City of Blackwell ends contract with MKEC in tense meeting

by Charles Gerian

The Blackwell City Council terminated its contract with the city's engineering firm during a three-hour meeting Thursday night after city employees complained to the city manager about the quality of the firm’s work. The Council also convened in executive session to discuss possible violations of Oklahoma state law and to discuss sexual assault claims filed by a female city employee against a male supervisor, according to the meeting agenda.

The meeting hall was packed Thursday night as the Council voted 3-2 to terminate the city's 10-year contract with MKEC, an engineering firm from Wichita, Kansas.

The move to terminate the city's contract with the firm came about after the city entered into an agreement with Cowan Group Engineering at its previous meeting. According to City Attorney Bryce Kennedy, the agreement with Cowan decidedly goes against the contract the city entered into in 2008 with MKEC. Under the terms of the 2008 contract, the city would have to retain MKEC as Blackwell's sole engineering contractor for any and all services; if Blackwell were to employ another firm, the city would have to forfeit its deal with MKEC.  

Kennedy said he contacted both Cowan and MKEC. To ensure that there is no legal issue, Kennedy said Cowan has agreed to wait for the city to terminate its existing contract with MKEC before moving forward.

Before the vote was taken, Keith Ayotte, the senior project manager for MKEC, spoke to the City Council.  

“I've been up here a lot, [and] I appreciate this opportunity. I just wanted to talk about my appreciation for this town,” Ayotte said before reading from a letter he had prepared for the Council. “Blackwell staff has decided to move forward with a new engineering firm. Times change, it's typical. The reason I'm here is that I had not received any formal termination. … I'd not even received that you were looking for a new engineer. I felt that, after 11 years of working in this town, I would like to have been a little more informed than that.”

In addition to his complaint that his firm had not been formally notified of the possible termination, Ayotte had previously sent a letter to Kennedy stating that the city of Blackwell had violated its contract with MKEC by signing a contract with Cowan.

However, according to records obtained by the Journal-Tribune, MKEC was formally notified about both issues. On February 27, Kennedy sent a letter to Ayotte which clarified the details surrounding the agreement with MKEC and the potential agreement with Cowan that was discussed at a February 21 Council meeting. Kennedy wrote that there was “no vote” to approve the general engineering agreement with Cowan because amendments had been proposed to the agreement. Because Kennedy proposed amendments to the contract, it had not yet been approved. There was only an agreement to pay Cowan $121,600 for various costs associated with engineering for the city's upcoming community development block grant, the letter said. Kennedy added that the city's agreement with MKEC may be invalid.

“I have my doubts as to whether the Contact for Engineering Services dated January 21, 2008, with MKEC is currently valid and legally binding as it did not contain a term, is more than ten (10) years old, was approved by a City Council no longer in office, may have the effect of unconstitutionally providing for an indebtedness for which there may not have been an authorized appropriation, among other legal reasons,” the letter read.

After Ayotte spoke to the Council, two Council members responded, saying they didn’t know that a move to terminate the agreement was on the table.  

Mayor T.J. Greenfield thanked Ayotte for all the work his firm has done. He then added that he was unaware that the city was looking into ending its contract with MKEC.

“I will say that the change came as a surprise to me. I didn't know until it was on the agenda,” Greenfield said.

Councilman Jon Webb also questioned the move.

“I would question why we're changing,” Councilman Jon Webb said. “I have the hourly rates from MKEC and the rates from Cowan. MKEC is cheaper. … I really question why we want to change to a contractor or engineering firm where the rates are higher than what we're currently paying.”

City Manager Janet Smith responded, saying she has discussed with city employees several key issues regarding MKEC. She said it was time for a change.

“Before I decided to go out for another company, rest assured I spoke with staff who worked closely with MKEC. … We have had so many issues with MKEC, things that have not been resolved,” Smith said.

One of those issues, Smith said, was in regard to the event center that was built at the Kay County Fairgrounds. The city is currently the plaintiff in a lawsuit against the project's general contractor, Atlas Construction, over defects in the building.

“Look at the event center. We're looking at litigation right now. We had a man we payed to be the 'boots-on-the-ground' looking at … every thing that happened there, and we couldn't even get them to work on our behalf so that those things could be resolved. Atlas was the contractor, and now we're working through an attorney out of Enid because we've not been able to get Atlas to do anything. They're going back to MKEC saying, 'These things haven't been brought up.' So, we have a lot of issues on that.”

