Management and Performance Audit of the
Port of Richmond
Julian Metcalf
Partner & CEO, GPP Analytics
[email protected]
Scope Questions and Findings
Scope Question Finding(s)
1 1
2 2, 3, & 4
3 1, 3, & 4
4 6 & 7
5 6 6 & 7
7 3 & 4
8 all
9 8
10 1 & 3
11 1
12 5
13 3
14 6 & 7
15 2, 6, & 7
16 17
18 4
19 4
20 1, 2, 3, 4, 6, 7, & 9
21 4
• There were 21 questions included in the scope of this audit (see pg. 8–13 of final report)
• All but three are addressed through specific audit
findings
Scope Questions Not Addressed in a Finding
5. Does the Port’s current oversight structure guarantee transparency and public access to the information? If not, what are the recommendations? “it is unusual for a Port to be directly overseen by a general government legislative body like the City Council. Most ports are overseen by a commission or board purely focused on Port-related activity. While we could not find objective evidence that the oversight structure has hindered transparency and access to information, a dedicated Port oversight body, such as a commission appointed by the City Council, could streamline access to Port information and provide more resources to monitor the Port’s activities.”
Scope Questions Not Addressed in a Finding
16. Can the Port take any legal actions against the delinquent tenants to recover lost revenue?
“All active lease agreements we reviewed have provisions regarding delinquent payments. Furthermore, we believe that following our recommendations to increase staffing for the Port will increase the capacity of staff in existing positions to better monitor delinquencies and other tenant related issues.”
Scope Questions Not Addressed in a Finding
17. Are there any conflict-of-interest issues involving any current or former City Council members, Current or former City staff, Current or former Port’s tenants, Current and former Port’s contractors?
“After a careful review, we did not find documentation to support conflicts of interest between City employees and current or former Port contractors.”
Management and Performance Audit Findings
Finding 1: Port Strategic Plan
Finding 2: Port Procedures
Finding 3: Maintenance Staff and Deferred Maintenance
Finding 4: Finance Staff and Financial Monitoring
Finding 5: Lease Solicitation, Selection, and Vetting Process Finding 6: Lease Volume Guarantee Verification and Documentation Finding 7: Environmental Compliance and Lease Monitoring Finding 8: Security at Port Facilities
Finding 9: Debt to the General Fund
Finding 10: Personal Emails
Finding 1: Port Strategic Plan
(addresses scope questions 1, 3, 10, 11, & 20)
We recommend that the Richmond City Council:
1.1 Provide direction to the Port on its long-term strategic goals for the Port. This will better inform Port staff as they develop a proposed strategic plan.
1.2 Formally adopt a proposed Port strategic plan developed by Port staff. This will help give Port staff clear direction.
We recommend that the Port of Richmond:
1.3 Develop and present a proposed strategic plan to the City Council. This will provide the City Council with a proposed plan to review that is developed using the knowledge of its Port staff.
1.4 Adopt a procedure to review the strategic plan with the City Council at least every five years. During the review staff should include any proposed revisions to the strategic plan to be considered and possibly adopted by the City Council at that time.
Finding 2: Port Procedures
(addresses scope questions 2, 15, & 20)
We recommend that the Port of Richmond:
2.1 Develop and maintain written procedures for its critical operating functions.
2.2 Develop and document a backup plan, or succession strategy, for critical roles and responsibilities at the Port.
Finding 3: Maintenance Staff and Deferred Maintenance
(addresses scope questions 2, 3, 7, 10, 13, & 20)
We recommend the Richmond City Council:
3.1 Appropriate funds to hire a Maintenance Manager within the Port.
If Recommendation 3.1 is adopted:
3.2 Direct the Port to consider all increased costs associated with the Maintenance Manager position and incorporate them when setting future fees, tariffs, and lease rates.
We recommend the City of Richmond Public Works Department:
3.3 Develop an agreement with the Port, or an outside vendor managed by the Port, with a known billing rate and set service-level expectations for work performed, to account for the remaining work, such as road repairs, that cannot be performed by the Port’s Maintenance Manager (see # 3.1).
3.4 Develop an interim tracking and billing method, such as tracking work performed using a spreadsheet, to recoup time and materials spent on behalf of the Port.
