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HomeMy WebLinkAboutApproved Minutes - March 10, 2022Finance Committee Meeting Minutes March 10, 2022 Page 1 of 10 CITY OF NEWPORT BEACH FINANCE COMMITTEE MARCH 10, 2022 MEETING MINUTES I. CALL MEETING TO ORDER The meeting was called to order at 3:00 p.m., in the Civic Center Community Room. II. ROLL CALL PRESENT: Chair Will O’Neill, Mayor Pro Tem Noah Blom, Council Member Brad Avery, Committee Member William Collopy, Committee Member John Reed, Committee Member Nancy Scarbrough, and Committee Member Joe Stapleton ABSENT: None STAFF PRESENT: City Manager Grace K. Leung, Finance Director/Treasurer Scott Catlett, Deputy Finance Director Michael Gomez, Budget Manager Shelby Burguan, Senior Budget Analyst Amber Haston, Administrative Specialist to the Finance Director Marlene Burns, Public Works Administrative Manager Chris Miller, Public Works Finance/Administrative Manager Theresa Schweitzer, Recreation & Senior Services Management Analyst Matt Chong, Deputy Recreation & Senior Services Director Sean Levin, Recreation & Senior Services Director Laura Detweiler, Harbormaster Paul Blank, Fire Marshal Kevin Bass, Fire Administrative Manager Mary Locey, Management Assistant Lili Melero, Library Services Director Tim Hetherton, Acting Library Services Manager Melissa Hartson MEMBERS OF THE PUBLIC: Charles Klobe and Jim Mosher III. PUBLIC COMMENTS Jim Mosher noted his comments at the previous meeting regarding the contract for the City’s Tyler Munis Enterprise Resource Planning (ERP) Program may have caused some confusion for the Finance Committee. He reported staff had since advised him that the original five-year contract for the implementation of the ERP software expired two years ago, but a recurring maintenance clause was included in the contract. IV. CONSENT CALENDAR MINUTES OF FEBRUARY 9, 2022 Recommended Action: Approve and file. Chair O’Neill clarified his comments from the minutes and advised the recommendation to replace the two piers came from discussions with the City Council. Chair O’Neill called for public comments and hearing none, closed the public comments. MOTION: Committee Member Collopy moved to approve the minutes, as amended, seconded by Committee Member Reed. The motion carried 7 ayes – 0 noes Finance Committee Meeting Minutes March 10, 2022 Page 2 of 10 V. CURRENT BUSINESS A. FISCAL YEAR 2021-22 FEE STUDY UPDATE Summary: Staff will present the Master Fee Schedule to the Finance Committee prior to presenting it to the City Council. Recommended Action: Review and discuss the proposed fee updates discussed in this report and provide any recommendations for consideration by the City Manager and City Council. Finance Director/Treasurer Catlett provided a brief overview of the annual Fee Study Update and provided background on types of fees and fines. He explained the authority behind setting cost-recovery-based user fees is established in City Council Policy F-4 – Revenue Measures and the Fiscal Sustainability Plan. He noted Newport Beach Municipal Code Section 3.36.030 mandates 100% cost recovery except for subsidized services as identified in the code. Finance Director/Treasurer Catlett reported cost recovery-based user fees cannot exceed the cost of providing the service and detailed how those costs are determined. He provided a brief overview of the Cost of Service Analysis process and calculations used to determine cost. Senior Budget Analyst Amber Haston provided an overview of Recreation and Senior Services fees and reported they were last updated in 2016. She reported the department is recommending increasing the cost recovery for five programs including Youth Camps (3%), Youth After School Programs (2%), Preschool Camps & Programs (2%), Aquatics Programs (3%), and Oasis Fitness Memberships (5%). She noted the increase in fees will help align with the increased costs in delivering those programs since they were last studied five years ago. Committee Member Collopy inquired if the benefactors of each activity have been charged the escalation costs. Finance Director/Treasurer Catlett explained the fees are the same as 2016 and the fee increase is to catch up to where an incremental adjustment would have set the fees. He clarified the fees are not Consumer Price Index (CPI) adjusted and the proposed increases are to maintain the level of cost recovery. Mayor Pro Tem Blom inquired if the rates have remained the same since 2016 on these programs. Senior Budget Analyst Haston confirmed the rates have remained the same. Finance Director/Treasurer Catlett reported some fees adjust annually based on CPI, but CPI adjustments are not applied to these fees. He clarified that because the cost of the program has increased over the past five years while the fees have remained the same, the now proposed cost recovery is increasing to return to approximately the level in place five years ago. Senior Budget Analyst Haston reported Adult Sports fees have been administratively reorganized to simplify the presentation of fees, correctly capture all fees related to current operations, and simplify the information that end-users are viewing. She reported Natural Resources Program fees are being modified to align with