Smith said she spoke with Water Department Supervisor Jim Hoos regarding the city's application for a community development block grant to repair some water lines within the city limits. Smith said she didn't want to “air dirty laundry” in the meeting, but said she felt the city needed to look elsewhere for engineering services for the upcoming project.

“The reason that I want to go with another company is that you have 11 - 12 years with MKEC. We've had a lot projects [with them], yes, but we also have a lot of unresolved issues. We paid almost $2 million in [engineering] costs to MKEC, and I think it’s time for a fresh start. I think the CDBG project is the way to do that. As I said, I didn't make this move without consulting my staff because I'm only as good as my staff, and I tell them that every day. When they tell me something, I bring it to the Council.”

Webb replied, saying that Smith should have talked to the Council about the problems, “whatever they may be,” before the meeting. Smith said that she did. 

Councilman Steve Marquardt then spoke, saying that Webb knew about the problems with the event center. 

“Jon, you and I both walked around that event center with the initial list [of problems] and found even more things that we didn't catch the first time,” Marquardt said. “These things should have never happened with the person they had as 'boots-on-the-ground.' The other thing I didn't like during this process was all the change orders. … I don't know exactly the total amount, but I've never seen a project have that many change orders. So, to me, that's due to the contractors as well as the engineering aspects. We still have an air conditioning unit and a heater that aren't working properly. … Here we are, two years since we built the event center, and we have things unresolved. I think we need to look elsewhere.”  

Greenfield then asked Ayotte how many dollars worth of projects MKEC had completed for the city. Ayotte replied, “Probably $14 or $15 million in those 11 years.”

Smith then addressed Webb's earlier claim that she had not spoken with Council members.

“I specifically remember talking to the mayor and vice mayor in my office within the first three weeks that I was here,” Smith said referring to Greenfield and Webb, respectively. “I expressed the concerns of my staff with the projects we had with MKEC, and both of you agreed it was time to look elsewhere.”

“That was on February 5, and we agreed to the fact that there's a door at the event center that isn't properly sized that needed to be taken care of,” Greenfield said. 

“That was not all we agreed to. You both agreed … that if I wanted to look at another engineering firm, that you supported that,” Smith replied.  

Greenfield denied the claim. He also asked Smith to name the employees to which she spoke. Smith said she would not name them publicly.

“I am not going to ask my staff to come up at this meeting. I'll be happy to report that to you later,” said Smith. 

Greenfield said MKEC was the “lowest bidder for a reason.”

Kennedy then interjected. He said that another issue with MKEC were the design specifications of the city's water treatment plant, which the Council agreed to speak to MKEC about. 

“To me, it sounds like we should have had more communication between us, with Keith, addressing the issues with MKEC,” Greenfield said. “I just don't see why you would terminate a relationship we've had over 11 - 12 years over a couple of items.”

“I don't think it was a couple of items,” Smith replied. “I could list for you everything. I will remind you that you all agreed to approve the Cowan Engineering contract. … The fact still remains that Cowan has been here working with us on the CDBG grant proposal. They have put hours into the work here. You might have a history with MKEC, and that is all well and good, but I felt it was time to move in another direction. As your city manager, you pay me for my expertise. When I come in, I make an analysis of the situation using the information, and when I am consistently faced with issues that MKEC that hasn't taken care of, that tells me there's an issue there. … I don't want to walk down that road because we know where that road leads to. I brought another proposal to you from a company that I know and I trust, and I'm asking you to agree with me on that because you pay me to do this job. You're not up here every day doing this job. You pay me for my expertise, and my expert opinion is that it's time to move to another company.”

“Once again, in all fairness, Cowan did agree to walk away from the deal, and I don't know what kind of time they've incurred on that,” Kennedy said. “But what you could do is that you could give the notice but not approve. You could let Cowan do the CDBG contract and not approve [the termination].”
Greenfield and Webb stated that they felt MKEC should have been contacted regarding the ceasing of its operations. Smith replied that she had contacted and communicated with MKEC regarding the issue.  

Ayotte confirmed that he had been contacted.

“I stopped work on February 9 when I received an e-mail from Janet,” Ayotte clarified. 

“And a phone call,” Smith added.  

Marquardt added that he also felt it was time for a change, as the contract with MKEC had not been re-approved on an annual basis.

“We've done this too long where we always go back to the same people,” Marquardt said. “We need to establish the people we want to work with. If they're good, we stay with them. If they're not good, we move on. If they change their prices, we should always be frugal with the amount of money we're spending out of our tax dollars here. I don't see how we're doing that If we're not doing it year-to-year. ... We need to make sure we're spending our dollars correctly with year-to-year contracts … instead of doing the same thing over and over again.”

