How Hudson Won The St. Louis Parking Contract With Treasurer Jones

WHEN OFFICIALS WORKING FOR St. Louis Treasurer Tishaura Jones requested proposals in April 2019 from companies that wanted to manage the city’s on-street parking operations, they laid out dozens of requirements.

Some of these involved the bidders’ references. St. Louis has about 7,700 metered parking spaces, and companies had to demonstrate they’d done work in at least three other cities with parking operations of similar size. For general questions, bidders were instructed to contact one of the key officials evaluating the proposals: Carl Phillips, parking administrator for the city of St. Louis.

Five months later Jones, who serves as the city’s parking supervisor, announced local firm Hudson & Associates had won a $7 million contract. As it turned out, Hudson’s bid had racked up 97 out of 100 possible points under the treasurer’s scoring system, including the maximum 15 points in the “References” category.

The person topping the list of references in Hudson’s winning bid? Carl Phillips, parking administrator for the city of St. Louis.

The dual role that Phillips played with respect to Hudson is unique among the 11 bids the treasurer’s office received. But it’s not the only thing that sets apart the proposal from Hudson, whose CEO Shelia Hudson has been a major donor to Jones’s political campaigns.

A review by McPherson of all 11 proposals and the scores they received reveals other discrepancies. Two in particular stand out:

• The scoring system, which encompasses six categories, appears arbitrary. Most of Hudson’s bigger competitors received no points at all for their references, even though some of them offered examples of previous work in major cities such as Chicago and Washington.
• Despite its years of experience with St. Louis’s parking operations, which include maintaining St. Louis’s traffic meters and staffing the city’s Parking Violations Bureau as a subcontractor, Hudson’s bid did not appear to demonstrate the broader experience necessary to meet the requirements in the treasurer’s request for proposals (RFP).

The inconsistencies raise fresh questions about the awarding of the business to Hudson, which signed a contract with Jones in April and began working as a prime contractor to the city’s Parking Division in May.

Hudson had been a major subcontractor to the previous manager of the city’s on-street parking operations, Conduent State & Local Solutions Inc., a unit of Conduent Inc. of Florham Park, N.J. Conduent (formerly known as Xerox) signed a five-year contract with Jones in 2015 and bid unsuccessfully last year to retain St. Louis as a client.

In June former City Counselor Julian Bush wrote to the Streets committee of the Board of Alderman that Jones had not obtained the required approvals for the Hudson agreement, adding that “the purported contract is not a contract at all.” Later that month aldermen voted to give the committee subpoena power to compel testimony and written records from both Jones’s office and Hudson regarding the selection process.

Red flags and “conspiracy theories”

McPherson first wrote about the Hudson contract in September, detailing how its flat-rate compensation structure contravenes the terms laid out by Jones’s RFP. Hudson gets a guaranteed $195,600 per month, or about $2.35 million during each year of the three-year contract. The deal can be extended beyond the original term if both parties agree.

Conduent was not paid flat rates. It earned a commission for each parking citation issued and a specified amount for each meter it oversaw.

Jones has previously said the Hudson contract will save the city between $500,000 and $1 million after its first full year of implementation, and that “the entirety of the process was executed with transparency, fidelity, and integrity.” In a Sept. 18 interview on KMOX-AM she dismissed McPherson’s earlier reporting as “conspiracy theories.”

When it comes to managing possible conflicts of interest in awarding city contracts, there is no single playbook. An ongoing legal dispute over the composition of the city’s Parking Commission and the powers of the treasurer’s office make it unclear which rules apply. The rules for professional services contracts under the city’s Board of Public Service do not address the subject of references, but they require officials involved in a selection process to disclose any possible conflicts, and to recuse themselves if necessary.

For this story McPherson contacted three current and former officials who have been involved in awarding public funds to private companies in exchange for goods or services in the St. Louis area. None of them would speak on the record about the treasurer’s office, but all three said Phillips’s dual role in the Hudson process could raise red flags. One said their office’s practice is to ask a bidder to submit a different reference if the bidder lists as a reference a person involved in the selection process.

Phillips retired in May. In response to e-mailed questions from McPherson, Felice McClendon, a spokeswoman for Jones, wrote back: “Carl Phillips serving as a reference was NOT a conflict of interest.”

McClendon added that Phillips was a suitable reference for Hudson because he was familiar with the company’s work and did not personally benefit from the fact that Hudson won the contract. “Carl Phillips had/has nothing to gain, nor was there any derived personal benefit…Carl Phillips was familiar with Hudson & Associates per their work history dating back to 2008.”

Representatives for Hudson did not respond to McPherson’s inquiries for this story.

A perfect 100

Hudson’s impressive result of 97 on the treasurer’s scoring system put it far ahead of its competitors. Even more fortunately for Hudson, one of its allies achieved a perfect 100: EDC Corp. of Syracuse, N.Y. (McPherson obtained the scores via a request under Missouri’s Sunshine Law.)

EDC — a vendor new to St. Louis that Hudson describes in its bid as a “strategic partner” — also won part of the city’s business. The company is supplying its AIMS parking management software, which links with the city’s existing meters and allows drivers to continue paying for on-street parking via credit cards or mobile apps. Hudson also uses the software to manage billing, payments and appeals related to parking tickets. Together, the two companies provide a suite of services similar to the ones formerly provided by Conduent.

