Transcript

The Audit Meeting meeting scheduled for 2023-09-07 at Pier 69

  • YOU
  • THIS IS COMMISSIONER MOHAMMED CALLING TO ORDER THE PORT OF SEATTLE'S AUDIT COMMITTEE COMMITTEE SPECIAL MEETING
  • TODAY IS THURSDAY, SEPTEMBER 7, 2023, AND THE TIME IS 09:10 A.M.
  • WE ARE MEETING TODAY AT THE PORT OF SEATTLE'S HEADQUARTERS COMMISSION CHAMBERS AND VIRTUALLY VIA THE TEAM'S PLATFORM
  • PRESENTED WITH ME TODAY IS COMMISSIONER SAM CHO AND PUBLIC MEMBER SARAH HOLMSTROM
  • TO MAKE THIS MEETING MORE ACCESSIBLE TO THE PUBLIC, THE MEETING IS BEING LIVE STREAMED AND DIGITALLY RECORDED, AND MAY BE VIEWED OR HEARD AT ANY TIME ON THE PORT'S WEBSITE
  • A CALL IN TELEPHONE NUMBER IS ALSO PROVIDED FOR ANYONE WHO WOULD LIKE TO LISTEN INTO THE MEETING
  • OUR FIRST ITEM OF BUSINESS IS APPROVAL OF OUR LAST MEETING MINUTES FROM JUNE 30, 2023
  • AS A REMINDER TO THE VIEWING AUDIENCE, THE PUBLIC MEMBER OF THE AUDIT COMMITTEE IS NOT A VOTING MEMBER FOR THE PURPOSES OF CASTING VOTES ON MOTIONS MADE PER THE COMMITTEE'S RULES
  • ARE THERE ANY CORRECTIONS TO THE MINUTES? HEARING NONE
  • ARE THERE ANY OBJECTIONS TO APPROVAL OF THE MINUTES AS PRESENTED? HEARING NONE
  • THE MINUTES ARE APPROVED
  • OUR NEXT ORDER OF BUSINESS IS THE OFFICE OF THE WASHINGTON STATE AUDITORS 2022 ACCOUNTABILITY AUDIT OPENING PRESENTATION MR FERNANDEZ, PLEASE INTRODUCE OUR SPEAKERS TODAY
  • THANKS, COMMISSIONER
  • TODAY WE HAVE JOE SIMMONS AND MADDIE FROST SCHAEFER FROM THE STATE AUDITOR'S OFFICE, WHO'LL BE PRESENTING THEIR OPENING PRESENTATION
  • JOE, THANK YOU FOR YOUR TIME TODAY TO HEAR OUR PRESENTATION REGARDING OUR UPCOMING ACCOUNTABILITY AUDIT
  • MY NAME IS JOE SIMMONS
  • I'M THE AUDIT MANAGER FOR THE STATE AUDITOR'S OFFICE HERE IN SEATTLE
  • I'M HERE WITH MADDIE FROST SCHAEFFER, WHO IS ASSISTANT AUDIT MANAGER AND WILL BE THE SUPERVISOR ON THE AUDIT
  • AND ANGELA FUNAMORI ISN'T ABLE TO BE HERE TODAY
  • SHE WILL AGAIN BE THE AUDIT LEAD ON THE AUDIT
  • AND ON THE NEXT SLIDE, JUST AN OVERVIEW OF OUR OFFICE
  • WE CONDUCT OVER 2400 AUDITS DURING THE PAST YEAR
  • THAT'S ROUGHLY 1000 ACCOUNTABILITY AUDITS, 1000 FINANCIAL STATEMENT AUDITS, AND AROUND 400 FEDERAL SINGLE AUDITS
  • WE REPORT TO INDEPENDENTLY ELECTED STATE AUDITOR PAT MCCARTHY AND HAVE AN OFFICE OF OVER 400 AUDITORS
  • AND WE HAVE ADDITIONAL AUDITS, INCLUDING PERFORMANCE AUDITS, CYBERSECURITY AUDITS THAT ARE LISTED THERE ON THAT PAGE
  • AND AS YOU KNOW, FOR OUR AUDIT THIS YEAR, WE'LL BE AGAIN CONDUCTING AN ACCOUNTABILITY AUDIT
  • AND ON THE NEXT SLIDE, IT TALKS ABOUT WHAT, IN GENERAL, ACCOUNTABILITY AUDIT COVERS
  • THAT WE AUDIT TO DETERMINE IF MANAGEMENT IS ADEQUATELY SAFEGUARDING PUBLIC RESOURCES THAT'S ASSETS, REVENUES, EXPENDITURES, AND PROTECTION FROM MISUSE AND MISAPPROPRIATION
  • AND THEN WE ALSO EVALUATE WHETHER THERE'S REASONABLE ASSURANCE THAT THERE'S PROTECTIONS AND ADHERENCE TO APPLICABLE STATE LAWS AND THE PORT'S OWN POLICIES AND PROCEDURES
  • AND WE USE A RISK BASED APPROACH WHERE WE DO PLANNING AT THE BEGINNING OF THE AUDIT TO EVALUATE WHICH AREAS ARE AT HIGHEST RISK FOR THE CURRENT AUDIT
  • WE'RE NOT YET AT THAT STAGE, WE'RE HERE TO TALK ABOUT OUR AUDIT IN GENERAL, BUT WE HAVE NOT YET STARTED THE PLANNING
  • ONCE WE'VE STARTED THE PLANNING STAGE, WE'LL DETERMINE THOSE AREAS AND THEN WE COMMUNICATE THOSE TO YOU ONCE THOSE ARE DETERMINED
  • AND ON THE NEXT SLIDE, AS YOU KNOW, OF COURSE, YOU ARE AUDITED FOR YOUR FINANCIAL STATEMENT AUDIT AND YOUR FEDERAL SINGLE AUDIT BY THE MOSS ADAMS CPA FIRM
  • AND AS ALWAYS, WE REVIEW THEIR WORK AND WE DO THAT EARLY IN OUR AUDIT PROCESS SO WE CAN REVIEW WHAT THEY LOOKED AT AND INCORPORATE THAT INTO OUR PLANNING FOR OUR ACCOUNTABILITY AUDIT
  • WE TRY TO AVOID ANY OVERLAP OF THINGS THAT THEY'VE LOOKED AT AND ALSO WE REVIEW IT TO DETERMINE THAT WE CAN RELY ON THAT WORK AND THEN WE POST THEIR REPORT ON OUR SITE ONCE WE'VE COMPLETED THAT REVIEW
  • AND ON THE NEXT SLIDE, WE TALK ABOUT WHAT WE DO FROM THE BEGINNING OF THE AUDIT THROUGH THE END
  • WE'VE ALREADY STARTED WORKING WITH THE PORT AS FAR AS WORKING OUT HOW WE CAN OBTAIN ACCESS TO DOCUMENTS AND SETTING UP SECURE WAYS TO DO THAT
  • WE'RE GOING TO HAVE AN INITIAL KICKOFF MEETING THIS AFTERNOON TO TALK WITH THE AUDIT LIAISON ABOUT PROCESS AND PROCEDURES FOR OBTAINING INFORMATION DURING THE AUDIT
  • OF COURSE, THIS ENTRANCE CONFERENCE TO TALK ABOUT OUR AUDIT
  • AND THEN THROUGHOUT THE AUDIT, WE HAVE WEEKLY STATUS MEETINGS WITH THE AUDIT LIAISON AND THAT ALSO INCLUDES GLENN FROM INTERNAL AUDIT
  • SO WE MEET REGULARLY TO KEEP THEM UPDATED ON THE PROGRESS OF AUDIT
  • AND IF WE DO IDENTIFY ANY ISSUES, WE DO OUR BEST TO COMMUNICATE THAT AS SOON AS THEY COME UP
  • SO WE DEFINITELY LOOK TO MAKE SURE THAT THERE'S NO SURPRISES AND COMMUNICATE THROUGHOUT THAT AUDIT
  • AND THEN AT THE END OF THE AUDIT, WE WILL PRESENT OUR RESULTS AND ON THE NEXT SLIDE THAT TALKS A LITTLE BIT ABOUT WHAT THOSE LOOK LIKE, WE WILL HAVE OUR ACCOUNTABILITY AUDIT REPORT AS ALWAYS, AND THEN THESE ARE THE LEVELS THAT WE HAVE AS FAR AS WHAT WE REPORT ON ANY KIND OF RECOMMENDATIONS
  • SO THE HIGHEST LEVEL IS FINDINGS AND THOSE THAT ARE MATERIAL OR SIGNIFICANT DEFICIENCIES RELATED TO INTERNAL CONTROLS OR SIGNIFICANT MATERIAL NON COMPLIANCE AND THOSE FINDINGS APPEAR IN OUR REPORT
  • BUT THERE'S ALSO AN OPPORTUNITY FOR THE PORT TO RESPOND TO THOSE FINDINGS
  • AS FAR AS WHAT ACTIONS THEY'RE TAKING
  • AT A LOWER LEVEL WITH MANAGEMENT LETTERS, THAT'S NOT AS SIGNIFICANT AS A FINDING, BUT STILL SOMETHING THAT WE THINK WARRANTS THE ATTENTION OF THE GOVERNING BODY
  • SO THAT'S IN THE FORM OF A LETTER THAT WE PROVIDE
  • THAT'S NOT INCLUDED IN THE REPORT, BUT IT IS REFERENCED IN THE REPORT THAT A MANAGEMENT LETTER WAS ISSUED
  • AND THEN OUR MOST COMMON LEVEL OF RECOMMENDATION IS EXIT ITEMS AND THOSE AREN'T REFERENCED IN THE REPORT, BUT THEY ARE RECOMMENDATIONS BASED ON THINGS WE IDENTIFY IN THE COURSE OF OUR AUDIT AND THEY'RE MORE MINOR TYPE ISSUES
  • BUT STILL WE REALLY HAVE APPRECIATED HOW THE PORT HAS REALLY ADDRESSED ANY EXIT RIGHT OF RECOMMENDATIONS THAT WE HAVE MADE AND DEFINITELY LOOK AT THAT AS SOMETHING THAT HOPEFULLY IS HELPFUL TO THE PORT AS FAR AS TRYING TO IDENTIFY ISSUES BEFORE THEY BECOME LARGER
  • AND ON THE NEXT SLIDE, GO AHEAD AND TURN IT OVER TO MADDIE
  • THANKS, JOE
  • SO ON THIS SLIDE, WE JUST HAVE A FEW GENERAL REMINDERS AS WE BEGIN OUR AUDIT
  • THE FIRST IS WE ARE COMMITTED TO SAFEGUARDING ANY CONFIDENTIAL OR SENSITIVE INFORMATION
  • IF ANY OF THE INFORMATION WE REQUEST DURING THE AUDIT IS CONFIDENTIAL OR SENSITIVE, PLEASE LET US KNOW SO WE CAN ENSURE WE'RE SAFEGUARDING IT
  • THROUGHOUT THE AUDIT PROCESS, WE HAVE INCLUDED THE ESTIMATED AUDIT COSTS IN THE ENTRANCE DOCUMENT, WHICH WAS SHARED WITH YOU
  • WE ALSO WANT YOU TO BE AWARE THAT WE HAVE AN AUDIT DISPUTE PROCESS
  • IF AT ANY POINT DURING THE AUDIT YOU HAVE ANY CONCERNS, WE DO HAVE AN ESTABLISHED PROCESS FOR YOU TO VOICE THOSE CONCERNS
  • WE ASK THAT YOU PLEASE START WITH JOE, BUT WE HAVE INCLUDED ADDITIONAL CONTACTS IN YOUR ENTRANCE AUDIT PACKET
  • LASTLY, WE JUST LIKE TO REMIND GOVERNMENTS THAT THERE IS A STATE LAW THAT REQUIRES YOU TO REPORT ANY KNOWN OR SUSPECTED LOSSES TO OUR OFFICE, AND YOU CAN DO THAT THROUGH OUR WEBSITE
  • AND ON THE NEXT SLIDE, WE HAVE SOME ADDITIONAL REMINDERS ABOUT REPORTING CYBERSECURITY ISSUES TO OUR OFFICE
  • YOU MAY ALSO BE REQUIRED TO REPORT CYBERSECURITY ISSUES TO THE ATTORNEY GENERAL'S OFFICE IF AN INCIDENT AFFECTS MORE THAN 500 WASHINGTON RESIDENTS
  • AND ONCE AGAIN, YOU MAY ALSO NEED TO REPORT ANY CYBERSECURITY ISSUES TO OUR OFFICE IF THEY INVOLVE FINANCIAL RECORDS OR FINANCIAL SYSTEMS AND ONCE AGAIN, YOU CAN DO THAT THROUGH OUR WEBSITE
  • AND ON THE NEXT SLIDE, A QUESTION WE OFTEN GET ASKED IS WHO EXACTLY AUDITS US? AND WE'RE PLEASED TO REPORT THAT WE ARE AUDITED EVERY THREE YEARS BY THE NATIONAL STATE AUDITORS ASSOCIATION
  • OUR MOST RECENT PEER REVIEW RESULTS ARE AVAILABLE ON OUR WEBSITE AT THE LINK WE HAVE PROVIDED, AND WE'RE PLEASED TO REPORT OUR LATEST RESULTS
  • RECEIVED A RATING OF PASS, WHICH DOESN'T SOUND VERY GREAT, BUT IT IS THE HIGHEST LEVEL OF ASSURANCE THAT YOU CAN RECEIVE, SO WE'RE VERY HAPPY WITH THAT
  • AND ON THE NEXT SLIDE OH, OKAY
  • AUDIT
  • SO, BEYOND OUR NORMAL AUDIT, WE DO WANT TO MAKE SURE YOU'RE AWARE OF SOME OTHER RESOURCES THAT OUR OFFICE PROVIDES
  • THAT INCLUDES OUR LOCAL GOVERNMENT SUPPORT TEAM, WHO PROVIDES SUPPORT THROUGH THE BARS AND ANNUAL ONLINE FILING PROCESS
  • THEY ALSO PERFORM ACCOUNTING AND REPORTING TRAININGS THROUGHOUT THE YEAR
  • SOME OF THEM ARE AVAILABLE VIRTUALLY AND RUN OUR HELP DESK THROUGH OUR CLIENT PORTAL, WHERE THEY CAN ANSWER ANY AUDITING OR ACCOUNTING QUESTIONS THROUGHOUT THE YEAR
  • THE NEXT IS THE CENTER FOR GOVERNMENT RESOURCES, WHICH PROVIDES FREE RESOURCES AND SERVICES TO HELP GOVERNMENTS WORK BETTER, SOLVE PROBLEMS, AND IMPROVE OPERATIONS
  • AND ONCE AGAIN, THESE TEAMS ARE AVAILABLE AT NO ADDITIONAL COST
  • ON THE NEXT SLIDE, WE TALK A LITTLE BIT MORE ABOUT THE CENTER AND SOME OF THE GREAT RESOURCES THEY'RE PROVIDING
  • THE FIRST IS THE NEW CYBERSECURITY CHECKUPS, WHICH ARE A FAST, FREE, AND INDEPENDENT ASSESSMENT OF A GOVERNMENT'S VULNERABILITY TO COMMON THREATS
  • THEY'LL ALSO PROVIDE ACTION STEPS FOR YOU AT THE END OF THE REVIEW
  • THEY'RE ALSO DOING A LOT WITH LEAN SERVICES AND CAN HELP GOVERNMENTS OPTIMIZE EFFICIENCY, QUALITY, AND CUSTOMER SERVICE
  • THEY'VE HELPED SEVERAL GOVERNMENTS WITH THINGS LIKE PERMITTING PROCESSES
  • THE CENTER IS ALSO PROVIDING CLIFTON STRENGTH WORKSHOPS TO HELP STRENGTHEN TEAMS AND PROMOTE EMPLOYEE SATISFACTION
  • AND LASTLY, THEY ALSO HAVE THE FREE FIT TOOL, WHICH YOU CAN USE TO MANAGE AND MONITOR THE PORT'S FINANCIAL HEALTH
