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Hot electric contract bid headed to City Council Use of minority subcontractors at heart of dispute Members of the city’s Electric Utility Commission (EUC) got a preview this week of what could be a bitter battle in the City Council arena next week when two firms square off over which should get a $16 million contract with Austin Energy (AE). City staff has recommended that the contract go to the low bidder, Pike Electric, Inc. of Mount Airy, North Carolina. The contract is for distribution, construction and maintenance services and could be renewed for an additional two years. Two other firms, Red Simpson Electric, which currently has a contract to provide those services, and Mastec North American Energy Division, protested. Mastec’s bid came in second, but still $267,000 higher than Pike’s. Simpson’s bid was fourth among five bids.

Wednesday, September 17, 2003 by

As AE General Manager Juan Garza explained to the commission, a hearings examiner heard claims from both Simpson and Mastec as to why the city should not award the bid to Pike, but the hearings examiner ruled in Pike’s favor in both cases. Garza said he would have posted the matter on the board’s agenda for review and recommendation, but the report from the hearings examiner had come in the same day as the meeting. However, representatives of the companies, as well as representatives of African-American sub-contractors came to make their cases before the commission. Simpson had claimed in its protest that Pike had failed to make a good faith effort to employ women (WBE’s) and minority subcontractors (MBE’s). Mastec claimed that the instructions regarding overtime charges were unclear to the bidders.

Attorney Henry Gilmore, representing Pike, said the hearings examiner not only affirmed AE’s determination "that we had made a good faith effort, but that our effort was exemplary and exhaustive." Gilmore noted that the company had sent out 227 separate inquiries and received only 30 responses. From those, he said, the company chose and signed contracts with nine subs, "spread amongst African-Americans, Hispanics, Asians and females." Gilmore said overall, Pike has 6.5 percent minority subs. "We did the things that you’re supposed to do," Gilmore said. The company even held a job fair, but there are not a large number of minority subs doing electrical work and "and others wouldn’t negotiate with us because they’re with our competitors." The city had set a goal of 35 percent minority and women subcontractors.

Attorney Jeff Friedman, who represents Simpson, as he did five years ago, said all bids should be thrown out and the process started over. In fact, that is what happened in 1998, he said, when Simpson ended up winning the contract. "There is no explanation why Pike came in with five percent when Mastec and Red Simpson had much higher," he said, adding that 38 percent of his client’s subs would be minority and women contractors. Friedman, who was elected Mayor of Austin in 1975, told the commission, "We think, economically speaking, the ordinance requires the city to look at the lowest, most responsible bidder," he said. "We use local minority and women enterprises," Awarding the bid to Pike, he said, "would be hypocrisy at its highest . . . Our challenge is simply to the word, the spirit of the MBE/WBE Ordinance." He said Pike would do a lot more of the work in-house than Simpson, possibly sending the money out of state.

Friedman was asked what findings of fact and conclusions of law reached by the hearings examiner were wrong. Friedman said he was not challenging the hearings examiner, but simply that only contracting with minority subs is important, regardless of the efforts made by Pike.

However, Carol Hadnot of the Austin Black Contractors Association told the commission, "The whole issue is not so much the 35 percent, because the 35 percent never get utilized. So we need to talk about performance. And that performance has to do with economic inclusion. We’ve had some serious experience with the protesting company (Simpson). Our contractors have . . . received defective equipment, never get their order of work and get put off the job. So, we need to be very careful about talking about percentages. We need to talk about quality of participation and the availability…. We don’t have a lot of contractors available for infrastructure type project and the ones that do—we have seen them battered by this company. As a matter of fact, I participated with this company long ago and I wrote the electric utility that I would not work with this company any longer because of what they wanted me to do. How many of those contractors, specifically African-Americans are still out there on the job? That’s what you need to ask." Ben Warmate, another member of the Black Contractors Association, said he had worked with Simpson and that the firm, "almost put me out of business . . . I’m still recovering from years of abuse." He said he would be pleased to work with the recommended firm. "We have the opportunity to come in and work with a genuine company . . . "I would rather get a genuine $50,000 than a promised $2 million." Cloteal Davis-Haynes, another black subcontractor, also spoke in favor of Pike. "Five years ago when you were considering awarding this to Red Simpson, I was contacted by Red Simpson, and I was left with the impression that they were going to contract with me. That was five years. I was definitely contacted, had meetings and up to the point of the bid deadline. I thought we were going to be a part; but we weren’t." Commissioner Caroline Leggett, an attorney, said she had not heard any reason why the findings of the hearings examiner should be rejected. Chair Barry Sarma agreed, saying that he did not wish to set a special meeting to make a recommendation. So, the matter will proceed to the City Council without a recommendation from the commission.

Buda Council tables subdivision request The Buda City Council decided last night to delay a decision on the 670-acre Garlic Creek West subdivision after hearing from opposition that included the Barton Springs/Edwards Aquifer District (BSEACD), Save Our Springs Alliance (SOSA) and members of Austin City Council.

