Capital Exclusive: City contractors' ranks, payroll boom

Called contractors, they're supposed to work for about a year or less and complete an assigned project before leaving. They're supposed to be a inexpensive and quick way of getting a lingering task finished without putting more work on the shoulders of civil service employees.

But that's not how the system has worked.

An analysis of city contract employees shows that many have lingered on the payroll for more than a decade. Some of them have enrolled in the city's health plan and received retirement benefits, limiting the cost-effectiveness they were expected to bring.

It's a practice with little oversight that has cost the city millions of dollars, documents and interviews show.

According to the report by the Blue Ribbon Commission on City's Finances released in April, it's difficult to tell if contractors add anything worthwhile to city government.

There "appears to be no uniform process for filling contractual positions" and "it is difficult to determine if the use of contractual employees is cost efficient or represents added value," without set standards, the report said.

Now just more than a month into his term as mayor, Josh Cohen is trying to determine what should be done with these employees and figure out exactly how and when any new ones should be hired, and under what conditions.

It's a task he said is a part of his main focus during his early days in office: strengthening the city's finances at a time when Annapolis faces, by some estimates, a $6.5 million budget shortfall.

Cohen has created a five-member committee that includes two aldermen, a senior member of his administration as well as two city government outsiders to evaluate how the city uses contract employees and their impact. They are expected to deliver a report in the middle of next month. Members said they expect their findings will be the fuel for new policies that reduce the number of contractors working for the city and, thereby, reduce expenses.

Of the 91 contractors working for the city, 77 were hired during the Ellen O. Moyer administration, with 38 in her last two years in office. The 38 was a hiring spree that added $1.44 million to the payroll.

Contract employees are hired through an ad hoc process more akin to an executive decision. Sometimes they're hand-picked by a department head or the mayor, sidestepping the typical vetting process that civil service merit employees face when they're put onto the city's payroll and the scrutiny of the City Council during budget meetings.

Moyer, whose second four-year term ended last month, used the process to hire her acting public works director, Bob Agee - he earns $118,100 plus benefits. Cohen announced Friday that Agee is resigning Feb. 1 to pursue private sector career opportunities.

Moyer's other hires included Marisa Wittlinger, a $38.26-per-hour horticulturist, interns, a park ranger, inspectors and a cache of other positions spread around city government.

It's a shift in the way the city is staffed that has cost millions. According to the city's Blue Ribbon Commission report, the city spent $417,000 on contractors in 2001.

But data provided to The Capital last week shows the figure has grown over eight-fold. And the actual costs are much higher because most contractors receive health and retirement benefits in addition to their salary.

In paychecks alone, the contractors will receive about $3.5 million this year, or around 4 percent of the operating budget. However, some of them are paid through state and federal grants, not entirely from the Annapolis taxpayers' pockets.

Moyer defended the practice, saying that hiring contractors is the only way to finish work approved by the City Council. If she didn't, these tasks would sit indefinitely, she said.

"It depends on whether you're concentrating and care about providing the public service and doing what the people have approved or sitting on it and delay and delay and delay," Moyer said in an interview Friday.

Moyer said that contractors, who report to a department head like regular employees, were typically on the city's payroll for a year. After that, they were out of work, she said.

But some have stuck around more than two decades. The longest tenure from Moyer's administration, Bruce Colbert, a custodian, had his sixth anniversary as a contractor last Wednesday.

Others have stuck around longer.

Cheryl Mauck was hired as a dance and fitness coordinator in September 1989, Sandra Miedema started as a contractor with a youth program in 1988, and Harold Clark Sr. has been a contractor behind the wheel of a bus since 1994.

In all, 23 contractors have worked for the city for five years or longer. Fourteen of those pre-date Moyer's first day as mayor.

Moyer said she didn't know why some workers had stuck around so long, but said some jobs take longer to finish.

Cohen adds seven

Since he took office last month, Cohen has brought on seven contractors - including Doug Smith, his chief administrative officer, at a salary of $145,000 - and then instituted a hiring freeze that covers all types of employees with an exception for police officers and firefighters. He said the contracts expire on June 30 and wants the positions converted to the city's regular merit-based system, or as exempt employees, should the rest of the council approve.

Overall, there are 591 regular full-time city employees. During parts of the year though, staffing increases to 720, including contractors and part-time workers, a boost to handle work at the Harbor Master's Office, mowing athletic fields and other seasonal jobs.

Cohen said that the longevity of some contracts raises the question about whether they should be on the city's merit system instead. Additionally, the use of contractors wasn't monitored, a lapse thatcreated costs, he said.

"The way it has been done has lacked on overriding policies and guidelines for, No. 1, how positions are created, and No. 2, how they are filled," he said.

The contract employee committee is charged with creating those policies, said Alderman Ross Arnett, D-Ward 8, one of the members. Nothing has been finalized, but it's likely that the numbers may decrease, he said.

However, some of the contract jobs may be converted to regular merit-based jobs or the work transferred to permanent employees already on the payroll, Arnett said.

Just too expensive

The use of contract employees has come under attack from elected officials and an independent commission alike. They say if done appropriately, contractors have clear benefits in terms of both the services they provide as well as the value. But they also say the city hasn't used them in such a way. The system has had little oversight, few if any policies, and was too costly at a time when the city is facing a budget gap of at least $2.5 million that could balloon to $9 million.

"The problem with the Moyer administration was there was an awful lot of people running around on contracts doing things that were redundant, things that were already being done by staff," Arnett said. "The patronage part of the contract employee is a really objectionable part in my mind. It is something we ought to have some guidelines on. You ought not to be a contract employee because you befriended the mayor or to some lesser extent, some department head."

Alderwoman Classie Hoyle, D-Ward 3, said that now is not the time to bring on more contractors - they're just too expensive. However, there are situations where they not only save Annapolis money, but make money.

For example, before the recession it made sense to hire building inspectors through contracts. At the time, the construction industry was booming and permits were flowing through City Hall, infusing the treasury with cash. But since the economic collapse, development has been stagnant and permits are few, as are inspections.

"Now it doesn't look like the wisest thing to do, but then it was," said Hoyle, chairwoman of the city Finance Committee.

The Blue Ribbon Commission also has attacked the city's use of contractors. In a report, the commission said that it has basically been an unchecked process that has grown unnecessarily.

"The current process regarding contractual employees appears to encourage what human resources professionals refer to as 'position creep,' " the commission's report said.

This belief predates the commission's work, said former Alderwoman Julie Stankivic, R-Ward 5.

"There's certainly an appropriate use of contractors, but the city has overstepped that use," she said.