June 14, 2010 - Auditors from the firm of O'Connor Davies Muns Dobbins present a live report to the Rye City Council for the first time in seven years.
As part of their general fund audit, Jean Gribbins, the newly hired City Comptroller at the time, recommended that the auditors "take a deeper look" at the operations of one department in particular.
That department? Rye Golf Club.
STAFFING SERVICES RED FLAGGED IN 2010
The auditor's written report from 2009/2010, sounds like it was written today. It specifically mentioned the services provided from RM Staffing:
"The golf club operated by the City utilizes outside contractors, who provide for the staffing of the club's restaurant, catering hall and kitchen, as well as clerical workers, supervisors and manual laborers, as needed, for capital projects. Additionally, the golf club enters into operating leases for golf carts and golf course maintenance equipment. Our inquiries with Golf Club management revealed that no bids are solicited to provide for these services. In addition, we were unable to locate copies of signed contracts or, in the alternative, City Council resolutions authorizing the approval of the service providers or the terms and conditions."
The auditor's written recommendations to Mayor French, the Council and City Manager Scott Pickup? Follow the law.
"It is our opinion that a competitive bidding process is required for these services, similar to other services that are provided to other . At a minimum, documentation should be readily available, including a signed contract outlining the services to be performed the rates to be charged and clearly specifying that all applicable employment laws are being followed."
AUDITORS: COMPETITIVE BIDDING PROCESS REQUIRED
The auditor's live presentation was shorter and not as detailed. They did mention, however, that they found some areas for improvement–or what they termed "low level" deficiencies–at Rye Golf Club.
The first problem the auditor addressed was with bidding–or the lack thereof. He explained: "Maybe they could tighten up some stuff regarding bidding for things. I think there were several things that did not go through the bidding process that normal city activities would require. That meet the bidding threshold."
He spoke of other inadequacies in keeping track of inventory, and money, as well: "We also reported on having a little better handle on the inventory items at the golf club, especially at Whitby Castle and the catering operations," he said. "That's obviously a big area, there's a lot of money going through there–a lot of cash transactions going through that."
CITY MANAGER PICKUP ON THE JOB IN 2010
June 14, 2010, also happened to be Scott Pickup's very first meeting as Rye's new city manager–having just been unanimously appointed by the city council only five days earlier [Item 3].
Two years later, the risk from the deficiencies detailed and documented fot the City Council in 2010 would lead to the suspension–and likely termination–of the club's general manager. The firing of numerous employees. The resignation of the golf commission's chairman. The termination of a $7.2 million dollar no-bid business relationship. And the launching of a $136,000 taxpayer funded investigation into the entire operation.
Of course, City Manager Pickup didn't need the benefit a live auditor's report his first week on the job to know how the golf club operated. He was the assistant city manager since 2005, and as such, we was plenty well-aware of the operations at RGC, having personally signed a $455,00 blanket purchase order for RM Staffing as far back as 2008.
AUDITORS IGNORED, CITY ATTORNEY DENIES VETTING RM
Additionally, City Manager Pickup did not institute any of the auditor's recommendations calling for the competitive bidding of staffing services at Whitby Castle–which they said was required (by law).
Instead, Mr. Pickup argued against those recommendations, and lied to the public when he told RGC members that the city's attorney, Kristen Wilson, vetted the RM Staffing relationship. Ms. Wilson flatly contradicted that statement by Mr. Pickup in the Journal News, 10/10/12.
NOTES: It was interesting to see that the financial report that was presented was not made available to all the council members in attendance, as mentioned by Mr. Sack and Ms. Parker (who chided the new city manager for the oversight). Mayor French said he and Deputy Mayor Jovanovich (and former councilwoman Paula Gamache) sat on the Audit Committee and, therefore, were already familiar with, and had a dialogue regarding, the report prior to the meeting.
You can view the full June 14, 2010 budget meeting here.