Vendor Of Defective Stickers Has 4 Years Left On Contract

June is the start of Chicago’s annual city sticker sales season.

But almost as soon as sales had begun this year, the City Clerk’s office had discovered an embarrassing problem with the 2010-2011 city vehicle stickers.

They didn’t stick.

Many of the $75 city stickers were defective and began peeling off car windshields because they lacked enough adhesive to actually remain permanently affixed.

The City Clerk’s office responded immediately, getting the word out in the media and with staff logging in many hours of overtime for the duration of sticker sales season, worked to replace as many defective city stickers as quickly as possible. The supplier, SecureMark Decal Company, based in Chicago, also reacted rapidly and rushed the City Clerk’s office a fresh batch of city stickers with the correct amount of adhesive.

Ultimately, over 76,000 city stickers (about 6.5% of total stickers sold) have been replaced by the City Clerk’s office so far, with deficient decals still trickling in to this date.

For years, the city sticker sales ran the full month of June, followed by a 15 day grace period ending July 15th, to allow sticker procrastinators to purchase and display their stickers before enforcement began in earnest July 16th. Because of the scope and scale of the problem, the City Clerk’s office decided to extend the standard 15 day grace period for city stickers an additional 15 days to July 30th.

This unprecedented move was to allow the tens of thousands of people with defective city stickers to get their replacements before enforcement started.

“The reason for the extended grace period was to ensure that people had sufficient time to receive a replacement sticker,” explains Kristine Williams, spokesperson for the City Clerk’s office.

City Sticker Enforcement Impacted By Grace Period Extension

Normally, after the grace period expires July 15th, the subsequent two weeks become a virtual feeding frenzy for enforcement of city sticker violations.

According to numbers provided by the Department of Revenue in a Freedom of Information Act request, 36,172 tickets for city sticker violations were issued from July 15-31st 2008 and 36,057 parking tickets for this violation were issued for that same time period in 2009.

In fact, city sticker violations in the two week period in July following the city sticker grace period for both 2008 and 2009, total more sticker violations than any full month within the year according to numbers provided by the Department of Revenue. The fines from these violations account for several million dollars of much needed revenue for a cash-starved Chicago flirting with a $650 million budget deficit.

But this year, only 1,306 tickets for city sticker violations were issued according to the FOIA response from the DOR. These violations never should have been issued due to the grace period extension and were “withdrawn by the Department of Revenue because they were issued in error,” according to DOR spokesperson Ed Walsh via e-mail.

Or in other words, zero tickets for city sticker infractions were issued for the same time period in 2010.

This particular violation carries a $120 fine. On its surface, using 2008′s lower total for the two week time period, the 2010 revenues generated from fines for 35,000 city sticker tickets would have roughly been $4.2 million dollars.

The City Clerk’s office, while fully aware of this seeming decline in revenue from enforcement due to the grace period, has been more concerned with ensuring drivers get working vehicle stickers.

“While we acknowledge there was a loss in revenue during this time, we were focused – and continue to be focused – on issuing replacement stickers as quickly as possible,” says Williams. “It’s not good to inconvenience Chicagoans in any way and being provided with a defective sticker is a very big inconvenience.”

However, in August, after the extended grace period ended, Chicago ticket writers went on an enforcement rampage writing 42,866 city sticker violation parking tickets compared to 32,234 written in August 2008 and 30,721 written in August, 2009, making up some of the ground lost to the extended grace period.

Just released September numbers for this violation were up as well, jumping a few thousand tickets over the previous two years to 25,719 compared to 21,066 in 2008 and 21,379 in 2009, according to data from the DOR.

Making Up Lost Enforcement Revenue Will Be A Challenge

Based on historical data, tickets issued for city sticker violations taper off for the last quarter of the year, and with overall city ticket writing already down nearly 12% so far this year according to numbers provided by the DOR during budget hearings last week, it seems unlikely enforcement will be able to make up the deficit by year’s end.

“I don’t see us completely making up the loss (in city sticker enforcement revenue),” admits Williams. “But I think some of it will be made up.”

Again, based on the last two years of ticketing, it is possible city sticker violations will be short 13,000 to 17,000 tickets or between $1.5 million and $2 million in expected revenue. These calculations don’t include any extra income derived from drivers who are slow in paying their tickets and allow the fines to double.

