In the final stretch of Ron Kim’s City Council tenure, the public endured a marathon session navigating 75 agenda items. Among them, Dillon Moran fervently championed contracts, seemingly brushing aside concerns about potential rule violations. He openly confessed to skirting necessary documentation, citing Risk and Safety's relocation as the cause. Moran and Kim's forceful demeanor repeatedly disrupted and pressured the steadfast Commissioner of Finance. An audience member even labeled Moran a bully, underscoring the meeting's tense atmosphere. The pinnacle of the gathering centered on Moran's relentless and manipulative 23-minute push to secure City Council approval for an extension of the bid contract renewal with RISE, igniting suspicions about ulterior motives. Additionally, recent maneuvers by the Mayor concerning changes to the RISE contract added fuel to speculation of impropriety.
Dillon's Dismissal of the $300,000 Allocation
Questions have emerged regarding the contract renewal's validity, primarily due to discrepancies between the $387,000 price and Commissioner Moran's apparent lack of awareness regarding the Mayor's allocated $300,000 for the temporary homeless shelter in the budget. This specific amount underwent extensive discussion during budget meetings and received attention from local media. Initially, reports indicated a $239,385 6-month contract, with the Mayor committing a maximum of $300,000 for the shelter. However, the certification of funds document indicated an allocation of $300,000 for 2024 alongside $87,000 for 2023, pending transfer. It's Moran's responsibility to ensure the documents are satisfactorily valid and proper. Unfortunately, this allocation was invalidated after being rejected in a previous meeting.
The RFP, Contract Terms, and Lapses in Renewals
The Request for Proposal (RFP) for operating and managing the temporary Homeless Shelter was initiated on May 8, 2023. RISE submitted a bid of $239,385, primarily designated for salaries, and had already secured the location lease before submitting the bid. However, despite being scheduled for RISE's signature on the June 6, 2023 agenda, the contract remained unsigned by Mayor Ron Kim. Instead, a special City Council meeting was convened on June 9, 2023, specifically to address a modified version of the pending contract. During a preceding Mayor’s Task Force meeting on June 8, 2023, Deputy Mayor Angela Rella clarified the contract's terms. She emphasized its strict 6-month duration, contradicting previous assumptions of a possible 2-year renewal option. Rella underscored the urgent need for another Request for Proposal to manage the temporary shelter for the following two years.
The Duality of Contracts
The contract signed with RISE on June 9, 2023, matched the $239,385 total bid but notably lacked any reference to renewal terms, aligning with Deputy Rella's earlier statements. The ensuing turmoil within the City Council, attempting to resolve a situation that adherence to proper planning and procurement protocols could have prevented, has sparked concerns among taxpayers. Neglecting established procedures over an extended period may prompt a comptroller audit. It's crucial to highlight that engineering an emergency to justify deviations from proper procurement procedures is unacceptable.
*6/6 & 6/9 Contract Comparison*
Desperate Measures and Oversight: Was RISE downgraded to a pro-bono consultant from 12/9-12/31 to circumvent procedures?
The realization that contract renewal wasn't possible prompted desperate attempts to achieve it. Comments made by Commissioners Sangvi and Golub hinted at potential missteps. The City Council's extension of RISE's contract from 12/9/23 to 12/31/23 lacked crucial proof of insurance, had expired based on original documents by 12/01/23, and took place while Risk and Safety were still under the Mayor’s office. Additionally, the extension labeled RISE as a consultant rather than a contractor, diverging from the initial terms. The expired insurance and altered terms raise doubts about the validity of the extension and question the City's decision-making process. Was RISE downgraded to a pro-bono consultant from 12/9-12/31 to circumvent procedures?
Denied Transfer Request: Shifting Funds from Shelters of Saratoga to RISE – A Glaring Procedural Flaw?
After further scrutiny, it was revealed that the Mayor sought a transfer of $87,000 to RISE on 12/5/23. Commissioner Sangvhi raised objections against processing these transfers, including the $87,000 allocation, during the Council session. Although the Council approved budget transfers, items 1-3, particularly the $87,000 meant for RISE, were excluded. Sangvhi reiterated the importance of a bid, echoing sentiments previously highlighted by a Mayor's Office official who issued the original RFP.
In a subsequent attempt during the 12/19/23 City Council meeting, there was an endeavor to amend the terminated RISE contract, aiming to extend RISE's role as an unpaid consultant to the City. This extension, cited until 12/31/23, was proposed to be renewed from 1/1/2024, introducing additional Homeless Support Services beyond the scope outlined in the May RFP. This expansion raises questions about its necessity and potential impact, considering it deviates from the initial RFP specifications.
Follow the Instructions. A No-fail FAIL!
A form on Commissioner Moran’s agenda outlined mandatory documents required for the bid extension to be considered by the City Council. However, this item was fraught with deficiencies that should have precluded its inclusion on the agenda. These omissions underscore a disregard for established rules. Lets review the litany of errors & omissions....
Budget Line Item: Funds were not transferred to the allocated line in the budget.
Certificate of Sufficient Funds: The intended transfer did not occur, rendering the funds insufficient. The transfer was invalidated.
Letter from Vendor for Extension: Missing confirmation from the vendor agreeing to an extension under the same terms, conditions, and prices.
Price Discrepancy: The listed amount of $387,160 differs from the initial total bid by RISE and does not align with any documented figures.
Terms and Conditions: The proposed contract's scope doesn't match the original RFP, deviating into Homeless Support Services.
Certificate of Insurance (COI): No attached COI meets the required coverage periods for the contract, pro-bono consultant time, or the proposed new contract.
Evidence of Bid Extension Capability: Documents do not demonstrate that the bid can be extended as required.
Purchasing Approval: The email referencing approval is contingent on receiving insurance and a letter affirming original pricing, which the provided letter does not confirm.
Ensuring all these components are in place is critical for the validity and compliance of a bid or contract extension. The absence of any of these elements might render the bid or extension incomplete or invalid based on the established guidelines.
The Slippery Slope of a Secret Piggy Bank?
The City Council's actions led to the establishment of a covert funding source for the homeless shelter, highlighting the importance of funding origins. Opioid settlement funds have been designated for this cause, with the Mayor mentioning a potential allocation of the latest $66,226 settlement to RISE on October 17, 2023. Forfeiture of Assets funds and Community Block Development Grants (CDBG), federal funds from HUD, have also been earmarked for use by the Council.
These funding sources, tied to the Operation and Management contract for a Homeless Shelter, mandate specific procurement procedures outlined in the City’s Purchasing and Procurement manual. Contracts involving state and federal funding surpass municipal policies, necessitating strict adherence to mandated procedures based on funding thresholds.
The city's allocation of additional funds to a contract vendor beyond the contracted scope raises questions about overpayment and the nature of these funds. The absence of such discussions during City Council meetings prompts inquiries into the transparency of these actions.
In customary procedures, any extra payment to a contractor usually necessitates City Council approval. Addendums specifying the additional amount are typically introduced, attached to the original contract, and subject to discussion and voting at the City Council table. The likelihood of the city making a donation to a contractor beyond the contracted price seems improbable without the proper procedures, including placing it on the agenda for discussion and voting, as is customary for any significant financial adjustments.
Audit Trigger?
Maintaining consistency in funding types and following established procurement procedures is crucial to avoid potential scrutiny or audits by the State Comptroller's office. Any deviations could indeed lead to an audit, but considering their caseloads, it might take several months, possibly even until next summer, before the city hears from the comptroller if an audit is initiated. Adhering to proper procedures is key to mitigating any risks and ensuring compliance with regulations to avoid such investigations.
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