Money to Burn
Felix Lozada, Dallas Park and Recreation Board member, is sleeping in his chair. Board member Dwaine Caraway, sporting a gold crucifix and a Gore-Lieberman pin, is swiveling his chair back and forth, looking at the scene from behind gold-rimmed glasses. He checks his watch. It's 10:30 on a Thursday morning, and the board is haggling over several hundred thousand taxpayer dollars. It sounds dramatic. Obviously, it isn't to them.
The problem the conscious members are dealing with: The department has already hired the consulting firm Carter and Burgess to create their long-term plan, but the bill looks too steep to afford. The department has a million bucks to spend, but the consultants say they need nearly $700,000 more to do what the city wants done--a demographic analysis of residents, historic documentation, suggestions of new ways to use the parks to make money, and creation of focus groups to, you know, find out how folks feel about parks.
Unfortunately, no one from Carter and Burgess is present. This leads to a less-than-efficient negotiation because the only one with whom board members can haggle is Park and Recreation Department assistant director Willis Winters. Winters is looking for clues on how to keep the study under its allocated budget. He receives contrasting suggestions, from pursuing federal grants to nabbing funds from other city departments to deferring some of the study's work until later.
Board member Carol Ann Brandon pipes up: Will deferring parts of the study mean raiding money earmarked for projects like fixing the scores of recreation centers in desperate need of repair?
Good question. No one has the answer, unfortunately--because no one knows where any extra money would come from.
The members then pore over an itemized list of what their money will buy them. For example: For $35,000, Carter and Burgess will conduct "Interviews with Key Community Leaders." The firm will carry out one-on-one interviews with 40 people--including the 15 park board members--for a cost of almost $900 per interview.
In other words, the firm conducting the study wants 35Gs so it can interview the people cutting the check. One hopes that Lozada can stay awake during his interview.
What's going on here? Sure, financial waste and government are kissing cousins, but the study the park board is trying to fund is nevertheless too typical of a widely accepted practice in Dallas: burning public money on expensive consultant studies with nothing to show for it other than an overpriced binder of paper.
"The market is driven by government entities like us who are willing to pay. The numbers we look at are so inflated over what they would be in the real world," says city council member Donna Blumer. "We never get a chance to evaluate how these consultants should be paid...They're just numbers to us."
The practice isn't going away any time soon, city officials say, because the process--hiring a firm to state the obvious or plead your political case with sympathetic statistics--has become routine. Consultants have become ready-made workers in an era of shrinking city staffs; instant public works, just add money and stir.
The problem is best seen in three common city-study scenarios: When the city comes up with an idea, it needs a study to validate it; when it has no idea, it needs a study to come up with a plan; finally, studies are often paid for and created simply to make it appear that the city is on top of a problem it would rather ignore.
In this case, the park board is paying for a long-term strategy for itself, a blueprint that somehow eludes the department heads, the board, and the city council. It is paying a million dollars to a firm to tell Dallas what it needs to do in order to run its public parks and gauge the priorities of Dallas citizens. The firm will spend nearly $150,000 on public forums and focus groups when anyone who's been to the city's battered recreation centers, seen its condom-littered lawns, or walked its unlit parking lots could tell you what to do for free.
"It costs $50,000 a playground. Every time we screw up, how many playgrounds does it cost the kids?" asks park board member Ralph Isenberg.
The park department has put its foot in its mouth.
It's April of this year, and the city is set to shut down 26 community pools, raising the ire of politicians and community groups. City council member Laura Miller hops on a high horse and rides the issue through City Hall. The battle becomes so politically charged that council members such as James Fantroy actually turn down donated money to keep pools in his district open.
Open mouth, insert foot. No such plan exists.
One soon will. The same department that wouldn't shell out $40,000 to keep a pool in Arcadia Park open has hired a firm to do a $197,000 study for the city's aquatic program.
"What they're doing is getting the park department out of trouble for getting caught with their pants down over pools," says Isenberg, Miller's combative appointee to the park board. "It would be nice to think this company would do an objective, nonpolitical study of an aquatic program. I fear there will be a political direction given."
Isenberg worries that the city is still devoted to shutting down the community pools, and this study is one big step closer to establishing a small network of park department-run, pay-to-enter water parks to replace them. The politics are divided along lines of community pools versus big facilities.
