Archive for July, 2016

The Open Records Fight

Monday, July 25th, 2016

July 25, 2016

There was an interesting editorial in the Commercial Appeal last Sunday concerning Germantown open records and the battle with Jon Thompson and Sarah Wilkerson-Freeman in order to get information on Germantown government salary, insurance and other perks. Congratulations to Thompson and Freeman. I have been fighting this open records battle since 2004.

 

Recently I asked the MLGW for current electronic copies of their annual pension and OPEB reports. I asked by email. I received an electronic copy of an open records request form which I filled out and signed electronically and sent it in. I then received the following message.

 

“Good afternoon, your documents are available for pickup. You can come to the Administration building and the documents will be at the security station.” I then objected to this bureaucratic requirement and sent my objections to Mr. Thompson (MLGW), Mayor Strickland and many others. I eventually got the electronic copies that I asked for and you can now look at the MLGW pension report and the MLGW OPEB report at www.memphisshelbyinform.com.

 

Now the Tennessee Open Records law does not require furnishing electronic copies but governments with a fully open records policy will furnish the information in electronic format because it is cheaper and easier and nearly all data is already in electronic format. If they want to discourage open records requests they will require you to travel down to their office and pick it up at the security desk.

 

I like the MLGW and their utility services. Very professional. President Jerry Collins is a great manager and runs a well trained and effective company. I call on the MLGW to put this information (pensions and OPEB) on their website and keep it updated. I also ask them to publish a return on investment report for their smart meter program to show the public how this program will be paid for and the return on the rate payers’ investment.

Now as to the pension and OPEB reports. Shelby County published their annual pension and OPEB reports online. The City of Memphis and MLGW do not.

 

The MLGW pension fund has a net value of $1.32 billion and $118 million of unfunded liability.

 

The City of Memphis pension fund has a net value of $2 billion and $533 million of unfunded liability. The City of Memphis does not publish their annual pension report online.

 

The Shelby County pension fund has a net value of $1.1 billion and $316 million of unfunded liability.

 

The MLGW OPEB fund has a net value of $333 million and $461 million of unfunded liability.

 

The City of Memphis OPEB fund has a net value of $17 million and $730 million of unfunded liability. The City of Memphis does not publish their annual OPEB report online.

 

The Shelby County OPEB fund has a net value of $197 million and $101 million of unfunded liability.

 

The trouble spots are shown underlined above. Again Shelby County leads in local government in open records policy and fiscal responsibility. I urge you to let local governments know what information you think should be put on their website. What are your thoughts on transparency in government?

 

 

 

 

 

Lack of Transparency On Local Contracts

Tuesday, July 19th, 2016

July 19, 2016

Lack of Transparency On Local Contracts

I have been investigating the barriers companies have to jump over in order to do business with local governments. As an advocate of open records and transparency, I measure the contract information transparency available to the public (taxpayers are the financiers of government purchases). Therefore let us look at what we (the taxpayers) get to know about government purchases and the cost of trying to direct a percentage of government business to minority, women  (MWSBE  minority, women small business enterprises) or locally owned small businesses (LOSB).

I was told recently that the County Commission passed a charter amendment a few years back (city also) that any contract over $100k requires 20% minority participation. Bidders include that in their pricing of the project.

I checked to verify the information and was told that the information was not  exactly correct.  The Locally Owned Small Business (LOSB) ordinance was passed by the County in 2007 and established a target of 20% of all purchases to be awarded to LOSB’s. There is a bidding advantage for LOSB’s of 5% for contracts up to $500,000; 3.5% for contracts up to $750,000; 2.5% for contracts up to $1,000,000 and 2% for contracts over $1,000,000.  For large construction projects the county normally establishes a LOSB percentage requirement.  According to the source, the County has met the LOSB target each year.

The City of Memphis has the following statement.

WHEREAS, the City of Memphis desires to be proactive in ensuring that economic opportunities in the Memphis Metropolitan Statistical Area (MSA) are equally available to all individuals or businesses, including minority and women-owned businesses, regardless of race, gender or ethnicity.