current operations and eliminate fees for services that are no longer provided. She reported the Fee Study is recommending modifying Municipal Code Section 3.36.030 to add a 0% cost recovery for applicants who successfully appeal Special Event Permits. Committee Member Scarbrough asked for clarification of an Isopod. Senior Budget Analyst Haston believes it to be related to tide pools. Senior Budget Analyst Haston reported the proposed changes to the Fee Schedule will result in a net positive revenue impact of $81,000. Finance Committee Meeting Minutes March 10, 2022 Page 3 of 10 Senior Budget Analyst Haston provided a brief overview of proposed fee changes in Library Services and noted the fees were last studied in 2016. She advised the Library Cancellation Charge will be reduced from $66 to $56. Committee Member Collopy inquired if an individual appeals a Special Event Permit, and it is approved then there are no added costs. Senior Budget Analyst Haston confirmed that is correct. Committee Member Collopy inquired if an individual proposed to have an event and it is declined, it is inferred that the City made a mistake. Recreation & Senior Services Director Laura Detweiler explained the Special Event application process allows individuals to appeal Level 3 events, which are large-scale events, to the City Council. Senior Budget Analyst Haston continued the presentation. She reported the Fee Study proposal to reduce the Library Cancellation Charge is based on the cost to provide the service. She reported an increase in the Passport Photo fee from $10 to $15 and updated cost recovery in the Municipal Code. She advised the department is proposing three new fees, which include two new fees for Per Page Copies from Central Printers and a new Test Proctoring fee. Lastly, she advised the proposed changes will result in a net positive revenue impact of $84,000 to the General Fund. Chair O’Neill reported the City is subsidizing passport photos at a fairly high amount in that it costs $25 to process the photos but the proposed fee would only recover $15 for them. He advised the City is processing approximately 558 passport photos per year which equates to the City subsidizing $5,700 of staff time for the service totaling 93 staff hours. He advised the fees mandated by the government to provide passport services also do not cover the City’s costs. He noted only $35 is recovered for this service which equates to $24,000 in staff time and resources. Chair O’Neill noted $30,000 of subsidized staff time is a large number given the passport process can be handled by other entities in the City. He inquired if the City should continue being involved in the passport process. He believes the City should review its passport service offering. Committee Member Scarbrough inquired if eliminating passport services would mean the City is providing less than other adjacent cities. Chair O’Neill confirmed that would be the case. Finance Director/Treasurer Catlett reported that while some neighboring cities do offer the service, Irvine, Costa Mesa, and Laguna Beach do not. Committee Member Collopy noted the $30,000 in question is not fully loaded and inquired if a position can be eliminated if the City does not continue to provide the service. Chair O’Neill does not believe a position can be eliminated for this service. City Manager Grace Leung clarified there is no dedicated staff for this service, and it is provided as part of existing staff duties and noted it is not exclusively for Newport Beach residents. Chair O’Neill advised he would like to bring the item back to the Finance Committee for further review. City Manager Leung advised the recovery cost for the passport photos can be increased to 100%. Chair O’Neill recommended the recovery cost for passport photos be set at 100%. Senior Budget Analyst Haston provided a brief overview of proposed fee changes for Fire Prevention and reported the fees were last studied in 2020. She advised the Fee Study recommends increasing cost recovery for all Fire Prevention services to 100% cost recovery levels in alignment with other agencies. She reported and provided details on two key methodology changes for certain State-mandated inspections and for Operations Permits to use 1/3 of the hourly rate for the full Engine Company. Finance Director/Treasurer Catlett Finance Committee Meeting Minutes March 10, 2022 Page 4 of 10 explained staff determined there was too much cost going into the fee given that the Engine Company remains in service to respond to emergencies while performing inspections. Committee Member Collopy inquired if the Engine Company was doing Fire Marshal work and if the Fire Chief still occupied the dual role of Fire Chief and Fire Marshal. Chair O’Neill reported a full-time Fire Marshal was hired three years ago. Committee Member Collopy inquired why Engine Companies are conducting inspections when it is the Fire Marshal’s job. Fire Marshal Kevin Bass explained there is more fire prevention work than the number of Fire Inspectors available can perform, and so certain inspections are conducted by Engine Companies. He noted it serves two purposes, which include the fire prevention work and familiarizing the Engine Company with their