Tuesday, August 29, 2017

No Financial Impact Exists on Parts Department Outsourcing

San Angelo's City Council approved contracting out its vehicle parts department in May 2014.  The consent agenda item had no presentation and was supported by a two page memo that said:

The financial impact will be finalized through the negotiation process.
That financial impact is nowhere to be found. When asked to produce the promised financial analysis city staff sent a copy of the signed contract.

The information requested is in "Section 7" of the contract, per the department
Section 7 is simply the pricing plan summary shown above. Assessing financial impact is Assistant City Manager/CFO Michael Dane's territory, not the Parts Department.  No credible financial officer would consider a vendor's pricing structure a financial impact analysis.  However, that is the city's position.

Oddly, Council's shadowy decision occurred in the midst of the city's rush to renew its trash contract with Republic Services. The Vehicle Maintenance Fleet Parts and Supply Management RFP was due April 9, 2014.  City staff opened trash bids the end of March only to learn Republic had over-billed commercial customers for over a decade.  That fact did not deter staff or council from their headlong rush to renew. 

With the public upset over the trash situation I'm sure city officials were relieved that no one raised the most basic questions regarding contracting out parts.

City Council remained out of the loop on the Parts Department until a recent strategic planning session.  As the contract is up for renewal now would be the time for city staff to show a three year financial impact analysis.  That the promised information does not exist should be concerning to city council and citizens wanting effective local governance.

Operations Director Shane Kelton is over both trash and vehicle maintenance.  City Manager Daniel Valenzuela signed both agreements.  Mr. Valenzuela is not known for his investigative abilities.   His investigative reports are light to the point they've been unsigned and undated.  These facts might explain why no financial impact exists in City Hall.

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