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Council delays decision on utilities audits

By Staff | Aug 8, 2011

City Council postponed a decision to shift the focus of a previously approved utilities audit after deciding it needed more time to discuss its options.

Mayor John Sullivan was looking to make the shift after the city’s utilities director found what he described as a high number of change orders for both the North Reverse Osmosis Plant and the Everest Water Plant during their construction.

Council previously approved spending $200,000 on two audits, aimed at the Southwest 6/7 and North 18 portions of the utilities expansion project, awarding the money to firms R.L. Townsend and Associates and Kessler International.

Council will now decide Sept. 12 whether or not to keep its sights set on the UEP, or one of the two water plants. Focusing on the Everest Plant would likely cost money, while investigating the North RO Plant would fall under the scope of the previously approved $200,000

Sullivan said the purpose of shifting the focus is to see if the city was overcharged and could recoup any funds.

“We feel we’ll be able to harvest more money from this we don’t know if the city should have paid on some of those change orders or not,” the mayor said.

It is important to find out if the contract was properly fulfilled, Sullivan added, saying records on the two water plant projects might be more readily available because they are newer than the either of the previously highlighted utilities audits.

Jeff Pearson, the city’s utilities director, said there are “volumes” of change orders numbering in the hundreds, including warranty items and design errors. There were 1,157 such change orders, Pearson said, spread over both water plants.

It appears the city paid for the design changes as the project kept moving forward, a format he said he is not familiar with.

“When you pay for a project once you normally don’t pay again for contingency,” Pearson said.

Councilmember Bill Deile said there were essentially three separate audits competing for the earmarked funds and council would likely be better informed if Pearson were allowed the four weeks to further investigate his discovery.

“It would be easier for us to make the right decision if we had more data in front of us,” Deile said.

Council hopes that monies recouped from the first audit – whichever it turns out to be – will help to fund the remaining audits moving forward.

“If we get a good enough return on this then we can proceed with more audits,” the mayor said.