The Orange County Great Park: Whose Park is it?*

Since that time, procurements for Orange County Great Park have been administered by the Corporation's staff in coordination with the City of Irvine's Purchasing Agent. Financial management of contracts has been conducted by the Corporation's staff with assistance from the City's Administrative Services Department. In the fall of 2005, the Orange County Great Park Corporation conducted a review of its Procurement Policies and implemented changes that clarified ambiguities within the policies and modified the disclosure requirements. The revised Procurement Policies Honorable Nancy Wieben Stock Orange County Superior Court September 13, 2006 are consistent with those of the City of Irvine. The following is a summary of the key levels of contract authority and signature levels contained in the Great Park Procurement Policies. Authority to sign a contract must be preceded by approval of the contractor, program or expenditure, either through the budget process or through separate action of the Corporation's Board of Directors. The levels and amounts are consistent with comparable functions in the City of Irvine. Contract Amount Contract Authority $100,000 and less Orange County Great Park Managers Deputy Chief Executive Officer & Chief Greater than $100,000 up to Executive Officer $1,000,000 Chief Executive Officer and Chairman* Greater than $1,000,000 *Any contract requiring the Chairman's signature must first be approved by the Board of Directors Additional highlights of the revised Orange County Great Park Procurement Policies include: Purchases or contracts in excess of $5,000 for supplies, equipment or ٠ construction require three qualified bids or quotes. Professional services or consultants require a formal proposal process for contracts expected to be greater than $5,000. In this case, three qualified proposals are also required. Pricing, however, is of secondary consideration to qualifications (as required by applicable State law). The use of a Consultant Team Program whereby certain professional consultants ٠ are pre-qualified through a competitive selection process and have master agreements which extend for a period of up to 3 years. (Consultant Teams pre- approved by the City are available for use by the Orange County Great Park.) Sole source – the policies allow for a sole source purchase or contract where a • competitive bidding or selection process cannot be accomplished. Such situations could occur due to time constraints, proximity, highly specialized knowledge or unique product. Sole source requests, in all cases, must be accompanied by a justification memo to the Chief Executive Officer. The Grand Jury makes particular reference to "no-bid" contracts in relation to public relations, legal and recycling services. In actual fact, the Corporation's legal services contract was awarded based on a competitive bidding process. The City's public relations contract was an existing six-year contract which was extended for one additional year to enable the Park to complete the selection of its Master Designer on time. This contract was competitively bid for the current fiscal year, which began July 1, 2006. Honorable Nancy Wieben Stock Orange County Superior Court September 13, 2006 The "contract" for recycling services was not a services contract at all; but a lease of 60 acres of land to a green waste recycling company following a thorough review by Great Park Corporation staff and a unanimous recommendation of the Orange County Great Park Asset Management Ad Hoc Committee, which is comprised of directors Steven Choi, Sukhee Kang, Michael Pinto, and Walkie Ray. Response to Recommendations 7.1 Great Park governance: The Irvine City Council should revisit and reconsider decisions that have split the City Council and that exclude county-wide participation in the control of the decision making process for development of the Great Park. As an example, the Irvine City Council should consider a resolution to amend the Great Park Corporation bylaws to require two Orange County supervisors, two members of the Irvine City Council and three elected at-large members from Orange County. (Report, pages 10-11.) Response: This Recommendation will not be implemented. This Recommendation is based on an incorrect perception of facts and events. At the least, the City of Irvine believes that the recommendation is unwarranted. Moreover, the change in governance structure recommended by the Grand Jury cannot be accommodated as a matter of law in light of the status of the Orange County Great Park Corporation as a "supporting organization" under the Internal Revenue Code, the restrictions imposed on the City relating to public financing, and the other legal constraints discussed above in connection with Finding 6.2. While the vast majority of decisions made by the Irvine City Council are made unanimously, the fact that some decisions are rendered on the basis of 4-1 or 3-2 votes is not an adequate justification to "revisit and reconsider" them. Were that to be the case, the successful and efficient formulation and implementation of responsible public policy-making would be severely impaired. The City Council consistently strives for consensus, yet because of occasional