City of Savannah's purchasing backlog: $6 million
By mid-August, emails from city staffers were taking a desperate tone.
As hundreds of requisitions backed up in the Purchasing Department, the delays were affecting every aspect of city operations, including police, water quality, traffic engineering and City Hall itself.
In internal memos dated Aug. 21 and Aug. 28, Assistant City Manager Stephanie Cutter and Management Services Bureau Chief Sean Brandon outlined the problem: As of Aug. 23, the city had 379 requisitions in backlog, representing more than $6 million.
That had increased by 100 requisitions and about $800,000 just since Aug. 3.
"Open requisitions have increased 37 percent since the beginning of August and it appears will continue to compound for a number of reasons,” Cutter wrote to City Manager Rochelle Small-Toney
Emails from city staff, obtained under the state’s Open Records Law, detailed the scope of the needs:
• “Please understand that it is imperative that we are not put on credit hold with the vendors/suppliers as indicated below since the chemicals are necessary to continue to treat the water for the operation of both water supply and the I&D facility,” wrote Heath Lloyd, the city’s head of Water Supply and Treatment on Aug. 20.
Lloyd referenced 15 requisitions, most sent in July but one as old as June. He and an assistant emailed Purchasing that same day to inquire about requisitions the assistant described as “seriously past due.”
• From Jerry Lloyd, the Savannah-Chatham police department’s administrative director, checking on 16 orders from Patrick’s Uniforms: “We are over $75,000 in arrears for payments and Account Payable cannot complete payment processing.”
• From Sgt. Clayton Cortes, officer in charge of the police armory unit. He wrote to explain the urgency for an order of 590 new Glock handguns requisitioned months earlier: “A large number of our service weapon(s) are nearing their 20-year-old mark. I have to declare their need/status to upgrade as an EMERGENCY.”
The city also had a limited window to trade in old weapons, which would take $40,000 off the purchase price.
Some of the delays happened because of simple oversight — requisitions weren’t properly filed or the dollar amount on an invoice didn’t match the amount on a requisition — but personnel problems fueled the problem.
Delayed requisitions were only half the equation. Once the requisitions were submitted and turned into purchase orders, there were delays in invoicing them. A spreadsheet, developed in August to analyze how long it took for a purchase order to get invoiced, found more than $3.4 million in stalled, unpaid bills.
Turning over the Purchasing staff
Since October 2011, the Purchasing Department had been working with a new computer system, known as Lawson. In explaining the backlog to City Council, Small-Toney blamed inadequacies with the new program and with staff difficulty adjusting to the complicated program. She also cited Purchasing staff taking advantage of the 2011 early retirement program.
The Purchasing Department, however, had been working for more than a year to implement and train on the new system.
By August 2012, it wasn’t the computer system that was new.
It was almost the entire Purchasing staff.
Within five months of Carla Byrd becoming Purchasing director in March, the only original employee left was the administrative assistant. Four Purchasing agents and the Minority/Women Business Enterprise coordinator had retired or resigned or been forcibly reassigned or terminated.
The exodus continued early this week when an employee hired a month ago as the new M/WBE coordinator resigned.
Purchasing operations and the M/WBE program were combined in January, joining two crucial contracting operations.
Buyers, who research bids and help determine which contractors and vendors should be selected, handle more than 60,000 invoices a year — worth roughly $62 million. One priority for the M/WBE program is to help determine goals for the percentage of minority and women contractors, an evaluation that can help determine which contractor gets a bid and which ones won’t.
The three most senior employees — Joy Kerkhoff, Barbara Hayes and Shawana Jennings — had a combined 79 years of government purchasing experience and were all certified with the National Institute of Governmental Purchasing. Among them, they had 33 years as city Purchasing agents.
Temporary employees and one new full-time buyer left in their place had no previous purchasing experience.
Having a department filled with novice buyers who don’t understand government procedure creates a system that can be easily manipulated, Hayes believes.
She said she chose to retire June 1 when it became clear Byrd’s main priority was forcing out the staff.
“It was public humiliation and intimidation from the day she walked in the door,” Hayes said.
Jennings resigned in August with the hope she could find work elsewhere.
She, Hayes and Kathey Porter, who had worked almost six years as the M/WBE coordinator, say the city manager provided regular, direct oversight of Byrd and talked to her daily.
“She was hired to clean out the department. She stated that to me,” Jennings said. “She would tell us over and over again how incompetent we were and said if it weren’t true she wouldn’t have been hired.”
Last week, as Small-Toney was fighting to keep her own job, she demoted Byrd, moving her to the Entrepreneurial Center. Byrd also will oversee the M/WBE program, which will move out of Purchasing.
