City leaders expressed cautious optimism during the latest Audit Committee meeting as they received updates on the Administrative Services Department and the City’s payroll operations.
The meeting featured detailed reports from Deputy City Manager Chad Reed and Human Resources representative Maya Rift, highlighting recruitment efforts, efficiency studies, audit plans and ongoing improvements in payroll reporting and technology integration.
Reed opened his report by emphasizing momentum in key recruitments.
“Our big one right now is for CFO,” said Reed. “That recruitment closed on Aug. 12. We had 11 qualified candidates, so I’m really excited about that.”
Initial meetings to review candidates begin Sept. 9, with interviews slated for Sept. 24–25. Reed added that recruitment for budget and procurement officers would launch the week of September 1.
Councilmember Michael Blower asked if the staggered hiring was intentional to allow the incoming CFO input in building their team.
“Exactly,” Reed replied. “If we find somebody that is a ‘wow,’ then yes, we want that person to help build their team.”
Reed also reported steady progress on the city’s efficiency study, focusing specifically on the Administrative Services Department (ASD).
“As of August, all 101 interviews have been completed,” he said. “August and September will be spent reviewing policies, charter, procedures and audit reports.”
Reed noted that focus groups will address themes such as leadership, software implementation, HR staffing and customer service. “Internal customer service is really, really important,” Reed said. “The team does a good job, but there’s probably a little more we can look into.”
The city’s 2025–26 fiscal budget book is near completion, and Reed took responsibility for it not being finished yet.
“I will fall on the sword,” Reed admitted. “There’s some editing that needs to be done, and that’s on my lap to finish… our goal is to get that published this week.”
Vice Mayor Jason Lee questioned the status of audits for Measure A and Measure M funds.
Reed confirmed, “We’re performing audits on all of these. This is just what the budget department is touching right now.”
As for the long-awaited move to the new City Hall, Reed offered a light-hearted response. “That is not a topic for the Audit Committee,” he joked. “But we’re looking at the end of the year for moving into Building Two.”
Rift gave a comprehensive update as well on payroll operations, including fixes in timekeeping and CalPERS reporting.
“HR and the ERP team are actively reviewing uses of pay codes for MUD employees,” said Rift. “We’re continuing testing of overtime rules… and have rescheduled the Executime system upgrade for August 27.”
She emphasized progress in reducing CalPERS reporting errors.
“When payroll came to HR, we started with about 900 CalPERS reporting errors. We are now down to 79,” Rift said.
Lee questioned a temporary increase in errors between July 13–26 and July 27–Aug. 9. Rift explained the spike was due to retirees and new hires not being reported with zero hours, causing technical rejections.
“So the spike is not necessarily an error, right?” Lee asked.
“It’s still reporting hours in error because we didn’t report it correctly,” Reed clarified. “Next time, we won’t show these errors.”
HR Director Rosemary Rivas noted that not all reporting issues can be eliminated.
“There’s going to always be variation,” said Rivas.
Rivas further clarified that if something were to change on the employees side, they would have to further correct and resubmit, so they’ll, “Probably never get to zero.”
Lee also asked about penalties associated with errors, Rivas confirmed none were incurred in the current cycle but added, “If we do (incur any penalties), we’ll bring that to this committee.”
Rift outlined the next steps which included reconfiguring mid-pay period processing, implementing a payroll task calendar, cross-training staff and launching new timesheet reporting protocols.
Lee asked whether cross-training was active or still conceptual.
“We’re doing it now,” Rift said. “We are cross-training with all employees in the department.”
Rivas also confirmed the City plans to extend contracts with payroll consultants Tyler Munis and Robert Half. “They’ve been the greatest resource to the city so far,” she said. “They’re helping build reporting modules that were never implemented at the beginning.”
The next major milestones include the completion of the Annual Comprehensive Financial Report (ACFR), a presentation to the audit committee and the anticipated December deadline for the efficiency study.