What Is The Cost of Minority Purchasing Policies?

Posted by jsaino on Jun 12, 2017

What Is The Cost of Minority Purchasing Policies?

June 12, 2017

 

 

What Is The Cost of Minority Purchasing Policies?

 

There has recently been a lot of discussion in the City and the County governments about the amount of minority purchasing and LOSB (locally owned small business).

Both governments have spent a lot of time on studies about how to expand the opportunity of minorities and LOSBs to get a bigger share of the public purchasing pie.

It is difficult to pull together the total cost of these efforts but the 2017 City of Memphis adopted budget shows $895,000 dollars under the title “EQUAL BUSINESS OPPORTUNITY AND DEVELOPMENT PROGRAM”.

Shelby County Commissioners voted to rehire consultants Mason Tillman Associates at a cost of $80,000 to help rewrite the county’s procurement procedures.

The 8-4 vote followed a debate on whether a consultant was needed, whether it could be done locally and whether the contract included litigation support.

Mason Tillman conducted the county’s $310,000 disparity study, which analyzed purchasing data from Jan. 1 2012 to Dec. 31, 2014. They found that contracts went overwhelmingly to non-minority males and that 55 percent of the contracts were awarded to firms outside of the county.

I share their desire to expand their share of the pie and allow qualified vendors to get experience and expertise in this area. My concern is the cost to the taxpayers for this expanded sharing.

The ordinance allows a bidding preference as follows. 5% for contracts up to $500,000 and under, 3% for contracts greater than $500,000 and under $1 million and 2% for contracts greater than $1 million. For construction contracts over $2 million a 2% preference will be given to the general contractor when they include LOSB who collectively have 50% of the total prime contract.

This all sounds very complicated and could involve some serious money.

Again let me say that the ability to help LOSBs to grow and gain experience is a good thing as long as it is limited in cost and time in the future. These businesses should use the public money preference and experience to grow their capabilities so that the major part of their future business will be private sector business.

Now my main concern is seeing these LOSB and minority contracts online with final contract amount and competitive bids clearly shown and the amount of preference, if any, shown online.

For example if the City or the County puts out a bid for cleaning supplies. The taxpayers should be able to see the request for proposals (RFPs).  When the bids are opened, the public should be able to see the bids of all bidders on line. Then when the contract is awarded, the public should be able to see the winning low bidder and the contract amount and all other higher bids. If the winning bidder is not the low bidder, then an explanation should be given publically on line for the choice of the successful bidder selection and the cost preference calculation.  Unless I have missed something online, that is not the current procedure.

In July of 2016 I asked the City and the County for their procedures and here is what they replied.

05/26/2016

Joe Saino

Memphis TN

RE: PUBLIC RECORDS REQUEST of 5/26/2016, Reference # W003337-052616

Dear Saino,

The City received a public records request from you on 5/26/2016. Your request mentioned “When sealed bids are received on a project or item, are the various bids put on line for the public to see and is the low bidder selected and if not are the reasons available for the public to see for the reason that the low bidder is not selected?”

 

Per the custodian:

Once sealed bids are opened and a project is awarded, the losing bids are not placed online—but can be requested via Open Records.  The winning bid is attached to the resulting contract.    If the lowest bid is not chosen, the Division must supply a letter justifying the reasons for recommending that the award be made to a different bidder. (see Section 10.3.1 of the Purchasing Policies and Procedures Manual)

10.3.1 Bid Award. If the purchase was procured via competitive sealed bidding or multi-step sealed bidding, the City will award the purchase order or contract to the lowest and best bidder. The B&C must be accompanied by a copy of the bid tabulation sheet. The bid tabulation sheet must list all bids submitted in response to the solicitation and be signed by the personnel who completed the bid tabulation sheet. If the division recommends that the purchase order or contract be awarded to one other than the lowest bidder, a full and complete statement of the reasons must accompany the recommendation, for review and approval by the Purchasing Agent.

 

This completes your public records request with the City of Memphis.

