2026-11-03 - Finance Committee

00:00in the Mobile City Council Finance

00:01Committee meeting.

00:02Finance Committee.

00:04Um the members are myself, Josh Woods,

00:07we have Councilwoman Reynolds, and also

00:09Councilwoman Ingram. Uh so, in order to

00:12to keep this on track, maximize the time

00:15we're sharing here together, we're going

00:17to we're going to go ahead and get

00:18started. Um I do know that I guess um

00:20kind of the or I'll go ahead and just

00:22recap the purpose of this.

00:24Obviously, this Finance Committee

00:25meeting is a result of the news that we

00:28found out um I guess it was

00:32last week or week before last regarding

00:34the $14.7 million transaction.

00:37And also uh

00:39any any information or updates that can

00:41be provided over the course of the last

00:43week,

00:44members of the public, our residents,

00:46our constituents

00:48have communicated with with us as

00:50councilmembers and women, men and women.

00:52And we now have gathered those

00:55information, we provided them to the

00:56administration in hopes that you know,

00:59we can fully walk through these

01:01questions with with answers and those

01:03that can be provided in a timely

01:05fashion. Um in addition to that, we did

01:08ask for an update regarding the Civic

01:11Center.

01:12Um and and where the where that that

01:14that is as well.

01:16And so, that being said, I'll I'll turn

01:18it over to the administration. I think

01:19the best way to work this

01:21and I think that we've talked about

01:24this. The best way to work this is is to

01:26just allow you guys to walk through

01:28these questions

01:30and provide any answers that could be

01:32possibly provided to us understanding

01:35that this there is an investigation, an

01:36ongoing investigation occurring.

01:39Um and then also, I do believe that I

01:41did hear a word that y'all had a

01:43presentation or or some sort of

01:45presentation regarding the status of the

01:47Civic Center. So, that being said, I'll

01:50turn it over to you guys. Whichever

01:52y'all would like to walk through first.

01:54Um I would ask and I've I've talked to

01:56my colleagues. I I ask that the the

01:58presentation of regarding the Civic

02:00Center be contained down to 10 minutes

02:03if possible um so that we can move on to

02:05the other um the other issues or the

02:07other questions that uh that we had. Um

02:10that being said I would defer to you

02:11guys. I don't know if it's easier or

02:13more more time constraint uh you know

02:15more

02:16I guess

02:17facilitating the time uh to do the Civic

02:20Center first and then the questions but

02:21um my goal here is to let's re-examine

02:24after an hour but I'd like to keep this

02:25meeting to an hour or shortly after an

02:27hour as as I respect everyone's time.

02:29>> Uh maybe we should start with the Civic

02:31Center for we're going to be limiting

02:32that to 10 minutes.

02:33>> It's perfect.

02:39>> We're going to start with a report on

02:40the Civic Center.

02:42Arena, I'm sorry.

02:44He's repeating his words.

02:47>> The Regions Arena, I'm not sorry. I'm

02:48sorry.

02:52>> [clears throat]

02:58>> Good evening council members.

03:01So

03:02we'll uh we'll try to keep this brief if

03:05uh you can go to the next slide and

03:11>> [gasps]

03:13>> Okay, so just uh

03:18I'll get started on on schedule

03:20regarding the schedule. Right now the

03:22arena's were approximately 75% complete

03:24with construction.

03:26Uh we're currently scheduled to be

03:28substantially complete and open for the

03:31first event on March 25th, 2027.

03:36And then there will be some remaining

03:38punch list and and other back of house

03:41work that will be completed between uh

03:43March 25 March 25th

03:46and the end of April when the contract

03:49uh

03:49is complete.

03:51Um

03:55On the status of the work and where

03:57we're we're at and uh and big pictures

04:00uh everyone can probably tell the

04:02exterior skin on the building is is

04:05essentially complete other than we have

04:08some facias and soffits and flashings to

04:10do.

04:12And then

04:19If

04:20you would just hang on with the slide

04:22show, I'll get to those in a minute.

04:25>> [clears throat]

04:26>> Go back to the

04:30There you go. It's right there. Okay.

04:32So,

04:34and then

04:35basically we're also in the process of

04:38forming and placing concrete for all the

04:40hard hardscape around the building

04:42sidewalks and ADA ramps etc.

04:46Our interior framing

04:48is substantially complete other than the

04:51commissary kitchen area in the back of

04:53house.

04:55Drywall finishing and painting those are

04:58ongoing. We're about 85% complete on all

05:02the drywall work.

05:05And then tile work and all the

05:08restrooms and the market areas and the

05:11bar areas

05:13we're

05:14we're we're about 60 to 65% complete

05:17with tile work.

05:20On the

05:22mechanical side, mechanical, electrical

05:24and plumbing and and fire sprinkler

05:26system

05:28rough in that is all substantially

05:30complete again except for the commissary

05:32kitchen area

05:34which was lagging a little bit behind

05:36the other work areas.

05:38We're currently also installing

05:39electrical devices, light fixtures.

05:43We have full power to the building so

05:45the the lights are on and we're we're

05:47installing all fixtures.

05:50Air handling units

05:52was a a

05:53big concern we had to get those started

05:55so we could start doing finishes and

05:58mill work. Air handlers started up last

06:01week.

06:02So, we now have uh

06:05adequate climate control and millwork

06:07started today.

06:11The ice rink floor uh is also under

06:14construction.

06:16And then uh the backing wall and and

06:20preparation for reinstalling the murals

06:24is uh is also underway. So,

06:27uh

06:28Carly, if you'll back up to the

06:30beginning then I'll kind of talk about

06:31the pictures. Okay, so

06:33just first it this just general

06:35appearance of the uh you know, the

06:37outside of the building from an aerial

06:39view.

06:40Um next slide.

06:42And same thing from another angle

06:44looking uh back toward the southwest.

06:48And then this is the Grand Hall entrance

06:50uh

06:51all the uh soffit fascia glasswork is is

06:54installed here.

06:56I note some sections of plywood there.

06:58That's just where some of the glass

07:00panels got

07:02accidentally broken which is kind of

07:04typical in a curtain wall. So, we're

07:06just waiting for those pieces to arrive.

07:09Uh that doesn't really impact anything

07:11other than getting the rest of the dark

07:12bronze trim on it.

07:15And then this is the the sidewalk work

07:18on the exterior of the building. This is

07:20on the north side where the uh

07:22the ballrooms are at. And then you see

07:24those glass curtain walls there. Those

07:26are the

07:27outside entrances to the individual

07:29ballrooms.

07:31And then those columns that uh that you

07:33see standing there, those are the base

07:35columns

07:37for the architectural metal screenwork.

07:40And that screenwork is going to start

07:43going up uh in December.

07:45So, probably about Christmas you'll

07:47you'll see all the the arched

07:49architectural metal millwork or

07:51metalwork in place.

07:53Uh this just a shot of the uh

07:55the Jumbotron scoreboard system that uh

07:58retracts it retracts up into the the

08:01ceiling of the arena when you're not

08:03having a sport event. And then for a

08:05sporting event, it drops down view. It's

08:08a big uh four-sided scoreboard. It's got

08:11uh ribbon boards that go around the top

08:13for, you know, messaging and all the the

08:16various things that go with a sporting

08:18event.

08:19This is the actual first layer of the

08:21ice ice floor in the on the arena floor.

08:25Uh there's it's a multi-layer system.

08:28This layer that you're looking at here,

08:30that's the heat layer. So, that's got

08:32all the heating coils that run through

08:34it to be able to melt the ice.

08:36Um right now we're putting in all the

08:39refrigerant piping on top of that, which

08:41is the

08:42layer that will actually freeze the ice

08:44slab.

08:47And this is a look at the the interior

08:50of the Grand Hall.

08:51Uh you can kind of see there that the

08:54those big

08:55rectangles, those are that's the

08:57framework backing framework for the

08:59murals.

09:00Uh so, we'll be ready to probably start

09:02installing murals next week.

09:06And this is an interior view of the

09:08current progress on all the drywall.

09:10These are the uh North Ballrooms

09:13uh that can be segregated into smaller

09:16smaller rooms through movable

09:18partitions.

09:20And then this is uh this is on your

09:23Concourse level here. This is just a

09:25This is a general shot of what some of

09:27the market food service areas

09:30will look like. I mean, they're in

09:31progress as you can see with the tile

09:33and the and drywall and and lighting is

09:36starting to go in.

09:38Uh this is a typical

09:40uh restroom

09:42uh with the tile work on the walls and

09:45then uh

09:46you know, this

09:48And this kind of gives you a shot of the

09:51uh

09:51the corridor and the walking area around

09:54the

09:54the arena bowl at the Concourse level.

09:57So, it's it's very open. So, you know,

09:59people can move around as as as they

10:02they see see fit.

10:05And uh this is uh one of the

10:08the food service and bar areas. This

10:10one's called the AB bar, which is on the

10:12uh north side of the building on the

10:14concourse level.

10:17And then this is

10:19another one of the serving bars on the

10:22concourse level. That one happens to be

10:24bar A.

10:26And then this this shot's a little bit

10:29dark, but this is the sideline club,

10:32which is on the concourse level and that

10:34uh

10:35the big square there in the center that

10:37again that that's the bar and then of

10:38course there'll be various

10:40furniture and seating that's that's set

10:42up in this space.

10:45And now we're moving up to the the

10:47premium level

10:49where the suites and the Loews Club are

10:50at. This is the the quad B elevator

10:55entry area

10:56with with bar and food service areas

10:59here.

11:00Uh

11:01This is again the same same area B just

11:04kind of give you an idea of the

11:07you know the the

11:09art the artwork with the the drywall

11:11work and the the curvatures and the you

11:14know the style of of how this was

11:17designed. Next.

11:19This is on the the other side. This is

11:21over in the quad A on the premium level.

11:24Again food service and bar area there.

11:28And

11:30that

11:31that's it for the photos. Uh

11:34I'm sure everybody's got uh

11:37questions about the budget but uh

11:40Basically the original estimate of $300

11:42million. Uh we are still on budget

11:46uh even with the uh

11:49the recent fraud event. Uh

11:52Basically if you subtract that out of

11:53the $300 million,

11:55that leaves us with about $285 million

11:58for completing the construction.

12:01My current estimate is $281.6.

12:05So we do not have any other unforeseen

12:09conditions, we will be complete slightly

12:12under budget.