The new job comes with a 10 percent pay cut, putting her salary at $88,700.
It makes her the highest paid administrator in the organization. But it strictly adheres to city policy as a demoted employee shall receive no more than a 10 percent reduction in pay or the highest level of the new pay grade, whichever is less.
Kerkhoff was put back in charge of Purchasing as assistant director.
Despite the administrative changes, Mayor Edna Jackson, with council support, has asked for Small-Toney's resignation.
Hayes said Purchasing change should help rectify problems, but it leaves questions.
“How did they let one bully come in here and do all this to the city?” she asked. “How can one person override the system? There are supposed to be checks and balances with our human resources department, but no one was allowed to do their job because of the city manager.”
Small-Toney disagreed in a Thursday interview, saying she did not directly supervise Byrd or get involved in running the department.
“In the structure between Mrs. Byrd and me and her staff would be a bureau chief and an assistant city manager,” she said.
She also challenged that anyone would want to clean out a department.
“I can’t imagine that,” she said. “That is something that would be counter-productive and counter-intuitive.”
She also questioned why, if employees were so upset, she could find no history of complaints filed with human resources.
Jennings, Hayes and Porter say they were in regular communication with HR, with Hayes and Porter even seeking transfers to other departments. They were told no positions were available.
Byrd has retained attorney Bart Turner “for the purpose of responding to any false statements against her,” he said Friday.
“While she looks forward to responding, she does not believe it’s appropriate to do so in this format,” Turner said, adding, “I would suggest to the city of Savannah and its city manager they stick to the facts. If not, the truth will come out in another format.”
Longtime employee terminated
Porter has her master’s of business administration degree from Georgia Southern and has been an adjunct professor at Savannah State University, the Savannah College of Art and Design, Strayer and the University of Phoenix.
Porter, 42, said before the Purchasing change she never had a bad performance evaluation, which a review of her personnel file confirmed.
“Not one,” she said. “Every performance review was ‘Exceeds expectations.’ I have never been reprimanded. There were no disciplinary actions in my file. I had been commended several times in the community for my performance.”
By June 20, Byrd suspended her pending termination. The city manager upheld dismissal July 3.
“A few weeks into it, every single thing was done in a way (Byrd) couldn’t understand, but she could give me no direction on how she wanted it done,” Porter said.
Byrd detailed problems in a letter, including that on multiple occasions in April and May Porter had to be reminded to submit two travel reports from September and November. The memo states Porter’s travel privileges were terminated in compliance with city policy.
Porter said her increased workload and missing travel documentation kept her from a timely submission.
She was also faulted for taking time off on short notice, once because her mother had collapsed at a local restaurant and was taken to the hospital.
Porter said any time off taken was earned comp time.
Then there was “the Google incident.”
In May, Porter was asked to provide directions to the Entrepreneurial Center. She gave the address and provided a link to MapQuest and Google maps.
Byrd’s memo called her directions “incomplete and difficult for a reasonable person to follow.”
“I used internationally recognized mapping systems that everyone uses,” Porter said. “Why would that be insufficient?”
As tension at work increased, Porter also had to cope with her mother becoming terminally ill. By May 22, Porter’s mother was in hospice care, but the Purchasing Department had a small business mixer scheduled that night.
“Because I didn’t want her accusing me of failing to perform or not following through, I went to the event,” Porter said.
She stayed until it ended at 8 p.m., then completed the necessary reports. She said she worked until about 10 p.m. but felt comfortable she would be allowed comp time to see her mother the next day.
Her mother died at 6:30 a.m. May 23, before Porter got to see her.
Local media reports confirm the mixer was May 22. Her mother's obituary lists date of death as May 23.
“During this time, I never used my mother’s illness as an excuse,” Porter said. “I told my co-workers, ‘Let’s not discuss it so I can focus on my work.’ And then the crazy thing was they accused me of not being serious about my job.”
The final problem, according to Byrd’s memo, is that Porter brought her daughter to work without prior approval.
Her daughter, Porter said, is a 16-year-old who read her Kindle for an hour before going to an appointment downtown.
Small-Toney said Thursday she upheld termination because it was the recommendation of her assistant city manager and bureau chief.
Porter has filed a complaint with the Equal Employment Opportunity Commission based on age discrimination and “creating and facilitating a culture of systematic and pervasive bullying and intimidation resulting in a hostile work environment.”
Last week, city supervisors asked her to return and offered a job in another department, but she has accepted a higher-paying job out of state.
She wasn’t willing to work with Byrd, she said, or Small-Toney.
“I would be very uncomfortable stepping back into that environment with (the city manager) still there because anything could happen.”