Sincerely,

Public Records Office

City of Memphis

 

THE FOLLOWING IS AN EMAIL RESPONSE TO A QUESTION TO HARVEY KENNEDY AT THE COUNTY ABOUT RESULTS OF SELAED BIDS.

 

Mr. Saino,

 

In response to your questions:

 

  1. If it is a sealed bid, each vendor can review the results online in Mercury Commerce. If it is an RFP, vendors will have to make a public records request and all of the information can be viewed.
  2. There are other criteria for RFP’s and all bids must meet specifications.  Cost is always an important factor but not the only basis for award.  I could provide you with an evaluation sheet for one of our bids if you would like to see one.

 

 

Harvey Kennedy

Chief Administrative Officer

Shelby County Government

 

As you see it is possible to get this information but it is not easy. Why not put this information online so that the public can look and see the all the bids and the reasons for the selection if not the low bid.

I would like anyone reading this posting that has experience in this public purchasing area to let me know what is really happening. Also I will be asking public officials why the taxpayers cannot know this information and the cost of these policies without having to put in a public records request.

What do you think?

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Workforce Development And Training

Posted by jsaino on May 31, 2017

Workforce Development And Training

 

I am an advocate of open records access and workforce development and training. For many years I have been asking taxpayer funded public bodies for information on finances and evaluation of the effectiveness of the public money that they spend. Some of these bodies are very forthcoming and I would rate the local Shelby County government at the top of the accessibility scale and the old Memphis school board and the successor, Shelby County School Board, at the bottom.

Mainly my focus is local and generally I have not tried to get detailed information on any agency at the Federal Government level. In 2015 there was an article in the CA which caught my eye. This was an article about a $42 million dollar federal grant to provide no-cost career technical and academic training to nearly 300 people over five years. The facility designated was the Dr. Benjamin L. Hooks job Corps center at 1555 McAlister Drive here in Memphis.

As a taxpayer I felt I was entitled to enter and see the facility and learn how my tax money was being spent and how effective was the program. I drove out to the facility one day and was stopped at a guard gate. I told them that I wanted a tour and was told that I would have to make an appointment. I said fine, I would call and make an appointment.

I tried several times and never was able to get to anyone but an answering machine. I left word and a return call number and message but never got a return call. I was frustrated but I did not give up.

This year I tried again and after several calls I got the names of some of the staff. I was able to make a 10 AM appointment with Mr. Smith and I showed up for the appointment at 9:45 at the guard gate. I told the guard about the appointment and was told Mr. Smith was not in. I had the names of several other people and finally the guard tracked down Mr. Harris and I was allowed for the first time to enter the facility.

The facility is interesting. The facility history is that it started out as Memphis Preparatory School which was setup in the face of school integration in the 1970s. It eventually had to close due to finances and the property and the buildings eventually sold to the US Department of Labor for $1.975 million dollars. According to the 2015 CA news story the facility had 232 students aged 16-24 living at the center and 55 non-residential students. According to Mr. Harris this is still the approximate numbers.

I toured the facility with Mr. Harris and saw two dormitories which separately house women and men students. Also there is a child care building for children of the students and outside families able to get into the facility. I viewed classes which included carpentry, industrial electronics and medical and nursing assistant programs and forklift training.

I asked if they published a financial statement and he said he was not aware of one. Concerning performance reports of results I was able to pull up one on the internet as shown from 2012/2013. It showed a graduate average wage of $8.73/hour and a 44.5% full time graduate placement.

Upon further research the facility is run by Minact Inc. under a subcontract with the labor department.

A very interesting thing happened. Due to my telephone requests to the center I got an email from Mr. Wayne Gillard asking me for the best number to reach me. On his email he is listed as “Outreach and Admissions, Job Corps, Alutiiq Commercial Enterprises, LLC, 22 N. Front St, Suite 680, Memphis, Tn 38103.

I looked up Alutiiq and it is listed as a wholly owned subsidiary of Afognak Native Corporation. Here is a statement from their website.

