HomeMy WebLinkAbout02/11/2010 - Workshop Agenda Packet - City Council (3) Mayor Councilmembers
Ben White John Crompton
Mayor Pro Tem James Massey
Dave Ruesink Dennis Maloney
City Manager Katy-Marie Lyles
Glenn Brown Lawrence Stewart
Agenda
College Station City Council
Workshop Meeting
Thursday, February 11, 2010 1:30 p.m.
City Hall Council Chambers, 1101 Texas Avenue
College Station, Texas
1. Presentation, possible action, and discussion on items listed on the consent agenda.
2. Presentation, possible action, and discussion regarding a non-voting student representative on the City
Council.
3. Presentation, possible action, and discussion of the City’s role in the hosting and promotion of special
community events.
4. Presentation, possible action, and discussion regarding a multifamily and commercial recycling feasibility
study. This feasibility study evaluates the technical and financial feasibility of an expansion strategy for
recycling services to multifamily and commercial solid waste customers in College Station.
5. Presentation, possible action, and discussion regarding the re-write of the City of College Stations
Ordinance as it relates to Animal Control.
6. Presentation, possible action, and discussion regarding the performance, progress and future pla ns of the
Bryan / College Station Convention and Visitors Bureau (CVB).
7. Presentation, possible action, and discussion regarding the development and construction of the
transportation infrastructure represented in the Thoroughfare Plan to meet the demands of growth
projected in the Comprehensive Plan.
8. Presentation, possible action, and discussion concerning the City Internal Auditor’s Utility Customer
Service Cash Handling Audit Report.
9. Presentation, possible action, and discussion of web logs (blogs) for interested city council members and
city staff who want to engage with citizens on a variety of topics.
10. Council Calendar
February 12-14 AMCC Elected Officials Conference, Camino Real Hotel - El Paso, 8:00 a.m.
February 15 2010 Citizens University w/ Fiscal/Capital Projects in Council Chambers,
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City Council Workshop Meeting
Thursday, February 11, 2010
5:30 p.m.
February 16 IGC Meeting at BVCOG, 12:00 p.m.
February 16 SPECIAL WORKSHOP TOUR (Twin Oaks Landfill at 1:30 and Lynntech
Facility at 3:30 p.m.) Meeting Location - City Hall
February 22 2010 Citizens University at Police Department, 5:30 p.m.
February 23 Council Transportation Committee Meeting in Council Chambers, 4:30 p.m.
February 25 Council Workshop/Regular Meeting at 3:00 p.m. and 7:00 p.m.
11. Presentation, possible action, and discussion on future agenda items: A Council Member may inquire
about a subject for which notice has not been given. A statement of specific factual information or the
recitation of existing policy may be given. Any deliberation shall be limited to a proposal to place the
subject on an agenda for a subsequent meeting.
12. Discussion, review and possible action regarding the following meetings: Arts Council of the Brazos
Valley, Audit Committee, Brazos County Health Dept., Brazos Valley Council of Governments, Brazos
Valley Wide Area Communications Task Force, Cemetery Committee, Code Review Committee, Design
Review Board, Historic Preservation Committee, Interfaith Dialogue Association, Intergovernmental
Committee, Joint Relief Funding Review Committee, Landmark Commission, Library Committee,
Metropolitan Planning Organization, National League of Cities, Outside Agency Funding Review, Parks
and Recreation Board, Planning and Zoning Commission, Sister City Association, TAMU Student Senate,
Research Valley Partnership, Regional Transportation Committee for Council of Governments, Texas
Municipal League, Transportation Committee, Wolf Pen Creek Oversight Committee, Wolf Pen Creek
TIF Board, Zoning Board of Adjustments, BVSWMA, Signature Event Task Force, (Notice of Agendas
posted on City Hall bulletin board).
13. Executive Session will immediately follow the workshop meeting in the Administrative Conference
Room.
Consultation with Attorney {Gov’t Code Section 551.071}; possible action. The City Council may seek
advice from its attorney regarding a pending or contemplated litigation subject or settlement offer or
attorney-client privileged information. Litigation is an ongoing process and questions may arise as to a
litigation tactic or settlement offer, which needs to be discussed with the City Council. Upon occasion the
City Council may need information from its attorney as to the status of a pending or contemplated
litigation subject or settlement offer or attorney-client privileged information. After executive session
discussion, any final action or vote taken will be in public. The following subject(s) may be discussed:
a. City of Bryan’s application with TCEQ for water & sewer permits in Westside/Highway 60 area, near
Brushy Water Supply Corporation to decertify City of College and certify City of Bryan
b. Discussion of Legal Issues Regarding: Wellborn Incorporation Request
c. Water CCN / 2002 Annexation / Wellborn Water Supply Corporation
d. Sewer CCN permit requests for Brushy & Wellborn Services Areas
e. Water CCN permit requests for Brushy & Wellborn Services Areas
f. Legal aspects of Water Well, permits and possible purchase of or lease of water well sites
g. TMPA v. PUC (College Station filed Intervention)
h. City of Bryan suit filed against College Station, Legal issues and advise on Brazos Valley Solid Waste
Management Agency contract, on proposed methane gas contract
i. Update on legal proceedings for Grimes County Landfill site and contracts for development of Grimes
County site
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City Council Workshop Meeting
Thursday, February 11, 2010
j. Weingarten Realty Investors v. College Station, Ron Silvia, David Ruesink, Lynn McIlhaney, and
Ben White
k. Chavers et al v. Tyrone Morrows, Michael Ikner, City of Bryan, City of College Station, et al
l. Rogers Sheridan v. Barbara Schob & Greg Abbott
m. Clancey v. College Station, Glenn Brown, and Kathy Merrill
n. Verizon v. City of College Station
Personnel {Gov’t Code Section 551.074}; possible action
The City Council may deliberate the appointment, employm ent, evaluation, reassignment, duties,
discipline, or dismissal of a public officer. After executive session discussion, any final action or vote
taken will be in public. The following public officer(s) may be discussed:
a. Mayor & Council Self Evaluation
14. Action on executive session, or any workshop agenda item not completed or discussed in today’s
workshop meeting may be discussed in tonight’s Regular Meeting if necessary.
15. Adjourn.
APPROVED:
___________________________________________
City Manager
Notice is hereby given that a Workshop Meeting of the City Council of the City of College Station, Tex as
will be held on the 11th day of February, 2010 at 1:30 pm in the City Hall Council Chambers, 1101 Texas
Avenue, College Station, Texas. The following subjects will be discussed, to wit: See Agenda
Posted this 8th day of February, 2010 at 1:00 pm
___________________
City Secretary
I, the undersigned, do hereby certify that the above Notice of Meeting of the Governing Body of the City of
College Station, Texas, is a true and correct copy of said Notice and that I posted a true and correct copy of
said notice on the bulletin board at City Hall, 1101 Texas Avenue, in College Station, Texas, and the City’s
website, www.cstx.gov . The Agenda and Notice are readily accessible to the general public at all times.
Said Notice and Agenda were posted on February 8, 2010 at 1:00 pm and remained so posted continuously
for at least 72 hours proceeding the scheduled time of said meeting.
This public notice was removed from the official board at the College Station City Hall on the following date
and time: _______________________ by ___________________________.
Dated this _____day of _______________, 2010.
CITY OF COLLEGE STATION, TEXAS By____________________________________
Subscribed and sworn to before me on this the ______day of _________________,
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City Council Workshop Meeting
Thursday, February 11, 2010
___________________Notary Public – Brazos County, Texas My commission expires:________
This building is wheelchair accessible. Handicap parking spaces are available. Any re quest for sign interpretive service must be
made 48 hours before the meeting. To make arrangements call (979) 764 -3517 or (TDD) 1-800-735-2989. Agendas may be
viewed on www.cstx.gov. Council meetings are broadcast live on Cable Access Channel 19.
February 11, 2010
Workshop Agenda Item No. 2
Non-Voting Student City Council Representative
To: Glenn Brown, City Manager
From: Hayden Migl, Assistant to the City Manager
Agenda Caption: Presentation, possible action, and discussion regarding a non-voting
student representative on the City Council.
Recommendation(s): N/A
Summary: This item is on this agenda to continue the discussion began at the January 28
meeting that had to be ended due to time constraints.
A bill was passed by the Student Senate on October 21, 2009 requesting that the City
Council create a non-voting student representative on the Council in order to represent the
opinions of the students of Texas A&M University. Texas A&M Student Government
representatives will be present to explain the bill that was passed, have discussion about
the intention of this position, and receive Council direction.
