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HomeMy WebLinkAbout06/27/2012 AGENDA CITY COUNCIL 345 6th Street, Suite 600, Bremerton, WA 98337 F Phone (360) 473 -5280 ** *AMENDED * ** JUNE 27, 2012 CITY COUNCIL STUDY SESSION 5:00 PM — STUDY SESSION in COUNCIL CONFERENCE ROOM 603 A. INFORMATION ITEMS 1. Results of "Fuel Purchases" Audit — Gary Nystul, Internal Auditor 2. Presentation on the Shoreline Master Program — Nicole Floyd, City Land Use Planner • Pass out binders • Ecology Requirements / Parameters • Explanation of Document Content • Overview of Public Process and City Council Schedule B. EXECUTIVE SESSION 3. 10- minutes to discuss Potential Litigation per RCW 42.30.110(1) (i) (Action is anticipated...) C. GENERAL COUNCIL BUSINESS 4. Council Committee Chair Reports 5. Other General Council Business (As necessary...) ® Americans with Disabilities Act (ADA) accommodations provided upon request. Those requiring special accommodations should contact the City Cleric's Office at (360) 473 -5323 by noon on the Monday preceding the Council meeting. f Gary W. Nystul CPA CFE City Auditor 345 Sixth Street Suite 600 Bremerton, WA 98337 -1873 360.473.5369 ¢evv oa www .gary.nystul@ci.bremerton.wa.us CITY AUDITOR June 15, 2012 Honorable Patty Lent, Mayor Members of the City Council In 2011 the City purchased over $573,000 of fuel for vehicles and equipment The State Auditors at the exit conference in December 2011 took exception with the adequacy of the City's monitoring of fuel purchases Attached is a report reviewing purchases of fuel for 2011 This report is intended to address the SAO concerns and makes several recommendations No response to the draft of the report was received from City management One recommendation is to have one person to be responsible for the overall fuel operation Some Departments could improve their monitoring of use and could encourage better accuracy of odometer readings Some minor changes in software would assist departments in monitoring and entering data Fuel purchases for two vehicles used by a non - governmental agency are under review The assistance of Fire Chief Al Duke, David Buffington of the IT Department, and Gemma Frary and Chuck Ernst of Equipment Services is greatly appreciated Please let me know if you have any questions i erely, ry Nystul R \City AuditorTuel\Report transmittal 2 doc FUEL PURCHASES The City Auditor has reviewed the procedures and accountability of fuel purchases by the City for 2011 This review is included in the 2012 work plan and was precipitated by an Audit Exception issued by the Washington State Auditor During the exit conference conducted by the State Auditors Office in December 2011 for their audit of the year 2010, they pointed out five audit exceptions. One exception was for fuel They stated "We reviewed 63 vehicles to determine if they had reasonable mileage We found 59 vehicles with reasonable mileage, and the other four could not be reviewed due to input errors We continue to recommend the City improve data input for fuel purchases to better monitor usage " This report is intended to address the SAO concerns This review found that some departments carefully monitor their fuel use while others do it infrequently Some enhancements in the data provided to managers would facilitate oversight Having one person responsible for overall management of fuel purchases could improve oversight BACKGROUND In 2011, for 228 vehicles and equipment, the City purchased 158,444 gallons of fuel costing $573,711 in over 9,800 transactions The City has a contract for fuel which is obtained from a 24 hour card key system in West Bremerton The system requires the use of the card that is assigned to each vehicle, and a personal identifying number To obtain fuel, the City employee swipes the card, enters their PIN number and is supposed to enter the odometer reading The Fire Department also has a diesel fuel station at each fire station and an unleaded fuel station at the headquarters station The fuel contractor delivers bulk fuel to these units This system also requires a card for each vehicle, an operator PIN number and the odometer reading can be entered Each month the city receives an electronic copy of the invoice for all purchases from the card key system This is downloaded to the COBWEB (the city web page) fuel page and any errors or corrections are resolved by Equipment Services staff The data is then downloaded to the equipment maintenance software (Cartegraph) Fuel dispensed from the Fire Department fuel system is manually entered into the equipment maintenance program by Equipment Services staff Any fuel purchased on a fuel credit card used when vehicles travel out of the area is entered. Fuel obtained at the golf course by Forestry or other departments is also added. The total is then loaded into Excel and transmitted to the Finance Department for entry into the accounting records The Equipment Services Division prepares the monthly interfund transfer forms for the departments to approve 1 Monitoring of fuel purchases relies on a review by the purchasing departments Management review is dependent upon having sufficient data to make judgments about reasonableness The minimum required data is the name of the purchaser, vehicle or equipment name, date, fuel type, quantity, and odometer reading Some departments have so few transactions that reviewing the monthly fuel transfer invoice with the total cost is an adequate measure This invoice only provides cost and no information on vehicles, fuel type or operators. Many departments have many vehicles that have several fuel purchases so that miles- per - gallon is the reasonable measure