A 3-2 vote by the Rockville City Council last night will postpone implementation of a consultant's recommendations to address the city's purchasing problems until next year. The report, which cost the city at least $58,000, found serious flaws in practices, systems and employee knowledge of purchasing practices. On the positive side, no abuse or corruption was uncovered, and the consulting firm concluded that the city has the fundamentals in place to successfully turn around the problems.
But Calyptus Consulting Group's George Harris said the city's "huge backlog" in purchasing, and low satisfaction among customers, are serious enough to require some fundamental changes. Foremost among these, is having purchasing report directly to City Manager Barbara Matthews. That recommendation was a major topic of discussion between Mayor Bridget Donnell Newton and Councilmember Beryl Feinberg - who both called for urgent action on a government function that makes up 60% of annual city expenditures - and Councilmembers Tom Moore, Julie Palakovich Carr and Virginia Onley, who wanted to delay implementation of the report's recommendations in favor of further review by Matthews and the city's Financial Advisory Board prior to acting.
Feinberg said she had already identified changes proposed by the report that, in her analysis, could provide $3.1-4.96 million in cost savings to taxpayers.
Moore agreed it was "an incredibly detailed" report "very valuable" to city staff in improving purchasing practices. But he challenged Harris on his recommendation to move purchasing under the City Manager's purview.
"We have a 220 page report, and two pages were spent on this particular item," Moore said, noting that only one of the jurisdictions Calyptus compared Rockville with - Montgomery County - uses such an organizational chart, and its budget is billions more than Rockville or the other municipalities. "Why would we be outside the mainstream," Moore asked Harris.
Harris said the change was justified by the huge purchasing backlog and low satisfaction ratings with the city's procurement actions.
Moore asked Harris if he thought the vacant procurement positions were a "major contributor" to those two problems. Harris said they were, but noted the Procurement Manager position had been vacant for a year. "It didn't seem like the attention was being placed in Purchasing," Harris said.
"We were down a couple of people in a small department," Moore continued, asking how that reality would justify the city treating procurement differently than other jurisdictions of similar size.
"The need is where you're at right now," Harris responded, arguing that the city's current need to address purchasing problems outweighed the factors that got it to this position. "You're in a special circumstance," Harris said. "I don't think you're gonna get the attention [required] by keeping purchasing in the department it's currently in."
Harris' report also found that the city's purchasing manual does not include over 25 areas of the city's purchasing code, that there was not a single purchasing report provided to the Mayor and Council that contained all of the necessary information elected officials needed to make decisions, that purchasing staff could correctly answer tests administered by the consultant only 44-56% of the time, purchasing was functioning at only 23% efficiency, there is currently no comprehensive system to track purchasing performance, there are no standardized forms or checklists across the purchasing system, that GAX payments or sole source bidding was being used in cases where they "should never, never be a sole source", and that P-card use was far higher in Rockville than in comparable jurisdictions.
Onley said, "This is a lot to absorb in one night. We need to step back, and figure out how we're going to tackle this." She suggested the City Manager decide how to implement the plan. Palakovich Carr concurred that Matthews should weigh in on the report before proceeding.
"I'm going to disagree," Newton said. "Those are things that need to happen right now." She said that the city had, in fact, just hired a Purchasing Manager, who will start this coming Monday. This would be the perfect time to switch to the suggested new system of reporting to the City Manager, Newton suggested. "As fiscal steward of our taxpayer money," Newton said, the Council shouldn't be second-guessing the recommendations.
The mayor also challenged Moore's earlier suggestion that understaffing was to blame for the purchasing mess. "The backlog didn't just happen in the last year," she said. "This is an ongoing issue. We need to stop burying our heads."
Palakovich Carr then made a motion to direct the City Manager to review the report, come back to the Mayor and Council in 90 days with her feedback, and allow it to be reviewed by the Financial Advisory Board.
Feinberg was livid. "90 days is going to take this report and put it on the shelf. To wait 90 days to get something back is going to get nothing done," she predicted.
Newton was also taken aback by Palakovich Carr's motion. "I am stunned by that motion, Councilmember." She said the report regards 60% of city expenditures. "Why would we wait another 90 days" to start saving money, Newton asked. "I'm flabbergasted." Turning around a talking point of her election opponents, the Team Rockville slate, she said, "It doesn't seem like people are ready to make the 'hard decision'. I'm really...I will not vote for that."
"90 days," Onley wondered aloud, "is that a long time?" "It is a lengthy report," Matthews said, whose remarks on the challenge of taking on supervision over purchasing gave cover to the political arguments for waiting to act on the report. Likening an immediate change to "flipping the switch," Matthews said she would "need to get up to speed." She implied that to have "an entirely new division reporting to me on Monday" would be difficult.
"I'm not comfortable with that," Feinberg said. "There's no way I'm going to agree to that." She said Matthews had sufficient experience and knowledge regarding purchasing to handle the new organizational chart.
"90 days is next year," Newton said. "I can read the tea leaves," regarding opponents' strategy in delaying the report's implementation. If the city were any other organization, and it had received a report like this, Newton argued, "heads would be rolling."
Palakovich Carr offered that if the length of the delay was the issue, "someone should offer an amendment to the motion." Feinberg offered one lowering the time to 30 days. Onley seconded it for the purposes of discussion, but concluded, "In light of [Matthews'] response, I can't vote for 30 days."
Matthews weighed in further, suggesting more "adequate staff resources" might be needed to handle the new responsibility. "30 days is too short," she said. "Would you agree, Councilmember Feinberg, that supervising someone takes time?"
Feinberg's amendment failed.
Newton called a vote on Palakovich Carr's motion, which passed 3-2, with Newton and Feinberg dissenting. The report, and Matthews' analysis of its recommendations, will now await the next Mayor and Council who will be elected on November 3.
"Making sausage isn't pretty," Newton said. "We've seen some of the ugliness of that here tonight."
Photo courtesy City of Rockville
