Council wants public input on new bid process for TIF money

Written by Nancy Hicks on March 7, 2015

A plan that allows private developers to bypass the city’s purchasing office for projects using tax increment financing will be the heart of a public hearing at Monday’s City Council meeting.

In response to criticism of the new purchasing option available for some TIF projects, the administration of Mayor Chris Beutler said it would give the public a chance to comment before deciding whether to use the plan again.

The new bid process that bypasses the purchasing department is part of a TIF agreement for expansion of the Swanson Russell building in downtown Lincoln. That agreement was scheduled for public hearing this past Monday.

But that hearing didn’t have enough public notice, Landis said. 

“I don’t think the development community knew to come,” he said.

The council agreed to extend the hearing to Monday, specifically for the bid process discussion. The meeting begins at 3 p.m.

Having the public hearing Monday “gives that notice to the world," Landis said.

"The development community will certainly know that fact,” Landis said.

The new bid process allows private developers to bypass the city’s purchasing office for work that will be paid for with tax dollars through TIF and will eventually be owned by the public, such as streets, sidewalks and streetscapes.

Under the new private bid process, developers advertise for bids with legal notices and open the bids in public, with oversight by the Urban Development Department. The developer chooses the contractor, but must provide reasons if it does not select the low bid.

The process mirrors what the city's purchasing department does, Landis said.

Purchasing agent Vince Mejer has said he doesn’t believe the private process is legal, and bypassing the official process could lead to problems.

Mark Hunzeker, an attorney for developers, defends the new private process. He said it is identical to the one used by the city purchasing office but is more efficient and less costly because it is handled by the developer.  

"When the city is perceived to be the one who will be contracting for the work, it is almost inevitable that you get higher prices," he said.

It also allows the developer to coordinate the entire construction process and takes less time than a bid process through the purchasing office, he said.

Common Cause Nebraska spokesman Jack Gould has some concerns about creating a new system and said the effort needs “to be carefully examined.”

“The purchasing department was created to provide oversight and to ensure the tax dollars are used in a matter that gives the public the best product at the lowest price,” says Gould in an email about Lincoln’s plan.

“If existing bureaucracy is too slow or efficiency is in question, then the process should be evaluated and changes made. To simply invent shortcuts that will circumvent the existing process opens the door to possible abuse."

The council has two specific options offered in amendments to the Swanson Russell TIF agreement:

* To remove the new bid process from the Swanson Russell project, thus sending a signal that the city will back away from this developer-led purchasing option in future TIF projects; and

* To add more transparency to the current private bid process by putting information about the bids on the city's urban development and purchasing websites.

Read more at the Lincoln Journal Star.

Office: Common Cause Nebraska

Issues: Access to Government

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