At the time, it might have seemed a King Solomon-like solution to the ever-contentious problem of Springfield's municipal towing contract: in April, 2007 then-Mayor Charlie Ryan decided that rather than select one of the two companies vying for the contract, he'd split it, dividing the city into four geographical zones and awarding each company two zones.
Ryan's decision came after many months of wrangling over the contract, which covers all police-ordered tows in the city. The city had tried to award the contract more than a year earlier, but ended up tossing out all three bids for the job, citing deficiencies in each proposal. In the interim, the job was being done on a month-to-month basis by CJ's Towing Unlimited, which had held the contract since 2000.
Two of those three bidders—CJ's and CF, Inc., doing business as the Springfield Towing Alliance, or STA— came back for another shot when the contract went back out to bid in 2007. Neither was happy with Ryan's plan to divide the contract. In a letter to the mayor, STA President Bobby Jones wrote that a split contract would not be financially viable for his company. CJ's, meanwhile, declined to accept the deal, leaving STA the sole winner.
And, critics say, it looks like city taxpayers may have been the losers. In the 15 months since STA was awarded the contract, there has been a steady stream of complaints and concerns about its service, recorded in numerous public documents from the Springfield Police Department, the city Law Department and the auditor's office. They include repeated failures by STA to make payments on time; failure to provide required paperwork and other documentation, including evidence of criminal-records checks on its drivers; failure to respond to police calls for tows within the required time frame; and failure to put fully in place a "state of the art" GPS tracking system STA had promised to install within a month of taking the contract.
Many of those concerns were outlined in a draft report, prepared by city auditors and released in March, that found that STA may have owed the city more than $70,000 in towing fees as of last December—a figure that presumably has increased since as well as about $10,000 in utility bills. STA's defenders say the report is an incomplete draft and not the final word on what, if anything, STA owes the city. City Hall says a final audit is pending, although more than four months after the draft, there's still no sign of it.
In addition, evidence suggests that Jones included false information in his bid by failing to disclose an earlier bankruptcy filing. The city's request for bids required companies to state whether any of their "owners, principals, partners and any other individuals with equity property, financial and/or ownership interest has filed for bankruptcy in the last ten (10) years." Jones signed and submitted a document, dated Jan. 23, 2007, "certify[ing] that the corporation has not filed a bankruptcy petition within the 10 years immediately preceding" the date of its bid.
But the bid requirements didn't ask whether the corporation had filed for bankruptcy—it asked whether any of its owners or principals had. According to a document from the U.S. Bankruptcy Court in Worcester, Jones did, in fact, file for Chapter Seven bankruptcy on July 10, 1997—less than 10 years before he bid for the tow contract. Neither Jones nor his attorney returned calls from the Advocate.
Under the contract, the city has the right to fine the company for contract violations, or even to cancel the contract; to date, neither has happened. Meanwhile, observers are left scratching their heads over why STA has apparently been allowed to slide on so many issues of concern.
Complicating the matter is the number of connections between Jones and the administration of new Mayor Dom Sarno. Among Jones' allies are Charlie Kingston, the controversial former city tax collector and convicted tax evader who is closely connected to Sarno, and former state Rep. Ray Jordan, whose daughter, Denise, serves as Sarno's chief of staff. (See sidebar.)
Under the terms of the contract, STA is to handle all police-ordered tows in Springfield, charging vehicle owners $79 per tow. In return, the city is to get a $30 administrative fee for each tow ordered by the SPD, plus a "remittance fee" of $19.75 for each tow for which STA receives payment from the owner. If the driver doesn't claim the car, STA can auction it, with the city getting a cut; there's no remittance fee for unclaimed cars that are sent to salvage. In addition, STA must pay $2,050 a month in rent for the city-owned lot at 29 Chandler Street where it stores its cars.
At the time it was awarded, the contract was hailed as a financial win for the cash-strapped city, expected to bring $500,000 a year into city coffers—a considerable increase over previous years' revenues, which never topped $160,000.
But according to public documents, problems with the STA deal began just a couple of months into the contract. In July 2007, in a letter to Jones, associate city solicitor Alesia Days wrote that "the City is anticipating a long-term relationship with the Alliance." Still, she added, the city had several "areas of concerns." They included the fact that STA had yet to provide documentation that it had checked all its drivers for criminal or sex offender records; that it had rescheduled an already overdue city inspection of its trucks; and that police were complaining that drivers were taking longer than the required 25-minute response time. Days also noted that the promised GPS system had yet to be installed, although she added that Jones' attorney had just informed her the equipment had been ordered and was on its way.
Less than a month later, Sgt. Donald Sicard, the SPD's liaison for the towing contract, sent STA a memo noting that the company's monthly reports were incomplete, preventing the department from processing the tow fees paid to the city.
In October, Days wrote to STA's attorney, Mickey Harris, chiding his client for withholding money without authorization from its monthly remittance to the city. At issue was whether STA should be paid for towing to its own storage yard cars that had already been at CJ's yard when STA took over the contract. According to Days' letter, the city had offered to compensate STA $30 per vehicle for these "holdover tows," but STA had refused that deal.
