Investigative Report on City of Carmel-By-The-Sea Contracts

8/9/2019 Investigative Report on City of Carmel-By-The-Sea Contracts

1/22

CITY OF CARMEL-BY-THE-SEA

Council Report

May 5, 2015

To: Honorable Mayor and Members of the City Council

From: Douglas J. Schmitz, City Administrator

Subject: Investigative Report on City of Carmel-by-the-Sea Contracts

RECOMMENDATION(S):

Receive Investigative Report on the City-of-Carmel-by-the-Sea contracts.

EXECUTIVE SUMMARY:

The City Attorney and outside counsel Stephanie Atigh will present the results of theinvestigation into City contracts.

APPROVED:

____________________________________ Date: ____________________

Douglas J. Schmitz, City Administrator

Council Meeting Date: May 5, 2015 Agenda Item: 8.A


2/22

ackground to Contracts Review

In Fall 2014, I was asked to review and report on a number o City agreements with the

following contractors: Public Consulting Group, Mark Alcock, Boots Road, Davies

Communications, Blaze Public Relations, and Richard Tavener.

The scope o my review was limited to the dollar value o each contract, the amount

paid by the City, and whether the City received a deliverable (service or product). My

report does not assess the value of the deliverables either in quality or quantity.

The review process included an initial 3 hour meeting with Caroli

na

Bayne and Carolyn

Hardy when I received copies

o

relevant documents (contracts, staff reports, invoices,

purchase orders, checks) as well as the initial financial spreadsheet prepared by

Carolyn Hardy.

In

addition, I conducted 15 interviews with current and former City officials/ employees

and citizens. I also interviewed three

o

the contractors to clarify billing information

submitted in their invoices.

I have prepared a separate report for each

o

the contractors, with the exception

o

the

combined report for Davies Communication and Blaze Public Relations.

I would like to thank Carolina Bayne and Carolyn Hardy for their good work and

generosity in sharing their time and the information they gathered. My task was

significantly assisted by their efforts

in

compiling the key documents and

in

meeting

with me to share those documents and their knowledge .

In

particular,

Ms

Hardy spent

countless hours reviewing invoices, purchase orders, and checks to compile detailed

spreadsheets itemizing each invoice received from the contractors and each City

payment. Those spreadsheets provided an essential foundation for my work, and by

saving me time, saved money for the City.


3/22

MARK ALCOCK 3 CONTRACTS

1 ASD-PCS-MA-001-2013-14

Contract Date:

February 25, 2013

Contract Term:

Not specified. This Agreement is subject to renewal

agreeable to both parties.

Contractor:

Mark Alcock, Sole Proprietor

Contract Amount:

Amount not to exceed $25,000 t a billing rate of

$200 per hour for FY 2013-14 and reasonable expenses.

City Approving Authority:

City Administrator

Contract Purpose:

Forensic technology investigative services as

determined by City

Amount Paid: 51,584

comprised of $43,800

in

fees for Consultant and

David Alcock ($18,800 fees

in

excess

of

cap); $6764

in

travel ; $1020

in

equipment. (Contract authorizes

on

ly Mark Alcock to provide services.)

Deliverables:

Consultant billed for himself and for David Alcock for

services including preliminary forensic exam on two desktop computers;

one deep dive exam on one desktop;

on

site visit for imagi

ng

and on site

exam of one desktop; internal scan of network; analysis of network scans

and preplanning

of

network remediation; network auditing and

i

nfosec

scanning and firewall project; creation

of

laptop image. Consultant's work

under this contract formed the basis for a June 5, 2013, search warrant that

was served on an employee at his home.

2. ASD-PCS-MA-002-2013-14

Co

ntract Date:

May 5, 2013

Contract Term:

Not specified. The Agreement is subject to annual

renewal agreeable to both parties.