  • AND THEN ON THE NEXT SLIDE, A RESOURCE WE'RE SHARING A RESOURCE WE'RE SHARING WITH ALL GOVERNMENTS IS A GUIDE THAT WAS RECENTLY CREATED BY OUR SPECIAL INVESTIGATIONS TEAM
  • THIS GUIDE WAS DESIGNED SPECIFICALLY FOR ELECTED OFFICIALS TO HELP YOU KIND OF PREVENT FRAUD AND DETECT FRAUD AND KNOW HOW TO RESPOND IF YOU BECOME AWARE OF FRAUD
  • SO IT'S A REALLY GREAT RESOURCE THAT WE'VE RECENTLY PUT ON OUR WEBSITE
  • AND ON THE NEXT SLIDE, ONCE AGAIN, WE WANTED TO INCLUDE A LINK TO THAT CYBER CHECKUP RESOURCE
  • OUR OFFICE IS CONTINUING TO SEE MORE AND MORE GOVERNMENTS BECOME VICTIM TO CYBER FRAUD
  • SO WE ARE PLEASED TO OFFER THAT FREE CYBER CHECKUP, ALONG WITH SEVERAL OTHER HANDOUTS AND RESOURCES FOR GOVERNMENTS TO RESPOND TO THE CYBER RISKS WE ARE SEEING
  • ANOTHER RESOURCE THE CENTER HAS RECENTLY PUBLISHED IS A GUIDE TO FUEL, WHICH INCLUDES PURCHASING FUEL, PROTECTING FUEL STATIONS, AND MONITORING FUEL CONSUMPTION
  • AND ON THE NEXT SLIDE, WE WOULD JUST LIKE TO, AT THIS POINT, THANK YOU FOR YOUR TIME AND OPEN IT UP TO SEE IF YOU HAVE ANY QUESTIONS OR COMMENTS FOR US
  • THANK YOU TO THE OFFICE OF THE STATE'S AUDITOR'S OFFICE FOR THE PRESENTATION AND FOR THE WORK THAT YOU ALL DO
  • ARE THERE ANY QUESTIONS FROM THE COMMITTEE MEMBERS AT THIS TIME? I HAVE A QUICK QUESTION
  • SO JUST GOING BACK TO THE CYBER CHECKUP AND RESOURCE GUIDES THAT YOU HAVE MADE AVAILABLE, DOES THIS INFORMATION TRANSLATE WELL FOR US TO SHARE WITH ORGANIZATIONS THAT WE PARTNER WITH? WE'VE SEEN SITUATIONS WHERE SMALL GRASSROOTS ORGANIZATIONS ARE IMPACTED BY SOME SORT OF CYBER ATTACK OR SOMETHING SIMILAR, AND THEIR INFORMATION GETS COMPROMISED, WHICH ULTIMATELY IMPACTS US
  • AND SO HOW DOES THAT WORK WITH THIS? THAT IS A GREAT QUESTION
  • SO I KNOW THAT THE CYBER CHECKUPS WERE ONLY OFFERING TO GOVERNMENTS, BUT AS FAR AS THE GUIDES AND RESOURCES, THEY WERE DESIGNED WITH GOVERNMENTS IN MIND, BUT THEY ARE BASED ON INDUSTRY BEST PRACTICES
  • AND SO I BELIEVE THAT THERE IS INFORMATION IN THERE THAT CAN ALSO BE HELPFUL TO OTHER ORGANIZATIONS AND COMPANIES AND NONPROFITS AS WELL, FOR THEM TO KEEP IN MIND ABOUT THEIR OWN VULNERABILITIES
  • GREAT, THANK YOU
  • THAT'S HELPFUL TO KNOW THAT THAT INFORMATION IS RELEVANT
  • I DON'T HAVE ANY OTHER QUESTIONS
  • IF THERE'S NO ADDITIONAL QUESTIONS FOR THE STATE AUDITOR'S OFFICE OR MR FERNANDEZ ON THIS ITEM, WE'LL MOVE ON TO THE NEXT TOPIC
  • THANK YOU GUYS
  • AGAIN, THANK YOU FOR YOUR TIME
  • THANK YOU
  • SO I'LL MOVE US ALONG
  • ITEM NUMBER FOUR ON THE AGENDA IS APPROVAL OF THE 2024 PROPOSED BUDGET
  • GLENN PLEASE PROCEED WITH THE UPDATE
  • THANK YOU, COMMISSIONER
  • SO, NEXT SLIDE, PLEASE, MICHELLE
  • A LITTLE OVERVIEW OF OUR DEPARTMENT COMMISSIONERS AND MS OLMSTROM
  • WE PROVIDE ASSURANCE THAT THE PORT CONTROLS ARE EFFECTIVE AND EFFICIENT, THAT THEY'RE WORKING ESSENTIALLY BEFORE A FIRE STARTS
  • SO THINK OF IT
  • IF THERE'S SMOKE, WE LIKE TO COME IN AND IDENTIFY THE SMOKE AND SAY, HEY, YOUR HOUSE HAS GOT SMOKE, RATHER THAN COMING IN AFTER THE FACT AND SAY, YOUR HOUSE BURNT DOWN
  • SO CONTROLS PREVENT SOMETHING, YOUR HOUSE FROM BURNING DOWN, IN ESSENCE
  • SO THAT'S ONE OF THE KEY THINGS WE DO
  • WE ALSO DO A LOT OF WORK ON WE'RE DOING A LOT OF GCCM CONSTRUCTION PROJECTS
  • NOW, THAT'S GENERAL CONTRACTOR, CONSTRUCTION MANAGER TYPE CONSTRUCTION METHODOLOGIES
  • AND BECAUSE WE'RE DOING THAT, THAT SEEMS TO WORK WELL FOR THE PORT
  • BUT THE RCW ALSO REQUIRES INDEPENDENT AUDITS OF THOSE
  • SO WE FACILITATE AND PARTNER ON THOSE INDEPENDENT AUDITS
  • AND IT'S A LOT OF WORK
  • SO, YOU'LL SEE, I'LL SHOW YOU A CHART LATER OF ALL THE GCCM PROJECTS THAT THE PORT'S DOING IN THE NEXT FEW YEARS AND THE WORK THAT NEEDS TO BE DONE IN THOSE
  • WE ALSO USE AN OUTSIDE FIRM FOR THAT THAT WE PARTNER WITH AND WE'LL TALK ABOUT THAT, KNOW WHERE POSSIBLE
  • WE PROVIDE ADVISORY SERVICES TO THE PORT
  • WE SEE A LOT WE HAVE A LOT OF EXPERIENCE WITH OUR TEAM AND WE, YOU KNOW, THANK YOU
  • NO WORRIES
  • GLAD YOU'RE HERE
  • ONE OF THE THINGS WE DO IS IF THERE'S A PROCESS BROKEN OR SOMEONE NEEDS HELP WITH SOMETHING, THEY'LL COME TO US AND THEY'LL ASK US, CAN YOU HELP US WITH THIS? AND FROM TIME TO TIME, WE'LL RECOMMEND AND WE'LL HELP THEM IMPROVE THEIR PROCESS
  • AND THEN ONE OF THE CRITICAL THINGS TO BEING A GOOD INTERNAL AUDIT FUNCTION IS YOU DON'T REPORT INTERNALLY TO SOMEONE IN HOUSE
  • YOU REPORT FUNCTIONALLY TO AN AUDIT COMMITTEE
  • SO YOUR WORK ISN'T YOU DON'T WANT SOMEONE IN MANAGEMENT REWRITING YOUR AUDIT REPORTS AND JUST LETTING THE GOOD STUFF COME OUT TO THE PUBLIC
  • I MEAN, THINGS THAT ARE SCRUBBED
  • SO BY REPORTING TO THE AUDIT COMMITTEE FUNCTIONALLY AND ADMINISTRATIVELY TO STEVE, WE MAINTAIN OUR INDEPENDENCE AND OBJECTIVITY
  • NEXT SLIDE, PLEASE, MICHELLE
  • SO, 2024, WHAT ARE WE DOING? WHAT ARE OUR MAJOR INITIATIVES? FIRST OFF, WE WANT TO BE ABLE TO CONTINUE TO DO OUR GCCM AUDITS BECAUSE I THINK THE PORT SCALING UP FOR THIS
  • AND AS I THINK STEVE METRUCK, THE EXECUTIVE DIRECTOR, HAS KIND OF ANALOGIZED IT TO, WE'VE CLIMBED SMALLER MOUNTAINS, WE'RE ABOUT TO CLIMB EVEREST
  • SO AS WE GO TO TAKE ON ALL THESE CAPITAL PROJECTS, WE WANT TO MAKE SURE THAT FROM AN AUDIT PERSPECTIVE, WE'RE READY ALSO FOR THAT SPEND AND THAT WE CAN ADD VALUE AS WE GO
  • ANOTHER THING THAT WE'VE GOT AS A MAJOR ENHANCEMENT IS OUR CONCESSION AUDIT PROGRAM
  • SO WE HAVE MAYBE OVER 100 CONCESSIONNAIRES AT THE AIRPORT AND ON THE MARITIME SIDE, A LOT OF CONCESSIONAIRES, A LOT OF THEIR REVENUE, WHICH IS OVER $100 MILLION IS SELF REPORTED TO THE PORT
  • SO WE CYCLE THROUGH AND WE AUDIT THOSE
  • BUT WE WOULD LIKE TO ENHANCE OUR PROCESS AND INCREASE OUR SPEED AND VOLUME AND USE PERHAPS AUTOMATED TOOLS, FIGURE OUT HOW WE CAN HAVE MORE TOUCH POINTS AND AT THE SAME TIME MINIMIZE IMPACT TO THE CONCESSIONAIRES
  • AND IT'S A WIN WIN BECAUSE A LOT OF THESE ARE SMALLER BUSINESSES ALSO
  • SO WE WANT TO HELP THEM EARLY ON IN THE PROCESS AND BE AS LITTLE IMPACTFUL AS POSSIBLE, BUT YET GET GOOD COVERAGE THERE
  • AND WE HAVE AN OPPORTUNITY THERE
  • AND THEN FINALLY THERE'S THE EQUITY POLICY DIRECTIVE THAT CAME OUT THIS YEAR
  • AND ONE OF THE THINGS BOOKDA GHEISAR, OUR SENIOR DIRECTOR OF OEDI OFFICE OF EQUITY, DIVERSITY AND INCLUSIONS, ASKED IS A PARTNERSHIP WHERE WE CAN BUILD A TOOL TO ASSURE COMPLIANCE WITH THAT, BE IT
  • IF WE HAVE ANTI HUMAN TRAFFIC POLICIES, IF WE HAVE A POTENTIAL THIRD PARTY CODE OF CONDUCT, HOW DO WE GO OUT AND ENFORCE THAT? ALL OUR TOUCH POINTS ARE ACTUALLY COMPLYING WITH IT
  • WE JUST DON'T WANT A DOCUMENT THAT'S OUT THERE THAT NOBODY FOLLOWS
  • SO WE WANT TO DESIGN THAT INTO OUR WORK
  • SO AS WE GO OUT AND TOUCH ALL OF THESE VARIOUS ENTITIES, WE'RE ALSO EDUCATING THEM AND ASSURING COMPLIANCE IN SOME WAY
  • BUT THAT NEEDS TO BE DESIGNED AND BUILT
  • SO THAT'S A MAJOR INITIATIVE AS FAR AS GOING FORWARD NEXT YEAR
  • NEXT SLIDE, PLEASE, PLEASE
  • SO HOW DO WE DO THIS? THIS IS THE TEAM, AN INTERNAL AUDIT AT THE PORT THAT DOES ALL THAT WORK
  • WE'VE GOT THREE GROUPS
  • DAN ON THE OPERATION PERFORMANCE AUDIT SIDE AND THE CONCESSION AUDIT
  • YOU KNOW, ALTHOUGH WE LEVERAGE OFF OTHER RESOURCES
  • DAN LEADS THE PERFORMANCE AUDITS AND THE CONCESSION AUDITS
  • SPENCER DOES ALL THE CAPITAL WORK
  • SPENCER BRIGHT IN THE MIDDLE
  • YOU KNOW, HE'S GOT THAT LOAD WITH THE GCCM AUDITS
  • WE DO HAVE OUTSIDE SERVICES THAT WE USE, BUT HE'S GOT TO MANAGE THOSE AS WELL AND MAKE SURE THAT THE AUDITS ARE HAPPENING AS THE LEGISLATURE INTENDED AND KEEPS PROJECTS MOVING AND MAKE SURE THAT WE'RE GOOD STEWARDS OF TAXPAYER FUNDS
  • AND THEN YOU HEARD A LOT FROM THE SAO AND CYBERSECURITY
  • RIDICA MARWAHA, OUR IT AUDIT MANAGER, DOES AUDITS OF IT AUDITS OF CORPORATE SIDE AND THE AVIATION SIDE
  • WHEN YOU LOOK AT THE AIRPORT AND YOU'VE GOT ALL THOSE MOVING PARTS, YOU'VE GOT BAGGAGE SYSTEMS, RUNWAY LIGHTS THAT ARE ALL MANAGED BY COMPUTERS
  • AND THOSE OPERATIONS TECHNOLOGY SYSTEMS ARE AUDITED JUST AS WELL AS THE FINANCIAL SYSTEMS AND ALL THE OTHER SYSTEMS WE HAVE
  • SO THE THREE GROUPS THERE
  • NEXT SLIDE, PLEASE
  • MICHELLE
  • OUR BUDGET IS RELATIVELY STRAIGHTFORWARD
  • LARGEST THING IS OUR SALARIES AND WAGES, WHICH JUST GOES UP WITH INFLATION
  • OUR HEADCOUNT IS CONSTANT
  • WE ALSO INVEST IN EDUCATION BECAUSE MOST OF OUR STAFF ACTUALLY, I THINK ALL OF OUR STAFF HAVE EITHER CPA LICENSES OR SOME CONSTRUCTION CERTIFICATION OR TECHNOLOGY CERTIFICATION, LIKE A CERTIFIED INFORMATION SYSTEMS AUDITOR
  • AND TO MAINTAIN THOSE LICENSES AND THE TRAINING THAT'S REQUIRED TO KEEP THEM FRESH
  • THAT GOES INTO THE TRAVEL AND OTHER EMPLOYEE EXPENSES
  • THAT'S PRETTY MUCH ALL THE TRAINING
  • OUTSIDE SERVICES
  • THE BIG NUMBERS THAT YOU SEE IN THE PAST ARE FROM THE GCCM AUDITS
  • THEY'D COME IN AND THEN THEY'D BE CAPITALIZED, AND LINE NINE WOULD SHOW THEM BEING CAPITALIZED AND COMING OUT OF EXPENSE
  • NOW WE'RE CAPITALIZING THEM DIRECTLY TO THE PROJECT
  • AND I'LL SHOW YOU A SLIDE THAT TALKS A LITTLE BIT ABOUT THAT IN MORE DETAIL
  • THE $40,000 THAT YOU SEE IN THERE, WE HAVE AN INDIVIDUAL THAT'S GOING ON MATERNITY LEAVE
  • SHE'S ALREADY ON MATERNITY LEAVE, AND SHE'S GOING TO BE OUT FOR THE FIRST HALF OF NEXT YEAR
  • SO IT'S FOR SOME TEMPORARY HELP
  • THE OTHER THINGS ARE JUST SUNDRIES AND COMPUTER EQUIPMENT, MISCELLANEOUS ITEMS NEXT SLIDE, PLEASE, MICHELLE
  • SO THIS IS THE NEW BUDGET REQUEST THAT'S OUT OF THE ORDINARY
  • IT'S JUST FOR SOME TEMPORARY HELP TO BACKFILL STAFF THAT'S ON MATERNITY LEAVE FOR THE FIRST PART OF NEXT YEAR
  • AND NEXT SLIDE
  • SO THIS SLIDE, COMMISSIONERS, THE AUDIT COSTS HERE DO GET APPROVED BY THE FULL COMMISSION WHEN THE PROJECT IS APPROVED
  • SO IT'S IN THE PROJECT PRESENTATION THAT'S MADE TO YOU
