SPECIAL REPORT: Township Energy Consultant's Bills Raise Questions

Written by Tim Zatzariny Jr. and Sean McCullen

The township has paid a total of nearly $450,000 over the past two years to a politically connected startup company, in part for an energy master plan that few, if any, local residents have actually seen.

Several of the bills the company submitted to the township lack enough detail to determine exactly what work the company, Blue Sky Power LLC, performed. A nationally recognized billing expert who reviewed the invoices said the township should not have paid some of them without first requiring additional explanation from the company.

The initial, no-bid contract the township signed with Blue Sky in early 2010 included an unusual, $15,000 up-front payment to be billed against future invoices. However, Blue Sky did not provide detailed invoices to the township explaining what work it performed to earn the advance.

And, in hiring Blue Sky in 2010 as its “energy consultant,” the township appears to have ignored its own requirement for the experience level it sought from professionals who responded to a request for qualifications for the job, an investigation by Gloucester Township Patch has found.

The revelations come as a local watchdog group, South Jersey Citizens, has submitted a petition seeking a November referendum that would ask voters if a township ban on pay to play—the process through which campaign contributors are awarded no-bid, professional contracts—should be put in place.

In a series of interviews over the past few weeks, Gloucester Township Mayor David Mayer defended the hiring of Blue Sky and the work the company’s done so far, saying it ultimately will save taxpayers millions of dollars by helping the township find ways to reduce its energy costs.

"Why were they appointed? Because I made it a primary focus to move this town in a direction that will focus on renewable energy and saving taxpayers money,” said Mayer, a Democrat and a former state assemblyman. “And when I looked at our budget—the township's budget—I looked at the fact that we spend thousands and thousands of dollars on energy." (In fact, after salaries and benefits, energy is the township’s highest expenditure. The township needed a blueprint—an energy master plan—he said.)

Blue Sky’s headquarters are located at the Waterfront Technology Center in Camden. The center is a small-business incubator run by the New Jersey Economic Development Authority.

Blue Sky’s chief executive officer is Benjamin S. Parvey II.

Parvey, an attorney, has served as president of the Haddonfield Democratic Club and is co-chairman of the borough’s Democratic Municipal Committee. He sat on the Camden County Environmental Commission from 2006 to 2009, and was the commission’s chairman during his last two years of service.

In November 2007, Parvey loaned $15,000 to the state Assembly Democrats’ political-action committee, according to campaign-finance records. The loan was repaid the following year.

In addition, Parvey in 2008 served as campaign manager for Camille Andrews, the wife of U.S. Rep Rob Andrews, when she acted as a placeholder for her husband’s seat as he unsuccessfully challenged incumbent Frank Lautenberg in the Democratic primary for a U.S. Senate seat.

Parvey, 37, formed Blue Sky in October 2008, according to state records.

In an interview this week, Parvey said he provides Mayer and Business Administrator Tom Cardis with detailed updates about the company’s work for the township, during regular meetings and phone calls.

Cardis said he didn’t see any reason to question the lack of detail in some of Blue Sky’s bills.

“I was looking at it as, ‘He’d just done the work, and we were just paying the bill,’” he said, referring to Parvey.

Parvey acknowledged during the interview that Blue Sky generally does not provide itemized bills to its clients, which include several school districts and municipal and county governments in New Jersey.

But, he said, “every client is different.”

Donating to local campaigns

Blue Sky has donated heavily to local Democrats over the past two years. In 2010, the company contributed a total of $900 to the Association of Former Gloucester Township Democratic Mayors, a political-action committee that funnels money to local races.

That same year, Blue Sky donated $1,000 to Gloucester Township Citizens for Government Reform, another political-action committee, according to campaign-finance records. The committee’s chairwoman is Cindy Carlamere, the wife of township Solicitor David Carlamere and chairwoman of the local housing authority.

David Carlamere is a former Democratic state Assembly candidate and a former township councilman. He is one of the township officials, along with Cardis, who is responsible for reviewing all responses to requests for proposals and qualifications submitted to the township, and for making recommendations on them to Council on the mayor’s behalf.

In October 2011, members of South Jersey Citizens called on Carlamere to resign as solicitor, saying his connections to the political-action committee compromised his ability to give impartial advice to the Democratic council. Carlamere refused to resign, saying he saw no conflict.

