Toledo mayor plans review of neighborhoods agency

Bell offers stricter procedures for awarding rehab contracts

Councilman D. Michael Collins questions the administration during a Toledo City Council Committee of the Whole.

The Blade/Amy E. Voigt
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Toledo Mayor Mike Bell fields questions during a City Council committee hearing. He said Wednesday that the changes being proposed do not necessarily mean that wrongdoing has occurred.

The Bell administration recommended several changes to the city's neighborhoods department's method of awarding federally funded housing rehabilitation contracts during a Toledo City Council hearing Wednesday but emphasized the proposals don't necessarily mean wrongdoing has occurred.

The recommendations follow a preliminary review prompted by an investigation by The Blade that highlighted allegations of bid rigging, favoritism, and poor oversight in the neighborhoods department, which awards millions of dollars every year in federal housing and development money.

Mayor Mike Bell said the administration plans to continue its review and will report back to council in about 45 days. The administration has asked Dan Hiskey, a former city auditor, to assist with the review.

"Through this review, we have been able to identify some areas where we can improve our ability to give the perception of fairness," the mayor said. "What we hope to be able to do is give you this initial review today and then about 45 days later, be able to give you an even more thorough review of the process."

Kattie Bond, the city's neighborhoods director, said the department appreciated the opportunity to review its procedures, then turned over the microphone to Mike Badik, the city's housing commissioner. He outlined four changes the department would make:

The city will now require all bids to be opened and recorded at the purchasing division on the 19th floor of One Government Center. Previously, some general contracting bids were opened by third-party developers outside the presence of city employees, Mr. Badik said.

Developers no longer will be permitted to act as their own contractors. All developers now will be required to seek at least three bids from general contractors. Developers also will have to use the city's pool of contractors when seeking bids. Previously, developers were allowed to maintain their own pool of contractors, Mr. Badik said.

Kattie Bond, neighborhoods department director, listens to the proceedings.

Third-party developers no longer will be allowed to refuse the lowest-qualified bid. In the past, developers were allowed to pass up the lowest bid and use a more-expensive contractor as long as the developer financed the difference, Mr. Badik said.

A copy of the bid-opening results now will be sent to all contractors who submitted a bid. In the past, only the winning contractor would receive a copy of the bid-opening results, Mr. Badik said.

Council members seemed supportive of the changes, but several questioned whether the mayor's proposed 45-day review would address irregularities and accusations of wrongdoing documented in last week's story in The Blade. The newspaper's investigation found that, in some cases, contracts went to companies whose bids were not the lowest.

In three other cases, a contractor claimed his sealed bids were provided to his competition. Yet another contractor said a city employee steered him to a subcontractor with a lengthy criminal record, but told him not to list the subcontractor on required city documents.

Councilman D. Michael Collins, a former Toledo police detective, called for the administration to investigate several specific issues raised in the story, including the unusual similarities between competing bids on two different projects.

The contractors' bids, which were 60 to 80 line items in length, were nearly identical, with the exception of just two or three line items that gave one contractor an advantage. "If you can consistently hit numbers like that, you'd be wiser to invest in the lottery," Mr. Collins said.

He also raised questions about two sets of handwriting on one bid document and suggested the administration contact the Ohio Bureau of Criminal Investigation to request an analysis.

The allegations put city officials in a difficult position, said Councilman Joe McNamara. On one hand, councilmen don't want to put millions of dollars in federal funding for Toledo's neighborhoods at risk. But on the other, they have an obligation to make sure nothing illegal has happened.

"I can tell you, council is very divided in how to handle this issue," Mr. McNamara said. "What I need to hear is that the administration has taken the allegations seriously and that this review is going to determine if there has been any wrongdoing."

The mayor avoided the word "investigation," but said he was prepared to do "whatever is necessary."

"There is no intent by the administration to hide anything," Mayor Bell said. "If we find some inconsistencies, we'll deal with them."

Councilman D. Michael Collins questions the administration during a Toledo City Council Committee of the Whole.

Councilman Paula Hicks-Hudson questioned whether an independent audit might not be more appropriate than an administrative review. Deputy Mayor Tom Crothers dismissed that distinction.

"The former city auditor is conducting a review," he said. "I would agree that I think we're talking about semantics."

"I'm not raising the specter of wrongdoing," Ms. Hicks-Hudson responded. "But we have to be clear that audits are done with certain testing, certain percentages, independent numbers, different things like that. There are things that can be discovered or not discovered. I'm not trying to say there is anything to be discovered. ... I would ask you to think about having an audit with those processes and standards attached to those reviews."

When the meeting was opened to the public, several contractors from the Northwest Ohio Minority Contractors Association told council members they couldn't understand why they received just one or two invitations to bid on city work, especially because Ms. Bond said earlier in the meeting that the neighborhoods department's minority participation rate is about 60 percent and that the department rehabbed 371 housing units during the most recent fiscal year.

"We received one contract," said Jackie Ruffin, the association's president and owner of North Regional Builders Inc.

Council President Wilma Brown promised that the city would respond to their concerns.

Contact Tony Cook at: acook@theblade.com or 419-724-6065.