This is not a new concept in College Station. There have been students in years past who
served as semi-permanent liaisons to the Council, but this bill is meant to memorialize this
position for both the students and Council.
Budget & Financial Summary: N/A
Attachments:
1. Texas A&M University Non-Voting Student City Council Representative Bill
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The Student Senate
62nd Session
Texas A&M University
Senate Bill S.B. 09 (F) 05 Introduced By: Daniel W. Dick
Action Taken _____________________ Certified By: ________________________
Michele Renee Breaux
Speaker of the Senate
Duly Approved: ________________________
Kolin Loveless
Student Body President
Texas A&M University Non-Voting Student City Council Representative Bill
“A bill requesting the creation of a non-voting student seat on the College Station City Council
to represent the opinions of the students of Texas A&M University.”
Whereas(1): College Station was a city created due to the growth of what was then Texas
A&M College and has seen tremendous growth as a result of the increased size of
Texas A&M University; and,
Whereas(2): It is imperative that the students of Texas A&M University have a say in the city
of College Station because they represent such a large percentage of the
population; and,
Whereas(3): Unlike the cities of Austin, Lubbock, and Waco the students who are registered in
College Station do not have a seat in the City Council; and,
Whereas(4): The afore mentioned cities all possess a smaller percentage of total population
represented by the respective student bodies and cannot claim the intertwined
history that Texas A&M University and the city of College Station can boast, yet
all have larger student participation in the civic activities of communities.
Whereas(5): A non-voting student seat on the College Station City Council will allow students
to participate in city issues and have a direct voice within the City Council
Chamber; and,
Whereas(6): By doing so the city of College Station will encourage civic participation of the
students and discourage apathy in what is going on within their community.
7
Senate Act S.B. 09 (F) xx – Page 2 Further Certified By:_______________________
Michele Breaux
Speaker of the Senate
Therefore
Let it be
Enacted(1): On behalf of the Student Body of Texas A&M University, the Texas
A&M University Student Government Association formally requests a
non-voting seat on the College Station City Council; and,
Let it be
Further
Enacted(2): The Students of Texas A&M University hereby commit themselves to
working with the College Station City Council on local issues to promote
a thriving relationship between students and the permanent citizens of
College Station and to ensure the continuing growth and prosperity of this
great city; and,
Let it be
Further
Enacted(3): That a copy of this bill be presented to each of the College Station City
Council members within five (5) business days after passage.
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C:\DOCUME~1\tmcnutt\LOCALS~1\Temp\Coversheet.doc
February 11, 2010
Workshop Agenda Item No. 3
Special Community Events and the Role of the City
To: Glenn Brown, City Manager
From: David Gwin, Director of Economic and Community Development
Agenda Caption: Presentation, possible action, and discussion of the City’s role in the
hosting and promotion of special community events.
Recommendation(s): Staff recommends that the City Council receive the presentation
and provide any input or direction in this regard.
Summary: Staff will provide the Council with a presentation highlighting the success of
several recent special events and discuss the City’s future participation and/or role in such
community events.
Budget & Financial Summary: Potential financial implications will be discussed during the
presentation and direction in this regard will be sought.
Attachments:
None
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February 11, 2010
Workshop Agenda Item No. 4
Multifamily and Commercial Recycling Feasibility Study
To: Glenn Brown, City Manager
From: Mark Smith, Director of Public Works
Agenda Caption: Presentation, possible action, and discussion regarding a
multifamily and commercial recycling feasibility study. This feasibility study evaluates
the technical and financial feasibility of an expansion strategy for recycling services
to multifamily and commercial solid waste customers in College Station.
Recommendation(s): After consideration and discussion regarding the study, staff
respectfully requests Council direction on the implementation of a long-term
recycling service expansion strategy. Staff is recommending the development of a
service level adjustment for a recycling drop off center during the FY 2011 budget
process.
Summary: Currently there are no recycling programs available to over 17,000
multifamily apartment units and over 1,000 commerical businesses in College
Station. These sectors have only two options, either throw away their recyclables or
transport them to the City of Bryan Drop-off Center. Expanding services to these
customers would provide a more convenient method in diverting recyclable materials
from the landfill. Over the past several years, the sanitation division has received
numerous requests from College Station multifamily residents and businesses that
want to recycle expressing concerns for the lack of recycling options that are
available in the City.
The feasibility study was conducted by sanitation division staff. During the study, the
division examined the best practices of Austin, TX; Waco, TX; Boulder, CO; Norman,
OK; Lincoln, NE; Killeen, TX; and Pearland, TX.
Budget & Financial Summary: An expansion of services to multifamily and
commercial customers may require a future sanitation rate increase. The minimum
annual operating costs for a drop off center, including a 10 year amortization of
capital costs will be $183,850. Applying the additional operating costs to occupied
multifamily units will result in a $1.01 increase to the current $6.75 monthly
sanitation fee assessed to each unit, or $7.76. The increase could be reduced if the
additional fee was also applied to commercial customers.
Attachments:
1. Multifamily and Commercial Recycling Feasibility Study
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Feasibility Report Multi-Family& Commercial Recycling Study
1
I. Introduction
This Feasibility Study evaluates the technical and financial feasibility of implementing a
multi-family and commercial recycling service in College Station. The purpose of this study is to
evaluate multi-family and commercial business recycling as an alternative to conventional waste
disposal. While all single family homes, duplexes, and some four-plexus currently receive
curbside recycling services, recent and future growth of The City of College Station will give rise
to increased multi-family residences and increased demands for recycling options. The
environmental image of the City will be negatively affected without the availability of these
alternatives. As such, it is necessary to explore and evaluate any and all viable waste disposal
options, including multi-family and commercial business recycling.
II. Background
The City of College Station has been a leader in environmental excellence for many
years. College Station, like many other municipalities across the nation implemented a recycling
program to allow its citizens an alternative to conventional waste disposal methods. Since the
inception of the curbside recycling program in 1990, over 17,000 tons have been diverted from
the landfill and numerous environmental awards have been received. The national and state
awards won by the College Station recycling program speak for themselves as do the
exceptional commitment to environmental excellence and awareness; the birth of the curbside
recycling program was just the beginning.
Today, the curbside recycling program serves approximately 18,000 single-family homes
and this number continues to grow each year; we service about 65-70% of these homes. There
are currently 17,798 multi-family units in College Station. Assuming an 85% occupancy rate,
College Station has approximately 15,128 households that have no recycling options. There are
also more than 1000 businesses operating in College Station that have no recycling options.
The population living in single and multi-family units will continue to rise as the College
Station community grows and prospers. In order for College Station to maintain its dynamic,
award winning environmental program, one challenge must be faced- a multi-family and
commercial recycling program.
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Feasibility Report Multi-Family& Commercial Recycling Study
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III. Objectives
In order for a recycling program to be a success, many objectives must be satisfied.
The lack of commercial business and multi-family options in College Station must be
addressed. A significant portion of the population has no access to recycling. These
sectors have only two options, either throw away their recyclables or transport
them to the City of Bryan Drop-off Center. Many College Station multi-family
residents and businesses that want to recycle have expressed concerns for the lack
of recycling options that are available.
A recent survey shows that out of more than 200 multi-family residents 87% would
use a conveniently located drop off center.
The program that is initiated must be cost effective. One concern we must face is
whether adding commercial business and multi-family recycling to the current
waste-management system will increase the overall cost of the system over the long
term. The answer, in large part, depends on the design and maturity of the recycling
program and the rate of participation within the community.
The current standard of service in the curbside recycling program must be
maintained. Multi-family residents and commercial businesses should receive that
standard as well. In addition, the service level that is selected and implemented
should be dynamic so that it can meet the needs of College Station’s residents and
businesses for many years to come. Providing a recycling service to multi-family
units and commercial businesses will allow more options than just conventional
waste disposal and will allow the recycling program to expand to its full potential.
IV. Success Factors
A pilot apartment recycling study was performed in 2001. According to this study, many
factors contribute to the success of a multi-family program. In order for multi-family recycling to
become established, these factors must be satisfied:
Apartment owners or managers need to support the program. This could be
accomplished with a voluntary “Green Apartment” Certification Program or, in the
future, through financial incentive. Changing from the current unit rate to a variable
commercial rate would make recycling financially attractive to apartment managers,
as they would save money through recycling. This change in billing from residential
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Feasibility Report Multi-Family& Commercial Recycling Study
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to commercial must be implemented in order to ensure the success of the recycling
program
A high participation rate. Education on the benefits of recycling is the single most
important variable influencing participation. A large-scale education program would
be essential for success.
