November 26, 2024
Economic Development
PORT
DATE: November 26, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Nickie Mastay, Deputy City Manager, Internal Services
Andrea Miller, Finance Director
Nannette Beacham, Economic Development Director
Charles Gerard, Port Director
Rita Martinez, Finance Manager II
Subject:
Port Performance Audit Management Update
FINANCIAL IMPACT: To be determined.
PREVIOUS COUNCIL
ACTION:
April 16, 2024, April 30, 2024
STATEMENT OF THE
ISSUE:
Management updates on the findings from the
Government Performance & Policy (GPP) Analytics
Management and Performance Audit of the Port of
Richmond.
RECOMMENDED ACTION:
RECEIVE management updates on the findings from the
Government Performance & Policy (GPP) Analytics Port
Management and Performance Audit; and ACCEPT the
City’s plan to implement auditor recommendations –
Port/Finance (Nickie Mastay 510-620-6565/Andrea Miller
510-620-6790/Nannette Beacham 510-621-1306/Charles
Gerard 510-829-2253).
AGENDA
REPORT
November 26, 2024
DISCUSSION:
In June 2023, the Richmond City Council gave direction to initiate a port audit. The City of Richmond contracted with Government Performance & Policy (GPP) Analytics Inc. to conduct a management and performance audit of the Port of Richmond. The goals of the audit were to evaluate the management, efficiency, and effectiveness of all Port operations and services.
The audit provided a comprehensive review of operational and administrative functions, including but not limited to the use of public funds, compliance with regulatory requirements, internal controls, resource and City staff management, technology, stakeholder responsiveness, lease management integrity, and financial practices. The audit was performed in accordance with the International Professional Practices Framework (IPPF) by the Institute of Internal Auditors and the U.S. Government Accountability Office's Generally Accepted Government Auditing Standards (GAGAS).
On April 16, 2024, City Council received a presentation from GPP Analytics Inc. on the Management and Performance Audit of the Port of Richmond. The Council recommended that City staff adopt the recommendations in the auditor's findings, establish a plan to resolve the findings and outline which departments are responsible for resolving and implementing them.
On April 30, 2024, the Richmond City Council directed the City Manager to appropriate funds in the Fiscal Year 2024-25 budget for two City staff positions; to consider all costs associated with these two City staff positions and incorporate them when setting future fees, tariffs, and lease rates; and work with City departments referenced in the Recommendations List of the Port of Richmond Audit to return in September of 2024 with action plans and timelines for the listed recommendations. Attachment 1 is the full list of recommendations with City staff updates for each finding.
Below are highlights of City staff updates to findings from the audit report with an established plan:
Finding 1: Port Strategic Plan
The strategic planning project will start in 2025 and be completed by 2026. A facilities assessment is the preliminary step prior to the strategic plan effort, so that the results can be accounted for within the strategic plan. A Request for Proposals (RFP) was issued in August 2024 and City Council approved a consultant in October 2024 to assist Port staff in the comprehensive facilities assessment of the Point Potrero Marine Terminal wharfs, graving basins, and piers.
Finding 2: Port Procedures
The Port operates as an Enterprise Fund department under City Management, with its procedures aligned to and documented within City processes. It relies on
November 26, 2024
City resources and City departments for a range of support functions.
Additionally, a dedicated procedures manual can be developed to address processes unique to the Port and its operations.
Finding 3: Maintenance Staff and Deferred Maintenance
City Council approved a Capital Projects Manager position for the Fiscal Year 2024-25 budget in April 2024. The solicitation for this position was posted by Human Resources and Port Director is in process of selecting a candidate. The approved budget for the 2024-2025 fiscal year includes funding for a Management Analyst. Additionally, the Port allocated funding for a dedicated Senior Business Assistance Officer position (there is also a second Senior Business Assistance Office position in Economic Development that assists Citywide with small businesses, retention, and recruitment).
Finding 4: Finance Staff and Financial Monitoring
City Council approved a Finance Manager position for the Fiscal Year 2024-25 budget in April 2024. The Finance Department has promoted Rita Martinez to the position of Finance Manager II. Rita is dedicated to Economic Development/Port and works closely with the Port staff.
Finding 5: Lease Solicitation, Selection, and Vetting Process The lease solicitation, selection and vetting process follows the City of Richmond Real Estate processes and procedures. The Port has taken steps in broadly marketing and promoting the Port, and the Port will continue with the procurement process to ensure open and transparent selection of tenants.
Finding 6: Lease Volume Guarantee Verification and Documentation A volume verification and audit process will be built into the Port procedures manual.
Finding 7: Environmental Compliance and Lease Monitoring Port and tenants operate under lease agreements with the standards of law and environmental compliance well documented. The Port’s larger concern regarding environmental conditions is the unleased properties that are subject to vandalism, waste disposal, and blight.
Finding 8: Security at Port Facilities
The Port is implementing traffic calming measures and other safety enhancements to improve its infrastructure and ensure public safety.
Finding 9: Debt to the General Fund
City staff members identified additional promissory notes and documentation to support the loan from the General Fund to the Port. There is a Payment Schedule in place that the Port has been adhering to.
November 26, 2024
Finding 10: Personal Emails
City staff will work with Information Technology to ensure adherence to City policy. City staff will coordinate a corresponding update of the Administrative Manual.
In summary, City Management, Finance, and Port staff will continue to collaborate on addressing the recommendations and work with the responsible departments to resolve the identified findings. City staff respectfully requests that the City Council approve the plan to implement the auditor’s recommendations.
DOCUMENTS ATTACHED:
Attachment 1 – Management Update Port Audit Findings and Recommendations September 17th, 2024
Attachment 2 – GPP Analytics Management and Performance Audit of the Port of Richmond March 18, 2024