12:13>> Got you. And then Sam, uh as referenced

12:16I guess by the administration, um the

12:19the owner's contingency, I guess is is

12:21what you're referring to, the the

12:23difference between the 300 and and the

12:24285.

12:25>> Right. So,

12:27that's not available to us for

12:29construction at this point. We will

12:30still be able to

12:32to be within within budget.

12:35>> Right. And that um and I guess kind of

12:37the the original intent for that owner's

12:39contingency was not to dive into it,

12:41obviously. Um with the true construction

12:43cost at 285, um even with any any

12:46changes or any any, you know, overruns

12:49to a certain extent, still that 285

12:51number's kind of what what the plan was

12:53and what you're saying and guess what

12:55we're hearing is a 281's kind of feel,

12:58you know, barring any any

13:00large things, uh

13:02that 281 will and I will ask at the

13:05committee meeting, um

13:06please, if we have to, we'll we got to

13:09keep this going, so and I'll I'll

13:12Great. I'll I'll talk as much into the

13:14mic as I can. Um and then I guess I

13:17barring any contingency other than that,

13:19281's what we're shooting for to come

13:21in, so therefore under budget, I guess,

13:22as far as what as what you're saying, I

13:24guess.

13:25>> Correct.

13:26>> Okay.

13:26>> Yeah. If we don't I mean, there's still

13:28room for problems to occur, but the

13:30closer we get to the end, the risk of

13:32that

13:33goes down very quickly.

13:35>> Got you.

13:36Um any other

13:37questions from council members?

13:38>> Yes, sir, Mr. Chairman.

13:40Um

13:42the 300 million included the 15 million

13:45owner's contingency, correct?

13:47>> Correct.

13:48>> Okay. How much is owed to the arena

13:50project currently?

13:51>> What?

13:51>> How much is owed to the arena project

13:54currently?

13:55>> I don't understand your question.

13:56>> we owe money for work.

13:59Correct?

14:01>> You mean outstanding payments to the

14:03contractors?

14:04Uh well, they're they're paid out at

14:0675%. I'd have to find those exact

14:08numbers, but right now they're not owed

14:11anything. They're current on their

14:12payments.

14:12>> So, the the contractor has been paid.

14:15>> Correct.

14:16>> For both the previous payment that was

14:19intercepted as well as any

14:22payments coming after.

14:23>> Yes.

14:24>> Okay.

14:25Um how many more payments are left?

14:29>> There will be uh

14:31five five more months of construction,

14:34so that'll be five more payments and

14:35then there'll be

14:36uh a retention and a closeout payment,

14:38so probably seven more

14:41payments.

14:42>> And they're paid monthly?

14:44>> Correct.

14:48>> Okay.

14:49Um

14:51>> [clears throat]

14:51>> of the project contingency, how much of

14:55that has been used?

14:58>> The

15:00if you mean the contract contingency

15:02>> That's correct.

15:03>> Let's

15:06uh

15:08We're projecting that

15:10you know

15:11we'll use

15:16I mean, we will use all of it.

15:19Uh

15:20plus

15:21we'll overrun that a little bit, but

15:23that's because we moved some of the

15:26items from the FF&E budget into the

15:29construction.

15:30So, we we

15:31we look at that as a whole, Councilwoman

15:33Reynolds. You know, the FF&E and the

15:35construction comes out of that that

15:37whole 285.

15:41>> Okay.

15:41>> So, we will the 15 million contingency

15:44that was in the construction contract

15:46that that will be exhausted, but the

15:4911.8 million that's in the FF&E budget

15:53will not be.

15:55So, that the FF&E will come in under

15:57budget and that will

15:59offset the the increase on the

16:02construction contingency.

16:04>> Okay. So, I guess I like how much have

16:06we paid to this point for the arena

16:07project? Do you know that?

16:10>> Not I I don't have a copy of their

16:11latest pay applications.

16:13>> Okay.

16:14>> We can of course get you that

16:15information.

16:17>> Um

16:19and what was the the the contingency

16:21amounts? I know the owner's contingency,

16:23I think we've agreed on it being 15

16:25million. What was the contract

16:26contingency?

16:27>> 15 million.

16:28>> So, just 15 and 15.

16:30Okay.

16:32Um and what was the contingencies

16:35originally put out there for?

16:38Well, well, I mean 15 and 15. That that

16:40number I mean that keeps coming up.

16:42>> Well, a contingency by definition is a

16:45cost you expect to incur, but you have

16:47not been able to quantify.

16:49So, the 15 contingency that was put in

16:51the construction contract was basically

16:54an allowance for unknown changes to the

16:57cost of the construction.

17:00The 15 million owner contingency was was

17:03another

17:05you know, set aside for you know, if

17:08there were unexpected events such as

17:11hurricanes or

17:13you know, we we get out there and find

17:15out that there's not adequate, you know,

17:18utility infrastructure

17:20that you have to add to or or if if you

17:24overrun the construction contingency,

17:27you've you've still got some

17:30some cushion cushion there. So.

17:32>> Of the 11.8 in FF&E

17:36that I think you said that we're going

17:38to reduce that amount. We're not going

17:39to use all that money. Why not?

17:42>> Why not? Well, primarily because some of

17:45the uh large FF&E items we we

17:49essentially procured those under the

17:52construction contract rather than FF&E.

17:55So, it's we're still going to use the

17:56money. It's just instead of being bought

17:59separately as a piece of like the

18:01scoreboard as an example. Originally

18:04that was intended to be an FF&E item,

18:07but we added that to the construction

18:09contract. So, it came out of the

18:10construction contingency, but

18:13that won't be spent out of the FF&E

18:15money.

18:16>> I got you. Okay, I understand that.

18:17>> So, it's It's really a

18:19it's not really a savings. It's just

18:21we've we've we've moved some cost from

18:24one

18:25>> Yeah.

18:25>> one bucket to the other.

18:26>> Understood. So, we're not reducing the

18:28amount of FF&E we're going to have for

18:29the arena.

18:30>> No, we're not.

18:31>> Okay.

18:32And

18:33um

18:35what

18:37if we got

18:38a $300 million budget and you think

18:40we're going to come in around $282

18:41million.

18:43Is that correct?

18:45281.6 I think is what you said.

18:47>> Well, that's my current projection, yes.

18:49>> Okay. Projection. [laughter]

18:51But we only have $285

18:53in the account, let's say, because of

18:55the loss.

18:57What do we What happens when we go over

19:00that, Sam?

19:02>> Well, you either have to de-scope

19:04elements of the work or you have to come

19:06up with additional funding.

19:08>> Right. And do you expect that that's

19:09going to

19:10I mean, I know

19:10>> I don't know.

19:11I don't expect that.

19:12>> do you think the percentage is of that

19:14happening? Do you think it's high

19:15percentage percentage low percentage

19:17that we're going to exceed the $285 that

19:20we have set aside for this?

19:21>> No, I think it's a low low percentage

19:24for that at at this point and you know,

19:26there's

19:26there should not be any big surprises

19:28out here.

19:29>> Okay. All right. Thank you, Sam.

19:31>> Yeah, anyone else with questions?

19:34>> [clears throat]

19:35>> Thank you, Sam. And I just um I

19:36personally thank you for for what you

19:38do. Thanks for managing the the project

19:40over there. Um and I know you're very

19:42very tight and aware of everything going

19:44on. So, thank you for uh stewarding the

19:46the money that's going in the the

19:48Rangers Arena uh very astutely. So,

19:50thank you. And thank you to your Volker

19:51team, too. So, we appreciate it greatly.

19:53>> Thank you, Council.

19:54>> Thank you.

19:56All right. That being said, um we'll

19:59move into the uh again, uh questions

20:01were provided to I'm trying to find the

20:03right place.

20:05Should have got a phone book, I guess,

20:06to sit on. Uh

20:08they um so, obviously, questions were

20:10provided to the administration. The

20:12questions came from from from council

20:14members, uh whether personal questions

20:16or questions that members of of

20:19residents in in their district or across

20:20the city have submitted to them. Um we

20:23submitted over the last week to the

20:24administration. Um, so I'll with that

20:26I'll turn that over to you for if you

20:28just want to just I guess the easiest

20:30way would be to roll through the

20:31questions and again, you know, some of

20:33them um, we do understand given the

20:35investigation, some may not be able to

20:38be answered here today, but um, just

20:40want to let you roll with that if that's

20:42fine.

20:43>> Certainly. Uh, thank you very much. Good

20:45afternoon, Council. Um,

20:47I want to start by addressing what uh,

20:51Councilman Woods just referenced. Uh,

20:53for those who were here this morning as

20:54the Council was, um, the FBI came and

20:57and spoke uh, as to the two pending

20:59investigations.

21:01Uh, I can tell you that um, in repeated

21:04conversations with the FBI, uh, they

21:07have stressed the importance of keeping

21:10uh, as much of this confidential as

21:12possible

21:13um, so that they can work to uh, to

21:16apprehend the perpetrator of this act

21:19and also uh, to maximize our chances of

21:22potential recovery.

21:23Um, as you know, the mayor uh, has

21:25stated repeatedly that he's committed to

21:27transparency and so we are

21:29trying to balance uh, that interest of

21:31transparency with um, what everybody

21:33wants, which is to recover as much of

21:36these funds as we possibly can and to

21:38apprehend um, the individuals

21:40responsible.

21:41To that end, uh, as Mr. Woods referenced

21:44and as I've spoken with Mr. Maples about

21:46this, some of these questions um, will

21:48not we won't be able to answer in

21:49today's session, but um, we're we're

21:52trying to answer as many as we possibly

21:53can. Uh, given the volume, I'm going to

21:55be answering some of them. I'm going to

21:57pull uh, Mr. Gewe and maybe Mr. Barber

21:59up at certain times to to assist and and

22:01the mayor as as he feels appropriate.

22:04Uh, I'm going to start with Councilwoman

22:07Ingram's questions.

22:09Um,

22:11and we'll just start in the beginning.

22:12Uh,

22:13I believe you had some questions

22:15regarding the August transaction

22:16timeline.

22:18Uh, for that transaction that was

22:20ultimately recovered. Um, and I I want

22:23to start and I think that um,

22:25uh, the FBI did a good job of explaining

22:27this this morning, but there's a

22:28distinction between the two types of

22:31attacks that occurred here.