Department clearinghouse continues
Kerkhoff was next to go.
She had been acting Purchasing director for nearly a year coordinated the Lawson computer training with regular department operations.
A June 29 memo from Byrd in Kerkhoff’s personnel file alleges she failed to meet performance standards over the previous four months. No details were included in the memo, and a review of her personnel file by The Savannah Morning News found no documentation of any discipline.
Effective July 2, Kerkhoff was transferred to Human Resources as a “senior management analyst,” and her salary was cut 10 percent. A memo from Byrd states the position was created and funded only until Kerkhoff retired, which she was expected to do in February.
The memo also directed Kerkhoff to abide by four expectations, including that she “would not engage in activities which have a negative impact on this organization (City Council, City Mayor, City Manager, City staff and public.)”
Kerkhoff, citing that clause, declined to comment.
In her written appeal, she said Byrd never gave her specifics about what standards she did not meet and said she had never received any formal disciplinary action.
The only criticisms she had received were minor problems, Kerkhoff believed, such as failure to copy someone on an email or using her speakerphone when an IT staffer instructed her to crawl under her desk to fix a computer problem. Byrd cited her for disrupting the office and claimed she had slammed a door when asked to work more quietly, which Byrd considered insubordinate.
Kerkhoff provided proof of her productivity, which showed she wrote the majority of requests for proposals and services and was the second-highest producer of annual contracts, bids and purchase orders. She handled those duties while continuing to coordinate Lawson training.
Kerkhoff also stated she felt forced to sign the paperwork for reassignment.
“Ms. Byrd stated that if I did not sign the memorandum agreeing to the demotion at that time, she would exercise her right to terminate my employment with the City of Savannah immediately,” she wrote in her appeal.
Small-Toney never ruled on Kerkhoff’s appeal, which went as far as Cutter.
Small-Toney did confirm the creation of a new position required her approval. That would include the new slot in Human Resources to which Kerkhoff was moved.
Purchasing problems aired
By the end of August, Jennings had resigned.
“Work came before everything — food, using the restroom, your family, everything,” Jennings said. “It was a terrible experience, and that was the reason for my resignation.”
The final buyer, Reginald Bryant, resigned in August, too.
City Council members didn’t get their first warning about Purchasing problems from the city manager.
That came from business people asking for help in getting invoices paid.
Council members, in a special meeting Aug. 31, were given a count of outstanding invoices. They were told the backlog numbered 106 invoices. One invoice could contain multiple requisitions, so it made it sound as though the backlog was less significant than the 397 requisitions Cutter and Brandon referenced in their memos.
Council members were assured that, in the previous two days, staff had cleared much of the backlog. One email from Chief Financial Officer Dick Evans noted on Aug. 28 that finance delivered 182 invoices to Purchasing that afternoon.
On Aug. 31, the day of the reprimand, 137 checks were issued to pay invoices and assure council the backlog had been significantly reduced — and to demonstrate to vendors that order had been restored and the city could make good on its bills.
On Friday, Mayor Jackson said the information council members had received even in recent days didn't have the detail of the internal memos.
What they had heard was disturbing enough, she said.
“It was a great concern when we heard our vendors were not being paid, not to mention our department being decimated,” she said. “Not only that, it was the treatment of our employees, the low morale within the city.
“I saw a loss of confidence, not only in our city manager, but in the mayor and council, in trying to correct the ills that had been going on.”
The August memos from Cutter and Brandon say the Purchasing Department is expected to struggle for a few months.
The reasons they cite:
• Almost all staff in Purchasing is new. It will take about three months before new buyers will be able to use the Lawson computer purchasing system at optimal levels.
• To try to keep goods flowing into vital departments, many departments contacted vendors directly. The drawback is Accounts Payable can’t pay the invoices until the requisitions clear Purchasing.
• As the end of the year approaches, requisitions typically accelerate as departments realize they will have enough money in the budget year to make purchases.
Cutter and Brandon, at a council financial workshop last week, explained the steps they are taking to revamp the department, streamline procedures and get staffing back to full levels.
One temporary step includes using workers from other departments with procurement experience to help.
Measuring staff efficiency
On Aug. 21, the same day Brandon issued his memo detailing the $6 million backlog, Byrd criticized the performance of the former staff while bragging on her new team’s performance.
Her assessment came in response to a query from HR Director Beth Robinson, who worried that, given the volume of work her team was handling, they must be earning comp time. Yet no comp time had been entered into the system since March. Failure to provide comp time would be in violation of the Fair Labor Standards Act.