Afognak Native Corporation (Afognak) is an Alaska Native Corporation (ANC) formed under the 1971 Alaska Native Claims Settlement Act (ANCSA) and through the 1977 merger of two Alaska Native village corporations: Natives of Afognak, Inc. and Port Lions Native Corporation. Native corporation shareholders are those Alaska Natives who were alive on December 18, 1971, and have proven their lineage to the respective region and village. Congress termed ANC enrollees “shareholders,” although being an ANC shareholder is truly more comparable to a tribal membership – it is a lifetime enrollment that cannot be bought or sold.

This all seems very strange to me. Is there anyone out there who can provide more information how native Alaskan tribes are involved so deeply in workforce development all over the country?

The Hooks center seems well run to me. My question is “What is the cost per student and what are we spending per student nationally on workforce development? Is our tax money being spent wisely? How can we find out? Open the Hooks center to the public and let the public see this facility as we are able to see Southwest Tennessee Community College and Tennessee Tech. Also provide detailed cost and result information to the taxpaying public. What do you think?

 

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The Highland Street TIF District

Posted by jsaino on May 16, 2017

The Highland Street TIF District

 

TIF stands for tax incremental financing. The theory is that a certain part of a city is in decline and that by creating a TIF district and investing in certain projects in the district, the future for that district will improve economically and that the tax revenue increases from that district year over year will finance the investment required to pay for the new projects in that district.

There is a TIF district on Highland Avenue south of central and the genesis of this TIF district comes from the University of Memphis and their desire to change the area to benefit the university and its growth. The city public library on Highland was closed as a result. The area of the TIF district is as shown on this map.

The finances of this district are as shown on this Highland Row Bond Amortization schedule. I hope that it works financially which depends on the incremental increase of tax revenue in the district  sufficient to cover the bond payments with interest to the tune of almost $26 million.

As I drive around this area along Highland and Ellsworth I wonder about the design and appearance. Frankly in my opinion the apartments along Highland are ugly, boxlike and unattractive. I wonder about the neighbors along the west side of Ellsworth and the future of this residential area. Maybe over time and with sufficient plantings the appearance will improve. What is your opinion? I would love to know.

 

The picture below in the center is a view of the west side of Ellsworth. The picture on the west below is a view of the west side of Highland of some of the apartments. The picture on the right side below is a view of the parking garage for the apartments.

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Help_Somehow my education got shortchanged

Posted by jsaino on May 13, 2017

Help_Somehow my education got shortchanged

 

I call on my friends with broad liberal education, medical degrees, financial backgrounds or political expertise to explain to me the pillaring of this local Rhodes College associate professor, Rebecca Tuvel.

I picked up the Wall Street Journal this morning and read this article. Is this what our universities have come down to? Frankly transracial and transgender issues are not high on my list of issues that keep me awake at night. However I only have an engineering education and somehow I missed the course on those issues. However I appeal to you out there to help me understand this squabble and explain why Ms. Tuvel has been shouted down.

I think universities ought to spend more time on getting rid of academic tenure and concentrate more on academic freedom of expression. My wife graduated from Rhodes and maybe I will consult her for a further explanation of these questions.

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Sleepless Or Desperate In Memphis

Posted by jsaino on Apr 24, 2017

Sleepless Or Desperate In Memphis

April 24, 2017

 

I must admit that I have been sleepless since reading about the Airport expansion and the Pop-Up Park project reported recently in the CA.

As a taxpayer, the Airport Authority and the Riverfront Development  Corporation are two of my least favorite organizations.

First the Airport Authority. This is a big time operation in terms of expenditures but look at the results.

In the year 2000 we had 10.6 million total passengers. In 2007 we had about the same numbers of total passengers. In 2013 we had 5.5 million passengers. Yet in 2001 they were planning the three story parking garage addition. In 2007 they stated in the CAFR that the new garage would proceed at a cost of $70 million dollars. Forward to 2009 and read the Memphis Business Journal article about the new $150 million dollar parking garage. Where did the money come from? $20 million from the Federal Aviation Administration, $50 million from the Tennessee Department of Transportation with the remainder in airport authority bonds. Get the picture. The Federal and State money is free money (it really is taxpayer money) and must be spent regardless of the benefits of the investment.

