After $352,410.00 Paid Over 4 Years, Billing Battle Rages Over Experience Everett

January 26, 2016

Everett, Everett Government

Experience Everett

The doors to the Experience Everett office at Xfinity Arena in downtown Everett are locked tight.

In 2012 the City of Everett entered into a contract with Sean Straub and his company Videri,LLC to work on tourism strategy for the City of Everett. The first contract was for an amount not to exceed $95,000.00 with an expiration date of February 28, 2013. In February of 2013 the contract was extended to February 28, 2014 for an amount not to exceed $120,000.00. In February 2014 the contract was extended to February 28, 2015 for an amount not to exceed $130,000.00. In February 2015 the contract was extended to February 28, 2016 for an amount not to exceed $130,000.00. That brought the total value of the contract to $475,000.00.

You can see the original contract and the extensions here…

Contract and amendments plus City of Everett payments

On July 21st 2015 the City of Everett terminated the contract and also referred the matter to the Everett Police Department and the State Auditor’s Office. The Everett Police Department concluded there was nothing criminal and that it was a civil problem between the city and one of its vendors. The State Auditor is expected to weigh in during its annual review with the city later this spring.

Last week MyEverettNews.com began contacting Sean Straub and the City of Everett regarding the contract, what happened with Experience Everett and where things stood. While not addressing MyEverettNews.com directly Experience Everett posted what it said was its side of the story on social media and the Experience Everett website. On Sunday January 24th, Sean Straub sent MyEverettNews.com the following message and e-mail…

Apologies that I did not get back to you sooner. I was really hoping the city and I could work out our differences. As you now know, this has all been quite a struggle–and one that I personally feel was unnecessary.

I just sent a final request to the city to see if we can make a last ditch effort to put those differences aside. I have attached my letter to Mayor Stephanson and the Everett City Council Members. I’ve also provided PDF documents and a link to additional resources that show how much the public enjoyed what we did. It really would be a waste to see it all go down the drain.

Here is the email to the city…

Mayor Stephanson and Everett City Council Members:
As you are undoubtedly aware, my company’s contract to manage the City of Everett’s tourism services was abruptly ended mid-term on August 4th, 2015. It is my opinion that this was done without an opportunity to try to amicably resolve mutual concerns.
I recently shared my experience publicly, as I felt the six months that have past while I go back-and-forth with city administration was not producing any meaningful results.  If you haven’t already, you can read my entire point of view here: http://bit.ly/ExpEvStory. The public and private feedback I have been receiving since my announcement has been nothing short of amazing, and only confirms that the services my company provided to the city were considered to be highly valuable to our local Everett residents and many, many others in our region and beyond.
I made my announcement on Friday, January 22nd at 2pm. Within forty-eight hours my message has been viewed by over 15,000 people. Dozens and dozens have written emails, commented on social media, and over 250 people have taken a poll created to solicit feedback on what the public desires. I have attached the poll responses and emails as PDF files. The other files (15+MB) can be downloaded by following this link: http://bit.ly/ExpEvCityFeedback. The resulting information proves overwhelmingly that the public loved what we did for the City through my company’s work.
I am not writing this letter because I’m interested in being right, or to say “I told you so.” I’m writing this letter because–from the beginning–all I have asked for was an opportunity to sit down and work through our differences in a constructive and mutually beneficial way. I am still willing to do just that. As I see it, we have two options moving forward. We can both chalk this up to a learning experience, and move on. I will harbor no ill feelings toward the City and will look forward to getting back to what’s important; making Everett a better place. Or, we can sit down and chart a path forward. I would propose we determine the six following points:
  • We determine what exactly the City of Everett is asking for and I provide what I can, within reasonable expectations. As I’ve mentioned, I’ve already spent many, many unpaid hours trying to appease City staff’s requests.
  • We determine the estimated value of the documentation that I cannot produce.
  • We determine the estimated value of outstanding invoices and unpaid labor and expenses owed to Videri, LLC.
  • We determine what the difference of these two amounts is. I have a hunch it is a sizable net amount back to Videri, although I’m willing to negotiate this amount in order to move on.
  • We mutually agree to hold each other harmless from any current and future claims.
  • We do our best to mend bridges so we can all move on and continue to pursue ways to make Everett a better place to live, work, play and stay.
I’m hopeful the City wants what I want–to move forward. We have much to accomplish still, and I personally am not interested in wasting any more time on petty disagreements and distractions. I hope you will agree and work with me to put this matter to rest.
Cordially,
Sean
Sean Straub | CEO 
Videri Group

Last week the City of Everett began processing a freedom of information request from MyEverettNews.com requesting emails documenting the events leading to the termination of the contract between Videri, LLC and the city. Today we received the first batch of those emails and also received a statement from the City of Everett sharing its point of view written by Meghan Pembroke, Public Information Director. Here is that statement…

Statement of City of Everett on Videri contract termination:

We agree that it is unfortunate that the issues that led to the termination of the Videri contract could not be resolved amicably. However, as is often the case, there are two sides to the story, and the documentation we’ve provided offers a fuller understanding of the events leading to the termination of the contract.

The City requires that contractors provide careful and complete accounting of their expenses to ensure taxpayer resources are managed responsibly and in accordance with their intended use. The City is also subject to strict financial reporting requirements, and the terms of our professional service agreements allow us to comply with those requirements.