“Ticket issuance has been trending down for about ten years,” says Walsh. “While the expansion of the vehicle (City) sticker enforcement grace period by the Office of the City Clerk may contribute nominally to an overall issuance decline, the Department of Revenue fully supported the extension of the grace period regarding vehicle sticker enforcement.”

While the DOR admits there might be a decline in ticketing writing for the city sticker violation, it contends that Parking Enforcement Aides for the city, did not stop writing all parking ticket violations the last two weeks of July during the grace period extension.

“The Department of Revenue’s Parking Enforcement Aides (PEA’s) enforce the majority of the Municipal Code with regard to parking violations,” explains Walsh. “While they may not have been enforcing vehicle sticker violations during the expanded enforcement grace period, they were obviously still writing other types of violations.”

But the problem with drastic reductions in this particular violation is that it will have a financial impact on revenue. Where the average fine for parking ticket violation is $50, at $120 a pop for a city sticker violation, city ticket writers need to write an additional 1.4 parking tickets of other violations for each lost city sticker ticket, just to make up for the lost revenue from this high dollar fine violation.

City Clerk Trying To Drop Sticker Vendor

Chicago-based SecureMark Decal Company is the company that won the five year contract to supply the City Clerk’s office with city vehicle stickers and residential parking permit guest passes in March of 2010. Their bid came in about $300,000 lower over the length of the contract.

But from the moment Chicago’s Procurement Services Department announced SecureMark as the winning bidder, City Clerk Miguel del Valle began his opposition to SecureMark’s contract. Del Valle sent Procurement a letter dated March 4th, 2010 asking them to ignore the low bid. Instead, del Valle asked Procurement to assign the contract to a company the Clerk’s office had worked with for years–The Standard Register Company.

Del Valle pointed out in his letter that the State of New York Department of Motor Vehicles, less than a year earlier, had experienced a well publicized problem with defective decals from SecureMark.

The problem?

They didn’t stick.

In fact, according to an October 14, 2009 article from New York Newsday, of the 13.4 million DMV decals ordered, over 5 million were defective. Ultimately, according to the Newsday piece, SecureMark agreed to replace 1.4 million DMV decals.

Despite del Valle’s reservations, Procurement went forward and awarded SecureMark the contract on April 8, 2010 for nearly $960,000.

After Chicago suffered through its decal disaster for city sticker season, del Valle again tried to drop SecureMark as a vendor. In a letter dated August 31st, 2010, citing the company’s inability to provide a product within the specifications of the contract, Clerk del Valle asked Procurement to terminate SecureMark’s contract and re-start the bid process.

SecureMark consultant Norm Hoffberg, despite all the problems feels the decal company dealt with the problem promptly and effectively.

“I think we responded as quickly as we possibly could and it got resolved,” said Hoffberg. “We took responsibility for what occurred. In manufacturing problems do happen. It’s how you work to resolve these issues.”

Quality Control Remains An Issue

But Williams’ view of the resolution of quality control issues is somewhat different than Hoffberg’s.

“We’ve still not been guaranteed a completely flawless product,” says Williams. “I can say that SecureMark cannot guarantee that the product they supplied us will adhere 100%. Our office continues to do quality control checks on all stickers sold. There were no issues with Standard (the past vendor). Last year (2009) not one customer came back to us to say a sticker did not stick. It’s a concern for us when the company can’t guarantee its product.”

Currently,  SecureMark continues to be the City Clerk’s vendor for city vehicle stickers.

According to Hoffberg, he’s not aware of any change in the status of SecureMark’s contract.

“Nothing we’re aware of,” says Hoffberg when asked if he’s heard anything from the city regarding the status of SecureMark’s multi-year contract. “I’m hoping we have a long relationship.”

At least in this area, Williams agrees with Hoffberg, because ultimately it’s the Procurement Services Department that makes final purchasing decision and controls contracts for the city.

“Up to this point, no RFQ (Request for quote or bid) has been issued,” says Williams. “And that’s what the Clerk is saying needs to be issued. Bidding a contract is a several month process. I can say we have been working closely with procurement to take the next steps so we don’t have to work with this vendor for next year.”

Del Valle is even more entrenched, and direct on this issue than Williams saying, “Under no circumstances will our office accept this vendor for next year.”

So far, despite the protestations of the City Clerk and it’s office, Procurement has not moved forward with the process to re-bid the contract.

This website attempted to obtain comment and information on this issue from Chicago’s Procurement Services Department, but as of publication, has not received a response.