Lessons learned from Louisa Megasite

Show This To Everyone

by Joe Mikolajczak

 

On November 19, 2018, the Louisa County Board of Supervisors held its regular scheduled meeting, which is open to the public for comments. The main topic of concern was the vote for investing taxpayer dollars into the development of an industrial park in the Shannon Hill area of Louisa County. As expected, there was a large public turnout to voice opposition to this form of development. The public comments were contentious with unanimous disapproval to continuing the project. The question was asked and no Louisa County citizen indicated support for this funding.

The due diligence reports were concluded and the financial aspect did not adequately support economic expansion of the type that was proposed. With so much public animosity displayed against this venture and the lack of financial justification, you have to wonder why the Board of Supervisors was split 3 to 3 on the vote to continue this development. As it finally, turned out, the Board voted to defeat the expansion and the wish of the citizens was granted. But why should there have been so much controversy and angst to overcome in the first place?

 

While participating in this endeavor I also took great pains to make sure that I observed and understood as much as possible. I learned a number of things – some unsurprising and some disturbing. A retrospective of events, even regular and seemingly insignificant, is always a good idea before setting out to repeat the same mistakes. My personal retrospective follows the chronology, which may be a better way to explain the progression.

Louisa County Procurement Process Needs Significant Improvement

In the business world there are assorted Good Business Practices or Good Management Practices, which don’t preclude implementation by government agencies whether federal state, or local. Procuring goods and services by the Louisa County Administration has to be performed, keeping in mind the best interest of the citizens of the County. Getting information to help with a decision about how to spend millions of taxpayer dollars requires more scrutiny and insight than what was available for the Shannon Hill Expansion; something that should have been done with better effectiveness. Below are the missing components from an effective process for the procurement of services in Louisa County.

 

  • The requirements have to be known and clear for the Offeror to estimate cost and duration of the work to be performed, but there was no end date for the project.
  • The development of the industrial was expected to take place over a 20 year period but there was no consideration given to quantifying the risks and consequences of that kind of investment that far into the future. In other words, there was no requirement to determine the probability of success and failure in the event of a catastrophe: a financial crisis similar to that of 2008, climate change, social upheaval, or natural disasters.
  • The Request for Proposal asked for verifiable documentation regarding “Methodology and Approach” to perform the specified tasks but there were no evaluation criteria listed to help with deciding where to let the contract.
  • There is no procedure for pre-qualification of suppliers. This requirement is identified in the Virginia State Code. (https://law.lis.virginia.gov/vacode/2.2-4317/)
  • There is no list of qualifications necessary to determine the members of the selection committee, which decides on what company gets awarded the contract.
  • The Request for Proposal states that “All reports, drawings, specifications, computer files, field data, notes, and other documents … shall remain the property of the Architect or Engineer.” It should be noted that the taxpayers are funding all these things but don’t get to keep any of them.
  •  “Methodology and Approach” isn’t listed as an evaluation criteria but it is listed as a requirement. This is supposed to be how the Offeror presents its case for the best way to perform the work. 

This isn’t a complete list of missing components that should have been resolved with a documented procurement process, but it should be evident that there are a number of things that would work better if some Good Business Practices were known and implemented.

Louisa County Evaluation Of Due Diligence Report For Deciding The Development Project

One specific report that was anxiously waited for was the Economic Due Diligence Report. This is a 49 page document that became available approximately November 8, 2018. The next time the topic would come up for discussion would be at the November 19, 2018 Board of Supervisors meeting, which would be open to the public for comments. Given the amount of time available – from receiving the Due Diligence Report, to reviewing it, to understanding it, and preparing for the meeting – these steps were challenging.

 

That challenge would be enough for the members of the Board to read and understand by the November 19 meeting, but the public was especially disadvantaged because it didn’t know when the report was available, where it would be posted, and in most cases would be unfamiliar and uncomfortable with trying to read and understand a relatively complex technical document on short notice. Even the elected officials on the Board must’ve had some difficulty because none addressed any of the report’s critical findings listed below.

  •  There is no calculation of the probability for risks and consequences in the event of adverse or catastrophic conditions so there is no way to determine the odds of failure or success.
  •  Using Net Present Value based on unverifiable assumptions and speculative data yields overly optimistic conclusions that increase the risk of failure and financial burden on the taxpayers
  •  There is no clear Cost-Benefit Analysis that includes and summarizes tangible and intangiblecomparisons of benefits especially those that would affect the taxpayers. The terms “cost” and “benefit” are scattered throughout the report but aren’t collected and displayed in a way that shows an analysis was done. Typically, Cost-Benefit Analysis focuses on the business or industry rather than on the general population.
  • The report itself makes a statement twice that is essentially a disclaimer about the validity of the data and the report conclusions saying that “it is not possible to provide any assurance that they will be representative of actual events.” This is the report author’s way of saying “don’t use this report for any serious decision making, and if you do, don’t blame me?”