What will the study suggest? No one knows for sure (it's not yet fully completed), but a betting man would note that Dallas hired Water Technologies Inc. to evaluate the city's community pools and study the feasibility of building a big water park. Water Technologies is nationally known for construction of (surprise!) large water parks. The firm then not only sells its consultations on how a city can hatch water parks, but it also builds them. One-stop shopping.
There are more park department-related studies out there beyond those above, including master plans for the Dallas Zoo, Trinity River Parks, Fair Park, and the Arboretum. (A master plan determines what's wrong with a facility, project, or department; in what order work needs to be done; provides ideas on how to generate revenue; and offers a usually ignored mechanism for public input.) The park department and its myriad studies are a microcosm of the city, whose every step requires the backing of a costly independent study.
Dallas Interim City Auditor Thomas Taylor says this reliance on consultants is not caused by staff ignorance but by the need for an outside voice to give advice. "It's based on the comfort level, to get them to go out on a limb to make a decision," Taylor says. "The decision-makers want an authoritative voice."
That voice does not often come from city workers. With the combination of a depleted staff and increasingly ambitious plans, cities need consultants to extend their reach beyond what the cities can handle.
"It's not a trend anymore, it's the way things are," says Michele Frisby, public information officer for the International City/County Management Association. "That's why you're not hearing any backlash."
When Donna Blumer first took her seat in 1993 on the city council horseshoe, she received a lesson in the perils of commissioning studies.
After the city annexed Preston Hollow, it became clear the rapid influx of people and houses would overcome the existing infrastructure. Then-rookie council member Blumer talked to city staffers about the problem, and they recommended hiring a consultant to study it. She agreed. The city hired local firm Wendy Lopez and Associates at a cost of $500,000.
Months later she found out that city staff, anticipating the growth, had done internal surveys that duplicated the Lopez study. Big parts of the half-million-dollar study were redundant.
"It seems the knee-jerk reaction to any difficult situation is to hire a consultant or consultants, and put it in the hands of somebody else," Blumer says. "Sometimes when we get negative press, we'll hire someone to make it look like we're doing something."
In February, the Washington, D.C.-based magazine Governing gave Dallas an overall grade of C+ for five categories, including financial management and human resources, while doing a city-by-city evaluation. It didn't take long for Mayor Ron Kirk to come up with cash to hire help. "The city management's immediate response was to hire Arthur Andersen for $1 million," says Blumer, who voted against hiring the high-profile firm. "If we're in such dire straits, we should have known a long time ago. But we respond to a magazine article by hiring a million in consultants."
Governing magazine also inspired the city to move along in upgrading its internal technology. The magazine gave the city's information technology services a stinging D+. There is now a huge push to modernize.
The spearhead of this effort is H. Daniel McFarland, Dallas' chief information officer, who is trying to drag the city's infrastructure from its current state, which he estimates is where other comparable cities were technologically in 1985.
According to McFarland, the software that runs the city was set up by city staff, most of whom are retired or dead. While at City Hall those staffers relished the advantage they had; they were the only ones who knew how the systems ran and were not inclined to change. Things are so bad that the city has to bring them back from retirement to fix problems since they alone know the software's archaic language.
So if the problems of the city's technology are so apparent, why hire a consultant? "You want to have someone that is unbiased, not someone who isn't there to protect their own self-interest," McFarland says.
And that's the scene in Dallas; department heads who need to hire outsiders just to get advice without political shenanigans, and intra-departmental squabbles clouding anyone's judgment.
Inadequate technology at the city's municipal court is also being targeted by consultants. McFarland has many ideas on how to fix the problem, starting with building a system that allows cops to combine multiple citations onto one ticket instead of writing one citation per infraction by hand. In the age of the information revolution, writing anything by hand is called waste. This waste also takes a human toll; impatient people stamp their feet like horses while waiting in long lines to pay their tickets.
The city's response: It has allocated $750,000 in consultant fees to perform a "process review" and "technology needs assessment" to figure out what's wrong at the courthouse and what technology needs to be bought to fix it.