Approval of the subdivision, which would roll out over three phases, would double the size of Buda’s population. More than a dozen people spoke against the subdivision at last night’s meeting, and former Buda Council Member Byron Warren presented a petition signed by 256 people who support a moratorium until growth questions could be addressed.

Both the BSEACD and SOSA came prepared to argue that the city was not prepared for such large-scale development. Brad Rockwell of SOSA presented an outline of 18 objections to the plans submitted by Garlic Creek West, not the least of which was the part of the subdivision’s location over the aquifer recharge zone. If the Texas Commission on Environmental Quality (TCEQ) approves the new Barton Springs/Edwards Aquifer map, a third of the land will sit on the recharge zone.

"The truth is the city council has full authority to deny the preliminary plat," Rockwell told the council members. "Indeed, the city council would have a duty to because the applicant’s submission does not comply with development code." Specifically, Rockwell said the plan fails to "preserve and protect surface and groundwater resources," a goal of the city’s comprehensive plan. Other deficiencies listed by Rockwell included a failure to submit adequate transportation planning, placing parkland in the 100-year flood plain and failure to provide water quality measures.

Rockwell, who has served as city attorney for Lakeway and Sunset Valley, urged the city to be careful in negotiations, noting that the new development would triple the demand for water. Veva McCaig, interim executive director of the BSEACD, told the council that houses in the subdivision, if built, would exceed the current permit of 200 million gallons per year for the city. Later in the discussion, Buda City Manager Bob Mathis assured the council that the city would be on surface water before exceeding its permitted water.

McCaig also cautioned the council that the developer had met only a portion of the water regulations and had yet to complete many of the full complement of environmental requirements set out by the TCEQ. McCaig said meeting those requirements was important because Garlic Creek runs directly into Onion Creek and the Edwards Aquifer.

In his presentation, Mathis told council members that the development met or exceeded every standard set by city code, including traffic impact mitigation, lot size requirements and impervious cover. Mathis told the council that the city was well within its water pumping requirements and should be on surface water before the subdivision is built out. The city is also only at 55-percent capacity at its current wastewater treatment plant, Mathis said.

That’s especially critical for Buda, because the city faced sanctions from the TCEQ two years ago for failure to get a new wastewater treatment plant on line fast enough to keep up with demand. That led city leaders to try to develop more comprehensive guidelines for dealing with growth in the area.

During the meeting, a letter from Austin Mayor Will Wynn and Austin Council Member Daryl Slusher was read in which the council was encouraged to respect Barton Springs and the Edwards Aquifer. The letter called the issue of the Garlic Creek West subdivision "critical." "In past negotiations that resulted in the release of Austin ETJ to Buda, Austin City Council released land with the understanding and assurance that water quality would be protected—not just on the released land, but on all tracts over the aquifer," wrote Wynn and Slusher in the letter. "We also assured our citizens that water quality would be protected. We are very concerned that this may not occur in this case." Water quality standards on the site meet both city and state standards, Mathis said. The recharge zone is not a factor considered under Buda’s city code, he added.

After an executive session and very little discussion, Buda City Council voted to table the preliminary plan for three weeks while council members considered the new information. Council members intend to hold a workshop session prior to the council’s next meeting three weeks from now and vote on the council agenda that night.

Chamber outlines plan for Austin economy The Greater Austin Chamber of Commerce presented its five-year plan for economic development on Tuesday at a breakfast meeting at the Austin Convention Center. Along with a road map for bringing jobs to the region, the chamber officials delivered a message: boosting the economy is necessary, difficult and will be expensive.

The overall strategy is based on a report done by economic consulting firm Main Street Services of Atlanta, Georgia. Company President Mac Holladay made the presentation, urging Central Texas to capitalize on its existing strengths, recruit and target diverse businesses in diverse sectors, stimulate entrepreneurship, market Austin nation-wide and improve the overall regional competitiveness. He also pointed to the need to improve the region’s transportation system and reduce the burden of development regulations on business in Austin. "There are certain companies who told us, ‘They just don’t want me to grow here . . . They just don’t want my small business to succeed’ . . . There are larger companies or site consultants who say, ‘It’s too much trouble there; I can go somewhere else’ . . . and not avoid the law or do something different, but simply know the time and effectiveness they’re going to have to have in terms of getting the job done," said Holladay. "This is not about changing anything other than making sure companies understand the rules and are allowed to play by them." Holladay said it would also take a cooperative effort between businesses and all local government entities to jumpstart the economy, and that there was little time to waste. "This place will succeed or fail as a region. That’s the way this economy is. You cannot afford to leave anybody behind. If this is not a public-private partnership it will not work," he said. "This ‘jobless recovery’ has created the most competitive stage for economic development I have ever seen. There is more work being done across the country trying to get ready and move ahead. Time is of the essence. The work really does start now." Mayor Will Wynn said he was glad to see the recommendations in the report and noted that the city had already started down the path laid out by Holladay and the Chamber of Commerce. "We do need to diversify our local economy," he said. "And we’re working to amend our Land Development Code to make it easier for our small, local businesses to be successful." He was also enthusiastic about the support being demonstrated for the plan so far. "We saw a great crowd here. We saw mayors, county commissioners and county judges from all five counties here . . . It really is a regional approach to a regional issue." Along with the broad outline for economic development, the Chamber of Commerce has developed a 100-page, detailed plan for the next five years. The overall goal is to create 72,000 new jobs with an aggregate increase in payroll of $2.9 billion. An economic development campaign of that magnitude will not come cheaply. The estimated cost is $11 million over the next five years, and local governments are not in a financial position to spend more money on the cause. So the Greater Austin Chamber of Commerce and the Greater Austin Economic Development Corporation is setting up a fund and will soon begin seeking donations. "We think that it’s proper that this be a volunteer campaign . . . The solicitations will be business associate to business associate," said Greater Austin Economic Development Corporation Chair Gary Farmer. "There will be absolute accountability. You can have absolute certainty that the money will be spent for the purposes intended. It does not go to the Chamber, and it will not be used for Chamber operations. I think the plan is right and the time is now."

