An online alternative news website’s story claiming that Conway illegally or improperly "amended the city code" to purchase its Christmas tree from an Arkansas vendor has been making the social media rounds this week.
According to the story, written by Nic Horton for the online Arkansas Project website (www.thearkansasproject.com), "the city of Conway actually wrote this company’s name into the city code and exempted this project from competitive bidding."
What the story’s author calls a change in Conway Municipal Code is an ordinance passed on Aug. 27 by the Conway City Council waiving the requirement to seek competitive bids for the tree.
According to state law, "in a city of the first class where the amount of expenditure for any purpose or contract exceeds the sum of twenty thousand dollars ($20,000), the mayor or the mayor’s authorized representative shall invite competitive bidding on the purpose or contract by legal advertisement in any local newspaper." A.C.A. § 14-58-303 (2)(A)(i). However, the same section of Arkansas Code also allows a city to waive this bid requirement "in exceptional situations where this procedure is deemed not feasible or practical." A.C.A. § 14-58-303 (b)(1)(B).
The Arkansas Project story also claims that the purchase violated Conway Municipal Code § 3.04.02. The 2012 updated Conway Municipal Code provides this section as follows:
"Where the amount of expenditure for any purchase or contract exceeds the sum of Ten Thousand Dollars ($10,000.00), the Mayor, or his duly authorized representative, shall invite competitive bids thereon by legal advertisement in any local newspaper. Bids received pursuant to said advertisement shall be opened and read on the date for receiving said bids, in the presence of the Mayor, or his duly authorized representative. The contract shall be awarded to the lowest responsible bidder; provided, however, the Mayor, or his duly authorized representative, may reject any and all bids received."
A Metroplan document providing commentary on the Arkansas Code’s municipal laws says that "if a city’s ordinance limits the amount of purchase to an amount less than $20,000 before bids must be taken, the city is bound by its ordinance." In other words, in Metroplan’s view the state’s waiver provision would not preempt municipal code setting a lower threshold for purchases requiring an open bidding process.
Under Metroplan’s reading of the application of state and municipal laws, and looking only at the pertinent sections of city and state code, the city would appear to have waived the bidding process in violation of city code and the issue would raise interesting questions of law regarding interaction between municipal and state statutes. However, on Nov. 9, 2010, the Conway City Council passed an ordinance (O-10-125) amending the City of Conway Purchasing Policies and Procedures document to be "consistent with the municipal governance issued by the State of Arkansas" relating to purchases that do and don’t require open bidding.
Conway Mayor Tab Townsell and city attorney Mike Murphy said on Wednesday that the ordinance setting the bid threshold at $20,000 "repeals by implication" the previously-adopted section of city code setting it at $10,000. Based on this, they said, the city was in compliance with Arkansas Code, which does preempt city code when the bidding threshold is set by ordinance at $20,000, and so the council’s waiver of the open bidding process was lawful.
Murphy said that amending Conway Municipal Code § 3.04.02 to reflect the $20,000 bid requirement threshold would be a good "housekeeping" measure to help clear up confusion.
Bids were waived because of the practical advantages of buying from an Arkansas company, Townsell said.
"If we had bought from an out-of-state company and we needed assistance after their people had left, where would they be?" Townsell said.
The Conway City Council voted in August to buy the 54-foot artificial tree from Springdale-based Get Lit, LLC for about $130,000 using advertising and promotion tax money raised through a 2-percent prepared food tax.
Conway’s prepared food tax (sometimes called the "hamburger tax") is a type of tax authorized by Arkansas law specifically for municipal advertisement and promotional efforts. The uses of the money it generates are specifically laid out in the law (A.C.A. § 26-75-606) as only for advertising and promoting a city to encourage tourism and building, operating or maintaining city-owned convention centers, family entertainment facilities (such as theme parks) or public parks.
The law also forbids the use of advertising and promotion tax money for capital improvements, general operating budgets or for any civic group or chamber of commerce. These prohibited uses would include city employee salary or benefit increases and filling potholes.
Townsell said that City Hall has heard much public comment on the tree, some of it positive and some of it questioning the expense and some of it suggesting that the money should have been spent on things that state law would prohibit.
It was suggested by a citizen at a recent council meeting that using the A&P money to build a public restroom downtown, which would probably be permissible under the law if built in Simon Park, would have been as good a use or better than the tree. Townsell said on Wednesday that this was an example of "a fair discussion" about the council’s decision to buy it.
"There’s an open debate on priorities for the spending of that money," Townsell said on Wednesday. "Should we have built another restroom? One restroom is actually more expensive to build than the tree, but can you argue that it’s a better use of the money? Sure. But it doesn’t have nearly the pomp and ‘pizzazz’ of the tree — both have their benefits and that’s a fair discussion."
The Arkansas Project story also correctly pointed out that there are companies that advertise similarly sized and constructed artificial trees for prices lower than Conway’s tree.
Santa’s Quarters, a New Orleans-based company, advertises its largest tree, a 44.5-foot "Giant Sequoia Tower Tree" with 45,700 LED lights, for $65,000 and invites inquiries for trees taller it advertises. Christmas Lights, Etc., based in Alpharetta, Ga., sells a 50-foot "Giant Everest Fir" with about 8,000 LED lights for about $75,000. Clark’s Commercial Christmas Displays out of Tavares, Fla., sells a 58-foot unlit and unadorned tree for about $62,000.
Townsell said that city officials looked into these companies when deciding on a tree.
"The prices you see on their websites aren’t apples-to-apples," he said. "there are still costs of shipping, sales tax, installation, service after the sale — all those things go into whether you waive bids or not, and it’s about anticipating what’s going to make for a good purchase when you’re looking back years down the road."
No one was answering the phone at these companies on Wednesday to answer questions about what incidental costs aren’t reflected on their trees’ price tags, but on Friday one vendor of similar trees was answering the phones, and a representative there agreed to talk only on condition of anonymity, saying that he "didn’t want to speak ill of someone else in the industry."
This man said that he’s sold "easily three dozen" artificial trees of the same general type as Conway’s, and after spending a few minutes online looking into the features of Conway’s tree, said that $130,000 "is really expensive, to be honest with you."
"I guess If you wrap [taxes, delivery, installation and other incidental costs] into one ... I still think that’s an expensive price," he said. "My guess would be that someone got the green light and didn’t discount anything ... and that’s kinda reflective of a non-competitive sale."
The tree’s first days weren’t as smooth as the city hoped. Unbeknownst to Get Lit or the city, lights from a third-party supplier were of a different type than expected and drew more amperage than they were supposed to and the tree blew a circuit breaker. Get Lit workers came from Springdale and installed a higher-amp power supply and the problem seems to be resolved.
(Staff writer Joe Lamb can be reached by email at firstname.lastname@example.org or by phone at 505-1277. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net. Send us your news at www.thecabin.net/submit)