Greenfield said that MKEC isn't a contractor, so they city does not have to take the lowest bidder for its engineering services.

Webb then said that MKEC charges $162 per hour, while Cowan charges $226.  

“It doesn't seem like we're saving money at all,” he said.

Marquardt replied: “We're doing the same thing we've always done, and all we're doing is coming up with the same thing. … Do you really gain or lose any money? Change is a good thing, and it's going to happen from now on, so what we need to do is always make sure we're looking after our dollars and making sure these projects are completed. … All I've seen is us going down the same path, and we need to stop. … We should be doing what the citizens ask for. Yes, they want the streets fixed, but we can't do that until we get the water lines fixed. … All we're doing now is wasting money, and I don't want to do that anymore. We need to get done what we need to get done, get it done correctly, and then move to the next project. We don't have to look at these things yearly like this, that isn't our job. It's what we hired [Janet Smith] for. It's her job. If she has a network of people that she knows are reliable, all she has to do is tell us, give us a reference, and we can call them and find out. If they fail us, we don't ever go back. We throw them to the side. That's all you can do. But we need to stop doing the same thing.”  

Smith addressed Webb's concerns about the disparity of the hourly rates between the two firms.

“You pay for credentials,” Smith said. “I brought up Cowan because I felt it was time to move forward. I talked to every single one of you and my staff about this. We all made the decision that it was time to move on. … I listened to my staff [because] they have that experience with MKEC that I don't have. We're entering into litigation right now over that event center – which, actually, was $3.5 million. We far exceeded the budget we had for that. It's a lot of money to spend on that, and the things we requested still weren't done. I understand we need to have this dialogue here, but we've exhausted this conversation. … Some of us here know we have to move on. We can't stay handcuffed to what we've been doing, because it's just not working.”

When Smith said that the event center's cost was actually $3.5 million instead of the $2 million that Ayotte had stated, Greenfield shook his head in disagreement. The breakdown of funds used to pay for the event center is as follows, according to the city's records:

$635,000.00 Fund 127- Hotel Tax
$850,000.00 Fund 212 – Rec. Sales Tax
$718,000.00 BPT Community Enhancement - Jan 2018
$351,866.00 BPT Capital Improvement - June 2017
$150,000.00 Dave Morgan Foundation
$342,000.00 BPT Community Enhancement - June 2017
$418,740.12 from Operations

That brings the total cost of the event center through May 31, 2018 to $3,465,606.12.

“When I bring to my Council another company and ask you to approve that, you can rest assured it's because I don't want to keep dealing with more and more issues. It's time to move in another direction,” Smith concluded.  

Councilman Richard Braden then spoke. He said that the Council had already approved the Cowan contract, but that it had to first terminate to contract with MKEC due to the non-competition clause.

Councilman Tom Beliel spoke, echoing Marquardt’s sentiments: “We hired Janet to be our manager. We make decisions based on what she thinks is best. I recommend that we terminate the MKEC contact at this time.”  

After the discussion ended, the contract was terminated. Councilmen Beliel, Braden, and Marquardt voted in favor of terminating the contract. Greenfield and Webb votes against.  

In other news at the meeting, a proposed amendment to Smith's contract and the approval of her Fiscal Year 2019 - 2020 contract were both tabled after Kennedy advised the Council to establish a severance package agreement and square away a one-year contract.  

Marquardt requested more time to look at the contracts more closely and that the Council table the two items. The motion to table the contracts was approved.

Next, Blackwell Fire Chief Cory Hanebrink requested permission to purchase five sets of bunker gear for a total of $15,000. The request was approved. The Council also approved a measure to allow Chief of Police Dewayne Wood to purchase new dash-cameras for the police department’s squad cars. Wood said that the current ones were outdated.  

The Council also re-appointed Mark Savage to the Blackwell Public Trust with a term through July 4, 2021. David Reser was also approved for a term through July 4, 2020.  

After a short recess, the Council entered into executive session, were Council members remained for close to two hours. The agenda for the executive session stated that Council members were discussing a possible violation of Oklahoma Title 11, which deals with municipal finance. The agenda also stated that council members were to discuss a potential sexual misconduct complaint against a male supervisor by a female employee of the city of Blackwell.  

The Council reconvened into regular session but took no action regarding the matters discussed in executive session. The meeting was adjourned shortly after 9:30 p.m.