Then in 2014 here is what was reported.

Memphis International Airport lashed back Thursday at last year’s de-hubbing by

Delta Air Lines with a $114 million plan to shrink the facility but improve the

experience for airlines and passengers.

Airport managers presented plans to spend $3 million tearing down a fourth of the

gates and $111 million upgrading much of what remains. They propose to consolidate activity into a refurbished and expanded B Concourse, mothball remaining gates in the other two terminals and leave ticket lobbies and the front of the airport unchanged.

Now we read the following.

Airport unveils $214 million plan

Memphis International Airport proposes to spend $214 million over five years on a transformative project that will build all-new passenger facilities in the airport’s oldest concourse.

Airport officials on Thursday unveiled a redesign of a three-year-old preliminary concept for B Concourse modernization and said the price tag is up about $100 million from what was previously estimated.

Airport president Scott Brockman said the new number is “all-in,” including non-construction costs and improvements that will help minimize impact on passengers when the B Concourse is shut down for reconstruction in 2018.

The modernization, which should begin in early 2018, will focus on expanding a majority of the B Concourse’s gates, leaving one section the same size but updated. It will literally raise the roof and blow out the exterior walls on the reconstructed sections, increasing ceiling height to 14 to 19 feet from nine feet and widening the concourse by about 30 to 40 feet.

If anyone can make sense of all these expenditures and where we are heading, please let me know.

It seems to me what we need is lower fares combines with direct flights from Memphis to desirable locations. Recently some of my family went to Mexico for spring break. They drove to Nashville to get lower fares and direct flights. Go figure.

Considering the size of the Airport expenditures the Pop-Up Park project seems insignificant by the Riverfront Development Corporation. They want to keep their jobs at RDC and they have to come up with ideas to keep themselves relevant. Put down some basketball courts and a skating rink and then take it back up when Memphis in May is over.

What are your thoughts about these projects? I would love to hear from you.

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Our Local Apprentice Program

Posted by jsaino on Mar 22, 2017

March 22, 2017

 

President Trump met recently with Germany Chancellor Merkel and he praised the German apprenticeship programs and indicated that he wanted something similar for the United States.

During my business career in metal manufacturing I had to deal with the local lack of trained employees in the various manufacturing skills. We needed welders, sheet metal workers, tool and die craftsmen, electrical technicians and smart draftsmen.

During this period (the 1970s and 80s) I traveled to Europe to various trade shows to see what was the latest technology in our field. I was particularly impressed with German and Swiss products and the well trained people who produced them. Their system was fairly rigid and based on education and testing at various levels of education. Depending on the results of the testing, students went on various paths. Some went on to prestigious universities, some went to colleges and many went to trade and skill training. This system resulted in a well trained and skilled work force.

Now locally we have the opportunity to form a similar program in the mid-south. Recently there was an article in the CA about Moore Tech (William R. Moore School of Technology) and the possibility of an auto mechanic training program involving the local auto dealers association and Moore Tech with the possibility of training and certification leading to well paying jobs in the range of $50,000/year to $150,000. Moore Tech has a high graduation rate (in the range of 80%) compared to 10% or less for institutions like Southwest Tennessee Community College.

The problem is that the Tennessee Promise program pays tuition for all students attending state owned community colleges in Tennessee but Moore Tech, which is a non profit system, is excluded from Tennessee promise. This makes no sense due to the obvious difference in graduation rates. Hopefully this exclusion will be corrected in the current legislative session.

Another problem is getting the Shelby County School system to cooperate and lease unused school facilities at a nominal $1.00 rate per year. There is a sign at the Shelby County School System headquarters that says “EVERY DAY, EVERY CHILD, COLLEGE BOUND”. It should say “EDUCATE EVERY CHILD TO REACH THEIR FULL POTENTIAL”. That potential could be planning space exploration or fixing that car that does not work right. Both are important.