assigned area. He advised this model allows the Fire Prevention staff to focus on more complex locations such as hotels, high-rises, and schools. Chair O’Neill inquired if the Fire Prevention staff are sworn personnel. Fire Marshall Bass clarified the staff are civilian employees and cost less than sending out sworn personnel. Chair O’Neill noted it would cost less if civilian personnel were deployed, but this policy allows for the use of those Engine Companies who may be responding to calls and creates a hybrid model when determining the fees. Fire Marshall Bass advised most agencies in Orange County are going to this model for inspections. He explained the Engine Companies do not have the continuity to complete longer, complex projects due to the fact the Engine Company works in shifts. Committee Member Scarbrough inquired about the type of inspections Engine Companies would conduct. Fire Marshall Bass explained it would be exit routes, fire extinguishers, fire sprinkler systems, and more complex systems depending on the location. Mayor Pro Tem Blom advised he has experienced both sides of this. He recalled an experience years ago where Costa Mesa Fire Prevention conducted the inspections but when an incident occurred, the responding Engine Company did not know where anything was located and caused damage to the building. He noted it is different now that they have been able to get to know the Engine Companies, which results in them getting to better understand know the layout of the business. He expressed support for the fee recommendation. Committee Member Scarbrough advised the fire plan check fee changes based on occupancy. She noted Group I occupancy facilities plan check fees were less than those of regular facilities even though they have more complex systems. She inquired if those fees should be reviewed in the future. Fire Marshall Bass advised the majority of Group I occupancy inspections in the city are conducted by a State agency. He noted those that are inspected by City staff do not take as long and are reflected in the current rate studies. He advised a Fee Study will be conducted again in two years to assess those fees. Senior Budget Analyst Haston continued the presentation and reported the proposed changes results in a net positive revenue impact of $84,000 to the General Fund. She reported other fee updates include increasing Notary Services to $15 to align with the fee increase authorized by Government Code. She advised three new fees are proposed based on actual costs and will utilize the fully burdened hourly rate of personnel, to includes Users Services Not otherwise Identified, Appeals where the Applicant is unsuccessful (50% Cost Recovery), and Appeals where the Applicant is Successful (0% Cost Recovery). Finance Committee Meeting Minutes March 10, 2022 Page 5 of 10 Committee Member Reed inquired when a Fee Study will be conducted on the User Services that have not been identified. Finance Director/Treasurer Catlett explained this would cover a situation that would typically not reoccur. He advised departments would follow a process notifying the Finance Department who would then review if a Fee Study is warranted. Senior Budget Analyst Haston reported the Fee Study proposes modifying the Municipal Code to authorize the City Manager or Finance Director to waive user fees up to $5,000 per occurrence, which is to be used in limited circumstances. Senior Budget Analyst Haston provided a brief overview of updates for Non-Studied Departments. She advised these include Marine Activities Permit (MAP) Renewal for Service Providers, which is a new fee to differentiate between the 2 business types due to the difference in processing times. She reported staff is working with the Community Development Department (CDD) to study two new fees relating to the first and subsequent requests for building permit extensions beyond the initial 3-year time limit. Lastly, she advised that no changes are proposed for the fee for the RGP Dredging Permit and noted staff recommends deferring any changes until Public Works fees are studied in Fiscal Year 2023-24. Senior Budget Analyst Haston reported the proposed fee updates will result in approximately $180,000 of additional revenue next fiscal year and noted it does not account for the impact of any fees where volume statistics are unavailable. She provided an overview of the fiscal impact of fee subsidies. Finance Director/Treasurer Catlett explained Recreation and Senior Services proposed annual subsidy is a large number due to the general benefit of those activities and it is commonplace for cities to subsidize those activities. Finance Director/Treasurer Catlett reported staff will be evaluating the format of the executive summaries provided to the Finance Committee and will bring back options to the Finance Committee for review next year. He advised a Request for Proposals (RFP) for a new user fee consultant will be advertised in spring 2022. He reported the Fee Study will go before City Council on April 12, 2022, for First Reading, April 26, 2022, for Second Reading, and if approved the fees will be effective on July 1, 2022. Committee Member Collopy and Chair O’Neill complimented Senior Budget Analyst Haston