The City Keeps Paying, and Paying, and Paying

Was this supposed to make us feel better?

” ‘The city never had any financial difficulty. This was never about financial difficulties,’ city spokesman Michael Walker said. ‘This was about performance of the contract, safety of city residents who are using the pools and our fiduciary responsibility to taxpayers. … We expected them to deliver what they promised within the scope of services in the bid and they did not do that.’ ” [Emphasis mine – KM]

The water is getting murkier in the matter of the management of the City of Trenton’s public swimming pools. Last week, the Jackson Administration recommended to City Council, and Council unanimously approved, that the City and USA Management part ways at the end of July. USA is the Georgia-based company that was one of only two bidders for Trenton’s business. The other bidder was the YMCA of Trenton, which had managed the city’s pools for the 2014 and 2015 summer seasons. As of August 1, the “Y” will once more manage the pools until their mid-September closure.

Michael Walker attempted to ease the minds of Trenton’s residents about the financial stability of the City in its dealings with the issue of the pools last week. Ironically, questions about the shaky finances, or at least the accounting functions of the City were raised by Trenton YMCA Executivce Director and former City Recreation Director Sam Frisby. Last week, he explained to the Times that City Hall just kind of shuts down for much of July:

“Frisby said the YMCA largely received its payments on time, but acknowledged that July is a difficult month for the city. Its fiscal year ends June 30 and checks are not cut for two weeks, he said.

” ‘The problem with recreation is that they’re just starting up summer programming when the city is shutting down,’ said Frisby, who previously served as the city’s recreation director under former Mayor Douglas Palmer. ‘You can’t ask for checks early. … You’re typically not going to get it until the end of July.’ “

So, Frisby’s quote didn’t do much to shore up Mr. Walker’s claim that this was “never about financial difficulties.” Oops. Also, last week Walker himself was quoted in local press accounts as saying that the problems were in fact, about money:

“We believe that USA Management has grossly underbid the contract, which prevents the company from managing the pool program per the requirements in the scope of services detailed in the bid,” city spokesman Michael Walker said, citing concerns about the lifeguard-to-swimmer ratios and charging residents for swim lessons. “We will not compromise the safety of residents who are using our city pools and we will not burden them with additional costs to enjoy them.” [Emphasis mine – KM]

So, which is it, Mr. Walker? Did the City part ways because USA Management “grossly underbid the contract” (an admittedly bizarre excuse for anyone who’s ever had any kind of business contract – if you underbid and your work costs more than you planned, you eat the extra costs) or was it because of USA’s performance? I am confused. I am also scratching my head about the “we will not burden [city residents] with additional costs to enjoy [the pools], because that’s exactly what we are ending up doing.

The original contract with USA, we were told last week, was $185,188. Pro-rating that sum for the approximately six weeks they provided their services, I estimate they cost us about $90,000, which includes a $41,000 payment to USA last week that had been overdue by two weeks.  The new  contract with the Y for the remainder of the summer is reported to cost $158,160. PLUS, in a week-ending report by Cristina Rojas in the Trenton Times, we were also told “In its termination letter, the city said that, all told, it had to incur at least $58,523.40 in additional costs because of the company’s ‘mismanagement.’ ” This “mismanagement” referring to the alleged failure of USA to be “responsible for the payment of all employment taxes and social security taxes related to the employment of said personnel.” (Now, where have I heard THAT before? Hmmm… It’ll come to me)

Taking all those numbers together, I come up with a figure approximating $307,000. To put that number in some perspective, according to Ms.Rojas, “[The YMCA’s] total bid [for this summer] cost had been $256,487. Last year, its contract was for $216,761 and in 2014, $205,515.

If Michael Walker wanted to assure us that “we will not burden [city residents] with additional costs to enjoy” the pools this summer, he kind of failed. It looks like we are on track to be spending about:

• 65% more than the original USA contract amount;
• 20% more than the Y’s bid this year;
• 42% more than the Y’s 2015 contract; and
• about 50% more than the Y’s 2014 contract.

How fucked up is that?

In the same July 22 Times article referenced above, in which Michael Walker attempted to tell the City’s side of the conflict with USA Management, Trenton’s Business Administrator Terry McEwen provided additional detail that, if true, frankly paints a picture of the City’s total inability to manage its contractor efficiently. Again, according to Cristina Rojas in the Times:

The city requires that there be one lifeguard for every 60 swimmers, or four per shift. But despite assurances that USA Management would provide that number, the city later learned that USA only planned to staff the pools with two lifeguards per shift.