McFarland's trying to be frugal, befitting his private sector tech chief and city bureaucrat background. (The last two hats he wore were president of Communication Engineering Co., a private high-tech company in California, and general manager of San Francisco's telecommunications network.) McFarland knows there's a right way to use consultant studies, and the key is accountability.
"What you do is peg fees on delivering what they proposed, then you see how committed they are. We don't want them to just come by, offer their opinion and then leave," he says. "We want them to be part of the solution, not part of the problem."
Unlike others at City Hall, he also has the sense to actually use the consultant's independent suggestions.
"I think I'm the only one to take the findings of two consultants and put them in the budget," says McFarland of the 2001 proposed budget, passed in mid-September. But isn't assuring accountability and actually using consultant suggestions a standard practice? "Not around here," he says.
Politics and bad judgment in moonlighting may have ridden City Auditor Robert Melton out of town, but not before he landed a good jab at the way the city hires consultants.
Last year, Melton drafted an audit that found that cultural affairs director Margie Reese and other top officials circumvented city rules to give a $500,000 architectural consulting contract to a firm Reese favored. Melton pointed out in his audit that there is no way to ensure "that a fair and objective process is followed." That can lead to an "increased risk of manipulation, favoritism, and lack of objectivity" in awarding such contracts, the audit concluded.
His audit and aggressive tactics provoked the wrath of some city council members who supported Reese. The anger of the whole council was fully unleashed when Melton was found to have taken a full-time auditing job in his native Florida. The mayor and others lambasted him in the press and told him not to come back.
Now, sitting away from the fray, Melton says Dallas is no more beholden to consultants than most government entities, but "of particular concern is the way the consultants are solicited and the type of work they are selected to do."
Often a consultant will be prone to bias in hopes there will be steady work from city management. Doesn't that eagerness to please lead to a breakdown in a consultant's objectivity?
"Yes, it certainly can," Melton says. "Consultants who are professionals will have boundaries and lines they won't cross...but when the city provides a lot of money, it's just human tendency to want management to be pleased."
It's not hard to find examples of studies that are done to push someone's agenda under the guise of independent evaluation. In 1990, the Texas Supreme Court struck down a Dallas ordinance that required liquor stores to obtain special permits before opening their doors. Singling out one type of business for discrimination, the court ruled, was unlawful. Stymied by these pesky laws and civil rights, the city has resorted to expensive studies to lobby themselves for rezoning designed to shut out these targeted establishments.
One main battle zone is the Fair Park area; during the last two months, the city has hired consultants to study development there. Three firms were hired to do the first studies, to "evaluate existing conditions and see if anything needed to be done," according to city planning director Leif Sandberg.
In February, the city council voted for a three-month ban on new building permits in Fair Park, an area residents have complained has a disproportionate number of liquor stores. The moratorium was voted into existence with an $80,000 study--the stated goal of which is to clear the way for reclassifying the area as a "redevelopment district." That designation would limit the establishment of new liquor outlets in Fair Park and put a clamp on sexually oriented businesses.
The council signed off on that moratorium without realizing consultants would be hired. "I assumed we'd be doing this in-house," huffed council member Laura Miller at a council meeting in September.
It's hard to see the study, given the consultants hired and the city's clear animosity to adult businesses, as anything but a way for the city to shore up its rezoning position. One of the consultants is Alva Baker, who lives in the Fair Park area and has ties with activists there. "I'm aware of this issue professionally as well as personally," she says cheerfully.
Baker is a very pleasant woman who has done work with Dallas before, from disparity studies to DART proposals. She is deeply involved with the Love Field Master Plan. Baker's role in the Fair Park study, she says, was to organize the community through mail surveys and newsletters, letting neighbors know the city was considering a change. She also coordinated small meetings between community groups and local clergy, who wrote joint letters to the council over the issue. There were no meetings with liquor-store owners, and Baker said that if any showed up at public meetings, "they were not vocal." Liquor-store owners say that, in essence, the city hired a local figure to lobby her sympathetic neighbors into supporting zoning changes.
The owners of the other two consulting firms hired to conduct the study, James Gilleylen and Ray Stanland, are former city employees. Gilleylen is the former director of the city's Department of Housing and Neighborhood Services and one of former City Manager John Ware's associates in forming large-scale neighborhood development plans.