22:33In that particular attack in August,

22:37there was a compromise of our

22:41IT system specifically

22:44emails of individuals were accessed by

22:47an outside third party.

22:50But the date that the fraudulent

22:52instructions associated with the August

22:55transaction were first received, that's

22:57the first question. And that date is

22:59August 12th.

23:01The date of disbursement

23:04of those funds is August 13th.

23:08Again, that's of this year.

23:10What date were the funds recovered?

23:13That would be August the 18th.

23:16What date were the corrective actions

23:20implemented? So

23:22after this event,

23:24there were several conversations and

23:26meetings that were commenced

23:28>> [snorts]

23:29>> immediately after

23:31to address prevention of future similar

23:34events.

23:35And on August 28th, a new protocol was

23:40put into place.

23:42That specific protocol changed our

23:46existing

23:47protocol and accounts payable was

23:50[snorts] no longer able to approve

23:52vendor changes. Now, that has been

23:54consistent since August 28th.

23:59You have something for me? I'm sorry.

24:02Okay, thank you.

24:04So since August 28th

24:07when that new protocol was put in place,

24:11the number of individuals

24:13at least immediately after August 28th

24:15who could approve vendor changes

24:18were limited to four or five people.

24:21We have further narrowed that since the

24:23more recent event.

24:24>> [snorts]

24:25>> With respect to the August transaction,

24:28was the insurance carrier involved? Uh

24:30the answer is yes. We did place our

24:32carrier on notice as we did in this

24:34particular instance. Uh as in this

24:36instance, um there was a firm engaged by

24:41the insurance carrier. That firm is KLA

24:43legal.

24:44Uh [snorts]

24:45our insurance carrier is coalition.

24:48And um they also have an incident

24:51response team that is captive to

24:53coalition as I understand it. And they

24:56came in and uh

24:58into our IT and and went through, uh and

25:02I I'm sorry, I can't speak to all the

25:04technical terms with regard to what

25:05exactly they did, but they did uh

25:08effectively audit um certain aspects of

25:11our IT system to determine, you know,

25:14what was hacked, what was uh viewed by

25:18that uh third-party criminal actor.

25:21>> [snorts]

25:21>> Um

25:23Disciplinary actions that were taken as

25:25a result of the August fraudulent

25:27transaction, um that's part of personnel

25:30matter. We can't get into that today.

25:32Uh the next question, were the same

25:35staff members uh involved in the August

25:38transaction? And and specifically was

25:40referenced the one person who's been

25:42terminated and the two placed on leave

25:44from the finance department. Uh again,

25:47that's not that's a ongoing personnel

25:48matter, something that we can't get into

25:50the to today.

25:52Um

25:53Based on the corrective actions made

25:55from the August transaction,

25:57do we have documented evidence that an

26:00independent audit,

26:02testing process, or reporting structure

26:05was put into place to ensure that the

26:08new protocols worked?

26:10Um we do know that Munis changes were

26:12made such that no change of vendor

26:14information could be affected uh without

26:18a change from uh

26:20or approval from above. And that's

26:21that's something we've discussed is

26:23effectively after this

26:26transaction, you couldn't have uh

26:29accounts people making those approval of

26:32vendor changes, which was a fairly

26:34significant change from what existed in

26:36the past.

26:39And then we were asked to provide the

26:41number

26:42>> [snorts]

26:42>> of fraudulent transactions in the last

26:44year that were either paid

26:47or recovered prior to disbursements. Um

26:51and and to our knowledge, there's only

26:53been two. One would be

26:55uh the most recent one um the October

26:58disbursement, which as you know is the

27:00subject of a pending investigation and

27:02and we currently have not recovered

27:04those funds. And then the August

27:06disbursement, which was ultimately

27:08recovered.

27:09>> [clears throat]

27:09>> Mr. Chairman,

27:11I want to go back to question eight. I

27:12just want to make sure

27:14that that question was answered. Is the

27:16response to question eight

27:18the fact that the MUNIS change is the

27:21documented evidence? Is that what you're

27:22saying for number eight?

27:25I'm sorry, I shouldn't say number eight,

27:27but the last question regarding

27:28corrective actions, the documented

27:30evidence.

27:32>> Yeah, so right. So and I think that what

27:36and I'm sorry, I may have misunderstood

27:38your question here, but you're looking

27:39for documented evidence.

27:41Um

27:43>> An example would be

27:45for example, if we put in place a

27:48protocol that required um

27:51only two two people had to approve it.

27:54Um in addition to that, the only way a

27:57vendor application could take place is

27:58that it meets these certain criteria. My

28:01question is, do we have documented

28:04evidence that a testing process

28:06occurred, a reporting structure, somehow

28:08to validate that it actually occurred?

28:12That that you have we actually put these

28:14uh procedures in place.

28:16>> Yeah, I mean we we have changes in the

28:18in the MUNIS system and then we also

28:20have documentation in terms of the

28:21communication to the department as to

28:23how this would be effectuated moving

28:25forward.

28:25>> That's what I'm asking. Thank you.

28:26>> Thank you.

28:27>> [snorts]

28:30>> All right, relative to uh

28:33the most recent um transaction at issue.

28:38Uh we were asked to provide a listing of

28:40total staff positions filled and vacant

28:42by each department across all

28:44departments. You know, this is I think

28:46part of the information that was

28:47provided in conjunction with the budget.

28:49Um but I I I don't know that I can speak

28:51to that standing here. We can give you

28:52all that documentation independently.

28:54Um

28:56the ethnicity and level of employment of

28:59the one person terminated and two placed

29:01on leave. Uh again, I think that that is

29:05touching on some personnel matters that

29:06are ongoing. Um

29:08I will state that in terms of uh their

29:12um their rank, there were different

29:14ranks. And in terms of ethnicities, uh

29:18there was there were two different

29:19ethnicities, um white and

29:21African-American.

29:23>> [snorts]

29:24>> Uh based on current internal findings,

29:28do you anticipate other actions within

29:30the next 2 weeks?

29:32Uh if so, please provide the ethnicity

29:35and level of employment.

29:37>> [snorts]

29:37>> Again, um we can't speak to that at this

29:39time. Ongoing personnel matters.

29:42Uh

29:44we were told that an executive-level

29:46staff member moved forward with sending

29:48the funds, although the email stated a

29:51need for confirmation.

29:53Was this staff member disciplined? Um

29:57can't speak to discipline of individual

29:59staff members separate and apart from

30:00what we've already said uh at this

30:02point.

30:04Impact on future budgets and hiring.

30:07>> [snorts]

30:07>> Um specifically, I'll request it of the

30:09mayor noting that he stated this loss

30:11will not have an immediate impact on

30:13city services.

30:14Can you clarify whether you anticipate

30:16any impact on future operating budgets,

30:19capital budgets,

30:21or the city's ability to fund previously

30:23planned priorities?

30:25Uh

30:26the simple answer is no, not at this

30:29time. I mean, I I I think the mayor has

30:31reiterated that, you know, we do not

30:34expect any interruption of city

30:36services. Um we do not expect any riffs

30:39or layoffs. Uh we do not expect um any

30:43uh significant impact to any existing

30:45capital projects. Uh but I do think it

30:48might be productive uh if Logan

30:52>> [snorts]

30:52>> Logan, do you want to speak to to this

30:54question as well?

30:55>> Yes, I got distracted with

30:57>> No problem. So So we're talking about um

31:00not having immediate impact on city

31:02services. Can you clarify whether you

31:03anticipate any impact on future

31:05operating budgets, capital budgets, or

31:07the city's ability to fund previously

31:09planned priorities?

31:13>> I think where this eventually flows

31:15through would be the

31:19two-to-four-year term, you know, how

31:23quickly do you want to

31:27Uh

31:27I mean, obviously this happened on the

31:29capital side of the

31:31books.

31:32So

31:34which capital projects you want to do,

31:36how quickly do you want to do them,

31:37what's your priorities.

31:39Uh I mean, ultimately the backfill over

31:42the long term would be

31:44uh as you said, through revenues or

31:47through

31:48just how much is being transferred from

31:51the general fund each year. But there's

31:53not a 15

31:54million hole today in the current

31:57budget.

31:58I think

32:01this kind of thing would flow through

32:03over years based on, you know, what

32:05projects you have and

32:07what your priorities and your needs are.

32:12If that helps.

32:14>> Good.

32:14>> clarify, I guess,

32:15>> [snorts]

32:16>> as far as how

32:17how you

32:18obviously [clears throat] coming into

32:19your role, you you made some changes as

32:21far as kind of projecting out

32:24Obviously, this year's budget was

32:26prepared with this year's capital needs

32:28and capital projects anticipated. So

32:30just kind of just confirm what you're

32:32saying is as as we move forward, as the

32:35city moves forward, and we're We're

32:36starting to kind of chart out that, you

32:38know, what's what's going to be year

32:39after year, you know?

32:40I mean, that that could be the

32:41implication of

32:43uh you know, some things just might take

32:45a little longer. Capital projects, so I

32:48mean, that's kind of what you're saying

32:49is that not immediately, but we we've

32:51got everything planned.

32:51>> Well, they don't they don't have to take

32:54longer if you want to

32:56fill the hole.

32:58Uh

32:58So, it's really a very dynamic decision.

33:02The city has a good bit of

33:04reserves in the general fund.

33:07Uh

33:08ample enough to really not have any

33:10immediate impact if you don't want it

33:12to.

33:12>> Got you.

33:13>> But, um

33:15I mean, and we have a pretty fair-sized

33:16capital budget each year, but

33:2015 million's also a lot, so the

33:22um

33:24I think you understand what I'm saying.

33:25The I mean, you've got

33:27you would have 15 million there that's

33:29that's not there anymore. Eventually,

33:31that would

33:34Well, I can just repeat what I said

33:35before, so I'm just

33:36>> That's fine.

33:37>> But, if that makes sense.

33:38>> Yeah, I appreciate it. Thank you.

33:40>> Okay.

33:45>> Um so, another question kind of along

33:47the same lines. I think we've addressed

33:49this, but

33:50um the question was, you have also

33:52discussed the city's financial position

33:54moving forward.

33:56Should the council anticipate any

33:57changes to hiring

33:59such as delays in filling vacancies,

34:02freezes on new positions, or

34:04reconsideration of positions that have

34:07already been budgeted? Um and as we've

34:09said before, no. We We don't forecast

34:13any any changes in that regard.

