The questionable world of Council contracts
Editor's Note: Ben took a look at Council's professional service contracts. Here's what he found.
Next year, Philadelphians will have to do without - without two classes of police cadets, without two fire companies and without libraries that will be open five days a week.
But City Council still has more than $600,000 budgeted for eight active outside contracts, and some of that money appears to duplicate services taxpayers already pay for.
Council's contracts have been on the radar lately because of what you might call "the McPherson effect." Charles McPherson is Council's longtime budget director who retired last year and has spent the last 14 months working in his old office without a salary. He's understood to have the inside track on a $150,000 contract to provide financial consulting to Council (on top of a $528,000 Deferred Retirement Option Plan payment and his $113,500 pension).
So we decided to take a look at who else has a Council contract, and for what.
Of Council's eight professional-service contracts, several are for easily understandable projects, like a new software system to help manage legislative work flow. But a few, like a $100,000 contract for public relations and a $70,000 contract for radio broadcasts of Council sessions, might be redundant, or at least inefficient.
Ross Associates, a public-relations firm owned by local power broker Bill Miller, has the $100,000 PR contract. According to it, Ross provides "issues management, crisis communications, special events, media relations, community engagement and message development" for Council.
But City Council already employs a full-time communications director, and many Council offices have staffers who do PR.
Anthony Radwanski, Council's full-time communications director, said the Ross contract is necessary because staffers don't have time to think beyond immediate concerns.
"I'm busy doing the day-to-day stuff," Radwanski said. "And I'm one person, as opposed to the mayor, who has eight or nine people. It was just overwhelming. There was no time for me to strategize about how to get the message across. That's why we felt that Ross Associates would be a good fit."
"Not everyone has someone doing public relations on their staff," noted Ann Kelly King, who is Council's chief accounting officer. "It gives specific Council members the opportunity to ask a professional what they think."
That may be. But even if there is a distinction between what Ross does and what taxpayers are already paying for, is it a big enough distinction to warrant an outside contract at this difficult fiscal time?
Similar concerns arise when looking at a contract awarded to LEVAS Communications, the owner of radio station WURD/900AM. The station has a multiyear deal for live broadcasts of Council sessions. The station receives $70,000 a year (it hasn't submitted the proper paperwork to get paid in 2010) to provide this service, though the sessions happen only once a week, and only during periods where Council is actually in session.
Putting aside the question of whether it should cost $70,000, city government already broadcasts Council sessions and other meetings through the Department of Public Property's Web site. There is also a city TV channel that's available to cable subscribers, and a live streaming of the broadcast on Phila.gov, including an audio-only option that can be run on computers with slow Internet connections.
Radwanski said the WURD contract is targeted at those people who don't have access to Council sessions despite the other options provided by the city.
"It was an effort to reach out to the African-American community and people who don't have access to the Internet," he said. "If you don't have a computer or you don't have cable, you're out of luck."
King said the contract goes back to when John Street was president of City Council.
"It's one of those things - and I know that's not an excuse for keeping a contract because we've always had it - but I think there is an expectation of certain members in the community that they can listen to a Council session on a Thursday morning."
Evaluating the appropriateness of professional-service contracts can be challenging because, unlike other city contracts (like contracts for supplies), they're not subject to specific guidelines - they don't have to go to the lowest responsible bidder. Instead, the Council president can use subjective criteria to decide which is the best bid.
"There is no really true objective way of doing it," Radwanski said. "You have to gauge the person's qualifications, and sometimes it's hard to do that."
It is also Council President Anna Verna who decides what contracts are necessary. Radwanski said she consults with other members before deciding on contractors, but ultimately the authority is hers.
A third Council contract that raises questions is one for $75,000 held this last year by the Econsult Corp. through Fairmount Capital Advisers to help Council review Mayor Nutter's budget proposal. Radwanski said that Econsult helped balance the views of longtime staffers, including McPherson.
"We wanted to achieve a team concept, with someone who wasn't tied to the past and was looking at it fresh from an outside perspective," Radwanski said. "We figured that blend might be conducive to coming up with the most reasonable approach to the budget this year."
But Council already employs dozens of legislative staffers, and also had McPherson helping out. With all this institutional expertise, was the Econsult contract, which only lasted through the budget process, really necessary?
Radwanski said that Econsult provided outside-the-box thinking, especially on reducing spending.
"They started to talk about where cuts could be made as opposed to raising taxes," Radwanski said. "That was one of their accomplishments."
There is certainly value in consulting experts, and Econsult is widely respected. Still, we can't help but note that passing the city budget is one of Council's main responsibilities. Why does it take an outside consultant - at the price of $75,000 - to tell Council to consider reducing spending instead of raising taxes?
Radwanski maintains that outside contracts actually save taxpayers money because the city is not required to pay pension or health benefits for contractors, and those benefits are a big part of the city's costs. Of course, that math only works if taxpayers aren't already paying for the service in some form.
In the grand scheme of the city budget, $600,000 isn't a huge amount of money. But it's real money the city could use at a time when it's raising taxes and pinching pennies. And it's being spent in a way that doesn't exactly inspire confidence.
Maybe if Council didn't give out $100,000 contracts for public relations, it wouldn't have to contract out for public relations help in the first place.
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