City Launches ‘More Transparent’ Contracting Process to Avoid Chick-fil-A ‘Train Wrecks’

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City Manager Erik Walsh

Bonnie Arbittier / Rivard Report

City Manager Erik Walsh

In the wake of the last-minute changes to an airport concession contract that removed Chick-fil-A from the deal, the City of San Antonio is adjusting how it handles public discussion about multimillion dollar contracts.

The changes instituted by the City’s Finance Department, which include increased scrutiny for more expensive, long-term contracts that generate public interest, are aimed at giving City Council more frequent and thorough information regarding these contracts before it’s expected to vote on them. 

In the case of Chick-fil-A, the only public Council discussion about the contract occurred on the day Council voted on it in March.

These changes were in the works even before that, Mayor Ron Nirenberg said, noting the controversy surrounding how the San Antonio River barge operator and public safety radio contracts were handled. In most cases, Council members asked for a delayed vote to have more time to consider the bidders’ offers and City staff’s recommendations.

“We’ve seen how large contracts – when there’s not full discussion, transparency, and open dialogue – can go off the rails,” Nirenberg told reporters before the meeting. “We’ve decided to go back to the way it used to be done years ago, which is that Council will get an update regularly on high-profile contracts and decide which ones are high enough profile that we want to have full Council discussion in addition to the [Audit and Accountability Committee] process it goes through.”

“So this is an effort to provide full transparency and keep … the train wrecks [from] coming to Council,” he added.

The City uses a competitive bidding process and scoring matrix to select companies for work or products such as operating licensed restaurants in the airport, custodial services, and body armor for police. Next month, it will select three electric scooter companies to operate in San Antonio.

A contract is considered high profile if it’s worth more than $1 million, is of significant interest to the community, or highly complex in terms of the product or contract terms. An average of 41 high-profile contracts are considered by Council each year, said Troy Elliott, the City’s deputy chief financial officer.

City staff added a “Select” high-profile category that will trigger full Council briefings before and after the City distributes those requests for proposals. These will include contracts that have a more than $25 million impact, more than 10-year term, have public safety implications, or have captured public or stakeholder interest. City Council will also receive biannual forecasts of contract activity in September and February.

The need for the changes became immediately apparent Wednesday afternoon as a pending decision on a high-profile contract with Ticketmaster was up for discussion. City Council will vote Thursday on whether to renew, try to extend its contract with the international company, or choose another vendor for ticketing processes at its convention and sports facilities. Some Council members felt uninformed about the contract and unprepared to vote.

Councilman Roberto Treviño (D1) said the proposals are too complex for Council to wade through in one afternoon and urged his Council colleagues to delay the vote.

“We shouldn’t be going from a B [briefing] session to a vote in less than 24 hours,” Treviño said.

City Manager Erik Walsh said he scheduled the briefing on the ticketing contract because of the relevant procurement process discussion. The ticketing contract acts as an example of the day-before and day-of-vote confusion the City should avoid.

“You won’t see this again,” Walsh said.

Councilwoman Adriana Rocha Garcia also noted that City Council is routinely notified of upcoming high-profile contracts via email from City staff, who are often available to provide one-on-one informational sessions.

“I encourage you all to reach out to staff [ahead of time],” she said.

It would be possible to delay Thursday’s vote, City Attorney Andy Segovia said, but an extension of Ticketmaster’s current contract that expires in October would require the company’s approval.

Thursday also is the last scheduled City Council meeting during which they could vote on the contract in September, though special sessions have been called before in emergencies.

Ticketmaster scored 80.14 out of 100 points in the matrix while the Tobin Center for the Performing Arts scored 60.60 and SquadUp, a relatively new company in the ticketing industry, scored 36.97. While the Tobin Center is local, it is not given extra points for the matrix’s local preference because it is a nonprofit, Elliott said.

Its decades of experience, audience reach, and tickets sold “set Ticketmaster apart from the other respondents,” said Patricia Muzquiz Cantor, director of the City’s Convention & Sports Facilities Department. The contract is to operate all City entertainment facilities such as the Lila Cockrell Theatre, Alamodome, and others.

The Tobin Center’s “Tobi” ticketing system relies on third-party software, Cantor said, adding another level of complexity to customer service. Ticketmaster uses proprietary software.

But the matrix used to score the bids didn’t fully take into account the Tobin Center for the Performing Arts’ proposal to dedicate a certain amount per year to distribute to the center’s resident companies, including San Antonio Symphony, San Antonio Ballet, and San Antonio Opera, Treviño said.

“You can’t say that [money is] not going to the City — in fact, I reject that,” he said, noting that those arts institutions are supported by that City.

These institutions have struggled financially, he said, and this could be a way to provide sustainable funding.

Segovia said how revenue from this contract is used is up to the Council, which could designate it towards funding the arts regardless of which group wins the contract.

“I was rooting for Tobi, but when you look at the objective scoring and the proposals, it’s clear that the national company that’s recognized, that scales up, that’s providing services through the world, is better able to perform the function that we need,” Nirenberg said. “And the goal of providing a steady revenue stream for the arts is still there.

“I’d be okay with an extension if the Council needs more time to discuss, but it’s pretty clear to me that there is a gulf between performance and revenue and services between the two companies and this is the problem with procurement getting political.”

Proposals for high-profile contracts are ranked with a scoring matrix and the audit committee is not given the names of the companies until the agenda is posted for the day of the vote. That process was not addressed by the Finance Department’s changes Wednesday. The City’s Ethics Review Board could vet and make recommendations to City Council, Elliott said.

Rocha Garcia said the blind review process is intended to remove bias from the equation – but it still seems to have an impact.

“It’s disappointing that it now matters” what the names of the companies are, she said.

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