The CCC, composed of the same members as the Celebration 2000 Committee, signed a contract with the city on July 7 to organize and fund the New Year's Eve celebration. With the contract in hand, the city council approved a $500,000 loan to the CCC to help pay for New Year's Eve expenses and dissolved the Celebration 2000 Committee. The city didn't completely cut loose the money. Instead, every expenditure is subject to review by the city's parks department.
The city now had what it thought was the best of both worlds. The CCC could cut deals quickly with whomever it wished and avoid public scrutiny. The parks department, meanwhile, would serve as a monitor and control the checkbook.
"We set this up to avoid the nightmare of public bidding and to allow flexibility in purchasing and meeting," city parks central district director Michael Whiting stated in a July 7 e-mail obtained under the state Public Records Law. "The only role the City has is to watch that the 500K is spent wisely and is paid back."
Prior to the city's recognition of the CCC on July 7, the Celebration 2000 Committee was still subject to the city's procurement regulations and Open Meetings Law. Throughout the first half of the year, the committee continued to post advance notice of its meetings and followed the Open Meetings Law.
But during the same period, city records show the Celebration 2000 Committee flagrantly ignored procurement rules -- with the city's tacit approval.
In late February, meeting minutes show the committee decided it needed to immediately secure stages and lighting for the New Year's Eve show. Rather than preparing a formal request for proposals and circulating it among the half-dozen or so qualified vendors in the Valley, Charlie Johnston cut a deal with On Cue Systems -- a company he regularly contracts with in his private promotion business, Select Artists Associates.
Johnston told the Celebration 2000 Committee at a March 15 meeting that he had spoken to Mark Cockriel of On Cue Systems and had been assured that the company could meet all staging requirements.
In an April 3 bare-bones contract proposal prepared by On Cue Systems, Cockriel promised to provide four stages with minimal lighting for a whopping $42,500 a stage.
The contract between Cockriel and the Celebration 2000 Committee (the CCC had not yet been incorporated) was signed by Grant Woods on May 24, and by Cockriel the next day. Not only did the contract lock the committee in for this year's show, it also guaranteed that On Cue Systems would provide stages for a planned December 31, 2000, celebration at the same $42,500-per-stage rate.
Though Woods had signed the contract, the Celebration 2000 Committee had no money -- even though the city council had approved a $25,000 appropriation last December. On June 17, the city agreed to "rush" the $25,000 payment.
Rather than depositing the money into an account controlled by the Celebration 2000 Committee -- which at that time was the only entity formally recognized by the city -- the $25,000 was deposited into a Citizens for Community Celebration account that Johnston had set up at Wells Fargo Bank. The city made the deposit into the CCC account on June 17, even though CCC would not sign a contract with the city until July 7, records show.
Johnston, who along with Woods, was a signatory on the CCC account, then issued a $10,000 check to Cockriel on June 18 as a deposit for the stages. The deposit check was sent 12 days before the Celebration 2000 Committee reviewed the contract and approved the $10,000 expenditure at its June 30 meeting.
Johnston says he negotiated the deal with On Cue Systems because it was the biggest firm in the Valley. "They are the one company in town that can do this," Johnston says.
Not so, says Joseph Lewis, owner of Spectrum Lighting, Sound & Beyond.
Lewis, who also is a Tempe city councilman, says his company received a call from a Phoenix official last March asking his company to make a bid on the stages.
"We were just asked to fax a quote for six stages," he says. "It was very, very vague."
Lewis says he asked for more details of what was to be required, but they weren't forthcoming. After reviewing a copy of On Cue System's contract provided by New Times, Lewis says his company could have delivered the same product for much less money.
"I guess it would have been around the $25,000 mark per stage," Lewis says.
City attorneys acknowledge that, while On Cue System's contract may have ignored city procurement regulations for failing to issue formal bids, such action is not necessarily illegal.