for her good work on the presentation. Chair O’Neill opened public comments. Charles Klobe inquired about how 2,500 hours of productive work time for each employee for the Cost of Service Analysis was identified. Jim Mosher reminded the Finance Committee that it was initially the City Clerk’s office who requested the ability to provide passport services in 2001 when other service locations were not as widespread as today. He noted the Library accepted the responsibilities when the City Clerk no longer wanted to offer the service and should not be blamed for providing the highly subsidized service. He advised the idea is that when an appeal is successful the opponent does not have to pay a fee is not a long-standing policy in the City and arose about six years ago from a former Councilmember. He recommends if it is now a new policy, it should state from the beginning that a successful appeal is 0% cost recovery and would save lines in the chart. He recommended improving the communication of the new User Services not otherwise identified fee and noted the definition should be further clarified and cited examples of why it is not clear. He expressed support for the City Manager being able to waive fees but believes the definition of hardship needs to be clarified. He advised he could not locate either the Hearing Officer Appeal fee or the Building Permit Extension fee in the proposed Fee Schedule. He reported the proposed fees for color copies at the Library are already set at $0.75 which have been set for the last year. Chair O’Neill closed public comments. Finance Committee Meeting Minutes March 10, 2022 Page 6 of 10 Chair O’Neill encouraged staff to modify the hardship language as noted by Mr. Mosher. Finance Director/Treasurer Catlett clarified the 2,500 hours of productivity accounts for multiple staff members in the example presented rather than a single person. Chair O’Neill agreed with Mr. Mosher’s point of moving towards a more standard zero-fee policy if the appeal is successful. MOTION: Chair O’Neill moved to recommend approval of the Master Fee Schedule to the City Council with the recommendation that the passport photo fee is increased from $15.00 to $25.00, seconded by Committee Member Stapleton. The motion carried 7 ayes – 0 noes. B. OVERVIEW OF REVENUE PROJECTIONS Summary: Staff will provide the Committee with an overview of the assumptions utilized to prepare revenue projections for the City's major funds as part of the Fiscal Year 2022-23 budget preparation process. Recommended Action: Receive and file. Finance Director/Treasurer Catlett provided a brief overview of the Fiscal Year 2022-23 Revenue Projections and noted the City is looking at a projected $265 million General Fund Revenue budget for Fiscal Year 2022-23, which is $15 million larger than the current year. He explained from a revenue perspective the City has fully recovered from the effects of the pandemic and is in a much better place than anticipated. Finance Director/Treasurer Catlett reported the City receives 17.2% of the 1% Property Tax. He advised the City receives the third-highest share of the 1% behind Santa Ana and Laguna Beach. He explained assessed value has a significant impact on revenue and noted the City’s assessed valuation for Fiscal Year 2021-22 was $67 billion. Committee Member Reed inquired about other cities' percentages. Finance Director/Treasurer Catlett reported Laguna Beach was the largest at 22% and Santa Ana was second at 19%. Committee Member Collopy inquired how the percentage is calculated. Finance Director/Treasurer Catlett explained it is a complicated and convoluted calculation based on the impact of Proposition 13 on property taxes in place at the time of its passage. Committee Member Collopy inquired how Irvine’s assessed valuation was calculated at $95 billion. Finance Director/Treasurer Catlett reported Irvine has the Spectrum and other sizable commercial areas and is a much larger city in land area than Newport Beach. Finance Director/Treasurer Catlett reported the median home price grew 16% in 2021 and noted 85% of the City’s Property Tax comes from homes. He advised staff worked with the City’s Property Tax consultant HdL to develop the secured Property Tax Revenue Projection and is projecting a 6.5% growth factor for the secured Property Tax. He noted this will be the City’s best year since Fiscal Year 2018-19. Chair O’Neill noted for perspective Laguna Beach adopted a General Fund Budget of $121 million. He advised the City will have a problem attracting young families into the City in the future with the average home price being $3 million. Finance Director/Treasurer Catlett reported Sales Tax is the City’s second-largest revenue source and noted it receives 1% of the 7.75% Sales Tax. He advised most of the tax revenue comes from auto sales, restaurants and hotels, and general consumer goods. He presented the top 25 Sales Tax producers in the City. Finance Committee Meeting Minutes March 10, 2022 Page 7 of 10 Committee Member Scarbrough inquired why Sales Tax growth from Building and Construction is so small. Finance Director/Treasurer Catlett explained those are businesses such as lumber yards and hardware stores, of which Newport Beach has very