Richmond’s Department of Public Utilities (DPU) has been beholden to a “consultant-led” culture change program within the division. Though, the four-year, $1.8 million contract aimed at improving workplace culture after a major racial discrimination settlement failed to produce measurable results and was deemed “ineffective” by the city’s auditor in June.
With the woefully underfunded Richmond Public School (RPS) system, potholes dotting the streets throughout the city, and countless fiscal waste on Parks and Recreation-led dance classes and taxpayer-funded NFL training facilities, one must assume that the cutting of an ineffective culture change program within Richmond’s DPU is good riddance. However, Mayor Levar Stoney’s fiscally-reckless city government is at it again. Three months after the ineffectiveness was revealed, the department agreed to pay the consultants another $420,000.
Former City Auditor and Inspector General Umesh Dalal issued the financial report last year. It came, however, with much dispute from the DPU leadership, causing Richmond-based TMI Consulting, who were leading the culture change program, to threaten Dalal with a lawsuit over his questioning of the program.
Neverthtless, Dalal’s report was warranted by employee complaints that the program had done little to improve the department’s work climate.
The audit recommended that DPU terminate the ongoing relationship with TMI consulting after the end of the four-year contract. Even so, last September, they agreed to a $2.34 million renewal for the firm’s services over the course of the five-year agreement according to a report from the Richmond Times-Dispatch (RTD).
“DPU did, of course, decide to renew the contract with TMI because we took issue with the findings of the auditor,” said DPU spokeswoman Angela Fountain. “I guess that pretty much speaks for itself, that the contract was renewed.”
City Hall first hired TMI Consulting in 2013 during the Dwight Jones Administration for “human relations services.” The relationship between the two began after the city paid a combine $1 million settlement to eight DPU employees after they claimed department supervisors were making racially derogatory remarks, failing to give black workers the same opportunities, pay, training, and promotions as white workers, and management retaliating against workers after complaints were filed after subsequent violations.
In light of the contract renewal, according to Mayor Stoney’s office, he was not consulted by DPU.
Revealing an interesting connection, Tiffany Jana, TMI Consulting’s president and CEO, was co-chair of Stoney’s transition team in late 2016 before the took control of the city. Although she is a political ally of the mayor, Jana told reporters on Wednesday that the audit report initiated by the mayor set back the company’s work with the department’s employees and has required “damage control.”
The auditor’s report said Dalal opened the investigation after DPU employees sent him a letter saying the work environment had not improved and the program was ineffective.
Although the program was deemed ineffective, the report does not explicitly fault TMI Consulting. The audit claims the company used “accepted training and development practice” to rectify department issues. Instead, the report places blame on the department for not addressing the right issues, “which could have included a much more direct effort to improve hiring, promotion and development practices,” according to the report.
Among the report’s recommendations was discontinuing the city’s agreement with TMI Consulting and redirecting the resources to address issues raised by the department’s employees.
Dalal write in report that, “An environment of low morale, stress and high anxiety continues,” within the DPU. He concluded, “Investment of nearly $2 million does not seem prudent and additional investment should not continue as is.”
Second District Councilwoman Kimberly Gray, who is part of the City Council’s Audit Committee, is concerned about the resulting contract renewal.
“I think it’s important to continually assess whatever kind of training goes on,” Gray said. “The cost is a huge factor.”
TMI Consulting has fought back against City Hall criticism, citing a decrease in complaints from DPU stemming from racism and sexism. Furthermore, they also questioned Dalal’s methods and ethics, saying the city’s human resources department was not fully supportive of the firm’s efforts.
According to the RTD report, last year, an attorney for TMI Consulting corresponded with Dalal detailing what the firm call “misleading information” in the auditor’s report. The attorney’s letter threatened legal action against Dalal if the audit was not, “‘retracted and disavowed in writing within’ one month.”
“TMI will continue to be substantially and irreparably damaged if the Report is not promptly corrected,” the letter reportedly stated. “In order to avoid legal action against yourself, your office, and (another person who helped prepare the auditor’s report), the report should be retracted and disavowed in writing by your office, or corrected in all respects, within 30 days of the date of this letter.”
Dalal left his city post soon after the report was released amid a Richmond City Council-ordered investigation into complaints from current and former employees of the office he headed. As of now, no lawsuit has been filed.
“If we would have taken the recommendation from (the auditor) and stopped work, that would have been a guaranteed way to throw away the $1.5 million or whatever they’ve put into it because the end of the contract is where all of the transfer of knowledge happens,” Jana stated. “This is the part of the contract where we’re equipping the department to take on the work themselves.”
Interestingly, an internal review done three months before the audit qualified the work of TMI Conulting as “excellent.” The review was attached to the department’s contract renewal request and signed by Wayne Lassiter, a deputy director of DPU, on behalf of then-director Robert Steidel.
The department had paid $1.92 million to TMI for its work on the program at the time the contract was renewed for a fifth year.
A portion of that sum has been paid to the subcontractor Trinity Transition Consultants to meet the 20 percent threshold for minority-owned business participation required by the city contract. In the proposal TMI submitted to the city, it committed to pay Trinity at least $92,000 annually. The company is owned by Jana’s mother, Deborah Threadgill Egerton.
Jim Nolan, one of the mayor’s spokesman, stated that the city is expected to a new DPU director within a week or two. As well, DPU employees are scheduled to meet with the consultants again next week.
It seems that even though DPU employees claim that the work done by TMI Consulting has not resulted in any change of morale within the department, officials like the diversity and inclusion the firm promotes on their website. As long as there is a “commitment” to inclusiveness, results do not matter, only the gimmick of a clear end game strategy.
It is clearly understandable that poor morale within DPU must be changed, but must it cost millions of dollars worth of city money and not be at the expense of new management?
Surely, RPS would like a chunk of extra cash.