Ease of participation. This largely depends on the type of program that is chosen
because some programs are inherently easier to participate in. A comprehensive
program making administration and recovery more efficient increases success. A
Materials Recovery Facility (MRF) would provide the type of uniformity and
participation that could make a good program great. A MRF is a facility that allows
for the sorting, separation, and storage of recyclables. This would allow recyclables
to be commingled, which could increase participation rates throughout the
program. As the materials are sorted at the facility, contamination is virtually
eliminated. The number of waste streams can be cut from the current five
(aluminum, plastic, glass, paper, garbage) to only two (recyclables and garbage). A
MRF provides convenience for residents, and addresses all of the success factors
mentioned above. In addition, recyclables would be sold to help offset the costs,
and both single and multi-family recycling could be completed at the same location.
If placed at the landfill, as a regional facility, the facility and its costs could be shared
with BVSWMA, The City of College Station, and The City of Bryan.
V. Approaches
Several service approaches will be discussed and include the following: a drop-off
center, curbside pickup, and an on-site container for recycling. In analyzing the approaches we
will consider the following questions, 1.) Life cycle of the program, time to implementation, and
ability to accommodate the growth of the city; 2.) Financial feasibility, estimate of costs,
materials needed, personnel present, contract labor, ability to use existing resources, funding;
3.) Negative impacts, increased fees, taxes and workload; 4.) Estimated benefits, cost savings,
contented residents.
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Feasibility Report Multi-Family& Commercial Recycling Study
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1. Drop-off Center
The location of the center is important in determining the feasibility of this option. If it
can be placed on city property, implementation would be rapid. A drop-off center would
have the ability to grow and expand as the city grows, and would produce revenue that
will help alleviate some of the costs incurred. Associated costs are land, building,
equipment, and personnel (See attachment 1 for breakdown of costs). Cardboard could
be collected at the drop-off, a commodity that College Station residents currently throw
away or take to the Bryan Drop-off center. In fact, cardboard has the potential to be a
source of increased revenue for the city. The advantages of a drop-off center are that it
will meet the needs of all residents in the area, including current curbside residents, and
might appeal to those that are eligible to participate in curbside recycling, but do not. It
would be controlled by the city and can be run exactly as the city sees fit. In addition,
due to the sorting of materials as they come in, there is almost no contamination of
recyclables. Possible negative impacts are mainly aesthetic, which could occur if the
area is not kept neat, clean, and professional. Disadvantages include the cost of possible
land acquisition and the storage and selling of materials. However, staff has been
approached by retail shopping centers about the possibility of locating a center in
parking areas as an extra convenience for retail patrons. Minimum annual operating
costs for a drop off center, including a 10 year amortization of capital costs will be
$183,850. Applying the additional operating costs to occupied multifamily units will
result in a $1.01 increase to the current $6.75 monthly sanitation fee assessed to each
unit, or $7.76. The increase could be reduced if the additional fee was also applied to
commercial customers.
2. Curbside Collection (containers)
An on-site container for recycling would place a container for recycling at every
complex. This approach would allow for a relatively short implementation period. Also,
this type of service would be able to accommodate growth as new containers are
needed, but more routes and pickups would have to be scheduled. Costs will include 30
yard containers for each complex (approximately 120 complexes, some complexes will
require two-three) and labor costs. The cost per container would be $7,695 plus a cost
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Feasibility Report Multi-Family& Commercial Recycling Study
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of $100-300 (estimation) per pickup. The initial cost for the containers would be
approximately determined by number of apartments willing to participate (See
attachment 2 for breakdown of costs). An important aspect of this approach would be
that it remains voluntary. By forcing a complex to recycle you create a rift between the
management and the city. A “Green Apartment” certification program would offer some
prestige and an additional marketing aspect to offer potential residents. Apartments
would recycle to keep pace with neighboring complexes. Since this would be
management oriented and voluntary, it ensures the complete support of the
management in helping the program succeed. The advantages are that the container is
on site and easy for the residents to participate. The disadvantages are that apartments
control the process and that programs might differ from complex to complex. From past
experiences there is a high contamination rate for this type of program, and containers
might not be able to be placed where they would be most effective. This would
negatively influence the longevity of this approach, because if it were not effective, it
would not be continued. Minimum annual operating costs for curbside collection
assuming participation in 100 complexes, including a 10 year amortization of capital
costs will be $350,000. Applying the additional operating costs to occupied multifamily
units will result in a $1.93 increase to the current $6.75 monthly sanitation fee assessed
to each unit, or $8.68.
VI. Solution Analysis
The multi-family pilot program utilized an on-site container for recycling at three
apartment complexes. The pilot program began on February 1, 2001 and ended on February 1,
2002. This time frame was chosen so that both spring and fall semesters at Texas A&M
University could be analyzed. The time frame chosen also allowed us to see the effects of
students moving out in May, and moving in during August, as well as summer, when the
percentage of permanent residents falls. This time span demonstrated the ability of the program
to achieve the goals that are necessary to warrant continuance.
There were three options considered for the onsite program. First was using 90-gallon
containers that are management assisted and are serviced by Texas Commercial Waste. Second
was a 30-yard roll-off container that is sectioned off to hold accepted commodities. College
Station would be responsible for emptying, sorting, and storing the recyclables. Third, a Request
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Feasibility Report Multi-Family& Commercial Recycling Study
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for Proposal (RFP) was sent out for a contractor to service the containers. College Station would
be responsible for education to residents only.
The pilot proved to be very unsuccessful due to very high contamination, lack of
participation, and high disposal fees due to the overwhelming amount of contamination.
(Contamination – anything other than the accepted recyclable materials available for recycling
in that area.)
VII. Conclusion
Looking back over the objectives and the factors for success, there are several points
that stand out. First, apartment managers and commercial businesses must support the
program. Unless the billing is changed from a unit rate to a variable commercial rate offering a
financial incentive to the apartment manager, the programs must be voluntary. Voluntary
enrollment provides a solid foundation to the program, because the participating complexes and
businesses want the program to succeed as well. This would allow for the program to be
streamlined and not waste time and effort on those that are not interested in providing
recycling.
In conclusion, the challenge of providing multi-family and commercial recycling is one
that has no easy answer, however it is a challenge that the City needs to address. While no
obvious solution exists, the approaches considered in this study provide the opportunity and
information necessary for further direction. While a full city-wide conversion to automated
single stream recycling collection would be the most efficient and highest cost-benefit outcome
for collections, it will require complex multi-entity cooperation and is at least several, possibly
five, years away from a potential implementation start date. Curbside collections will be
expensive and have the potential to fail due to contamination issues. The staff recommendation
is that the City move forward at least as a temporary measure until single stream collection is a
possibility, with a manned drop off recycling center. Staff further recommends that the City
pursue a public private partnership to locate the center at a retail shopping center in order to
minimize capital costs for land acquisition.
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Feasibility Report Multi-Family& Commercial Recycling Study
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Attachment 1
Proposed Project: Manned Drop Off Recycling Center
Capital Investments
Land Acquisition If no City Property Available
$75,000 Minimum 10,000 sq. ft.
Building $50,000 100 x 50 Ft. Steel Building
Equipment Bailer $15,000 Containers $10,000 (10)
Vehicles $30,000 Forklift $30,000 Truck $5,000 Trailer
Building amenities should include: A/C & heat, full bathroom, phone, computer
Salaries
Drop-Off Coordinator $45,000 Full-time, with benefits
Customer Service (5) $31,200 Junction 505 Employees
Intern (1) $8,160 Part-time
Operating Budget
Est. Annual Operation Budget $53,000 Without salaries
Collections Contract $25,000
Initial Costs
Capital Investment w/ Land $215,000
Capital Investment w/out Land $140,000
Salaries $84,360
Annual Operating Supplies $78,000
Total Annual Operating Budget $162,360
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Feasibility Report Multi-Family& Commercial Recycling Study
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*Commodity Based Costs
Collection Contract $25,000/annually for roll-off rental and collection of materials
Annual Tonnage 1100 tons
Annual Revenues Not available
Revenue Per Commodity
Brown Glass <$.03 per lb.
Clear Glass <$.03 per lb.
Green Glass Does not accept
Aluminum $.15 per lb.
Steel $.05 per lb.
