Questions about state bidding laws were raised once again at a fiscal court meeting on Tuesday, and, Judge-Executive Robbie Williams said all vendors who have been paid more than $30,000 this fiscal year will be “cut off” until the questions are answered.
“Clearly, we’re getting conflicting information,” Williams said Wednesday, a day after the bidding questions were raised at a fiscal court meeting. “I am issuing a directive this morning and anyone who has been paid over $30,000, we’re not doing business with them. Right now, they will be cut off until we get a clearly definitive answer that the county attorney can agree on and the state auditor’s office.”
Williams issued the directive on Wednesday, notifying all county department heads that, “Until further notice all vendors that have exceeded the $30,000 threshold should be notified that their product or service will not be utilized until further notice ... I realize this may be an inconvenient but it is imperative as elected officials that we act in accordance with local laws regardless of how these transactions have been handled in the past.”
All county gas cards were turned off on Nov. 21 until further notice, the directive says.
In October, the fiscal court went against advice of County Attorney Keith Bartley and approved buying a $20,000 truck from Pop’s Chevrolet. State law requires bids for purchases over $30,000, and, prior to that purchase, the fiscal court had bought other cars at Pop’s, partially with grant funding, bringing the total spent at the company to more than $30,000 this fiscal year. Bartley advised the fiscal court that bids were required for the $20,000 truck purchase because the county had already spent $30,000 with that vendor.
Magistrate Ronnie Akers brought the issue up again at a fiscal court meeting on Tuesday, Nov. 19, when he made a motion to include a spreadsheet detailing the total spent to date, per vendor, in the monthly treasurer’s report so fiscal court members would know how much had been spent prior to voting.
“That’s a good idea,” Williams said.
Treasurer David Layne said he provides that report annually, but Akers requested a monthly total.
“I’d just like to know where we stand with each contractor, each vendor, because we had some questions last month about the $30,000 threshold on that bidding, so. I’ll just put that in the form of a motion and then if anybody wants to second it,” Akers said.
He said the fiscal court needs “some kind of checks and balances to where we know where we stand” on bidding requirements.
The fiscal court discussed the issue for around 30 minutes, and Akers’ motion eventually died for lack of a second.
Talking about the bidding requirements on a per vendor, per fiscal year basis, Williams said, “I think I’ve pretty much cleared that up with the folks in Frankfort. That $30,000 limit, per vendor, that’s not correct.”
Akers asked Bartley to confirm that bids are required for the $30,000 threshold.
“I mean, there are exceptions, obviously, but, generally, that is true,” Bartley said.
Williams said he understands bids are required for “one-time” purchases over $30,000.
“If we buy a, let’s say we have a contractor that does a project in, I don’t know, Weeksbury. It’s $20,000. They come back down to Prestonsburg and they do a project and it’s another $20,000. That’s over the $30,000,” Williams said. “Those project stand independent on their own. There’s not a — you don’t have to bid those. Now, if there is, for instance, the situation with the bridges, we know the bridges are under $30,000, per bridge, but that project total will be over $30,000, so we do have to bid the bridges because the total project is over $30,000. What they do is they, and — this my understanding from the department of local government and the state auditor’s office —Keith, am I off track, or?”
“I believe you’re off track, yes,” Bartley told him. “I believe the DLG is dead wrong if that’s what they told you. Although I’ve heard them tell similar things to other people in similar positions. David and I actually had a discussion after the last meeting. I think we agreed that if it’s $30,000 or more per year, per vendor, it has to be bid.”
Layne and Williams reported that officials with the DLG and the state auditor’s office interpreted the law in another way and gave them different advice. Williams complained that if that were the case, the county would be in a “constant flux of bidding.”
As the discussion continued, Bartley advised that the statute is “pretty plain,” and he also talked about exemptions to the law, such as emergencies that permit local governments to buy things without bids. The law also offers other exceptions, including the purchase of products from a “sole source” and for other reasons.
“You know, the statute to me is pretty plain. You talk about getting a letter from somebody from a state agency ... it’s exactly what I told you. When DLG tells you, you can do something, they’ll never give it to you in writing. Period. Ain’t going to happen. Ain’t going to happen, period,” Bartley said at the meeting.
Akers said the fiscal court “used to bid everything,” saying it would take hours to open bids.
“I’m asking to bid anything over $30,000, like the law says,” Akers said. “That’s all.”