Blue Sky’s contract with the township is a blatant example of pay to play, said Joshua Berry, South Jersey Citizens’ political director.

“What pay to play does is it corrupts the municipal-vendor selection process,” he said. “So, instead of having a level playing field where truly independent people can review applications based on their merit, these organizations are being chosen based on either their connection to the party (in power), or their financial contributions.”

In April 2011, Blue Sky donated $1,200 to the former mayors’ association. Later that same year, the company donated a total of $2,500 to another local Democratic PAC, the Gloucester Township Chairman’s Club, campaign-finance records show.

Asked why his company makes political donations to local Democrats, Parvey said, “We support the civic engagement in Gloucester Township.” He cited the charitable work the Democratic political-action committees perform in the township.

Mayer denied that Blue Sky’s contract with the township is an example of pay to play. He pointed out that the company didn’t donate to his mayoral campaign in 2009.

However, Blue Sky did make donations to the local PACs shortly after it was awarded its first agreement in early 2010, and has continued to do so. Blue Sky was given a second annual contract as the township’s energy consultant in early 2011, and a third this past January.

"I think they've done a great job,” Mayer said of the company. “And I think they're going to provide a tremendous benefit for taxpayers of this community by harnessing together a plan that will save taxpayers money and be good for the environment."

Blue Sky’s appointment, he said, “had nothing to do with anyone giving any contributions."

South Jersey Citizens' proposed pay-to-play ban would prohibit professionals who contribute not just directly to candidate committess, but also to local political-action committees, from doing business with the township. 

Questions about the agreement

According to invoices and payment vouchers obtained by Gloucester Township Patch, the township paid Blue Sky a total of $447,390 between March 2010 and December 2011. Patch obtained the documents through the state’s Open Public Records Act.

During this period, Blue Sky used two subcontractors, T&M Associates and BlueWire Media, and paid them through funds received from the township. T&M performed engineering work on the township’s energy master plan. BlueWire, which has an office in Washington Township, Gloucester County, helped create a media campaign to promote recycling initiatives in the township. That media campaign cost a total of $217,500, including Comcast Cable air-time buys for September and November, Mayer said. (T&M, which is based in Moorestown, has also donated to local Democratic campaigns over the past two years, records show.)

The township’s agreement with Blue Sky gives the company free reign to choose the subcontractors it hires in performing work for the township.

A nationally recognized billing expert said that arrangement is out of the ordinary, especially for a local government.

“I have no idea why anybody, especially a municipality, would agree to pay for undisclosed contractors,” said attorney John J. Marquess, president of Legal Cost Control Inc. of Haddonfield. “You’re giving Blue Sky the unilateral right to hire anybody they want to, to do work on behalf of (the township). That’s not the way it should be.”

Marquess’ firm reviews bills from lawyers, consultants and other professionals for public agencies and private businesses.

At Patch’s request, Marquess reviewed the Blue Sky invoices and payment vouchers provided by Gloucester Township.

Another issue, Marquess said, is the large, advance payment the township made to Blue Sky.

According to an agreement dated Feb. 1, 2010, and signed by both Parvey and Mayer, “Gloucester Township shall pay to Blue Sky Fifteen Thousand Dollars ($15,000) payable upon execution of this Agreement. Such amount shall be applied to monthly invoices until exhausted.”

However, it does not appear that Blue Sky provided the township with any specific detail of the work it performed before or after the payment was made. Instead, the company submitted an invoice for the full payment on March 1, 2010. The township paid the bill in full nine days later, according to the documents obtained by Patch. (To view a copy of the invoice and the payment voucher, click on the PDF above.)

Marquess said it’s not uncommon for attorneys to be paid retainers against which they charge for work they perform, but in this case, the advance payment seems highly unusual.

“I don’t know why they would have advanced these people $15,000 for the purposes of signing a contract,” Marquess said. “There’s no itemization. If that’s the case, the township paid $15,000 and got nothing for it in return.”

Mayer was unable to explain exactly what work Blue Sky performed to earn the $15,000, but said he meets with company representatives biweekly.

“I keep people’s feet to the fire,” Mayer said. “We try to move our projects forward.”

Of Blue Sky’s contract, he said: “It’s not like it’s a no-show gig.”

Marquess said that about 40 percent of the Blue Sky bills he reviewed should not have been paid by the township because they lacked enough detail.