Participation
Regular Traffic 100-125 cars per day
* Based on City of Bryan Drive-In Recycling Center for 2009
The Bryan Drive-In Recycling Center located at the Super Wal-Mart is 100x50 feet with a 7-foot
privacy fence around the parameter. They currently have an 8x10 building within the fence that
has a window A/C & heating unit and a separate portable restroom. The plan to increase the
building size to 10x16 and establish full bathroom facilities has been approved.
Hours of Operation
The Drive-In center is open seven days a week. Their current hours of operation are:
Monday-Friday 10am-6pm
Saturday 9am-6pm
Sunday 12pm-6pm
Based on their service, they suggest having an early day, where the center would open at 8am
or earlier. They do report a minimal amount of materials left outside the facilities fence after
business hours. They are closed on City of Bryan holidays, but the Drive-In Coordinator or an
employee he designates periodically removes any materials left by residents on these holidays
in order to maintain the facilities appearance.
Employees
The Drive-In coordinator works Monday-Friday. Junction 505 employees work Monday-Thursday
and Route Managers work at the center on Friday. Junction 505 employees do no work on
weekends, so city employees from the Solid Waste Department work these shifts. Six employees
is the optimum number of staff per shift.
Containers
The Drive-In Center uses containers designed by TCW specifically for their center. They have
three modified roll-off containers that each have 3 square or round openings (depending on
what it’s used for) with plastic lids that lift vertically to open. They suggest having lids that slide
horizontally to reduce the incident of lids closing while filling container. These containers are
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Feasibility Report Multi-Family& Commercial Recycling Study
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used for newspaper/magazines, clear/brown glass and aluminum/steel cans. There is a
dumpster on-site for green glass and a baler for cardboard. The Center notifies TCW 24 hours
prior to needing a pick up and has these containers emptied. The Drive-In Coordinator hauls
plastic, approximately 30 bags every two days, to TCW. The aluminum/steel and
newspaper/magazine container is emptied twice a week and the glass containers once a week.
The center also accepts plastic grocery bags, which it gives to Wal-Mart for recycling. Since
materials often arrive co-mingled, there is a sorting table with approximately 8-inch walls and a
screen bottom to separate materials.
Attachment 2
Proposed Project: Curbside Collection for Multi-family and Commercial Sectors
Capital Investments
Vehicles $200,000 Roll Off Trucks
Containers $750,000 For all Multi-Family and Businesses
Salary
Recycle Route Manager $40,000
Operating Budget
Est. Annual Operating Budget $215,000
Initial Costs
Capital Investment $950,000
Salaries $40,000
Annual Operating Supplies $215,000
Total Annual Operating Budget $255,000
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February 11, 2010
Workshop Agenda Item No. 5
UPDATE: Re-write of Local Animal Control Ordinance
To: Glenn Brown, City Manager
From: Jeff Capps, Chief of Police
Agenda Caption: Presentation, possible action, and discussion regarding the re-write of
the City of College Stations Ordinance as it relates to Animal Control.
Recommendation(s): It is recommended that the Council receives the recommended
changes as developed by the subcommittee in conjunction with City Legal and discusses the
content and the process for addressing the elements presented. Options include setting
additional workshops and opportunities for public input prior to adopting the City of College
Station Code of Ordinance Chapter 2 – Animal Control.
Summary: Approximately 2 years ago a sub-committee of the Intergovernmental
Committee (IGC) was formed to review and look at the Animal Control Ordinances and
policies throughout Brazos County. The sub-committee is chaired by City of College Station
Councilman James Massey. The sub-committee has developed a proposed re-write draft of
the City of College Station Code of Ordinance Chapter 2 – Animal Control.
Councilmen Massey and Assistant City Attorney Mary Ann Powell will be presenting the
findings to Council.
Budget & Financial Summary: None
Attachments:
The following items may be reviewed by going to the City of College Station’s Animal
Control website http://www.cstx.gov/index.aspx?page=3441 or by reviewing a hard copy
available in the City Secretary’s Office: (will be provided at meeting)
· Current Animal Control Ordinance
· Animal Control Ordinance Subcommittee: March 2009 Draft
· Animal Control Ordinance Subcommittee: Legal Department Review Draft
· Summary of changes
· Power point presentation
· Public Comments
20
February 11, 2010
Workshop Agenda Item No. 6
Bryan / College Station Convention and Visitors Bureau
Semi-Annual Performance Briefing
To: Glenn Brown, City Manager
From: David Gwin, Director of Economic and Community Development
Agenda Caption: Presentation, possible action, and discussion regarding the performance,
progress and future plans of the Bryan / College Station Convention and Visitors Bureau
(CVB).
Recommendation(s): N/A
Summary: Ms. Shannon Overby, Executive Director, will provide a presentation on the
performance, progress and future plans of the CVB since the last semi-annual performance
briefing.
City representation on the CVB Board of Directors is realized through the efforts and
participation of the following appointments:
Dave Ruesink, City Council - Board Member (Executive Com)
Steve Moore - Board Member (Executive Com)
John Crompton - Board Member (Executive Com)
David Gwin, City of College Station - Ex-Officio
Budget & Financial Summary: In FY 2010, the City Council allocated $1,107,000 in
annual funding for the CVB. The City of College Station is the primary source of funding for
this Contract Partner agency and its various tourism development and enhancement
activities.
Attachments: N/A
21
February 11, 2010
Workshop Agenda Item No. 7
Transportation Capital Projects Funding
To: Glenn Brown, City Manager
From: Mark Smith, Director of Public Works
Agenda Caption: Presentation, possible action, and discussion regarding the development
and construction of the transportation infrastructure represented in the Thoroughfare Plan
to meet the demands of growth projected in the Comprehensive Plan.
Recommendation(s): N/A
Summary: In September staff made a presentation where we discussed the
implementation of the Thoroughfare Plan as well as strategies for funding maintenance of
our street infrastructure. This workshop presentation will follow up by providing information
better identifying the expected costs of the development of new facilities, how those costs
may be allocated and our current ability to meet the financial demands.
Budget & Financial Summary: Implementation of street capital improvements are
funded in a variety of ways.
Attachments: None
22
February 11, 2010
Workshop Agenda Item No. 8
Utility Customer Service Cash Handling Audit Report
To: Mayor and Members of the City Council
From: Ty Elliott, City Internal Auditor
Agenda Caption: Presentation, possible action, and discussion concerning the City
Internal Auditor’s Utility Customer Service Cash Handling Audit Report.
Recommendation(s): Give staff direction to implement the recommendations contained
in the Audit Report.
Summary:
Reason for the Audit: A cash handling audit of the Utility Customer Service Division was
included in the fiscal year 2010 audit plan based on the results of the Citywide Cash
Handling Questionnaire completed in August 2009, results of the Citywide Risk Assessment
completed in October 2007, and findings from previous audit work.
Background: Utility Customer Services, a Division of the Finance Department, has over
36,000 utility customers. In FY09, the Division collected approximately $120 million in
revenue for the City. Utility Customer Service is also the largest handler of currency in the
City, with approximate currency collections of over $5 million per year.
Audit Scope and Objectives: This audit addresses Utility Customer Service cash handling
policies, procedures, processes and practices. The audit objectives determined:
· The adequacy of procedures to receive, handle, safeguard, and deposit cash,
· The presence of indicators of common cash handling fraud schemes, and
· The existence of unauthorized checking accounts at any banks in the local area.
Audit Results: No cash handling frauds were detected. In addition, no unauthorized bank
accounts were identified. Overall, I found that most Utility Customer Services policies and
procedures aligned with cash handling best practices. However, a few areas of
improvement were identified such as:
· Controls could be strengthened if some duties of the Division’s staff were separated.
· Policies and procedures could be better communicated and practiced.
· Polices should be reviewed relating (1) to non-cash credit adjustments and (2)
support documentation requirements for adjustment approvals.
· A policy prohibiting cashiers from cashing personal checks of city employees should
be implemented.
Attachments: Utility Customer Service Cash Handling Audit Report
23
Cash Handling Audit of
Utility Customer Service
November 2009
City Internal Auditor’s Office
City of College Station
File#: 09-02
24
25
Utility Customer Service Cash Handling Audit
Table of Contents
Introduction ................................................................................................................. 1
Utility Customer Service Background.................................................................... 1
Audit Objectives ..................................................................................................... 4
Scope and Methodology ......................................................................................... 5
Findings and Analysis .................................................................................................... 6
UCS is in General Alignment with Cash Handling Best Practices ......................... 6
The Duties of Some Employees Could be Better Segregated ............................ 6
Effective Receipting Controls Exist, but Some Practices Could Improve ......... 7
Cash Collection Security Measures Are Adequate ............................................. 9
No Cash Handling Fraud was Revealed ............................................................... 11
No Cash for Check Substitution Schemes were Detected ............................... 11
No Lapping Schemes Were Detected ............................................................... 12
No Account Receivable Schemes Were Detected ............................................ 13
No Unauthorized City Bank Accounts Were Identified ....................................... 16
Recommendations ....................................................................................................... 17
Appendices
Appendix 1 Chief Financial Officer’s Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
26
27
Utility Customer Service Cash Handling 1
Introduction
The City Internal Auditor conducted this cash handling audit of the
Utility Customer Service Division of the Department of Finance
pursuant to Article III Section 30 of the College Station City Charter,
which outlines the City Internal Auditor’s primary duties.
