In Part 4 of this five-part series, I will try to explain how the City normally plans for and funds projects like the precast concrete structure in City Park.   Then I will show what the City did to circumvent the normal funding process.  The circumvention has an unintended consequence.

In theory, everything the City does follows some plan or series of coordinated plans.

For example, each city department should be required to do something resembling a strategic plan.  The Government Accountability Office (GAO) defines strategic planning as, “A systematic method used by an organization to anticipate and adapt to expected changes.”  If the Police Department had been doing meaningful and effective strategic planning, then some years ago the need for the “Park substation” might have begun to appear.   The substation would likely have been identified as an objective, and the plan would go on to state how the Department planned to achieve the objective.  Presumably that would have been something like, “In the Financial Plan for FY 2007-2008, request a precast concrete structure and put it behind the Museum in City Park.”  The strategic plan would have included some funding alternatives and ways to measure if the objective was being met.

So with whatever passed for strategic planning in Coeur d’Alene done, we move on to how the substation could be funded.

The City of Coeur d’Alene’s annual financial plan (see Financial Plan, Fiscal Year 2007-2008) is its roadmap for spending public money for programs, goods, and services needed to operate the City in fulfillment of its plan.   The process to reach a finished financial plan is fairly straightforward.

Departments submit specific requests to the Finance Department.  For example, this might have been the request (Page 1 of 2 and Page 2 of 2) Police Chief Wayne Longo had intended to submit for the proposed precast concrete structure in the Park.

Once the various departments’ requests arrive in the Finance Department, a collaborative effort prioritizes, revises, and deletes some of them.  Someone makes decisions about what will stay in and be funded.  The public is usually invited to participate at one or more workshops, however rarely does public input cause any significant changes.  The proposed final plan is prepared, and in September the Finance Director presents and explains it to an open Council meeting.  The Council votes to approve the plan, and that authorizes the City departments to spend the money allocated.  That’s a very broad overview of the way the process is supposed to work.

That’s not how it worked with the proposed substation.  In his presentation to the Lake City Development Corporation (LCDC) on March 19, 2008, City Finance Director Troy Tymesen stated bluntly that the proposed substation was not in the budget (the financial plan) for this year.  The City had allocated no money to fund this proposed project.

I had made an earlier Public Records Law request for the most recent five years of Police Department strategic plans to see how the substation evolved.  It didn’t evolve.  It was in neither of the two Police Department strategic plans the City provided.  That’s not surprising.  In his presentation to either the Council or the LCDC, Police Captain Steve Childers said that the first serious mention of the proposed building was in 2007.  Police Sergeant Christie Wood is in charge of civilian volunteers, and she felt a building in the Park would help those volunteers.  There was subsequent discussion of the idea among the Police, Fire, and Parks Departments.  There was apparently general agreement that the building could be beneficial.  On January 30, 2008, the project appears to have been formalized with the designation of Howard Gould, City of Coeur d’Alene Building Maintenance Supervisor, as the project manager.

Since the FY 2007-2008 Financial Plan had been approved in October, and since the project hadn’t been specifically requested, the City needed to find a way to quickly and quietly (meaning without the public having an opportunity to question its need or justification) fund the project if it was to be completed by mid-June 2008 as hoped.

Keep in mind it isn’t as if the City didn’t have the money.  From Page 79 of the Parks & Recreation Master Plan:  “B. Funding Resources | Parks Capital Improvement Fund Sources:  The following funding sources provide revenue that appears in the Parks Capital Improvement Fund — ‘Impact Fees.  The City of Coeur d’Dlene charges impact fees on new construction, and these fees are used to fund capital improvements for Parks, Police, Fire and Streets.'”  Page 33 of the City’s FY 2007-2008 states the City expects to end the FY with a balance of $93,500 in the Parks Capital Improvement Fund and $1,805,000 in the Impact Fees Fund.  The City had the money to fund this project without going to LCDC.  The City had failed to plan ahead so the money could be lawfully spent.  Or there was some intervening event, maybe a promise made, that compelled the City’s desperate drive on this project at the eleventh hour, fifty-ninth minute.

Thus begins the formal procurement process.

I presume this substation is a public works construction project as defined in Idaho Code 54-1901.  If so, that would trigger the provisions of Idaho Code 67-2805, Procurement of Public Works Construction.