  • BUT FOR TRANSPARENCY, SINCE WE'RE AUDITED BREAKING THIS OUT, THE ESTIMATED CONSTRUCTION COSTS ARE EARLY ESTIMATES OF JUST THE CONSTRUCTION RELATED COSTS
  • SO THERE'S DESIGN COSTS AND THE PORT COSTS THAT WILL INCREASE THE COST OF THESE PROJECTS
  • AND THESE ARE EARLY ESTIMATES
  • A LOT OF THESE PROJECT COSTS WILL GO UP, BUT WE BASE OUR SPEND ON THOSE AND WE ACCORDINGLY BID OUT THE AUDIT SERVICES
  • THEY ARE BID OUT PUBLICLY
  • SOME OF THEM ARE IDIQS, WHERE IT'S A PARTICULAR CONTRACT THAT COVERS TWO, THREE PROJECTS
  • AND THEN SOMETIMES YOU HAVE SOMETHING BIG LIKE THE SOUTH CONCOURSE, WHICH IS GOING TO BE A BILLION DOLLAR PLUS PROJECT
  • AND WE'LL PROBABLY HAVE TO HAVE A DEDICATED AUDITOR ON THAT WORKING WITH US CONTINUOUSLY
  • IT'S A TEN YEAR PROJECT
  • SO WHEN YOU GO ALL THE WAY INTO 2030 SOMETHING, YOU'RE GOING TO HAVE A LOT OF SPEND AND A LOT OF CHANGE THAT OCCURS OVER THAT IN THE LIFE OF THAT PROJECT
  • BUT FOR TRANSPARENCY, THESE ARE ESTIMATES OF WHAT THE AUDIT COSTS WILL BE
  • AND I JUST WANT TO IT'S REALLY THE EXPENSE BUDGET THAT GETS APPROVED HERE
  • THE CONSTRUCTION PUGET HERE IS, LIKE I SAID, APPROVED BY THE FULL COMMISSIONER AND SEPARATE PRESENTATION
  • AND THAT CONCLUDES ACTUALLY, COMMISSIONERS, MY BUDGET PRESENTATION, IT'S RELATIVELY SIMPLE, STRAIGHTFORWARD
  • I'LL ANSWER ANY QUESTIONS NOW
  • THANK YOU
  • MR FERNANDEZ, ARE THERE ANY QUESTIONS FROM OUR COMMITTEE MEMBERS AT THIS TIME? OKAY, IS THERE A MOTION AND A SECOND FOR APPROVAL OF THE 2024 PROPOSED BUDGET SO MOVED? SECOND
  • THE MOTION HAS BEEN MADE AND SECONDED
  • IS THERE ANY OBJECTION TO APPROVAL OF THE 2024 PROPOSED BUDGET HEARING? NONE
  • THE MOTION IS APPROVED
  • THANK YOU, COMMISSIONER
  • ABSOLUTELY
  • NEXT SLIDE, PLEASE
  • MICHELLE
  • SO, COMMISSIONERS, I HAVE A LITTLE BIT OF A GOOD NEWS STORY HERE
  • IF YOU LOOK AT THE BARS IN THIS FOLLOW UP CHART, YOU'LL SEE THAT THE BARS IN THE FAR RIGHT, MORE THAN TWO YEARS HAS COME DOWN SIGNIFICANTLY
  • 1 SECOND, YOU'RE ON ITEM NUMBER FIVE
  • RIGHT? I'M SORRY
  • YEAH, I CAN INTRODUCE THE ITEM
  • YOU'RE GOOD
  • BUT YOU'RE AHEAD
  • THIS IS GREAT
  • ITEM NUMBER FIVE ON THE AGENDA IS A REVIEW OF THE OPEN ISSUES STATUS REPORT
  • GLENN, PLEASE PROCEED WITH THE PRESENTATION
  • AGAIN
  • APOLOGIES, COMMISSIONER
  • I'M JUMPING AHEAD
  • BUT LIKE I SAID, IT'S A GOOD NEWS STORY
  • AND ONE OF THE THINGS WE DID OVER THE LAST QUARTER PLUS ACTUALLY, OVER THE LAST YEAR, WE'VE BEEN WORKING DILIGENTLY WITH MANAGEMENT, ESPECIALLY ON THE INFORMATION TECHNOLOGY SIDE, TO IDENTIFY THINGS THAT ARE FIXED OR THINGS THAT ARE NOT
  • GOING TO BE DONE AND MITIGATED SOME OTHER WAY IF A SYSTEM IS TOTALLY GOING TO BE REPLACED BECAUSE EVERYTHING CHANGES VERY QUICKLY, IN SOME CASES JUST OTHER MITIGATION WAS PUT IN PLACE
  • OR HAS MANAGEMENT ACCEPTED THE RISK? THERE ARE SOME CASES WHERE WE'VE DECIDED WE'RE GOING TO DO SOMETHING ELSE, BUT POST COVID, A LOT OF WORK'S BEEN DONE AND A LOT OF ITEMS HAVE BEEN CLOSED OUT
  • SO WE FLUSHED THAT OUT
  • AND TO MS HOLMSTROM'S EARLIER REQUEST IN THE APPENDIX, WE HAVE ALL THE DETAILS ON ALL OF THESE ISSUES
  • SO THE ISSUE, THE STATUS, AND A LITTLE BIT MORE DETAIL ON THEM
  • SO YOU DO KNOW WHAT'S IN THESE BARS AND WHAT MAKES UP THE BARS
  • WE DO HAVE AN OPEN ISSUE IN ARCHITECTURAL AND ENGINEERING SERVICES THAT WE'LL TALK A LITTLE BIT ABOUT LATER
  • THERE'S A COMMENT IN THERE THAT I HAVE THAT SAYS THIS APPEARS TO BE IN THE PROCUREMENT COUNCIL AGENDA IN SEPTEMBER
  • THAT IS NOT ON THE AGENDA
  • SO THAT COMMENT NEEDS TO BE STRUCK
  • BUT EVERYTHING ELSE, IT'S STILL AN OPEN ISSUE
  • QUESTIONS ON FOLLOW UP, ARE THERE ANY QUESTIONS FROM THE COMMITTEE MEMBERS AT THIS TIME? MY MIC'S NOT ON
  • EVERYONE IN HERE HEARD ME
  • I NEVER QUESTION GOOD NEWS
  • THAT'S RIGHT
  • I MUST SAY THAT THE GRAPH HAS CHANGED SIGNIFICANTLY
  • I POINTED TO SARAH, YOU'VE MADE THAT POINT SEVERAL TIMES
  • WHY ARE THERE SO MANY OPEN ISSUES? AND SO IT'S GREAT TO SEE THIS UPDATED GRAPH
  • THANK YOU
  • OKAY, SO HEARING NO FURTHER QUESTIONS, WE CAN MOVE ON TO ITEM NUMBER SIX ON THE AGENDA, WHICH IS AN UPDATE ON THE 2023 AUDIT PLAN
  • GLENN, PLEASE PROCEED WITH THE PRESENTATION ON THIS ITEM
  • THANK YOU, COMMISSIONER
  • SO, A QUICK STATUS UPDATE ON OUR PLAN AND WHERE WE STAND
  • A LOT OF THIS IS ON TRACK
  • WE HAVE A FEW CHANGES
  • WE PUSHED THE EQUITY POLICY DIRECTIVE AUDIT THAT WAS SCHEDULED FOR THIS YEAR INTO 2024, PRIMARILY AT A REQUEST OF THE DIRECTOR OF OEDI, BECAUSE THE DIRECTIVE WAS SIGNED, INITIATED JUST IN 2024
  • AND SHE HASN'T HAD REALLY TIME TO SHE NEEDS A LITTLE MORE TIME BEFORE WE CAN COME BACK AND LOOK AT IT AND MAKE SURE THAT PROCESSES HAVE BEEN SET UP
  • SO IT MADE MORE SENSE TO MOVE THAT OUT
  • SO WE DID MOVE THAT OUT
  • WE DID PULL IN A CONTINGENCY AUDIT THAT THE AUDIT COMMITTEE HAD APPROVED EARLIER ON THE POLICE DEPARTMENT
  • SO WE'LL BE FOCUSING ON THE POLICE DEPARTMENT EVIDENCE ROOM, AND WE MOVED THAT UP IN LIEU OF THE EQUITY POLICY DIRECTIVE JUST FOR TRANSPARENCY
  • THE STATE AUDITORS AT THIS TIME ALSO DOING AN AUDIT OF THE POLICE DEPARTMENT
  • THEY'RE LOOKING PRIMARILY AT SEIZURES AND THEY'RE LOOKING STATEWIDE AT POLICE DEPARTMENT SEIZURES TO MAKE SURE THAT THEIR SEIZURES ARE EQUITABLE AMONGST DIFFERENT DEMOGRAPHICS
  • SO I WILL ASK THEM TO COME PRESENT TO THIS COMMISSION AS TO THEY'RE DOING IT STATEWIDE, SO THEY WILL PRESENT TO JLARK AS WELL, AND THEN THEY'LL PRESENT TO THIS COMMISSION WHEN THEY'RE DONE
  • BUT OUR WORK IS DISTINCT FROM THEIRS AND FOCUSES SPECIFICALLY ON THE EVIDENCE ROOM AND OUR CONTROLS OVER THAT
  • ON THE CAPITAL FRONT, THE POST, IF REALIGNMENT AT THE BOTTOM, WAS A LITTLE BEHIND SCHEDULE ON THE CONSTRUCTION SIDE
  • SO WE'VE MOVED OUR AUDIT ALSO, AND OUR AUDIT WORK INTO 2024
  • IN LIEU OF THAT, WE'VE MOVED UP CONCOURSE THE BUILDING EXPANSION FOR THE DELTA LOUNGE
  • SO THAT'S IN PROCESS RIGHT NOW, AND WE'LL REPORT ON THAT IN THE FOURTH QUARTER
  • SO THAT WAS A SWAP OUT
  • AND THEN ON THE INFORMATION TECHNOLOGY SIDE, THE NETWORK INFRASTRUCTURE MANAGEMENT AUDIT WILL BE MOVED TO 2024
  • AND WE'RE NOT PULLING ANYTHING IN FOR THAT
  • THAT'LL JUST BE DONE IN 2024
  • AND THAT'S PRIMARILY BECAUSE BRUCE CLAUSAL, WHO WAS OUR IT AUDIT MANAGER, RETIRED EARLIER THIS YEAR
  • AND WHILE WE'RE FILLING AYE
  • POSITION, WE HAVE FILLED AYE
  • POSITION WITH RIDICA MARWAHA, BUT WE HAVE AN OPENED AUDITOR POSITION
  • AND WHILE WE'RE FILLING THAT, WE'RE EXPECTING LATE SEPTEMBER TO HAVE THAT FILLED
  • WE JUST WON'T HAVE TIME TO GET IT DONE FOR THIS
  • IT IS POSTED, YES
  • AND I BELIEVE MID SEPTEMBER WE'RE SCHEDULED TO HAVE INTERVIEWS FOR THE POSITION CANDIDATES
  • SO ALL OUR OPEN POSITIONS ARE POSTED AND PEOPLE GROW, PEOPLE DEVELOP, PEOPLE RETIRE, PEOPLE MOVE ON
  • YOU'VE GOT A CONSTANT, CONSTANT, AND IT'S THERE WILL COME A TIME YOU CAN GROW, BUT YOU CAN'T RETIRE, MOVE ON
  • NEXT SLIDE, PLEASE, MICHELLE
  • SO THIS SHOWS IT'S A GANTT CHART THAT SHOWS YOU WHERE WE STAND WITH OUR AUDIT PLAN
  • THE ONES IN RED, AS I MENTIONED, ARE THE ONES THAT ARE GETTING PUSHED INTO 2024
  • AND UP ABOVE, WE'VE GOT A FEW MORE THAT WE'VE PULLED INTO 2023 THAT WE'LL BE DOING SO WITH THAT
  • COMMISSIONER, I'LL TAKE ANY QUESTIONS ON OUR AUDIT PLAN BEFORE WE JUMP INTO BUT YEAH
  • IS THERE ANY QUESTIONS FROM OUR COMMITTEE MEMBERS AT THIS TIME? NO QUESTIONS
  • I CAN MOVE US ON TO THE NEXT ITEM ON THE AGENDA
  • WE'RE NOW AT THE PERFORMANCE AUDIT SECTION OF THE AGENDA
  • ITEM NUMBER SEVEN IS A REPORT ON THE C CONCOURSE EXPANSION PROJECT
  • GLENN, YOU HAVE THE FLOOR
  • PLEASE INTRODUCE OUR SPEAKERS
  • THANK YOU, COMMISSIONER MOHAMED
  • SO I'M GOING TO ASK SPENCER BRIGHT TO COME UP TO THE PODIUM
  • HE'S OUR CAPITAL AUDIT MANAGER, AND I'M ALSO ON THE LINE ON TEAMS WE'VE ALSO GOT DEBBIE TOWNSEND FROM RL
  • TOWNSEND AND ASSOCIATES AND PATRICIA PHARRELL SHEARER FROM RL
  • TOWNSEND AND ASSOCIATES
  • NOW, RL
  • TOWNSEND AND ASSOCIATES IS A WMBE BUSINESS THAT ACTUALLY THEY'RE EXPERTS IN CONSTRUCTION MANAGEMENT
  • THEY'RE NATIONALLY KNOWN
  • AND ON THESE GCCM AUDITS, ON THREE OF THEM, THEY'VE WON THE CONTRACT TO DO THE INDEPENDENT AUDITS AS REQUIRED BY THE RCW
  • SO ALTHOUGH THEY'RE LOOKING AT SUBCONTRACTORS, THEY PARTNER WITH US ON THESE AUDITS, AND SPENCER'S GOT A LONG WORKING RELATIONSHIP WITH THEM AS WELL
  • SO I'M GOING TO PROVIDE A LITTLE BIT OF AN OVERVIEW, AND I'LL INTRODUCE OUR FIRST ISSUE, AND THEN WE'LL TALK THROUGH THE FIRST TWO ISSUES
  • AND THEN I'LL ASK MANAGEMENT TO COME UP AND SPEAK AND RESPOND AS WELL
  • THIS IS PRECONSTRUCTION
  • SO IT'S A SEA CONCOURSE EXPANSION PROJECT
  • AND BEFORE WE ACTUALLY START THE BUILDING OF THE FACILITIES, WE HAVE TURNER, THE WINNING BIDDER, COME IN AND DO A LITTLE BIT OF PRECONSTRUCTION WORK
  • SO IN THIS CASE, WE'RE EXPANDING THE SEA CONCOURSE BY ADDING MORE THAN 20,000 ALASKA LOUNGE ACCESS
  • WE'RE TAKING 81,000 SQUARE FOOT BUILDING AND CONVERTING IT INTO A 226,000 SQUARE FOOT FACILITY
  • WE'RE GROWING UPWARDS, IN ESSENCE, ALSO BECAUSE WE'RE RUNNING OUT OF SPACE AT THE AIRPORT
  • SO THIS IS JUST A PRELIMINARY WORK, WHICH WILL TURN INTO 100 MILLION DOLLAR PLUS PROJECT, OR QUITE A BIT OVER THAT
  • THIS WORK STARTED IN 2020 AND WILL RUN OUT ALL THE WAY TO THE END OF THIS YEAR
  • SO IT SHOULD BE DONE AT THE END OF THIS YEAR
  • AND THEN WE'LL GO INTO MAJOR CONSTRUCTION FROM THERE
  • TURNER
  • AS YOU SEE THERE, TURNER CONSTRUCTION COMPANY WAS SELECTED AS THE GCCM OR THE GENERAL CONSTRUCTOR CONSTRUCTION MANAGEMENT MANAGER
  • AND THEY'LL LIKELY BE CONTINUING ON WITH THIS PROJECT
  • NEXT SLIDE, PLEASE
  • SO, BECAUSE THIS IS PRECONSTRUCTION, YOU'RE LOOKING AT ABOUT A $4.4 MILLION PRICE TAG, WHICH YOU LOOK AT ALMOST 2 MILLION IN CHANGE ORDERS
  • A LARGE PART OF THIS IS CHANGE ORDERS THAT HAVE COME IN AFTER THE FACT
