Late payments at the St. Louis airport nearly brought down business

ST. LOUIS — St. Louis Lambert International Airport came perilously close last month to greeting travelers with overflowing trash cans and dirty toilets.

The airport failed to pay its cleaning company, Regency Enterprises Services, on time. And the owner of the Regency, Charles Brown, was days away from missing wages.

“If I hadn’t gotten a check by that Wednesday, we wouldn’t have had anybody on Friday morning,” Brown said in an interview.

Brown had already maxed out his lines of credit and was hemorrhaging money in interest costs to pay about 130 custodians hired by his firm to keep the airport clean under Regency’s three-year, $30 million contract.

Brown was desperate, so he and his attorney told the city they wanted out. They gave their 120-day notice to terminate the contract on February 1.

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This caught the attention of the town hall. He met with Lambert Brass and officials from the office of St. Louis Mayor Tishaura O. Jones, he said. City officials fought back and got his monthly bill paid that Wednesday. Brown made payroll and custodians showed up to work cleaning up the city-owned airport that Friday.

“When I went to them last month, I had stretched every resource I had,” Brown said. “It would have put me out of business if they hadn’t made that payment.”

Regency isn’t the only artist to receive a delay. Lambert, one of the city’s largest operations, is scrambling to catch up on a backlog of vendor invoices as it struggles to sync its new accounting system with City Hall’s.

The payment delays at Lambert come as similar problems related to staff turnover and a new accounting system in the city’s independent finance department — run by St. Louis Comptroller-elect Darlene Greene — spread across departments.

Lambert’s problems, while related, are compounded by the airport’s decision to migrate to its own accounting and procurement system using Microsoft Dynamics 365, rather than the Oracle platform that the comptroller’s office and the rest of City Hall began using in March 2022 Mr.

And while the airport leader said Regency’s payment delays were related to other factors, the issue surfaced as Lambert officials were busy dealing with issues related to the new payment systems.

Airport director Rhonda Hamm-Niebrugge admitted that the airport has been taking longer to pay its suppliers since it started using Microsoft Dynamics in July. But she said airport officials are coming in on weekends and are “all set” to integrate Dynamics with the city’s new Oracle payment system, a process she hopes to complete by early next year.

“We know there are some very disappointed suppliers because it took a while,” Hamm-Niebrugge said in an interview. We hope that our Microsoft Dynamics integration into Oracle is coming in the near future. There are just a few bugs that they are still working on.”

“Pointing fingers at each other”

The new payment systems — known in business jargon as Enterprise Resource Planningor ERP — replace the ones the airport and city hall have used for decades.

Although the new systems are upgrades from the legacy programs the city and airport previously used, their implementation is causing headaches for vendors who could reconsider doing business with the city again, potentially reducing competition and raising costs.

Not only must Lambert employees and their finance staff review and approve vendor invoices, but the comptroller’s office at City Hall must also approve them. This office has been working on the issues of its new Oracle accounting system since it was switched on in March 2022.

Processing of invoices has been delayed both in Lambert’s new system and when they reach the comptroller’s office, Hamm-Niebrugge said.

“It’s both, but I can’t put the blame entirely on them,” she said. “We have our own.”

Regency’s Brown said some of his invoices were delayed by two months or more. The airport told him the downtown accounting department — Comptroller Greene’s office — wasn’t processing his invoices because the airport’s accounting staff had to reconcile clock strikes with his employees. The center told him no, all the airport had to do was sign that his company was actually operating and they would approve it.

“Everybody was pointing fingers at each other,” Brown said.

Hamm-Niebruegge said the slow payments to Regency were not solely related to the new payment systems. She said most of the problem with Regency is that the company upgraded its own time clock system, and that doesn’t sync with how the airport tracks Regency employees’ hours and pays the company’s invoices.

“All of this happened at the same time that the Microsoft Dynamics crossover happened,” Hamm-Niebrugge said. “It wasn’t a pure Microsoft Dynamics crossover. There were other things.’

Because of Regency’s new time clock system, airport staff had to go through Regency employees “name by name” to confirm their check-ins, which “took our staff 40 hours a week to invoice,” Hamm-Niebrugge said.

“That was fixed and now his bills are being paid consistently,” she said. “It was disappointing for them and it was disappointing for us.”

Still, other vendors’ invoices have been delayed weeks to a month beyond the airport’s usual 30- to 45-day payment cycle, she said. The problem is often that Lambert’s accounting staff don’t realize that invoices are delayed while they and their consultants work to migrate data to the Dynamics system.

“If someone hasn’t paid until they raise their hand, we don’t always know,” Hamm-Niebrugge said.

The reason the airport uses a different system than City Hall, which still has to approve its payments, is because of timing, Hamm-Niebrugge said. Lambert submitted its request for proposals for a new accounting system to the city, which issued its RFP for the new system in 2019.

“We came out before the city made a decision on whether they were going to update,” she said. “Our system was internal and dying. We were extremely concerned as we did not know the exact chronology of the city. We just had to do something because we felt ours would die any day.

She said the airport had already chosen Dynamics when the city decided to use Oracle in 2020. Lambert then had to delay the adoption of Microsoft Dynamics to wait for the city to implement Oracle, which is why the airport didn’t turn on its new system until July.

Despite waiting for the city to switch to Oracle, Hamm-Niebruegge said Lambert still wants to use its own system.

“The city’s needs are probably a little different than ours,” she said.

Regency’s Brown said he is waiting to see if Lambert continues to pay him on time. He has a pending invoice for his services in October that he needs before the end of the month. And he wants to renegotiate some protections in his contract and have the city heal him for the interest costs he incurred borrowing money to pay salaries.

“I can’t go through this again; I’m not going to be able to go through that again,” Brown said. “My plan is to extend the contract if they pay on time. If they miss any payment on time between now and February 1st, we will be gone on February 1st.”

The St. Louis comptroller said the previous mayor wanted a new accounting system.  But she voted for it.

Explore the history of Tower Grove Park, which was founded on October 20, 1868 and was a gift from the city of St. Louis.

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