Category Archives: Consumer issues

Is it wrong for local government to save money by using out-of-state vendors?

12 Replies

I flagged this comment when it was posted on the “Next Door” website.

Just got our property tax bill from City /county of Honolulu and it went up again . That was upsetting , but I decided this year to put it on our credit card so I could get flight points. Our grandkids love to visit and flights are so expensive.! So I call the number on the back and a nice man informs me that it would cost me 76.00$ to put it on the credit card. Even more annoying was , he was working in Texas because the city outsources the payments. So we don’t have a bill paying service in our own state? They can’t give local people the job here? The county can’t set up a service here so more of our young people can stay here to work? So next time I hear how the state is concerned about losing our young workers, they should look at their own policies.

It seems like a fair point.

But one comment made a pretty good point in response.

it is not simply a matter of hiring people to do jobs. it takes special software and interfaces to deal with the credit card companies, all kinds of computer security updates and controls, and these are neither inexpensive to install for a big government process, nor cheap to maintain. There are service companies that specialize in providing that service and they are more cost effective than trying to do it “in house”. The processing fee is a pass through from the credit card processors, part of which gets rebated to people, like the original poster, who earn “flight miles” on their cards. Using an “echeck” is only a $2 or $3 fee or else, the check can be mailed by “snail mail” at no extra charge.

So it may be that setting up an operation of that kind in Hawaii, with its relatively small population coupled with high costs, just isn’t feasible, even if there were “buy local” preferences in place.

The Institute for Local Self-Reliance has a good discussion of local purchasing preferences that have been adopted by many state and local governments.

Here’s an excerpt:

Local governments spend a lot of money, and their procurement and contracting policies can be important mechanisms for advancing other public aims. Many cities, counties, and states give a preference to local businesses in their procurement decisions as a means of supporting and growing their local economies.

At least 45 states, plus the District of Columbia, have procurement policies designed to give a preference to businesses that meet certain characteristics, such as those that are owned by veterans, pay certain wages, use environmentally sustainable practices, or manufacture within the state. Of these, about half have adopted an explicit preference for businesses that are small and/or local. In addition, more than thirty states have policies aimed at steering purchasing to minority- and women-owned businesses.

Looking beyond state governments, large numbers of counties, cities, and towns have procurement policies of their own.

These policies vary considerably. Some apply broadly, while others focus on construction contracts, others on goods and services, and others only in certain narrow situations. Some are absolute preferences, or more commonly, percentage preferences. These say that if a company meets certain qualifications, it doesn’t have to have the lowest bid in order to win a contract, just be within a certain percentage—usually 5 percent, but as high as 15 percent—of the lowest bid.

I couldn’t find a concise description of preferences used by state and counties in Hawaii.

State law does have preferences for certain kinds of “made in Hawaii” products.

A Hawaii product requires over fifty per cent Hawaii input towards the total cost of the product for:

(1) Class I products mined, excavated, produced, manufactured, in the State; or

(2) Class II products are agricultural, aquacultural, horticultural, silvicultural, floricultural, or livestock product raised, grown, or harvested in the State.

Are there others? And are there legal limits? When does the idea of competitive bidding to create a level playing field give way to specific preferences?

Interesting issues.

Condos aren’t unique in limiting powers of individual board members

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Civil Beat’s continuing coverage of condominium governance issues is important, but I’m afraid the latest story gives far too much credence to a conspiratorial view of property management companies and condo boards (“Oahu Condo Board Members Feel ‘Muzzled’ By Management Companies“).

The story begins by reciting complaints from a newly elected board member at a Waikiki condominium who says she was told that it wasn’t proper for a board member to be contacting vendors directly with questions, or attempting “something as simple as attending to a clogged trash chute….”

She complains that the condo’s property manager explained she “was a board member only during meetings,” and she didn’t like it.

And the story goes on to give credence to the view that limiting the powers of individual board members is somehow unusual and suspect, and an abuse of the power held by management companies.

But there’s nothing unusual about the view that power is held by the board of directors as a whole, and not by its individual members. In this respect, condo boards are the same as public boards and commissions, or nonprofit organizations, that are guided by a board of directors.

It is generally the case that boards set policy, while those policies are implemented by employees or contractors who wield powers delegated to them by the boards.

All condo by-laws generally have similar legal descriptions of the powers of their boards.

Here’s a quote from the by-laws of a condo where I served several terms as president of the board of directors.

