Archive

The TWW Emergency Contracts

Tomorrow evening, Trenton’s City Council will deliberate the two Contracts entered into last month on an emergency basis by the outgoing Administration regarding the Trenton Water Works (TWW). Since the Administration already signed these contracts, as pressured by the NJ Department of Environmental Protection after months of frequent operational and safety violations at the Water Works and a marked lack of corrective action by the City, Council approval of these deals is a foregone conclusion. However, there are still a lot of details and questions raised by these contracts that deserve public scrutiny and Council’s attention. The two deals are here for your review, today.

Here is the contract with Wade Trim Operations Services, along with several forms and certifications by the City, totaling $1,312,269.

And here is the contract with Banc 3 Engineering, totaling $755,322.00.

A couple of observations here, and then a few questions.

Below is a form required by the State to accompany contracts executed on an emergency basis, before Council has an opportunity to review and approve it. Take a look and see if you notice the same thing I did.

wadetrim emergency

The first form, the “Emergency Procurement Report” for Wade Trim” was prepared by a Danielle London, Senior Administrative Analyst with the City, and signed by Public Works Director Merkle Cherry. Signed by Mr. Cherry even though several fields were empty of what I would consider pretty important information.

The Dates and Times the Emergency situation occurred and when publicly declared? Blank.

The question, “When was the notification [of Emergency] reduced to writing and filed with the Purchasing Agent?” was not answered.

Also, there is no response to the question, “Has the public agency adopted a ‘chain of command’ procedure pursuant to N.J.A.C. 5:34-6.1?”

Mr. Merkle signed anyway. There’s that famous attention to detail that this Administration is widely known for!

To the question on another form, asking if there is “adequate funding” for these two deals, both forms indicate that “Water De” – for Department – funds will be used. So that’s the answer to one question people have had since these deals came to light last month: these contracts will presumably not be paid under the City of Trenton’s budget, but by TWW’s operations, from the utility’s customer income.

That’s it for the observations. Now, the questions.

OK, first, as I just mentioned above, these contracts totaling $2,067,591, are to be paid by the Water Works. According to the City’s Introduced Budget (8 months into the fiscal year, we still don’t have an Approved Budget – Standard Procedure, maddeningly, for the City), the Water Works is projected to earn a surplus of $3,150,000.

TWW 2018

These contracts will eat up over two-thirds of that surplus. A surplus, remember, that is used to help balance the City’s overall budget.

Will these contracts be paid for by reducing the year-end surplus, massively affecting the City’s bottom line? Or will Water Rates be raised across the entire customer base?  That’s my first question. UPDATE: For that matter how many of these positions are already accounted for in the budget, but not filled? How much of this $2.067 Million is incremental cost, and how much already accounted for?

Next.

Wade Trim’s Scope of Services is defined in their contract with this language (Page 6):

“The Contractor will provide Operational Assistance Services expertise with the requisite qualifications and experience in their respective areas of responsibility including, for example, treatment plant operations, collection, distribution, customer service and maintenance. These experts will assist in the identification of approved cost reductions and operational enhancements. It is not expected that the contracted services or staff will replace or supersede any existing TWW or Trenton Sewer Utility [this is the first time this department has been brought into this situation. Up until now, we've heard that TWW's problems have not yet extended to the Sewer Utility. - KM] staff to achieve the long-term goals.”

The language in the Scope of Services section of the Banc3 Agreement (Page 7) is almost identical. So, that raises one obvious question: How do the services to be provided by these two separate companies differ from one another? Why do we need two companies to provide the same operational staff?

The rest of these contracts don’t help to answer that question. This is the list of positions to be filled by Wade Trim (Page 16):

wade trim schedule BAnd here is the similar list of positions to be hired by Banc3:

banc3 schedue APretty similar list, right? They seemingly overlap on four positions.

So, once again, how are these two deals with these two different firms supposed to be different?

When I first wrote about the City’s arrangement with Wade Trim on January 24, I noted that there were several Help Wanted notices posted on that company’s website, seemingly advertising for the TWW positions. One of the notices is linked here. Banc3 has a similar advertisement on their website, here.

So we are paying both firms to provide several operating staff positions that TWW desperately needs to fill. However, neither of these companies seem to be able to fill at least several of these positions with their own personnel. They are advertising for new hires that they can provide TWW. Neither firm currently employs the talent that their contracts with the City require them to provide. They have to attract that talent.

Which begs the next questions: Why do we need two companies to recruit and hire for us? Trenton Water Works couldn’t recruit on its own? Is there no way TWW can’t attract on its own the same talent that these two outside firms are advertising for? We have to spend $2 Million Dollars for what sounds essentially like an employment service?