Managers with many purchases should look at documents other than the monthly invoice to adequately monitor their use On the City web page (COBWEB) is a "fuel page" which lists each fuel purchase during every month. It can be viewed by department, operator, cost, or fuel type and is available to all city employees This is the only source of detail available to managers OBSERVATIONS AND RECOMMENDATIONS 1. Management One person has not been assigned the responsibility for overall fuel management The Equipment Services Division administers the fuel contract and does the monthly billing and administration However, they do not have authority or responsibility to monitor use, fueling entries, consumption, or perform any analysis A policy has not been established for this oversight 2. Department Procedures An inquiry of department managers disclosed a variety of levels of monitoring Some Managers look frequently at the fuel page and some do not look very often In one instance a department is budgeted to pay for the fuel which is used by another agency and they have no knowledge of the use In another instance, the department looks at their monthly cost but assumes another manager is reviewing use One person should be in charge of the entire process to ensure accountability of all users A review of over 9,000 fuel purchases disclosed many errors by employees entering the odometer reading Without accurate readings, computing miles per gallon and monitoring use is difficult Part of the management oversight should include accuracy of odometer readings However, managers do not have reports with odometer readings that are readily available. Adding odometer readings to the fuel page would help make more complete data available for review 2 3. Fuel Web Page The fuel page report on CobWeb is a good management tool that was created by the IT Department. All managers should be familiar with it One limitation is that the odometer reading is not included on the report page The readings are included in the Excel schedule that is attached but it must be downloaded to be reviewed The better procedure would be to show the odometer readings so managers could more easily review consumption and accuracy The fuel page also has a computation of miles- per - gallon However, the computation starts from the first day the vehicle was placed in service by the city A cumulative mpg over several years is not a meaningful measure. If the computation of mpg were by calendar year it would be more useful to department managers Accurate odometer readings are necessary for this computation. 4. Fire Department System The Fire Department fuel system provides data such as date, amount, operator, vehicle and type of fuel This data is not downloaded to the fuel page on CobWeb It if were, the Fire Department would be better able to review and monitor its use The Department of Information Technology can easily make this addition if requested 5. Recommendations • All departments should have a system in place to monitor fuel purchases Monitoring of fuel purchases is similar to monitoring the purchase of supplies and materials Adequate documents or reports are needed to verify the purchase Departments with minimal purchases may be able to track monthly dollar amounts Departments with many purchases may need to use miles per gallon to assure propriety • Managers need to be provided with sufficient data to perform their monitoring Reports in CobWeb with odometer readings and miles per gallon computed on an annual basis would be helpful • Management should establish an overall policy and procedure to ensure adequate monitoring. One person needs to be responsible for the overall fuel operation • Fire Department data on fuel use should be downloaded automatically to the fuel system Additional Information The following tables list fuel activity by department and fuel for 2011 3 FUELS USED BY DEPARTMENTS Off Highway Diesel Diesel Regular Premium TOTAL Department Gallons Cost Gallons Cost Gallons Cost Gallons Cost Gallons Cost BKAT 0 0 0 0 240 870 16 53 257 $923 Community Development 0 0 0 0 634 2,280 0 0 634 2,280 Community Services 0 0 0 0 962 3,421 43 152 1,005 3,573 Engineering 0 0 0 0 839 2,985 0 0 839 2,985 Equipment Services 20 71 0 0 1,116 3,987 0 0 1,136 4,058 Facilities 27 88 0 0 584 2,018 0 0 611 2,106 Fire 11,390 45,224 0 0 2,686 10,170 30 115 14,106 55,509 Information Services 0 0 0 0 189 674 0 0 189 674 Parks 2,244 8,200 0 0 9,132 32,885 0 0 11,376 41,084 Police 27 105 0 0 50,615 180,102 209 818 50,851 181,025 Sewer 3,577 12,982 23 89 759 2,652 0 0 4,359 15,723 SOG 0 0 0 0 3,833 13,655 0 0 3,833 13,655 Storm 10,874 40,558 0 0 2,765 9,819 0 0 13,639 50,377 Streets 8,819 31,778 0 0 7,406 26,336 26 105 16,251 58,219 Wastewater 1,073 3,989 1,493 5,487 5,422 19,368 0 0 7,987 28,844 Water 5,899 21,628 1,219 4,422 24,239 86,565 15 61 31,371 112,675 Total 43,949 164,621 2,735 9,999 111,421 397,787 340 1,304 158,444 $573,711 TOTAL FOR DEPARTMENTS All Fuels Department Gallons Cost Police 50,851 $181,025 Water 31,371 112,675 Streets 16,251 58,219 Fire 14,106 55,509 Storm 13,639 50,377 Parks 11,376 41,084 Wastewater 7,987 28,844 Sewer 4,359 15,723 SOG 3,833 13,655 Equipment Services 1,136 4,058 Community Services 1,005 3,573 Engineering 839 2,985 Community Development 634 2,280 Facilities 611 2,106 BKAT 257 923 Information Services 189 674 Total 158,444 $573,711 4 $ a s Move to approve the settlement between the City of Bremerton and Lexington Insurance Company related to the City's claim for collapsed biofilter media in the amount of $225,000 and authorize the Mayor to sign settlement documents subject to the approval of the City Attorney.