Section 2. Powers. The Board of Directors shall have all powers necessary for the administration of the affairs of the Association and may do all such acts and things therefor as are not by law, the Declaration or these By-Laws directed to be exercised or done only by the apartment owners. Each director shall owe the Association a fiduciary duty in the performance of such director’s responsibilities.

Note that it is the board of directors, as a whole, that has the power to administer the affairs on behalf of their Association of Apartment Owners, or AOAO. Individual board members are not empowered to act on their own, unless on specific matters that the board may delegate. And the powers and responsibilities of board officers are also spelled out in the by-laws.

This is a similar description from a publication of the state Real Estate Commission (“Condominium Property Regimes: Board Members Powers and Duties“).

The association is governed by a board of directors elected by the unit owners to represent them in governing and managing the condominium (§514B-106(a)). The board’s primary responsibility is the establishment of policies governing the operations of the association. The board is then responsible for delegating authority to implement the policies it adopts and for the overall supervision of the association’s officers, employees, and agents.

The idea is simple. The board sets policy, and then delegates authority to implement policies to its “officers, employees, and agents.”

Board members may disagree with particular board decisions, and can ask that those disagreements be reflected in meeting minutes.

“However, once a decision is made by the board, it is the decision of the board as a whole,” according to the Real Estate Commission publication.

This is no different from the way public boards and commissions work. The board makes decisions and sets policy. Individual board members simply do not have the authority to insert themselves directly into operational matters unless authorized by the board.

In my view the story conflates two very different things. Advising board members, or individual owners, that they shouldn’t discuss building issues or share information with other owners or directors is, as attorney Terry Revere is quoted as saying, “a ridiculous prior restraint on free speech.”

However, these rogue boards are not the norm. Advising board members that they exceed their proper board roles when trying to actively insert themselves in condo operations, such as interrogating contractors and vendors, or trying to make their own repairs to common facilities, is is actually proper advice, both legally and for the smooth functioning of the organizations. It’s simply business as usual in both public boards and private organizations like condominium associations or nonprofit corporations.

About those consumer surveys

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You know the ones I’m talking about. You buy something, or use a service, and not long afterwards a survey appears in your email asking for comments about your experience.

“We want to hear from you!,” or “Let us know about your experience with x,y, or z product or service.”

I typically make an attempt to respond to these surveys, hoping that the company’s might actually pay attention to critical feedback.

But here comes one of my pet peeves: About half the time, these poorly worded surveys include questions with multiple choice answers that simply don’t apply to my experience. When that happens, often with a poorly thought out force-choice question, I just leave that question blank.

And then it happens.

An error message appears sending me back to the unanswered question with a “slap on the wrist” kind of message.

“A response is required,” one of these snapped at me this afternoon.

Oh, really? Required? You’ve got to be kidding. Here I go out of my way to answer at least a dozen questions, and you tell me that a response is “required” to the one I declined to answer? Seriously?

A response is required, you say? My answer is simple. D-E-L-E-T-E.

This happens far too often. Take note, marketing execs. You’re losing customer goodwill every time.

Less than glowing reviews for Homeaglow house cleaning service

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If you happen to turn on your tv anytime during the day, you’ve likely seen the ads for Homeaglow, a company promising to get your whole house sparking clean for just $19, yes, $19. They’ll clean everything, even do your laundry, according to the broadcast ad.

After seeing the ad repeating endlessly on cable channels, I decided to check it out.

Homeaglow Inc is based in Austin, Texas, according to its initial business registration filing in Hawaii.

Corporate officers are listed as Aaron Cheung, CEO/Direcor, and Xiao Wei Chen, Secretary/Director.

On closer inspection, Homeaglow is setting itself up to be the Uber or Lyft of house cleaning.

The company “is a digital application-based company that facilitates ‘on-demand’ home cleaning services. Individuals who perform cleaning jobs for third parties sign up to be independent contractor cleaners through the Platform,” according to a declaration filed by Cheung in a class-action lawsuit filed earlier this year in California.

In other words, the company doesn’t clean houses. It owns and operates a digital platform that schedules “independent contractors” who sign up to offer cleaning services as part of its gig economy.

The privately-held company doesn’t have to file public reports, but “between December 5, 2018 and January 5, 2023, approximately 5,715 individuals performed approximately 129,910 cleaning jobs, performed on approximately 113,088 aggregated days, in the state of California for third parties using the Platform,” court records show.

A LinkedIn profile of someone who joined the company last year added more information about the company.

Fast forward 10 months, we’ve grown, we’re now at >$100m GMV, bootstrapped and net income profitable. We’re still a small company, with 9 in HQ and hundreds of colleagues in the Philippines. We’re now looking for employee #10, a growth PM who loves to make huge business impact and play in a large playground. Ideally, this PM wants to own a lot and can run independently.

