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COLUMN

Henry administration invites scrutiny of consultant fees

Expensive study of contract 'fairness' proves spending can be cut

Thursday, September 6, 2012 - 6:27 am

If you want to avoid the heat, don't add fuel to the fire.

But that bit of simple physics seems to have escaped Mayor Tom Henry, whose administration inexplicably suggested spending at least $143,849 on an ill-conceived and possibly counterproductive study mere weeks after City Council members began to ask overdue questions about the use of taxpayer-funded consultants.

In an obvious and anachronistic example of a solution in search of a problem, the administration wants to hire a California firm to study why small businesses – especially those owned by minorities and women. As The Journal Gazette reported, just 0.9 percent of the city's $77 million in construction contracts went to minority-owned companies last year, with 1.6 percent going to firms owned by women.

But unless the city is illegally discriminating against such companies -- and it already has policies and personnel in place to prevent that very thing -- this is an issue only to those who believe government contracts should be handed out on the basis of “fairness” instead of earned on the basis of price and performance.

So City Council was exactly right Tuesday when it balked at a study that could ultimately cost more than $230,000. And should the administration proceed even without Council's consent, it will only expose the degree to which President Tom Smith was also right last month when he asked the administration for a decade's worth of financial records pertaining to consultants, professional services and other “soft costs.”

The administration has not yet responded to what is for now only a friendly request. But it should, and not just because some members are suggesting it may be appropriate to pay minority- and women-owned firms more to boost their participation despite its own admission of a looming budget crisis.

“(Council) has been told that 2014 and beyond will be difficult years because of reduced revenues,” said Smith, R-1st. “So I thought, 'How can we find ways to save money?' A lot of people ask why we use so many consultants, and it would be good to know if certain skill sets show up (in contracts) over and over again.

“If we had people with those skills on staff, could we save money?”

But even more money could be saved by avoiding questionable practices in the first place, which is precisely what Councilman John Crawford, R-at large, suggested the city do regarding the proposed contract study. “A quarter of a million dollars is a large amount to spend in tough budget times when I believe the chance of discovering actionable information is very low,” he told The News-Sentinel's Christian Sheckler.

Of course, this isn't the first time the wisdom and value of pricey consultants has been questioned. In 2009 the city commissioned a $32,000 study of a casino's economic impact on Fort Wayne and paid lobbyists more than $46,000 to seek state approval for a referendum on the subject that was never held. City officials at the time were not exactly thrilled to have their lobbying expenses publicized, and probably don't like the idea much better now. But all governments should face similar scrutiny.

There may in fact be political reasons why the mostly Republican Council would seek such details from a Democratic administration, just as Smith correctly notes that politics could also motivate the refusal to provide what should be public information. But, having sounded the budget alarm, the administration is hardly in a position to deny Council facts it needs to carry out its responsibility to review and approve spending.

“If we don't get the information, I would be upset,” Smith said. “We do have subpoena power, but I can't imagine we would have to use it.”

In 1990, when the city's ordinance promoting minority- and women-owned firms expired, then-Mayor Paul Helmke didn't commission a study to crunch the ethnic and gender statistics. He crafted a sensibly simple and non-discriminatory ordinance designed to boost all “emerging” businesses regardless of who owned them. This was done in part by helping them obtain the bonds without which they could not win many contracts.

Now, we are told, some firms still just don't feel comfortable dealing with the city.

We don't need an expensive study to fix that "problem." A huge “welcome” mat in front of City Hall would be a lot cheaper and just as meaningful, but not as meaningful as, in Smith's words, uncompetitive firms "learning to improve how they do business."

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com, or call him at 461-8355.