Privately-held EDC signed a separate agreement with Jones in December to license the AIMS software. The three-year contract pays EDC about $128,000 each year.

In last year’s RFP the treasurer’s office outlined the following key criteria for evaluating the proposals:

• Pricing (30 points)
• Ability to perform the required services (25)
• References (15)
• Technology and innovation (10)
• Minority/Women-owned business participation (10)
• Value-added services (10)
• Total (100)

Seven of the 11 bidders scored at least 50 points. The chart below shows the results.

The scores that lower-ranked bidders received, especially in the References category, are difficult to reconcile with Jones’s requirements. The RFP said bidders “must furnish at least five (5) references from municipalities with the same software, three (3) of which with minimal installations of more than 7,000 parking spaces.”

One bidder that appeared to clear this hurdle is Passport, a transportation software company based in Charlotte, N.C. Its references included three cities with at least 7,000 parking spaces, including Chicago (36,000 spaces). Yet Passport received no points for its references from Phillips and his colleagues.

Likewise, software company gtechna (a unit of Harris Computer of Canada) provided references from cities such as Pittsburgh, Washington and  Tucson, Ariz. But like Passport, gtechna earned no points in the category.

“A competitive bid”

Another company, United Public Safety of Fort Washington, Pa., scored all 15 points for its references. It was the third finalist in the selection process. But United received no points in the MBE/WBE category, despite the fact that its president, Joan Young, is a woman. The company’s total score, 71, lagged far behind the scores for EDC and Hudson.

EDC’s bid provided references from six cities including Las Vegas, Grand Rapids, Mich., and Palm Beach, Fla.  

“The review committee awarded the score commensurate to the data received.”

McClendon, responding to McPherson’s questions, appeared to refute the reference information contained in some of the proposals. “No other competing bids included a scope of services in other municipalities of over 7,000 parking spaces,” she said. “The review committee awarded the score commensurate to the data received.”

As for Hudson, besides its extensive work history in St. Louis, the firm highlighted in its bid other examples of its work that included a parking meter pilot in Kansas City and work in the St. Louis area related to the Loop Trolley.

The company also touted its assignment at St. Louis Lambert International Airport, where it provides the staffing for information services personnel who assist travelers. Hudson also included its contract to manage valet parking operations at Charleston International Airport in South Carolina. Hudson supplied references from both airports, even though neither of the roles involves on-street parking.

McClendon made it clear that Jones’s office stands by its decision to choose Hudson: “Hudson & Associates met all the terms of the RFP and presented a competitive bid of the bids received.”

What’s happening with parking tickets?

The extent of the relationship between Hudson and EDC is unclear. Each company submitted its own proposal in response to the treasurer’s RFP.

But Hudson’s bid assumed the city would also use the EDC/AIMS software system; in fact, the Hudson proposal contains language in some sections that is identical to the language from EDC. Hudson’s proposal mentions the AIMS system more than 120 times. EDC’s bid does not mention Hudson at all.

“The treasurer’s office is not aware of any business relationship between Hudson (nor any of its senior executives) and EDC/AIMS.”

“By adopting the AIMS solution…St. Louis is already seeing efficiency gains in managing its 300,000 parking tickets per year,” EDC said in a post on its website dated Sept. 13. The news item, which appears to be EDC’s first public acknowledgement of its contract in St. Louis, was posted nine months after the company signed the contract with Jones. The item appeared on the EDC site the same week McPherson began asking questions about the company’s role.

In response to a question earlier this week from McPherson, McClendon said: “The treasurer’s office is not aware of any business relationship between Hudson (nor any of its senior executives) and EDC/AIMS.”

Jones’s office has not released data on parking tickets since Hudson and EDC took over the business. KMOV-TV reporter Lauren Trager filed a Sunshine request for the information on Sept. 19. But the response from the treasurer’s office included data only through mid-March, when Jones suspended parking enforcement due to the COVID-19 pandemic and while Conduent was still the city’s prime contractor.

Parking enforcement resumed in June. It’s unclear why reports since then are unavailable. McClendon told McPherson that the transition to the AIMS system is going well, and that the treasurer’s team is “satisfied with the technology upgrades that have been made.”

An EDC official declined to comment for this story, citing company policy against releasing information regarding its customers.

Missouri State Auditor Nicole Galloway released a report on Jones’s office last week as part of an ongoing citywide audit of St. Louis government departments. The audit gave the office an overall performance rating of “Good,” although it faulted the treasurer’s staff in some areas related to procurement procedures and contracts. The audit did not address the contracts with Hudson and EDC.

The pandemic has hit the Parking Division especially hard, since the division normally relies on demand for parking from office workers, conventions, concerts and sporting events. Last month officials projected that parking revenues would be 31% below budget, contributing to a projected net loss of $4.6 million in the current fiscal year. –McP–

[Like this story? Be notified by e-mail every time McPherson publishes a new item by dropping a note to Editor Jack Grone at jgrone@mcphersonpublishing.com. There is no charge for McPherson’s content, and I will not sell or share your contact information.]