City backs down on vision fleet contract claim

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INDIANAPOLIS,  Ind. -{ May 20, 2015}       In an effort to, “provide complete documentation and clarification of confusion…”, Indianapolis Mayor Greg Ballard’s top lawyer has offered yet one more contradictory explanation of a controversial $32 million lease/rental/services agreement to flood the city’s municipal fleet with electric and electric-hybrid cars that Metro police officers say they don’t want, union mechanic’s say they can’t work on and City County Council members say no one asked them about.

Vision Fleet CEO Michael Brylawski, the leader of Mayor Ballard’s hand-picked partner in this bold new venture that the start-up company has never before tried on this scale, told CBS 4 Indy that the cost to Indianapolis taxpayers might be as low as $26 million for the life of the seven-year contract which will end with the city owning none of the 400+ electric cars rented to its fleet.

“The gasoline savings have exceeded expectations,” wrote Brylawski in a statement to CBS 4 News, “saving the City more than 26,000 gallons in the first year.”

The road to alternative energy freedom has been filled with political potholes and contractual detours guided by a confusing map that is continually rewritten by city leaders.

City County councilors will hear an update from staff members who have tried to unravel the tangled web of agreements, misstatements and evasions during a Public Works Committee meeting Thursday at 5:30 p.m. at the City County Building.

A CBS 4 Indy investigation has revealed at least six versions of two contracts containing a minimum of three original and backdated and altered signature sheets of the Vision Fleet principles and three top city officials.

Repeated and contradictory attempts to clarify the documents and the process by Corporation Counsel Andy Seiwert, responding to the CBS 4 investigation, have served only to compound the confusion.

In December of 2012 Mayor Ballard, a former U.S. Marine, announced his intention to totally break the grip foreign oil had on Indianapolis’ municipal fleet in 2025 by gradually phasing in alternative fuel vehicles, electric and electric-hybrids, starting in 2014.

On August 29, 2013, Ballard signed a Memorandum of Understanding with Vision Fleet, a California-based company whose chairman, Reuben Munger, was the CEO of Bright Automotive, Inc., an Anderson, Indiana, hybrid-vehicle maker that shut down in 2012 when it failed to receive a low-interest loan from the U.S. Department of Energy.

Vision Fleet sought to sign Indianapolis, America’s 12th largest city, as its first client to prove to mayors all across the country that municipal fleets could save money running on electricity.

The next day, the Ballard Administration determined that only Vision Fleet could meet its needs and opened negotiations for a lease of hundreds of electric cars.

On February 18, 2014, after structuring the deal so as to avoid scrutiny and review of not only the City County Council but also the Public Works Board, the Department of Public Works signed a Lease Agreement with Vision Fleet.

Within weeks, doubts began to surface about the wisdom of the deal and its legality.

Jerry Stewart, President of AFSCME Local 3131 which represents 80 automotive technicians at the city’s various garage facilities, told DPW Chief of Staff Jeremiah Shirk and city legal officials that his union membership was not trained to work on electric cars. Stewart was also worried that elimination of hundreds of gasoline powered cars from the city’s fleet would mean layoffs.

And Stewart asked why the Ballard Administration didn’t seek council approval.

“Absolutely that was brought up in one of the meetings,” Stewart told CBS 4 News. “My administrator and I, we had directly approached this, and we even had a copy of the ordinance, and at that point I would say that it was just basically ignored.”

Stewart said the Office of Corporation Counsel told him council approval was not needed on a lease, even a $32 million seven-year contract.

“Our governing body for the city is the City County Council,” he said. “Why did this not go before the City County Council, and even if you don’t have to, why would you do something like this? Why would you not go before the council?”

Within weeks, despite the City’s committment to push through the Mayor’s pet project, doubts began to creep in to the Ballard Administration.

In April of 2014 a DPW public announcement featuring Mayor Ballard and Vision Fleet to introduce Indianapolis’ “Freedom Fleet” was called off days before it was scheduled and the Lease Agreement was sent back to the company and City Legal to be reworked.

In May of 2014, the “City realized a drafting error in the Lease Agreement,” Seiwert wrote to City County councilors in a memo last week.