We should ask the current Tennessee legislature to include Moore Tech and similar high performing job training programs in Tennessee Promise funds.

Let us find what works. What are your thoughts?

 

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The Targeted Generation

Posted by jsaino on Mar 14, 2017

We have all read about and many of us have experienced credit card and even bank irregularities. Hopefully we are aware of the scammers, hackers and fraudsters as we live in the electronic age of banking and credit devices.

I try to be vigilant but it is not easy to keep up with these electronic artists. I charge most items on a well respected credit card (capital one). They seem to be vigilant and their fraud detection software seems good. If some charge is large and outside of my normal shopping pattern they alert me immediately. I have had to change credit card numbers several times over the last few years and that gets to be a problem when you pay bills automatically against your credit card (e.g. donations, MLGW bill etc.).

Recently I have had problems with my credit card at Kroger. It is a chip card and they had to try it three or four times before it accepted the charge. I asked Capital One about the problem with Kroger and they said that some companies had not kept up with security software changes. Then all of a sudden while checking recent charges on my credit card account I found that my card had been put on hold. When I called, they told me that the address on my driver’s license did not match my current credit card address. (We recently sold our house and moved into a retirement community). They told me I had to send them a pdf file for the following items by secure email.

 

A) Both sides of my driver’s license. B) My social security card. C) Some bank document showing my new address. Then to top it off, the security person said:

“YOUR GENERATION IS BEING TARGETED BY SCAMMERS”.

It is no doubt true but it did make my blood boil.

I did send them the documents by secure email and then I had to wait 72 business hours to get the card reinstated. Is it worth the trouble?

Some of my friends have gone to all cash payments for shopping, meals, groceries etc. That has its’ own problems including physical security and now the government is looking hard at anyone who regularly gets large currency bills from the bank. Think drug dealers.

Am I the only one who is concerned about these scammers? My daughter and son in law work for the VA and, of course, the VA had a huge loss of personal information (social security numbers, birth dates etc) to hackers. They had their credit cards compromised and went thru a similar reset, luckily without financial loss.

I would love to hear your thoughts, scammer and hacker stories and solutions.

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Could Mandatory Military Service Help Our Youth

Posted by jsaino on Mar 07, 2017

March 7, 2017

 

When I was young I was faced with mandatory 6 month military service and with a following service in the reserve. Looking back on that time and seeing the current problems with youth education and crime I have come to the conclusion that the re-institution of six months to one year of military service could benefit our youth in several ways.

I am in no doubt that the current political climate would probably not vote for such a change. But look at several factors. It seems to me that the current youth situation has several problems, namely lack of education, discipline and family structure. The military could provide all three elements for at least a significant number of our youths.

I think back on my military experience. When I graduated from high school (1951) I went on to college. When I graduated from college I was required to serve six month of military service including BASIC TRAINING. I went to Fort Jackson, South Carolina and it was somewhat of a shock. I went by train from Memphis to South Carolina and it took at least 24 hours to make the trip. I arrived in early morning and the drill sergeants were waiting for us and marched us of off to Fort Jackson. Several months later I was a new person.  I was in great physical shape, I learned how to make up my bed, I learned how to scrub large pots and garbage cans and to clean out the dreaded grease trap. I also learned how to get along with all types of people of all races and religions.

After basic training I was sent to Ft Benjamin Harrison in Indianapolis to finance school where I learned basic finance. More importantly I learned how to type which has been a lifelong benefit as computer came along.  The most important lesson I learned was discipline, organization and love of country.

Now it seems to me that many of our current youth could benefit from such a program. A dose of discipline, vigorous exercise, education and race and class mixing could benefit some of our current youth. Now the next question is should women be included? As the father of four daughters my reaction is that it would not hurt and might be of benefit.  Switzerland has mandatory military service for all able-bodied male citizens who are conscripted when they reach the age of majority, though women may volunteer for any position.

