Tag: Finance and Administrative Services

Records Shed Light On How Much City Overpaid for “First Responder” Hotel

By Erica C. Barnett

The Executive Pacific Hotel in downtown Seattle is currently serving as a temporary shelter for vulnerable homeless people, under an $3.1 million contract with the Low-Income Housing Institute. (The remainder of the contract, $5.2 million, is to rent the hotel itself for about 10 months.)

But before it was a shelter, as PubliCola has reported, the hotel had another contract with the city, providing isolation and quarantine rooms for first responders, health care workers, and a handful of homeless service providers).

The three-month contract benefited the hotel to an almost comical degree: Instead of renting out rooms individually, the city agreed to pay the hotel’s owner, Vancouver-based Executive Hotels and Resorts, full price for all 155 rooms.

Now, records the city provided in response to a PubliCola records request shed additional light on how much the city (and, ultimately, the federal government) overpaid for the rooms. In one representative four-week period, from March 23 to April 21, the hotel was occupied for a total of 127 room-nights (a room-night is one room occupied for one night), at a cost to the city of $332,440, or the equivalent of $2,618 per room, per night. Rooms at Executive Hotels’ flagship hotel in downtown Vancouver are currently available on Expedia for $144 a night.

Overall, the city ended up spending about $1.9 million on the initial, three-month contract for all 155 rooms. We’ve reported before on how empty the hotel was during the early going; now, the newly available invoices reveal that the hotel remained largely empty throughout the three-month contract, peaking at an rate of no more than a dozen or so occupied rooms per night.

The invoices do not reveal precisely how many people were in the hotel during any specific period; however, they do show how many meals the city paid for in each billing period, which can serve as a proxy for the number of rooms that were occupied in any period and for how many nights.

But the city wasn’t just paying for empty rooms; it was paying an increasing price for those rooms every month.

In the early days after the hotel opened, the city paid a flat $45 fee for three meals a day, so the number of meal payments equaled the number of guests. Later, when it became clear that not everyone was eating all three meals at the hotel, the city started paying $15 per meal instead.

In April, when the city was paying for three meals a day, the total number of room-nights was 188—an average of about six people per night, or the equivalent of just over one night of a totally full hotel.

The number of meals increased slightly in May, when the city started paying for each meal individually instead of all three at once, to 611 meals total; however, even assuming that each of these meals represents a person who ate just one meal on-site per day, that still works out to fewer than 20 guests per night, or about four nights during which the hotel was full.

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But the city wasn’t just paying for empty rooms; it was paying an increasing price for those rooms every month. For the month of April, for example, the city paid the Executive Pacific $332,440 for the hotel’s 155 rooms; a month later, the exact same rooms cost the city $556,708. The reason? The rates increased as summer approached, in keeping with the start of the usual tourist season. Of course, there were no tourists in 2020. According to the contract, signed last March, the monthly price for the entire hotel ranges from $222,000 in January to $794,000 in August.

In August, one month after the city paid the final $851,918 invoice on its three-month contract, the hotel submitted two new bills for the use of its rooms by Seattle police and fire personnel. The total bill: $1,580.

According to Melissa Mixon, a spokeswoman for the city’s department of Finance and Administrative Services (FAS), “the contract was negotiated and agreed to at the very beginning of the pandemic when the City had limited information about the duration, level of impact, and longevity of the pandemic” and when dozens of city workers had contracted COVID-19.

In August, one month after the city paid the final $851,918 invoice on its three-month contract, the hotel submitted two new bills for the use of its rooms by Seattle police and fire personnel. Between July 12 and August 8, three people stayed in the hotel. The total bill: $1,580.

Mixon said the city had no idea at the time when the pandemic would end or if tourism would recover quickly. The Executive Pacific, she said, was the only hotel that was “willing to partner” with the city that also had an appropriate HVAC system and individual restrooms so that people who had been exposed to COVID could quarantine if necessary.

Given the stigma around COVID-19 when the outbreak was still unfolding, not very many hotels were interested in partnering,” Mixon said. “Given the still unknown properties of the virus and public sentiment at the start of the pandemic, by agreeing to house COVID positive or exposed individuals we recognized the hotel’s ability to rent rooms to regular guests was severely impacted both by potential liability for an unknown duration.”

The final indication of how much the city overpaid for the Executive Pacific is what happened after the initial contract ended and the city began contracting with the hotel for individual rooms. In August, one month after the city paid the final $851,918 invoice on its three-month contract, the hotel submitted two new bills for the use of its rooms by Seattle police and fire personnel. Between July 12 and August 8, three people stayed in the hotel. The total bill: $1,580.

