Candidates under the microscope
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BY DEENA WINTER / Lincoln Journal Star
Chris Beutler and Ken Svoboda are in the home stretch of the mayoral race. Election day is May 1. No turning back now. But sometimes, when looking ahead, you need to look at the past for information that might help voters decide. Svoboda’s landscaping work for the city has been scrutinized. Today, we look at Beutler’s contracts from 2000 to 2006, when he worked as a fundraiser for the city.
In 1978, when Don Wesely made his first run to represent northeast Lincoln in the Legislature, he was pulling for his friend Marge Schlitt to win a seat serving central Lincoln.
Schlitt was running against a 33-year-old lawyer named Chris Beutler.
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The mayor gave City Councilman Ken Svoboda more than extra time to finish city landscaping work when she signed a change order in March.
She also agreed to waive more than $100,000 in damages.
Svoboda’s family-owned company, Ray’s Lawn and Home Care, has won the vast majority of contracts to maintain landscaping on city medians since the city began hiring contractors about six years ago.
Ray’s earned about $300,000 doing work for the city during the past decade.
The city has not been satisfied with Ray’s performance on a number of contracts to install and maintain landscaping on certain medians.
Ray’s received written notices threatening to terminate the contracts unless it corrected problems with median work on North 27th Street, West Highlands Boulevard, South 70th Street and 84th Street.
Svoboda phased out city work as he began his run for mayor.
Now the only contract is a lingering landscaping agreement for medians on 84th between South Street and Montello Court, which Ray’s won with a low bid of $55,835.
The medians were supposed to be planted with buffalo grass, poppy mallow and trees by June 1, 2004, but the contract still hadn’t been completed to the city’s satisfaction by March.
That’s when Mayor Coleen Seng and Svoboda signed a change order altering the terms of the 84th Street contract and extending the completion date.
Assistant City Attorney Steve Huggenberger confirmed the change order effectively waived $101,100 in “liquidated damages” against Ray’s for not getting the medians landscaped according to the city’s specifications by the original deadline of June 1, 2004.
The original contract said damages would accrue at a rate of $100 a day if the deadline wasn’t met.
Normally, the contractor doesn’t pay those damages until the contract ends.
But the change order will erase that big bill if Ray’s gets the medians in order by May 1. The only damages deducted from Ray’s final payment is $12,483 in “actual damages” that had accrued as of March 9, plus whatever additional staff and consultant expenses are incurred to inspect medians through May 1.
The change order also required Ray’s to get a $75,000 letter of credit the city can immediately draw on if Ray’s defaults on the contract.
But if Ray’s doesn’t come through by May 1 - Election Day for Svoboda - liquidated damages will be charged at a rate of $200 a day, beginning March 9.
Svoboda said he assumed his contract was being extended after repeated meetings with city officials about the problems he was having getting poppy mallow established. He said he didn’t know he was supposed to formally request an extension that would erase late damages.
On Friday, he said the medians are “in great shape,” and poppy mallow is scheduled to be planted next week, weather permitting.
City Councilman Jon Camp - who criticized the mayor when she waived damages related to the late arrival of seven new firetrucks last year - was surprised to learn his Republican colleague on the council also may have substantial damages waived.
Contractors should fulfill their obligations, Camp said, although there can be “mitigating circumstances.”
The news makes him worry about “who’s minding the store” in city government.
“The firetrucks were a matter of life and safety, so one could rationalize that that makes that more important,” Camp said. “Flowers are not firetrucks.”
- Deena Winter
Beutler won, forgave Wesely and they became friends.
So 21 years later, after Wesely had moved to the Lincoln mayor’s office and the city was looking for a fundraiser and grant-writer, he encouraged Beutler to apply.
Beutler was chosen from three candidates and spent nearly seven years applying for grants, shaking down donors and putting together fundraising campaigns the city says brought $8.9 million into its coffers.