ACVB moves to 6 th Street Meanwhile, officials with the Austin Convention and Visitors Bureau hope moving to a new location on 6th Street next year will help them boost the region’s economy by improving their services to tourists and encouraging the development of businesses other than bars or nightclubs in the city’s entertainment district. They announced on Thursday that the ACVB would move from its current location at 201 E. 2 nd St. to the historic Grove Drug Building at 209 E. 6th sometime after the start of the new year.

"We have 100,000 visitors go through the Visitors Center every year, and now they will be coming to 6th Street to see our great inner city," said ACVB Board President Bruce Walcutt. "It’s no secret that when people come to Austin, one of the first things they think of is 6th Street." Members of the 6th Street Property Owners Group support the move, saying the area could use some diversity in the types of businesses on the street between Congress Ave. and IH-35. "We feel like that the addition of the Visitors Center to 6th Street will have an immediate positive impact," said Gary Manley, "and really help us in bringing more daytime uses and businesses, which will enable us to have a more rounded 6th Street." The building dates back to 1871. Vernon Grove bought it in 1933, and it was operated as a drug store until 1985. "One of the great things about being here is this is one of the most historic areas of all of Austin," said ACVB President and CEO Bob Lander. "This is a great, old building. There’s still a lot of it that’s original, and we want to preserve as much of that as we can." The distinctive neon sign out front, one of the first in Austin, will remain. It was restored in 1998 and may have some minor modifications to reflect the new tenant once the ACVB occupies the building.

©2003 In Fact News, Inc. All rights reserved

Moving on . . . Al Lujan, Austin Energy’s senior vice president for electric service delivery has resigned effective Sept 26. Lujan will be the Senior Vice President for Transmission and Distribution at City Public Service of San Antonio. In moving to CPS, Lujan will join Milton Lee, who was general manager of AE prior to joining CPS in late 1998. Lujan retired from the Public Service Company of New Mexico immediately before joining Austin Energy in January of 2000. AE spokesman Ed Clark told In Fact Daily, "Our system reliability is the best it’s been in the history of the utility and that’s directly related to things he did. As a matter of fact, during the last four years we have invested more in upgrading the electric system than was spent in the previous ten years." Cheryl Mele, director of system operations and reliability, will become Acting Vice President for Electric Service Delivery. Mele is currently Director of System Operations and Reliability, which includes oversight of staff responsible for the reliability of the utility’s transmission and distribution system. She joined AE in 1991 as a generation engineer and was promoted to plant engineer for the Decker Power Plant, and then to plant manager of Decker in 1996. In 2000, Mele was promoted to her current position . . . Shifting gears . . . Wendy Willingham, who has until recently hung her hat in the city’s Department of Transportation, Planning and Sustainability as a conservation program specialist in air quality, has become program manager for the Clean Air Partners Program, which is funded through CAPCO. She has a one-year contract . . . Press conference on Lowe’s plans today . . . Lowe’s, Lowe’s go away . . . Representatives of the Save Barton Creek Association, the SOS Alliance, the Austin area Austin Sierra Club and Texas Clean Water Action will hold a press conference at noon today at Barton Springs Pool to ask Lowe’s to abandon plans to build over the recharge zone near Sunset Valley. Joining the group will be Sunset Valley Mayor Terry Cowan and Village of Bee Cave Alderwoman Marcy Holloway. Lee Leffingwell, chair of the Austin Environmental Board, who is said to be considering a future City Council race, will also be on hand. The coalition of groups opposing Lowe’s—as well as Wal-Mart—will highlight portions of a recently produced "Lowe’s Social Responsibility Report." The entire report will also be posted at . . . A pat on the back . . . On Thursday, The Children’s Advocacy Center will recognize Austinites who have shown exceptional dedication to children in the civil court system without a mentor. The center’s annual Team Excellence Awards will be presented at a ceremony tomorrow, beginning at 6pm at Johnny Fin’s Floatin’ Bar and Grill. The Team Excellence Awards recognize outstanding dedication to the establishment, development, growth and continuation of the Children’s Advocacy Center movement in Texas.

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