The Videri contract with the City required that Sean provide any and all of his records and documents upon the City’s request, and the agreement is clear that the City has the right to audit all contracts, invoices, materials, payrolls, records of personnel, etc. (sec. 12). The contract also specifies that the City will only pay for completed work and services actually rendered (sec. 4), not estimates. These are standard requirements for nearly all City of Everett professional services contracts.

In summer 2015, City staff discovered two instances where Videri had billed the City for expenses not yet incurred, including one professional membership that was billed to the City in February 2015 but was not paid to the membership organization until October 2015.

In June 2015, Sean invoiced the City for a large amount of Facebook advertising that had not yet been purchased. In accordance with the professional services contract, which allows payment only for expenses actually incurred, the City did not pay the invoice, and asked Sean for additional documentation in order to resolve accounting inconsistencies (see July 8, 2015 email from Carol Thomas). Sean provided screenshots and word documents, but to date has not provided the original documentation that was requested by the City per the terms of the Videri contract.

As Sean admits in his recent online statement, he “did a poor job of keeping up with Facebook invoicing” and he sometimes “estimated ad expenses.” He also states that he didn’t keep several ads and related documentation.

Unfortunately, the terms of the contract required that the company’s invoicing comply with City accounting practices and when Sean did not provide the supporting documentation that the City requested, the City terminated the Videri contract on July 21, 2015. In keeping with state requirements, the City also referred the matter to the Everett Police Department and the State Auditor’s Office.

The City continued to communicate with Sean in a good faith effort to resolve outstanding invoices and issues, even after the contract had been terminated. Economic Development Director Lanie McMullin met with Sean on two occasions in an attempt to reach a resolution. On Aug. 27, 2015, the City sent a second certified letter outlining follow-up items and responding to Sean’s claims. On Sept. 28, 2015, Carol Thomas reiterated the outstanding issues in an email, and invited Sean to meet with City finance staff. On Oct. 8, 2015, City finance staff met with Sean to discuss the required documentation. He cut the meeting short after just a few minutes and left without providing the records. City finance staff continued to communicate with Sean via email through December 2015.

We appreciate the work that Sean did to promote Everett events and businesses; in fact, City staff often recommended Sean to other organizations interested in increasing their marketing efforts. However, the City must comply with local and state financial reporting requirements, and when Sean chose not to cooperate with the requirements of his contract, we could not continue our contractual relationship.

Meghan Pembroke
Communications Director
City of Everett

Of the total value of the contract worth $475,000.00, the City of Everett tells MyEverettNews.com it has paid $352,410.00 as follows…
2012 – $58,652.00
2013 – $121,808.00
2014 – $110,958.00
2015 – $60,992.00

You can see the initial email documentation provided to MyEverettNews.com here. Meghan Pembroke from the City of Everett tells MyEverettNews.com they believe they have adequate documentation for invoices prior to 2014.

91 pages of contract and emails from City of Everett regading Experience Everett

We’ll provide further documentation as we receive it.




About myeverettnews

My Everett News is a hyperlocal news website featuring breaking news and events in Everett, WA. We also cover City of Everett information and items of interest to those who live and work in Everett. It's written by Leland Dart a former Snohomish County based radio reporter born and raised in Everett.

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7 Responses to “After $352,410.00 Paid Over 4 Years, Billing Battle Rages Over Experience Everett”

  1. leanne Says:

    $350k over almost 4 years for two contact employees plus a variety of other contractors = approx. $40-50k each per year for two people. That does not sound excessive to me.

    This group put on the Food Truck Festival, The Beer Festival, and The Bubble Run, along with doing a bunch of other marketing for the city. Last year those 3 events alone drew 25k people to Everett.

    Their Facebook page has 14k fans, and they posted almost daily about cool stuff going on in Everett. Check out the recent comments – clearly they made a positive impact on the city.

    The outcome is unfortunate, but it seems like money very well spent to me.

  2. Eleanore Says:

    I have read the story and still don’t understand what this company was and what it actually did for the city =/

  3. Jason Says:

    I feel obligated to share that my Everett news seems to be a one man band. The information about Experience Everett in this article is also available on the business owners website and the financial records are publicly available.

    Appreciate what we have, or volunteer to help! Many communities have to rely on their local, for profit, newspaper.

    Thank you for what you do MEN!

  4. Anonymous Says:

    A Boeing plant tour or Allen’s WWII aircraft collection might well be the only tourist draws to Everett. That’ll be $350,000, please.

  5. Aaron Says:

    While I appreciate the article considering the source and funding….There are invoices to review and people to interview with pointed questions based on actual records. I guess I’m seeking more rigorous journalism rather than cursory reviews.

  6. Underwood856 Says:

    So let me get this straight? The city thinks he owes approximately $15k, and he thinks the city owes him approximately $15k? Sounds like a wash.

    On an unrelated note, didn’t the city spend $5k for some fancy designer to basically steal a copywrited logo that they now can’t use?

    Who are these jokers that are running this town? Maybe if they spent more time on things that actually matter, we wouldn’t have a ridiculous homelessness issue, businesses that are dying (did ya see that Trinity Lutheran College is closing after just a couple years downtown?), and we wouldn’t need to sacrifice public safety (people are LITERALLY dying in fires every week lately) by closing fire stations. Maybe there’s more important things to worry about? Just sayin.