An internal audit is an objective, systematic examination of evidence
to assess independently the performance of an organization, program,
activity, or function. The purpose of an internal audit is to provide
information to improve public accountability and facilitate decision-
making. Internal audits encompass a wide variety of objectives,
including those related to assessing program effectiveness and
results; economy and efficiency; internal control; compliance with
legal or other requirements; and objectives related to providing
prospective analyses, guidance, or summary information.
A cash handling audit of the Utility Customer Service Division was
included in the fiscal year 2010 audit plan based on the results of the
Citywide Cash Handling Questionnaire completed in August 2009,
results of the Citywide Risk Assessment completed in October 2007,
and findings from previous audit work. On September 24, 2009, the
City Council approved the City Internal Auditor’s audit plan.
Utility Customer Service Background
Utility Customer Service is a division of the Fiscal Services Department
responsible for connecting and disconnecting water and electric
meters, reading those meters, and providing billing and collection
services for the City’s electric, water, wastewater, sanitation and
drainage utilities.
Utility Customer Services has two primary operating areas, meter
services and customer services, which deliver five distinct lines of
business. These lines of business are meter reading, meter connects
and disconnects, call center activities, bill calculation and generation,
and bill collections.
28
2 Utility Customer Service Cash Handling
Utility Customer Services has over 36,000 utility accounts consisting
of approximately 35,000 electric and 22,000 water meters that are
read, billed and collected monthly. In fiscal year 2009, Utility
Customer Service collected approximately $120 million in revenue for
the City of College Station. This revenue represents the largest
revenue stream in the City. The customer base consists of
approximately 33,000 residential and 3,000 commercial accounts.
The Division is headed by the Utility Customer Service Manager and
has 28 full-time employees and three part-time employee. The
Manager reports to the Fiscal Services Director. Figure 1 below is the
organizational chart for the Utility Customer Service Division.
Figure 1: Utility Customer Service Division Organization Chart
The Collections Unit is responsible for collecting utility payments
monthly; therefore, most cash handling responsibilities reside in this
business unit (highlighted in blue in the chart above). The Collections
Unit’s customer service representatives primarily function as cashiers
and main responsibilities consist of accepting and processing
payments received from the public at the Utility Customer Service
front counter or drive thru using automated cash registers. With
these cash registers, the cashiers directly input cash receipts activity
into the Cash Receipts application of the City’s automated accounting
system, HTE.
29
Utility Customer Service Cash Handling 3
Currently, there are five (four full-time and one part-time) customer
service representatives responsible for working six cash registers.
Generally, three customer service reps work the counter and two
customer service reps work the drive thru at one time. When the
customer service reps are not working at the front counter or drive
thru (cashiering), they answer walk-in customer questions and
process payments received by mail, electronically, or by phone.
A senior customer service representative provides lead direction to
the customer service reps working the cashiers. Her main duties
pertaining to the Collections Unit include reviewing and approving
each cashier’s daily cash receipts reconciliation; safeguarding cash
and cash equivalents, keys, and important documents; and
functioning as a back-up cashier incase of high volume activity.
Several payment options are offered including bank draft, credit/debit
card over the web or phone, night deposit, mail and paying in person.
In fiscal year 2002, Utility Customer Service introduced an interactive
voice response system (IVR) that allows customers with a touch-tone
phone to retrieve automated account information and pay utility bills
by phone. Also in fiscal year 2002, Utility Customer Service
implemented a program which gave customers the ability to access
account information and pay bills over the internet. Table 1 below
describes the customer usage of the various types of payment options
offered by the City.
Table 1: FY09 Payment Method Comparison
Payment Method # of Pmts Amount
Mail 133,898 29% $48,473,800 41%
Internet Payments 149,020 32% 27,709,800 23%
Counter/Drive-Thru 78,494 17% 16,681,300 14%
Bank Drafts 41,994 9% 12,896,200 11%
Phone/IVR 23,651 5% 4,376,300 4%
Night Deposit 16,100 3% 3,654,700 3%
Electronic Pay1 9,679 2% 2,027,000 2%
Other 8,721 2% 3,651,500 3%
Totals: 461,557 $119,470,600
Since the implementation of the internet payment program and IVR,
credit/debit card payments made by customers has steadily
1 Online bill pay system customers setup with their bank to electronically send utility bill payments to the City,
which are uploaded into the City’s financial system.
30
4 Utility Customer Service Cash Handling
increased; whereas, currency and check payments have decreased.
Currently, approximately 5 percent of utility bills are paid through
currency, 40 percent through debit or credit cards, and 55 percent by
check. Despite only 5 percent of collections are in the form of
currency, Utility Customer Service is still the largest handler of
currency in the City. Figure 2 below compares the currency receipts
of the City’s cash handling locations for fiscal year 2009.
Figure 2: FY09 Currency Receipts Comparisons (in dollars)
Audit Objectives
This audit addresses Utility Customer Service cash handling policies,
procedures, processes and practices. This report answers the
following questions:
· Does the Utility Customer Service Division have adequate
procedures to receive, handle, safeguard, and deposit cash and
cash equivalents?
· Are there any indicators of common cash handling fraud schemes
that exists within the Utility Customer Service Division?
· Are there any unauthorized or other off-book checking accounts at
any banks in the local area?
31
Utility Customer Service Cash Handling 5
Scope and Methodology
This audit was conducted in accordance with government auditing
standards, which are promulgated by the Comptroller General of the
United States. Audit fieldwork was conducted from September 2009
through October 2009.
The audit scope included procedures and practices used by the
customer service representatives of the Utility Customer Service
Division’s Collections Unit to receive, handle, and deposit cash,
checks, and credit card payments at the time of fieldwork.
The audit methods used to complete the audit objectives included:
· Reviewing the work of auditors in other jurisdictions and
researching professional literature to identify best practices for
municipal utility billing and collections.
· Interviewing staff responsible for performing cash handling
oversight functions.
· Conducting data analysis using specialized auditing software to
test for cash handling fraud indicators and system control failings.
· Reviewing cash receipt support documentation, Utility Customer
Service employees’ system functional access authority, the City’s
fiscal policy on cash handling, and Utility Customer Services
procedures.
· Observing customer service representatives perform their
cashiering responsibilities.
· Observing non-cash credit review and approval and receipt
reconciliation processes performed by the Division’s supervisors.
· Performing a surprise cash count of all Utility Customer Service
counter and drive-thru drawers on September 23, 2009.
· Making an inquiry at all banks in the local area for a list of all
accounts in the name of the City.
32
6 Utility Customer Service Cash Handling
Findings and Analysis
UCS is in General Alignment with Cash Handling Best Practices
Cash may include currency, coins, checks, money orders, or
credit/debit card transactions. The following are generally considered
to be best practices in cash handling: (1) appropriate segregation of
duties, (2) effective receipting controls, (3) proper security measures
regarding daily balancing and depositing of cash collections, (4) and
sufficient management or officer review. Policies and procedures
were reviewed, key staff was interviewed, system functional access
authority was analyzed and operations were observed to determine if
Utility Customer Service (UCS) exhibited these characteristics.
The Duties of Some Employees Could be Better Segregated
Separation of duty, as a security principle, has as its primary objective
the prevention of fraud and errors. This objective is achieved by
disseminating the tasks and associated privileges for a specific
business process among multiple users. To achieve the highest level
of internal control over the cash handling process, a different person
should be involved in billing/recording, collecting, and reconciling
functions. Figure 3 below illustrates this concept.
Figure 3: Appropriate Cash Handling Segregation of Duties
Independent Party
(Supervisor)
-Reconciliation
Clerk Position
-Billing -No-Bills
-Posting -Shut-Offs
-Adjustments
Clerk Position
-Collecting
-Depositing
33
Utility Customer Service Cash Handling 7
Customer Service Representatives are cross trained. Billing,
Call Center, and Collections customer service representatives are
cross trained in order to be capable to work in any of these three
business units. Cross training allows staffing flexibility to better
manage leave and to rearrange staff in the case of unexpected high
volume for a business unit during the day.