  • SO YOU'RE GOING FROM 4.4 TO ABOUT FROM TWO TO FOUR, ROUGHLY
  • NOW, THIS DOES FALL INTO THE RCW 39 TEN, 385 CATEGORY
  • THAT REQUIRES AN INDEPENDENT AUDITOR TO LOOK AT SUBCONTRACTOR COSTS, PRIMARILY
  • AND AS I INTRODUCED, RL
  • TOWNSEND DID A LOT OF THE WORK, IS DOING THE WORK ON THAT
  • NOW, THIS PARTICULAR AUDIT THAT WE'RE TALKING ABOUT, OUR INTERNAL TEAM, SPENCER DID THE WORK ON IT AND AYE
  • TEAM
  • HOWEVER, WE'RE LEVERAGING OFF THE EXPERTISE OF R
  • L
  • TOWNSEND AND ASSOCIATES
  • SO OUR WORK IN THIS AUDIT ALSO FOCUSED ON THE EXPENSES THAT WE PAID TO TURNER, TO THE GCCM, AND WE WANTED TO MAKE SURE THAT THOSE EXPENSES WERE ACCURATE AND THAT THEY WERE IN COMPLIANCE WITH THE CONTRACT
  • AND THEN WE TOOK IT ONE STEP FURTHER AND PUT ON A PERFORMANCE AUDIT
  • HAT LIKE THIS IS WHERE YOU DON'T JUST LOOK AT COMPLIANCE, BUT IS WHAT YOU'RE PAYING REASONABLE? AND ARE THE MODELS THAT WE'RE USING REASONABLE? AND IT'S CALLED A PERFORMANCE AUDIT, REALLY
  • SO WE LOOKED
  • AT LABOR RATE ANALYSIS AND WE'RE GOING TO TALK ABOUT OUR FIRST ISSUE AND HOW WE BUILT THAT UP INTO THE CONTRACT
  • NEXT SLIDE, PLEASE, MICHELLE
  • SO ONE OF THE THINGS THAT HAPPENED IS IN THE CONTRACT, IN THE BACK OF THE CONTRACT WAS A TABLE
  • AND THE TABLE HAD ALL THE STAFF FROM TURNER WORKING ON THE PROJECT OR SCHEDULED TO WORK ON THE PROJECT AND A RATE FOR THEM
  • AND THAT'S THE AGREED UPON RATE PER HOUR THAT YOU'LL PAY FOR THESE INDIVIDUALS
  • THE DETAIL WASN'T, I GUESS, FROM WHAT I UNDERSTAND, IT SHOULDN'T HAVE BEEN IN THE CONTRACT, BUT IT WAS THERE
  • IT SHOWED YOU THE BUILDUP TO HOW TO GET TO THAT RATE AND IT WAS TURNER'S WORK FOR EACH OF THE INDIVIDUALS BY JOB TITLE AND BY POSITION NAME
  • SO WE TOOK A LOOK AT THE DETAIL IN THERE AND THEN WE ALSO GOT MORE DATA FROM TURNER
  • WE CLEANED UP SOME OF THE DATA AND WE DID IN ESSENCE, A COST PLUS ANALYSIS, A COST PLUS APPROACH
  • SO THERE'S TWO WAYS TO DO MEAN TO COME UP WITH A RATE
  • THERE'S A RATE TOOL THAT WE HAVE IN HOUSE, A MARKET RATE ANALYSIS WHICH USES OUR IN HOUSE BUILDUP AND SOME MODEL THAT WAS CREATED IN HOUSE AND WITH THE HELP, I BELIEVE, OF BCG, I MIGHT BE, YOU KNOW, IT'S AN IN HOUSE MODEL
  • SO WE HAVE THIS IN HOUSE MODEL AND THEN THERE'S ALSO A COST PLUS APPROACH AND WHAT WE USE IS A COST PLUS APPROACH WHERE YOU ADD UP ALL THE COSTS THAT MAKE UP THE RATE AND THEN YOU ADD A MARKUP ON THAT
  • THAT'S REASONABLE AND THAT'S PRETTY STANDARD
  • AND IN A LITTLE BIT I'LL LET DEBBIE AND PATRICIA TALK A LITTLE BIT ABOUT THAT AS WELL BECAUSE THEY SEE IT AND THEY'RE EXPERTS AT IT
  • CPO USED THEIR RATE TOOL THAT CAME UP WITH THE RATES
  • BUT WHEN WE RECALCULATED EACH POSITION, WE FOUND SOME THINGS AND SOME OPPORTUNITIES WHICH WE THOUGHT WERE THAT LED US TO CONCLUDE THAT MAYBE WE NEED TO TAKE A SECOND LOOK AT OUR RATE TOOL, LOOK AT THE INPUTS AND SEE IF THERE'S AN OPPORTUNITY TO FINE TUNE THAT A LITTLE BIT
  • AND I THINK BY DOING THAT, ESPECIALLY AS YOU SCALE UP ON THESE PROJECTS, REMEMBER, RIGHT NOW WE'RE AT LIKE 4 MILLION
  • THIS IS GOING TO GO TO 100 MILLION PLUS AND ALL OF THESE GCCMS ARE GOING TO BE USING A SIMILAR PROCESS
  • IN ADDITION, WE HAVE A LOT OF CAPITAL COMING AND A LOT OF SPEND THAT'S ON THE TABLE
  • SO HOW DO WE MAKE SURE OUR MODELS ARE UP TO DATE? THE FINAL RATE, LIKE I MENTIONED ON THE CONTRACT, IN COMPLIANCE WITH THE CONTRACT, WE PAID THE RATE, BUT THAT BUILD UP TO THE RATE IS WHAT WE'RE QUESTIONING AND WE'RE SAYING THERE'S AN OPPORTUNITY TO IMPROVE THE INPUTS IN THE MODEL
  • NEXT SLIDE, PLEASE
  • SO THE TOP ILLUSTRATES OUR INTERNAL RATE TOOL THAT GIVES YOU THE NEGOTIATED RATE BY POSITION AND INDIVIDUAL
  • AND THEN THE RIGHT YOU HAVE TURNER'S RATE BUILD UP WHICH WE ESSENTIALLY USED AND DID A COST PLUS ANALYSIS OF AND BUILT KNOW THEY BOTH COME UP TO A RATE THAT'S THEN USED IN THE CONTRACT AND THEN WE PAY THAT RATE FOR A POSITION PER HOUR THAT THEY WORK AT THE PORT
  • SO IF THEY WORK FOR 100 HOURS AND THEY CHARGE US $170 AN HOUR, DO THE MULTIPLICATION, THAT'S WHAT WE PAY THEM FOR
  • THAT IN THE BUILD UP, IF YOU DO A COST PLUS, YOU HAVE THEIR SALARIES, THEIR WAGES, EVERYTHING'S COVERED
  • YOU HAVE THEIR OVERHEAD, THEIR PROFIT
  • ALL THE KEY ELEMENTS SHOULD BE EITHER IN THE COST PLUS BUILD UP OR COVERED BY THE RATE TOOL
  • THERE'S NOTHING OUTSIDE THAT
  • SO AFTER THAT, AT THE END OF THE DAY, THOSE ELEMENTS ARE WHAT YOU'RE PAYING ON, AND THERE'S A PROCESS AND A WAY TO DO THAT
  • SO, LIKE, YOU KNOW, WE'VE GOT A SERIES OF ITEMS IN MY THIRD BULLET HERE THAT WE LOOKED AT THAT WOULD BE QUESTIONED IF WE USED A COST PLUS APPROACH
  • AND THAT'S HOW SPENCER CAME UP WITH AYE
  • DIFFERENCE ON POTENTIAL SAVINGS
  • AND AT THIS POINT, RATHER THAN GO THROUGH THE DETAIL HERE, I'M GOING TO LET THE EXPERTS TALK
  • SO, PATRICIA AND KNOW, IF YOU CAN UNMUTE AND WHOEVER WANTS TO TAKE THE STAGE AND TALK A LITTLE BIT ABOUT THESE, I WOULD APPRECIATE IT
  • AND INTRODUCE YOURSELF AS YOU COME ONLINE
  • GOOD MORNING
  • MY NAME IS PATRICIA FARRELL SHEARER, AND I'M A PROJECT EXECUTIVE WITH EARL TOWNSEND ASSOCIATES
  • AND DEBBIE TOWNSEND, OUR PRESIDENT, IS ALSO HERE, SO SHE MAY CHIME IN FROM TIME TO TIME
  • IN TERMS OF THE RATE BUILDUP, THERE WERE SOME ITEMS THAT I BELIEVE INTERNAL AUDIT IDENTIFIED AS POTENTIAL NON COMPLIANCE WITH THE AUDIT, PERHAPS NON REIMBURSABLE COSTS
  • AND FROM AN INDUSTRY STANDARD PERSPECTIVE, THE BENEFITS THAT WE IDENTIFY AS NON REIMBURSABLES ARE TYPICALLY WHAT IA HAD DONE AS WELL
  • SO, FOR INSTANCE, TUITION REIMBURSEMENT WE TYPICALLY SEE WITHIN THE INDUSTRY
  • KNOW THE CONTRACT REQUIRES SKILLED EMPLOYEES, AND THAT WOULD BE SOMETHING THAT WOULD BE COVERED BY THEIR GENERAL OFFICE OVERHEAD EXPENSE AND OR FEES
  • AND THEN BONUSES, OBVIOUSLY, ARE DISCRETIONARY
  • AND SO STAFF RETENTION, WE HAVE FOUND IN THE MARKETPLACE, THERE'S A LOT OF FLUCTUATION RIGHT NOW IN TERMS OF STAFF RETENTION
  • HOWEVER, WE WOULD LOOK AT THAT AS SOMETHING, AGAIN, THAT THE PORT MAY NOT HAVE TO PAY FOR IN THE MARKET RATE
  • EMPLOYEE ASSISTANT PROGRAMS, THINGS LIKE OUTSIDE EDUCATIONAL PROGRAMS, IN WHAT HAVE YOU FOR THE ASSISTANT PROGRAMS THAT THE EMPLOYEES MAY GO THROUGH
  • SO THE YEAR END PREMIUM PAY AGAIN, WE IDENTIFY THAT TYPICALLY AS DISCRETIONARY, AS SOMETIMES A BONUS AND OR OTHER AREAS WHERE THE YEAR END PAY IS HIGHER THAN THAT, WHICH WOULD BE THE NORMAL SALARY ABOVE AND BEYOND THE OTHER AREAS THAT INTERNAL AUDIT HAD IDENTIFIED
  • I THINK WHEN WE MET WITH SPENCER WAS A GENERAL LIABILITY INSURANCE RATE THAT APPEARED TO BE EXCESSIVE
  • AND HE SOUGHT OUR COUNSEL
  • AND WE HAVE A TENDENCY TO AGREE WITH AYE
  • IN THAT ACCORDING TO OUR DATABASES, HISTORICAL DATA THAT WE HAVE, WE TYPICALLY FIND THE INDUSTRY STANDARD TO RANGE BETWEEN 0.5 AND .75
  • AND SO, OF COURSE, THAT RAISES THOSE RATES THAT ARE BILLABLE FROM THE CONTRACTORS
  • WHAT WAS SOMEWHAT SURPRISING IN THE FINDINGS WAS THAT THE VIRTUAL DESIGN, WHICH IS A MODELING SYSTEM, IT'S A SOFTWARE PRODUCT THAT ALLOWS THE CONTRACTOR TO LOOK AT THE MECHANICAL AND THE ELECTRICAL DESIGN TO DETERMINE WHETHER THERE WILL BE CONFLICTS DURING THE CONSTRUCTION PHASE
  • AND SO THAT VIRTUAL DESIGN AND CONSTRUCTION SOFTWARE IS IN FACT A REIMBURSABLE
  • HOWEVER, IT WOULD BE SOMETHING THAT WE WOULD TYPICALLY SEE TO BE SOMEWHAT REASONABLE ONCE THEY INVEST IN THIS EQUIPMENT, INVEST IN THE SOFTWARE
  • WE DON'T SEE IT AS A RECURRING COST
  • I BELIEVE IN THIS PARTICULAR CASE, THE AVERAGE RATE SHOULD HAVE BEEN APPROXIMATELY $6.14
  • HOWEVER, THE AUDIT IDENTIFIED AREAS WHERE THE RATES WERE BETWEEN FIVE AND 75, WHICH WE DON'T TYPICALLY SEE WITHIN THE INDUSTRY FOR THAT PARTICULAR ROLE
  • AND THE BNO TAX PRETTY SIMPLE
  • I BELIEVE THAT THE BNO TAX FOR THE STATE OF WASHINGTON THAT WE HAVE USED FROM TIME TO TIME, OF COURSE, IS ZERO POINT 41%
  • AND THAT WAS ELEVATED AS WELL IN THE INTERNAL AUDITS REVIEW
  • DEBBIE, IF YOU HAVE SOMETHING WHEN WE LOOK AT THIS, WE WOULD RECOMMEND THIS IS AN ALTERNATIVE METHODOLOGY OF ESTABLISHING REASONABLE RATES FOR PROJECT MANAGEMENT THAT IS DOING PRECONSTRUCTION ALONG WITH DURING THE CONSTRUCTION PHASE
  • AND THAT WOULD BE SOMETHING THAT WE WOULD RECOMMEND TO THE PORT IN TERMS OF ESTABLISHING SOMETHING THAT YOU HAVE ACTUAL COST EVALUATIONS TO COME UP WITH SOMETHING THAT'S REASONABLE
  • AND DEBBIE, I'M THINKING MAYBE THROUGH THE DURATION OF THE PROJECT AS WELL, THAT MAY BE SOMETHING THAT IF THE COST, OBVIOUSLY THEY ARE GOING TO BE INCREASES AND WHAT HAVE YOU
  • AND SO IF, IN FACT, YOU CAN ESTABLISH A RATE THAT'S BASED ON ACTUAL COSTS OR INFORMATION THAT'S WITHIN THE INDUSTRY AND ESTABLISH THOSE RATES, THAT WOULD BE REASONABLE FOR THE DURATION OF THE PROJECT
  • RIGHT, I WAS GOING TO ADD TO THAT
  • WE'VE BEEN IN BUSINESS FOR OVER 30 YEARS, AND WE ONLY DO CONSTRUCTION AUDITING
  • SO WE HAVE QUITE A BIT OF HISTORY ON THIS TYPE OF AUDITING
  • MOST OF THE TIME, GENERALLY, OUR GO TO POSITION IS ACTUAL COST FOR LABOR
  • WE FIND THAT ANYTIME YOU USE A FIXED RATE, ESPECIALLY IF IT'S NOT AUDITED, YOU END UP PAYING MAYBE 15, 20% MORE THAN WHAT YOU WOULD EXPECT TO
  • WE BELIEVE THAT CONTRACTORS SHOULD BE PAID FAIRLY AND REASONABLY
  • AND I THINK YOU CAN DO THAT VIA THE AUDIT PROCESS, OR IT DOESN'T MATTER
  • IT DOESN'T AUDITORS HAVE TO DO IT
  • BUT WHOEVER REVIEWS TO MAKE SURE THAT THEY UNDERSTAND THE COMPONENTS IN THESE LABOR RATES AND PAY IN A REASONABLE AMOUNT, I THINK THAT'S REALLY THE OBJECTIVE OF WHAT I WOULD THINK THE PORT WOULD WANT TO GO TOWARDS
  • DEBBIE, WE ALSO USED REDUCED THE FEE FROM I BELIEVE IT WAS, WE SET IT AT FIVE TO 15% IS THAT WHAT YOU USED? FIVE TO 12%
  • FIVE TO 12% THAT SPENCER USED
  • I JUST WANT YOU TO COMMENT ON THAT AND SEE IF THAT'S REASONABLE AS WELL
  • RIGHT
  • WHEN WE REVIEWED WHAT SPENCER DID ORIGINALLY VERSUS SORT OF THE FINAL KNOW, I THINK HE HAS BEEN EXTREMELY FAIR AND CONSERVATIVE