Finally (for now), what happens at the end of these contracts next year? Both Wade Trim and Banc3 will provide the professionals for these positions (that they have to recruit for!) positions at TWW. All of these folks will be on the payrolls of these two firms. Both contracts state “

The next question I have is: After both of these contracts are completed next January, what happens then? Please recall from the excerpt above that both contracts state “It is not expected that the contracted services or staff will replace or supersede any existing TWW or Trenton Sewer Utility staff to achieve the long-term goals.” – [Emphasis mine - KM]

So, what happens? Will the Wade Trim and Banc3 employees then become TWW employees? If that’s the case, will those new hires “replace or supersede” TWW and/or Sewer Works staff next January?

If that’s not the case, and the Wade Trim and Banc3 contract employees leave, what then? Both contracts are silent about what happens next year after the contracts are done.

Are those two firms going to recruit permanent staff for the city’s Utilities? No? Will that be the City’s responsibility, then? When is the recruiting for permanent staff supposed to happen?

What obligation does the City have to the State to involve the NJ Department of Environmental Protection and/or Department of Community Affairs in the staffing process for the permanent staff?

I don’t see any of these matters addressed in these agreements. These documents read, as I have no doubt they are, agreements hurriedly negotiated and concluded in order to solve problems gone white-hot critical in the last few months of 2017. Agreements which are essentially one-year Band-Aids on problems that the next Mayoral Administration will be left to deal with. Since these deals don’t appear to describe permanent solutions past the expiration of their term, they are woefully incomplete.

There are now two Council members with aspirations to head up “the next Mayoral Administration,” and most of the rest are seeking re-election after letting the current TWW crisis develop unimpeded for the last four years, along with many other sad accomplishments.For that reason, I’d say that Council should be pretty motivated to ask these questions, and more, tomorrow evening.

Will they? Based on past performance, I doubt it. The outcome tomorrow is likely to be rubber-stamped approval of both of these contracts. Which will solve the problems at TWW, hopefully, for the next 12 months. Which will put a new Administration and new Council -and the 150,000 customers in Mercer County who depend on Trenton’s Water Works for clean and safe drinking water – in this exact same place in January 2018.

Prove me wrong, Council.

3 comments to The TWW Emergency Contracts

  • Marge CAldwell-Wilson

    Kevin, at last night’s meeting Mr McEwan was grilled on these contract by myself and some questions from Alex Bethea.

    I asked why there are two contracts..WAde Trim couldn’t handle all of the hiring.. Still don’t know why
    The numbers don’t add up…Amount in contract is different of that in the Ordinance. The salaries total the whole amount of the Contract, so how much money does Wade Trim Make. It is not broken down

    Wade Trim did not complete a C271. Political Contribution Disclaimer form
    Wade Trim did not list their Stockholders.]

    BANC3 did not list positions or salaries…

    I am not going to be able to support these contracts until I get some answers.

  • Kevin

    Thank you, Councilwoman!

    I hope you can ask some questions about the transition next year as these contracts wind down.

    Namely, whose responsibility is it to plan the transition? What happens to these temporary(?) employees when the deals end?

    And how much of this $2 Million, if any, is already part of the TWW budget?

  • W. Pyle

    The $3,150,000 is not the amount of the Water Utility surplus. The water Utility surplus has been reported to exceed $12,000,000. That $12,000,000 exists after the $3,150,000 is budgeted and then transferred to the City. This has occurred over the last 10 years or so. In one year, the City transferred $6,000,000 from the Water Utility to the City. After doing so, the Townships filed a lawsuit and then came to an agreement with the City to limit the amount of the transfer. A check of prior year budgets should show that the amount was $3,150,000. Apparently, this is the amount to which the Townships agreed. Another aspect to consider is the number of reported vacancies in the Water Utility budget. If the positions exist in the budget, then they should be fully funded by prior year revenues and, if prior year revenues do not cover the entire budgeted expenditure, a portion of all the existing surplus can and will be used to balance the budget. It has been reported that there are about 75 vacancies in the Water Utility. What this means is that 75 funded positions in the budget are expected to require the expenditure of funds. If all 75 positions remain vacant for the entire fiscal year, then the budgeted monies will contribute to the next year’s surplus. If the average budgeted salary of the 75 vacancies is $50,000 and there is a 40% overhead to cover health insurance, Medicare, Social Security, pension and any other overhead aspect, then each unfilled position would generate $70,000 of budgeted expenditures that were not spent. Based upon these estimates, this would contribute $5,250,000 to the surplus. This a major factor in the size of the surplus. This could also beg the question of why the surplus isn’t more since this has been happening for since the City drained the Water Utility surplus when it took the previously mentioned $6,000,000. The $3,150,000 doesn’t look like it is jeopardy. If it was, the City could and probably would have the Water Utility cut its budget to preserve the amount of the transfer.