The “outside consultant” who helped Placentia city management shape the bidding process for a lucrative billboard contract was in fact a paid lobbyist for the company that is poised to be awarded the deal.
The lobbyist, Ken Spiker, “performed an informal proposal process that identified Lamar Advertising Company as a strong potential to fulfill the City’s identified needs,” stated a city staff report.
Spiker acknowledged this week that Lamar has paid him about $180,000 over the past three years and is also set to pay him another $300,000 or so to help procure permit approvals.
“They were to pay me a success fee if they were a winner in the city of Placentia,” he said in an interview. He added that he had a similar permit consulting contract with one of the two other bidders not chosen for the deal.
Lamar’s billboard contract, to be considered Tuesday by the Placentia City Council, is raising more questions in a city that has been mired by controversy over the last decade for conflicts of interest on a $650-million railroad project that led to criminal charges against top managers.
Ahead of the vote, two council members spoke out against Spiker’s involvement.
Councilman Jeremy Yamaguchi said everyone involved in the bidding process should be independent from the bidders.
The lobbyist’s involvement “makes me uncomfortable,” said Yamaguchi.
“At the end of the day, I think that at the very minimum we need to take a step back and look at this from a big-picture perspective and say we need to open this up … for competitive bidding,” he added.
Councilman Chad Wanke echoed Yamaguchi’s sentiments.
“The process appears to be flawed in a bunch of different ways,” said Wanke. “There’s clearly a problem with the way this whole thing was handled.”
“I would like this to be opened up” to a formal bidding process, Wanke added. “I think we have an obligation to do that for the public.”
A good-government expert has some of the same concerns as the councilmen.
Consultants “should be independent, not affiliated with any of the potential applicants. That’s what a consultant is,” said Tracy Westen, CEO of the Center for Government Studies.
“When you want a consultant, you’re hiring them for objective judgement,” he added.
Spiker, meanwhile, said there’s nothing wrong with his role, pointing out that he also has a signed contract with Regency Outdoor, one of the other bidders.
“If that’s a conflict, that’s a joke,” said Spiker. He simply educated city management about specifications for proposals and invited companies to submit them, he said “I added value to this game, because they didn’t understand this game.”
Mayor Scott Nelson said he has no problem with Spiker’s role in the process. “I’m extremely comfortable,” said Nelson. The city attorney recommended that the contract be put out to bid, Nelson added.
“I don’t see it [as a conflict of interest], the way the process was done. And we’ve been advised that it certainly has not been” a conflict, he said.
Mayor Pro Tem Joseph Aguirre and Councilwoman Connie Underhill couldn’t be reached for comment, nor could City Administrator Troy Butzlaff.
Tuesday’s agenda items would allow Lamar to put up digital billboards on city-owned properties next to the Route 57 freeway.
The city would receive 25 percent of Lamar’s net revenues, with the city paid a minimum of $725,000 annually.
Spiker said he informed Butzlaff and Assistant City Administrator Ken Domer about “what they have to do to put together a proper proposal.”
“The city asked me to educate them on what size signs to put up, what candle power to put up,” among other specifications, Spiker said.
As for staff’s description that he recommended his client to the city, Spiker said he never saw the submitted proposals but “told them that Lamar knew the game very well.”
Lamar outbid Regency by $500,000 per year, Spiker said.
“Why would the city ever in their wildest dreams pick Regency over Lamar?” he asked. “What’s the problem here?”
Like Nelson, City Attorney Andrew Arczynski said he does not have any concerns about Spiker’s actions and called the staff report’s contention that the lobbyist “performed” the bidding process “a bit of an overstatement.”
“He was requested to put the city in contact with some of the companies,” Arczynski said. “That’s his role in the whole thing.”
He added that Spiker “didn’t recommend them, didn’t participate in the evaluation process, none of that. He simply made a few phone calls.”
Westen says transparency is crucial in cases like this one, where industry experts might also work for potential bidders.
“It’s not the kind of thing that should come out in bits and pieces and surprise people,” said Westen. “There has to be full disclosure out front, and we have to know about it.”
But Placentia city management didn’t disclose Spiker’s relationship with the company — or even his name — in their official staff reports.
The staff report for the July 9 Planning Commission meeting simply stated that the city had been “working with an outside consultant to identify the potential of each site. The outside consultant performed an informal proposal process that identified Lamar Advertising Company as a strong potential to fulfill the City’s identified needs.”
The next day, an outside attorney repeatedly asked city staff to reveal the identity of the consultant, and the staff eventually named Spiker.
The next staff report for Tuesday’s meeting, however, didn’t mention any role of consultants in the process, instead stating that the city had been “conversing with knowledgeable outdoor advertising professionals to identify the potential of each site.”
This lack of information doesn’t sit well with Wanke and Yamaguchi.
“People feel like they’re getting the wool pulled over their eyes,” said Wanke. “There are just enough errors in the process. I don’t think it could be explained away as ‘we made one bad decision here.’ ”
Yamaguchi said the public should be kept fully informed about the bidding process and who was involved.
“Every piece of information that’s relevant to this should be made available to everyone,” said Yamaguchi.
The city attorney defended the staff’s removing references to the lobbyist’s oversight role in the bidding process, saying it was done to make the narrative accurate.
Spiker declined to provide a copy of his contracts with Lamar and Regency.
“I don’t need my contracts in the press,” said Spiker. “What I get paid from a private company has nothing to do with the public process.”
Please contact Nick Gerda directly at ngerda@gmail.com and follow him on Twitter: @nicholasgerda.