Who in his right mind would enter into a $5.9 million contract without getting other bids?
Who in his right mind would enter into a seemingly one-sided $5.9 million contract?
Government officials spending other people’s money, that’s who.
Wilkes-Barre Mayor Tom Leighton, he of the cash-strapped city, convinced his cronies on the city council in September to go deeper into debt by approving a $5.9 million contract with Johnson Controls to implement measures to improve energy efficiency. Last week, the council approved an ordinance to float $5 million in general municipal bonds to pay for the project.
We’re told that the city could – big emphasis on could – save about $11 million in energy costs over the next 20 years. At first glance that sounds like a good deal. But keep in mind, it was pushed through by a gang who’s proven it sometimes can’t shoot straight. Who can forget the failed plan to lease the city’s parking assets in exchange for a quick $20 million windfall? The only ones who got rich there were former city administrator J.J. Murphy, who raked in $300-per-hour consulting fees and his brother’s Philadelphia law firm, which was paid $400 per-hour, until the party ended.
Unfortunately, it was The Times Leader, and not apparently the city council, which scrutinized this energy plan contract. The newspaper reported that this company makes no guarantees at all that the city will realize $11 million in savings after spending $6.38 million, which includes paying back the bonds and approximately $1.3 million in interest over the next 13 years. The company does guarantee the city will save $3.9 million.
What’s wrong with this picture, you might ask? It sure sounds like Johnson Controls is in the driver’s seat and not the ones paying the bill, which is you, city taxpayers.
The city did not seek other bids for a very good reason. It didn’t wanna. Butch Frati, the city’s director of operations, said the city didn’t believe it was necessary to get any other bids because it has been satisfied with the firm’s past performance. So there you have it. Why bother to see if there are any other energy efficiency companies out there who may charge less for the same work? Because Mr. Frati and Mr. Leighton saw no need. Just like Mr. Leighton saw no need to inform city taxpayers that a Secret Santa years ago donated $1 million to the city to purchase fire engines.
Even more disturbing, after reading the TL’s two day analysis of this contract, is that officials in York, PA, which is also undergoing energy infrastructure improvements, costing $2.4 million, did get a guarantee from Johnson Controls, that it would end up with a $55,512 surplus at the end of its 15-year bond issue. That compares to Wilkes-Barre’s $3.9 million guarantee in savings after spending $6.38 million. But why drive a hard bargain when the company did good work in the past?
The contract, according to the TL’s report, also says that Johnson Controls will monitor and calculate the energy savings it has guaranteed. No conflict there, said Mr. Frati. “I’m confident a company like Johnson Controls would be honest, fair and accurate,” he said. If only we could be so trusting of this administration.
Weighing in, city Administrative Coordinator, Drew Mc-laugh -lin, told The Citizens’ Voice, “We’ve done our homework and looked at this extensively. We believe that the operational savings we are committed to are not extreme and well within our power to execute.”
Don’t laugh because this isn’t funny.
Those operational savings, $6.9 million, rests with the city once the improvements are made. The company making the big bucks – $5.9 million – is only guaranteeing $3.9 million in energy cost savings. Johnson Controls helped the city estimate the projected $11 million in savings but that was it. It bears no responsibility in making sure those total savings are realized because the company said such savings are “outside of the (company’s) control.” That means they’re in the city’s control. UH OH!
You do the math. The project, including interest, will cost $6.38 million. The city is guaranteed to save $3.9 million over a 20-year period. The rest is up to the city. It may save more, but who knows?
How again is this a good deal?
- Betty Roccograndi