34:24Next question, [snorts] are there any

34:25departments, programs, capital projects,

34:28or planned investments that the

34:30administration is currently reviewing

34:33because of this $14.7 million loss even

34:37if no final decision has been made to

34:40reduce or delay them.

34:42Uh and again, the answer to that is no,

34:45not at this time.

34:48>> Mr. Mr. Chairman, so you're telling me

34:50there was no projects that anybody had

34:52planned that this would affect?

34:55>> Uh yeah, I mean I Well, I'll let the

34:57mayor speak to that. But, you know, we

35:00>> I mean then we had a $15 million owner's

35:03contingency

35:04as part of this very large capital

35:07project, which is the arena.

35:09Um

35:10it was always our hope that some of

35:12those dollars would not ultimately be

35:13expended. And it was always our hope

35:16that that money would either be returned

35:17to the unassigned fund balance

35:20uh or capital pro- particular capital

35:22project.

35:24That really wouldn't have occurred. We

35:25had no plans for those dollars

35:28uh

35:29specifically. You know, the the

35:31project's not closed out, the

35:33contingency will exist until the

35:35project's closed out or until it's

35:37expended.

35:38Now it had to be expended. So, in next

35:41year's budget on us you know, obviously

35:44we will

35:45have $15 million less than we would have

35:48without this fraudulent transaction

35:50unless

35:52uh we can recover some of that money,

35:54unless we can

35:56uh exceed our revenue projections,

35:58unless we can bring the budget in uh you

36:02know, with reduced expenses versus the

36:04budget. Uh

36:06but even we would have had all of those

36:08options too available to us throughout

36:11this year except the recovery of the

36:13money. So, in the end

36:15that $15 million

36:17unless recovered is going to have an

36:19impact at some point. I do think we have

36:22opportunities to make it up.

36:29>> [snorts]

36:33>> Uh the next question is if the city

36:35ultimately recovers only a portion of

36:37the $14.7 million, what funding source

36:40would absorb the remaining loss?

36:43Would that come entirely from the arena

36:45contingency reserves,

36:48future revenues, or some combination of

36:51those sources? Um and I think that Logan

36:54and the mayor have spoken to this, but

36:56you know, as it as it pertains to the

36:57arena, it would come out of the owner

36:59contingency.

37:00>> [snorts]

37:01>> Uh if the administration determines that

37:03this event has moved from having no

37:06immediate impact

37:08to creating a measurable impact on

37:10future city budgets,

37:13at what point uh will the council be

37:15informed?

37:16Um

37:18you know, of course, it it's our desire

37:20to keep the council informed as to

37:22anything that's going to significantly

37:24impact um the budget. As stated before,

37:27we do not believe that this event will

37:29have an immediate impact.

37:31Um I know that Logan has otherwise

37:34detailed the anticipated effects

37:36over time. Um

37:39for example, how much is transferred

37:40from general to capital in kind of the

37:42next two to three to four time year uh

37:44excuse me, year time frame. That'll be

37:46part of ongoing discussions uh with the

37:49council, I'm sure. Um particularly in

37:51future budgets. But certainly, if we uh

37:54if we know that there's going to be any

37:56kind of measurable immediate impact on

37:58on the city budget, um that's something

38:00that we'll be we'll be bringing to the

38:02council

38:03immediately.

38:05Uh next, please provide a listing of the

38:09various investigations and the fund

38:11source and or insurance carrier for each

38:13vendor.

38:14>> [snorts]

38:14>> Um so, let's start with uh obviously, we

38:17have um the Federal Bureau of

38:19Investigation, FBI,

38:21uh has an ongoing investigation as

38:23detailed this morning. Um we're working

38:26daily with them uh in in an effort to

38:29get them the information that they need.

38:31Um and uh and have ongoing meetings um

38:35this week and in in the future.

38:37>> [snorts]

38:37>> Uh

38:39next, with regard to our insurance

38:40carriers, I mentioned before with the

38:42last incident, um they've retained again

38:45KLA legal team. Um this is a law firm

38:48that specializes in these types of

38:51responses.

38:53Engaged by our insurance carrier. We

38:56have a $25,000

38:57deductible on

39:00our coalition policy.

39:02Um

39:04and that would be applicable in this

39:06particular instance. Um any

39:10any bills up to that meeting that

39:14deductible threshold will be paid out of

39:17the legal liability fund as I discussed

39:20previously.

39:22Um coalition incident response

39:25is

39:27again, that's paid for by our insurance

39:29carrier. Um coalition and that is the

39:32forensics team that came in again with

39:36respect to this incident and did their

39:38investigation of our IT system and as I

39:41confirmed for you before um they have

39:44expressed to us again yesterday that

39:47they see no evidence of any kind of

39:48compromise

39:50of our IT infrastructure.

39:53Um

39:54>> I'm sorry. The 25K deductible for what?

39:57What's the deductible for?

39:58>> Just plain old deductible.

39:59[clears throat]

40:00>> Yeah, yeah, it's a deductible for right,

40:02for expenses associated with

40:05you know, this particular claim, right?

40:07So that would be any legal expenses,

40:10um the loss itself.

40:12All of that.

40:15>> So what's the coverage again?

40:17>> Well,

40:18I'd rather discuss that if if we can in

40:21executive session just because it is

40:23kind of nuanced and we have a legal team

40:25that's currently analyzing that piece of

40:26it.

40:28>> 25 deductible, 25K deductible is for

40:31a coverage of some sort.

40:32>> Correct. Yes.

40:33>> Okay.

40:34>> Yeah.

40:34>> And it's like any other deductible would

40:37be for anybody else's insurance

40:39basically.

40:40>> Yes.

40:40>> to understand why there is a deductible.

40:42>> That's correct. Right. Yeah. Yeah, I

40:44mean that that's money that we're going

40:46to have to spend first before we hit the

40:47coverage.

40:49If that makes sense.

40:50>> [snorts]

40:51>> You want to speak to that?

40:58Yeah.

40:59Yeah.

41:01Um

41:03in addition we've engaged a national

41:06firm that has a robust cybersecurity

41:08practice. That firm is Polsinelli. I

41:11know that the mayor and others have

41:13spoken

41:14about them before.

41:16>> What's the name again?

41:17>> Polsinelli, p o l s i n e l l i.

41:22Um

41:24that uh

41:27they've been in communication with the

41:29Secret Service.

41:30Um you know, we're working with

41:33our brokers and insurance carrier

41:36in an effort to see if we can't get

41:39their bills covered by our carrier as

41:41well, but if not,

41:43we feel confident in the budget that we

41:45have available in the legal liability

41:47fund to cover those fees.

41:50>> What's the What's Polsinelli's role?

41:53>> Yeah, so Polsinelli is is conducting

41:55their own

41:56investigation

41:58to determine what happened. That

42:00includes witness interviews, review of

42:03the relevant email documentation,

42:06advising us

42:08on

42:10a variety of things

42:12related to this particular loss

42:14and future prevention.

42:17>> How did [clears throat] we come about

42:19finding this particular firm?

42:21>> Yeah, certainly. So they've got a

42:23reputation and while they're a national

42:26firm, they have a presence

42:28in Alabama.

42:30Um and a specialist that

42:33that

42:34several

42:36I guess local lawyers

42:37are familiar with. A lawyer who

42:39practices

42:41out of their Birmingham office. Um and

42:44immediately after this we we reached out

42:46to her

42:48and we felt like they had the requisite

42:51capability to go ahead and proceed with

42:53an engagement.

42:57>> Did they provide some sort of product?

43:00>> Yeah, and that's that's a question that

43:01was asked later is um you know, I will

43:04say that as counsel, you know, typically

43:08um

43:08the any product that you would provide

43:11would would have that privilege.

43:13However,

43:14um we are uh in discussions with them

43:16about preparing a report that ultimately

43:18is something that we can provide

43:21uh in this instance to the council

43:23um that will detail

43:25uh kind of the narrative here and the

43:27investigation.

43:31So, there will be a deliverable.

43:34>> [snorts]

43:36>> Mr. Chairman.

43:37>> Yes, ma'am.

43:38>> I just Were you through giving us all of

43:40the uh current investigations? I listed

43:43four and I just want to make sure I have

43:45>> Yeah.

43:47>> Okay.

43:47>> Well, I've got Okay, yeah, now I've got

43:50one more that we're kind of in the

43:51process of. Um so, in existing in

43:54addition to all of that, we've also been

43:56in communications with two accounting

43:58firms, both of whom we are meeting with

44:01tomorrow to conduct a review and

44:04examination of our accounts payable

44:06policies, our processes, and our

44:09internal controls.

44:11Um and again, that's that's just part of

44:13this process to to try and make sure

44:16that we are implementing best practices.

44:19Um

44:20So, that's that's going to be their

44:21role, so to speak, in in the process.

44:24>> What was that word you used?

44:25>> Examination.

44:26>> Examination.

44:27>> Exam-

44:28>> Examinations. Are Are these accounting

44:30firms local?

44:32>> Uh yes, they are.

44:34>> Are they firms that we've already used

44:35within the city for audits, etc.?

44:38>> so we asked for uh for recommendations

44:41and um

44:42the [snorts] the recommendations that we

44:44got were uh to use um

44:47two existing firms who have uh audited

44:50in the city in the past that have a

44:51familiarity with our accounting

44:53processes and um and could also come in

44:57and review our our current processes

45:00uh in addition to what they know from

45:02their prior work and advise on

45:03implementation of best practices.

45:07>> I have to ask the question. I mean, do

45:09y'all think that's the best course of

45:11action to use a firm that is local and

45:13is familiar with all of us sitting in

45:15here and I have had relationships with?

45:17Should we not have gone further out in a

45:19search on something like that?

45:21>> Go ahead, Logan.

45:23Well, we're

45:25uh we're up for absolutely anything.

45:26That was a recommendation by one of the

45:29law firms that Trotter Robert mentioned

45:32to

45:33uh

45:34actually go that route was their

45:36recommendation.

45:37Um but we're

45:41um

45:43I mean, we there's no special opposite,

45:46you know, there's no

45:47there's nothing behind that outside of

45:49that recommendation. And

45:50>> Yeah, and to Logan's point, um you know,

45:52we're certainly happy if y'all would

45:55like for us to consider other firms. I

45:57mean, we have not engaged anyone in this

45:59regard yet. We've got meetings that have

46:01um we've been working to schedule

46:03tomorrow with with these two firms, but

46:06uh we can add to the list and we're

46:07happy to meet with with anyone that has

46:09interest in helping.

