Principles or business, which will win?

September 22, 2013

My imagination is not capable of dreaming up these things.

This post was about some at the city trying to disqualify a bidder because even though they were low bid, their mobilization cost was too high.  The fact that the contractor is a friend of the city manager did not enter into the discussion at city council.  As I recall the city manager stayed out of the discussion.  Ultimately the old city council voted to give the contract to the low bidder and thus ignored the mobilization issue.

The backup material for this first round indicated that “On January 22, 2013 a letter was sent to Karlshruher informing them of the Engineering and Construction Management Department’s recommendation to City Council.  The letter also, informed Karlshruher, Inc that the item was posting to the City Council meeting of January 29, 2013, should they wish to appear before City Council.”

We had a bidder who was low, but was going to be disqualified because of a problem with one line item, getting a friendly letter from the city telling them that they may want to appear before city council and object.  Ultimately the bidder did appear before city council and was awarded the bid.

The result was good.  The low bidder got the job.

Round two

The September 24, 2013 city council agenda has another bid award item on it.  The same two bidders are contending for a different piece of business.  This time the shoe is on the other foot.

The low bidder this time is the firm that lost the first round.  City staff wants to disqualify them because their mobilization costs are too high.

The backup material makes no mention of sending a letter to them telling that they may want to appear before city council like their competitor received last time.

Stay tuned

This one will be interesting to watch.

Will the Karlshruher firm bow out knowing that their bid is higher, and that the technicality setting them up to get this business is one that they fought against and called wrong last time?  Is fair for the goose fair for the gander?

Will the low bidder appear before council and argue that low is low, regardless of an individual line item?

Will the new city council be made aware of the complete situation?  Will they give the business to the low bidder?  Two of the city manager’s supporters are not on council this time.

City staff has been consistent here in recommending that a bidder with mobilization costs that are over 5% of the bid should be disqualified.

Have they been consistent in warning the low bidder about the problem?  We know they did the first time.  Did they the second time?

Will the city manager’s friend get the business again?

We deserve better

Brutus

8 Comments | City government, Purchasing | Permalink
Posted by Brutus

Money down the drain

September 20, 2013

When we created our Municipal Drainage Utility (stormwater) the city promptly moved it’s operations  over the the Public Service Board.

These were costs that were formerly contained in the city budget.  A new user fee was created and added to our water bills.  The revenue exceeds $15 million each year.  The city moved personnel and equipment and other costs over to the utility.  There are now 104 people allocated to the utility with operating costs of just over $6 million each year.  Another $1.3 million is paid to the city because, after all, they need our money.  That brings the operating costs to just over $7.3 million annually.

What happens to the rest of the $15 million?

Before we go there remember that the city did not lower it’s budget or reduce our taxes when it moved the function out of the city general fund over to the utility.  We are now paying those costs twice.  Nifty huh?

Unfortunately the utility does not have a pay as you go attitude.  The other roughly $8 million is used to fund construction of facilities.  Actually the utility sells general obligation bonds and uses the $8 million to pay the principal and interest.

As an example, the 2013-2014 budget shows this:

principal $2,359,000   interest $3,216,968    total $5,575,968

We are paying more in interest than the value of the projects we are funding!   Yes, not borrowing would slow down the construction.  The reality is that there will always be flooding.  We should take a prudent step-by-step approach to the solution and pay as we go.

We would get more than twice as much for our money and not saddle our children with more debt.

We deserve better

Brutus

Leave a Comment » | City government | Permalink
Posted by Brutus

Earth to the Times — wheel was invented years ago

September 19, 2013

The El Paso Times front page headline yesterday introduced an article about the city releasing more than 180 previously unreleased emails Tuesday evening.  Two reporters worked on the article.

Old news

I don’t think that there is such a thing as old news, but evidently the Times does.  The emails in question were released a few weeks ago on the city web site.  I know — I read them weeks ago.

Out of touch

Are the Times reporters and editors this much out of touch?  City council approved releasing the emails on August 20.  Yesterday was September 17.  The documents were on the web site soon after August 20.

Did the reporters miss the invention of the wheel?  Will that be their next headline?

I can’t imagine the reporters assigned to the city beat not knowing for a month that the emails were released.  The email controversy is a major one in the public mind.

Maybe it is true that the reporters do not investigate our city government, but instead only act as a publishing arm for the city.

