January 5-11, 2006
city beat
Cash Flow: Headed by Kretsge, a city Web site will soon bring tangible ethics reform. : Michael T. Regan |
Want to know how the city does business? Starting next month, you can check the Web.
Last fall's push for ethics reform was supposed to deflate the perception that companies have to pay into elected officials' campaign coffers to play the game of vying for professional service contracts with the city. Easier said than done?
The Street administration hopes to answer that question by turning a complicated, 21-page ordinance, approved by City Council in the spring and by voters in November, into a user-friendly Web site where companies must go to apply for contracts and, in the process, disclose campaign donations for all to see.
After the contracts are awarded, the winners' and losers' applications will be posted on the site for public scrutiny. The goal is to bring more transparency to the process of awarding noncompetitively bid contractsthat is, contracts that do not necessarily have to go to the lowest bidder. Even Councilman Michael Nutter is giving Street's people, criticized in the past for secrecy, kudos for looking at ways to implement his legislation well before they had to. "The administration should be credited for working on this even before it was clear that it was going to be approved because it's very complicated and would take a fair amount of lead time," says Nutter.
Another sign the administration may be taking ethics reform seriously is the fact that they put a 31-year-veteran of city government in charge of a startup process that includes launching the Web site and hiring six to eight staff members. Deputy managing director Susan Kretsge estimates initial costs at $1.5 million, with an annual $700,000 expense.
"The intent of this is to increase competition," she says, "to make sure more businesses are interested in entering into partnerships with the city, and to that end we want to make sure people know what to do, how to do it."
Currently, each city department has its own method for advertising contracts, making it difficult for companies to find opportunities. Some do it on their Web sites; some do not. But by February, the date set forth in the legislation, companies will log on to a central, yet-to-be-named site to find a list of contracts, which must be posted at least 14 days before the filing deadline. Kretsge says her "drop-dead deadline" for implementing the last details is July 1. (One significant exception to all of this is municipal bond transactions, at the core of the corruption probe that sent former City Treasurer Corey Kemp to prison, which will be addressed in an executive order from Street.)
The city awards about 900 new no-bid contracts each year, not including another 600 amended and renewed contracts. Although not required, Street has promised to post for-bid contracts on the site in about a year, bringing the total contracts advertised online to about 3,300, says Joe Grace, the mayor's spokesman.
To apply for a no-bid contract, companies must register online by providing the city with basic identification information in exchange for an access code. Also thanks to Nutter's legislation, a company is ineligible to apply for no-bid contracts in excess of $25,000 if it contributed more than $10,000 to an elected official or candidate within the past year. (Street has opposed extending eligibility limits to for-bid contracts, saying it would cost the city more money.)
When applying, a company must disclose any donations it made to an elected official or candidate in the state in the past two years. If consultants or subcontractors are used to secure or carry out the contract, their donations must also be disclosed.
Companies are on the honor system, but if the city's finance director discovers discrepancies, companies could be barred from reapplying for up to three years and face a fine that grows from $1,100 for violations committed in 2006 to the maximum of $2,000 for violations committed after 2008.
The winner of the contract must be posted online at least a week before the contract is signed or executed. If the winner was not the lowest bidder, the city office or department awarding the contract must explain why the others were rejected.
After the contract is executed, all applications, including disclosures, will be posted online, but in the end, the success of the reforms may be measured by whether anyone actually checks out the information.
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