News-Press.com

December 12, 2007

Cape utility auditor may get new look at books

Original report triggered storm of controversy

An auditor who in 2006 kicked off a combative debate about Cape Coral’s utility expansion project wants to take a fresh look at the books.

Auditor Michael Kessler, president and CEO of Kessler International, said he would be “more than willing” to do a new audit if asked by the city.

“The truth is the truth, and it should be made public,” Kessler told The News-Press.

Mayor Pro Tem Tim Day called Monday night for Kessler to be rehired to complete a new audit.

Kessler’s audit of the water and sewer lines project, first released on news-press.com, started a flurry of activity that resulted in several audits, lawsuits, a work stoppage, reduction in assessment costs, resident complaints and an intensive online and print investigation by The News-Press.

Tuesday, Kessler said he would gladly sign on for a new review at a cost that would be determined. Day learned through The News-Press of Kessler’s response.

“I haven’t talked to him recently,” Day said. “I talked to him when all the craziness was going on. One of my first questions was if he would come back, but he was so upset ... he wouldn’t commit to anything. I’m glad to hear he is not throwing the possibility out.”

Kessler’s final report on July 17, 2006, made claims of possible bid rigging; inflated profit margins among contractors; lack of cooperation in obtaining information among city staff and contractor Montgomery, Watson and Harza, and poor record-keeping by the city.

The city has denied those claims. City Manager Terry Stewart said the report contained “innuendo and allegations.”

After Monday’s meeting, Stewart said: “I think I have said all I have to say about Michael Kessler.”

The report’s release resulted in an immediate, though short-lived, work stoppage on the expansion project and triggered a federal investigation.

Residents lashed out against the project, including a lawsuit filed by current District 3 Councilman Bill Deile regarding an assessment on his own home. That suit remains in the courts.

Since the Kessler report, the city found ways to reduce costs for water, irrigation and sewer lines, from a high of $22,000 to $17,992 in Southwest 4. The price for the most recent assessment area, Southwest 5, dropped to $13,690.

The report left lingering concerns among residents about the legality of the expansion.

“I wonder how they got their bidders,” said Arthur Lyman, who owns a home on Southwest 1st Avenue. “I would hope they do field bidding. But there is always that question.”

Kessler was paid $130,000 in 2006 to review the city’s Southwest 1, 2 and 3 projects that are part of a $1 billion citywide utility expansion done through MWH.

But city officials say all the report did was seed ill will. The report incited scorching criticism — especially after Kessler reported to council on July 24, but abruptly left to catch a plane, saying he did not have time to answer council questions. Later, he did say he would return.

With the denials of Kessler’s claims, Stewart said staff provided him with all the information he requested.

Officials at MWH said the report was “flawed” and “inflammatory.”

Kessler said he is not surprised.

“People who are guilty usually throw stones,” he said. “They can’t discredit the information so they try and discredit the messenger.”

Day said the information redacted from reports provided for the audit made it impossible for Kessler to complete his job.

Kessler said the circumstances of his first audit were unusual.

“Normally an auditor has full reign on records,” Kessler said. “It is highly unusual to have any redacted records from a contractor that is getting paid by the city and has audit clauses in the contract.”

Day said if Kessler is brought back, he needs access to un-redacted reports.

MWH Constructors president Joe Adams said his company would cooperate with any review, within the parameters outlined by its contact.

“As MWH has done in previous audits of the Utilities Extension Program, the company will cooperate with any additional audits to the fullest extent required under contract by the city of Cape Coral,” Adams said in a prepared statement.

Without knowing exactly what the city wants from a new audit, Kessler quoted no price for his services this time, though he does expect to be paid.

Of course, any new audit would need the support of the City Council, which has a workshop scheduled on the project in January.

But while Day once stood alone in supporting the audit, the installation of five new city councilmen in November offers new opportunity.

District 2 Councilman Pete Brandt was enthusiastic about bringing Kessler back. “I don’t think he should have been run off in the first place,” Brandt said.

District 5 Councilman Eric Grill said while a new audit is justified, he wondered if Kessler was the best choice.

“I have no problems with Mr. Kessler,” he said. “But based on previous experience with MWH, city staff and Kessler’s firm, I wonder if animosity is still there. I would prefer a brand new auditor, someone who can come in with a clean slate.”

By Jacob Ogles
jogles@news-press.com