1


4/22

Contractor:

Mark Alcock (Note: Contract reads that consultant

is

Pacific Consulting Group which appears to be a typo since Alcock is

mentioned

in

the preamble and Alcock signed the contract)

Contract Amount: Amount not to exceed $25,000 and reasonable

expenses. No hourly rate is specified but invoices are billed at $200 per

hour for Mark Alcock and David Alcock for services provided on site and

remotely. (Note: The Preamble of the contract reads: Whereas,

Mr

Alcock may use additional qualified individuals to perform the work required

under this Agreement. )


City Administrator

Contract Purpose:

Information technology consulting and assessment

services including but not limited to installing and configuring network

routers and security devices; provide security guidance; additional

information technology services as necessary

Amendment: August 28, 2013

Approving Authority:

City Council

Amount

o

Amendment:

$43,500 new cap

Amount Paid: 107,169.09

comprised of $94,650 in fees ($51,150 in

excess

o

cap) plus $11,428.34 in travel and $1090.75 in miscellaneous

equipment. City has also received two invoices totaling $33,126 (fees

o

$30,500;

tr vel

$2626) which to date

h ve

not been paid.

Deliverables:

Mark Alcock and David Alcock provided remote and onsite

IT services. The following are some on site work items specified in the

billings for Mark Alcock: oversee management

o

IT staff; GFI and

LogMeln accounts installed on city computers and server; Network/Firewall

project; Fixed AD server and police network communications error; rebuilt

Cops 2 raid; fixed Tracknet issues; moving user accounts onto CityBrain 2.

Off site services for David Alcock include monitor Cops 2; troubleshooting

and monitoring Tracknet; troubleshoot Tracknet hard drive issues;

troubleshoot spam issues, update patches on Citybrain

2;

install GFI on

2


5/22

Cops 2. Imaged various staff's city desktop computers; David Alcock

billed for help desk work while Barandas on vacation; worked on EOC

access point, created new shares. Administrating IT personal activity for

months

o

January-April 2014.

3 AS 0 PCS MA Examiner 003 2013 14

Contract Date: June 19, 2013

Contract Term:

Not specified. The Agreement may be amended and is

subject to annual renewal agreeable to both parties.

Contractor:

Mark Alcock (Note: Contract reads that consultant is

Pacific Consulting Group which appears to be a typo since Alcock is

mentioned

in

the preamble and Alcock signed the contract)

Contract Amount: An amount not to exceed $25,000, at a billing rate not

to exceed $200 per hour and reasonable expenses.


City Administrator

Contract Purpose:

Contract preamble provides the City is interested

in

appointing a Computer Forensic Examiner; City desires to retain the

services o a qualified Examiner to assist in the coordination of the

investigation related to Information Technology. Scope of Services reads

that Consultant shall perform computer forensic consulting and

assessment services. The attached Scope

o

Work document reads:

Coordination

o

investigative activities with various enforcement agencies,

serve as a forensic technology to support a variety of agencies; additional

information technology services as necessary

.

Amendment:

August 28, 2013

Approving Authority:

City Council

Amount o Amendment: $60,000 new cap


6/22

Amount Paid: 186,122 comprised

of

$182,410 in fees ($122,410 in

excess

of

cap) plus $2632

in

travel and $880

in

miscellaneous equipment

including 11 hard drives that are not in City's possession. Alcock has

submitted another invoice for $6000 which has not been paid to date.

Deliverables: Based

on

the detail shown in Consultant's invoices, Alcock

performed Cyber Lab

on

5 City staff computers; imaged 3 staff desktops

and laptops; did preliminary examinations and deep dive examinations

on various staff computers ; ongoing network monitoring; document

preparation and review to support attorney; carving, procession and

analyzing images; document retrieval and review; image analysis; City Hall

scanner image preliminary examination; preparation for testimony; file

recovery.

Contract Values (Fees only)

MA 1

MA 2

MA 3

Total

$25,000

$43,500

$60,000

$128,500.

Total Fees Paid for 3 contracts

MA 1

MA 2

MA 3

Total

$43,800

94,650

182,410

$320,860


7/22

Total Paid for 3 contracts

MA 1

MA 2

MA Examiner

Total

51,584.00

107,169.09

186,122.00

344,875.09

Amounts Paid n Excess o Contracts Fees only)

MA

1

18,800

MA 2

MA 3

Total

MA002

MA003

Total

Unpaid Invoices

51' 150

122,410

192,360

33,126

6,000

39,126

5


8/22

BOOTS ROAD CONTRACT

ASD-PCS-BRWEB-016-2013-14

Contract Date: September 3, 2013

Contract Term: September 1, 2013 through August 30, 2014

Contractor:

Boots Road Group LLC

Contract Amoun

t

25,000 using hourly rates

o

50 (administrative

assistant); 80 (technical support, site management, content maintenance

and updates; 110 (Web Development and design , technical diagnostics

and solutions, graphic or interface design, writing); 150 (creative

direction); 200 (strategic counseling)

City Approving Authority: City Administrator

Contract Purpose: Web Site Support Services: Log into current content

management system and become familiar with structure and current

condition

o

the site and its content; scan the site for broken links and other

technical problems; study a list of issue and needs identified by City staff or

representatives; estimate amount

o

work needed to address existing

problems and update needs; repair technical problems, edit existing

content and create new content; consult on site management, technical

support, work flow, design

or

other topics

Amount Pai

d

19,441.45 during the term of the contract. After the

contract expired, City continued to pay Consultant a total of 2365.

1

as of

December 2014. These payments were ratified by the City Council when

the contact was renewed on March 3, 2015.

Deliverables: On a monthly basis Consultant posted and deleted variety

o documents including meeting notices, minutes, requests for proposals,

board vacancies, PGE work updates, job vacancies and application forms,

special events calendar.

Total Paid

22,329.18


9/22

DAVIES COMMUNICATION (2 Contracts)

1

Davies Communication Perceptioneering, Inc.)

Contract Date:

November

8

2013

Contract Term: There

is no

City contract with Davies Communication.

Davies provided services pursuant to its contract with Stradling Yocca

Carlson & Rauth Law Firm which provided legal services to City. The term

of

the City's contract with Stradling Yocca Carlson

&

Rauth Law Firm is

unspecified, continuing until terminated by either party

Contractor: Perceptioneering, Inc. (dba Davies) Contract is between

Perceptioneering, Inc. and Stradling Yocca Carlson

&

Rauth Law Firm.

There is no City contract for this service.

Contract Amount: Fees billed

at

hourly rates

of

$575 (Executive Vice

President), $400 (Senior Vice President), $350 (Vice PresidenUSenior

Counsel) and hourly fees

of

$100-$300 for Project Manager and Project

Coordinator to Contract Labor/Support Staff

Davies' invoices were sent to Attorney

eff

Dinkin at Stradling Yocca Law

Firm which would issue an invoice to the City for its legal services and the

Davies services shown as Agency Fees. City would issue a single check

to Stradling Yocca for legal services and Davies' services.


No City signatory to agreement. City

Administrator gave verbal direction to Stradling Yocca to engage services

of

Davies.

Contract Purpose:

Agreement between Davies and Stradling Yocca

Carlson & Rauth reads Strategic communication counsel and services

and that Davies will provide Public Relations consulting for the City

of

Carmel

Amount Paid: $63,439.52 including a payment for $4350.77 for website

design and maintenance, a service outside

of

the scope of the agreement

between Stradling Yocca Carlson & Rauth and Davies

1


10/22

Deliverables: Davies provided expert assistance in how to present the

City point of view to the press and to the public; how to respond to inquiries

from the public and the media; how to respond affirmatively to help citizens

understand why City was doing what it was doing; assistance to

management staff to improve staff morale.

2

Blaze Public Relations

ADM PSA BLAZE 007 2013 14

Contract Date: March 28, 2014

Contract Term:

Unspecified , until terminated by either party but no

termination for convenience by either party before first

9

days

Contractor:

Davies/Blaze LLC (dba BLAZE) (Blaze is a wholly-owned

subsidiary

o

Davies)

Contract Amount:

$14,050


City Administrator

Contract Purpose:

This was a confidential agreement for Blaze to

create a stand-alone digital asset to distribute City news

in

a timely

manner without waiting for weekly news outlets. Website will act as a place

for notices and updates on city services and programs as well as key

stories about City's progress.

Blaze agreed to build the platform ($7850); develop initial content ($3650);

train for ongoing content publishing ($2550)

Total Paid: $14,050

Deliverables:

City received a blog type

o

website (carmelcitynews.com)

posted with content relating to City

2


11/22

Davies

Blaze

Total Paid for Contracts

63,439.52

14,050.00

77,489.52


12/22

PUBLIC CONSULTING GROUP (PCG) 4 CONTRACTS

1. ASD-PCS-PCG-001-2013-14

Contract Date:

March

5, 2013

Contract

T

er

m:

March 5,

2013

through March 4,

2014,

subject to annual

renewal agreeable to both parties.

