Play by the rules

Published:

Officially, we don’t know why Jim Smith got fired this February after less than two years as the Frankfort Plant Board’s general manager. The board dismissed its chief administrator in a late-night meeting without stating a cause. Smith thus qualified for a severance package including six months’ pay and health insurance coverage.

State Journal reporter Kevin Wheatley presented some possible clues to the circumstances leading to the director’s ouster in a Sunday story revealing Smith and Assistant Manager Ron Thomas, also dismissed, left a trail of contracts and purchases with little or no evidence they complied with the state’s Model Procurement Code (requiring public bids on expenditures topping $20,000) or the Plant Board’s own policy of obtaining three price quotes for buys of $2,500 to $20,000. In some cases, Smith was crafting deals with former business associates.

The utility was unable to document that procedures were followed in numerous instances. Among the transactions were a $32,729 deal with Fifth Third Bank to process bill payments sent to a post office box, an open-ended contract with Main Source Bank for credit-card processing, a $28,000 cost-of-services study, a $26,000 contract to conduct a customer-service survey, a deal exceeding the $20,000 limit to supply coffee, tea and hot chocolate for Plant Board offices, an arrangement with local sheriff’s deputies and a constable to patrol the utility’s properties and $20,000 for evaluation of the Plant Board’s facilities expansion plan.

All of these expenditures may have been justifiable (although the manager’s coffee tastes seem a tad rich). More efficient bill processing, objective reviews of facilities planning, and security upgrades in response to copper wire theft at utility installations are not mere indulgences. It was improper, however, to bypass purchasing rules that are intended to ensure the utility gets the best value for its money while discouraging favoritism.

When Wheatley contacted the former manager for comment on the dearth of records, Smith said the board itself approved the contracts with people it had a history of engaging. If indeed the manager was simply doing “business as usual” for the Plant Board, that says as much about the organization’s own failings as it does about the administrator’s presumptuousness. Plant Board customers, who expect a non-profit municipal utility to provide reliable services at lower rates than a for-profit company would charge, have a right to demand even its chief executives be subject to spending and procedural limitations, just like the linemen who risk their lives restoring service after storms with no expectation of special privilege. The system should maintain full records showing each and every purchase clears the necessary hurdles – whether a mundane clerk or a lofty executive is handling the purchases. No one – no one – should have a means of bypassing these prudent steps.

Sheila Burton, chairwoman of the board, declined to comment on any connection to Smith’s firing but said procurement policies have come up for discussion lately. She said she’s less perturbed that the manager did business with former associates than that deals were apparently finalized without competitive bidding. Steps have been taken to require more transparency in the future, she added.

Good. We trust the next general manager will understand from the outset that the position bestows no right to spend ratepayers’ money without establishing a record of adherence to cost and propriety standards.

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