46:13>> So, just to recap, so we have the FBI

46:16for the criminal

46:18investigation.

46:19>> Yes.

46:20>> Then you said KLA legal team.

46:23That team, their investigation, the

46:25scope, is it IT? It Is it Are Is it the

46:29same as the coalition

46:31group? Are they two different ones?

46:32>> Yeah, so these are two different ones.

46:34Um the the coalition group that you

46:36referenced is the cyber forensics firm,

46:39right? So, they're not lawyers. They

46:40have a specialization in cyber

46:43forensics. Um KLA legal uh is if you can

46:48think about it, our insurance carrier

46:50has existing agreements with certain

46:53firms where um they will go ahead and

46:56proceed with retaining

46:58uh those firms at carrier approved rates

47:02to come in and assist with

47:05investigation and reporting. And and we

47:08think that the KLA KLA legal folks are

47:12certainly qualified and are providing a

47:14great service

47:16and have been very responsive today.

47:19However, given the magnitude of this

47:21particular loss and given the fact that

47:24the ultimate insurance coverage

47:26regardless of what it ends up being is

47:28not going to be sufficient to cover the

47:30extent of the loss.

47:32We immediately reached out to

47:35a

47:36more of a larger national firm with a

47:38more robust capability to to step in and

47:41and assist.

47:42>> So is it safe to say that we have two

47:44firms that are taking care of the

47:45investigation

47:47similar in scope and that is

47:50KLA legal along with Polsinelli?

47:54>> Polsinelli.

47:54>> Okay, Polsinelli. Is that true?

47:56>> That's correct.

47:57>> Okay. And and you and that's happening

47:59because Polsinelli offers a wider

48:02>> Yes.

48:03>> scope.

48:03>> Yes, they're they're just a larger firm

48:05with with more capabilities and that's

48:08certainly not to diminish the

48:09capabilities of of KLA. We just felt

48:11given the the magnitude of the loss it

48:13it justified

48:15engaging someone with

48:16a more robust practice.

48:18>> Okay. And so I show a total of five

48:20invest Are you showing five five areas

48:23of five different um

48:26firms in terms of the investigation? I

48:28know the accounting firm has not come on

48:30board yet, but that would give us a

48:32total of five.

48:33>> Yes, so we would have the accounting

48:34firm. We've got Polsinelli. We've got

48:38the cyber uh

48:40forensics firm or firm. They're kind of

48:42a captive, if you will, of our insurance

48:45carrier. They're just doing the cyber

48:46investigation. We've got KLA, which is

48:49the the firm I previously mentioned

48:51that's been retained by our [snorts] uh

48:54insurance carrier and then an

48:56anticipated engagement with an

48:58accounting firm.

49:00>> Okay. And and just regarding again part

49:03of that question was

49:05you know the actual source the funding

49:07source and I think you shared with us

49:10about the deductible. I think you also

49:12shared that.

49:14So for the accounting firm would that

49:16also come out of the legal defense?

49:19>> Um

49:20so

49:21it kind of depends.

49:23Um

49:24I do not think it would be covered by

49:27our insurance. I don't think that that

49:28would apply against our deductible.

49:32You know

49:33again we're we're kind of just now

49:35having interviews with those accounting

49:37firms. So I think it's going to depend

49:39on the scope of what they are engaged to

49:42do

49:43in addition to kind of what they

49:45anticipate from a fee structure.

49:47That's not typically something that we

49:50would pay out of the legal liability

49:51fund but that that could be available to

49:53us if needed.

49:55>> Okay.

49:56Thank you.

49:59>> Question.

50:01Um

50:04FBI and I from my understanding I

50:07thought the Secret Service was involved.

50:09Can you speak of what the Secret Service

50:11>> Yeah. So um

50:13the Secret Service has a desk which

50:15handles these kind of matters. The first

50:17thing that our

50:20um

50:21I want to be careful here without saying

50:24anything that would be subject to

50:25attorney-client privilege but I can tell

50:26you that when we reached out to

50:28Pollsnelli the first thing that they

50:30accomplished was to make contact with

50:33the Secret Service. These are two

50:35federal agencies that work in tandem

50:38and work together on this matter. So

50:41you know our in terms of what they are

50:44doing I know that they work in

50:46conjunction with the FBI but

50:49our outside counsel Pollsnelli has

50:52largely handled the the direct

50:53communications with the Secret Service.

50:56>> [snorts]

51:02>> Um

51:03next there's a there's a section

51:06uh

51:07that's

51:09titled recovery through uh banks and

51:12insurance.

51:13And

51:14again, and I know we've we've kind of

51:16spoken to this, and I

51:17I mentioned to Mr. Maples,

51:19I think that um

51:21I think that all of this likely falls uh

51:24under something that that would be

51:26privileged. Um

51:27and if necessary, we can discuss it in

51:30executive session

51:32in terms of the available recovery and

51:33the legal strategy associate strategy

51:35associated therewith.

51:37Uh

51:38however, uh there are a couple of

51:40questions here that I think uh

51:43we can answer today.

51:45Um number 14 is can the administration

51:48commit to providing the council with

51:50regular updates,

51:52and if so, with a weekly minimum, even

51:54if those updates simply identify what

51:56has changed, what remains under

51:58investigation, and what information

52:00still cannot be disclosed? And the

52:02answer to that is absolutely. We can we

52:04can certainly commit to to regular

52:06weekly updates.

52:08>> [snorts]

52:09>> Um

52:11number 15, and this is something I

52:12believe I previously addressed, but will

52:14the council receive the final reports

52:16from the outside law firm and forensic

52:17accounting firm the city has retained

52:20subject to any necessary legal or

52:21investigative restrictions? Uh and the

52:24the answer is yes, there will be a there

52:26will be a work product for uh council

52:29review.

52:39All right, uh moving on to the next

52:42question section. This is controls and

52:44accountability going forward.

52:47Uh

52:47>> [snorts]

52:47>> and the question reads as follows.

52:49You have stated that large payments will

52:51no longer be electronically transmitted

52:53in the same manner. Beyond that

52:55immediate change, is the administration

52:57conducting a broader review of

52:59authorization levels, vendor

53:01verification, segregation of duties, and

53:04payment controls across all city

53:06departments. Um the simple answer is

53:08yes, the city is is further segregating

53:11duties as I mentioned before, uh for

53:14instance, accounts payable has no role

53:16whatsoever in vendor verification

53:18anymore. At this time, all vendor

53:22changes, and that's all of them in the

53:23city of Mobile, require a three-layer

53:26approval. Triple verified, and that

53:28includes the executive direct director

53:30of finance.

53:32Um I may look let Logan Is he still You

53:35want to speak a little more to this

53:36particular?

53:38>> Yes, and

53:41um

53:43there's nothing wrong with accounts

53:45payable.

53:47And just I don't want to

53:49just the town there. I mean, they're

53:50fantastic people there, but we have

53:53added further segregation of duties

53:56uh for exactly that. So, there's

54:00um

54:01there's a process.

54:02Things come in. There's a two-layer

54:05process, and it gets to me for a final

54:07review and approval.

54:09Um

54:10you know, on the firm, I mean, I can

54:12understand the the reaction you guys

54:14gave. I think the question is are these

54:15firms sufficiently independent? Um

54:20and part of the consideration there's

54:21trying to get this done sooner than

54:23later.

54:24Um

54:25and

54:27there there is a set of best practices

54:29out there to choose from. I I do think

54:31we're implementing it now. It will be

54:32nice to

54:33or I know that we're implementing it

54:35now, and we and we have, but

54:37um

54:38the

54:41uh all third party

54:43you know, review will be welcome to, but

54:45if there's any consternation about it

54:46being local, anything like that, we can

54:49absolutely

54:50factor that in. Uh but there were some

54:52other considerations and recommendations

54:54that have gone into that.

54:57Um

54:58but we've also had some conversation

55:00with third parties as well who

55:03or one in particular, and we will review

55:05others who do

55:07who are very reputable around this area

55:09of vendor verification uh the team.

55:12Some of these products have been

55:13recommended through other people who

55:14have experienced them.

55:16Uh we had a detailed

55:18demonstration call. We've sent back a

55:20list of 17 or so questions to this

55:23company.

55:24Um that would take a few months to roll

55:27out. I don't think I'm giving up any

55:29secrets there, but

55:30uh so as a department the main

55:33focus is

55:36is bridging right now to uh what already

55:39is the new policy. We're just getting

55:41that fully

55:43up to speed so we're making payments

55:44back on a very regular cadence.

55:47And

55:48uh bridging to any potential other

55:50support down the road.

55:55Did that make sense?

55:56>> [laughter]

55:58>> My eyes were just glazing over. I don't

56:00know about you guys.

56:04>> I was told to talk Tim. I'm sorry.

56:07>> no, no, no, no. I I'm sorry. It's just

56:09And this red is on. Red is on which is

56:12just so odd with these microphones. But

56:14anyway, can [snorts] you just kind of go

56:16through that and repeat it one more time

56:18so that we can try to understand? I mean

56:20I understand that there was further

56:22segregating going on. So what does that

56:25mean? And how are you paying bills

56:27today? I mean how many layers do we have

56:29to go through to pay a bill whether it's

56:31a small one or another 14.7 million? How

56:35are you How are you doing that today?

56:36And what is new with what you're doing

56:39today than what was done a month or so

56:41ago?

56:42>> And I wanted before he starts I want to

56:43jump in and make sure that you recognize

56:45there's a distinction here, right?

56:47Between vendor verification

56:48>> speak into the microphone?

56:49>> I'm sorry. Between vendor verification

56:52and payment, right? So those are those

56:54are two kind of different concepts. And

56:56so when we're talking about this

56:58excuse me, this three-layer review, what

57:00we're speaking to there is is vendor

57:02verification. So in other words, if we

57:04have a new vendor or an existing vendor

57:06who wants to change their payment

57:08instructions, that goes through a

57:11uh three-layer review before we confirm,

57:14okay, these people are who they say they

57:16are and we can issue payment.