Durkan Administration Asks State to Expand Scope of Audit Into City Council Contract

By Erica C. Barnett

On Monday, the director of the city’s Department of Finance and Administrative Services, Calvin Goings, and the city’s Finance Director, Glen Lee, signed a letter to the State Auditor’s Office (SAO) asking the auditor to expand the scope of its ongoing audit of the contract between the city’s legislative department and the Freedom Project, which served as the “fiscal agent” for a $3 million project to study participatory budgeting and alternatives to policing.

However, PubliCola’s reporting indicates that the letter was written not by Goings and Lee but by Mayor Jenny Durkan’s office—and that Goings and Lee were less than thrilled to sign their names to such a blatantly political series of requests and leading questions.

The letter asks the auditor to look into three new issues: Whether the city auditor should be removed from Seattle’s legislative branch, where (according to the letter) it doesn’t have “adequate independence”; whether it was appropriate for the city council to award a “high-dollar contract … without competition to a non-profit,” the Freedom Project; and whether “laws of the state expressly authorize direct earmarked appropriations for specific entities, and if so, in what circumstances.”

The finance department does not typically get involved in political debates between the legislative and executive branches. In her seven years at the city, council president Lorena González said, “I’ve never seen a letter of this nature to an outside agency.”

In multiple instances, the letter suggests openly that the city council may have broken city and state law by granting the contract in the way it did.

Specifically, the letter suggests that by granting a no-bid contract, the council may have violated the City Charter, and that appropriating funds to a specific entity (in this case, King County Equity Now, via the pass-through contract with the Freedom Project) may have violated prohibitions on earmarks in city law, the charter, and state law.

The first point is a bit ironic, given the mayor’s history of granting noncompetitive contracts, including one to a personal friend who is married to Durkan’s then-deputy mayor.

On the second point, the letter takes a conspiratorial turn, suggesting that the council scrubbed the public record to hide evidence of misdeeds.

“[T]he original legislative documents (since revised and removed from the web), public statements by Councilmember and other records demonstrate that the $3 million dollar appropriation was for the benefit and intended to go to a specific entity,” the letter says.

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We know there are a lot of publications competing for your dollars and attention, but PubliCola truly is different. We cover Seattle and King County on a budget that is funded entirely by reader contributions—no ads, no paywalls, ever.

Being fully independent means that we cover the stories we consider most interesting and newsworthy, based on our own news judgment and feedback from readers about what matters to them, not what advertisers or corporate funders want us to write about. It also means that we need your support. So if you get something out of this site, consider giving something back by kicking in a few dollars a month, or making a one-time contribution, to help us keep doing this work. If you prefer to Venmo or write a check, our Support page includes information about those options. Thank you for your ongoing readership and support.

“Again, the Executive has not been directly involved in the award of [our] implementation of the contract, as it was wholly in Council’s purview. However, Council has regularly appropriated funding for a specific contractor or provider, and in this case the contract is structured as a pass-through for an entity that was not qualified for the non-profit exemption,” the letter concludes.

“It would be helpful to know whether this type of ‘pass-through’ contracting is a proper use of the non-profit exemption and whether the Executive can award contracts based on ‘earmarks’ by Council or whether doing so would run afoul of the Charter, state law or generally accepted best practices.”

City council president Lorena González told PubliCola that she does not believe the state auditor’s mandate and jurisdiction extends to the city charter or municipal code. “We are certainly aware of several contracts in which the mayor’s office has engaged in no-bid contract practices,” she added, “and it’s interesting to me that FAS didn’t highlight those as additional potential issues.”

A spokeswoman for FAS directed all of PubliCola’s questions to the mayor’s office, which did not respond to several emails seeking responses to questions on Tuesday.

The letter is highly unusual in both its tone and content: The finance department, which oversees many city contracts as well as city facilities, HR, and many other internal aspects of city government, does not typically get involved in political debates between the legislative and executive branches. In her seven years at the city, González said, “I’ve never seen a letter of this nature to an outside agency.”

A spokeswoman for FAS directed all of PubliCola’s questions to the mayor’s office, which did not respond to several emails seeking responses to questions on Tuesday.