few. Finance Director/Treasurer Catlett provided a brief overview of the Sales Tax Revenue Projection methodology. He advised HdL looks at new and closed retailers and misallocated revenues from the State. He explained HdL works with Beacon Economics to develop a statewide revenue forecast by industry category. He noted preliminary Sales and Use Tax Revenue projections do not match the budget because some of the Sales Tax is shared with Newport Lexus under a tax sharing agreement. Chair O’Neill inquired if Lexus is the only business with which the City has an active Sales Tax sharing agreement. Finance Director/Treasurer Catlett confirmed Lexus is the only business with an active agreement. Committee Member Collopy inquired about the duration of the Sales Tax sharing agreement. Finance Director/Treasurer Catlett believes it will conclude in a few years but will confirm for the Finance Committee. Public Works Finance/Administrative Manager Theresa Schweitzer noted she also believes it concludes in the next few years. Committee Member Collopy inquired about the $400,000 Administration Cost. Finance Director/Treasurer Catlett explained this is the State fee to administer the Sales Tax. He reported the County similarly takes a portion of the City’s Property Tax allocation as an administrative fee. He reported anticipated Sales Tax Revenue growth for Fiscal Year 2022-23 is 5.3%. Committee Member Collopy inquired if it would be worth discussing what Sales Tax for the Fashion Island Hotel would be. Finance Director/Treasurer Catlett advised the main item for Fashion Island Hotel would be Transient Occupancy Tax (TOT) which will be discussed later in the presentation. He advised the City did lose some Sales Tax from automotive dealers that have left the area but noted they were very low volume. Finance Director/Treasurer Catlett provided a brief overview of TOT Revenue and reported the City charges a 10% TOT tax rate and noted how it compares to other cities in California. He advised the 10% TOT is charged on both hotel and Short-Term Rentals (STRs) stays. He provided a brief overview of the TOT Revenue Projection methodology and advised staff has been working with Visit Newport Beach to determine future trends. He reported Visit Newport Beach publishes a weekly Economic Recovery Dashboard that tracks a variety of data including occupancy and room rates. He noted they also track John Wayne Airport traffic and noted traffic is hovering around pre-pandemic levels. He advised the projections do not account for any impact from the VEA Newport Beach reopening and assume the Pendry Newport Beach (former Fashion Island Hotel) will not open until Fiscal Year 2023-24. Finance Director/Treasurer Catlett reported anticipated TOT Revenue growth is 4.6% after taking into account a $1 million reduction in the prior year's projection for timing concerns. He advised hotel-related revenues are projected to exceed pre-pandemic levels and STR-related revenues are growing well beyond the already-reached record high level of revenue. Finance Director/Treasurer Catlett reported other General Fund revenues include Service Fees and Charges, Property Income, and Other Taxes. He advised Business Licenses are captured under Other Taxes. He reported the anticipated growth from Services Fees and Permit Revenues is due to the implementation of the recycling fee increase and recreation class revenues returning to pre-pandemic levels. Finance Director/Treasurer Catlett reported Property Income Revenue includes leased property income generated from non-Tidelands property leases and parking income generated from non-Tidelands parking lots and meters. He advised the projection was developed Finance Committee Meeting Minutes March 10, 2022 Page 8 of 10 internally with subject matter experts in the departments responsible for each of the programs. He advised growth came from parking revenue increases and higher percentage-based property rents. He noted parking revenues have been projected conservatively for next year. Finance Director/Treasurer Catlett reported Other Taxes Revenues include Business License Tax Revenue, Property Transfer Tax Revenue, and Franchise Fees and the projection was developed by Finance staff. He reported the decline is due to the conservative revenue forecast for Property Transfer Tax. Finance Director/Treasurer Catlett reported the Tidelands Fund is a special revenue fund used to account for revenues related to the Tidelands areas under the City’s jurisdiction. He advised the Tidelands Operating Fund is supported by the General Fund and noted the General Fund will transfer $4.6 million to the Capital Fund in Fiscal Year 2022-23 to support capital needs. He provided a brief overview of Tidelands Fund revenue sources and advised 96% of revenues are generated from leases and 4% of revenues are generated by investment income. He advised staff predicts a modest increase in revenue in the next year. Committee Member Collopy inquired if these projections will be baked into the City Council budget presentation in the next few months. Finance Director/Treasurer Catlett confirmed they will be included. Finance Director/Treasurer Catlett reported 98% of the Water Utility Revenue is generated by