Bartley repeated his advice to the fiscal court, telling them, “If you read that statute, it says no county, city, clerk, blah, blah, blah, shall make a contract, lease or agreement for materials supplies, services, contractual services, other than professional, involving an expenditure of more than $30,000.”
Layne said if that were true, the county would not be able to make any purchases at Wayne’s Supply because it has already spent $30,000 with that company this fiscal year. He suggested the company is the county’s sole source for Caterpillar repair, which would fall under the sole source exception in the state bidding law.
Williams asked Bartley to reach out to state officials and mentioned having a work session to educate the fiscal court about the process.
“I mean, as an auditor, when I was an auditor, I was always told each project stood alone as work. And if you knew that project, like the bridge, for example ...I was always under the impression if you did a job in Prestonsburg for $20,000 and you go do a job in Wheelwright for $20,000, that project didn’t have to be bid because those projects are, they’re two different projects, two different locations, and each project stands on its own,” he said.
Williams and others emphasized that the fiscal court does not want to circumvent state law and referenced advice he and Layne received from state officials.
“We’re not trying to circumvent the law,” Williams said. “I mean, we’ve actually spoke with the director of the state auditing for the northern part of Kentucky, correct David? We spoke with the department of local government. They both told us the same thing.”
Bartley told him, “It would certainly protect your butt if you could get one of those agencies to give that to you that in writing. But I bet my right arm, they won’t do it.”
On Wednesday, Williams read a statement he said Layne received from the state auditor’s office on the matter. He would not provide the newspaper a copy of the statement, saying that the person who sent it told them not to release it, and that the person wrote, “don’t take my responses as answers but more of a guide on what the answers could be,” because procurement is a complicated process that “depends on a lot of things.”
That statement, Williams said, reported that the purchase of an individual vehicle would be considered an individual purchase unless several cars are part of a package bid.
After the Chronicle published a story last month about the fiscal court approving the truck purchase without bids, Williams and Layne reported that officials at the Kentucky Department for Local Government and the Kentucky Auditor’s office informed them that bids were not required — contrary to what Bartley told the fiscal court.
Layne asked the newspaper to reach out to both offices for clarification on the issue.
When asked whether the county should have bid the purchase of the truck, Gregory B. Ladd, general council for the DLG, stated in an Oct. 22 email, “In this case, we would defer to the county attorney as we do not have all the pertinent facts.” The email was forwarded to Layne the following day.
Requests for clarification from the state auditor’s office were referred to Pamela Trautner, public information officer for the Finance and Administration Cabinet.
The newspaper asked Trautner whether the $30,000 bidding threshold is a “per item” threshold or a “per vendor, per fiscal year” threshold, providing an example that highlighted a $30,000 purchase to buy a truck one month with a bid and then buying another truck for $20,000 (under the bidding threshold) a couple of months later from the same vendor.
Citing KRS 45A, Trautner wrote, “KRS 45A.345 defines ‘aggregate amount’ for local government as total dollar amount during a fiscal year of items of a like nature, function and use the need for which can reasonably be determined at the beginning of the fiscal year.”
In an interview Wednesday, Williams maintained that the county could not have reasonably foreseen that the transmission would go out of the truck that was replaced for the $20,000 in October. He reported that the truck was about 20 years old and said the county has lots of old vehicles and equipment.
He said the $30,000 threshold requirement is for “ongoing relationships” with specific vendors, like Kings Supply, where the county buys its cleaning supplies.
“But if it’s a situation like the truck, for example, the transmission went out of the truck, so we called dealerships trying to find a truck that we need,” he said.
Williams reported the truck was purchased by the county before the fiscal court voted for it. He emphasized that county officials obtain quotes for contract work and purchases.
That was the case, he said, for a $21,500 bill the fiscal court approved paying on Tuesday to Nova Inc. for drilled steel work on the right fork of Justice Branch. In August, the fiscal court awarded a $52,000 bid to that company for work on a different county road, bringing the total paid this fiscal year to that company to $73,500.
Williams said county officials obtained several verbal quotes from other companies before hiring Nova to do the work.
Williams said since the fiscal year started on July 1, the county has already spent $30,000 or more with at least 15 vendors that sell gasoline, parts and equipment.
When asked why he did not second Akers’ motion to provide a listing of vendor totals as part of the treasurer’s report, he said it was not necessary because Akers could obtain that information upon request and because the report was not part of Layne’s job duties.