That “error” was writing the contract as a Lease Agreement, which would quite possibly require council and Public Works Board approval and would definitely include, by Municipal Code, involvement of city technicians in the maintenance and repair of the electric cars.

Instead, on June 13, 2014, Vision Fleet rewrote and signed a “Master Fleet Agreement” which was, in essence a rental services contract that permitted the vendor to keep maintenance responsibility and practical ownership of the cars.

The City then told Brylawski and Munger, who had already signed the Fleet Agreement days earlier, that it would backdate the contract to make it appear as if it had been written and signed in February.

“In June 2014, at the request of the City of Indianapolis legal team, Vision Fleet electronically signed an updated version of the contract that reflected what we believed were immaterial changes to our services agreement for the Freedom Fleet,” Brylawski wrote CBS 4 News. “We agreed that for administrative purposes, the updated version of the contract would reflect the original signing date in February 2014.”

Seiwert, the man in charge of the city’s legal team, admitted the contract was backdated.

“The contract was actually done in June,” Seiwert told CBS 4 News last Friday, “but backdated so that when the contract was uploaded to the city’s website, only one contract would be there.”

Not only was the contract backdated, the typewritten date lines below the signatures of Munger and Brylawski were altered to obliterate the June signature dates and handwritten, “2/18/14” dates were affixed.

Significantly, DPW Director Lori Miser did not date her signature as she did on the February Lease Agreement, thereby avoiding the impression that she signed the June Master Fleet Agreement the previous winter.

Throughout 2014 Vision Fleet moved forward with its purchase of Chevy Volt, Ford Fusion and Nissan Leaf models to reach its goal of 425 cars for the Freedom Fleet which was finally unveiled by the mayor in October.

On December 15, 2014, City Legal provide council members with a heavily redacted version of the Vision Fleet contract which contained no trace of the city’s financial committment or the word “Rental” which subsituted the word “Lease” in the original February, 2014, discarded contract.

Also absent from the redacted Master Fleet Agreement was the name of the contact person at Vision Fleet who could potentially be served with legal notice should the City decide to sue its partner for breach of contract.

At the April 29, 2015, meeting of the council’s Public Safety Committee, Councilman Aaron Freeman likened the redacted copy to a CIA report on the killing of Osama Bin Laden.

“All the redactions were done based on what Vision told us the proprietary model was for financing,” said Seiwert, “and it was all run past the state Public Access Counselor who looked at both versions, un-redacted and redacted, and said, ‘Yes, I agree,’ and that’s what was released.”

While the City’s and the taxpayer’s top attorney was so worried about Vision Fleet’s proprietary exclusions, he missed the basic legal reality that the Ballard Administration had now signed two contradictory contracts with its electric car provider and had neglected to revoke the discredited Lease Agreement.

“In retrospect the prior contract from February should have been formerly voided,” Seiwert said. “Everybody knew that’s what was going on. We superseded the first contract with the Master Lease (sic) Agreement.”

“There were conversations in May, once the relationship started getting up and they started getting cars in,” said Seiwert, “it was like, ‘Whoa! Wait…we’re not leasing cars. We’re renting cars…because we don’t want people misled that we were leasing cars when we’re actually renting cars.'”

Despite the lack of a formal clause or addendum to the Master Fleet Agreement dissolving the previous Lease Agreement, Seiwert insists the City has only one contract with Vision Fleet.

“There’s always been one,” he said. “It should have reflected that it was voided. The intention of the parties…all the parties to the contract knew that the May (sic) contract signed superceded the prior one.”

Seiwert claims the Lease Agreement was a “draft” even though the designation does not appear on the copy signed by Vision Fleet, Miser, City Controller Jason Dudich and Assistant Corporation Counsel Alex Beatty on February 18, 2014.

“The more accurate term would be it was voided by the execution of the second contract. It superseded the first one,” said Seiwert. “It was voided by the second contract that was signed in May (sic) to reflect what was actually happening.”

In fact, the second contract was signed in June, but that may be among the least of Seiwert’s worries when it comes to the Vison Fleet dispute and the never officially rescinded February Lease Agreement.