Certified AABE (African American black enterprise), HBE (Hispanic American business enterprise), ABE Asian American Business Enterprise, NABE (Native American Business Enterprise), or WBE (Women business enterprise) shall mean an AABE, HBE, ABE, NABE or WBE which has been certified by a City approved central certification agency and approved by the Office of Contract Compliance (OCC).

The initial annual MWBE goals shall be:

  • a. Goals for Subcontracting Construction:
    • (16 %) – Minority
    • (3 %) – Women
    • (19 %) – Total goal
  • b. Goals for Prime Construction:
    • (15 %) – Minority
    • (3 %) – Women
    • (18 %) – Total goal
  • c. Goals for Architecture & Engineering Services:
    • (22 %) – Minority
    • (7 %) – Women
    • (29 %) – Total goal
  • d. Goals for Goods and Supplies:
    • (12 %) – Minority
    • (1 %) – Women
    • (13 %) – Total goal
  • e. Goals for Non-Professional Services:
    • (23 %) – Minority
    • (2 %) – Women
    • (25 %) – Total goal
  • f. Goals for Professional Services:
    • (13 %) – Minority
    • (2 %) – Women
    • (15 %) – Total goal

The annual goals provided above shall be reviewed annually by the EBO advisory committee. These overall MWBE participation goals are only intended to be benchmarks evaluating the overall performance of the EBO program on an annual basis. These participation goals are not and, shall not be quotas for purposes of determining or satisfying annual participation goals.

I have tried to find the actual results of this program but I cannot find anything online. It may be there but I cannot find it. I will ask the City of Memphis in an open records request. What I want for the public to know is the results of the City and County small business and minority programs. What are the percentages and what did it cost over and above lowest and best bid for the work? We, the taxpaying public, deserve to know.

Why Is Doing Business With Local Government So Closed and Difficult?

Tuesday, July 5th, 2016

Why Is Doing Business With Local Government So Closed and Difficult?

 

July 5, 2016

 

I have wondered about this question for a long time. I have talked to many local business owners and almost all of them say that it is too expensive and difficult to bid on city of county business. I decided to look into how the City and County buy stuff and what we as taxpayers get to know about the successful vendor and how the vendor was selected. What do I, as a taxpayer, want to know?

  • If it is a negotiated contract, I want to know who was contacted, who bid and who was selected and why that firm was selected. If more than one firm was contacted for negotiations, I want to know those firms and their bids.
  • If it is a sealed bid contract, then I want to see all the bids after opening and if the lowest bid was not selected I want to know the reasons.
  • I want to know the qualification process for being accepted as a possible city or county vendor. What do they have to do to get on the qualification list and is the process of qualification really necessary?

I recently met with a ranking County official and we discussed the above points. He wants to open up the sealed bid process so that the public will get to see online the winning bidder and the reasons the winning bidder was chosen over the low bidder if that is the result of the sealed bid process. Currently this is not the case for either the City or the County. We did not discuss the negotiated contract process but I feel that he would be open to more public information about that process. Negotiated contract are necessary in many cases due to time restraints and emergencies and thereby the taxpayers have to have trust in their public officials. By the same process, these public officials have to earn this trust by being open in their dealings and by making open records their gold standard.

The problem with this whole purchasing area is the clamor for equal opportunity and minority access to public contracts. Therefore there is a whole infrastructure set up which is difficult for the average business to navigate. Many just say on the front end that they will not bid public work because it is too difficult and costly to jump over the hurdles. This difficult qualification process necessarily raises the cost of the purchased goods. Here are some examples of what is necessary to even bid on public work.

City of Memphis: click on this: http://www.memphistn.gov/Business.aspx/SupplierRegistration.aspx

Then go here: http://www.memphistn.gov/Government/BusinessDiversityCompliance/ContractCompliance.aspx

And then to here: http://www.memphistn.gov/Business.aspx/Certification.aspx

The Shelby County process is similar but somewhat simpler. However both registration and certification processes are difficult because of the minority and equal opportunity concerns. I want minorities to get a share of the business but I want the taxpayers to be able to see on line that they are doing so and to see what cost we have to pay if the successful bidder is not the one with the lowest price. What premium would you be willing to pay for this objective? Eventually I want open competition between vendors without regard to race, color or any other factor.

Again the County is leading the way in opening their records and they deserve credit for this leadership.