Some on council question spending, cite pay to consulting firm of ex-FirstEnergy lobbyist

Council members in 1966 applauded Akron Mayor John Ballard’s first city budget for funding some of the police, fire and parks positions cut by his predecessor.

In the excitement to restore services, though, lawmakers missed a fundamental debate about their oversight role, according to a review of old newspaper clippings. Known then as Section 15 and today as Section 56, Mayor Ballard and his finance director slipped a new provision into the 1966 city budget, effectively taking from City Council its authority to approve large contracts.

Akron Mayor Dan Horrigan, who is not seeking reelection this year, has used Section 56 to do what every city administration has done for the last 56 years: sign contracts without having to publicly advertise them, bid them out or worry about council objecting to them. Based on newly released documents posted by the city after the Beacon Journal and members of council started asking questions this month, Horrigan has used Section 56 to issue 362 contracts worth $121.5 million in the past two years — all without council's knowledge.

Following budget hearings this month, Horrigan's Cabinet members told City Council on Monday that the administration is open to amending Section 56, which was first reported by the Beacon Journal in December. Removing part of the section would restore fiscal oversight to council, which is what voters have approved time and again in the city charter for the past 100 years.

But Horrigan's team wants council to take it slow, cautioning that there could be unintended consequences to reversing 56 years of less restrictive contracting. If council approves the city budget by the March 31 deadline, Horrigan's Cabinet members promise they won't sign any more Section 56 contracts without council approval as the two branches of city government work on a permanent solution that rebalances power.

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Meanwhile, council members are scrutinizing even more deals approved these past two years under Section 56. The deals continue to illustrate how former top city officials are working for consulting firms that land six-figure consulting contracts with the city, sometimes to explain the work they did before they left.

Why not address Section 56 now?

“What’s the worst thing that could happen if you took this (provision) out of the budget?” At-Large Councilwoman Linda Omobien asked the administration Monday.

Finance Director Steve Fricker explained that portions of the section should remain so he can pay vendors for council-approved work. Most council members agreed.

Gert Wilms, the mayor's chief of staff, said she needs time to educate herself on Section 56.

Council also takes a month off in the summer, which administrators said might be problematic if the mayor needs its approval on an emergency contract. Omobien reminded the administration that council regularly and unanimously ratifies spending after the fact for emergency measures like special contracts to fix water main breaks.

Vice President Jeff Fusco said removing Section 56 could make it more difficult for “managers to manage.” Budget and Finance Committee Chairman Mike Freeman asked his colleagues to approve the budget and “trust” that the administration would hold up its end of the bargain and not sign any more contracts until the two sides reach a permanent solution.

“I hope we don’t use (Section) 56 to hold the budget captive,” said Freeman, who added he would like to know more about some of the people behind some of the contracts mayors have approved without his specific consent in the 22 years he’s been on council.

“Obviously this is not going away," Freeman said of the Section 56 debate. "But we have to get the budget passed.”

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Some council members said they’d be willing to meet every day until the March 31 deadline. But they’re unwilling to approve a 57th annual budget that hands over their fundamental oversight role.

Ward 4 Councilman Russ Neal, who has long advocated for council to receive training on the intricacies of the city budget, said it's time now — before the budget is due — to deal with Section 56.

Ward 1 Councilwoman Nancy Holland, who did some research this weekend, gave the administration a history lesson on when Section 56 language first appeared and what the city charter has always said about council’s spending authority.

Ward 5 Councilwoman Tara Mosley requested that Section 56 be stricken entirely from the 2023 budget bill. Ward 8 Councilman Shammas Malik made a more nuanced request, seeking a repeal of a portion of Section 56 while entertaining some spending flexibility during emergencies.

The five council members, who also opposed council's vote in 2021 to give Horrigan sole discretion on spending all $145 million in federal aid from the American Rescue Plan Act, were unconvinced of why the mayor shouldn’t honor the city charter, which requires public bidding, accepting the best and lowest offer, and council approval for all expenditures of more than $50,000.

Malik went back to Omobien's question about "what would happen."

"To the extent that I’ve heard today, it sounds like the worst thing that could happen is that you come see us a little bit more often. And we’re not that scary," Malik said.

Another contract scrutinized

Last week, council and the public got a look at Section 56 contracts from 2022.

They included contracts with former Mayor Don Plusquellic (to renegotiate economic agreements with neighboring cities and towns), a crisis communication firm that employs former city spokeswoman Stephanie York (to help with public messaging after Akron police killed Jayland Walker) and former chief of staff James Hardy (who was brought back eight months after leaving to help the city understand what projects he oversaw in the Office of Integrated Development).

Fricker confirmed to the Beacon Journal on Monday that the $155,000 contract with Plusquellic, like a $250,000 contract for financial advice and other agreements under Section 56, was not bid out but created specifically for the former mayor.

Late last week, the administration released the 2021 contracts under Section 56, all 190 of them.

"I did have questions around one specific contract," Malik said, asking about a $261,906 agreement in 2021 with Gateway Development Group Inc.

"That is a consulting firm?" Malik asked. "And one of the consultants is Joel Bailey?

"Correct," Fricker said, motioning to Sean Vollman, deputy mayor for integrated development, when Malik asked what services were provided by Bailey.

Vollman explained that, along with Bailey, the Gateway contract involved consulting from former Public Service Director and Deputy Mayor Rick Merolla, who left the city in 2013, and Director of Development Adele Roth, who retired in January 2021 but stayed on to help with her transition until May 2021, a month after the Gateway contract took effect.

Vollman couldn't link specific projects to each Gateway consultant.

"It's one big contract with a number of consultants under Gateway, but (the consultants) are not broken down by individual task," he said.

"If I try to put my finger on it, this is why I believe there needs to be more scrutiny because before Mr. Bailey was a consultant; Mr. Bailey was a lobbyist with FirstEnergy during the passage of H.B. 6," Malik said, referring to a state nuclear bailout bill at the heart of the largest bribery and public corruption scandal in Ohio history.

Bailey did not return a phone call Monday evening.

While lobbying for FirstEnergy, Bailey also worked with a group of local donors called Partners Advancing Our Future. The political action committee, which could raise unlimited sums, spent $454,000 to help elect Horrigan in 2015. It also supported Plusquellic in 2011. In this election cycle, the group's spokesman, Brouse McDowell attorney Marc Merklin, said he will not disclose donors or planned spending until required to do so by state and local campaign finance laws.

Individually, Bailey is supporting Marco Sommerville, Malik's opponent in the race for Akron mayor.

Reach reporter Doug Livingston at dlivingston@thebeaconjournal.com or 330-996-3792.

This article originally appeared on Akron Beacon Journal: Akron mayor open to giving spending authority back to council