differences of opinion - whether philosophical, political or otherwise - unanimity is not always achievable. Many votes by county and city decision-making bodies are not unanimous due to sincerely held and honest contrary viewpoints, especially when matters of public controversy are implicated. One simply cannot conclude that 4-1 and 3-2 votes somehow are less legitimate or less effective than 5-0 votes. The Grand Jury's position conflicts with the fundamental democratic principle that public institutions are governed by the majority. Another assumption underlying the Recommendation is erroneous. The recommendation refers to decisions "that exclude county-wide participation in the control of the decision making process for development of the Great Park." The Grand Jury does not identify any such decisions. If the Grand Jury had Irvine City Council Resolution No. 06-42 in mind, the Grand Jury would be mistaken. That resolution simply restated and clarified the governing structures and responsibilities relating to the Honorable Nancy Wieben Stock Orange County Superior Court September 13, 2006 Orange County Great Park. It altered nothing with regard to the authority of the Great Park Corporation or the legal relationship of the Corporation and the City. Prior to the adoption of Resolution No. 06-42, there were four non-City members of the Orange County Great Park Corporation. Following the adoption of Resolution No. 06-42, there are still four independent public directors. The input and quality of participation by these directors has been tremendously important and invaluable. Even though, as legally required, the City of Irvine exercises final decision-making authority as to substantive financial matters, the City Council typically grants a great deal of deference and respect to the extensive study and careful consideration of the Corporation's Board of Directors. To date, not once has a recommendation of the Board been rejected. And since the establishment of the Board of Directors, all of its decisions have been accompanied by majority if not unanimous support of the independent directors. In short, the City Councilmembers serving on the Board never have voted as a group to overrule a prevailing position of the independent directors. The Grand Jury suggests that the Irvine City Council modify the composition of the Orange County Great Park Corporation Board of Directors to include two Orange County supervisors, two members of the Irvine City Council, and three elected at-large members from Orange County. This suggestion will not be implemented because such a move would effectively surrender governance of the Corporation to people outside of the City of Irvine. Indeed, it would be possible – some believe even likely – that were this suggestion implemented, the reconstruction and configuration of the Orange County Great Park Corporation Board of Directors would consist of just two members of the City Council and all five members of the Orange County Board of Supervisors. For all of the reasons stated above, the Irvine City Council continues to believe the current composition of the Great Park Corporation's Board of Directors adequately and properly allows for broad public input into the Great Park's design, planning, construction and operation, while leaving ultimate governance of the Great Park in the hands of those elected by the citizens of Irvine to represent their collective interests. 7.2 No-bid contracts: The Irvine City Council should review current practices involving no-bid contracts to ensure that appropriate business controls are in place to protect the citizens of the City of Irvine. (Report, .) Response: This Recommendation has been implemented. As described above, the Corporation Board of Directors has reviewed its procurement policies and has adopted policies consistent with those utilized by the City for many years. Certain factual assertions in the Report regarding the award of no bid contracts are in error. Honorable Nancy Wieben Stock Orange County Superior Court September 13, 2006 The Irvine City Council has reviewed current practices involving no-bid (or sole source) contracts, ensuring that appropriate business controls are in place to protect the citizens of the City of Irvine. This review was performed in the context of a City Council study session held on September 27, 2005, during which time City staff presented a comprehensive review covering all aspects of the City's purchasing, bidding and contracting functions. The City Council found that current policies and procedures are consistent with all applicable laws and regulations, contain appropriate business controls, are periodically reviewed by the City's Finance Commission and City Council, and followed by all City staff. Generally, goods and services with a value greater than $5,000 are competitively bid. In some instances, sole source contracts are awarded if a firm is considered uniquely qualified to perform a particular service. (The City Council possesses the authority to make such a determination.) Public Relations Contract The contract for public relations services for the Orange County Great Park for FY 2004-05 was unanimously approved by the Irvine City Council on July 27, 2004. The contract was extended