The June 5, 2023 Ann Arbor City Council agenda is quite long and illustrates how a new Council approaches the job of local government, accountability, and informed decision making.
On the June 5th agenda, item CA-12 is a $2.7 million construction contract for water main and resurfacing work at Pontiac, Swift, Moore and Wright. The contract will be awarded to Bailey Excavating, whose bid was over $400,000 higher than an alternative bid.
CA-12 (23-0778) Resolution to Approve a Construction Contract with Bailey Excavating, Inc for the Pontiac, Swift, Moore and Wright Watermain and Resurfacing Project ($2,759,293.42) and to Appropriate $2,316,000.00 in Contributing Funds (8 Votes Required)
This contract was assessed under the “Best Value” standard. The “Best Value” standard for awarding City contracts was an amendment to the City charter, approved by voters in November 2021; it replaced the previous standard of “Lowest Responsible Bidder.” That off-year election had 17% voter turnout and was approved by 78%, which – given the low turnout – means that only 13% of registered voters approved the standard. Since 2022, the City has applied a “Best Value” standard in awarding millions of dollars in City contracts.
City spending on construction contracts has prompted debate and skepticism around what “Best Value” actually means. Twice – at the suggestion of Council Members Eyer and Radina – Council has rejected City staff recommendations in order to award contracts to Bailey Excavating. I wrote about it here:
In advocating for specific contractors, Council members have made inaccurate statements denigrating some companies and praising others. For example, at a meeting on February 22, 2022, Council Member Eyer insisted that her preferred contractor – Bailey Excavating – had a superior safety record and that the staff-recommended contractor (E.T. MacKenzie) had “twice as many” safety violations. Several weeks later, MLive reported the facts (emphasis added):
The OSHA website lists eight safety violations for E.T. MacKenzie in the last five years and six for Bailey Excavating.
E.T. MacKenzie disclosed its violations in response to the city’s bid questionnaire, while Bailey Excavating did not, instead answering that it did not have any violations.
Last month, Council Member Eyer again challenged City staff assessment of bid proposals. At the May 1 meeting, Council considered a staff-recommended $2,122,850 contract with Fonson Company for water main and resurfacing work at Madison/Madison Place. Eyer explained that she had spent “several hours” studying the bid proposals, and concluded that the contract should have been awarded to Bailey Excavating, at an additional cost of $26,000. Remarkably, Council colleagues wholly accepted Eyer’s assessment and offered praise for her diligence in “digging into this.” Bid proposals include a lot of information and this week’s contract with Bailey Excavating is worth digging into. Primary sources are more reliable than claims made at the Council table.
When companies submit bid proposals for City contracts, they must include information about their safety record. A company’s Experience Modification Rating (EMR) score is based on actual insurance and workers’ compensation claims – scores higher than 1.0 reflect a higher rate of injuries and claims. In bid proposals, construction companies must submit a letter from their insurance carriers, summarizing the most recent three years of EMR scores. When the City issues an RFP, this EMR information is one of four factors contributing to a “Workplace Safety” score (emphasis added):
Provide the bidder’s Experience Modification Rating (“EMR”) for the last three consecutive years. Preference within this criterion will be given to an EMR of 1.0 or less based on a three-year average.
An EMR score is a snapshot of a given point in time, assessed annually to reflect the past cost of injury and future chances of risk. In other words, an EMR score for a specific year is a historical point of fact that does not change. You can find more information about EMR here:
This week, Council will consider awarding a contract to Bailey Excavating, based on the bid proposal they submitted in response to RFP 23-22 (Pontiac, Swift, Moore & Wright Water Main & Resurfacing Project). Bailey’s bid proposal includes the following EMR scores for the last three years in a letter dated April 25, 2023:
- 06/01/2022 – 2023 1.00
- 06/01/2021 – 2022 1.00
- 06/01/2020 – 2021 0.90
This EMR score information is different from what Bailey Excavating submitted earlier this year when it responded to RFP 23-09 (Brooks Street Improvements Project). City Council awarded the contract to Bailey Excavating on May 1, 2023 (Legistar Link). Bailey’s bid proposal included the following EMR score information in a letter dated June 13, 2022:
- 06/01/2022 – 2023 1.00
- 06/01/2021 – 2022 1.27
- 06/01/2020 – 2021 0.90
Experience Modification Rating letter from page 151 of the bid proposal from Bailey Excavating for RFP 23‐09 (Brooks Street Improvements)
Experience Modification Rating letter from page 165 of the bid proposal from Bailey Excavating for RFP 23‐22 (Pontiac, Swift, Moore and Wright Water Main and Resurfacing Project)
I loaded the entire bid proposals here:
Note that an EMR score over “1.0” reflects a greater workplace safety risk but, more importantly, the EMR score for any given year should not change.
When the City issues an RFP, it includes this boilerplate language:
False statements by bidders to any of the criteria provided herein will result in the proposal being considered non-responsive and will not be considered for award.
