Did the City of Moab follow the right procedures when it awarded a contract to a business whose partners have ties to Moab City Manager Rebecca Davidson?
The city’s elected officials and others are waiting for an answer to that question, in response to a Grand County Council member’s allegations that Davidson failed to disclose a conflict of interest regarding her connections to the company.
Moab Mayor Dave Sakrison informed the Moab City Council last week that the city hired an outside firm to conduct an independent audit that reviews specific financial transactions over the past three years. Among other things, the city asked the auditor to take a detailed look at the city’s emergency purchases and all purchases over $7,000, as well as purchases for information technology (IT) and engineering consultant services.
“We’re taking this action to clear up some, I think, to put this matter at rest,” Sakrison told the council during a special meeting on Tuesday, June 7.
Moab City Council member Rani Derasary told the Moab Sun News that she and other council members are hopeful that the independent, third-party auditor’s findings will address concerns that some residents have raised.
“I’m not worried … I’m just hoping that it gives them information that reassures them, one way or another, and provides answers to the questions they have,” she said.
The mayor said he expects that the accounting firm of Larson & Co. will complete its audit by week’s end and then submit it to Utah State Auditor John Dougall for further review. In the meantime, Sakrison said he asked Moab City Attorney Chris McAnany to look at “some legal issues” that could not be addressed in the audit.
The city’s move to hire an auditor follows Grand County Council member Chris Baird’s calls for a state auditor’s investigation into the city’s procurement of an IT consultant whose partners include Davidson’s friend and a business associate.
That company – Tayo Inc. – was previously registered at Davidson’s home address, where the city manager lives with registered company agent Tara J. Smelt. Niyo Pearson, who is a past associate of Davidson’s, performed the bulk of the consulting work.
Baird said the city’s decision to retain the consultant’s services amounts to a “very clear and obvious” conflict of interest because any profits that Tayo Inc. gained could increase Davidson’s household income.
Moab City Recorder Rachel Stenta said in an email to Moab City Council member Heila Ershadi that she was responsible for the decision to hire Pearson, based on a recommendation from Davidson.
Baird said there is “no way” that Stenta wasn’t aware of Davidson’s ties to Pearson and Smelt. She should have made those connections clear to the council before the transaction occurred and the city “successfully sidestepped” any competitors.
“I don’t think that happened,” he told the Moab Sun News. “Rachel should have informed the mayor, who should have informed the council.”
The issue has been a hot topic on social media sites in recent months, along with concerns about the departures and dismissals of longtime city employees since Davidson took over last year as city manager.
Sakrison and other city officials have repeatedly praised Davidson’s job performance. But the controversies surrounding her time as city manager have grown among online groups, drawing large crowds of residents to the Moab City Council’s chambers on Tuesday, June 7, and Tuesday, June 14.
City recorder says consultant addressed major security flaws
Davidson did not respond to the allegations that Baird raised on June 14, and she could not be reached for comment.
But Stenta told the council last week that the city spent about $99,000 on hardware and software, plus more than $56,000 on consulting services, to resolve major computer security flaws.
She did so under an exception that allows the city to authorize expenditures in the event of an “emergency situation” that threatens public health, welfare or safety, without having to advertise and solicit sealed bids. The exception in city code does not define how long an emergency could last.
Up until 2015, former Moab City Manager Donna Metzler’s husband Mike Baird – who is not related to Chris Baird – worked as the city’s IT consultant for 16 years. During that time, Stenta said, the city never went through a competitive bidding process – even though other IT consultants were available in the community.
When the city retained Tayo’s services, it paid the company a reduced rate of $60 per hour, Stenta said, compared to the $90-per-hour rate that Mike Baird’s consulting company ComputerWise earned.
Stenta said that Metzler asked her to assume the role of IT systems administrator, but noted that the city has relied on consultants for most of the IT work because it doesn’t have a full-time position dedicated to those tasks.
Under the former city manager, she said, the city did not have any formal standards regarding the acceptable uses of IT. Since nothing was spelled out in the city’s policy, she said, it was using outdated hardware, unsupported operating systems and unlicensed – or “pirated” – software.
None of the computers required a password, so users could download anything, from any site on the internet, she said. Unregulated wi-fi access at city hall also meant that visitors could “abuse” the network and compromise the city’s system, she said, because no proper safeguards were in place.
The city’s computers stored more than 27,000 credit card numbers, and hackers could have gained access to those numbers, as well as the cardholders’ names and addresses, she said.
According to Stenta, the previous IT consultant had remote access to the city’s system. But his access was not secure, she said, so anyone could have hacked into the city’s computers.
Stenta said the city dealt with the most worrisome computer security issues last August, after she read Tayo’s report that detailed the problems in depth.
“At the point that I got the report back and saw the critical issues, I can tell you I was losing sleep,” Stenta said.
Moab City Council member Kalen Jones thanked Stenta for going over the report’s findings in detail, although he questioned whether the city could have handled things differently.
“This is kind of shocking to me in some ways,” Jones said on June 7. “But still, it seems like some of the current controversy might have been avoided … It seems like we’ve ended up in a situation where there’s some concern, so I’d like to avoid that in the future, but I’m not sure what the best way to go about that is, or if this is such a special situation that it would be hard to.”
Stenta said she isn’t sure how the city could steer clear of this type of situation, adding that it doesn’t always have time to sit through the competitive bidding process. In the future, she said, the city needs to hire a full-time IT consultant, who will be chosen through competitive bidding.
“This is something that we need to dedicate more resources to,” Stenta said.
Chris Baird said he isn’t satisfied by the city’s responses to the concerns he’s raised, adding that officials have dodged the question of whether or not there was a potential conflict of interest.
“I don’t think they’ve really addressed (it),” he said.
He said he doesn’t think that Stenta intended to violate state law because she was just following city code.
“It’s just a mistake that came about as a result of the city being out of compliance with state law,” he said.
Baird suggested that city officials have nothing to gain by justifying the “emergency situation.”
“I would just ask you, what are you accomplishing by defending that transaction?” he told the city council on June 14. “Are you facilitating trust and confidence? I don’t think you are.”
Although weeks have gone by since Baird submitted his formal complaint, Sakrison said a Larson & Co. employee recently reported that the state auditor appeared to be in the dark about the call for an investigation.
“(The Larson & Co. employee) had a conversation with the state auditor and asked how the complaint was coming, and they had not received any complaint, either by a person or anonymously, requesting an audit of the city,” Sakrison told the city council.
Baird, who gave the Moab Sun News a copy of his original May 24 complaint and a follow-up email to the state auditor’s office, said he isn’t sure why Dougall’s office has not acknowledged receipt of his messages.
“Maybe nobody checks their email,” he said.
Move comes after Baird alleges cronyism in hiring of IT consultant
This (security issue is) kind of shocking to me in some ways … But still, it seems like some of the current controversy might have been avoided …