57:17>> So, once you get everything verified

57:19like that, then it can be just a regular

57:21payment schedule or are you going

57:23through the three layers

57:25that you're at the top of?

57:28>> We're not making any payment at all is

57:31it

57:32and we are making payments, but any

57:34payment we make right now is being

57:37reviewed for vendor activity. Were there

57:40any recent changes? Have recent payments

57:42cleared?

57:44There's a step there to ensure that

57:46every as Mr. Reynolds mentioned at the

57:48last meeting make sure that every

57:50payment we make now this isn't happening

57:53again.

57:54Then at the same time we got incoming

57:55request for new vendors to be added or

57:58changes to vendors and they are also

58:01being put through that same process. So,

58:03at the end of this process we would have

58:05a fully

58:07>> [clears throat]

58:07>> clean list by our view of

58:10our entire active vendor pool.

58:13Um

58:14you know, part of this

58:17part of how we also narrow that pool is

58:18disabling vendors who've been inactive

58:20past a certain amount of time period.

58:23Now, their data doesn't disappear but it

58:26can't be used until it's re-verified if

58:28it's been acted for inactive for a

58:30certain amount of time.

58:32So, there's some other things like that

58:33that we're doing

58:35behind the scenes. It's taken

58:37this this is real. This is operational

58:39inside the department. So, it took a few

58:41days to get this solidified and

58:44active and we're

58:46running on it now.

58:48So, uh I I feel that

58:52I feel quite confident in that process.

58:54I sit at the top of that process. It is

58:56very manual.

58:58I was

58:59uh working most of the weekend getting

59:01all this going and and that's totally

59:02fine. That's my job and that's what I

59:04want to be doing, but

59:06um

59:08anyway, we we feel good about where we

59:09are right now. There is a place down the

59:11road where this can all be more

59:13efficient.

59:14And

59:16we can still have that level of security

59:18very efficiently.

59:20>> Okay. That helps. Thank you. Appreciate

59:22it.

59:23>> Got you. And we've reached the 2:00

59:25mark. So I guess um

59:27uh

59:28maybe we'll maybe we'll we'll go ahead

59:30and take off take another 15 minutes I

59:32guess. Is there any um any questions at

59:34the moment that that have have not been

59:36covered? I feel we we covered the

59:38covered the arena um status of that. Um

59:41we've looked at chat have some had some

59:43time to ask some checks and balance

59:44questions as far as what's moving

59:46forward that that the finance

59:47department's doing to to ensure this

59:49doesn't happen again. But is there there

59:51any section of questions kind of that we

59:53can we can kind of more dive dive into

59:56that that we feel have not been covered?

59:58I guess uh in in some form or capacity.

1:00:02>> Mr. Chairman, this this is a bigger

1:00:04issue than an hour.

1:00:06I mean that's just fact of the matter. I

1:00:07mean we got to take the time we need.

1:00:09Not we're going to get every answer we

1:00:10want today, but

1:00:12you know, setting an arbitrary hour time

1:00:14limit I think is probably a little I'm I

1:00:16don't I'm I don't mean that negative.

1:00:18>> that's also why we set up another

1:00:19meeting too

1:00:20in 2 weeks, but I was trying to trying

1:00:23to move this along I guess.

1:00:24>> I understand.

1:00:25>> Mr. Chairman

1:00:27Um I totally agree. I I I know we have

1:00:30another meeting and and I don't even

1:00:32think you had opportunity to get to my

1:00:33questions yet, Robert.

1:00:35>> You're next.

1:00:36>> And I have more more than

1:00:38than those questions. So I know that um

1:00:41it's a lot. But just with the

1:00:42information that was shared

1:00:44I guess how long it's been since we

1:00:46found out been a week and a half two

1:00:49>> Two and a half weeks.

1:00:49>> Two weeks. Um

1:00:51>> Two weeks.

1:00:52>> hearing

1:00:54things that took place in August, things

1:00:56are here taking place in October.

1:00:58Um all the information has been shared.

1:01:01Some information that we're just finding

1:01:02out um even today with the FBI sharing

1:01:06exactly what took place in August.

1:01:08Um hearing from Logan, um hearing that

1:01:11there was a 100% turnover rate.

1:01:14Um six directors and

1:01:17it's a lot of information.

1:01:19And that this council, I believe, has a

1:01:22responsibility

1:01:24to know exactly what's going on and use

1:01:26the tools that we have. And I think that

1:01:28we should have a independent

1:01:30investigation. I hear I'm so grateful

1:01:33for all the information that you just

1:01:35shared from the FBI to the Secret

1:01:39Service to K A and all these but I think

1:01:43this council

1:01:44deserve it to to let our constituents

1:01:47know that we're doing our job and I

1:01:49think it's going to help you as well,

1:01:50Logan. I mean, and the mayor. And when

1:01:53you think about the things that have

1:01:55been taking place, you wasn't here six

1:01:57Well, how long you been here, Logan?

1:01:58>> Six.

1:01:59>> Six months. So, after I mean, seven

1:02:01months ago you weren't here. Some of the

1:02:02changes I asked you about why capital

1:02:05wasn't in certain accounts, you weren't

1:02:07here to make that decision.

1:02:09The mayor wasn't here to make that

1:02:10decision.

1:02:12I believe this investigation is not an

1:02:13attack towards what I'm requesting. It's

1:02:16not an attack towards some

1:02:17administration or any individual. But us

1:02:20as a council need to know exactly what's

1:02:22taking place.

1:02:23I heard Vice President state

1:02:26"Hey, are they local? Have we used them

1:02:28in a while?" I think that matters.

1:02:31And I think we have to figure out how we

1:02:33can move forward together.

1:02:35So.

1:02:35>> Got you. Well, I'll let you keep pick

1:02:37back up

1:02:38Robert if you want to.

1:02:40>> I have one other question, sorry to you.

1:02:42>> Quick.

1:02:42>> How are you fine?

1:02:43>> That's regarding the the bond funds

1:02:46from that we got issued here.

1:02:50Those bond funds were never going to

1:02:52just automatically transfer back to

1:02:55capital.

1:02:56Right? Those are

1:02:58bond funds for specific reason

1:03:00that those were never going to go back

1:03:02to capital just arbitrarily, correct?

1:03:06>> The

1:03:08to be very technical about it, I believe

1:03:10extra money left from the bond fund goes

1:03:12back into debt service. But that frees

1:03:15up other money in the capital portion,

1:03:18so

1:03:19it's it's fungible in a certain way.

1:03:21Yeah.

1:03:21>> the term I've never heard it

1:03:23used so much since I've been in office,

1:03:25the term fungible. You know,

1:03:27>> [laughter]

1:03:27>> and

1:03:28and I'm not saying it's just you, but I

1:03:29mean everybody just sort of has this

1:03:31fungible mindset that, you know, money

1:03:33here goes there. I mean, it's just

1:03:35those bond funds are segregated bond

1:03:37funds for a specific purpose. And yeah,

1:03:40maybe it does free up money somewhere

1:03:42else, but I I want to make sure we stay,

1:03:44you know, in the bounds of that money

1:03:45that was lost was in fact bond money

1:03:47that was lost.

1:03:49Am I correct in saying?

1:03:50>> Yes, that was from the um

1:03:53>> [clears throat]

1:03:54>> the

1:03:55account that was included the money that

1:03:57was that was created by the money that

1:03:59was raised from the bond. Yes.

1:04:02>> I just want to make a quick comment to

1:04:04piggyback a little bit of what you said,

1:04:06Mr. Reynolds, and what you said, Mr.

1:04:08Penn.

1:04:09Um

1:04:10>> [clears throat]

1:04:10>> I agree. I kind of just looking at the

1:04:12timeline of events, all this

1:04:14information's been extremely helpful

1:04:16um to be able to wrap our minds around,

1:04:18let the public hear when this started,

1:04:20how it got to this point.

1:04:23You know, regardless of whose fault

1:04:25[clears throat] it is or, you know,

1:04:26where the the who dropped the ball and

1:04:29what we're going to do to prevent it,

1:04:30you know, I still look back from August

1:04:3212th to mid-October

1:04:36and roughly a 10-week period of time,

1:04:38we had a million dollars and then 14.7

1:04:41million dollars that was compromised.

1:04:43That's just a lot of money, and I just

1:04:44want to make sure we're not vulnerable

1:04:45moving forward. I want to make sure

1:04:48all the safeguards are in place. We're

1:04:50dotting our eyes, crossing our tees. And

1:04:51Logan, I trust you being at the top of

1:04:54that that

1:04:55three-step verification and all that. I

1:04:57just I think taking a deeper dive into

1:04:59this

1:05:01um

1:05:02is needed at this point cuz this can't

1:05:04happen again.

1:05:06>> Yeah, I do, Mr. Chairman.

1:05:08Uh I do concur

1:05:10with Councilman Penn and also Councilman

1:05:13Fleming.

1:05:14And

1:05:15you know, I'm going to just ask this

1:05:16council, you know, about, you know,

1:05:19you know, let us do our own

1:05:20investigation. I mean, we understand

1:05:22what the administration is doing.

1:05:24But, um what are we also doing also at

1:05:26the same time?

1:05:28Um I believe that we should um

1:05:30recommend some people that have

1:05:33expertise in this.

1:05:35Um if the council members can pretty

1:05:36much reach out to our attorney, and our

1:05:38attorney can vet these people that we um

1:05:41maybe you know, to suggest, you know,

1:05:43that she do this independent uh

1:05:45investigation, you know, for us. And um

1:05:48you know, let's roll from there, you

1:05:50know. And um

1:05:52yeah.

1:05:54>> Mr. Chair.

1:05:55>> Oh, go ahead.