Contrac tor: Public Consulting Group (PCG, Sally Nagy )

Contract

mount:

Hourly rate for Sally Nagy

of $200.

Contract in an

amount not to exceed

$25,000

and reasonable expenses. For each trip to

the City, City to pay

an

additional flat travel cost of

$1000

which represents

reimbursement for car travel and a portion of travel time plus hotels and

meals.

City pproving uthority:

City Administrator

Contract

Purpose:

provide consult ing services to conduct an

assessment of the City's current IT structure and provide recommendations

about what is currently needed with respect to its structure, ways to

improve IT service delivery and considerations for the implementation of

technologies to build and support the future capacity

of

the organization

.

Focus on open government, mobile apps and cloud technology. PCG to

conduct thorough assessment, work with the City to identify strategic

priorities and develop an operationally grounded and actionable

implementation plan .

men

dme

nt:

August

5, 2013

City

pprovi

ng

uthor

ity:

City Council

mendme

nt

mo

unt: $48,800

for work performed under the Amendment

(New Total

$73,800)

mendment Purpose:

Facilitate public feedback and incorporate into the

final plan; develop final plan document and present information; assist with

the implementation of the plan and other consulting services.

1


13/22


14/22

requirements for the City to move toward mobile applications and cloud

technology and other updated technologies.

Amendment: May 15, 2013


City Administrator

Amount: $17,000 for work performed under the Amendment (New total:

$42,000)

Amendment Purpose: Adding Sally Nagy to technical assessment team

to provide business continuity and related technology security .

Amount Paid: Total $48,522.64 ($41 ,600 in fees; $6,922.64 in travel

costs/expenses)

Deliverables: The IT Strategic Plan references assessment services and

provides general recommendations. The IT Strategic Plan Year 1

Implementation included a Kick-off Meeting on March

11,

2014, according

to the document. The Year 1 Strategic Plan Implementation provides

general follow-up to the Plan's objectives.

3.

ASD PCS PCGMB 003 2013 14

Contract Date: June 7, 2013

Contract Term: for FY2013-14 through FY 2014-15 while enterprise wide

support and administrative services are procured.

Contractor: Public Consulting Group

Contract Amount: Services

o

Manuel Barandas at $100/hr. Contract

in

an amount not to exceed $25,000. For each trip to the City, City to pay an

additional flat travel cost of $1000 which represents reimbursement for car

travel and a portion of travel time plus hotel and meal expenses.

City Approving Authority: City Administrator


15/22

Contract Purpose: Provide temporary, part time IT System

Administration and Support Services to the City while it undergoes a

procurement for such services. Provide immediate assistance to support

the recently upgraded City network and provide limited end-user support.

Support for Network Administration Services, Server Administration

Services, Desktop Administration Support, AntiVirus/AntiSpyware Software,

and Other (maintain network diagram, perform and manage regular

backups, provide initial response to help-desk ticket requests).

Amendment:

April

1,

2014

City Approval Authority: City Council

Amendment Amount: $15,000 (New total

of

$40,000)

Amendment Purpose: Continue the temporary services

Amount Paid:

$31 ,553.46 ($28,700 fees; $2,853.46 expenses)

Additional invoices have been submitted totaling $6,776.52 ($5,300 fees,

$1,476.52 travel) which to date have not been paid.

Deliverables:

According to City's IT consultant (Martech), PCG was the

first point

of

contact for any help desk requests.

f

Barandas was unable to

handle the request remotely, Martech would step in.

4

ASD PCS PCG IT 019 2014 15

Contract Date: February

5,

2014

Contract Ter

m

shall commence February 2014 and shall terminate

January 2015

Contractor: Public Consulting Group, Inc.

Contract Amount: City shall pay Consultant

in

an amount not to exceed

$75,000 . For each trip to the City, City to pay an additional flat travel

cost

of

$1000 which represents reimbursement for car travel and a portion

of

travel time plus hotel and meal expenses.