  • THOSE FEE THAT GLENN JUST MENTIONED ARE REALLY ON THE VERY HIGH END OF WHAT WE TYPICALLY SEE
  • 5.5% IS PROBABLY A GOING RATE RIGHT NOW, MAYBE EVEN A LITTLE ON THE HIGH SIDE
  • BUT I WOULD SAY, CONSIDERING THE TIMES, THAT'S PROBABLY NOT UNUSUAL, ESPECIALLY IN THE WASHINGTON AREA
  • BUT ANYTHING HIGHER, 15%
  • I HAVE NEVER SEEN ANY ON A BIG PROJECT LIKE THIS, HAVEN'T SEEN FEES THAT HIGH
  • SO I THINK THAT THE WORK I THOUGHT THE WORK DONE WAS LOOKED AT FAIRNESS FOR THE CONTRACTOR
  • AND I WILL TELL YOU, WE'VE AUDITED TURNER FOR YEARS AND HAVE A VERY GOOD UNDERSTANDING OF THEIR FINANCIAL SYSTEM, THEIR LABOR AND LABOR
  • YOU KNOW, I THINK WHAT SPENCER DID PRETTY MUCH FELL IN LINE WITH WHAT WE WOULD KNOW COMMENTED ON AS WELL
  • QUESTIONS? WELL, THANK YOU TO THE STAFF FOR THIS REPORT AND PATRICIA AND DEBBIE, THANK YOU FOR OFFERING YOUR EXPERTISE AND ALL OF THE INFORMATION THAT YOU TWO HAVE SHARED TODAY
  • ARE THERE ANY QUESTIONS FROM THE COMMITTEE MEMBERS AT THIS TIME? I HAVE ONE GENERAL QUESTION
  • I THINK ONE THING THAT STOOD OUT TO ME IN A PRESENTATION ON THE C CONCOURSE WAS THE $1.94 MILLION IN CHANGE ORDERS
  • AND I HAVE NO SENSE OF WHETHER OR NOT THAT'S A LOT OR A LITTLE
  • BUT OFTENTIMES I FEEL LIKE THERE'S ALWAYS THIS DEBATE, ESPECIALLY AROUND PROJECT MANAGEMENT, OVER HOW YOU GO ABOUT THE PROJECT, WHETHER IT'S GCCM OR DESIGN BUILD OR DESIGN BID BUILD
  • AND I'M CURIOUS IF WE'VE EVER LOOKED AT THE DATA AROUND HOW MUCH WE GET IN CHANGE ORDERS RELATIVE TO HOW WE'RE MANAGING THE PROJECT
  • AND OBVIOUSLY EVERY PROJECT IS A LITTLE DIFFERENT AND THE PROJECT COST IS DIFFERENT
  • BUT IT WOULD BE INTERESTING FOR ME TO SEE WE'RE SEEING A LOT MORE CHANGE ORDERS IN GCCM PROJECTS OR IN DESIGN BUILD PROJECTS, BECAUSE I THINK IT'S IMPORTANT FOR US TO UNDERSTAND AND BE ABLE TO FORECAST WHAT OUR COSTS ARE
  • AND IF WE CONTINUE TO GET RECURRING, IF WE SEE A PATTERN OF MORE CHANGE ORDERS IN CERTAIN TYPES OF PROJECTS THAN OTHERS, THEN MAYBE THAT'S REASON FOR US TO CONSIDER TAPERING THOSE KINDS OF PROJECTS
  • I ALSO HAVE A THEORY THAT CERTAIN PROJECTS ARE PROBABLY GOOD FOR DESIGN BUILD AND CERTAIN PROJECTS ARE GOOD FOR GCCM AND CERTAIN PROJECTS ARE GOOD FOR DESIGN BID BUILD
  • AND IT MIGHT JUST BE MY IGNORANCE ON HOW WE DECIDE WHICH ROUTE WE'D GO, BUT I WOULD IMAGINE THAT ANALYSIS ON THE CHANGE ORDERS AND WHATNOT COULD INFORM US ON THAT TOO
  • SO I SEE JANICE IS COMING, BECAUSE JANICE CAN ANSWER THAT
  • I DO KNOW JUST ONE COMMENT
  • I KNOW THE PORT HAD A LOT OF SUCCESS WITH GCCMS, AND ALSO IF YOU HAVE A LUMP SUM, IT'S NOT AUDITABLE
  • SO A LOT OF THESE THINGS THAT WE'RE TALKING ABOUT ARE JUST LUMPED TOGETHER, CHARGED TO THE PORT IN ONE, AND YOU CAN'T PICK IT APART FROM AN AUDIT PERSPECTIVE
  • SO THERE'S AN ADVANTAGE TO GCCMS FROM THAT PERSPECTIVE
  • AND I'LL LET JANICE TALK ABOUT WHETHER 1.94 IS REASONABLE AND CHANGE ORDERS
  • YEAH, THANK YOU VERY MUCH FOR YOUR QUESTION
  • I WOULD SAY THAT AS WE CONTINUE TO USE MORE GCCM, WE HAVE LEARNED A LOT IN THE LAST FOUR OR FIVE GCCM
  • THESE ONES YOU'RE SEEING HERE, THE NEXT ONE WITH THE MAIN TRAUMA, LOW VOLTAGE WAS AWARDED IN 2019, THIS ONE IN 2020
  • WHAT WE ARE LEARNING IS THE BENEFITS OF THE GCCM IN PRECONSTRUCTION
  • SO THESE EARLIER ONES, WE DID NOT HAVE ENOUGH MONEY IN THE PRE CONSTRUCTION FOR SOME OF THE SITE INVESTIGATION AND THE HELP THAT THEY DO WITH OUR DESIGNERS IN THIS EARLY PART OF THE DESIGN WORK
  • SO THAT'S WHY YOU'RE SEEING THE LARGE CHANGE ORDERS IN MAIN TERM, LOW VOLTAGE HAD AN INCREASE C CONCOURSE
  • AND THEN AS WE'VE MOVED ALONG IN OUR NEWER GCCM, WE'RE HAVING DISCUSSIONS TO REALLY UNDERSTAND FROM OUR LESSONS LEARNED, WHAT SHOULD WE HAVE AS A PRECONSTRUCTION CONTRACT VALUE THAT ACCOUNTS FOR THE SCOPE OF WORK THAT WE WANT DONE? BECAUSE THE REASON WE USE GCCM AND THE RCW 39 TEN IS BASED ON IS THAT EARLY INTERACTION OF THE CONTRACTOR TO HELP US VET AND REDUCE RISK AND UNDERSTAND THE SITUATION AND SITE CONDITIONS
  • AND I WOULD SAY THAT OVER THE FIRST COUPLE OF THEM THAT YOU ARE SEEING NOW, WE UNDERESTIMATED THE BENEFITS OF THE GCCM
  • AND SO THOSE INITIAL CONTRACTS, WE ISSUED CHANGE ORDERS TO INCREASE THE VALUE SO WE COULD GET MORE EFFORT OUT OF THE GCCM
  • AND CAN YOU REMIND ME WAS IF GCCM OR WAS THAT DESIGN BUILD? IT WAS PROGRESSIVE DESIGN BUILD
  • THAT'S WHAT I THOUGHT
  • OKAY
  • THANKS, SARAH
  • OKAY, ON THIS RECOMMENDATION, I GUESS I'M STILL TRYING TO PIECE TOGETHER SOME OF THIS
  • SO, LIKE THE GENERAL LIABILITY RATE AND THESE THREE ITEMS AT THE BOTTOM OF THIS PAGE, IS THAT IN OUR CPO MODEL THAT THESE ARE WRONG, OR IS THIS IN WHAT TURNER SUBMITTED THAT WAS THESE NUMBERS? NO
  • SO TURNER HAD SOMETHING ATTACHED ACTUALLY TO THE BACK OF THE CONTRACT
  • IT WAS A RATE BUILDUP TABLE
  • AND AN EXAMPLE IS IN THE ACTUAL AUDIT REPORT WHERE THEY LISTED OUT ALL OF THESE CHARGES AND LITERALLY THEY PUT THE RATES ON THERE AND HOW THEY CAME UP WITH THE FINAL CHARGE PER POSITION
  • SO THE TABLE WILL SAY, THESE ARE THE BENEFITS WE'RE CHARGING YOU
  • THIS IS THE VIRTUAL DESIGN COST, THIS IS OUR INSURANCE, THIS IS OUR TAX
  • AND IF YOU PUGET ALL OF THOSE, IT COMES UP TO A RATE, AND THAT RATE IS WHAT ENDS UP BEING CHARGED TO THE PORT
  • NOW, WHEN WE ASKED CPO WHY WAS THIS IN, THEY SAID THE TABLE SHOULDN'T HAVE BEEN IN THE CONTRACT
  • WE AGREED TO THIS RATE IN THE CONTRACT, SO WE SHOULD BE PAYING BASED ON THE RATE
  • AND THEY SAID OUR MODEL COMES UP WITH THE SAME RATE, SO OUR MODEL SAID THE RATE IS OKAY
  • AND THAT'S KIND OF WHERE WE OKAY
  • SO THAT'S WHY THE RECOMMENDATION IS FOCUSING ON OUR TOOL AND OUR CURRENT RATE TOOL, BECAUSE WE'RE SAYING BASED ON WHAT TURNER SUBMITTED, THESE ARE CLEARLY IS THIS DOESN'T LEAVE A LOT OF QUESTION MARK
  • I MEAN, LIKE, THE B O TAX RATE IS VERY CUT AND DRY
  • SO I GUESS I DON'T UNDERSTAND HOW I MEAN, FROM TURNER'S PERSPECTIVE, I GUESS THERE'S A PROFITABILITY ASPECT, OBVIOUSLY, BUT FROM OUR SIDE, WHY WOULD WE I CAN'T IMAGINE WE HAD THE RATE WRONG
  • SO DO WE HAVE SOMEWHERE ELSE IN OUR TOOL THAT IS TOO HIGH, THAT IS ACCOUNTING FOR HOW WE CAME UP WITH THE SAME RATE? LIKE, IF THE BNO TAX I CAN'T IMAGINE WE HAVE SOMETHING DIFFERENT THAN THE ZERO POINT 47 1%
  • CLEARLY TURNER'S DID
  • AND IF WE'RE SAYING OUR RATE TOOL CAME UP WITH THE SAME RATE, THEN WE'VE GOT PROBLEMS ELSEWHERE WITHIN OUR TOOL THAT WE NEED TO FIGURE OUT WHERE THEY ARE
  • DO WE KNOW WHERE THOSE ARE? WELL, THAT'S MY RECOMMENDATION
  • I HAVE SOME THEORIES, BUT I THINK YOU HAVE TO GO BACK AND LOOK AT THE TOOL
  • AND I THINK MY CONCERN WITH THE TOOL IS THAT WE'VE GOT THREE COMPONENTS THE MARKET RATE ANALYSIS, HISTORICAL, AND WHAT OTHER INFORMATION WE HAVE FROM THAT COMPANY
  • NORA IS GOING TO TALK ABOUT THIS IN A RESPONSE IF YOU'D LIKE HER TO RESPOND NOW
  • YES
  • AND YOU ALSO HAVE THE RL TOWNSEND FOLKS THAT CAN ANSWER ANY QUESTIONS FOR YOU
  • NORA, WOULD YOU LIKE AND KYLE, WOULD YOU LIKE TO RESPOND TO THAT? THANKS, COMMISSIONER
  • PUBLIC MEMBER
  • MY NAME IS KYLE DOBERT
  • I'M THE SENIOR MANAGER OF CONSTRUCTION CONTRACTING, SO I'M IN CHARGE OF THE GROUP THAT MANAGED THIS CONTRACT
  • JUST A COUPLE THINGS ABOUT THE RATE TOOL
  • SO, ONE, THE TABLE THAT TURNER PROVIDE WAS INFORMATIONAL
  • SO IT WASN'T IN THERE INCORRECTLY, BUT IT WAS FOR INFORMATION ONLY
  • WE DIDN'T USE THE RATE BUILDUP TO NEGOTIATE THE RATES, SO WE WERE LOOKING FOR A FAIR AND REASONABLE RATE BASED ON MARKET RATES
  • SO WE HAVE INFORMATION ABOUT WHAT A FAIR AND REASONABLE RATE FOR, LIKE, A PROJECT MANAGER ONE WAS
  • WE DIDN'T GO DOWN TO THE LEVEL OF BNO TAXES XYZ, SO WE KNEW THAT A PROJECT MANAGER ONE IN THIS AREA MIGHT MAKE, LET'S SAY, $100 FULLY BURDENED
  • TURNER SUBMITTED A RATE
  • WE USED THAT INFORMATION TO NEGOTIATE WHAT WE CONSIDERED IS A FAIR AND REASONABLE RATE
  • SO GLENN'S REFERRING TO NOW GOING BACK AND RECREATING THE RATE AS A COST PLUS FIXED FEE CONTRACT, THAT'S NOT HOW WE CAME UP WITH THE RATE
  • SO THAT'S WHY THERE'S MAYBE A DISCREPANCY WITH WHAT THEY'RE SAYING AND WHAT OUR TOOL MIGHT HAVE
  • OUR TOOL WOULDN'T USE THIS INFORMATION
  • SO I GUESS CAN YOU ELABORATE ON WHAT THE TOOL USES FOR THE FAIR MARKET RATE? WHAT ARE THE INPUTS FOR THAT, THEN, YEAH, FOR THE MARKET RATE, WE GET A NUMBER OF DATA POINTS FROM DIFFERENT MARKET BOOKS
  • I DON'T HAVE THE MANAGER HERE WHO HAS ACTUALLY CREATED THE DOES THE INPUTS AND STUFF
  • SO BASICALLY WE GO AND ON AN ANNUAL BASIS, THERE ARE A NUMBER OF REFERENCE GUIDES THAT WE USE THAT WE INPUT THAT INFORMATION AND THEN WE BREAK IT DOWN BY JOB CLASSIFICATION
  • WE DO, I THINK IT'S A ONE THROUGH TEN GRADE, SO TO SPEAK
  • SO IT CAN BE A PM ONE UP THROUGH A PM TEN
  • AND SO WE USE THE MARKET DATA TO CREATE A CALCULATION IN ORDER TO COME UP WITH WHAT THE MARKET RATE IS
  • I THINK IT'S IMPORTANT TO ALSO UNDERSTAND WE DON'T JUST USE ONE TOOL, WE DON'T USE ONE DATA POINT
  • SO WHEN WE'RE LOOKING AT THIS, WE LOOK AT THE INFORMATION THAT COMES FROM OUR DIFFERENT RATE BOOKS AND CREATE THAT CALCULATION THROUGH THE TOOL
  • WE ALSO LOOK AT HISTORICAL INFORMATION, AND I'M NOT NECESSARILY CERTAIN IN THIS INSTANCE, A LOT OF TIMES WE CAN LOOK AT OTHER INVOICES WHAT OTHER AGENCIES, WHAT OTHER COMPANIES PAY IN ORDER TO UNDERSTAND SORT OF WHAT ARE ALL THOSE DIFFERENT DATA POINTS
  • IN ORDER TO DETERMINE WHAT IS A FAIR AND REASONABLE BILLING RATE, WE SPECIFICALLY CHOSE NOT TO DO A COST REIMBURSEMENT
  • IT'S NOT COMMON TO DO THOSE ON GCCM TYPE CONTRACTS
  • OKAY, SO I GUESS MY CONCERN IS THE SPECIFIC ITEMS IDENTIFIED HERE SEEM PRETTY BLACK AND WHITE
  • AND WHEN WE'RE LOOKING AT COMPARING TO A FAIR MARKET RATE THAT WE ARE UPDATING ANNUALLY, IT SOUNDS LIKE WE ARE LOOKING AT THOSE EACH YEAR
