Grace signed 15 different contracts on Nov. 30 with Robert Ernst of MT Business Technologies Inc. They outline a five-year lease agreement between the city and the Avon Lake company for more than a dozen photocopy machines, as well as the service of the machines.
Law Director Scott Serazin said he will advise the Safety Service Department to void the contracts and go through the competitive bid process because the contracts when added together exceed the $25,000 threshold for spending the mayor can authorize without a formal public bid.
“The contracts together are in excess of $200,000 a year and as such violate the spending limit and bid splitting provision of the charter,” he said. “The charter specifically says you cannot split up a contract to make it come under the $25,000 threshold. It is very clear under the law that if the contract exceeds the state spending limit, then the contract is void.”
The contracts also showed an increase from what the city previously paid the business for service. In the most recent three years, the city paid MT Business Technologies $97,050 in 2009, $96,690 in 2010 and $97,638 in 2011.
Grace said he believed he was within his right to sign the contracts without going through the bid process. Former Law Director Terry “Pete” Shilling has never alerted him to a concern that would make him think otherwise, he said.
“But obviously if Mr. Serazin’s interpretation is different, then it is his call,” he said. “I have built a reputation of doing things properly and spending the city’s money wisely, and I would not jeopardize that for any reason.”
Ernst attended a fundraising event for Grace, according to an Ohio Campaign Finance Report filed prior to the May 2011 primary. The event was held on Feb. 24, 2011, and Ernst paid $50 for his ticket. Ernst also contributed $100 to the Yes Elyria campaign to fight the recall of Grace in December 2009, according to campaign records.
Grace said he does not have a personal relationship with Ernst, but he does have a long-standing friendly professional relationship with Ernst as well as MT Business Technologies. It is not atypical for those who do work for the city to support candidates, he said.
“I can say over the years that they have proven to be an exceptional company, and I don’t think anyone can dispute that,” Grace said. “We have received proposals from a number of other competitors but we have been very satisfied with MT Business Technologies and others have not been able to touch their level of service, the pricing and the quality.”
A call to MT Business’ Columbus office that handles press inquires was not returned Thursday.
The contracts were brought to Serazin’s attention by new Safety-Service Director Mary Siwierka in the course of her evaluation of all contracts in the city.
“We were not looking for or at any specific contract. Rather, I was trying to get a handle on all contracts in the city,” she said. “I asked department heads early in the year to provide the mayor’s office with a copy of all contracts, service agreements and vendor agreements. They are being looked over because we would never want to be in position where a contract was expiring or we missed an opportunity to save the city some money.”
Siwierka said the contracts for the copiers — more than 60 pages — are very detailed and she wanted Serazin’s opinion.
“I wanted to make sure I knew exactly what the city’s rates are compared to previous rates, where the machines were at in the city and what the contracts spell out as to the responsibilities of the city and those of MT Business Technologies,” she said.
Siwierka said she also wanted to know if the service should have been bid out.
Serazin said he is still in the process of writing a formal opinion.
“I’ve looked into this matter, and even if the equipment is different and goes to different departments, it is my interpretation of Ohio law that if the vendor is the same, then the spending limit guideline must be followed,” he said. “The Information Technology Department was managing the contracts, but it seems like every department seems to have gotten a new copier.”
City Auditor Ted Pileski said MT Business has been a city vendor for more than a decade.
“About a year after Bill Grace took office, we switched to MT Business Technologies and they have been our copier contractor ever since,” he said.
Pileski said he did not know the specifics of the new contracts, so he could not explain why the annual cost paid to the company increased.
Contact Lisa Roberson at 329-7121 or lroberson@chroniclet.com.
http://chronicle.northcoastnow...ned-by-law-director/
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