Utility Billing employees have functional access to perform
incompatible duties. Customer Service Representatives in all
business units have the authority to enter receipts, enter
adjustments, create and change customer information, bill customer
accounts, create/change delinquency status, and create and close
work orders. As a result, employees who collect cash have the ability
to perform billing and recording duties.
Adjustment review and posting is appropriately typically performed by
the Sr. Customer Service Rep in the Billing Unit. However, the Sr.
Customer Service Reps in the Call Center and Collections Units also
have system access to perform this function. In addition, all three Sr.
Customer Service Reps have system access to post cash receipts and
authorize voided payments.
Procedurally, posting cash receipts and authorizing voided payments
is appropriately performed by the Sr. Customer Service Rep in the
Collections Unit. She also performs the daily balance and review of
each cashier drawer. However, she sometimes performs an
incompatible duty as a back-up cashier during instances of high
volume activity.
Effective Receipting Controls Exist, but Some Practices Could
Improve
The following are generally considered to be best practices in
receipting cash: (1) Official pre-numbered receipts should be used.
(2) Information on receipts should include the payor’s name; purpose
or description of the cash payment; quantity; and unit price, if
applicable; type of cash received (check, currency, etc.); total amount
of cash received; and the signature of the person collecting or
receiving the cash. (3) Checks received should be immediately
restrictively endorsed, “For Deposit Only”. (4) A duplicate receipt
should be provided to the payor for each transaction.
34
8 Utility Customer Service Cash Handling
System generated receipts are adequate. Official City of College
Station Utility Customer Service receipts are created by automated
cash registers, which are integrated with the City’s accounting
system. Receipt documentation created by these registers contains
all the necessary features to effectively reconcile processed payments
to accounting records. Figure 4 below is an example of a receipt
cashiers furnish to customers upon payment of a utility bill.
Figure 4: Example of a Utility Customer Service Receipt
Official
Receipt
Cashier
User ID
Payment
Description
Payment
Type
Date of
Transaction
Receipt
Number
Customer
Information
Payment
Amount
Checks received are appropriate endorsed. Based on my
review, I found that when cashiers receive checks for payment they
immediately endorse the check with an official City stamp that
contains the language “For Deposit Only”.
Cashiers are not providing all customers with duplicate
receipts. City cash handling procedures state that cashiers should
always give the customer a receipt. In addition, they state that “each
cashiering location should have a sign encouraging customers to
notify management if they do not get a receipt.” I observed
occasions where customers where not offered a receipt. In addition,
there are no receipt related signs present at the Utility Customer
Service location.
Surprise cash count revealed missing receipt documentation.
I performed a surprise cash count and analytical review of utility
payments on September 23, 2009. During this audit procedure, I
35
Utility Customer Service Cash Handling 9
found that several transactions were lacking necessary receipt
documentation. Table 2 on the next page summarizes these findings.
Table 2:
9/23/09 Utility Payments’ Receipt Documentation by Tender Type
Tender
Type
Totals
Transactions
No Receipt but had
a Billing Stub
No Receipt or
Billing Stub
Trans Amount Trans Amount Trans Amount
Check 71 $22,826 39 $15,260 10 $949
Cash 56 8,871 8 1,212 1 30
Credit 28 6,463 8 1,998 3 904
Totals: 155 $38,159 55 $18,470 14 $1,883
Approximately 9 percent of transactions had no receipt
documentation—i.e., no receipt or billing stub accompanied the
payment. Four cashiers were on duty on September 23, 2009 and all
but one had instances where receipt documentation was missing from
their cash drawer. Table 3 below describes these results.
Table 3:
9/23/09 Utility Payments’ Receipt Documentation by Cashier
Cashier
Totals
Transactions
No Receipt but had
a Billing Stub
No Receipt or
Billing Stub
Trans Amount Trans Amount Trans Amount
Cashier1 12 $2,187 5 $994 0 $0
Cashier2 46 9,067 9 2,153 4 934
Cashier3 67 22,060 38 14,789 5 353
Cashier4 30 4,845 3 534 5 596
Totals: 155 $38,159 55 $18,470 14 $1,883
Cash Collection Security Measures Are Adequate
Effective security measures for balancing and depositing cash
collections have the following elements: (1) Cashiers should have a
lockable cash drawer, and it should be secured in a locked safe, to
which access is limited to the employee collecting the cash and a
supervisor. If there is more than one person receiving cash at the
same time, each person should have his/her own cash drawer. (2) All
cash receipts should be balanced daily by comparing the pre-
numbered receipts issued with the actual amount of cash in the
drawer. (3) Deposit should occur at the earliest possible time with all
funds intact. The entire amount of receipts collected must be
36
10 Utility Customer Service Cash Handling
deposited so that all collections are posted as receipts to the City’s
accounts. (4) The deposit receipt should be reconciled to cashiers’
receipt documents after the deposit has been made.
Security Measures for Balancing and Depositing of Cash
Collections Are Effective. At the end of each business day,
cashiers reconcile his or her cash receipts. The cashier begins by
printing out his or her cash edit listing report from HTE. This report is
designed to identify and summarize all cash receipts activity
performed by the cashier for the day. After this is done, source
documentation for each type of transaction is totaled (adding machine
tapes are prepared), and reconciled with the edit report by the
cashier. Additionally, currency, coins, checks, and credit card
payments are totaled and compared with like information in the edit
report.
Once this has been done, the Collections Unit Sr. Customer Service
Rep reviews each cashier’s reconciliation to make sure the cash
receipts edit listing reports, cash and cash equivalents, and
supporting source documentation are in agreement. As part of the
review process, the Sr. Customer Service Rep recounts the currency
and coins for each cash drawer to make sure all money is accounted
for. All cash receipts and most support documentation for these
receipts are then placed in a courier bag with a bank deposit slip,
which is locked and placed in the Utility Customer Service safe by the
Sr. Customer Service Rep. The bank bag is picked up the next day by
an armored vehicle to be delivered and deposited into the City’s
Citibank account.
Independent reconciliation is performed by Accounting
Division staff. Each day, an Accountant in the Accounting Division
of Fiscal Services reconciles the daily Utility Customer Service deposit
to the City’s Citibank account statement. She verifies that all deposits
reconcile to accounting records, sales records, and the bank
statement. This step ensures that all cash sales recorded for the day
were properly and timely deposited and correctly recorded in the
City’s accounting system.
Cash drawers are individually assigned and secure. Each
cashier is assigned a cash drawer with a $220 change fund. The
drawers are all locked in the safe overnight. In addition, cashiers can
lock their drawers at their work station.
37
Utility Customer Service Cash Handling 11
No Cash Handling Fraud was Revealed
According to the 2006 Association of Certified Fraud Examiners Report
to the Nation on Occupational Fraud and Abuse, approximately 33
percent of occupational fraud target incoming receipts or cash on
hand. The three most common frauds related to cash handling
include: check for cash substitution schemes, lapping schemes, and
account receivable schemes. I performed various audit procedures to
determine the risk that any Utility Customer Service employee is
involved in perpetrating one of these frauds.
No Cash for Check Substitution Schemes were Detected
A check for cash substitution scheme is the number one way funds
are stolen in any cash receipting activity. This scheme is perpetrated
by a cashier who substitutes checks from unrecorded payments for
cash from payments which have been receipted and recorded in the
accounting records. When the cashier places the checks from these
unrecorded transactions in the cash drawer, there is an immediate
overage in the account. To remedy this situation, the cashier merely
removes the displaced cash from the cash drawer. The checks used
in this scheme are almost always received through the mail. These
are high risk transactions because these customers do not ever
expect to receive a receipt. The customer’s account for each
unrecorded transaction is always marked “paid”.
Y N Check for Cash Substitution Scheme Risk Evaluation:
1. Are employee duties appropriately segregated?
2. Are deposits made daily and in the same form received?
3. Does the check and cash composition of the daily bank deposit
agree with the mode of payment indicated on the cash receipts?
4. Are official pre-numbered cash receipts used, which indicate mode
of payment data (i.e.; payment by check or cash)?
5. Does the organization verify daily cash receipt accountability to a
bank-validated deposit slip showing check and cash composition?
6. Does the Division control revenue checks which are received through
the mail by having more than one employee present when the mail
is opened, making a log of the transactions, and then reconciling this
information to daily cash receipt transactions to ensure that all
payments were recorded properly and deposited in the bank?
