The following are the eight areas identified by the audit firm:

Mr. Tuneberg summarized the review and stated that it is staff's goal to train, document and improve purchasing guidelines, policies and processes. He also noted the problems associated with the level of staff to complete the municipal requirements.

Councilor Hardesty noted his experience with technical editing, and voiced his objection to the use of collective nouns in a passive voice. He requested that future information more clearly identify who is responsible for which actions.

Councilor Hartzell arrived at 5:22 p.m.

Councilor Silbiger questioned why AFN has so many problems with contracts not associated with the other city departments. He commented on the history of this issue and stated that responsibility for contracts was addressed in a 1999 letter from the auditor and the Council previously discussed the creation of a centralized system for contracts back in 2000. Councilor Silbiger also cited the issues associated with the Qwest contract.

Mr. Tuneberg agreed with Councilor Silbiger's comments on the Qwest contract and clarified that city contracts are being entered into the LaserFiche document imaging system; however staff also prepares manual purchase order lists and contract lists.

Councilor Hartzell suggested strengthening the recommendations brought forward by staff and stated that there could be additional safeguards included. In regards to the conflict of interest issue, she stated that it was important to have this under control and expressed her concern that signing off on a form might not accomplish this. She also suggested that it may be beneficial to have one person within each department designated as the contract specialist and have them participate in training and regular re-training.

Mr. Tuneberg noted that the Ashland Municipal Code addresses conflict of interest; however there is a question of how often employees refer to this. From the auditor's perspective, they felt that having a form reviewed annually by the purchaser would inform them of the procedure and the responsibility that goes with it. He stated that following this recommendation would help to educate employees that are in a purchasing capacity. Mr. Tuneberg also clarified that the City does have a purchasing manual and the Finance staff provides training on this subject. He added that they could offer this training more frequently, but noted the staffing issues.

City Administrator Gino Grimaldi pointed out that the auditors did not find a conflict on interest; but rather have recommended action steps to ensure that employees understand the rules in a way that is documented. He stated that the Council needs to be careful to not put policies in place that would take up a lot of time, and stated that this area is not as broken as the Council's conversation is implying.

Mr. Tuneberg clarified that the auditors only reviewed the AFN contracts. He also offered an explanation as to why these problems are not associated with other city contracts. He stated that AFN is different because it is a fast moving industry and often a lot of things need to happen quickly. Mr. Tuneberg noted his request for an AFN Director to be brought on board to help assist with this department. In regards to the previous director, Mr. Tuneberg stated that regardless of the talents of a director, if you spread them out too thin, some things are going to go undone. He stated that AFN needs to have a dedicated manager who knows the business and can take the great ideas and work with them within our model. He also clarified that there is no trade in dollars for some action that did or did not get done regarding AFN.

Request was made for future reporting to not include names as previously suggested, but to include a description of the type of staff, such as administration, technical or AFN. Suggestion was made that instead of requiring employees to sign a piece of paper regarding conflict of interest; they should have to sign a letter stating they have received training or have read and understand the rules. Comment was made regarding the need for a citywide centralized database and it was questioned if the Eden or LaserFiche systems could accomplish this. Mayor Morrison commented on the need for a systematic process for monitoring City contracts. In regards to conflict of interest, request was made for the Legal Department to review any proposed system to ensure that it is not only educational, but also legal in nature and requires the employee to acknowledge that there will be consequences if procedures are not followed.

Council briefly discussed their role in this issue. Concern was expressed that there is a fine line between setting policy and entering into personnel matters.

Mr. Grimaldi summarized the Council's discussion. He stated that Council wishes staff to implement what is in the report; however there are two areas they want staff to go further. He noted that one of the two areas that generated the most discussion was the conflict of interest issue. This is an area where Council wants a more systematic approach, much beyond just the signing off on a form. The other area is the centralized maintenance of contracts and Council would like staff to look into this; and Staff will report back in 3-4 months. Mr. Grimaldi also noted that there was quick discussion about staff coming back to give a progress report and requested that Council provide a timeframe for this action.

Mr. Tuneberg clarified that there are some things that can be done right away and suggested providing some information to the Council within a week or two and then providing a full report by March 31, 2006 that addresses what has been accomplished and identifies other things that can be done and associated budgetary implications.

Councilor Amarotico left the meeting at 6:30 p.m.

Mr. Tuneberg noted the Exemptions to the Formal Competitive Selection Procedures that fall into the telecommunications category:

Councilor Silbiger commented on the 'R' exemption and suggested moving this to the three quotes requirement. He also commented that 'R' should not be completely exempted. Mr. Grimaldi clarified that the two phrases that seem to be causing concern is the broad term "hardware" and also "approved equipment manufacturers". He suggested possibly revising the sentence to read "Contracts to purchase specialized cable television equipment and related components." Mr. Grimaldi stated that staff could work on this and bring something back for Council for review. He also clarified that staff would work on removing exemptions for equipment that would normally be purchased through the regular purchasing procedures.

Councilor Hardesty left the meeting at 6:38 p.m.

Mr. Tuneberg provided a brief explanation why requesting quotes is not necessarily part of the process for certain projects. He also clarified that staff is not asking for an exemption for AFN construction projects, and stated that they are currently creating an RFP for this.