Bashing the schools

The same issue of the Times featured an article where the El Paso Independent School District rolled out a new payroll system.   They paid over 10,000 employees.  The headline “Payroll glitch hits hundreds” portrayed a pretty ominous picture.  Of the over 10,000 paychecks, 355 were reported to be wrong.  Anyone in business knows to expect problems with every payroll.

The Times evidently thinks that this is another sign of the incompetence over at the district.  If it is, shouldn’t we hold the new board of managers responsible?  After all, the chief financial officer (CFO) of the city is a member of the board.

Then again maybe we should have expected a bigger failure given the CFO’s history of presenting wildly misleading numbers to city council.

Talk about embarrassing!  The Times has sunk to a new low in my opinion.

Muckracker

1 Comment | City government, El Paso Times | Permalink
Posted by Muckraker

First things first

September 18, 2013

The recent rain and flooding has some of us thinking about the city’s priorities.

We must be patient

  • We have passed a bond election calling for the building of a new children’s museum costing up to $19.2 million.
  • The city has other things to do so the museum will not be built in the next three years.  No one has said that they plan to build it in the three years after that, or after that.  It is not even scheduled at this point.
  • Despite the fact that city council authorized the issuance of $218 million of certificates of obligation over a year ago to be spent on streets, our roads are still a mess and they have not told us what the plan is.
  • Our new city budget decreases spending for libraries, parks, museums, the zoo, public health, transportation, and environmental services while increasing funding for city planning, engineering, the city manager and a host of other “internal” departments.  See City budget
  • After creating a new tax in 2007 (the city calls it a fee — one that you must pay) to improve storm water handling and collecting many millions of dollars the city tells us that it will take time (unspecified) to solve our flooding problems.

On the other hand

  • The city has fast-tracked construction of a new ball park, one that none of us voted for.  Local contractors say that the spending is “wildly high” because of the need to finish the ball park on an emergency basis.  Work is going on in the residential neighborhood 24 hours a day, seven days a week.  The project cost is now well over $60 million.  They evaluated the bids and chose their contractor in only one day!
  • The city needed to sell bonds for the ball park but started construction without them.  That are in a hurry.  The plan is to build the stadium in less than one year.
  • The city tore down our old city hall and bought and remodeled buildings  in less than a year, once again actions that the public did not vote for.  The moves have cost us more than $70 million.  Much of this was done without bidding and giving 4% to Houston schools.
  • The city is closing one of the busiest streets in town for 18 months for reconstruction.  The project is scheduled to cost $12 million.

What’s important

Evidently the city thinks that the ball park and city hall relocation are more important than flooding, road repair, Country Club road, the children’s museum or a host of other projects.  They can move fast when they want to but not for the things that we think are important.

We deserve better

Brutus

6 Comments | Ball park, City government | Permalink
Posted by Brutus

Never waste a crisis

September 17, 2013

10 year storm

25 year storm

100 year storm

What do those terms mean?

Following the big storm of 2006 city staff went into spasms over the opportunity to use the storm as an excuse to create a municipal drainage utility.  Or, in other words, another taxing entity.  Homeowners with “typical” (according to the utility) homes now pay about $3.00 a month into this utility.

Double tax

Storm water issues used to be paid out of the city general fund.  Creating the utility not only generated another source of revenue for the city, but it gave our city staff the opportunity to move millions of dollars worth of city functions and expenses over to the utility.  Did our tax rates go down?  No.

This statement in the El Paso Times tells us a lot about how effective our efforts have been:  “… the stormwater system in Central El Paso can maintain a 10-year storm now that the Gateway Pond, located at Gateway West and Luna Street, is complete. The Gateway Pond was filled to the top Wednesday and needed El Paso Water crews to pump water out of it.”

Let’s see, we had a storm in 2006 then we built a pond to help us withstand a 10-year storm.  In 2013 we had to pump water out of it to avoid flooding.

I suspect that we will hear that the utility needs more money, after all you can’t control nature.

Be comforted by this statement on the utility’s web site:  “We expect the greatest portion of the capital improvements to be completed within three years.”  They don’t mention any dates.

This is another example of what happens when you take responsibility away from elected officials and vest it in a special organization.  City council can now “look into” the matter instead of bearing responsibility.

We deserve better

Brutus

 

1 Comment | City government, El Paso Times | Permalink
Posted by Brutus

« Previous Entries
Next Entries »