Gilleylen was one of the people behind the Fair Park Gateway Plan, a NationsBank-funded study that concluded, among other things, that the city and NationsBank should acquire 150 acres of property for redevelopment--with Dallas paying $12 million for the first 100 acres.
Why didn't the council members know that the consultants had been hired? Because the money for the Fair Park consultants totaled $45,000--three contracts of $15,000. That's the maximum amount that the city can authorize without approval from the city council, and that's why Laura Miller didn't know the studies had been out-sourced.
Miller won't complain too much; like the rest of the council, she's eager to find a way to crack down on these establishments. (Maybe overeager. At a budget hearing this year she likened them to "cockroaches.") Other anti-liquor and sex-club activists are watching the Fair Park experience to use it as a model to run these establishments from their neighborhoods too.
In the same way these studies are used to run babes-and-booze joints out of city limits, Dallas relies on hired guns to do what the courts said it shouldn't: set racial quotas (called "benchmarks" in cityspeak) in city contracting. To make sure there's enough minority businesses in the community to support the quota, the city, as required by law, must hire an outside firm to survey minority businesses in local industry.
The city's not supposed to be in the race-counting business to begin with. The U.S. Supreme Court ruled in 1989 that cities couldn't set minority contracting goals unless they can prove past discrimination. No one has here in Dallas. Nevertheless, in 1994 the city hired Atlanta-based D.J. Miller & Associates to determine how many minority firms the city could use. The study cost more than $250,000 and took three years.
The study was unveiled in 1997, then dismissed. The study found that City Hall had overestimated the number of active minority firms in the area in setting previous benchmarks. The city council ignored the findings and in 1997 set all but one quota--um, "benchmark"--above those recommended by the consulting firm.
But here's the real kicker: They didn't have to do it at all.
According to Reye Olivas, assistant director of the Office of Minority Business, the city could go to the North Central Texas Regional Certification Agency for a constantly updated list of the certified minority firms in and around Dallas. That agency vets various companies and registers them as minority-owned. The city could just call them, get the numbers, and damn the studies.
Undaunted, the city has commissioned another "availability and disparity study" in this year's budget. The cost for that study: $500,000.
The park board's meeting is over. Lozada has woken up and Dwaine Caraway has dashed to the bathroom. There is no consensus on how to get the parks' master plan done for a million dollars.
Doing it in-house is not an option. Willis Winters says his department's planning staff has been cut 70 percent since the mid-1980s. "Our planning and design division staff doesn't have the capacity to conduct a study of this magnitude. We don't have the time to do any design in-house, like we did in the '80s," he says. "We'll never get to those levels again."
Winters will go back to Carter and Burgess for more negotiations. It's unclear whether the city will scrape for the $1.7 million or stick with their allocated million.
City staff is getting smaller while the scope and breadth of the city projects is growing. The only way to fill that gap is by hiring experts. This year's budget is the biggest in Dallas history, and 540 staff positions are being cut.
"One trend we've noticed is that you see more and more staff being reduced," says Susan Barron, of Carter and Burgess' marketing department. "For some of the more specialized jobs...they just don't have the staff."
She cited the city's transportation and engineering staffs as ones that have witnessed large cutbacks. The firm has several former Dallas city employees of those departments on staff, but wouldn't let the Dallas Observer speak with them.
David Dybala, director of the city's public works and transportation department, says the numbers of consultants hired has been steadily increasing as the city pushes through bond package after bond package.
"We handle that many more projects and we don't have the staff," he says. "With the amount of work we do now, with the '95 and '98 bond programs, we have to use consultants."
By the way, the city cut another 18 staff positions from this year's transportation budget. Of the 13 employees that received pink slips, all but two are getting new jobs with the city, saving taxpayers nothing. Six of the positions that were cut, members of a city survey team, are being out-sourced to a private firm.
During the park board's meeting, Ralph Isenberg spies two city planning and development department staff members in the audience. At one point he asks the two, "Could we hire you to do this study, and how much would it cost?" Everybody guffaws, but Isenberg is serious. Pressed, the planning department guys tell him that it isn't feasible because of time constraints.
Later Isenberg goes over the daylong meeting, details of the water-park study and upcoming comprehensive parks department study swirling in his head. Finally he says, "We didn't talk about kids much, did we?"
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