The New Orleans City Council on Thursday unanimously passed an ordinance to require the mayor to get council approval to sign contracts worth more than $1 million, as well as contracts with a term of more than one year.
The measure greatly expands the council’s authority over city contracts. Although the council has control over the budget, it is the mayor that largely controls which contracts the city signs to spend the funds allocated by the council.
Previously, city law only required council approval for multi-year cooperative endeavor agreements, or CEAs. CEAs are primarily meant for joint agreements and projects, but their broad definition in local law allows the city to commit significant sums of money through them.
The new law will force a council vote for multi-year contracts as well as contracts “providing for the expenditure of more than $1,000,000 in City funds.” Councilman JP Morrell, who sponsored the ordinance, said the law should apply to one-year CEAs worth over $1 million as well.
Morrell said that he believed the law would also require council approval of renewals of one-year contracts and contract amendments that require a signature from the city. The law takes effect on Jan. 1, 2023.
The ordinance includes an exception that allows the city to bypass council approval for contracts signed within 60 days of a declared state of emergency if they are related to that emergency.
The ordinance was also amended on Thursday to add two more exceptions. The first new exception is for public works contracts that are required under state law to follow the process layed out in the state’s public bid law, rather than the local public bid law, when they are worth more than $250,000.
“Those are already held to the strictest, most stringent standard and awarded based on public bid law which is already in the code,” Morrell said at Thursday’s meeting.
The second new exception is for contracts entered into by the New Orleans Aviation Board.
“The New Orleans Aviation Board is already governed by both city, state and federal contract codes and statutes and basically operates purely under public bid law,” Morrell said.
The council’s lack of contract review authority has led to some controversy in recent months. Morrell on Thursday sighted ongoing problems with the city’s sanitation contracts, which led to two different waste contractors both covering the same territory at the same time.
“We have seen over the course of the drama and pageantry of the sanitation contract, the issues we’ve had thus far,” Morrell said at Thursday’s meeting. “Had the council been engaged in that process while the contract was being negotiated, a lot of the drama that occurred could have been avoided.”
Another high profile example was related to the city’s now-scandalous “smart cities” project.
“Smart cities was the thing that was the initial seed for this,” Morrell told The Lens.
For the smart cities project, the city had released a request for proposals for a contractor who would achieve a long list of goals for the city, including setting up citywide WiFi to serve municipal infrastructure and provide a city-directed internet service to compete with existing providers like Cox and AT&T. The city selected a proposal submitted by a consortium of businesses including wireless giant Qualcomm and JLC Infrastructure, an infrastructure firm co-run by NBA legend Earvin “Magic” Johnson.
The project required a 15-year CEA, meaning it would need City Council approval. But soon after the details of the project were reported on by The Lens, some council members began to question aspects of the plan. Councilwoman Helena Moreno raised concerns about the privacy implications of new data-collecting “smart” devices that would be installed and used to collect massive amounts of data to help finance the plan.
Council members also raised questions about the plan’s finances. The proposal didn’t disclose how much the city would owe the consortium every year. And it was also unclear how the project would achieve one of its main public selling points — getting internet access to those who can’t currently afford it.
The Lens also reported on contract-fixing allegations lodged by a competing bidder on the project related to the role of a “pro-bono” city consultant, called Ignite Cities, that helped put the deal together. Those allegations gained steam when it was revealed that a city employee who was heavily involved in the project, Jonathan Rhodes, was running a side “smart cities” business and had previously worked with Qualcomm, a member of the selected consortium.
As issues with the project emerged, council members began demanding more information and clarity from the Cantrell administration before they would approve the multi-year CEA. But instead of bringing the multi-year agreement to a council vote, the administration quietly signed a one-year contract to jumpstart the project while it continued to lobby the council for support of the longer term contract.
The city signed a contract to procure up to $3 million worth of WiFi and “smart” equipment. Councilwoman Helena Moreno said the move was an attempt to circumvent the council’s authority, and some council members said it was another red flag for the entire project.
The City Council is in the middle of a formal investigation into the scandal.