When Stevens left the payroll on August 31, 1995, he was one of the city's highest-paid employees, earning $83,184 per year as the director of Stapleton 2000, an agency set up by Mayor Wellington Webb to redevelop property at the city's abandoned airfield. That comes out to $40 per hour. But a consulting contract that took effect the next day, September 1, guarantees him $65 per hour--for doing the same work.
Deputy aviation director Vicki F. Braunagel says Stevens was hired to wrap up a number of land deals he had been working on at both Stapleton and Denver International Airport, as well as to help "streamline" the aviation department's contrac ting process.
"It didn't make any sense to try to hire a brand-new person full-time to do that," says Braunagel. "But we did need somebody, and somebody who had the expertise and experience Errol had was a find."
The aviation department's one-year contract with Stevens is for $30,000; so far, he's billed the city for $9,264.
Braunagel says she expects Stevens to finish his work for the city before his contract expires this coming August, though she doesn't rule out the possibility that his contract will be extended. "I may not even use all his time," she adds. "If I can finish up all his work for $15,000 to $20,000, I have saved the city a great deal of money."
The aviation department didn't open up the Stevens contract to competitive bidding, a decision officials said was justified by Stevens's expertise.
In addition to the $65-per-hour payments to Stevens, the city also agreed to reimburse the former bureaucrat for such expenses as long-distance phone calls, copies and faxes and to pay him 25 cents a mile for any in-town auto travel related to his airport work. Braunagel notes that Stevens has "costs associated with setting up his business that any consultant would pass on."
Stevens, however, rejects any suggestion that his years with the city and personal acquaintance with top-level administrators resulted in a sweetheart deal. Far from being paid a premium, he says, he is actually settling for less than he could earn from other clients in an effort to avoid any suggestion of impropriety.
"If you take a textbook on consulting off the shelf at the Tattered Cover, it'll tell you how to calculate rates," says Stevens, who now works out of his home in east Denver. "Mine would be $85 per hour at a minimum."
Stevens says he and Braunagel arrived at his fee by taking his former annual salary from the city, adding to it the cash value of the fringe benefits he received as an employee, and then tacking on "just a little bit" (roughly $4,200, should Stevens draw down the full contract amount) for costs such as business machines and office furniture. Under that arrangement, Stevens is guaranteed to receive a slightly higher total compensation package than he did as a city employee--while, as a retiree, also drawing his city pension.
"The theory was, we needed him, but he's covering his own overhead," says Braunagel.
City Auditor Don Mares says he believes the issue of employees being hired back as consultants is best left to the judgment of individual city agencies. "We don't have any laws against that," says Mares. "When I look at a $40-per-hour employee and a $65-per-hour consultant, my immediate thought is, it's not that big a difference when you take into consideration the fringe benefits."
And Stevens contends that even with the city helping foot the start-up cost of his foray into private enterprise, taxpayers are getting a good deal. "I accepted an hourly rate that is drastically below the market," he says.
Stevens spent 22 years in city government before stepping down, and he says his new consulting firm will specialize in the "interface between the public and private sectors." In fact, if he has his way, this shouldn't be his last consulting contract related to city business.
Stevens declines to name any of his current clients but says he expects to receive most of his work from businesses--permit applicants, developers and others--who need help understanding how Denver government really works. Adds Stevens, "I'm not saying I have a huge portfolio of clients. But I'm working on it."
The name of Stevens's new consulting firm: Second Wind Ventures.
