• Around Alhambra news stand (Photo - ColoradoBlvd.net).

      Around Alhambra news stand (Photo – ColoradoBlvd.net).

      The City of Alhambra has two annually renewed no-bid contracts with the Alhambra Chamber of Commerce worth hundreds of thousands of dollars.

      By Sean McMorris

      One is for the outsourcing and oversight of the City’s Rose Parade float, the other is for “promotional services.” Not only are these contracts non-competitive and indefinite, they are vague and non-transparent, and provide for zero accountability and public oversight. They also present a potential conflict of interest for Councilmember Sham, and raise ethical questions about the City’s relationship with the Chamber and its Executive Board.

      Promotional Services Contract

      According to public records, the City of Alhambra’s contract with the Chamber of Commerce has been renewed on either an annual or bi-annual no-bid basis since 1995.[1] These contracts claim to be for services that promote the City’s “advantages as a business, industrial and recreational center.” The most recent contract, which was for $111,925, lists a series of ten promotional activities that the Chamber will carry out on the City’s behalf, but nearly all of the activities appear to fall within the category of things a Chamber of Commerce would likely do on its own–without city subsidization–like maintain a central information office to serve both citizens and out-of-town business inquiries for information; assist and promote the business community’s interests; and disseminate, print and distribute guides and informational brochures that include a business directory and Chamber membership list. Why are taxpayers paying for the distribution of the Chamber’s membership list?

      Lack of transparency and accounting?

      There is also no cost justification for, or accounting of the contracted funds. The City has confirmed that an itemized invoice of receipts detailing the cost of each service the Chamber supplies the City in the contract does not exist.[2] The contract merely stipulates that the City will pay the Chamber $9,327.08 every month from July to May and $9,327.12 in June. To justify its lack of transparency and accounting, the City referenced a suspicious “audits” clause in the contract that states, “The books of account of Chamber shall be subject to audit upon the order of the Alhambra City Council.” Consequently, public records detailing how the Chamber uses City funds do not exist because the City Council has never voted to audit the Chamber’s books of account.[3] The City has also confirmed that the Chamber’s mandated quarterly statements of activity to the city manager do not exist.[4]

      Surplus?

      Thus, not only do the City and the public not know how the Chamber has used these funds, we do not know if the Chamber has ever run a surplus of funds at the end of each contract and what happens to those funds if it has, or if the Chamber is over-charging the city for services to ensure that it does not run a surplus. Because of the non-transparent nature of the contract, we also do not know if the City’s money is being steered towards City Councilmembers’ and Chamber Executive Board members’ favored sons and daughters. Nor do we do know to what degree the contract benefits Councilmember Sham since he recuses himself from voting on the contract because of a “potential” conflict of interest.[5]

      The City would not supply details about Councilman Sham’s conflict of interest other than he receives income from the Alhambra Chamber of Commerce through his business, Plaza Printing.[6] How much money Plaza Printing has received from the Chamber during Sham’s 12 years on the City Council as a result of the contracts has not been made public.

      City-Chamber Tournament of Roses Contract

      In addition to the “public services” contract, public records also show that the City has been non-competitively contracting with the Alhambra Chamber of Commerce as a third-party to “oversee” the design, construction, decoration, and operation of the City’s Rose Parade float since at least 1968.[7] The last two contracts were around $100,000 each, and the money accounts for most of the yearly allotment of the City’s Art in Public Places fund.[8] Councilman Sham has recused himself from voting on this contract as well.[9]

      The actual wording in the contract states that “the City contracts with the Chamber to provide services required to contract with a firm…” Thus, it appears that the City is outsourcing its contractual duties to the Alhambra Chamber of Commerce, a non-profit 501(c)(6).

      Like the “promotional services” contract, there is little public accounting of funds in the City-Chamber Tournament of Roses contract. Despite repeated public records requests, the city has provided very little information about the contracts. The City confirmed that the Chamber contracts the work out to Phoenix Decorating Company in Pasadena and that the Chamber is not required to contract with the least expensive entity to build the float.[10] Other than that, little is known about how the money is used.

      Why are
      taxpayers paying
      for the distribution
      of the Chamber’s
      membership list?

      The City was unable to supply receipts from the Chamber to justify the $90,000 price tag for the City’s 2016 float. All the City provided were two bulk invoices that show the city transferring money to the Chamber for the float with little detail and no breakdown of the cost of services provided.[11] The City claims that Phoenix Decorating Company provides receipts and a detailed breakdown of services to the Chamber, but those submissions are not public record because the City does not require the Chamber to turn them over to City Hall.

      A pass-through

      Perhaps most curious is that the City claims the Chamber is receiving no payment for its contractual services to the City for the Rose Parade float. The City claims that the money going to the Chamber “is essentially a pass-through” to a third party of the Chamber’s choosing.[12] This is very suspicious given the lack of transparency in the contract. Furthermore, the City has not provided any evidence to substantiate this claim.