  • OBVIOUSLY, THE ECONOMY AND DEMAND AND AVAILABILITY OF RESOURCES OF THESE TYPE OF PEOPLE IS GOING TO MAKE A BIG DIFFERENCE IN THAT
  • AND THEN HISTORIC TRENDS, I GUESS WITHOUT TRYING TO GET TOO MUCH INTO THE DETAILS, I'M TRYING TO UNDERSTAND HOW THE TOOL SO YOU HAVE THESE RATE BOOKS THAT GIVE YOU, HEY, THIS IS A PM ONE, THIS IS THEIR RATE, WE INPUT THAT
  • HOW DOES HISTORIC PLAY INTO THAT AND DOES IT AVERAGE ALL THOSE? AND WHEN YOU GUYS LOOK AT IT, LIKE TURNER SAID, OKAY, THIS IS $50 AN HOUR
  • OUR TOOL SAYS BETWEEN 30 AND 50 IS REASONABLE
  • SO DO YOU GUYS JUST SAY, OKAY, WE'RE OKAY WITH 50? CAN YOU TELL ME A LITTLE BIT MORE ABOUT THAT PART TOO? THE FOLKS WHO ARE NEGOTIATING THIS LOOK AT ALL THE DIFFERENT DATA POINTS, AND IT IS ASSESSING THOSE DATA POINTS USING SORT OF THEIR UNDERSTANDING OF THE WORK
  • IT'S NOT JUST CPO
  • SO WE ALSO PULL IN JANICE'S TEAM, THE PROJECT MANAGEMENT TEAM, AND SO THE TEAM AS A WHOLE LOOKS AT ALL OF THE DIFFERENT DATA POINTS THEY ARE GIVEN
  • SO ON THE HISTORICAL INFORMATION, WE CAN DIG DOWN AND SEE HOW MANY TIMES IT'S BEEN USED
  • WE CAN LOOK AT WHAT THE AVERAGE IS
  • AND SO WE ARE LOOKING AT MULTIPLE LAYERS OF SORT OF THE DATA IN ORDER TO DETERMINE WHAT WE BELIEVE IS AN APPROPRIATE BILLING RATE
  • AND ONE FOLLOW UP, YOU HAD ASKED A GOOD QUESTION AROUND
  • IF OUR TOOL IS SAYING THIRTY DOLLARS TO FIFTY DOLLARS, AND IT'S $50, DO WE JUST APPROVE IT? GENERALLY? NO
  • WE HAVE A NEGOTIATION STRATEGY THAT SETS A REPORT TARGET, AND WE WILL PUSH TO THAT TARGET
  • AND GENERALLY IT'S NOT ON THE HIGH END OF WHATEVER OUR RANGE IS
  • FOR THIS CONTRACT, FOR EXAMPLE, WE REDUCE RATES TOTALLY DOWN 7% FROM WHAT WAS INITIALLY REQUESTED
  • SO, FOR EXAMPLE, IF THEY HAD REQUESTED $100 WORTH OF RATES, WE ACTUALLY NEGOTIATED IT, AND THE CONTRACT ENDED WITH $93 WORTH OF RATES ON AVERAGE
  • SO THERE'S SOMEONE ONLINE WHO HAS A HAND UP, MAYBE SARAH, THEY'LL BE ABLE TO ANSWER YOUR QUESTIONS
  • ADDITIONALLY, I DON'T SEE THE NAME OR OH, YOU DON'T KNOW WHO IT IS? YOU'RE WELCOME TO ANSWER IF YOU HAVE A COMMENT
  • HELLO, THIS IS MANDELA
  • CAN YOU GUYS HEAR? YEAH
  • YES
  • OKAY, A COUPLE COMMENTS AROUND THE SPECIFICS
  • I AM WORKING
  • MY NAME IS MANDELA THOMAS
  • I HELP RUN THE ANALYTICS TEAM THAT HELPS DO THESE RATES
  • I WORK FOR NORA
  • SO THE SOURCES, WHERE DOES THE MARKET DATA? I WANTED TO SPEAK TO THAT, AND THEN I CAN ALSO COMMENT ON SOME OF THE HISTORICAL QUESTIONS AROUND HOW THE HISTORICAL NUMBERS ARE USED
  • SO AMERICAN COUNCIL OF ENGINEERING COMPANIES, THAT'S WHERE WE GET SOME MARKET INFORMATION
  • WE LOOK AT THE BUREAU OF LABOR STATISTICS
  • WE LOOK AT THE AMERICAN SOCIETY OF CIVIL ENGINEERS AND A COUPLE OF OTHER SOURCES
  • SO THOSE ARE THE TYPES OF MARKET INFORMATION THAT WE COLLECT AND SYNTHESIZE
  • AND THEN FROM THE HISTORICAL PERSPECTIVE, WE DO LOOK AT THE AVERAGE OF WHAT WE'VE PAID HISTORICALLY OVER A PERIOD OF TIME
  • AND IF THAT AVERAGE, IF WE HAVE MAYBE TWO OR THREE INSTANCES OF THAT PARTICULAR RATE, THEN THAT HAS LESS OF A SIGNIFICANCE
  • BUT IF WE HAVE, SAY, 150 INSTANCES OF HISTORICAL DATA, THEN WE KEY IN AND PAY A LITTLE BIT MORE ATTENTION TO THAT
  • SO THE NICE THING ABOUT THE MARKET DATA IS IT GIVES US A LOT OF INFORMATION, BUT IT IS THE AVERAGE
  • SO YOU'RE GOING TO HAVE OUTLIERS THAT ARE ABOVE AND OUTLIERS THAT ARE BELOW
  • AND THE MARKET NUMBERS WILL FIT VERY WELL FOR A BULK OF IT, BUT THERE ARE INSTANCES WHERE IT DOESN'T FIT
  • AND THEN THAT'S WHY IF THE MARKET INFORMATION ISN'T MAKING SENSE, THEN WE SAY, OKAY, WELL, WHAT'S HAPPENED AT THE PORT HISTORICALLY? BECAUSE WE HAVE DIFFERENT REQUIREMENTS AT THE PORT
  • AND SO WE LIKE TO UNDERSTAND WHERE THAT HAS BEEN IN THE PAST, AND THAT CAN HELP US INFORM HOW WE GO
  • BUT WE DON'T LOOK AT SOLELY STRICTLY MARKET AND ONLY THAT WE DON'T LOOK AT SOLELY HISTORICAL, BUT THESE ARE REFERENCE POINTS TO HELP US GO INTO A NEGOTIATION INFORMED
  • DOES THAT ANSWER THE QUESTIONS AROUND THE HISTORICAL AND THE DIFFERENT SOURCES? YEAH, THAT'S SUPER HELPFUL
  • THANKS FOR GIVING SOME DETAIL
  • I GUESS IF I TAKE A STEP BACK HERE, WHAT I WOULD ULTIMATELY SAY IS BASED ON WHAT INTERNAL AUDIT FOUND OF SAVING APPROXIMATELY 160 TO 257,000, WHEN YOU LOOK AT FULLY BURDENED, LIKE DOING LIKE A COST PLUS METHODOLOGY
  • I UNDERSTAND YOU GUYS SAID THAT'S NOT TYPICALLY HOW WE DO THESE GCCMS, AND I GET THAT
  • BUT I THINK AT A MINIMUM, THIS BEGS THE QUESTION OF WE PROBABLY NEED TO LOOK AT THE WAY WE'RE PUTTING THIS TOGETHER BECAUSE IT SEEMS LIKE WE'RE MISSING SOMETHING
  • IF THE FULLY BURDENED COST IS COMING UP WITH THIS KIND OF DISPARITY BETWEEN WHAT OUR MODEL IS SPITTING OUT, IT SEEMS LIKE AT THE END OF THE DAY WE'RE MISSING SOMETHING OR WE'RE LEAVING SOMETHING ON THE TABLE THAT IS COSTING THE PORT MONEY
  • YEAH, THANKS FOR THAT
  • I'D LIKE TO JUST RESPOND QUICKLY
  • CERTAINLY WE THINK COST PLUS OR COST REIMBURSEMENT MODELS ARE AN OPTION FOR THE PORT
  • IT'S SOMETHING WE CONSIDER ON EVERY CONTRACT THAT WE DO
  • BUT THERE IS CERTAINLY SOME INAPPROPRIATENESS ABOUT COMPARING THIS COST REIMBURSEMENT MODEL WITH THE WAY THAT WE DID IT
  • ONE IS RISK MANAGEMENT
  • SO THE RISK PROFILES ARE CONSIDERABLY DIFFERENT BETWEEN THE TWO CONTRACT TYPES
  • SO A COST REIMBURSEMENT CONTRACT THROUGHOUT THE LIFE OF THE CONTRACT WILL PAY ACTUAL COSTS
  • YOU HAVE NO PROTECTION AGAINST INDIRECT COST RATES GOING CONSIDERABLY HIGHER AND THEY ARE ADMINISTRATIVELY CONSIDERABLY BURDENSOME
  • THE TIME TO VERIFY THOSE COSTS THAT THE CONTRACTOR IS SUBMITTING TAKES CONSIDERABLE TIME AND IT MAKES US SLOWER FOR PROJECT DELIVERY
  • SO THOSE ARE CERTAINLY QUESTIONS THAT WE CONSIDER WHEN WE PICK A CONTRACT TYPE
  • I ACTUALLY ALSO HAVE CONCERNS WITH THE POTENTIAL COST SAVINGS THAT WE'VE LISTED IN THIS
  • SO ONE GOOD EXAMPLE IS THE GENERAL LIABILITY INSURANCE COST REIMBURSEMENT MODEL
  • CONTRACTS PAY ACTUAL COSTS
  • SO WE'VE CHOSEN TO SAY INDUSTRY STANDARDS 0.5%
  • THEY BILLED US 1.2%, BUT WE DON'T LIKE THAT BECAUSE INDUSTRY STANDARDS 0.5, IT COULD BE 10%
  • IF THAT'S WHAT IT COSTS TURNER, THEN THAT'S WHAT IT COSTS US IN A COST REIMBURSEMENT MODEL
  • SO WE CHOSE FOR OUR ANALYSIS TO REDUCE COSTS THAT SHOULD NOT HAVE BEEN REDUCED
  • ANOTHER EXAMPLE OF THIS IS THE BENEFITS CHARGE WHERE WE REDUCED A LOT OF THINGS THAT WE SAID ARE SOMETIMES NOT ALLOWABLE THAT NEEDS TO BE NEGOTIATED AND FIGURED OUT
  • WE SHOULDN'T HAVE JUST WIPED THOSE OFF THE BOARD
  • AND THEN FINALLY THE FEE AT FIVE AND A HALF PERCENT THAT THEY INCLUDED, THAT IS CERTAINLY STANDARD FOR CONSTRUCTION
  • I AGREE WITH THAT
  • THIS IS NOT EXACTLY A CONSTRUCTION CONTRACT
  • PRECONSTRUCTION CONTRACTS ARE MORE SIMILAR TO A PROFESSIONAL SERVICES CONTRACT
  • THEY DON'T HAVE MATERIAL COSTS AND MARKUP ON THOSE AND THINGS THAT A CONSTRUCTION CONTRACT WILL MAKE
  • AND THERE ARE MANY REFERENCES THROUGH ACEC OR EVEN FEDERAL LEGISLATION LIKE 23 CFR THAT LISTS COST PLUS FEE CONTRACTS GENERALLY ARE EIGHT TO 15%
  • WE CHOSE TO USE 5% FOR THE PURPOSE OF SHOWING A COST SAVINGS
  • THAT IS PROBABLY INAPPROPRIATE, I GUESS, HEARING THAT FEEDBACK
  • ONE THING
  • I GUESS I WOULD DIRECT THIS TO GLENN AND TEAM
  • WHAT IS OUR PROCESS FOR LIKE WHEN THERE'S DEBATE AMONG STAFF THAT WE'RE KIND OF WORKING ON THIS AND THE PEOPLE WORKING ON THIS VERSUS WHAT WE FOUND, IT SEEMS LIKE WE'RE NOT ON THE SAME PAGE AND WE'RE BRINGING THIS FORWARD TO BE PRESENTED WITH THESE SPECIFIC NUMBERS
  • BUT IT SOUNDS LIKE THEY HAVE SOME PRETTY SIGNIFICANT CONCERNS OR IDEAS AROUND WHY THEY DID WHAT THEY DID
  • SO WHEN WE PUT THIS TOGETHER, WHERE DOES IT GO? WHAT IS THE PROCESS HERE? I GUESS I DON'T KNOW
  • SO I'LL PROVIDE AN OVERVIEW
  • WE DO HAVE A DISAGREEMENT ON IT
  • THAT'S CLEAR
  • I THINK THIS PROCESS STARTED PROBABLY ABOUT SIX MONTHS AGO, AND WE CHOSE NOT TO BRING IT TO THE LAST AUDIT COMMITTEE MEETING BECAUSE WE HADN'T IRONED OUT SOME OF THE THINGS
  • BUT OUR POSITION STILL IS THAT THIS TIES TO THE RATE TOOL
  • WE THINK THERE'S AN OPPORTUNITY THAT NEEDS TO BE ADDRESSED
  • I THINK WE'RE SPENDING TOO MUCH
  • OUR RATE TOOL NEEDS TO BE RECALIBRATED, AND THAT CAME FROM A PRIOR AUDIT WHERE WE TOOK IT APART AND WE IDENTIFIED OPPORTUNITIES FOR IMPROVEMENT
  • SO THE OLD AUDIT ISSUE STILL STANDS
  • IT HASN'T BEEN ADDRESSED
  • NOW, WE DISAGREE IN SOME THINGS
  • I THINK THAT'S WHY ON THE RATES, THERE'S STILL MONEY IN THE TABLE
  • BUT I BELIEVE THAT'S WHY WE HAD DEBBIE TOWNSEND AND PATRICIA SPEAK A LITTLE BIT ABOUT WHAT THEY'RE SEEING AND WHY THEY THINK RATES ARE DIFFERENT
  • WHEN WE TALK ABOUT GLI
  • YEAH, THEY MIGHT HAVE AN ACTUAL GLI OF 10%, BUT THAT'S UNREALISTIC
  • I MEAN, I THINK THEY KNOW WHAT TURNER'S GLI IS, AND THAT'S WHY THEY WORK WITH TURNER EVERY DAY, AND THAT'S WHY THEY BROUGHT THAT UP
  • RIGHT
  • AND WE CAN ASK THEM AS WELL
  • SPENCER, IS THERE ANYTHING YOU'D LIKE TO ADD TO THAT? YEAH, MAYBE
  • I'LL JUST EVEN AT A HIGHER LEVEL OF PROCESS THROUGHOUT THE ENGAGEMENT, AS WE'RE FORMULATING CONCLUSIONS, WHAT WE'RE SEEING AT THE TIME, WE WORK WITH THE DEPARTMENTS
  • IN THIS PARTICULAR CASE, OF COURSE, THERE'S A DISAGREEMENT ON THE CONCLUSIONS, BUT IN MOST CASES, THROUGHOUT THE ENGAGEMENT OF CONTINUOUS MEETINGS AND UPDATES, USUALLY THE CONCLUSIONS OF THE AUDITS ARE AGREED UPON
  • WOULD YOU GUYS AGREE THAT UNDER MOST CIRCUMSTANCES GLENN JUST ADDING ON TO WHAT SARAH HAS ALREADY SAID, AND YOU ASKED WONDERFUL QUESTIONS TODAY THAT WERE REALLY HELPFUL
  • SO I JUST WANT TO THANK YOU FOR YOUR CONTRIBUTIONS
  • IT'S CLEAR THERE'S A DISAGREEMENT
  • SO I WONDER IN THIS CASE, WHAT ARE OTHER AGENCIES DOING AROUND THE STATE, AND HOW DOES THIS COMPARE TO WHAT THOSE AGENCIES ARE DOING? WOULD WE BE ABLE TO GET SOME DATA OR SOME INFORMATION THAT PROVIDES A COMPARABLE ABSOLUTELY
  • GO AHEAD
  • YES
