The office of Madison Mayor Dave Cieslewicz has essentially rubber-stamped the Community Development Authority's practice of contracting out work once performed by city workers, due to current and impending budgetary pressures.
"Given the uncertainty of future federal support at current levels, contracting for services should remain a viable option, but not one that is entered into lightly," writes mayoral aide Janet Piraino, in a memo released last week.
Piraino recommends that the agency weigh certain factors, including savings, quality of service, contract severability and whether layoffs are needed. But she admits the city has "no authority" to give orders to the CDA, a semi-autonomous agency.
Cieslewicz asked Piraino to look at the issue last fall, in response to longstanding union concerns and articles in Isthmus ("CDA Outsources Union Jobs," 9/21/08, and "The CDA's No-Bid Contracts," 10/12/08.)
The report addresses CDA purchasing, contracting and overall financial health. It concludes that since the agency is not subject to the city's purchasing rules, it cannot be violating them.
This is an odd contention, since Isthmus reported that the CDA was actually violating its own rules, not the city's. For instance, the agency has long-term, month-by-month, no-bid contracts with service providers, despite rules that require it to distribute purchases equitably and seek bids prior to placing repeat orders.
Asked about this, Piraino allows that the CSA also "needs to take a look at its own policies."
The report takes at face value an analysis by Agustin Olvera, director of the CDA's Housing Operations Division, showing that contracting out saved $590,000 between 2003 and 2007. Admits Piraino, "I don't have access to the data that went into these."
David White, a staff rep for Council 40, which represents some CDA workers, says Olvera has "apparently just looked at the wages and benefits paid to people who have left and compared it to the amount of money paid to contractors performing such services since then. That's hardly a rigorous analysis."
And Olvera's number-crunching does not consider job quality. "We have seen on numerous occasions situations in which we have had to clean up after, or even re-do, work performed by contractors," says White.
Last week, The Capital Times reported that the CDA was about to hire a security company with a checkered past. That decision is now being reconsidered.
The CDA may soon be facing even tougher times. New federal rules mandate that CDA projects operate at a profit. Only one of the agency's three housing complexes meets this test; the other two have a combined operating deficit of $282,000.
Piraino's report says the CDA can comply in 2008 by transferring surpluses between projects. But it's "likely to face some dire consequences" in 2009, and may need to "dispose of some money-losing projects."
"We've got some serious issues to address," says CDA chair Stu Levitan. He praises the report for the clarity and direction it provides. In the future, he says, "We will be more mindful of complying with the spirit of city standards, even if we're not legally required to."
