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Renewal of contract against previous decision sparks controversy

(Oct. 11, 2013) The revelation that the Town of Ocean City would be extending its contract with MGH Advertising, after allowing its opt-out deadline to pass, sparked a heated exchange at this week’s council session.

“I’m saying you had a valid motion [to go back out to bid], and it didn’t happen. Why not?” Councilman Brent Ashley asked City Manager David Recor.

“You have MGH for another year and I take responsibility for that,” Recor replied.

MGH has been the city’s marketing firm for the past 11 years, coordinating the resort’s public presence outside the island with everything from TV ads in Pennsylvania to billboards on the Jersey Turnpike. The company last signed an agreement with the city in 2010, following a competitive selection process.

That agreement carried a guaranteed two years’ work, with a clause that automatically extends the contract for an additional year unless either party gives 120 days’ notice that they intend to terminate the agreement. The expiration date of the contract is Dec. 31 of each year, making the end of August the decision time.

If the city were to give MGH notice that it planned to opt out, it would then need to write a new bid specification and issue a request for proposals (RFP), which would likely generate responses from MGH as well as other firms. The city would then select a contractor, which could be MGH or another firm.

In August 2012, the council voted 4-to-3 to give MGH notice and re-bid the contract before the end of the year. However, that decision was reversed and the contract extended after the city’s Tourism Advisory Board said the resort’s stakeholders would not have enough time to consider and comment on proposals before the contract expired in December.

Although a non-binding body, TAB’s recommendation at the time was “to keep Andy’s [MGH President Andy Malis’] contract for another year, but start the RFP process now and have a whole year to do it.” The council approved the recommendation with only Ashley and former Councilman Joe Hall objecting, preferring to go to bid immediately.

“I pointed out [previously] that the council had extended the contract for one year, last year, and again it was due to expire at the end of this year, 2013,” Ashley reiterated again this week.

However, the impression of Recor, as well as Council Secretary and Tourism Commission Chair Mary Knight, was that the contract was good through 2014 and that MGH’s status was a non-issue.

“Four of the five council members that voted for this policy directive are still sitting on the council,” Ashley said. “This is what I was talking about at the last meeting and everyone seemed confused.”

“Then I see a headline in (Ocean City Today) that reads “city renews ad contract by default after notice deadline passes.”

After that exchange, Ocean City Today had inquired about the status of the contract, with the city confirming that an RFP had not been developed and that, with the passage of the August deadline, MGH’s contract was good through 2014.

At what point the directive to go back to bid was abandoned, however, was not made clear, with staff saying only that “discussions regarding tourism … have been favorable” and that the “issue to go to RFP has not been revisited.”

Malis also confirmed that the issue had not been brought to him and that the notice deadline had passed without comment from anyone.

Recor relayed the same to council this week, saying that “there wasn’t a conscious decision at any point not to do an RFP.”

“I’m not going to offer you an excuse as to why it didn’t happen,” Recor said. “I’m just going to say that it didn’t happen.”

MGH’s status has always been somewhat of a hot potato in council chambers, as the agency’s success – and ergo the success of the city’s government in its role as the resort’s primary destination marketer – carries with it considerable political import.

Those winds turned against the agency in 2010, with the rise of a council faction – particularly Hall and Ashley – that frequently criticized the direction of the resort’s marketing, and maintained that City Hall had too much political investment in MGH’s success to be able to make a fair decision on its employment.

With Hall’s ouster and the return of the previous sitting majority in 2012, those winds shifted back. The city’s tourism commission, which recommended MGH strongly in previous bid processes, was reinstated after having been dissolved in 2010.

“We reinstated the commission system,” Recor said in his explanation this week. “We made great strides with MGH and made improvements in significant initiatives throughout the year.”

“TAB’s role diminished, and they went to meeting on a quarterly or as-needed basis,” he said.

But even if a new request for proposals was a moot point given the political reversal, Ashley still objected that a new policy was being assumed without it actually having been recognized in a public vote of the council.

“We pay extremely competitive salaries to our staff to make sure what we vote on gets carried out,” he said.

Earlier this year, Recor also came under fire from Ashley after it was revealed that the city had not received two years’ worth of parking lot rent from a local restaurant. The restaurant owner told this newspaper that he had never realized he was delinquent because the city had simply never asked for the money.

“We just had a case where a parking lot wasn’t paid for two years because nobody here knew about it,” Ashley said. “Who’s watching the safe here? Is there anything else we should be checking on?”

“Probably so,” answered a tense Recor.

However, Councilwoman Margaret Pillas suggested that last year’s decision, and the affirmative vote to not renew for 2014, could legally be notice enough to get the city out of an extension with MGH if it so chose.

“Maybe they don’t have the extension,” Pillas said. “I’m requesting of the council that we have Guy [Ayres, City Solicitor] look at the contract. Maybe we already gave them notice.”

Pillas’ suggestion was approved with six votes, with only Councilman Joe Mitrecic objecting.


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