“If these bills had come to us for review, we would have said, ‘Don’t pay,’” Marquess said. “Somebody (in the township administration) should be looking at these. These bills are a little to generic for our liking.”

In March 2011, for example, Blue Sky submitted a bill to the township for $28,367. The bill was “for services performed in connection with Gloucester Township’s Energy Projects.” The document goes on to list several of the projects, including the creation of the township’s energy master plan. Blue Sky’s bill references 121 “staff hours” (at an agreed-upon rate of $85 per hour) and 84.5 “executive hours” of work (at $215 per hour). However, the bill offers no detail about who at the company performed what duties, nor does it offer a breakdown of the amount of time spent doing the work.

Still, the township paid the bill in full later that month.

Cardis, the township business administrator, defended the arrangement with Blue Sky, saying residents are getting great value for the money, and that the township is investing in the future.

“I have no doubt that a tremendous amount of work has been performed,” he said. “There was no time that I looked at this and said, ‘What are we paying Blue Sky for?’”

While it’s common for professionals such as attorneys and engineers to provide itemized bills to government clients, New Jersey does not have a law requiring them to do so.

A lack of experience?

Blue Sky has been awarded its three annual agreements with the township under the state’s “fair and open process.”

This means that a municipality need only publicly advertise the job, and that it does not have to seek competitive bids for the work.

In the request for proposals it issued in late 2009, the township sought an energy consultant with a minimum of  “five years of experience providing consulting services to municipal governments in New Jersey.”

At the time the township hired Blue Sky in January 2010, the company had been in business for less than two years.

A second company, Birdsall Services Group, a Sea Girt-based engineering firm, also submitted a proposal for the 2010 contract. The company, which also has contributed to Gloucester Township political campaigns, has been in business since 2002.

Blue Sky submitted its proposal for the 2010 contract in parntership with T&M Associates, which has been in business since 1966. However, once Blue Sky won the contract, T&M served only as a subcontractor, and the company was never paid directly by the township.

Mayer did not directly address the question of why the township apparently ignored its own requirement in the request for qualifications.

But, he said, Blue Sky’s South Jersey location gave it the edge.

“I know that in looking at the differences between the two companies, you have Birdsall—a good company; I am not disparaging any company—that is from North Jersey and its home base is in North Jersey, and you have a local company that is from this area and knows this area. What's wrong with that? See, I think this story would be much better if Blue Sky didn't know what they were doing and was messing everything up."

In the request for proposals issued late last year, the township changed the experience requirement for its energy consultant from five years to two.

“There’s no question that I am an expert” on green energy, Parvey said, regarding the question of experience. “We’re not a fly-by-night company proposing public-energy projects.”

The master plan

Blue Sky completed work on the township’s energy master plan in August 2011. (Click on the PDF above to view the plan.)

The 237-page document is a blueprint for the township’s future energy use. But, the plan was never posted on the township’s website. After Patch asked why the plan wasn’t available online, Mayer said the full document would be posted on the township’s site, and that it’s always been available electronically for anyone who requests it.

The township spent a total of $93,318.80 on the plan, according to figures provided by Parvey.

Mayer said the plan will pay dividends for years to come. He pointed out that at least some of the payments made to Blue Sky were covered by a $564,900 federal Energy Efficiency Community Block Grant ($238,000 of which was spent on installing solar panels on the roof.)

Mayer also noted that the township will be reimbursed by the developer for work done by Blue Sky in preparation of a lease on the vacant Owens Corning property on Somerdale Road, once the deal is complete.

The developer, Project Navigator LLC, is awaiting approval to connect to the regional power grid so it can turn the Superfund site into a solar farm, which will supply nearby Chews Elementary School with electricity at 5¢ per kilowatt hour for 15 years—about 11¢ less than the current going rate in the Philadelphia area.

California-based Project Navigator will pay the township $1.89 million over 20 years on the proposed lease.

“Blue Sky did that,” Mayer said. “They put this whole thing together. It’s invaluable.”

However, questions about the township’s return on investment are likely to linger because of the lack of detail in Blue Sky’s billing, said Marquess, the billing expert.

“When it comes to taxpayer money,” he said, “I think there’s a higher duty to ensure you’re getting what you pay for.”

Don't be the last to know what's happening around town. Sign up for Gloucester Township Patch's newsletters and get the top news, events and more in your inbox.