He was paid an average of nearly $57,000 per year from mid-2000 to the end of 2006, for a total of $370,000, and worked an average of 25 hours a week.
Now Beutler wants to be mayor, and with his Republican opponent, City Councilman Ken Svoboda, under scrutiny for work his landscaping company did for the city, Republicans are scrutinizing Beutler’s city contracts.
They say Beutler’s contract was a political favor, compliments of his friend, Wesely. They say his contract should have been put out for bid rather than extended by Wesely year after year after year. And they question whether much of the $8.9 million Beutler says he raised would have flowed into the city anyway.
But city officials, Wesely and Beutler say he did the work he was paid to do. And the proof is in park paths, trees, new playgrounds and renovated parks like Sunken Gardens.
‘Sweetheart deal’
Actually, it wasn’t Wesely’s idea to hire a fundraiser. Former Parks Director Jim Morgan lobbied former Mayor Mike Johanns to add the position before Wesely took office.
A few months after Wesely was elected in 1999, the city began advertising for a fundraising consultant. Former United Way employee Darrell Podany and an Omaha company applied. But Morgan decided not to fill the position, in part because there were so few applicants and because the compensation they requested was higher than anticipated. Podany offered to work full time for $44,680 a year.
A year later, Morgan took a job in Wisconsin. After he left, the city readvertised the fundraising position. Beutler, Podany and an Omaha firm applied.
But this time, applicants were instructed to send proposals to then-city Personnel Director Georgia Glass, rather than the city purchasing agent, as was done the first time.
Podany thought it was odd the hiring was taken from the purchasing agent and given to a Wesely appointee.
But Wesely said it made sense for personnel to make a hiring decision, and Glass said she was not pressured by Wesely to hire Beutler.
She and two others on a selection committee thought Beutler was clearly the most qualified and recommended his hiring to Wesely.
She doesn’t recall interviewing the candidates.
She said they wanted “someone with connections,” someone “embedded in the Lincoln community.”
Applicants were supposed to have experience raising money, writing grants and leading capital campaigns.
Podany’s resume said he had experience raising money as director of the United Way Volunteer Connection from 1990 to 1999. He also had worked for Republican City Councilman Jon Camp — which probably didn’t help his chances with the Democratic administration.
City officials were unable to find the three proposals for the Journal Star to review, but Beutler said his resume touted experience raising money for his legislative campaigns.
In July 2000, Wesely signed a contract hiring Beutler as an independent contractor. The contract required Beutler to work at least 1,400 hours for $50,500 the first year.
Mark Fahleson, chairman of the Lancaster County Republican Party, said Beutler’s part-time gig was a “sweetheart deal.”
“This is further backroom politics between the same old gang who’s been in charge since Don
Wesely was mayor,” Fahleson said.
Beutler was clearly the best candidate, Glass said.
“This was not a set-up deal,” she said.
And Wesely said Beutler’s experience raising money for campaigns, involvement in environmental issues in the Legislature and connections in the community made him the clear choice.
“Honestly, there was no comparison between him and Chris,”
Wesely said of Podany. “Chris was the best applicant clearly.”
Two extra payments
A somewhat unusual term of Beutler’s contract called for him to be paid upfront before beginning work — and that led to a mistake in which he received a last paycheck in December that he shouldn’t have gotten.
He also received an extra payment in September 2005, when supervision of his contract was switched from the Finance Department to the Parks Department.
Those two checks — worth about $10,000 — were discovered recently by the Finance Department. Beutler reimbursed the city.
Beutler’s first contract required him to log a minimum of 1,400 hours of work and prepare monthly reports on hours and activities. But the reports weren’t done for the first two years of the contract.
City Budget Officer Steve Hubka, who oversaw the contract for the first few years, said he and Beutler didn’t realize the reports were required. He didn’t think it would be proper for Beutler to recreate them, so Beutler began generating the reports after they discovered the oversight in mid-2002.