  • ESPECIALLY WHEN IT COMES TO GCCM PROJECTS THROUGHOUT ALL AGENCIES, THEY ALL HAVE TO FOLLOW THE SAME RCW
  • SO THERE'S A LOT OF THESE TYPE OF PROJECTS OUT THERE AMONGST AGENCIES AND EXTERNAL INDEPENDENT AUDIT, CONSTRUCTION AUDIT FIRMS THAT ARE PERFORMING VERY SIMILAR WORK
  • SO THE INFORMATION IS DEFINITELY AVAILABLE
  • IS IT IN ALIGNMENT WITH WHAT YOU GUYS ARE FINDING? IS OTHER AUDITORS
  • FINDING SIMILAR CONCERNS
  • WELL, SO WHEN WE LOOKED AT THE A E RATE TOOL THE FIRST TIME AND HOW WE COME UP WITH THE RATES WE FOUND, YOU KNOW, IT WAS ACTUALLY RAISED TO US FROM INSIDE CPO
  • SOMEBODY HAD RAISED A CONCERN TO US SAYING THE TOOL ISN'T FUNCTIONING AS INTENDED
  • SO WE DID OUR FIRST AUDIT
  • WE ALSO LOOKED AT WHAT THE STATE AUDITOR WAS DOING
  • THE STATE AUDITOR HAD DONE AN AUDIT, A SIMILAR TYPE OF AUDITS, AND RATES ON THE COLUMBIA CROSSING BRIDGE
  • SO WE USE LEVERAGE OFF THAT WE TALKED TO WSDOT AT THE TIME, AND WE STILL THINK THERE'S AN OPPORTUNITY TO IMPROVE IN HOUSE
  • AND THAT'S KIND OF WHY WE'VE GOT IT ON THE KNOW
  • THERE'S A CERTAIN POINT WHERE DO YOU LET THE AUDIT ISSUE GO AWAY OR DO YOU KIND OF KEEP IT OPEN ON THE TABLE AND SAY THERE'S AN OPPORTUNITY TO IMPROVE, BUT IF WE'RE NOT GOING TO ADDRESS ANYTHING ON IT, THEN THAT'S FINE
  • WE DID WANT TO BRING IT FORWARD AND NOT PART OF WHAT WE DO AS NODDERS
  • WE'RE NOT ALWAYS GOING TO AGREE
  • LIKE I SAID, NINE OUT OF TEN TIMES, WE DO AGREE, OR 99% OF THE TIME WE DO AGREE, BUT THERE ARE TIMES WHERE WE DON'T
  • BUT WE'LL RAISE IT
  • IF MANAGEMENT ACCEPTS THE RISK, WE CLOSE THE ISSUE OUT AND MOVE FORWARD
  • I THINK IT'S REALLY STILL VERY CONCERNING HOW ELEVATED THESE NUMBERS ARE
  • AND I ALSO THINK ABOUT THE HISTORICAL INFORMATION THAT WE'RE USING
  • AND I KNOW THAT YOU GUYS HAVE SAID YOU USE A RATE BOOK AND THERE'S A LOT OF OTHER INFORMATION THAT'S BEING CONSIDERED
  • BUT ULTIMATELY WHATEVER IS COMING OUT AS AVERAGE I FEEL LIKE IS ON THE HIGHER END
  • WE'RE KIND OF GETTING THE SHORT END OF THE STICK HERE IS HOW I FEEL
  • AND SO IT MAKES ME THINK THAT WHAT COULD WE BE DOING BETTER IS THAT WHEN WE'RE CONSIDERING THINGS LIKE HISTORICAL NUMBERS AND NOT FOCUSED ON JUST THE MARKET RATE IN ITSELF, I FEEL LIKE WE'RE PROVIDING A LOT OF GRACE AND NOW WE'RE TALKING ABOUT MONEY
  • AND ARE THOSE OTHER CONTRACTORS WILLING TO ACCOUNT FOR HISTORICAL NUMBERS? IF THOSE NUMBERS HAVE BEEN LOWER IN THE PAST, WOULD THEY HONOR SOMETHING LIKE THAT? AND I WOULD DOUBT THAT
  • AND SO WHAT IS THE USE OF THAT, IS WHAT I WONDER
  • AND IS IT ULTIMATELY, BY INCLUDING THAT IN OUR CONSIDERATION, ARE WE ENDING UP HAVING TO PAY MORE AND SHOULD THAT BE REMOVED? AND SO I DON'T THINK THE SITUATION IS LIKE, WE DISAGREE AND WE BOTH LEAVE THE TABLE SORT OF THING, BUT WE GOT TO GO BACK TO THE DRAWING BOARD AND FIGURE OUT WHERE ARE THE ROOMS TO MAKE IMPROVEMENTS AND IF OTHER AGENCIES ARE DOING THE EXACT SAME THING
  • I DO THINK WE SHOULD HEAR THAT BACK AS A COMMISSION TO SAY THAT, OKAY, THERE'S ALL OF THESE AGENCIES THAT ARE DOING THIS, AND IT IS BEST PRACTICE, IT'S BEEN PROVEN, AND THIS IS THE ONLY WAY THAT WE CAN MANAGE SOMETHING LIKE THIS
  • I DON'T THINK THAT THIS IS A DONE THING, AND I KNOW YOU WANT TO RESPOND
  • YEAH, PLEASE, GO AHEAD
  • THANK YOU
  • AND MAYBE MANDELA WOULD EVEN LIKE TO CHIME IN AS WELL
  • BUT I DO SIT ON THE PROJECT REVIEW COMMITTEE AT THE STATE
  • I KNOW JANICE SITS ON CPARB, WHICH IS THE PARENT COMMITTEE OF THAT THAT SEES ALTERNATIVE PUBLIC WORKS AS A DELIVERY METHOD, AND AGENCIES COME TO GET APPROVAL FOR THAT
  • SO I DO HAVE SOME INSIGHT INTO WHAT SOME OTHER AGENCIES ARE DOING, AT LEAST FOR GCCM
  • AND ACTUALLY, MOST ARE NOT EVEN THIS ROBUST, SO A LOT OF THEM DO JUST COMPETE THEM AS PART OF THE RFP PROCESS
  • PLEASE TELL US WHAT YOUR RATES ARE ON THE PM, AND WE'LL USE IT AS A VERY SMALL PART OF THE ANALYSIS FOR SELECTING THE WINNING CONTRACTOR
  • AND THEN THAT RATE, REGARDLESS IF IT'S HIGH OR NOT, GETS INCLUDED IN THE CONTRACT
  • SOME DO A NEGOTIATED PROCESS LIKE WE'RE DOING, BUT THEIR TOOLS ARE GENERALLY NOT AS ROBUST
  • IT GENERALLY DOES SCALE WITH THE SIZE OF THE AGENCY AND HOW SOPHISTICATED THEY ARE
  • I'M NOT AWARE OF ANY THAT DO COST REIMBURSEMENT MODELS, BUT THEY COULD BE OUT THERE
  • JEZ, I'M NOT SURE IF YOU HAVE ANYTHING ELSE TO ADD, AND MANDELA MIGHT LIKE TO TALK A LITTLE BIT MORE ABOUT AYE
  • PROCESS, SPECIFICALLY TO YOUR COMMENTS, COMMISSIONER
  • YEAH
  • THANK YOU, KYLE
  • I WAS ACTUALLY JUST LOOKING
  • WE HAVE TWELVE PUBLIC AGENCIES AROUND THE STATE THAT ARE CERTIFIED TO USE GCCM, AND CERTAINLY WE CAN DO SOME OUTREACH TO SEE WHAT THEY'RE DOING
  • CPARB ACTUALLY ALSO HAS A GCCM BEST PRACTICES COMMITTEE WHERE WE'RE IN THE MIDDLE OF TRYING TO FINALIZE THE BEST PRACTICES GUIDE, AND WE CAN TAKE A LOOK TO SEE IF WITHIN THE GUIDE THIS PARTICULAR ITEM HAS BEEN ADDRESSED
  • AND IF NOT, MAKE SURE THAT WE BRING THAT UP BECAUSE I THINK IT'S AN IMPORTANT DISCUSSION ABOUT WHAT ARE THE BEST PRACTICES AROUND THIS
  • AND CERTAINLY LOOKING AROUND THE STATE TO SEE WHAT OTHERS ARE DOING WOULD BE IMPORTANT
  • JANICE AND THE OTHER THING THAT'S REALLY HELPFUL, AND IF YOU GUYS CAN COME BACK TO US WITH THAT INFORMATION, THAT WOULD BE GREAT
  • THIS WHOLE MODEL
  • I ALSO DO WONDER, HOW DOES THIS APPLY WHEN WE'RE DEALING WITH WMBE BUSINESSES? IS THE SAME LEVEL OF SORT OF GRACE AND INFORMATION BEING ACCOUNTED FOR? YEAH, I CAN ANSWER THAT QUESTION
  • WE USE THE DIFFERENT DATA POINTS FOR ALL OF OUR FIRMS, AND SO THAT WAY WE ARE TRYING TO BE CONSISTENT AMONGST THEM ALL AND TAKE INTO ACCOUNT THE NUANCES OF THE DIFFERENT FIRMS SO SOMETIMES WMBE FIRMS WILL GIVE US, IN ADDITION TO OUR MODEL, IN ADDITION TO HISTORIC, IF THEY HAVE INVOICES WHERE THEY CAN SHOW THAT OTHER AGENCIES ARE PAYING
  • SO, SAY IF OUR MODEL IS LOWER, OUR HISTORICAL SHOWS LOWER
  • IF THEY CAN SHOW THAT THEY HAVE A CONSISTENT PRACTICE OF GETTING PAID AT A DIFFERENT RATE, WE WILL LOOK AT THOSE INVOICES AND TAKE THAT INTO ACCOUNT WHEN WE ARE NEGOTIATING THE BILLING RATES WITH THEM
  • INTERESTING
  • OKAY, WELL, THANK YOU GUYS FOR PRESENTING
  • I DON'T THINK WE HAVE THANKS
  • DO WE HAVE ANY ADDITIONAL INFORMATION? I WANT TO THANK THE STAFF FOR THE REPORT AND TO THE TEAMS THAT ARE MANAGING THIS
  • THANK YOU FOR THE INFORMATION THAT YOU'VE SHARED
  • SO I WILL MOVE US ALONG
  • COMMISSIONER, THERE'S A COUPLE MORE ISSUES IN THIS REPORT THAT WE HAVE TO MOVE THROUGH
  • OKAY, GREAT
  • AND THEN WE'LL MOVE TO THE NEXT SPENCER, MICHELLE
  • NEXT SLIDE, PLEASE
  • LET'S MOVE ONE MORE FORWARD
  • AND ONE MORE
  • OKAY, PERFECT
  • AND SPENCER IS GOING TO TALK ABOUT THIS ONE
  • THANK YOU, GLENN
  • COMMISSIONER
  • MS HOLMSTROM
  • THE SECOND ISSUE IS SIMILAR TO WHAT WE WERE JUST DISCUSSING ON THE PREVIOUS ONE
  • THIS IS RELATED TO DURING OUR TESTING, IN SOME OF THE INSTANCES WE NOTICED, THERE WAS A LACK OF DOCUMENTATION THAT SUPPORTED THE APPROVED RATES THAT HAMDI EXCEEDED THE PORT PORTS MARKET MAXIMUM
  • SOME OF THE REASONS PROVIDED TO US WERE THAT IN CERTAIN CASES, THIS IS A PERMISSIBLE PRACTICE, PROVIDING THAT A CONTRACTOR PROVIDES DOCUMENTATION JUSTIFYING THE REQUESTED HIGHER RATE, AND ADDITIONAL REASONS PROVIDED WHY DOCUMENTATION WAS ABSENT
  • WAS THE PERSON THE RATE ANALYST THAT WAS RESPONSIBLE FOR APPROVING THE RATES AT THIS TIME? THIS WAS 2020 TIME FRAME SO THAT THAT RATE ANALYST WAS NO LONGER AT THE PORT AND DOCUMENTATION COULD NOT BE FOUND
  • NEXT SLIDE, PLEASE
  • HERE'S OUR RECOMMENDATIONS, AND KYLE AND NORA CAN PROVIDE THEIR MANAGEMENT RESPONSE AND ANSWER ANY QUESTIONS
  • TWO MORE
  • IN ESSENCE, IT'S A DOCUMENTATION ISSUE
  • WHEN WE WENT TO LOOK FOR THE DOCUMENTATION, IT WASN'T THERE NO RESPONSE FROM US
  • WE APPRECIATE THE AUDIT, AND I DO THINK OVERALL CPO IS VERY FOCUSED ON PROCESS IMPROVEMENT, MAKING SURE WE HAVE THE RIGHT DOCUMENTATION, AND ALSO MAKING SURE THAT WE'RE TAKING INTO SORT OF THE REASONABLENESS OF THE DOCUMENTATION AND STUFF
  • AND SO AS WE PROGRESS FORWARD, WE DO WANT TO MAKE SURE WE HAVE THE RIGHT LEVEL OF DOCUMENTATION
  • ANYWAY, THIS IS MANDELA QUICK COMMENT TO THAT
  • THOSE FILES WERE ON SOMEBODY'S HARD DRIVE
  • THEY LEFT, AND THE FILES DISAPPEAR TODAY
  • WE HAVE THEM STORED ON A SHARED LOCATION, AND THAT'S BEEN IN PLACE FOR THE LAST COUPLE OF YEARS, BUT IT WAS NOT IN PLACE IN THAT 2020 TIME FRAME
  • I HAVE A QUICK QUESTION, GLENN
  • DOES THAT MEAN YOU GO BACK AND LOOK AT THOSE DOCUMENTATION? NO, WHAT MANDELA SAID IS HE DOESN'T HAVE IT ANYMORE, SO THERE'S NOTHING HE SAID THEY FIXED IT GOING FORWARD, BUT GOING BACK, I SEE THEY DON'T HAVE AN ADDRESS
  • JUST A QUICK QUESTION
  • I WANT TO MAKE SURE I UNDERSTAND THIS
  • SO WE DID THE RATE NEGOTIATION
  • THE NEGOTIATION LIKE IT WAS OVERALL 7% THAT YOU HAD MENTIONED, LESS THAN WHAT THEY HAD SUBMITTED
  • SO ARE WE SAYING THAT IN THIS SPECIFIC ISSUE, THAT RATE THAT WE AGREED TO, WE HAD SOME THAT CAME IN HIGHER, AND THERE WASN'T DOCUMENTATION OF THAT? IS THAT WHAT WE'RE SAYING? AS PART OF THE 7% PROCESS, WE NEGOTIATED EVERY SINGLE RATE
  • SOME OF THEM WE HAD A PORT TARGET THAT WE DIDN'T AYE., SOME WE EXCEEDED THE PORT TARGET AND WENT EVEN LOWER THAN THE PORT TARGET
  • AND THIS IS SAYING IN SOME OF THOSE INSTANCES WHEN WE WENT ABOVE THE PORT TARGET, THERE WASN'T THE LEVEL OF DOCUMENTATION THAT AUDIT PREFERRED
  • WE THOUGHT WHEN YOU LOOK AT THE MATERIALITY OF THE NUMBERS, MAYBE OUR DOCUMENTATION WAS OKAY, BUT THAT WE WOULD ALWAYS LOOK AND MAKE SURE THAT GOING FORWARD OUR DOCUMENTATION IS AS ROBUST AS WE SHOULD HAVE IT
  • OKAY, SO YOU'RE SAYING THE NEGOTIATED RATE WAS HIGHER THAN THE TARGET WE HAD, BUT WE STILL NEGOTIATED AND AGREED TO THAT RATE, BUT WE DIDN'T KEEP IT
  • OKAY
  • THAT'S WHAT I UNDERSTAND
  • THANKS, KYLE
  • THANK YOU