The fraud detection methods utilized revealed no fraud. In
order to determine if a check for cash substitution scheme was being
38
12 Utility Customer Service Cash Handling
perpetrated by a Utility Customer Service employee, I reviewed: (1)
the segregation of duties of key personnel, (2) the check and cash
composition of the daily bank deposit during an unannounced cash
counts and during substantive audit tests of cash receipts, (3) the
records of the numerical series of official pre-numbered receipts to
verify that these receipts are used sequentially (including properly
accounting for all copies of voided documents). Based on this review,
I did not detect any cash substitution schemes.
No Lapping Schemes Were Detected
A lapping scheme is perpetrated by a cashier who issues cash receipts
for customer payments, but subsequently makes no bank deposit, or
a short bank deposit, of the funds. The difference between the total
amount receipted and the lesser amount deposited is stolen.
Cumulative cash shortages over a period of time represent the total
amount of the loss in a lapping scheme. The customer’s account for
each unrecorded transaction is always marked “paid”. Ways
perpetrators conceal the disposition of lapping schemes include:
paying back the amount of the loss, canceling the accountability
established by the cash receipts issued through unauthorized voiding
activity, destroying the supporting documents representing the
accountability for the funds stolen, or reporting a mysterious
disappearance theft of cash receipts.
Y N Lapping Scheme Risk Evaluation:
1. Are employee duties appropriately segregated?
2. Are personal checks of cashiers or other fund custodians not allowed
to be cashed at Utility Customer Service registers?
3. Are there no deposit timing lags from Utility Customer Service to the
City’s bank account?
4. Are deposits made daily and intact?
5. Is there no excessive amount of void cash receipts transactions?
6. Does the check and cash composition of the bank deposit agree with
the check and cash composition of the cash receipts issued?
7. Is there no reported mysterious disappearance of cash receipts?
8. Are official pre-numbered cash receipts used and are none missing?
The fraud detection methods utilized revealed no lapping
scheme fraud. In order to determine if a lapping scheme was being
perpetrated by a Utility Customer Service employee, I conducted
comparative analytical reviews of three fiscal years of utility revenue
streams to determine which areas had unfavorable trends. To
39
Utility Customer Service Cash Handling 13
determine reasons why revenue changed from previous reporting
periods, I interviewed the Utility Customer Service Manager and
confirmed responses obtained from her by using alternative records
and through substantive audit tests. Additional audit procedures to
detect lapping schemes included: unannounced cash count, review of
the timeliness of deposits, review of the check and cash composition
of daily bank deposits, analytical review of voided transactions, and
observations of cash receipting operations. Based on this review, I
did not detect any lapping schemes.
Employees’ personal checks are being cashed by cashiers. I
analyzed payment records over the last three fiscal years for the
presence of personal checks from cashiers and other fund custodians.
Utility Customer Service was the only location that cashes personal
checks of city employees. The Division has a policy that cashiers
should not cash their own checks, but this could not be verified
through existing records. Therefore, the presence of employees’
personal checks in cash drawers increases the risk of a lapping
scheme being perpetrated by a cashier. In fiscal year 2009, 655
personal checks were cashed for over $31,000.
No Account Receivable Schemes Were Detected
In account receivable schemes, an employee steals a customer’s
payment, and then does one of two things in order to conceal the
irregular activity. He or she either writes-off the account, such as
through a “non-cash credit” transaction (i.e.; an account write-off,
adjustment, or cancellation), or lets the account go delinquent (i.e.;
without taking any action). This latter condition usually results in
customer feedback and detection of the scheme, unless customer
feedback is received by the same employee who stole the customer’s
payment. The dishonest employee could then further manipulate the
records to conceal any irregular activity from view by managers.
Y N Account Receivable Schemes Risk Evaluation:
1. Are employee duties appropriately segregated?
2. Does management periodically review exception report listings of all
non-cash credit transactions?
3. Are all non-cash credit transactions authorized and approved?
4. Are all non-cash credit transactions supported by appropriate
documentation for the action?
5. Are delinquent accounts monitored closely?
6. Does the entity maintain an accounts receivable control account?
40
14 Utility Customer Service Cash Handling
7. Does the balance in the accounts receivable control account agree
with the total of the customer account balances?
The fraud detection methods utilized revealed no accounts
receivable fraud. In order to determine if an accounts receivable
scheme was being perpetrated by a Utility Customer Service
employee, I did the following: (1) reviewed the segregation of duties
of key personnel, (2) performed comparative analytical reviews of the
last three fiscal years of non-cash credit transactions to identify
correlations between employees and these types of risky transactions,
and (3) observed a Sr. Customer Service Rep perform the non-cash
credit review and approval process. Based on this review, I did not
detect any account receivables schemes.
Adequate support documentation is not required for some
types of adjustments. Late fees are 10 percent the value of the
customer’s bill, and the minimum late fee charged is $3. Utility
Customer Service’s policy is to forgive a customer’s late payment fee
without question under the following two conditions (1) it is the
customer’s first late bill within a twelve month period and (2) the
customer requests for the late charge to be forgiven. Any Customer
Service Rep (including cashiers) can make these types of adjustments
regardless of the amount of the late bill. Adequate support
documentation is not required to demonstrate that the customer
requested the late bill to be forgiven. In these instances, the Sr.
Customer Service Rep who approves the adjustment confirms that the
amount adjusted is correct and checks to make sure that it is the first
time the customer has been forgiven of a late charge within the last
twelve months. Table 4 below provides a breakdown of late fee
adjustments made from the beginning of fiscal year 2007 to the end
of fiscal year 2009.
Table 4: FY07 – FY09 Late Fee Credit Adjustments
Late Fee Credit
Adjustment Range
Transactions Number Transaction Amount
Count Percent Amount Percent
Less than $50 7,142 92.96% $119,974.81 39.83%
$50 to $99.99 250 3.25% 16,818.85 5.58%
$100 to $499.99 209 2.72% 50,008.15 16.60%
$500 to $999.99 45 0.59% 32,867.48 10.91%
$1,000 to $4,999.99 36 0.47% 76,348.64 25.35%
Greater than $5,000 1 0.01% 5,183.79 1.72%
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Utility Customer Service Cash Handling 15
Customer Service Reps also adjust customers’ bills when customers
explain that their high consumption was due to any type of water
leak. No support documentation is required by the customer to show
that they have fixed the leak before the adjustment is made. For
these types of cases, the Sr. Customer Service Rep who approves the
adjustment verifies that the customer’s consumption is greater than
their historic consumption. Typically, the adjustment is made for half
the billed consumption—as long as half is not less than normal
consumption. For example, a customer has an $800 bill and
consumption of 144,000 gallons; the Customer Service Rep will credit
the customer account for 72,000 gallons, resulting in a $400 credit to
their bill. Table 5 below provides a breakdown of water consumption
adjustments made from the beginning of fiscal year 2007 to the end
of fiscal year 2009.
Table 5: FY07 – FY09 Water Consumption Credit Adjustments
Water Credit
Adjustment Range
Transactions Number Transaction Amount
Count Percent Amount Percent
Less than $50 1688 69.24% $33,749.26 13.39%
$50 to $99.99 395 16.20% $28,351.55 11.24%
$100 to $499.99 326 13.37% $60,339.85 23.93%
$500 to $999.99 17 0.70% $12,438.37 4.93%
$1,000 to $4,999.99 7 0.29% $19,262.00 7.64%
$5,000 to $14,999.99 2 0.08% $18,889.62 7.49%
$15,000 to $29,999.99 2 0.08% $46,721.39 18.53%
Greater than $30,000 1 0.04% $32,388.50 12.85%
Unsupported account adjustments represent the highest risk
of fraud. Unsupported account adjustments eliminate the
accountability for money from real debts owed to the City after
customer payments have been stolen. These adjustments represent
a high risk for fraud, similar to any other kind of negative cash
transaction. Because cashiers have the authority to perform billing
and recording duties, fictitious adjustments made to forgive
customers’ late bills or higher than normal consumption could be done
without detection.
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16 Utility Customer Service Cash Handling
No Unauthorized City Bank Accounts Were Identified
No unauthorized or other off-book checking accounts at any banks in
the local area were identified. Through Chamber of Commerce
records, I identified 48 financial institutions in the local area where
personal and commercial checking accounts can be established. The
City’s official account is with Citibank; therefore, there should not be
any other accounts in the City’s name or any City department’s name
at any of the other 47 financial institutions in the local area. I
contacted each of these financial institutions and received official
verification that no unauthorized City accounts exist.