Byrd responded the previous staff had been required to work undocumented hours, but her staff, comprised mostly of temporary workers or new hires with little to no purchasing experience, did not require comp time. She also faulted the former employees for spending too much time on social networking sites such as Facebook.
City documents indicate a company called Palo Alto Networks reviewed the Internet use of Hayes, Bryant, Jennings and Kerkhoff during a one-week period in late February and early March.
Byrd started her employment with the city on March 5.
While Facebook, Twitter and Yahoo were not their primary activity, the analysis showed frequent visits.
Byrd stated that wasn’t the case with her new team and their work ethic.
“This team’s diligence and precision to the work is allowing them to complete projects in less time than the other employees in the past. ... For instance, one employee completed seven solicitations in one week, which typically took the previous team approximately three months due to the previous team’s distractions of Internet use (Facebook, social networking sites), etc. I am very proud of the current team and its direction.”
More money for computer training
By mid-June, Byrd had contacted Lawson about scheduling more training for her staff.
Alerted by Lawson, Joy Wilkinson, the city’s Lawson project manager, emailed Byrd that additional training was not part of the contract and would require the city to spend more money.
“You have a really strong purchasing team,” Wilkinson wrote. “Joy K., Reggie and Shawana all know different parts of the system really well. If there is something in particular that we are weak on, let me know. I’ll get the help we need.”
In Byrd’s response, which was copied to Small-Toney and the assistant city manager, she wrote she had been “directed by the City Manager to make sure that my department is properly trained. For this reason, I am following a direct order. I am copying Ms. Rochelle Small-Toney, the City Manager, in case clarity and specific direction is needed from her.”
Byrd’s email told Lawson representatives she was prepared to pay for additional training.
“And don’t worry,” she wrote, “the City will handle the particulars as directed by the City Manager.”
Wilkinson emailed Small-Toney, saying she wasn’t sure of the scope of training Byrd wanted. She said a five-day Lawson session would cost $9,300 and a full month $37,200.
Small-Toney instructed a change order to be placed on an upcoming City Council agenda and added, “Any questions are to be forwarded to me.”
In a June 28 email, Wilkinson reminded Byrd of the on-site training Lawson had provided since November 2010. Consultants were on site for nine weeks before the system went live and provided another month of follow-up support. Purchasing wanted more training in late July.
City Council in July approved spending another $18,720 for Lawson training on the city manager’s recommendation.
City manager oversight
When City Council members in August asked the city manager how directly involved she was with Purchasing operations, she said she had been trying to work through her management staff, which meant Cutter and, later, the newly appointed Brandon.
She told council she had not been deeply involved in Purchasing oversight but in light of the problems, she would become so.
In contrast, emails and public records show Small-Toney was involved in Purchasing’s direction all along.
In February, she sent Byrd a letter of acceptance outlining her compensation package. It included compensation for moving expenses and a $1,500 housing allowance for three months. Her salary was set at $98,644. That was $9,000 more than Byrd earned as deputy director of contracts and procurement in Charleston County, records indicate.
It was almost $18,000 more than previous director Peggy Joyner earned after 24 years in the department. Byrd, however has a master’s degree and a law degree.
Small-Toney on Thursday said she wrote the offer letter because she had negotiated Byrd’s salary directly with her.
Emails to other city personnel show Byrd didn’t hesitate to mention that she was working under the direction of the city manager. In an email exchange Aug. 10, she asks Small-Toney to hire a new M/WBE coordinator “at no less than $50,000.”
That was slightly more than what Porter had made after almost six years with the city.
Within two minutes, Small-Toney emailed back “Approved.” She said Thursday Byrd went directly to her because the pay level would have required her approval. The candidate ended up not taking the job.
Other pay increases reviewed by The Morning News have gone through a department’s management chain.
By Thursday, Kerkhoff was back in Purchasing and had a plan to quickly reduce the backlog, Brandon said.
Before she returned, she sought and received written assurances from the city manager.
The letter detailing her demotion is to be removed from her personnel file, and the agreement is voided, Small-Toney confirmed.
Kerkhoff also will not be expected to retire in February, and if the city attempts to terminate her for cause, it must be handled through the Human Resources process.
She also has been given the authority to assemble a team of buyers.
Cutter and Brandon hope interviews will begin this week. They have become heavily involved in correcting Purchasing problems, and in recent meetings, have been the ones to answer council questions and lead presentations.
One buyer candidate who won’t be available is Jennings. She is finalizing a higher-paying job offer in Atlanta.
Brandon considers the city’s buyers among its most vital employees.
“Those three or four buyers,” he said, “are literally the way things get done in this city.”
To contact Savannah Morning News writer Lesley Conn, call (912) 652-0326, or email firstname.lastname@example.org/