  • AND THEN THE THIRD ISSUE THAT WE IDENTIFIED, WE IDENTIFIED OPPORTUNITIES TO STRENGTHEN CONTROLS DURING THE PAY APPLICATION REVIEW PROCESS
  • IN SOME OF OUR REVIEW, WE NOTICED THAT INSTANCES WHERE, SAY, CONTRACTUAL REQUIREMENTS WERE NOT FOLLOWED
  • FOR EXAMPLE, BEGINNING ON PAY APPLICATION NUMBER TWELVE, THE PORT STOPPED REQUIRING TURNER CONSTRUCTION TO SUBMIT TIMESHEETS WITH THEIR PAY APPLICATIONS, WHICH WAS A REQUIREMENT OF THE CONTRACT
  • OF COURSE, THE RISK ASSOCIATED WITH NOT REQUIRING TIMESHEETS IS THAT THE CONTRACTOR COULD BILL FOR TIME NOT WORKED OR A HIGHER BILLABLE RATE THAN WHAT WAS APPROVED
  • WE ALSO IDENTIFIED A SMALL DOLLAR AMOUNT OF OVERBILLINGS
  • TURNER CONSTRUCTION DID MAKE THAT ADJUSTMENT ON ONE OF THE LATER PAY APPLICATIONS AFTER WE BROUGHT IT TO THEIR ATTENTION
  • ANOTHER AREA IS THE PORT ALLOWED FORECASTED PAYMENTS, WHICH WAS EVERY MONTH
  • TURNER WOULD SUBMIT AN AMOUNT OF ANTICIPATED WORK THAT WOULD BE PERFORMED THE FOLLOWING MONTH
  • THE CONTRACT ONLY ALLOWED REIMBURSEMENT OF ACTUAL COSTS
  • WE DID PERFORM A TEST TO RECONCILE PREPAYMENTS TO MAKE SURE THAT THEY WERE CREDITED BACK TO THE PORT
  • WE WERE ABLE TO DO THAT WITHOUT EXCEPTION
  • SO ALL THE PREP PAYMENTS WERE DECREASED THE FOLLOWING MONTH
  • AND THEN FOR CONTRACTOR PERSONNEL CHANGES, MANAGEMENT WAS UNABLE TO PROVIDE US WITH SUPPORT THE SUPPORTING DOCUMENTATION THAT WAS REQUIRED BY CONTRACT FOR APPROVAL OF ANY OF THOSE CHANGES
  • FOR MOST OF THOSE PERSONNEL, WE WERE ABLE TO OBTAIN SUPPORTING DOCUMENTATION FROM TURNER CONSTRUCTION ON APPROVED RATES
  • NEXT SLIDE, PLEASE
  • AND HERE'S OUR RECOMMENDATION
  • AND JANICE CAN PROVIDE THE RESPONSE OF MANAGEMENT
  • YEAH
  • SO I APPRECIATE OUR PARTNERSHIP WITH INTERNAL AUDIT
  • SO THIS WAS A CONTRACT FROM 2020, AND THE PIECE AROUND THE DOCUMENTATION WHEN THEY HAVE A CHANGE IN PERSONNEL HAS HAPPENED ON A COUPLE OF OUR PROJECTS
  • AND SO WE'VE TRAINED OUR STAFF TO MAKE SURE THEY'RE REALLY CLEAR ABOUT THE STANDARD OPERATING PROCEDURES
  • AND THE SAME WITH THE PAY ESTIMATES THAT ALTHOUGH THEY MIGHT HAVE THOUGHT THAT THAT WAS ACTUALLY TO THE BENEFIT OF HAVING THESE FORECASTED PAYMENTS THAT THEN ARE RECONCILED THE NEXT MONTH WITH ACTUAL, THAT IS NOT OUR STANDARD OPERATING PROCEDURE
  • SO WE HAVE MADE SURE THAT OUR STAFF ARE REALLY CLEAR ABOUT OUR PROCEDURES AND THAT THEY DON'T GET TO CHOOSE ON THEIR OWN WHEN THEY MIGHT WANT TO DEVIATE FROM THAT
  • THEY MIGHT BE WELL INTENTIONED, BUT THAT IS NOT HOW WE WANT TO CONDUCT BUSINESS
  • SO WE THANK THEM FOR IDENTIFYING THAT AND WE'VE RECTIFIED THE SITUATION
  • OKAY, NEXT SLIDE, PLEASE
  • MICHELLE
  • LAST CONSTRUCTION AUDIT THAT WE'RE GOING TO TALK ABOUT IS THE MAIN TERMINAL LOW VOLTAGE PROJECT
  • SO THIS ONE, AGAIN, ANOTHER GCCM WITH MORTENSEN AS THE GENERAL CONTRACTOR CONSTRUCTION MANAGER
  • THIS IS ABOUT, YOU KNOW, IT'S PRECONSTRUCTION AGAIN
  • SO IT'S ABOUT $3 MILLION IN TOTAL THAT WE'VE GOT
  • AND LOW VOLTAGE IS ESSENTIALLY 110, 220 VOLTS AT THE PORT
  • AND I BELIEVE IT'S PRETTY OLD AND NEEDS TO BE REPLACED
  • SO WE'RE GOING THROUGH THIS MASSIVE PROJECT TO UPGRADE THE LOW VOLTAGE AT THE PORT
  • WHEN ALL SAID AND DONE, THIS IS AGAIN GOING TO BE A LARGE PROJECT IN TOTAL, NOT JUST PRECONSTRUCTION, BUT IT'LL BE OVER $100 MILLION AND THERE'LL BE SOME WMBE WORK AS WELL DONE IN THIS
  • SO I'LL LET SPENCER TALK ABOUT THE ISSUE AND THE OPPORTUNITIES FOR IMPROVEMENT
  • AND AS ALWAYS, LIKE JANICE SAYS, IN KNOW, WE FIND OPPORTUNITIES AND JANICE JUMPS RIGHT ON A GOOD THAT'S A GOOD PARTNERSHIP
  • ONE OF THE FINDINGS HERE IS VERY SIMILAR PAY APPLICATION REVIEW PROCESS, JUST TO GIVE SOME MORE PROBABLY MORE BACKGROUND OR SOMETHING FOR THE WORK THAT WE'RE PERFORMING IS QUITE DETAILED
  • AND SO FOR THESE FINDINGS, AS EVEN IN THE CASE THAT I'LL BE DISCUSSING SHORTLY ON THIS, FAIRLY LOW AMOUNTS IN CONSIDERATION OF THESE ARE MILLION DOLLAR PAY APPLICATIONS EVERY MONTH
  • SOME CAN BE 50 PAGES LONG
  • SO I DON'T WANT IT TO COME ACROSS AS THERE'S NO INTERNAL CONTROLS AT ALL BECAUSE THESE ARE PRETTY MINOR IN THE GRAND SCHEME OF THINGS
  • JUST TO PUT THAT OUT THERE, THE RESULTS THAT WE SAW ON THIS, THERE WERE $1,200 IN UNALLOWABLE COSTS, 7400 IN OVERPAYMENTS BRINGING THIS JUST BECAUSE, ALTHOUGH SMALL AMOUNTS, IT COULD POSSIBLY PERMEATE THROUGH THE REST OF THE PROJECT IF NOT CORRECTED BEFORE OR CORRECTED AS SOON AS POSSIBLE
  • WE NOTICED THAT THE PORT'S APPROVAL OF KEY PERSONNEL CHANGE WAS NOT MAINTAINED
  • THAT'S A CONTRACT REQUIREMENT
  • AND THERE'S TWO BUDGETS, CONTINGENCY AND OTHER STIPULATED DIRECT COST BUDGETS
  • THESE WERE MUTED FOR EXPENSES RELATED TO COMPLETING PRECONSTRUCTION AREA OF WORK, INSTEAD OF EXPENSES THAT WERE ALLOWABLE AS OUTLINED IN CONTRACT
  • OR THERE WAS A RELATED CHANGE ORDER
  • TOTAL CHARGED WAS $85,000 TO BOTH BUDGETS
  • AND AGAIN, THAT $85,000 ISN'T QUESTIONING IT AS UNALLOWABLE PAYMENTS OR WORK THAT WAS NOT PERFORMED
  • IT WAS JUST CHARGED TO INCORRECT BUDGETS, WHICH COULD HAVE BEEN COVERED BY A CHANGE ORDER OR SOMETHING
  • NEXT SLIDE, PLEASE
  • HERE'S OUR RECOMMENDATIONS AND JANICE CAN PROVIDE ANY ADDITIONAL INFORMATION
  • YEAH, SO SIMILAR TO THE LAST ONE, WE AGREE WITH THE RECOMMENDATIONS
  • THIS ONE WAS ACTUALLY AWARDED 18 MONTHS BEFORE THE ONE YOU HEARD PREVIOUSLY
  • SO A LOT OF THESE RECOMMENDATIONS WE'VE BEEN TRAINING OUR STAFF ON ALREADY
  • AND THE ONLY THING I WILL ADD IS THAT WE JUST HAD OUR QUARTERLY MEETING WITH THE ASSOCIATED GENERAL CONTRACTORS
  • SO WE HAVE A QUARTERLY BEST PRACTICES MEETING WITH THEM, AND WE SHARED WITH THEM THESE TWO AUDITS, PLUS THE ONE THAT CAME TO YOU IN JUNE
  • BECAUSE A BIG PART OF WHAT WE WANT TO MAKE SURE IS THAT THE CONTRACTORS ARE SUBMITTING FACTUALLY CORRECT INFORMATION SO THAT WE ACTUALLY ARE STOPPING THE MISINFORMATION FROM THE VERY SOURCE OF THE INFORMATION THAT COMES TO US
  • SO, AGAIN, JUST APPRECIATE THE PARTNERSHIP AND CONTINUOUS IMPROVEMENT
  • THIS ONE, JUST LIKE YOU ASKED BEFORE, COMMISSIONER CHO, ABOUT THE CHANGE ORDER AMOUNT, THIS ONE ALSO WAS UNDERESTIMATED IN TERMS OF HOW MUCH WORK WE WERE GOING TO BE DOING WITH THE CONTRACTOR
  • REALLY TRYING TO MAP OUT SOME VERY OLD INFRASTRUCTURE RELATED TO OUR LOW VOLTAGE INFRASTRUCTURE THAT WE WERE REPLACING
  • THANK YOU, JANICE, AND THANKS FOR SHARING YOUR RESPONSES AND ALWAYS BEING PROACTIVE AROUND THIS
  • ARE THERE ANY QUESTIONS FROM THE COMMITTEE MEMBERS AT THIS TIME? AND THIS WAS ITEM EIGHT, SO IF THERE'S NO QUESTIONS OR ADDITIONAL COMMENTS, I CAN MOVE US ALONG TO ITEM NUMBER NINE
  • SO ITEM NUMBER 910 AND ELEVEN ON THE AGENDA ARE INFORMATION TECHNOLOGY AUDIT ITEMS THESE ITEMS ARE SECURITY SENSITIVE AND WILL BE DISCUSSED IN NON PUBLIC SESSIONS
  • WE HAVE ONE LIMITED CONTRACT COMPLIANCE AUDIT ON OUR AGENDA TODAY
  • THIS IS ITEM NUMBER TWELVE
  • GLENN, PLEASE PROCEED WITH THE REPORT
  • THANKS, COMMISSIONER
  • THIS IS A CLEAN AUDIT
  • SO IT'S JUST A LITTLE BACKGROUND ON THE GRAIN TERMINAL THAT YOU SEE AT TERMINAL 86 OUT THERE
  • IT'S AN OLD COMPANY, LOUIS DREYFUS AND COMPANY, THAT'S BEEN MOVING GRAIN AND AGRICULTURE SINCE 1909
  • SO THE VOLUME IS QUITE IMPRESSIVE
  • AND COTTON, SOYBEANS, WHEAT, CORN ARE MOVED
  • THEY CAN STORE UP TO 4 MILLION BUSHELS OR 100 METRUCK TONS, WHICH IS ENORMOUS
  • AND THERE'S INDEPENDENT GRAIN CERTIFICATION, QUALITY CERTIFICATION THAT GOES ON OVER THERE
  • NEXT SLIDE, PLEASE
  • JUST IN VOLUME
  • IF YOU LOOK AT THE VOLUME OF METRUCK TONS THAT OCCURRED THIS YEAR AND IN THE PRIOR COUPLE OF YEARS, THIS IS THE PRIMARY ITEMS THAT THEY MOVE
  • YELLOW CORN
  • NOW SOYBEANS AND GRAIN SORGHUM WAS MOVED AND ABOUT 4 MILLION METRUCK TONS
  • SO QUITE A BIT
  • NEXT SLIDE, PLEASE
  • AND AS YOU CAN SEE, WE GET A LOT OF MONEY FROM THEM ALSO
  • SO ABOUT $6 MILLION A YEAR IN REVENUES THAT COME TO THE PORT
  • SO FROM EVERY FIVE, SIX YEARS OR SO, WE'LL GO IN AND LOOK AT THEM AND MAKE SURE THAT THEY ARE PAYING US THE CORRECT AMOUNT
  • SO JUST A LITTLE OVERVIEW THERE THAT I WANT TO PROVIDE
  • MY NEXT SLIDE JUST SAYS THAT THEY MATERIALLY COMPLIED WITH THE LEASE AND WE HAVE NO FINDINGS
  • AND THAT CONCLUDES OUR AUDIT PRESENTATION FOR TODAY
  • SO BACK TO YOU
  • GREAT
  • WE LOVE A CLEAN AUDIT
  • ARE THERE ANY QUESTIONS FROM THE COMMITTEE MEMBERS AT THIS TIME? HEARING NONE
  • MR FERNANDEZ, DO YOU HAVE ANY CLOSING COMMENTS FOR THE COMMITTEE TODAY? NO, I DO NOT
  • I JUST WANTED TO SAY THANKS TO PATRICIA AND DEBBIE FOR SPEAKING TODAY
  • ALSO, THEIR WEALTH OF KNOWLEDGE AND ALL THOSE DISAGREEMENT
  • THEY HAVE CLOSER INPUT AND A RELATIONSHIP WITH TURNER SINCE THEY'VE WORKED WITH TURNER FOR YEARS
  • THEY KNOW GLI RATES ARE NOT 10%, THEY'RE 0.5 OR WHATEVER SHE QUOTED, AND I SEE THEM ON THE SCREEN
  • SO THANK YOU VERY MUCH AND THANK YOU TO THE COMMISSION FOR BEING WITH US TODAY
  • THANK YOU
  • ARE THERE ANY CLOSING COMMENTS FROM THE COMMITTEE MEMBERS AT THIS TIME? WELL, I JUST WANT TO SAY THANK YOU TO YOUR ENTIRE AUDIT TEAM AND EVERYONE WHO PRESENTED TODAY AND THANKS FOR JOINING US
  • PATRICIA AND DEBBIE, YOU SHARED A WEALTH OF INFORMATION AND APPRECIATED YOUR COMMENTS AS WELL
  • SO, HEARING NO FURTHER COMMENTS, WE ARE NOW RECESSING INTO THE NON PUBLIC PORTION OF OUR MEETING AND THE TIME IS 10:44 A.M
  • TO DISCUSS THE THREE AUDIT RELATED ITEMS THAT ARE SECURITY SENSITIVE INFORMATION
  • THE NON PUBLIC PORTION OF THE MEETING WILL LAST APPROXIMATELY 30 MINUTES AND THE MEETING WILL ADJOURN WITH NO FURTHER BUSINESS AFTER THAT TIME
  • PARTICIPANTS JOINING THE PUBLIC, NON PUBLIC PORTION OF THE MEETING VIA TEAM, PLEASE CLOSE OUT OF THIS MEETING LINK AND JOIN THE 11:00 A.M
  • TEAMS MEETING
  • AVIATION FOR EVERYONE JOINING IN THE PHYSICAL MEETING ROOM, PLEASE PROCEED TO THE THIRD FLOOR CONFERENCE ROOM THREE CC THREE
  • THE CURRENT TIME IS 10:45.

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