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1500 Warburton Avenue City of Santa Clara Santa Clara, CA 95050 santaclaraca.gov @SantaClaraCity Legislation Details (With Text) File #: 18-1372 Version: 1 Name: Type: Public Hearing/General Status: Agenda Ready Business File created: 9/27/2018 In control: Council and Authorities Concurrent Meeting On agenda: 11/27/2018 Final action: 11/27/2018 Title: Action on Responses to City Council Questions related to the Performance Audit entitled “Santa Clara Convention Center and Convention-Visitors Bureau: Restructuring Operations Can Strengthen Accountability, Performance and Revenue” Sponsors: Indexes: Code sections: Attachments: 1. Convention Center and CVB Performance Audit, 2. List of Events/Groups Receiving Partial Facility Discounts, 3. List of Events/Groups Receiving Full Facility Discounts, 4. Commission and Incentive Pay, 5. Memo regarding SCCCPAC Filings for 2010 - 2014 dated 10/29/2018, 6. Memo regarding SCCCPAC Filings for 2015 - 2018 dated 10/31/2018, 7. November 13, 2018 FPPC Letter, 8. POST MEETING MATERIAL Date Ver. Action By Action Result 11/27/2018 1 Council and Authorities Concurrent Meeting REPORT TO COUNCIL SUBJECT Action on Responses to City Council Questions related to the Performance Audit entitled “Santa Clara Convention Center and Convention-Visitors Bureau: Restructuring Operations Can Strengthen Accountability, Performance and Revenue” BACKGROUND At the September 18, 2018 Council meeting, TAP International presented the analysis and findings of the performance audit entitled “Santa Clara Convention Center and Convention-Visitors Bureau: Restructuring Operations Can Strengthen Accountability, Performance and Revenue” (Attachment 1). During the September 18 and October 9, 2018 Council meetings, Council requested additional information related to the audit. DISCUSSION In response to Council questions, this report transmits the requested information. Question: What groups received discounts and/or free facility rentals? (Audit Reference - page 38) The requested list of groups receiving partial discounts per fiscal year audited is attached. TAP International provided this information to City using data provided by the Chamber (Attachment 2). The attachment does not detail the nature of the discount. City of Santa Clara Page 1 of 3 Printed on 2/5/2019 powered by Legistar™ File #: 18-1372, Version: 1 By fiscal year audited, Attachment 3 identifies the organizations which received a fully discounted/free rental. TAP International provided the attached information to City using data provided by the Chamber. The attachment does not detail the rationale for the free rental. Question: What were the commissions and incentives paid to Chamber staff? (Audit Reference - page 25 and 26) During the audit period the Chamber paid over $300,000 in commissions and $23,500 in bonus payments that require further review. Attachment 4 provides commissions and bonuses paid by month, quarter, and calendar year, as applicable. Question: Santa Clara Chamber Political Action Committee (PAC) filings of its Fair Political Practices Commission (FPPC) Reports In response to Council inquiry, the Appointed City Clerk and City Auditor reviewed the Santa Clara Chamber PAC filings of its FPPC Reports on file with the City Clerk’s Office. Based on the review by the Council Appointees, they issued two reports/audits on October 29 and October 31, 2018, respectively (Attachments 5 and 6), which identify potential violations of FPPC report filings. Both reports were forwarded to the FPPC for review and further determination of fines. On November 13, the FPPC issued a letter (Attachment 7) stating that “the Enforcement Division of the Fair Political Practices Commission will investigate the allegation.” The City is contracting with TAP International to audit credit card statements. However, City staff has been reviewing all credit card statements/charges since May 2018. ENVIRONMENTAL REVIEW The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. FISCAL IMPACT There is no additional cost to the City other than staff time and expenses. COORDINATION This report has been coordinated with the City Attorney’s Office. PUBLIC CONTACT Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library. RECOMMENDATION Note and File Responses to City Council Questions related to the Performance Audit entitled “Santa City of Santa Clara Page 2 of 3 Printed on 2/5/2019 powered by Legistar™ File #: 18-1372, Version: 1 Clara Convention Center and Convention-Visitors Bureau: Restructuring Operations Can Strengthen Accountability, Performance and Revenue” Reviewed by: Ruth Shikada, Assistant City Manager Approved by: Deanna J. Santana, City Manager ATTACHMENTS 1. Convention Center and CVB Performance Audit 2. List of Events/Groups Receiving Partial Facility Discounts 3. List of Events/Groups Receiving Full Facility Discounts 4. Commission and Incentive Pay 5. Memo regarding SCCCPAC Filings for 2010 - 2014 dated 10/29/2018 6. Memo regarding SCCCPAC Filings for 2015 - 2018 dated 10/31/2018 7. November 13, 2018 FPPC Letter City of Santa Clara Page 3 of 3 Printed on 2/5/2019 powered by Legistar™ ~~~ ••~~~ ♦~, ~~ ,~, TAPlnternational SANTA CLARA CONVENTION CENTER AND CONVENTION-VISITORS BUREAU: RESTRUCTURING OPERATIONS CAN STRENGTHEN ACCOUNTABILITY, PERFORMANCE AND REVENUE FINAL REPORT September 18, 2018 ACKNOWLEDGEMENTS TAP International, Inc. appreciates the assistance and cooperation received by City staff and all of the Contractor's CVB and SCCC employees who contributed to this review. CONTACT Denise Callahan, President &Principal Consultant TAP International, Inc. 3436 American River Avenue, Suite 9 Sacramento, CA 95864 [email protected]~ www.tapinternational.org TAP International, Inc. Table of Contents Report Brief...........................................................................................................................1 Why the Assessment Was Conducted ........................................................................................ 1 Summary of Key Results .............................................................................................................. 1 Conclusions.................................................................................................................................. 3 Recommendations ...................................................................................................................... 3 Background ...........................................................................................................................5 City Agreements Guide Operations at the Convention Visitor's Bureau and the Santa Clara Convention Center ...................................................................................................................... 5 City's General Fund Supports Contractor's Activities .................................................................6 The CVB and the SCCC are Managed Separately ........................................................................ 7 The CVB and the SCCC Receive High Customer Satisfaction Scores ........................................... 7 Recent City Council Action Stopped Contractor Payments ........................................................8 Objective, Scope and Methodology ............................................................................................9 Objectives................................................................................................................................9 Scope....................................................................................................................................... 9 Methodology......................................................................................................................... 10 Principle Results .................................................................................................................. 12 Section 1A: The City Can Build on the Financial Performance of the SCCC and the CVB ........ 12 SCCC's Fiscal Health is Good Although Can Be Made Stronger ................................................ 12 Contractor/CVB Fiscal Health is Satisfactory Although Cost Allocation Activities Need Attention ................................................................................................................................... 18 CVB's Year End Fiscal Performance Varied but Within Ten Percent of Total Budget .......... 18 Contractor Opted Against Continuing Conference Registration Services ............................ 19 The CVB's Revenue and Expense Allocations Need Reconciliation ...................................... 20 The CVB's Value is Generating Tax Revenue for the City.......................................................... 20 Section
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