The statutory funding options were simple:

• If the value of the project was contemplated to be between $25K and $100K, written solicitations for bids had to be submitted to at least three owner-designated licensed public works contractors.
• If the City determined it was impractical or impossible to get three bids, then the City could get the work from a qualified public works contractor quoting the lowest price.

The City neither solicited nor obtained bids even though the project cost was within the range requiring them.  The City obtained quotations from two companies.  After negotiating the quotations, the City apparently accepted the quotation for $49,800 from CXT, Inc. of Spokane Valley, WA.

I disagree with the assertion made by Sergeant Wood on Page 1 of 2 of her press release that, “The Departments received three bids on the project ranging from $49,800, one for $50,000, and another for $54,610.  This same “three bids” was echoed by Captain Childers in his presentations.  In my public documents requests, I specifically and explicitly requested copies of bid solicitations.  There were none delivered to me.  In her email to me on March 24, 2008, City Clerk Susan Weathers said, “Also, I misstated the dollar limits in regard to quotes – from $0 to $25,000 no formal quotes are required; from $25,000 to $100,000 a semi-formal quote process is required, and; above $100,000 requires the formal bid process.”  So Wood and Childers says the City got bids, and Weathers says bids were not necessary.

I also disagree with both Wood and Childers that three bids (or quotes) were obtained.  The City got two quotes.  What Wood and Childers are calling the third bid was a State of Idaho Blanket Purchase Order for $500,000 [sic] with CXT, Inc. of Spokane Valley, WA, the same company the City received its first (and winning) quote from.  Nowhere in the documents provided to me was a bid or quote for exactly $50,000, Wood’s and Childers’ phantom “third bid.”  The City might have been eligible to use the BPO with a MIPR, a multi-interagency procurement request, but there was no indication that was done in the documents provided pursuant to my Public Records Law request.

Moving on…

The City wanted to spend $49,800 for the substation, but it said spending that money for that purpose had not been authorized in its Financial Plan.  That’s correct.  And that’s exactly where the project should have ended for this year.  The City Council should have told the Police, Fire, and Parks Department to put this previously unidentified “need” in its Financial Plan submissions for next year.  That’s not what happened.

Before this matter ever got to Council, City Finance Director Troy Tymesen and LCDC Director Tony Berns had tentatively agreed that the LCDC could fund the entire amount this year.  The City would try to find $25,000 to pay half the cost back to LCDC in February 2009.

As noted in an earlier post on this subject, the LCDC normally requires that applicants submit a completed LCDC Project Proposal Application.  Please flip through the pages of this linked document to get an idea of what is normally required for LCDC to give your money away.  Now look at what Tymesen submitted and what the LCDC accepted instead.  Page 1 of 2.  Page 2 of 2.  Berns’ cover letter forwarding those two pages two me explained why the abbreviated procedure was acceptable.  He said, “LCDC did not ask the City to complete a project application for two reasons, 1) the information presented to the LCDC Finance Committee on Marth 12th included the same information we would have asked for in the proposal application, including a clear cost/benefit analysis of the proposed project; and 2) the project proposed a June 2008 target date forinstallation of the proposed building making it very time sensitive.”  Readers can compare the documents and decide for yourself if Berns’ explanation revealed good stewardship of the public money.

Regardless, minutes of the March 18, 2008, Coeur d’Alene City Council meeting reflect a motion offered, seconded, and passed “…to authorize staff to proceed with the necessary steps to acquire a fabricated cement building to be located in City Park and to be used as a public safety building.”  So during this meeting the Council agreed to authorize a purchase for which funds had not yet been allocated.  You see, it was not until the next evening, March 19, 2008, that the LCDC agreed to fund the entire amount for the building.  That’s what passes for fiscal responsibility in the City of Expedience.

The unintended consequence mentioned in the opening paragraph of this post?  Until the City repays the entire amount to the LCDC, that moveable police substation cannot be moved and used outside the boundaries of the Urban Renewal Agency.  Anyone want to bet this building is going to show up in Riverstone after the Ironman contract eventually terminates?

Next:  Part 5 – How the City could have met the project’s objectives at far less cost and far more benefit to the taxpayers and participating agencies.