But the available online reviews of the company’s services are quite critical, and point to several key problems on the ground, where cleaning services are actually performed. Basically, it’s another example of the familiar adage–If it sounds too good to be true, it probably is. And in this case, there are now mountains of negative reviews panning the service, many calling it a scam.

I’ll just browse through a few online complaints.

There are more than 80 complaints that have been lodged with the Better Business Bureau in Austin, where the company is headquartered, which gives it an “F” rating.

Here’s a typical complaint.

…falsely advertises and misleads customers with $19 home cleaning. What they leave out is that price is a lure to mislead customers to get trapped in a 6 month membership in addition to fees that they say they charge at their discretion to pay for their business expenses on top of and beyond the membership and actual cleaning costs. If you request to discontinue the monthly charges they will only allow you to do so with a big fee.

Some sound more desperate.

Homeaglow: I have been trying to cancel with this company for months. I have not been using any services yet they continue to charge my credit card $49 dollar monthly. I even switched my card info and somehow they were able to charge my new card. This company if fraudulent and stealing from many people daily. Please stop them!

Indeed.com collects complaints from the perspective of cleaners who sign up with the company. Here are a couple of samples.

Clients rarely tip, you have to waste money on your vehicle, gas and cleaning products for usually 20/hr. On top of that the clients was promised a whole house clean in 2 hours. They now have a shady deal where people sign up for a membership and pay for the cleaning on top of that so the client can’t choose to just hire me directly instead. No help from Home-a-glow except lies. They’ve sent me into BIOHAZARD cleaning jobs before where I would get in trouble if I left. Would never work for them again.

***

They “give” you tons of jobs that are never available to anyone.
It says job not available anymore
Then they will text you to say they tried calling when they never have. Just don’t do it
They have a bad reputation & employees as well as customers have nothing good to say

Eighty-four percent of the reviews on Trustpilot.com are for 1-star out of five, and some reviewers sound like they would have preferred an even lower rating.

This service is not worth the money! I only wanted to try the service first, but was forced to become a member. If you cancel prior to 6 months, you are charged $200 for the first cleaning for $19 originally.
The monthly service fee (which provides NO SERVICE!) was VERY MISLEADING appears to be included in the cost of the cleaning is actually an additional charge. But, once you book, you learn that you have to pay that membership fee monthly! SO, any savings from the “discounts” offered, are eaten up by the monthly fee. AND they also charge a $15 service fee per cleaning??? There is NO options to speak with a customer service representative. So, the monthly charge and service fee serves no purpose, it’s just an empty charge.

Here’s one review that was somewhat “balanced.”

The service provider was excellent. They did an excellent job. They were on time and I feel that I received what I paid for. But beware! In order to get their discounted rate, even the first time, you are signing up for a club that cost $50 a month and if you use the service once then you are locked into the club for six months. If you cancel your $20-$40 introductory fee would then be changed to upwards of $200. I paid for four hours of service for $39 which was a great deal. However, if I don’t stay with their club then I will be paying an additional $210 for that first service plus other fees. They are deceptive. And you will NEVER REACH A LIVE CUSTOMER SERVICE REPRESENTATIVE.

A review at 99Consumer put the blame on those gullible enough to believe that you can get your house cleaned for $19.

HONESTLY!! All the individuals here who have expressed disappointment and disapproval of the company, especially those who are upset about the payments and fees they charge after you try to cancel, I say you DESERVE IT! You deserve to be scammed every bit of the way. Why would you in your ever right mind listen to a commercial that only wants to “charge” you $19 for your first cleaning. Like really think about it. Does that sound like a company who is even willing to pay their workers well? Does that sound like a company who is going to prioritize anyone but the company, they literally told you to book a cleaning for ONLY $19 !!!! That’s outrageous. I would never try to have someone come and clean the place that I’m suppose to Value and call HOME the place Wher I lay my head and get peace of mind. I should only pay someone $19 I don’t care I value the place I live in too much to stoop that low, or try to get a lowball offer to clean my place, y’all deserve it. Good for you. Sorry but Stop supporting those type of company’s, most of you are adults but your really need to grow up and stop being so sheeply.

And, yes, it appears the company is active in Hawaii. It was registered with the state in August 2022. And the Homeaglow website says their service is available in Hawaii: “Yes, 235 people near 96816 signed up for Homeaglow in the last 30 days!”

But quite obviously, this is a classic case of “Buyer, Beware!”