On May 15, 2015, after a contentious, contradictory and evasive interview with CBS 4 News, Seiwert and a media representative from Mayor Ballard’s office provided reporters and City County councilors with a packet purporting to be the final versions of the Vision Fleet contracts along with supporting documentation.

Buried within the official Master Fleet Agreement, backdated on its cover sheet to reflect February 18, 2014, not June 13, 2014, as the date of its origination, was the signature sheet the City provided committing Indianapolis to a deal that will cost taxpayers tens of millions of dollars well into the next decade.

Gone and intentionally removed was the unnumbered sheet out of contract sequence with electronic signatures, white-out altered dates and DPW Director Miser’s missing signature date.

Instead, in its place, was the signature sheet, with handwritten titles and dates, of the scrapped February Lease Agreement.

When CBS 4 Indy brought this specific discrepancy to the attention of Mayor Ballard’s office late Monday afternoon, a spokeswoman confirmed the accuracy of the supplied Master Fleet Agreement, writing that the contract with the discredited and discarded signature sheet, “should serve as the final version of the agreement.”

The voided signature sheet did not conform to the operative contract to which is was assigned.

But further inquiries Tuesday by CBS 4 News brought a different answer from Seiwert who back peddled once again when asked to account for the various versions of the two contracts and multiple signature sheets.

“In our effort to provide complete documentation and clarification of confusion surrounding the Master Fleet Agreement and the prior version of the contract, we made a clerical error,” he wrote.

(Editor’s note:  This past Friday, when the mayor’s lawyer was asked to explain the use of the word “lease” in the original contract when he claimed everyone, Vision Fleet, the DPW, the city controller and his own staff thought the deal was a “rental,” Seiwert said, “I’m telling you, I’ve written stuff and you look at it 8000 times and someone else says, ‘Hey, you missed a word, you’ve misspelled a word,’ and you can look at something 80 thousand times and not seen it, that’s what happened here.”)

“We inadvertently included an earlier signature page, and again, apologize for the confusion,” Seiwert wrote in the late afternoon email following an initial report on CBS 4 News. “The correct Master Fleet Agreement signature page has appeared on our public contracts portal since the document was posted there and is identical to the contract Vision sent to the City-County Councilors on April 30.”

Those would both be the altered backdated versions.

Sewiert, who told CBS 4 News, “I’m not sure what else needs to be clarified,” when asked Friday if he was confident that there were no more misunderstandings between the City and Vision Fleet on its contract, did not respond tonight to questions regarding the city employee who inserted the voided Lease Agreement signature page into the Master Fleet Agreement or who was responsible for determining  the accuracy of the contract packet that was delivered to reporters and councilors.

Councilor Zach Adamson will chair the council’s Public Works Committee meeting Thursday and has doubts that councilors will get the full story without more investigation.

“Oh, I think its very disturbing,” he said. “I think it lends itself that there has been some tampering to deliberately mislead not only the council but the press as well. I think it’s definitely something the council is going to look into and hopefully nail down some remedies as to how the Mayor’s administration and the Department of Public Works has continually gone around the city’s legislative body.”

Fellow Democrat Frank Mascari has called for an outside criminal investigation, telling CBS 4 Indy, “it was illegal what they did.”

Republican Councilman Jack Sandlin, a former grand jury investigator while assigned to IPD, agreed.

“I think that the process that went forward was deliberate to keep the council out of the process,” he said. “Absolutely.”

Staff members of the council are researching possible city ordinance, state statute and purchasing policies violations the DPW may have committed in consummating the Vision Fleet deal.

Vision Fleet, for its part, has pledged to work with councilors and police officers to assuage their concerns and assign the appropriate vehicles to city employees based on their assignments.

Councilors who met with Vision Fleet behind closed doors Friday, as Seiwert was briefing reporters, told CBS 4 News that the company’s representatives seemed taken aback and overwhelmed by the negative reaction the deal and its implementation had generated and admitted as a start-up, they were unaware of the city’s purchasing and procurement policies.

“Their excuse was this is their pilot program and they didn’t totally understand,” said Mascari, “and I said, ‘Ignorance of the law doesn’t make a difference. You need to know what’s going on.’ They didn’t understand the laws pertaining to purchasing agreements in Indiana or Indianapolis.”

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