We recommend the Port of Richmond:
3.5 Perform a comprehensive facility condition assessment of all major Port assets after a strategic plan has been adopted (see Finding 1).
Finding 4: Finance Staff and Financial Monitoring
(addresses scope questions 2, 3, 7, 18, 19, 20, & 21)
We recommend that the Richmond City Council:
4.1 Appropriate funds to hire a Finance Manager, a position that was previously held at the Port until Fiscal Year 2014–15.
If Recommendation 4.1 is adopted:
4.2 Direct the Port to consider all increased costs associated with the Finance Manager position and incorporate them when setting future fees, tariffs, and lease rates.
We recommend that the City of Richmond Finance Department:
4.3 Investigate and review the consistency of its document retention practices for both onsite and offsite storage.
If Recommendation 4.1 is adopted:
4.4 Use the additional staff capacity gained by the Port adding a Finance Manager to perform comprehensive and routine budget and financial monitoring of the Port that is in line with the Government Finance Officer’s Association’s best practices.
Finding 5: Lease Solicitation, Selection, and Vetting Process (addresses scope question 12)
We recommend that the Port of Richmond:
5.1 Write and implement Port-specific procedures regarding how it solicits, selects, and vets tenants for Port properties. The procedures should include appropriate retention of supporting documents such as all proposals received, the selection criteria and scoring, and all documents used to vet the accuracy of the tenant’s information.
We recommend that the Richmond City Council:
5.2 Determine the nature of the Surplus Property Authority and, as recommended in the 2011 audit of the Port, either disclose more information about it or dissolve it if no information exists.
Finding 6: Lease Volume Guarantee Verification & Documentation (addresses scope questions 4, 6, 14, 15, & 20)
We recommend that the Port of Richmond:
6.1 Write and implement a procedure to verify all reported cargo volume that affects revenue from lease agreements, wharfage fees, tariffs, or other fees that may be calculated by the volume of cargo.
We recommend that the Richmond City Council:
6.2 Appropriate funds and approve the positions recommended in Finding 3 and Finding 4 to help ensure that Port staff have the capacity to carry out verification activities.
Finding 7: Environmental Compliance & Lease Monitoring
(addresses scope questions 4, 6, 14, 15, & 20)
We recommend that the Port of Richmond:
7.1 Include specific direction within their policies and procedures manual regarding inspections/ monitoring of Port properties for tenant compliance with environmental clauses included in their leases as well as the San Francisco Bay Conservation and Development Commission policies (see Finding 2).
7.2 Document staff inspections/monitoring of Port properties for environmental compliance and other tenant activities which may require a permit from the San Francisco Bay Conservation and Development Commission.
Finding 8: Security at Port Facilities
(addresses scope question 9)
We recommend that the Port of Richmond:
8.1 Prioritize the process of soliciting for, and vetting, potential tenants for vacant Port properties, in line with the Port’s strategic plan (see Finding 1).
8.2 Establish a written procedure to consider security services, surveillance systems, alarm systems, and secure fencing when properties become vacant.
This is in line with the recommendations made in Finding 2 of the audit report.
Finding 9: Debt to the General Fund
(addresses scope question 20)
We recommend that the City of Richmond Finance Department:
9.1 Provide documentation to the Port of Richmond and Richmond City Council related to the original loans to the Port and their purpose by June 30, 2024.
9.2 Review all loans between the General Fund and other City departments and ensure all supporting documentation is maintained and sufficient to demonstrate that the liability is appropriate in compliance with state law.
We recommend that the City Council:
9.3 If documentation of the original loans to the Port and their purpose have not been received by June 30, 2024, restate and eliminate the liability for these loans to help maintain compliance with state law.
Finding 10: Personal Emails
We recommend that the City Manager’s Office of Richmond:
10.1 Amend its Administrative Manual to clarify its policy regarding personal internet and email usage by City employees.
10.2 Disseminate the amended sections of the Administrative Manual to all City employees and provide specific information and technological guidance on how to comply with these policies and the California Public Records Act.
Thank you!
Questions?
Julian Metcalf
Partner & CEO, GPP Analytics
[email protected]