 

What are your thoughts?

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The Memphis Police Situation

Posted by jsaino on Feb 28, 2017

I read Mayor Strickland’s weekly update (https://mail.google.com/mail/u/0/#all/15a4e354e56b4a71) and it was a very thoughtful and informative article on the Memphis police staffing, recruitment and benefit situation. He blames the current shortage of uniformed officers on two things. One was the Memphis pension and OPEB (other post employment benefits, mainly retiree healthcare) unfunded liability. The unfunded liability was so massive that the State of Tennessee Comptroller threatened to take over the city unless it was addressed. This was in 2014. In order to meet this funding requirement retirement healthcare benefits had to be cut and more and more officers decided to retire or resign.

I have written in the past about this situation and it was the fault of past city of Memphis mayors and past city of Memphis City councils that ignored the 2007 GASB 45 regulation that required that pension and retiree health care expenses be recognized as they are earned rather than as they are paid. The Shelby County government did the right thing and the City of Memphis did not and hence the 2014 year of reckoning.

We all want and need good and effective policing as Memphis is earning a bad reputation for violent crime. I want Memphis to hire more qualified officers and apparently Mayor Strickland is moving in that direction. There is one more thing he can do which will help in the future and that is to stop the abuse evident in the City of Memphis pension board. This abuse is the number of LINE OF DUTY DISABILITY approved by this board. In the past I have compared the number of line of duty disability approvals from Memphis to the MLGW and Shelby County. The approval in Memphis is 10 times higher per active employees than Shelby County and the MLGW. Line of Duty disability approval gives the disabled employee a pension of 60% of his highest average salary tax free for life.

The City of Memphis in 2011 had 429 people on line of duty disability costing the City $11.8 million per year. In 2016 the figure is 510 people costing $14.7 million. Compare this with the MLGW employees. In 2008 they had 37 people in this status costing $523,000 per year. In 2015 they had 34 people in this status costing $485,000. Shelby County in 2015 had only 17 line of duty retirees. Compare that to 510 for the City of Memphis. Clearly there is a problem at the City of Memphis and it goes to the Memphis Pension Board and it’s makeup of members. The membership of this board and its rules need to be changed. The numbers of line of duty retirees at the City of Memphis when compared to the MLGW and the County clearly show a problem and the problem should be addressed. Qualified new officers should be paid whatever the market requires but obvious abuses of the system should be stopped.

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Moving After 42 Years

Posted by jsaino on Feb 07, 2017

Moving After 42 Years

February 7, 2017

I have not had the time to publish to my blog (memphisshelbyinform.com) for several months. My wife and I sold our home and moved to a retirement community here in Memphis. Cleaning out our house after 42 years was quite a task. Luckily we have several daughters and sons in laws locally who pitched in and made the difference.

Letting go of stuff is hard. One of my daughters told me that I had two feet and 91 pairs of socks. “But I love those socks” I replied. Finally I got rid of the worst of the 91. And on and on it went. Stuff you put away and forget about. Finally I decided that the most important things were pictures and travel diaries. Even then it was difficult and we finally had to rent some local space to store excess boxes of pictures and files which I promise to go through and throw away most of the stuff and keep only those that are the most important.

My wife and my daughters made the really important decisions, what furniture, rugs and stuff to take and which to sell or give away. On moving day I swore that it would not all fit into the apartment but somehow it all fit due to their good planning. I am now convinced that we had too much space in the old house. But then we raised four daughters in that house and that required space to keep our individual sanity. Those were wonderful years as they grew up and finally left for their own lives.

I plan to get back into my comments on local government and occasionally national government as we experience the Trump years to come. I have several questions about local government and I would love to hear from you as to what questions you have about local government, education, non profits, energy, crime, Mata, business, taxes, environment and other matters on which you have questions. I am anxious to get back into local research and discussion.

Thanks for all your support as I look forward to new friends and raucous discussions.

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