1:05:56>> Mr. Chairman, I also concur with my

1:05:58colleagues, but I want to be more

1:06:00specific about the need. I think as we

1:06:04listen to I I go back to the first

1:06:06incident in August. We find out today

1:06:09that it was a link in in the way that it

1:06:11was compromised. But yet, I'm not aware

1:06:14of any massive training that occurred

1:06:16across the the the departments, and

1:06:18including us because I have an email we

1:06:21we receive emails also. And so, you

1:06:23would expect that there would be this

1:06:24massive alertness in in terms of

1:06:27training. In addition to that In

1:06:29addition to that, we've called out five

1:06:31different types of investigations. We've

1:06:33talked about criminal, we've talked

1:06:35about forensic, IT, and so forth. But,

1:06:39as you listen to my colleagues, and and

1:06:41I'm of the mindset that we do need an

1:06:44internal investigation that is more

1:06:46comprehensive and get to the conditional

1:06:50uh factors, such as the high turnover

1:06:52rates. No one is looking at that. No one

1:06:54is examining that. And so, that's going

1:06:56to allow us to get to some of the root

1:06:57causes because some of this is going to

1:06:59be human error. And so, I did ask for

1:07:01the vacancies and and you know, the

1:07:04number of vacancies and um the the

1:07:06length of time those vacancies have been

1:07:08unoccupied. And I think all of that is

1:07:10critical, and that's why we do need an

1:07:12investigation that is more comprehensive

1:07:15and not on a criminal side, but on

1:07:17really looking at the conditions, the

1:07:19the situations, and getting to the root

1:07:21causes of some of these human errors.

1:07:23So, um I would like to concur with my

1:07:26colleagues.

1:07:28>> And

1:07:29>> [clears throat]

1:07:29>> for what it's worth, I'm

1:07:31getting very deep in all this in the

1:07:32background. So, I have no problem

1:07:34talking about this myself for as long as

1:07:36you guys want to.

1:07:38Uh or in complying with any

1:07:39investigation you recommend. So,

1:07:43um I mean this this is a new world to

1:07:45me. There's only

1:07:46I get

1:07:4730 minutes with you guys a week or so.

1:07:49So,

1:07:50there's only so much time.

1:07:52Um

1:07:53but we are prepared to talk about all

1:07:55this.

1:07:57>> Mr. Chairman,

1:07:59>> Do you I'll go ahead and I'm sorry.

1:08:00>> No, no, no. I I agree with my

1:08:01colleagues. I think it's important for

1:08:03us to do this, to run

1:08:05our investigation parallel to what is

1:08:08currently going on with the five

1:08:11separate investigations that we've heard

1:08:13about. Um not so much on the FBI side or

1:08:17you know, that. But but for us it's it's

1:08:19more of the internal and finding out

1:08:21information that our constituents are

1:08:24asking us about. So, that helps us and

1:08:27and I think we can work with Jonathan as

1:08:29well as working with you, Logan, to get

1:08:31the information that we are requesting.

1:08:33Some of it you probably already have.

1:08:36So, that might make things go a little

1:08:38quicker. But but I I agree with my

1:08:40colleagues. This is something that I

1:08:41feel like we need to do.

1:08:45>> Um that said, David, is there would you

1:08:46like to pick back up I guess with

1:08:48questions or um where do y'all how do

1:08:50y'all want to go from here?

1:08:53>> I defer to this council.

1:08:56>> Mr. Chairman, I have 40 questions. So, I

1:08:59already know they're not going to be

1:09:00able to get to

1:09:01to all my questions. My question,

1:09:02Robert, is is it are you able to

1:09:06send us a response

1:09:09that we can read over before our next

1:09:12committee meeting?

1:09:13>> Yes. Yes, we can get you something in

1:09:14writing.

1:09:15>> Okay.

1:09:15>> Yeah, so for me, if I can I'm okay with

1:09:18getting that in writing cuz I know that

1:09:2040 questions could be 2 hours.

1:09:23So, if I can get that information in

1:09:24writing,

1:09:25>> At the pace going, we've got a few hours

1:09:27left.

1:09:27>> Yes.

1:09:28>> [laughter]

1:09:29>> So, that that will work

1:09:31for me. And then I'll share that

1:09:32information

1:09:34the information I'm able to share

1:09:36to the public that I receive.

1:09:39>> And then I guess I'm kind of deferring

1:09:41to to Mr.

1:09:49Yeah.

1:09:50And that that uh

1:09:52And I think kind of deferring to Mr.

1:09:54Maples on obviously

1:09:56there are some things like Mr. Shreve's

1:09:59saying there's some things that really

1:10:00can't they can't talk about at the

1:10:02moment just due to pending litigation or

1:10:05investigation or heard that and then Mr.

1:10:08Shreve said you know maybe over the

1:10:09course of the next week you know as as

1:10:12we we progress and week after week we go

1:10:14further down there might be more things

1:10:15that can be shared. But I guess

1:10:18if it's okay with you and Mr. Shreve but

1:10:19we'll work with with you and I'm see if

1:10:21there's any questions that we can make

1:10:23more public whether that's posted on the

1:10:25website somewhere as a news update or

1:10:27something like that. And then you know

1:10:29again I I think it's the

1:10:32it's the the the intent of this council

1:10:34and this committee not not to hide

1:10:37anything or cover anything or perceive

1:10:40of covering anything up. But also too I

1:10:42know and I've said this before it would

1:10:44it would trouble me greatly if I did

1:10:46anything

1:10:48from my council seat that would hinder

1:10:50us from possibly getting even $1 back of

1:10:53taxpayer money. So

1:10:55that's definitely not our intent. So as

1:10:57open and honest and transparent as we

1:10:59can be I see the intent of this council

1:11:00and and I do understand the comments

1:11:02that have come from from my colleagues

1:11:04here regarding a potential investigation

1:11:06so we can go from there. But I do want

1:11:08to also remind everyone that you know we

1:11:10do have the ad hoc committee at least

1:11:11that we can you know the intent of that

1:11:14is to review policies which seems like

1:11:15y'all jumped on that on that kind of

1:11:17quickly by by bringing in some firms or

1:11:19potentially bringing in firms to examine

1:11:20your policies and procedures. And then

1:11:22just you know as the ad hoc committee

1:11:24that we created today just looking over

1:11:27that is you know some separate folks, a

1:11:29little little separate outside the

1:11:30bubble.

1:11:31Uh that I think that's a a good step as

1:11:34well to, you know, a lot of eyes

1:11:36keeping look keeping watch on the

1:11:37taxpayer dollar dollar. So, I appreciate

1:11:39that. Um that being said, I guess I'll

1:11:42I'll leave it to my committee members to

1:11:43see what you where you think we should

1:11:45go today from here and um

1:11:48and

1:11:49uh Pat Ford, I guess.

1:11:50>> Thank you, Mr. Mr. Chairman. Um I want

1:11:52to confirm a way forward. Um I heard

1:11:55Councilman Payne state that or ask if we

1:11:57were going to get these uh question get

1:11:59responses to these questions in writing.

1:12:01And I think that's important. Like I've

1:12:03written my notes, but I don't want to

1:12:04communicate this to the public because

1:12:05what if I have one date wrong? So,

1:12:08are we expecting that we're going to get

1:12:10written responses to these questions in

1:12:12the next week or so?

1:12:13>> Yes. Uh to um earlier point I think made

1:12:17by Mr. Woods, I'll work with Mr. Maples

1:12:19and we can go through um the questions

1:12:22that we think can be answered uh

1:12:25publicly right now and uh we'll get you

1:12:28full responses on those.

1:12:29>> Right. Like so, for example,

1:12:31you answered uh over 50% of the ones

1:12:34that I submitted, right?

1:12:35>> I think it was more like 97%.

1:12:37>> I would agree. I I'd give you that. So,

1:12:40so again, what I'm asking, you know,

1:12:42like so because we want to get this

1:12:44information out to the public. We want

1:12:45to tell them what we know. So, what can

1:12:47we expect as a turnaround? And I'm

1:12:48asking that because that'll guide us in

1:12:50terms of our next steps.

1:12:52>> Yes. Yeah. We'll we'll work together and

1:12:54and get you that within the week.

1:12:55>> Okay.

1:12:56So, for me, what I'm hearing um Mr.

1:12:59Chairman is that, you know, we will

1:13:01continue with the responses that they

1:13:04provide and maybe the next committee

1:13:06meeting is just a follow-up to filling

1:13:08gaps from those questions. But in the

1:13:10meanwhile, we would be moving forward

1:13:12because we have majority saying move

1:13:14forward for our own investigation. And

1:13:16so, what I hear happening next is that

1:13:18our um

1:13:20attorney will work collaboratively with

1:13:22either Logan or and not necessarily

1:13:24saying work with them uh in terms of

1:13:26that, but figuring out what that looks

1:13:28like as we move forward. That's what I

1:13:29see as our next steps.

1:13:31>> Yes, ma'am.

1:13:32>> Okay.

1:13:32>> Mr. Reynolds.

1:13:35I just don't want this to be lost. I

1:13:36don't think it's lost on anybody, but

1:13:39um

1:13:40the public

1:13:42trust us to make good decisions on their

1:13:45behalf. And we just don't need to lose

1:13:47sight of that, right? That

1:13:49when that trust is gone,

1:13:51you know, a lot is gone, right? And and

1:13:54it's up to us to make sure that public

1:13:57trust is

1:13:59restored in in some capacity with with

1:14:02facts and sticking to the facts. This is

1:14:05not a, you know, some sort of political

1:14:08This doesn't turn into some political

1:14:09vendetta or anything like that. That

1:14:11this is just a

1:14:13a gathering of facts, and that's what

1:14:14the public demands. That's what our job

1:14:16is in all this. And I know it's going to

1:14:18be difficult.

1:14:19We've been down this road before, you

1:14:21know, some of us. And um

1:14:24you know, it's a it's a different

1:14:26you know, it's it's very difficult, and

1:14:27it's very time-consuming and draining on

1:14:30um

1:14:31city resources.

1:14:33And

1:14:35if our goal is narrowly focused on the

1:14:37facts, uh I think it possibly can be

1:14:40done where it's not as disruptive, or it

1:14:43it's not doesn't get in the way, but all

1:14:45the facts still come to us. And you

1:14:47know, frankly,

1:14:48I'm not a financial expert. I don't

1:14:51think any of us here are, you know, have

1:14:53the credential like Logan or all these

1:14:55other folks that

1:14:57you know, if you got into some, you

1:14:59know, precise problem that existed, I

1:15:01don't know that I'd fully comprehend or

1:15:03understand it or know how to fix it. But

1:15:05having someone who knows that stuff,

1:15:08and can, you know, put it in layman's

1:15:10terms for, you know, us as

1:15:13representatives of the citizens, I think

1:15:14it's important. So,

1:15:16uh I'm open to exploring that

1:15:18possibility going forward. Um

1:15:20next week's finance committee meeting

1:15:22>> We got I

1:15:24week after next.