González, who is running for mayor (Durkan will not seek reelection), called the letter a “distraction” from the issues Durkan could be addressing in the final months of her term. “I’m just confused about why the Durkan administration is spending time, energy, and resources on this letter… instead of on the real problems facing the city in the remainder of her term,” González said. “This audit was already happening, and it’s going to go through its natural course, and I don’t understand how this letter helps advance our city.”

SAO spokeswoman Kathleen Cooper said the office would treat the letter from the city like any other tip or whistleblower complaint. “We consider everything that comes our way, and if there is an issue of large enough significance … that we think it should be considered in our auditing work, even though we hadn’t included it before now, then we would consider it,” Cooper said.

Another Durkan Shakeup Adds to Long List of Departments Without Permanent Directors

Mayor Jenny Durkan announced yet another departmental shakeup at the city today, moving longtime Finance and Administrative Services department director Fred Podesta over to the Human Services Department to head up an expanded Navigation Team. The Navigation Team—a joint effort between HSD, outreach workers from REACH/Evergreen Treatment Services, and the police department— oversees the removal of unauthorized homeless encampments and provides outreach services and referrals to people living in encampments.

As head of FAS, Podesta was in charge of coordinating the team responsible for outreach and garbage removal at unauthorized encampments, so moving him to the Navigation Team isn’t as out of left field as it might appear. (The Nav Team’s transition to HSD was approved, in fact, as part of last year’s budget).  It does, however, look very much like a demotion for the city veteran, who will now report to new deputy director Tiffany Washington, under interim director Jason Johnson. This latest reshuffle also leaves another city department without a permanent director at a time when an unusually high number of city departments lack permanent leadership, and when the mayor’s own policy shop is short-staffed.

Some of this goes with the territory of working in a job where the person at the top changes every four to eight years. Every mayor makes his or her mark on the city by changing out departmental leadership, reorganizing some departments, and generally shaking things up. That’s the mayor’s prerogative, and it can serve as a vital corrective to entrenched bureaucracy and government waste. What is unusual in this particular administration is the number of significant departments that lack permanent leadership more than eight months into the mayor’s term.

Here’s a list of some of the departments that currently have interim directors or that are being headed up by deputies:

• Seattle City Light. After former City Light CEO Larry Weis resigned last year, Durkan appointed chief compliance officer Jim Baggs to take his place as interim director while the administration conducted a national search. In February, Durkan announced the formation of a search committee to hire Weis’ replacement. Her office has made no further announcements about how the search is going. Meanwhile, City Light is losing another top administrator, as Chief of Staff Calvin Goings (who, like Podesta, is by all accounts well-liked at the city) moves over to replace Podesta as interim director of FAS.

• Seattle Office for Civil Rights. Former SOCR director Patricia Lally left her position as head of SOCR in December, shortly after Durkan took office. Since then, the office has been headed up by interim director Mariko Lockhart.

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• The Office of Economic Development, which has been headed by Rebecca Lovell  on an acting basis since last December.

• The Human Services Department, which has been headed by former deputy director Jason Johnson since May (his promotion, from deputy director, was announced in March). Today’s announcement about Podesta also included the news that Tiffany Washington—appointed as a division director in charge of homelessness strategy by Durkan earlier this year—will step into the deputy director position.

• The Department of Neighborhoods. Durkan removed Kathy Nyland from her position as director of DON in April and appointed former Greg Nickels aide Andres Mantilla as interim. Nyland, who had a target on her back because of her reputation as a change agent at DON, was moved into a position advising the parks department on neighborhood outreach.

• The Seattle Parks Department. Jesus Aguirre left the department last November, shortly after Durkan’s election, and was replaced by acting director Christopher Williams in January “as a search process for a permanent head begins.” Seven months later, Williams remains acting director at Parks.

• Human Resources. After Susan Coskey stepped down last December, Durkan appointed an interim director, Melissa Beatty, who has since left and been replaced by another interim, Susan McNab.

• Information Technology. Former Chief Technology Officer Michael Mattmiller was cut loose by the Durkan Administration last December, and replaced by acting director Tracye Cantrell in February, when Durkan also announced plans to  “launch a search process to find a candidate for the permanent position.” Cantrell is still in the position.

• Seattle Department of Transportation. I reported last week that Goran Sparrman, who has served as interim director since Durkan sacked former director Scott Kubly last December, is preparing to leave SDOT to take a job at HNTB Corporation, a big transportation engineering firm, at the end of August. He will be reportedly be replaced by another interim director.

And, of course, Seattle has not had permanent police chief since the departure of former chief Kathleen O’Toole, announced last December.