City Attorney Dana Roper said that’s not a violation of law. “It’s not a good practice, however, not to have the contracts complied with.”
The initial contract said that after one year, Beutler’s contract could be renewed annually for two more years. When Wesely signed a contract extension after the first year, the language was changed to allow the contract to be extended for three years, instead of two.
Fahleson said the contract should have been put out to bid instead of renewed without question.
“What harm is there in giving the marketplace the opportunity to do the work?” he asked.
Until 2003, Wesely renewed each of Beutler’s contracts late. He signed them in July even though they were supposed to be renewed before the June 30 anniversary date.
But in 2003, Wesely renewed the contract earlier than usual. He had decided not to run for re-election, and Democratic Councilwoman Coleen Seng and Republican Councilman Glenn Friendt were locked in a tight race for mayor.
Two weeks after Friendt came out ahead of Seng in the primary election and appeared headed for the mayor’s office, Wesely signed a $57,351 contract renewal with Beutler April 22.
Councilman Svoboda held a rare press conference to decry the move as “cronyism and pork-barrel politics.” Wesely dismissed his complaints as pre-election politicking.
Seng won the election, and the following year the city opened up the job to others by sending out a “request for proposals.” This time, the city was offering a multiyear contract that would run through 2007.
City Finance Director Don Herz said the job was opened up to other bidders, because typically the city doesn’t renew contracts for more than four years.
Parks Director Lynn Johnson said the city wanted a four-year contract to ensure “some commitment to continuity” with the consultant.
This time, applicants sent proposals to the purchasing agent, rather than the personnel director.
And this time, Beutler was the only applicant.
Podany didn’t apply, he said, because it was clear Beutler was a shoo-in.
Beutler’s new contract called for annual raises of 3.5 percent.
$8.9 million raised
Among his duties, Beutler was required to develop written policies regarding gifts and donations, develop a plan for annual giving programs, develop a database of donors and generate publicity materials.
Beutler did all of those things, Johnson said.
Even though Beutler reported his own hours on the honor system, his office was near Johnson’s — and Beutler was putting in the time, Johnson said.
City officials provided documentation Beutler had “primary or significant involvement” in obtaining $8.9 million in grants and donations during his six years of work.
But Republicans such as Fahleson have questioned whether much of that money would have flowed into the city anyway.
Two of the largest sources of money Beutler obtained were Nebraska Environmental Trust grants and Land and Water Conservation Fund federal grants.
In his resume for a contract renewal, Beutler called himself “the key legislative force” that got the Environmental Trust Grant program passed by the Legislature.
The program began doling out grants in 1994, six years before Beutler began working for the city. Records from the Environmental Trust Grant program indicate the city received two grants in those six years: $103,000 in 1995 and $8,250 in 1999. After Beutler began, the city obtained five grants totaling $3.49 million.
But the city long has received Land and Water Conservation Fund grants in the program’s 40-year history.
The amount of money available statewide ebbs and flows, but records from the Land and Water Conservation Fund indicate the city received an average of $52,279 annually in federal grants from the fund from 1966 to 2000.
After Beutler came on board, the city received an average of $33,929 per year.
Beutler began a utility checkoff program called Lincoln Cares, in which Lincoln Electric System customers can contribute to projects and corporate sponsors match their contributions.
He was also instrumental in the Sunken Gardens renovation campaign.
“I’m really proud of all the work I did for the Parks Department,” he said.
Sandy Hilsabeck-Hastings, president of the Lincoln Parks Foundation — a nonprofit corporation that raises private money to enhance park programs — had nothing but praise for Beutler’s work for the foundation. He regularly attended board meetings and was always available when needed, she said.
“He has been able to get us federal funds when we didn’t even know it was out there,” she said. “We miss him.”
The city hasn’t yet filled the position Beutler left vacant in January.
Reach Deena Winter at 473-2642 or dwinter@journalstar.com.
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