1 Percent Tax: A Test for Contractor Reform | Jackson Free Press | Jackson, MS

1 Percent Tax: A Test for Contractor Reform

Mayor Tony Yarber checked off quite a few items from his agenda, including the hiring of 1-percent sales tax program manager and a vendor for a new open-data portal, as well as getting the City Hall guest WiFi back up and running.

Mayor Tony Yarber checked off quite a few items from his agenda, including the hiring of 1-percent sales tax program manager and a vendor for a new open-data portal, as well as getting the City Hall guest WiFi back up and running. Photo by Imani Khayyam.

Almost two years after voters in Jackson decided to tax themselves an extra 1-percent worth of sales tax on certain goods, heavy machinery will soon be turning dirt and the City will start spending from the tax fund.

Officials also believe sales-tax-related construction will be a good test for a new openness and transparency regime the City says it's entering. In a near-unanimous vote, the Jackson City Council approved hiring of Jackson-based IMS Engineers for $839,999 to manage projects in the first year of the 1-percent sales-tax master plan.

Mayor Tony Yarber said total first-year expenditures will total about $15 million. In four subsequent years, Yarber expects the City will commit $50 million in sales-tax-funded projects, but did not know how much IMS would be paid in those years because it would depend on the number of projects involved.

Council members asked 30 minutes of questions before voting 4-to-1 in favor of hiring IMS, with Ward 1 Councilman Ashby Foote as the lone dissent.

"We've got all these layers of oversight, and we're building in another layer in here," Foote said. He has expressed frustration during other contract negotiations about the council's inability to know where the buck stops between the city, prime contractors and subcontractors.

Foote's protest notwithstanding, the selection of IMS came with relatively little controversy compared to other professional-services contracts that have gone before the city council in recent months. These include an agreement to remove 305,000 tons of sludge from the Savanna Wastewater Treatment Plant and switching health plans for city employees. For 1-percent sales tax projects, IMS will help develop a comprehensive infrastructure plan—a 20-year blueprint to overhaul of the City's infrastructure system of roads, bridges as well as water, sewer and drainage systems. IMS will also provide geographic information system mapping and handle the public relations and outreach.

Yarber said IMS did not receive the top score from the City's evaluation committee, but two companies that scored higher had conflicts because those firms would have overseen work they previously completed.

So far, taxpayers have generated approximately $21 million from the 1-percent tax that voters approved through a referendum in early 2014. The first year of the tax added up to $15.1 million and is designated to begin repairs on some 2,000 miles of roadway, 881 miles of water main and 1,000 miles of sewer pipe.

A Test for Openness

Despite the lack of surface tension over bringing IMS on board, it serves in some ways as a test of a promised era of openness and transparency in the way City government operates.

Ward 6 Councilman Tyrone Hendrix has put forth a slate of proposals to increase transparency with subcontractors and professional-services agreements; another proposed ordinance codifies an executive order Yarber signed over the summer.

The ordinances went to the council's Rules Committee last week, but City Council President Melvin Priester Jr. took the opportunity to ask IMS about its subcontractors.

Rod Hill, an IMS co-founder and principal, said the company subcontracted out to four firms, including Jackson-based TMHall and Advanced Environmental Consultants to handle permitting, regulatory and compliance issues; ATI is overseeing public education and outreach; and QSI will perform hydraulic modeling work. A national firm, Kansas City, Mo.-based Burns McDonald, is also on the project to consult on environmental design issues, but Hill said the company would not do a significant amount of work.

Together, the subcontracts represent 40 percent of its contract—approximately $356,000—of IMS' total contract.

Hendrix points to New Orleans as a model for subcontractor reform. In June 2010, the New Orleans City Council enacted an ordinance requiring contractors to disclose its subcontractors, and how much they're paid, after a series of high-profile corruption convictions of top officials and their associates.

In 2008, a political insider named Stan Barre was sentenced to five years in federal prison for taking kickbacks from subcontractors looking to do business with the City of New Orleans. Former New Orleans Mayor Ray Nagin was convicted on 21 corruption charges related to taking bribes from contractors, including a 2004 Hawaii vacation paid for by a city subcontractor.

Yarber has said his office does not directly engage subcontractors, but that several layers of oversight are in place to make sure everything is above board. In response to a JFP editorial calling for increased subcontracting transparency, Yarber's office wrote:

"While we don't get involved in negotiating the prime contractor's subcontracts, we do require roles and responsibilities of all subcontractors and a utilization plan so that it is understood how those subcontractors and subconsultants will be used. The utilization plan is tied to the Equal Business Opportunity Plan, if applicable. Additionally, the contractor must submit progress reports, including the percent complete and the EBO status report, to the City with invoices."

In the meantime, the City also approved an agreement with Seattle-based Socrata for its months-in-the-works open-data portal. Jackson does not have to pay for the service for one year; after that, the City will be responsible for a maintenance fee. The portal is part of a $42 million Bloomberg Philanthropies initiative.

The system will work in tandem with another system called OpenGov, a government budget-tracking system.

"You can be anywhere in the world and see what the City of Jackson is doing with city financing and city funds," Yarber said.

OpenGov will cost the City approximately $21,000 per year. Hendrix said management of the system will be governed in part by an open-data ordinance he proposed to give Yarber's executive order some teeth. Another layer of oversight will be the City's open-data governance committee, which will perform regular checks to make sure departments are uploading the necessary documents, including executed contracts.

Disclosure: JFP news editor R.L. Nave serves on the city's open-data governance committee.

Comment at www.jfp.ms. Email R.L. Nave at [email protected].

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