1:15:26>> Two weeks. And And then in that same

1:15:28meeting we're supposed to have some

1:15:30presentation regarding TIFs and

1:15:33everything else. I mean, I

1:15:34>> I'd pack a dinner.

1:15:35>> You know, it just

1:15:38we we need to as a finance committee

1:15:40meeting be precise about, you know, how

1:15:42we're going to go about this. And so I

1:15:44don't know that I have the answer today,

1:15:45but it's something everybody needs to

1:15:46give thought about, you know, what is

1:15:48the cadence of our intervention or our

1:15:50information.

1:15:51>> Got you.

1:15:52Uh Mr. President

1:15:53>> Uh Mr. Chairman, I understand what Mr.

1:15:55Reynolds is talking about and especially

1:15:57being down here since 9:00 in the

1:16:00morning and I don't do know that we have

1:16:02a lot of meeting dates uh available in

1:16:05the future uh especially on Tuesdays. I

1:16:08mean, maybe we can just look at breaking

1:16:10it up. I mean, have the TIF meeting of

1:16:12course in 2 weeks. But also, I mean, we

1:16:16just don't need to rush this situation

1:16:18at all. So I mean, I suggest, which I'm

1:16:20not on the committee, but probably just

1:16:23break it up because I'm pretty sure the

1:16:24TIF we're going to especially expecting

1:16:26some visitors to come.

1:16:28And that can probably be a hour and hour

1:16:30and a half by itself, especially if we

1:16:32have visitors from the school board, the

1:16:34county commission, and also the license

1:16:35commission. Then the council member has

1:16:37questions, so that's almost a hour and a

1:16:39half by itself. So maybe you want just

1:16:41maybe want to break it up.

1:16:43>> up.

1:16:44>> Yeah.

1:16:44>> We can do that.

1:16:46>> I just wanted to add one thing about um

1:16:50the report that we would expect from

1:16:52from our ad hoc committee as well as the

1:16:54document that the administration or

1:16:56documents that they will have at the end

1:17:00of all of this.

1:17:01Because sometimes when you get these

1:17:03back the answers are not what some

1:17:06people would want to see.

1:17:08So just be prepared for for that to

1:17:10happen. You know, we will get a report

1:17:12back and this is these will be the facts

1:17:14that they found. And then at that point

1:17:16we have to decide what it is we do going

1:17:18forward.

1:17:20And just because you don't like the

1:17:21answers that were returned that doesn't

1:17:24mean that they're not correct. And we

1:17:26have to be ready for that.

1:17:27>> Got you.

1:17:28>> Mr.

1:17:29Yeah, thank you, Mr. Chairman. And my

1:17:30last thing, you know, I'm glad that my

1:17:32colleagues agree uh with moving forward.

1:17:35Um but my last thing and and I know

1:17:38Robert you you mentioned that the

1:17:41administration is willing to give us

1:17:43weekly updates.

1:17:45It's imperative

1:17:47that we know this information.

1:17:50Today with the FBI

1:17:53that was new to us.

1:17:55We need a contact person.

1:17:57And I'm just requesting like we we need

1:17:58a contact person that's going to give us

1:18:00updates weekly.

1:18:02Exactly what's going on. If there's been

1:18:05a change, is this something If nothing

1:18:07changed, say nothing have changed.

1:18:10But we need that weekly update because

1:18:12when we don't have that information,

1:18:14it's hard for us to respond to our

1:18:15constituents.

1:18:17>> Certainly and and we're we're happy to

1:18:19accommodate there.

1:18:20>> Mr. Chairman, I want to just follow up

1:18:22with what Councilman Penn stated. That

1:18:25was one of the questions that we asked

1:18:26that you know, that we would receive

1:18:28these weekly updates at a minimum. And

1:18:31so and you agreed that you know, we

1:18:32would receive that. I think what I hear

1:18:34Councilman Penn stating is that you

1:18:36know, tell us what what that structure

1:18:38is going to look like. Who's that

1:18:39contact person? So we can know who to

1:18:42expect and we will not be able to say,

1:18:44"Okay guys, it's Wednesday. We were

1:18:46supposed to get an update. It didn't

1:18:47happen." That way we're all in this

1:18:49together and it's not just on

1:18:50administration to

1:18:52you know, have some accountability for

1:18:54that communication. But we

1:18:56would have a responsibility to request

1:18:57and say, "Hey, we haven't received

1:18:58that."

1:18:59>> Yeah, so generally speaking I would say

1:19:01that Ms. Brown is your primary contact.

1:19:06There are some matters as we discussed

1:19:08here today that it would probably be

1:19:10best for Jonathan and I to

1:19:13communicate about just because of the

1:19:14privileged nature

1:19:16due to ongoing investigations.

1:19:18And I'm certainly happy to confer with

1:19:21him and he can speak to you all about

1:19:22about those specific matters. But

1:19:25otherwise, I think that Ms. Brown is

1:19:26your is your primary contact.

1:19:28>> That's correction. I thought it was

1:19:29Chief

1:19:30Barber.

1:19:31>> And you can always call Chief as you

1:19:34know.

1:19:35>> And

1:19:36I guess to kind of wrap up today

1:19:38game plan moving forward if we're all

1:19:40amenable. I might work with you all

1:19:41individually this week. Um, we'll

1:19:44I know that there's a week in between.

1:19:46We have We always have next Tuesday. So,

1:19:48I'll work with you you all to see what

1:19:51what your after hours looks like as far

1:19:52as um, the afternoon hours.

1:19:54Um, potentially

1:19:56call a meeting by Friday this week of

1:19:58the finance committee. I'll get with you

1:19:59individually and find out what that

1:20:00looks like for you all. Um, but then

1:20:02we'll we have that other like like

1:20:04President Small said, we have the TIF

1:20:06conversation coming up in 2 weeks. So, I

1:20:08do like breaking it up. I appreciate

1:20:10that. I do know that as far as ad hoc

1:20:12committee,

1:20:13we'll we'll work towards that on the

1:20:14coming week as well to see if we can

1:20:16identify members for that. And then, you

1:20:18know, assuming once they once they

1:20:20engage the the policies and procedures

1:20:23walk, I guess. And then after that

1:20:25work's done, I guess that's when the ad

1:20:27hoc committee would would take

1:20:29would take up. So,

1:20:31I guess that being said, anything else

1:20:32from the council?

1:20:33>> One one last thing. I guess this is for

1:20:35Logan and current operations.

1:20:38Um, you're

1:20:40you don't have to get into specific

1:20:41staffing levels, I guess, but obviously

1:20:44this is disruptive to

1:20:46what you all have going on in finance. I

1:20:48mean, are are we adequately staffed

1:20:50currently? I mean, are you hiring?

1:20:52And what

1:20:53what are the immediate steps to make

1:20:54sure that I know vendors are

1:20:56payments are slower, you know, you all

1:20:58are finding I mean, you all are affected

1:21:00in a major way.

1:21:00>> Is there more hands that we need to

1:21:02contract to come in, I guess, too as

1:21:03well?

1:21:04>> I

1:21:04No, I I don't think we need that. There

1:21:08I'm sure there'll be a posting or two

1:21:09eventually, but the department really

1:21:11has been great. We've gotten a little

1:21:13bit creative. We've talked with another

1:21:16uh, part of the department. There's a a

1:21:19manager there who's very highly esteemed

1:21:21who's going to

1:21:22uh, come help us in some of these roles.

1:21:25Um,

1:21:26some some other people outside these

1:21:28core functional lot of history with the

1:21:30city have jumped in and really helped as

1:21:32well. Uh, people that we trust and who

1:21:35just have a great track record. Um, but

1:21:39you know, part [clears throat] of this

1:21:40is also just better

1:21:42better system, better process. So you

1:21:44don't have to have

1:21:46You don't always need more people for

1:21:47that. So

1:21:49you know, we're designing better

1:21:50processes, better systems.

1:21:53We'll include third parties in one way

1:21:55or another to

1:21:57I want to say leverage them. That's a

1:21:59big word. The but

1:22:01Um

1:22:03no, I feel comfortable with what we with

1:22:05where we are right now.

1:22:06>> Okay, and we have to be making payments

1:22:10to our vendors that

1:22:12>> Yes.

1:22:12>> You know,

1:22:14can't just I know I understand there's

1:22:16going to be a slowing, right? There is a

1:22:17slowing. I've gotten emails about a

1:22:19slowing.

1:22:20But that

1:22:21that has to

1:22:23change where we're making payments as

1:22:25soon as securely possible. ASAP.

1:22:30And um

1:22:32you know, I don't want that to be lost

1:22:33that we can't just shut payments down.

1:22:35Okay? I understand now

1:22:37>> 100% Yeah.

1:22:39Um

1:22:39>> It's got to be a priority because

1:22:40they're they're not going to be I mean,

1:22:41we've worked a long time to have vendors

1:22:43that like to work for the city of

1:22:45Mobile. We can't lose them either.

1:22:47>> 100%

1:22:48Um

1:22:49100% That that that is my top priority.

1:22:53Uh

1:22:55That has been my top priority for the

1:22:57past few days. So Robert had to command

1:23:00my attention to

1:23:01to get away from anything else. But

1:23:04we we will be back there.

1:23:06So.

1:23:07>> Yeah, and I think just to follow on

1:23:09there and and I want this council to

1:23:10appreciate you know, number one, the the

1:23:13mayor certainly appreciates the

1:23:14partnership here and and we welcome the

1:23:17input, right? The the directive that he

1:23:19gave

1:23:21after we first learned of this was,

1:23:23you know, we want to leave no stone

1:23:25unturned.

1:23:27We want to find out what happened. We

1:23:28want to do everything that we can

1:23:30possible to maximize our chances of

1:23:32recovery.

1:23:33And we don't want to just get better. We

1:23:34want to be the model moving forward in

1:23:37terms of securing our systems,

1:23:40securing our payment controls, making

1:23:42sure that this can never happen again.

1:23:44Um to that end, there have been no days

1:23:47off since that day. And uh no one, I can

1:23:50assure you, has worked harder to ensure

1:23:53uh that the security of our systems, but

1:23:55also that we put ourselves in a position

1:23:58to pay our vendors in timely manner than

1:24:00Mr. Gillon. So, um please know that.

1:24:03Thank you.

1:24:04>> Thank you. And with that, we'll we'll

1:24:06stand adjourned, I guess.

```*