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The
contract at issue is with A.I.S. Risk Management,
which is owned by Lynn Moroz, the county's former
risk manager. A.I.S., in turn, subcontracts with Freebery
& Houghton, a law firm. Michael Freebery, one of the firm's
principals, is the brother of Sherry Freebery, the county's
chief administrative officer, the second-ranking position in the
administration, and Joseph Freebery, general manager of the
county Department of Special Services.
Council's
finance committee, at a meeting on Sept. 14, grilled Mullaney at
length about the validity of the contract; whether the
arrangement it covers is the best deal the county can get; how
much is rightfully owed to A.I.S.; and why he authorized payment
of $450,000 to the firm despite the fact that Council had
specifically deferred approval of a purchase order which, at the
time it was entered, purported to provide for the payment.
"The
whole thing just stinks," said Council president Christopher
Coons.
In
another matter before the committee, Council members questioned
a proposal to use proceeds from the sale of long-term bonds to
finance three large grants which at least some people previously
understood would be financed from the county's operating
surplus.
Councilman Robert Weiner, at whose behest action on the purchase
order was tabled at Council sessions in both August and July,
said he has "questions about the county attorney's conduct in
this case" and alleged that Mullaney "seems to be working for
the chief administrative officer's interests and not the
county's." Weiner and Mullaney have clashed several times in the
recent past.
"A.I.S.
Risk Management is providing a service to the county," Mullaney
said. "We entered into this agreement and they (sic) have
performed the service. There is no way we can not pay them."
He added
that Council has the option to not renew the contract, but said
that requires 60 days advance notice and the contract's present
iteration runs until Apr. 1, 2005.
Mulllaney
said Council approval of the purchase order was not required
because existence of the contract had the effect of authorizing
the payment.
He did
acknowledge Weiner's contention that the arrangement with Freebery
& Houghton is the only one in which county government pays for
outside legal services through a contractor rather than directly
through its law department.
According
to conversation at the meeting, Council approved an initial
contract with A.I.S. in 1998. That agreement evidently had a
one-year term. Subsequently, however, former county attorney
William Rhodunda twice amended it with the second amendment
making it, in Weiner's words, 'evergreen'. That means it can be
cancelled at the end of a contract year but, absent any action
to do so, it gets extended for another year.
Council
members said there is no indication that it ever approved the
amendments. Nor was it asked to nor informed that the changes
had been made. Rhodunda, who was not at the finance committee
meeting, had not responded to a Delaforum request for comment as
this article was being prepared.
Coons
said he "can't see how it can be appropriate to go on for years
... without Council's knowledge and approval."
"I have a
belief this contract violates county law. My experience has been
that we [have to] approve all contracts," he added.
"How did
[it] slip through the cracks of Council not knowing there was a
contract out there?" Councilwoman Patty Powell asked.
Weiner
earlier had questioned why Moroz's firm is being paid $450,000
and Moroz himself draws a monthly salary of $16,500 when "his
only duty is to pay funds Freebery & Houghton."
Mullaney
replied with a list of various tasks that he said A.I.S.
performs for county government as part of its management of
worker compensation claims. Moroz's monthly salary is $13,500,
Mullaney reported.
"I am not
a proponent of 'evergreen' contracts, [but] we have a contract
with a vendor who is providing a service," Mullaney told the
committee. Council members seemed to agree that A.I.S. is
entitled to payment for services rendered, but no poll was taken
at the committee meeting on that point.
Councilman Penrose Hollins said the matter would not have come
to light nor would Council members and others who thought that
Moroz was a county employee learn that he is a contractor were
it not for an audit by auditor Robert Hicks. A report on that
audit was issued last April over objections by the county
administration to the public 'release' of information about that
aspect of the audit.
Weiner
questioned why the position of in-house risk manager has not
been filled. Mullaney replied that a new position, insurance and
control manager, was added to the county government roster as of
July 1, 2002, and that the county advertised for candidates to
fill it in March and April of that year. It was re-advertised,
he said, in March and April of 2004 and nine applications were
received. Three of the current applicants, who include Moroz,
have been found to have the "minimum qualifications" required
for the job, he said.
Mullaney
at the committee meeting repeated a previous assertion that the
original agreement with A.I.S. was entered into as a way to save
the county money and said that it has worked out that way. He
did not offer a specific figure. "With Lynn Moroz making
$162,000 a year, I don't accept the fact we've saved a lot of
money," Weiner said.
Moroz did
not attend the committee meeting.
Declaring
that it was apparent there would be no resolution of the matter
at the meeting, Councilwoman Karen Venezky, who chairs the
finance committee, requested that Coons meet with Mullaney and
other county officials in an effort to come to some kind of
resolution of the situation.
At
Council's regular business session, which followed the committee
meeting, Venezky decided not to introduce a proposed resolution
authorizing an $80 million bond sale, pending further
consideration by the finance committee. Such resolutions are
normally introduced and approved routinely.
In this
case, however, Hicks questioned whether it was appropriate to
include the county's $15 million share of the buy-out of
property owners in Glennville whose houses were destroyed by
flooding during the September, 2003, storms; $10 million for a
nature education center on the Christina River waterfront in
Wilmington; and $1 million for the Iron Hill Museum.
Noting
that borrowing money for those grants will require county
taxpayers to pay for what he described as one-time spending over
the next 20 years. "You buy short-term goods with short-term
money; you buy long-term goods with long-term money," he said.
Ronald
Morris, the county's chief financial officer, disputed that,
saying that using the Glennville site to provide mitigating
wetlands to allow widening of Interstate 95 "is something that
will last 100 years."
"Everyone
has been made aware that these [grants] were going to be paid
for by issuing bonds," he added. Hollis disputed that saying
that "there was a lot of discussion about these grants coming
from surplus."
Morris
said a desire not to have to raise property taxes for as long as
possible also justified going the bond route. But, he added, the
policy decision concerning whether to use long-term financing or
pay for projects from the current operating budget rests with
Council. "You make the decision -- a large bond issue or no bond
issue," he said.
Other
components of the proposed issue are $16 million for the new
county police headquarters; $8 million for acquisition of
another office building in New Castle Corporate Commons, and $15
million each for sanitary sewer rehabilitation in Brandywine
Hundred and extension of sewers in the southern part of the
county. |