through FY 2005-06 to accommodate the on-going Great Park Master Design Competition and public outreach program. This contract was extended on a 3-2 vote at the July 12, 2005 City Council meeting. The competition and related public outreach effort extended from March 2005 to January 2006. The contract was managed by Great Park staff in accordance with the approved Great Park Procurement Policies and all applicable City of Irvine procedures and practices. Legal Services Contract The Report is in error. The contract for legal services awarded by the Orange County Great Park Corporation on May 27, 2005 was the result of a procurement process that was initiated with the issuance of a Request for Proposals in April of 2005. The selected firm was the top-ranked candidate during both the interview and the proposal review processes. Recycling Lease At its March 31, 2006 meeting, the Orange County Great Park Asset Management Ad Hoc Committee authorized staff to enter into lease discussions with Tierra Verde Industries regarding an interim lease on 60 acres of land. Tierra Verde was interested in relocating its green waste recycling operations from property north of Irvine Boulevard. As part of its deliberations, the Committee not only reviewed the revenue benefits to the Park from the lease but also considered other aspects of the proposal that assist the Great Park, the Irvine community and the County as a whole. To assist it in evaluating the public benefits to be provided by the lease, the Corporation engaged a consultant experienced with green waste recycling business to provide independent confirmation that the lease terms are competitive and conform to relevant business standards and practices. Honorable Nancy Wieben Stock Orange County Superior Court September 13, 2006 At its meeting of April 13, 2006, the Orange County Great Park Board of Directors recommended to the City Council the signing of a lease with Tierra Verde Industries to operate a recycling facility at the Orange County Great Park with the revenue and benefits generated from the lease being dedicated to Great Park development. The land lease is expected to generate an estimated $2.7 million over the four year lease term, or $2.0 million if terminated at the three-year option date. Concluding Statement In closing, the City of Irvine again thanks you for the opportunity and ability to respond to the Findings and Recommendations made by the Grand Jury in its Report. It is truly unfortunate that many important details were overlooked or misunderstood, given the responsiveness of the City in providing the Grand Jury all the information necessary to avoid such deficiencies. The City provided the following prescient statements in its March 21, 2006 letter to the Grand Jury: "As you no doubt have discerned, there is a complex history associated with the Orange County Great Park, spanning a significant period of time, involving numerous governmental and private entities and persons, and encompassing voluminous documents. Appreciating that the quality and credibility of your ultimate findings and analysis will be dependent on having an accurate and complete grasp of a multitude of factual matters, the City requests that it also be furnished with a copy of your draft report so that it may comment on the correctness of any underlying facts and circumstances relevant to your conclusions and/or recommendations." However well-intentioned, the Grand Jury's efforts have been compromised by the lack of consideration for fact and detail and the insufficient investigation and analysis underlying its Report. Working with the Orange County Great Park Corporation and benefiting from the active support of residents throughout Orange County, the City of Irvine is poised to create America's first great metropolitan park of the 21st Century. This commitment has been reinforced through extensive public outreach, focus groups, a stakeholders' conference, on-line polls and publications designed to engage and inform as many individuals and constituencies as possible throughout Orange County. These sustained and extensive efforts culminated in an international competition to select a master designer for the Great Park and just recently, the Orange County Great Park Corporation completed a series of meetings between the design team and various interest groups regarding the Park's conceptual plan. This process will culminate with a public Open House in mid- October to reveal the preliminary Master Design before it is presented to the Orange County Great Park Corporation Board of Directors and the City Council later this year. Honorable Nancy Wieben Stock Orange County Superior Court September 13, 2006 The City of Irvine is understandably and justifiably proud of its accomplishments relating to the effectuation of the mission, vision and values associated with the Orange County Great Park for the benefit of present and future generations. The City welcomes and encourages the continued constructive involvement of people and sharing of ideas as we move forward in honoring our commitment to this magnificent, once-in-a-lifetime opportunity. Sincerely, BETH KROM Mayor Orange County Grand Jury CC: Irvine City Council Orange County Great Park Corporation Board of Directors . . .