Something’s Wrong at City Hall
May 17, 2011, 8:03 PM
Filed under: City Staff, WiFi

May 17, 2011

We’ve been noticing a series of management failures at City Hall. For example, new details about the complex, expensive and unworkable transaction described below raise troubling issues with fallout that has persisted for four years. See what you think.

Automated Water Meter Readers

Back in 2007, the City wanted to convert water meter reading to an automated process. There was no money to fund the capital cost so City procurement staff issued an RFQ (Request for Qualifications) for an “energy savings performance contract” that would allow the City to borrow the money and repay the loan over a period of years with savings that would come from this new technology.

Staff Rushed the Project: Why?

Before the March 2007 due date for the RFQ, the City canceled it and soon issued a different one. Five companies then submitted bids. The City held no interviews with the bidders and allowed for no presentations. Just five days after the bid closing date, staff selected Johnson Controls (JCI) for the job, and placed this selection on the City Commission’s consent agenda. Mayor Giulianti commented that the back-up on this item required five hours of reading, and she made sure it was pulled from the consent agenda so that objecting bidders could speak. But in the end, the commission followed the staff recommendation.

Why was staff so quick to select Johnson Controls over Honeywell and the other bidders? At whose behest was the original RFQ revoked and for what reasons? Why did staff recommend such a costly and complex project with no opportunity for the commission to hear presentations from the bidders? (A cone of silence was in effect which prevented the elected officials from their own meetings with any of the bidders.) Why was this matter placed on the consent agenda where no discussion could occur? How many elected officials beside Mayor Giulianti actually spent the many hours required to read and understand the backup material?

Once selected, Johnson Controls ramped up the project to include not only water meter reading, but also a secure public safety communications system, automated parking meter reading, and a City-wide wi-fi network that would allow the Hollywood public free internet access.

This ambitious project received final approval by the new City Commission elected in January 2008. A few months after they took office, in order to finance the project, the new Commission approved a $16 million lease purchase agreement with Bank of America, to be repaid over 15 years. Although the City has now paid about $13 million to JCI and we continue to make payments on the BOA loan, not a single component of the project is working as promised.

The City has now accepted that the wi-fi network will not work city-wide. The new goal is downtown and the beach, only. But it does not even work reliably in these locations. The parking meters are being read by cell modems because the wi-fi network is too unreliable. Only 5,000 of the City’s 40,000 water meters are being cautiously read by the rickety wi-fi network. The City Commission has given up entirely the idea of using wi-fi for public safety communications. So the project is greatly diminished.

JCI paid the City some $926,000 in January 2011, to account for a “shortfall” in the City’s anticipated energy savings from the project in 2010. But JCI is now seeking more money from the City (as described below) and in any case, no “shortfall” payment comes close to compensating the City for four years of staff time and money spent trying to make this project work.

Although high-level staff have been touting this program for four years now, assuring us that the problems can be cured, the minutes of weekly staff meetings on this project suggest otherwise. Every Tuesday, at 3 PM, for many months, staff have been meeting with JCI representatives to discuss “progress.” The minutes of the May 3 meeting, which involve a JCI subcontractor called US Bronco, are devoted to problems with water meter reading. With perseverance, they can be read HERE.

These minutes are written so poorly and reflect so much confusion that they are an embarrassment to city residents and staff alike. The very last sentences, however, make clear that the network is not working, JCI wants the City to assume the cost of maintaining the malfunctioning network, and JCI wants additional money from the City. What we see reflected here are weeks and months and years of wasted staff time, millions of wasted tax dollars, unacceptable management practices, and profound dysfunction at City Hall.

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