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Utility Customer Service Cash Handling 17
Recommendations
Utility Customer Service needs a few slight improvements,
encompassed in the following audit recommendations. Implementing
these recommendations would strengthen internal controls to further
prevent any misappropriation of cash on hand.
1. To strengthen controls, the Collections Unit Sr. Customer Service
Rep should not function as a backup cashier because she
performs the following incompatible duties: reconciles the
cashiers’ end of the day receipts, approves voided transactions,
reviews essential cash control reports, and prepares the daily
collections deposit.
If this separation of duties is not entirely possible, other means of
internal control should be practiced, such as: rotation of duties,
exercising more strict supervision, double-checking work, enforced
vacations, additional training to improve the quality of
performance, and frequent audits.
2. To achieve the highest level of internal control, Utility Customer
Service should consider segregating the duties of customer service
representatives to their essential duties within each business unit.
As a result, Collection Unit employees with the primary
responsibility of collecting cash payments would not have access
to billing and recording functions.
As a mitigating control, Utility Customer Service should at least
restrict cashiers from making credit adjustments over $50.
Approximately 84 percent of credit adjustments made in fiscal
year 2009 were under $50. However, this represented only 25
percent of amount of credit adjustments made in fiscal year 2009.
If an adjustment of over $50 is needed to be made to a
customer’s account, a cashier could call upon the Collections Unit
Sr. Customer Service Rep to make the adjustment (provided she
no longer functions as a cashier).
3. The Department of Fiscal Services cash control policies and
procedures are in alignment with accepted cash handling best
practices. The Utility Customer Service Manager should
periodically communicate these policies and procedures to her
staff along with explaining their purpose and importance. Special
emphasis should be placed on providing receipts to customers and
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18 Utility Customer Service Cash Handling
retaining receipt support documentation in cash drawers for end
of the day balancing. In addition, each cashier location should
have a sign encouraging customers to notify management if they
do not get a receipt.
4. The Utility Customer Service Manager should implement a policy
prohibiting cashiers from cashing personal checks of city
employees. During the daily balancing process of cash receipts,
the Collections Unit Sr. Customer Service Rep should verify that
no employee personal checks are in the front counter or drive thru
cash drawers.
5. Utility Customer Service should reexamine their customer friendly
policies of forgiving money owed to the City that are a result of
customer mistakes. In fiscal year 2009, Utility Customer Service
made 13,155 non-cash credit adjustments (excluding write-offs)
for approximately $767,000. Legitimate account adjustments in
include: (a) pre-billing adjustments for unusual circumstances,
such as meter reading errors and broken transmission lines or
facilities; and, (b) post-billing adjustments for other miscellaneous
accounting errors noted by both employees and customers for a
wide variety of reasons. In other words, generally accepted
account adjustments are the result of employee errors. A large
number of the account adjustments made by Utility Customer
Service, however, are a result of customer friendly policies of
liberally forgiving customer mistakes (e.g. late payments,
plumbing leaks, etc.).
6. Support documentation should be required for all types of
adjustments in order for the adjustment to be approved and
processed. For example, if Utility Customer Service decides to
continue to adjust customer bills in the case of a plumbing leak,
the customer should be required to furnish documentation that
the leak has been repaired.
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Utility Customer Service Cash Handling 19
Internal Audit Recommendations and Fiscal Services Response:
1. Recommendation: To strengthen controls, the Collections Unit Sr. Customer
Service Rep should not function as a backup cashier because she performs the
following incompatible duties: reconciles the cashiers’ end of the day receipts,
approves voided transactions, reviews essential cash control reports, and prepares
the daily collections deposit.
If this separation of duties is not entirely possible, other means of internal control
should be practiced, such as: rotation of duties, exercising more strict supervision,
double-checking work, enforced vacations, additional training to improve the quality
of performance, and frequent audits.
Response: Management realizes that this recommendation would strengthen
controls. However, there is a fine line between too much control and the inability to
provide efficient, effective service. It would not be prudent to take away cashiering
duties from the Collections Unit Sr. Customer Service Representative as she must
function as a backup cashier when we are short handed. We do concur that other
means of control should be exercised and will develop a plan to address this.
2. Recommendation: To achieve the highest level of internal control, Utility
Customer Service should consider segregating the duties of customer service
representatives to their essential duties within each business unit. As a result,
Collection Unit employees with the primary responsibility of collecting cash payments
would not have access to billing and recording functions.
As a mitigating control, Utility Customer Service should at least restrict cashiers from
making credit adjustments over $50. Approximately 84 percent of credit
adjustments made in fiscal year 2009 were under $50. However, this represented
only 25 percent of amount of credit adjustments made in fiscal year 2009. If an
adjustment of over $50 is needed to be made to a customer’s account, a cashier
could call upon the Collections Unit Sr. Customer Service Rep to make the
adjustment (provided she no longer functions as a cashier).
Response: Management concurs and will develop a policy to restrict the dollar
amount of adjustments made by Customer Service Representatives that handle cash
to $50.00. Any adjustments over $50.00 will be made by a Senior Customer Service
Representative that does not have cash handling duties.
3. Recommendation: The Department of Fiscal Services cash control policies and
procedures are in alignment with accepted cash handling best practices. The Utility
Customer Service Manager should periodically communicate these policies and
procedures to her staff along with explaining their purpose and importance. Special
emphasis should be placed on providing receipts to customers and retaining receipt
support documentation in cash drawers for end of the day balancing. In addition,
each cashier location should have a sign encouraging customers to notify
management if they do not get a receipt.
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20 Utility Customer Service Cash Handling
Response: Management concurs and has implemented this recommendation. Staff
has been instructed to always print a computer generated receipt so that one can be
retained in their cash drawer and the other can be presented to the customer.
Management will be revising policies and procedures to include this. Signs will be
placed in the lobby and drive through areas encouraging customers to notify
management if a receipt is not given.
4. Recommendation: The Utility Customer Service Manager should implement a
policy prohibiting cashiers from cashing employee personal checks of City
employees. During the daily balancing process of cash receipts, the Collections Unit
Sr. Customer Service Rep should verify that no employee personal checks are in the
front counter or drive thru cash drawers.
Response: Management concurs and will cease cashing personal checks of City
employees.
5. Recommendation: Utility Customer Service should reexamine their customer
friendly policies of forgiving money owed to the City that are a result of customer
mistakes. In fiscal year 2009, Utility Customer Service made 13,155 non-cash credit
adjustments (excluding write-offs) for approximately $767,000. Legitimate account
adjustments in include: (a) pre-billing adjustments for unusual circumstances, such
as meter reading errors and broken transmission lines or facilities; and, (b) post-
billing adjustments for other miscellaneous accounting errors noted by both
employees and customers for a wide variety of reasons. In other words, generally
accepted account adjustments are the result of employee errors. A large number of
the account adjustments made by Utility Customer Service, however, are a result of
customer friendly policies of liberally forgiving customer mistakes (e.g. late
payments, plumbing leaks, etc.
Response: Management concurs and will reexamine these policies. A policy will be
written that will give guidelines for processing adjustments to customer accounts.
6. Recommendation: Support documentation should be required for all types of
adjustments in order for the adjustment to be approved and processed. For
example, if Utility Customer Service decides to continue to adjust customer bills in
the case of a plumbing leak, the customer should be required to furnish
documentation that the leak has been repaired.
Response: Management concurs and will work with IT to find a solution that could
include scanners or electronic signatures that could be utilized by Customer Service
Representatives that handle cash to receive documentation or signatures before
making adjustments.
47
February 11, 2010
Workshop Agenda Item No. 9
City of College Station Blogs
To: Glenn Brown, City Manager
From: Jay Socol, Director of Public Communications
Agenda Caption: Presentation, possible action, and discussion of web logs (blogs) for
interested city council members and city staff who want to engage with citizens on a variety
of topics.
Recommendation(s): Provide direction to staff to create a blog for any city council
member who is interested in establishing deeper relationships with constituents in the form
of respectful, transparent, two-way conversation.
Summary: At a time when there is general distrust of government at all levels, blogs can
serve as a powerful communications tool to engage with constituents in transparent and
authentic ways. Public Communications stands ready to create and manage a blog for each
city council member who wants one, as well as an additional blog that’s open to a variety of
city staff. Terms and conditions would be established for both the blogger and for those
choosing to post comments.
Budget Impact: No additional funds would be spent to create or maintain blogs.
Attachments: N/A
48