In email exchanges between USA Management’s Alison Abbott and Fiah Gussin, the city’s recreation director, Abbott said the company follows the national standard based on square footage and that the extra lifeguards would cost an additional $77,540.

“We are willing to accommodate your request if you would like the additional zones and hours for the costs,” Abbott wrote in a June 20 email.

A July 6 email explains that USA Management instead chose to allocate the money that would have been spent on security toward the extra lifeguards. In total, another $13,037 would have added to the bid cost, making it $198,225.

“It’s not fair to the city to have the awarded bidder start to increase the pricing to the city because that incurs an additional cost to our taxpayers that wasn’t put into the process,” McEwen said.

The city also says USA Management failed to disclose in its proposal that it planned to charge residents for swim lessons.

“That was supposed to be a free service,” McEwen said. “That’s something that we were not going to allow.”

He said the city also took issue with the fact that USA Management classifies its seasonal workers as independent contractors, meaning that taxes are not withheld from their paychecks.

The city’s bid, however, required that the vendor be “responsible for the payment of all employment taxes and social security taxes related to the employment of said personnel.” In a July 8 email, Abbott said it would be in the lifeguards’ best interest to receive 100 percent of their money.

Sheesh, this all sounds to me that this vendor was entirely out of control! If the City can not properly monitor the performance of its contractor on compliance with the basic terms and conditions of the service contract, then what good are they? Because this sounds like the City is claiming that USA didn’t pay any attention to some of the most basic elements of this contract: namely, staffing levels, security, and the proper employment status of its hires. The City effectively let USA call its own shots, if we are to believe Mr. McEwen.

If that is in fact true, this is indeed a failure of the City’s ability to manage its contractors. That this may be indeed a true tale can be seen in the way that the City is letting the successor to USA – the Trenton YMCA – impose its own terms in how it will deal with the City’s contract, in contravention to the City’s specifications.

For example, one of the City’s complaints about USA’s performance is that whereas the City requires 1 lifeguard for every 60 swimmers, USA ignored that requirement and provided half that number. Well, the YMCA also ignores that requirement, providing DOUBLE the number of lifeguards that the City requires, and charges the City for the extra manpower. In his proposal to the City, Sam Frisby “wrote that they had a full staff in the mornings when there could be as many as 60 to 100 campers brought in. The bid required one lifeguard for every 60 swimmers, but the YMCA’s standard ratio is 30-to-1.” [Emphasis mine – KM]

Similarly, the YMCA proposal ignored the City’s specified hours for operating staff. In the same YMCA proposal, “CEO Sam Frisby said an extra hour per day was calculated for unit costs than what was called for since they knew from experience that the first hour was often spent cleaning up from people who broke in at night.” Rather than postpone opening the pools in question later in the day to allow that kind of clean-up, which is what one would expect a contractor to do if he were limited in his resources, he just unilaterally included “an extra hour per day” over and above the specifications laid out by the city, and passed those extra costs along to the City.

Those are among the reasons, I suppose, that the Y’s cost proposals grew by 25% in just two years. The City literally allows the YMCA to write its own deal. The specifications and terms in the City’s Request for Proposals (RFP) are, I guess, looked at as being more a point of departure to be added on to than a description of strict limits and constraints.

So, let’s summarize, shall we.  The City of Trenton claims it was being jerked around by a vendor that failed to provide the minimum level of service it promised to in its reply to the City’s RFP. Its solution is to bring in a vendor who, in its proposals, jerks the City around by providing MORE services than the City asked for it to do, and charges the City handsomely to do so.

Got it? OK, then.

I will finish this piece by repeating what I said last week. This episode with the City’s contracts for management of its pools proves that nothing has changed in Trenton. Its purchasing and contracting procedures are broken. Since it allowed the theft of more than $5 Million Dollars by another poorly-managed vendor – without making any transparent, public, significant changes to its management structure and procedures – the Administration of Eric Jackson still fails to provide competent management and oversight of its contractors, and the City simply continues to pay and pay, and pay. It’s losing precious money, of course. It’s also losing something infinitely more valuable. It’s losing trust.