4


16/22

Sally Nagy to provide CIO Advisory, Project Management at $160/hr

Austin Wagenknecht to provide Business Analyst support at $85/hr

Senior Level Consultants (Carter) to provide subject matter expertise

as needed at $145/h r

City Approval Authority City Council

Contract Purpose Implementation Support Services for the recently

adopted Information Technology Plan to include modernizing the current

technology infrastructure by increasing network capacity and strengthening

network security; redesign City's website; implement a new financial and

payroii/HR system; begin upgrade

o

Granicus system to include

implementation

o

automated agenda packet; and begin detailed planning

for Online City Hall and other initiatives.

Amount Paid $57,946.69 ($52,097.50 fees; $5849.19 expenses)

Additional invoices were submitted totaling $52,879.85 ($43,655 fees,

$9224.85 expenses) which to date have not been paid .

Deliverables Consultant twice prepared and circulated a Request for

Proposals for Financiai/Payroii/HR Software Vendors. One vendor

(Springbrook Software) responded with a proposal for a 4 year contract

($190,683). PCG also proposed that Sally Nagy be the Project Manager

for the Springbrook contract at a cost o $73,200 for one year. Both

contracts were pulled from the 9/8/14 City Council agenda.

Consultant prepared and circulated a Request for Proposals for website

development. A City staff panel interviewed the finalists, but all activity was

suspended n early September prior to the award of any contract.

Granicus has not been upgraded as a result

o

the PCG contract.

There has been no computer upgrade n response to the Implementation

Plan.

5


17/22

Total Paid for 4 contracts

PCG 1

PCG Tech 2

PCG 003

PCG IT

Total

Contract Value Fees)

PCG

1

PCG Tech 2

PCG 003

PCG IT

Total

PCG 003

PCG IT

Total

Unpaid Invoices

86,325.70

48,522.64

31,553.46

57,946.69

224,348.49

73,800

42,000

40,000

75,000

230,800

6,776.52

52,879.

85

59,656.37


18/22

RICHARD TAVENER 2 Contracts

1. ADM PCA WSPAC 009 2013/14

Contract Date: August 15, 2013

Contract Term: August

1

2013 February 1, 2014

Contractor: Richard Tavener, sole proprietor

Contract Amount: 25,000 with expense dv nce of 20,820. No

hourly rate specified. Invoices billed in six equal parts ( 4150)


City Administrator

Contract Purpose: Institute for the Future to be located in Carmel;

Innovative Learning Programs and Events for Carmel; Attract high

v lue

groups; Rediscover the lost art

of

getting together.

Tasks during contract period:

**Evaluate and integrate project into research and policy plan

**Meet for involvement and support from community leadership

**Workshops for involvement and support from Hospitality District,

selected resorts, venues, hotels, and other existing events

**Seek larger, long term funding from legacy contributors

**Recruit Board

of

Directors

**Review facilities, amenities, technology, venues and personnel

**Meet with key industry gatekeepers

**Determine non-profit oversight entity, personnel structure, roles and

responsibilities.

Amount Paid: 24,900 in fees 20,820 in Advanced Expenses for

which City has received invoices and receipts totaling 20,673.79. In

1


19/22

those receipts, $2650 is shown as Administrative Services which Tavenor

has invoiced for his own time working on the two events. This investigator

has disallowed this expense for two reasons: (1) the purpose of Advanced

Costs was to pay for third party vendors such as hotels, flights,

restaurants, and additional staff needed for the events; and (2) under the

agreement Tavener was paid for his time working on these events.

Deliverables

Tavener's invoices for this contract specify numerous meetings with

various members

of

local businesses and organizations including the

Monterey Bay Aquarium (idea to incorporate corporate workshops into

Whales to Windmills video), Bach Festival (proposed Mind and Music

workshop series), Carmel Unified School District (proposed Teacher

Summer Camp) and an online web presence for Wonderspace Carmel.

According to Tavener, this first contract resulted in one community

workshop and the Brainworks and Dot Day events, all of which occured in

the week

of

January 5-12, 2014.

Tavener provided a workshop at the City Council chambers on

January 7 2014.