Even with the disclaimer by the report’s author, it’s amazing that there still was a 3 to 3 split and continued controversy about proceeding with the Economic Development Plan. None of the above points were mentioned by any Board members, either those who voted “For” or those who voted “Against” development. So what was the basis for deciding how to vote by any of the Board members?

Public Comments About The Megasite Were Stifled

The claim that public comments are stifled is real, in fact, it becomes more obvious by examining events and the process of public meetings. If you ask about what constitutional right voters exercise by attending public meetings, most would guess the answer is the 1st Amendment of Freedom of Speech. That answer is anecdotal without the formality of a valid survey. There appears to be one part of the 1stAmendment that often gets forgotten, maybe because it doesn’t sound as dramatic: “… petition the government for a redress of grievances.”

Members of the Board of Supervisors frequently make comments that sometimes sound critical – that the public should participate more than it does. This invitation sometimes sounds more like an admonishment than a welcome, but it’s true, the public should play a larger role in how it’s governed. There should be more thought to determine why there may be little public participation and more work in solving how to solicit larger public involvement.

Lead time for review and comprehension of documents is too short

As mentioned previously, the Due Diligence Report became available approximately November 8 with an expected Board of Supervisors meeting scheduled for November 19. The next Board meeting would be December 3 because of a December 4 deadline for committing to continue the project. Given the length and technical nature of the report it is unreasonable to assume that the pubic, in general, has the experience with reading and understanding the content within the timeframe and still comment about the flaws and any possible merits with any comfortable degree of confidence. This would even be a daunting task for the Board members, which may well have been, since there was little discussion about the Critical Findings that invalidate the basis for funding the Megasite. The most significant finding is the report author’s disclaimer about using the report to make a decision based on the report.

With the report written the way it was, it inherently discourages those without the background to analyze the information. Reports of this kind should include a section written specifically for the general public using layman terms.

“The definition of genius is taking the complex and making it simple.” – Quote attributed to Albert Einstein

Limited public speaking time

The right to “petition the government for a redress of grievances” implies that the Freedom of Speech is not abridged in a way that would impact that petition. For some people, 3 minutes is insufficient to express and explain the specific nature of a grievance especially with information is presented with the complexity of the Due Diligence Report. The problem is aggravated by the short time between receiving the report and appearing at the public meeting. The problem may be further exacerbated by invoking parliamentary rules, such as, Robert’s Rules of Order, or similar restrictions. The formal rules of order may be necessary for a small group of public servants but this imposes an unfamiliar burden on an unsuspecting public. This doesn’t mean that there shouldn’t be some “Rules of Engagement” but those should be clear, understandable, and unintimidating. Some parliamentary procedures are intended to facilitate discussion, but discussion is limited with a format that doesn’t allow for an immediate exchange of ideas and rebuttals.

 

Rationale is missing for decisions

During the public meetings, it appeared that the Board of Supervisors had expectations for the public to present its case against the Megasite without emotions. Because it is the “public,” that could very well be an unreasonable expectation. People get emotional about increased traffic, destroying scenery, interruptions in livelihood, and a whole host of even “tiny” assaults on lifestyle.

That’s the public!
That’s the voting public!!

In some sense, the process of public meetings and decision making should be treated along the lines of due process. Advocacy, for or against the Megasite, needs clear and adequate rationale to justify decisions on behalf of the public. A simple “Yes” or “No” doesn’t do that because there’s no indication that our elected representatives even understand the issues well enough to make a decision, one way or the other. Without including a discussion of why the vote was made, there’s little confidence the voter can have about the capability of its elected representatives.

In many ways, the Board of Supervisors owes the voting public more than just a public meeting to be heard. The voting public needs to be listened to. Comments from some of the members of the Board of Supervisors indicted that the hearing part functions much better than the listening part. That perception is enhanced again when some members of the Board claim that if the voters are unhappy with a decision, that member can be voted out in the next election. After some research, it appears that Virginia is one of two states that have a legislative recall mechanism for elected state and local officials.

All the above represents what I observed and what I concluded, mostly about the interactions between the public and the officials that were elected to represent it. Looking at this from a communication point of view, the picture is dismal, but it can be shored up with outreach by the Board of Supervisors that would hopefully lead to more interest and enthusiasm by the public. The occasional high-emotion motivator, like the Megasite, could be avoided with long-term consistent involvement by the public, and a Board of Supervisors that focuses on soliciting what the public wants rather than assuming that it can determine what the public needs. With the right discussion methods in place, the public can be satisfied and the Board of Supervisors can make its own work easier.

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