      Rather than take public bids for the Rose Parade float, which would provide greater transparency and potentially save the City money, Alhambra City Hall has chosen to relinquished its contracting duties to the Alhambra Chamber of Commerce for the building of the float–and it has done so with a contract that provides little-to-no oversight and accountability. The City hands over a mysteriously predetermined amount of funds to the Chamber who then subcontracts out the work for the float without taking bids or submitting receipts for the public record.[13]

      The City simply trusts that the Chamber will use public money appropriately. This is not common, and like the City’s other contract with the Chamber, it is unethical and raises questions of legality.

      Why do these contracts exist?

      These contracts pose a conflict of interest between Alhambra City Hall and its residents whom City Hall has an obligation to represent equally and with full transparency.

      Chambers of commerce are not apolitical organizations nor do they represent the community at-large. They are fee-based exclusive bodies with legislative platforms[14] and governmental affairs committees[15] that promote exclusionary economic policies.

      But most troubling is the vague and non-transparent nature of these contracts. They are annually renewed no-bid contracts with little-to-no oversight. The chamber is allowed to outsource services to whomever they like without submitting itemized costs of services for the public record.  And in the case of the “promotional services” contract, many of the services the city is paying for, the Chamber would likely be conducting anyway–without city subsidization.

      In this instance, what is good for the goose is not good for the gander. Alhambra residents should scrutinize these contracts and demand that City Hall provide greater transparency in this matter.

      [1] See email thread from City Clerk and 1995 contract agreement (PDF), as well as 1998 City Council meeting minutes (PDF).

      [2] See email thread from City Clerk

      [3] See email thread from City Clerk

      [4] See email thread from City Clerk

      [5] See 2017 CC meeting video and minutes. See email thread with City Clerk.

      [6] See email thread with City Clerk

      [7] See email thread with City Clerk

      [8] See City Budget (bottom of page S-3)

      See also, City Municipal Code Chapter 23:81 Art In Public Places Fund

      [9] http://www.cityofalhambra.org/imagesfile/agenda/201707/minutes_2017_06_12_152852.pdf

      Also see CC meeting video where Sham recuses himself from the vote at the 1:39:55 minute mark. He appears to have his mic off but he recuses himself from voting on both Chamber contracts because of a conflict of interest.

      [10] See email thread with City Clerk

      [11] See attached invoices

      [12] See email thread with city clerk

      [13] See email thread with city clerk

      [14] http://www.alhambrachamber.org/business-advocacy/legislative-platform/

      [15] http://www.alhambrachamber.org/about/chamber-committees/

       

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      Contributor

      Comments

      1. Gutierrez says:

        That is not Right! Bids for contracts are needed to ensure the best business for the contract is hired.This ensures the best price. Bids Keep the process Transparent.

      2. MS. says:

        What is going on with all the $$$$ with the City of Alhambra and the Chamber. What happen to honesty and integrity ? What happen to education? What happen to rent control? what about our fire department working with out a contract for years? what about our homeless people in the streets of Alhambra? I used to be so proud of the City of Alhambra, now I don’t know.

      3. bedita says:

        Bea, is sad that all the $$$ goes between the Camber and the City. What happen to honesty and integrity ? What about rent control, what about education, what about our fire department working with out a contract, what happen to the city of Alhambra. I used to be so proud of my city.

      4. LIsaGirl says:

        Trouble in Alhambra again? Happy I left Alhambra and moved to Pasadena and not with that city government that is so stacked against the residents. We have our own problems here but the history of Alhambra city council is pretty sad. Contractors, chamber and developers have ruled Alhambra for so many years. Same good old boys running that place since I moved here 15 years ago. Public art fund tapped out every year for chamber/city float? They are pushing the legal gray zone on this one. Waiting for the next shoe to drop.

      5. Joe says:

        Wow! This looks pretty crooked. Always thought that Alhambra City Hall had an unhealthy relationship with the Chamber. Alhambra City Council never has a bad thing to say about the Chamber and vice versa. A lot of Alhambra’s City Council members came up through the chamber ranks (it’s like a right of passage). The Chamber’s Executive Board then forks over large campaign donations to their groomed candidates and incumbents to ensure the gravy train continues. The Alhambra Planning Commission currently has multiple members of the Alhambra Chamber’s Gov. Affairs Committee appointed to it. If that is not letting the fox into the hen house I don’t know what is. I hope Alhambra government cleans up its act.

      6. Buckgrove says:

        pinstripes all around

      7. Edward Wong says:

        The Chamber of Commerce is a very conservative organization and I never heard of a city that finances it in our area. I believe it is illegal for a city government to finance publications that promote elected officials. I know in Alhambra the local chamber paper Around Alhambra always promotes the council members and especially around election time. Sean, have you done any research about city money going towards the publication of the chamber paper? The whole setup is seems very “Bell” like and the District Attorney’s office should investigate . There appears to be some possible criminal activity going on.

      8. Marty says:

        OMG Finally someone outed the corrupt connection between the City of Alhambra and the Chamber. I have never heard of hundred of thousands of dollars going unaudited. This smells so fishy. How can they get away with this?

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