Tavener organized the first meeting

of

Brainworks on January 9-11,

2014,

t

the La Playa Hotel beginning with a reception

on

Thursday,

January

9

and a one-day workshop at La Playa Hotel. The reception was

attended by 25-30 people. The goal

of

the workshop was to discuss how

to get

an

institute or think tank ( Wonderspace ) started

in

Carmel. The

workshop involved twelve (12) professionals invited by Contractor from

around North America (Boston, Washington, DC, Arizona, Toronto) who

represented various disciplines such as engineering, neuroscience,

multiple learning platforms, creative platforms, and consciousness. The

workshop was not open to the public. There was one Carmel

organization, the Bach Festival, represented by its Director, Debbie Chinn,

who reports that her organization developed valuable relationships and

networks. Throughout the day teams made up

of

the various participants

met with each other to share their vision.

2


20/22

Tavener did not prepare a report on this event. He believes that the

City received the ability to form a think tank, made connections with

participants who are top

of

their fields, and connected groups together.

Tavener also organized Dot Day event at Sunset Center from 5-7

p.m. on Friday, January 10, 2014. The unticketed event featured art from

grammar school students

t

Tularcitos School (attended by Tavener's

daughter) and All Saints Day School to display the creativity, imagination

and innovation in schools. According to Tavener, Dot Day is an

international event with 3 million worldwide contacts, and in 2014 Carmel

had a presence in that effort. The Sunset Center event records estimate

around 150-200 attendees, mostly families

of

the students. The catering

was planned for 250 youngsters and cost $2320. There is no written

report on this event.

Tavener does not have a report showing whether the contract tasks

have been met. He says that he did not recruit a board

of

directors, did

not seek larger, long term funding from legacy contributors, and did not

determine a non-profit oversight entity.

2 ADM PCS RTCE 0012 2013 14

Contract Date: March 19, 2014

Contract Term: March 4 2014 through December 31 2014

Contractor: Richard Tavener, sole proprietor

Contract Amount: $25,000 maximum from City; Contract mentions

intention for Hospitality Improvement District (HID) to contribute $30,000.

HID did not sign this contract and has no contract with Tavener.

No hourly rate specified. Invoices billed

t

$4585 per month. (This amount

was calculated as 1/12

of

$55,000.)

City Approving Authority: City Council


21/22

Contract Purpose Contractor to serve as City's special events

coordinator and liaison for planning, marketing, and enhancing community

events; aligning this work with the Destination Marketing Plan's Strategic

Marketing Priorities to include enhancing/expanding city events with the

goal of increasing annual visitors to City by 3,000 with corresponding

minimum 2 night- and mid-week stays.

Contract Responsibilities:

**Plan, organize, coordinate, promote and facilitate City's special

events working with community partners and other required

individuals

r

groups

**Schedule, maintain communication with speakers, vendors and

participants; coordinate and monitor event timelines

**Propose new ideas to improve event planning

**Conduct research, make site visits and find resources to facilitate

decisions about event possibilities

**Assist with preparing budgets and provide periodic progress reports

for each event projects

Total Paid $27,510

($2,51 0 exceeding contract cap)

Deliverables The contract specified measured outcomes to be:

Transient Occupancy Tax & Retail Tax

Growth

n

mid-week visitors and overnight stays

Evaluate services and outcomes; obtain customer feedback

about how well we are doing on events

Tavener does not have statistical information regarding these three

measured outcomes. His work focused on the following events:

**Mind Drive (June 6 event

n

downtown Carmel using 23

midweek Carmel hotel rooms)


22/22

**National Drive Electric Week Dine, Stay and Drive

sponsored by Tesla and Cadillac (September 18 event at Pine

Inn)

**AMGEN Cycling Tour (Planning for a 2016 event)

**Concours d'Eiegance (Attempting to find sponsors for the

annual program in downtown Carmel)

Tavener worked on other events (Glass Brain, Blue Mind, Blank

Canvas, Your Brain on Food) which did not occur.

Tavener compiled a 150 page record o all marketing, planning, and

day-of-event activities with copies

o

permits and applications relating to

Mind Drive which he provided to the Carmel Hospitality Improvement

District but not to the City.

Total Paid for contracts

Fees: Contract 1

Contract 2

Expenses Contract 1

Total

$24,900

27,510

20,820

$73,230

Amounts Paid n Excess o Contracts

Unused Advanced Expenses

Overpayment

2n

d

Contract)

Total

$2796.21

2510.00

$5306.21

Documents

Investigative Report on City of Carmel-By-The-Sea Contracts