"[I]t is unacceptable that prior to the compensation rate being agreed to by both parties, the Towing Alliance unilaterally made an unauthorized decision to charge [the city] for the vehicles moved from CJ's," wrote Days, who added that the issue had been dragging out for several months.
In addition, Days noted that STA had been charging storage fees to drivers whose vehicles were being held under police orders (for example, as evidence in an investigation). The city maintained that these owners should not be charged for storage; STA, however, was charging fees, which in some cases had mounted to thousands of dollars, which some owners could not afford to pay.
On Dec. 3, 2007, Days wrote again to Jones and Bob McCollum, the former School Committee member who is now STA's operations manager, demanding an overdue monthly payment to the city from October—the third late payment in the previous five months, and a "serious breach of contract," she wrote. (Subsequent documents show STA's November payment also was not made on time.) In addition, STA had been late an unspecified number of times with its lease payments for the Chandler Street property and continued to file inadequate paperwork with its monthly payments to the SPD.
On Jan. 29, the SPD issued a long letter to Jones, citing numerous problems that remained unresolved despite months of escalating pressure from the city, including: repeated late payments, incomplete weekly reports, missing criminal-records checks, failure to provide the city an up-to-date list of STA subcontractors, and the still-incomplete GPS system.
Those issues were underscored in the draft audit released in March. In addition, the auditor's report compared the Police Department's records of the number of tows in the city from the time STA took over the contract through December, 2007 with the number of tows reported by STA and found a major discrepancy. According to the SPD, there had been 4,625 police-ordered tows during that period. STA, however, had only paid the city for 3,196. Those 1,429 missing tows would result in payments of $71,093 not made to the city.
In addition, according to the draft audit, the city had inappropriately been paying utility bills for the Chandler Street property because STA had failed to transfer the accounts to the company. Those bills—which cover the period from October 2007, when STA took occupancy of the lot, to this February, when the company finally transferred the accounts—total $10,285.
Neither Jones nor his attorney, Mickey Harris, returned calls from the Advocate to discuss the contract.
It's important to note that the March audit was incomplete; missing from the draft, for instance, was the SPD's response to the auditor's findings. At the time of its release, Harris told the Springfield Republican, "We believe that we do not owe any money and we would submit that the city owes us money. We believe we are current on all payments to the city of Springfield." City Auditor Mark Ianello concurred that the draft was inconclusive.
Still, the figures—coupled with other documented problems with the contract—were enough to cause some city officials grave concerns, with City Councilor Tim Rooke the most outspoken. In April, Rooke tried to block City Council approval of a special permit STA needs to lease the Chandler Street property, saying he didn't think the permit should be given while questions lingered about whether the company owes the city money. Councilor Rosemarie Mazza Moriarty joined Rooke in an attempt to delay the vote by sending the matter to committee. That effort failed, and the permit was granted by a 7-to-2 vote.
Last month, STA again came before the Council, seeking a special permit to sell used cars from its lot. Again, Rooke protested that the Council should not give STA any permits until the payment issue is resolved. This time, his colleagues agreed, voting to send the request to committee.
Rooke told the Advocate he has run into numerous dead ends trying to get information about the STA contract. Last week he tried to schedule a meeting of the Audit Committee, of which he is chair, to discuss the contract, but had to cancel because neither the audit nor a city compliance report were complete. At press time they were still unavailable.
It's "unbelievable," Rooke said, that 15 months into the contract, there are still so many unresolved issues. "Nobody has taken responsibility for [this contract]," said Rooke, adding that, if he had the authority, he would have already exercised the city's right to cancel the deal.
Among Rooke's concerns: under state law, a towing provider can charge vehicle owners a $20 daily storage fee, provided the lots meets certain safety requirements, including having outdoor lighting and a six-foot fence around the entire perimeter. If these things aren't in place, the company can only charge $10 a day. But while the Chandler Street property is not fully fenced, Rooke contends, STA has been charging vehicle owners the $20 rate.
Those concerns were reiterated in a March 11 brief filed by Benjamin Coyle, attorney for CJ's Towing, with the state Dept. of Public Utilities, which issues certificates of compliance to towing companies. CJ's had filed a petition to intervene in the matter, and with his brief, Coyle submitted four photographs of STA's lot showing unfenced areas. Coyle also argued that, after being informed it needed a DPU certificate, STA took more than three months to file for one, meaning it had been operating illegally.
In May, Craig Morel, president of CJ's, sent Sarno a three-page letter outlining his concerns about STA's performance, citing many of the issues raised in the draft audit and other city documents. Morel questioned why the company had faced neither fines nor a contract suspension and asked the mayor to investigate. Morel told the Advocate he never heard back from Sarno.
Days, the city attorney handling the contract, did not return a call from the Advocate; her boss, City Solicitor Ed Pikula, returned a message but could not be reached at deadline. Police Commissioner William Fitchett's office referred questions to Sgt. Sicard, the contract liaison officer; he also could not be reached by deadline.
Sarno did not respond to an interview request from the Advocate.
mturner@valleyadvocate.com
