.
CONGRATULATIONS. IT'S A SOURCE OF PRIDE.
THANK YOU, KAREN, FOR YOUR PRESENTATION.
I LIKE TO HEAR THE WORD SUPER FUNDED.
THAT'S ALWAYS A GOOD THING TO HEAR.
I GUESS THE ONLY QUESTION I REALLY HAVE.
I THINK IT'S AN INCREDIBLE DOCUMENT. THANK YOU VERY MUCH.
I'M GLAD TO HEAR WERE CLEAN AS I EXPECTED.
BUT IT'S ANOTHER ISSUE, BUT IT'S INTERESTING WITH THE REVENUES AND WHERE THEY'RE GOING.
WHEN DO WE RECEIVE PROPERTY TAX PAYMENTS? WITH FISCAL YEAR, OUR YEAR AND THE COUNTY'S YEARS, HOW DOES THAT WORK OUT WITH US?
>> WE RECEIVE OUR TWO MAJOR PAYMENTS IN APRIL AND DECEMBER.
TWICE A YEAR, WE GET BIG PAYMENTS, AND THEN FROM ALAMEDA COUNTY, WE RECEIVE SMALLER CHUNKS ALMOST EVERY MONTH, BUT MUCH SMALLER.
>> I WANT TO POINT OUT, PEOPLE GET CONFUSED ON THE RECONCILIATION FROM THE FUND LEVEL TO THE ENTITY WIDE LEVEL, THE FINANCIAL STATEMENTS.
BECAUSE OF THE TIMING YOU POINT OUT, YOU'LL SEE ON I DON'T KNOW WHAT PAGE IT IS ON YOUR PDF, BUT THE GOVERNMENTAL BALANCE SHEET, THERE'S A BALANCE FOR UNAVAILABLE REVENUE OF ABOUT $80 MILLION.
BECAUSE AT 12:31, IT'S THE TIMING OF WHEN THAT PAYMENT.
AVAILABLE MEANS IT'S RECEIVED WITHIN THE ACCRUAL PERIOD IN CASH.
BECAUSE IT'S NOT RECEIVED UNTIL APRIL, IT'S OUT THERE, BUT AT THE ENTITY WIDE AND THE STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES, IT IS RECOGNIZED AS REVENUE.
THAT CAN BE A CONFUSING POINT BETWEEN THE FINANCIAL STATEMENTS.
>> KAREN, IS THAT REALLY THE WORD THAT [INAUDIBLE] USES, SUPER FUNDED? I THOUGHT MAYBE WE WERE MAKING THAT UP. I DON'T KNOW.
TO ME, A VERY STRONG MEASURE OF THE FISCAL HEALTH OF AN AGENCY IS THE DEGREE TO WHICH IT'S ABLE TO FUND ITS PENSION LIABILITIES.
[01:50:04]
THIS DISTRICT HAS ALWAYS BEEN WAY UP THERE IN TERMS OF WHERE MOST AGENCIES ARE.IT IS ONCE AGAIN, A VERY STRONG INDICATOR OF THE FISCAL STRENGTH OF THIS ORGANIZATION.
IT'S ALWAYS JUST REALLY HAPPY TO SEE THAT.
I DON'T HAVE ANY OTHER SPECIFIC QUESTIONS, OTHER THAN THANK YOU AND WELCOME TO THE DISTRICT.
CONGRATULATIONS ON THE FIRST YEAR.
>> NO PUBLIC COMMENTS. WE NEED, LET ME GET TO THE LANGUAGE, A MOTION TO RECOMMEND TO THE FULL BOARD OF DIRECTORS TO ACCEPT THE 2024 ANNUAL COMPREHENSIVE FINANCIAL REPORT AUDITORS COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE, 2024 SINGLE AUDIT REPORT, AND THE INDEPENDENT ACCOUNTANT REPORT ON AGREED UPON PROCEDURES APPLIED TO THE 2025 APPROPRIATION LIMIT SCHEDULE. TAKE A BREATH.
>> I'LL SECOND IT. ALL IN FAVOR SAY AYE.
DEBORAH COVERED FOR US ON THAT.
NEXT AGENDA ITEM, INFORMATIONAL ITEMS. DEB.
>> I HAVE NO INFORMATIONAL ITEMS. THANK YOU.
>> NO. THANK YOU. GREAT MEETING.
>> NO ANNOUNCEMENTS. WE STAND ADJOURNED. VERY GOOD MEETING.
WE ALL VERY MUCH APPRECIATE ALL THE TIME AND EFFORT AND RESOURCES PUT INTO ALL THE INFORMATION YOU PROVIDED TODAY.
OFFICER, THANKS FOR ATTENDING.
>> THANK YOU, GUYS.
* This transcript was compiled from uncorrected Closed Captioning.