service fees and charges from customers. He advised the current rate plan ends January 1, 2024. He noted these are demand-based fees and noted it is hard to determine actual revenues. He anticipates a 9.2% increase in Water Utility Revenues next year. Finance Director/Treasurer Catlett reported 98% of the Wastewater Utility Revenue is generated by service fees and charges from customers. He reported the rate plan ended January 1, 2022, and a rate study will be funded as part of the ongoing Fiscal Year 2022-23 budget process to complete a new rate plan. He anticipates a 9.7% increase in Wastewater Utility Revenues next year. Committee Member Collopy noted it is impossible to meter wastewater at the residential level. He inquired if the rates charged for water subsidize the additional cost year after year for wastewater due to the age of the infrastructure. Finance Director/Treasurer Catlett explained the funding is in separate Enterprise Funds and revenues are not shared between the two. He clarified there is a wastewater rate charged as part of a resident’s utility bill. City Manager Leung advised the rate will be reviewed as part of the rate study in the future. Chair O’Neill expressed concern that rates will not keep pace with inflation. He would like to see a projection of infrastructure costs for water and expressed concern that the City will not be property funded in its Enterprise Funds and does not want to pass a large deficit in the City’s Utility Funds to future City Councils. Committee Member Scarbrough inquired how funding is acquired for infrastructure repairs should a natural disaster occur. Finance Director/Treasurer Catlett advised there are reserves available in each of the Enterprise funds and if it was a significant disaster, the City would be eligible for Federal Emergency Management Agency (FEMA) funding. He explained the City would pay for repairs out of its reserves and then request reimbursement from FEMA. Committee Member Scarbrough inquired how the City determines enough funding is available in the reserves to cover a disaster. Committee Member Collopy advised a General Fund Reserve Analysis was conducted two years ago to determine appropriate levels. Committee Member Stapleton inquired about the number of units for rent both hotel and STRs that contribute to the City’s TOT. Finance Director/Treasurer Catlett noted he does not have those numbers with him but reported STR permits are capped at 1,550 although he believes Finance Committee Meeting Minutes March 10, 2022 Page 9 of 10 there were more operating before the cap was imposed. He believes there are under 1,500 permitted STRs actively reporting revenue at least in the last quarter. He advised timeshares are not subject to the STR ordinance. Chair O’Neil opened public comments. Mr. Klobe noted while residential property owners are benefiting from the increase in property value it does make it challenging for residents’ younger children to live in the City. He suggested the City Council recommend some focus on senior housing, low-income housing, or home purchase subsidies to help develop some affordable housing. Mr. Mosher reported the City is leasing the public road to Fletcher Jones at no cost. He advised when Fletcher Jones was offered millions of dollars in incentives to develop the property the thought that it would be recouped from the Sales Tax the facility generated. He noted the City believes it got a good deal out of those negotiations but does not feel the City needs to continue to subsidize auto dealers. He noted the Water Utility Revenues, and the Wastewater Utility Revenues cannot be comingled because they come from different payers. He reported Property Taxes vary because in 1978 properties were taxed by different agencies. He encouraged residents to look at their property tax bill and review the tax rate area which defines how the 1% is divided up. He advised the tax rate can be looked up at the Orange County Auditor-Controller’s website under Property Tax Accounting and then select Annual Tax Increment factor by tax rate area. Chair O’Neill closed public comments. The item was received and filed. C. INTERNAL AUDIT PROGRAM UPDATE Summary: Bi-monthly progress update on the internal audit program. Recommended Action: Receive and file. Finance Director/Treasurer Catlett reported Deputy Finance Director Michael Gomez assumed this project from former Deputy Finance Director Steve Montano before his departure. He advised the five-year contracts for the new panel of firms that will conduct the program will be brought before the City Council in the next several months. He reported the program is in the implementation phase of the last five audits and beginning in May a regular update will be provided on a bi-monthly basis that will highlight progress. Committee Member Collopy suggested changing the program name since the audit is conducted by outside firms. Finance Director/Treasurer Catlett explained from an industry terminology standpoint it is an outsourced internal audit program, so it is permissible for the City to have its internal auditor be a paid contractor. Chair O’Neill called for public comments and hearing none, closed public comments. The item was received and filed.