The evaluation results for RFP 23-09 and RFP 23-22 illustrate how quickly scores can change – for the same company – in categories titled “Qualifications, Experience, & Accountability” and “Workplace Safety.” In the space of a month, Bailey Excavating scores in both of these categories increased from 15 to 20 (the maximum).
Construction Proposal Evaluation Results for RFP 23‐09, April 5, 2023 (Brooks Street Improvements)
Construction Proposal Evaluation Results for RFP 23-22, April 27, 2023 (Pontiac, Swift, Moore and Wright Water Main and Resurfacing Project)
City Council is tasked with spending public dollars responsibly, on behalf of the taxpayers and residents they represent. At the 1/23/23 City Council meeting, public commenters raised questions about how the City was scoring and assessing bid proposals to justify more expensive “best value” contracts. In response, Council Member Eyer dismissed all concerns as “anti-union” rhetoric (other members of Council remained silent). The evaluation and scoring of these bid proposals is now extremely variable and inconsistent. At least one Council Member believes that anyone who might want to see consistent, measurable standards in City contracting is simply “anti-union.”
DELEGATING RESPONSIBILITY & OVERSIGHT
Agenda item DC-6 would authorize the City Attorney to initiate virtually any legal action without the approval of Council; instead, the City attorney will provide “timely report to Council.” The resolution delegates broad authority to initiate a long list of activities “including but not limited to”: lawsuits, administrative actions, appeals, alternative dispute resolution (ADR) methods, amicus curiae briefs, and settlements as a class member.
DC-6 (23-0928) Resolution Authorizing the City Attorney to Initiate and Pursue Litigation or Other Legal Action on Behalf of the City of Ann Arbor
The City Attorney already has the authority to respond to litigation filed against the City and the cost is significant. E.g. This week’s agenda includes $200,000 in legal fees related to the Platt Convenience case – approval of CA-16 will bring the total cost of that litigation up to $810,000.
CA-16 (23-0558) Resolution to Approve Amendment Number 2 to the Professional Services Agreement with Rosati, Schultz, Joppich, & Amtsbuechler P.C., for Legal Services Relative to Platt Convenience, Inc. v City of Ann Arbor ($200,000.00 amendment; $810,000.00 total contract)
Litigation is not a cheap endeavor when the City is forced to participate. When litigation is a choice – initiated by the City itself – our elected representatives should recognize (and accept) responsibility for deciding whether it’s necessary and in the public interest. It is not simply a matter of “professional judgement” because these decisions have long-term implications for (and costs that will be paid by) the whole of our community.
This item, too, is consistent with other recent Council decisions. A new Council is rapidly delegating authority and abdicating its own responsibility for decisions that impact residents. In March 2023, City Council voted unanimously to disband the Insurance Board, eliminating Council review and approval of small claims against the City. I wrote about it here:
Just last month (May), City Council voted unanimously to disband the Brownfield Plans Review Committee, which provided additional discussion, review, and public engagement re: millions of dollars in tax abatements for developers. I wrote about it here:
BIGGER DECISIONS, LESS CONSIDERATION
Agenda item DC-2 is direction to City Staff to accelerate TC-1 re-zoning for Washtenaw Avenue and Plymouth Road “as expeditiously as possible, without extraneous steps or process beyond requirements of code.”
DC-2 (23-0845) Resolution Directing the Planning Commission to Prioritize Rezoning of the Plymouth and Washtenaw Corridors to TC1
This directive for speed and haste is remarkable, given the fact that our community is on the eve of serious planning for growth and development City-wide. In April, Council approved a nearly $700K contract with a consultant to update the City’s comprehensive land use plan. The process of updating this plan will include significant public engagement and discussion of priorities for current and future development. Instead of planning changes to Plymouth and Washtenaw through a process that considers long-term goals and City-wide impacts, Council asks staff to hurry up and re-zone two enormous areas of the City as quickly as possible.
Last summer, TC-1 rezoning on the west side of Ann Arbor was similarly rushed. The results: the active corridor of commercial businesses and close residential neighborhoods along Stadium Boulevard now shares the same zoning as the corridor of large office buildings, parking lots, and wide setbacks along State and Eisenhower. Last summer, City staff offered multiple recommendations to create and establish more location-appropriate zoning for Stadium Boulevard, but Mayoral appointees on the City Planning Commission set all of these suggestions aside. I wrote about it at the time here:
Last November, the re-zoning of Stadium boulevard was approved by a majority of Council led by the Mayor. Within weeks of the rushed re-zoning of Stadium Boulevard, a new Council unanimously approved a resolution directing the Planning Commission to evaluate and recommend amendments to it.
The resolution this week in DC-2 is a clear directive to staff that re-zoning for Plymouth and Washtenaw should happen as quickly as possible; the wording of DC-2 means that we are unlikely to see any staff recommendations to improve or amend the zoning to more appropriately fit the different environments along Plymouth and Washtenaw. Similar staff advice was rejected when offered for Stadium Boulevard. Ann Arbor is now led by elected representatives who choose not to learn from mistakes made in just the last six months.