News Archive
2008 Articles
2007 Articles
2006 Articles
2005 Articles
2004 Articles
2003 Articles
2002 Articles
2001 Articles
2000 Articles
1999 Articles
Past Articles
|
|
The News Press
February 28, 2007
ATTORNEY GENERAL FAULTS CAPE CORAL UTILITIES PROJECT
Bidding may have violated state law, opinion finds
The City of Cape Coral may have violated a state law when it negotiated two contracts for major utilities projects, Florida's attorney general concluded in an opinion released on Tuesday.
The attorney general's report said the city was wrong to negotiate the price for complex utilities contracts in phases rather than all at once.
The findings could have far-reaching implications that could affect how future utilities projects are bid, how lawsuits are resolved, how quickly the utilities expansion program continues and how much confidence citizens have in the city's government.
"Any time the attorney general finds fault in the contractual process it doesn't argue well for what they're doing," said resident Bill Diele, who has a utilities-related lawsuit pending against the city.
Mayor Eric Feichthaler said the council needs to take the attorney general's opinion seriously.
"The big question is has the city done anything wrong. If the city has done anything incorrect, we need to correct it," Feichthaler said.
Councilman Tim Day, who has called for a new way to bid utilities projects, wants to talk about the issues at next Monday's council meeting.
"I don't know if anybody is going to step up to the plate," said Day.
Feichthaler said the issue will be on Monday's agenda.
He said he wonders whether the city could bid design work for a project separately and bid construction later.
Construction costs depend on the design, Feichthaler said.
First impact
Residents who live in areas where projects to install water, sewer and irrigation lines are pending, known as Southwest 6 and 7, are likely to be the first to feel the impact of any changes prompted by the attorney general's nonbinding report, Feichthaler said.
Work on the next project in line, called Southwest 5, may be too far along, he said.
The council approved the design phase of Southwest 6-7 on Feb. 19. Before it could make any changes, the council would have to calculate the costs of killing a contract with a firm called MWH Americas to manage the construction phase, the mayor said.
Work is under way in Southwest 4, where residents are paying $17,992 for a typical two-lot building site to receive the utilities lines.
Audits critical
Three audits have criticized how the city is managing the program.
One of those is the 2006 state audit that led to the request for an attorney general's opinion.
A separate audit by Kessler & Associates has led to a U.S. Department of Justice investigation into possible bid rigging in three prior projects.
The third audit, by auditor R.L. Townsend in 2005, said the city was paying too much to run the expansion program. City officials rejected most of his findings.
Attorney General Bill McCollum's opinion on Tuesday addressed an issue raised in the state audit concerning utilities operations between Oct. 1, 2000, and March 31, 2005.
Projects in areas known as Southwest 1, 2, 3 and along Pine Island Road were under construction at the time.
"Accordingly, it is my opinion that separately negotiating each phase of a multiphase project that has been awarded to a construction manager at risk or program manager at risk does not comply with the plain language or intent of section 287.055(9)(c), Florida Statutes," McCollum concluded in his five-page opinion.
City Manager Stewart released a 220-word statement that largely ignored the main issue of how contracts are negotiated.
He defended the city's method of managing projects and devoted just one sentence to the issue of negotiating prices in phases.
"This opinion does not state that the construction manager at risk method is prohibited by state statutes. Nor does it render our existing contracts null and void," Stewart wrote.
The state audit said negotiating each project phase separately limits the city's ability to determine total estimated cost.
The city's response was that it could better ensure a competitive and fair price for each phase. Contractors also were more likely to ask for more money since it's hard to predict labor and material costs five years in advance, officials said.
State impact possible
Stewart said the overall impact of Tuesday's report is unclear and the city's staff is standing by to help the council determine how to proceed.
The impact could stretch beyond Cape Coral, so one option might be to ask the Legislature to clarify the intent of the statutes.
Day said the attorney general appears to have researched the intent of the statute.
"He's clear. It's very short, and he's clear," Day said of the opinion.
Going to the Legislature could take another year, Day said.
The lawsuits
The city is involved in at least four lawsuits related to the utilities projects, and the attorney general's opinion could have an impact on them.
"People have a shot at starting a class-action suit against the city. Some doors have been blown off here," said John Sullivan, one of those who sued. He founded the Cape Coral Minutemen, a group of residents devoted to lowering the costs of the utilities projects.
McCollum's opinion just raises more questions, Sullivan said.
"Are these contracts illegal? If they are, what recourse do citizens have? Are our public officials responsible for this?
"This is just going to shore up those lawsuits," Sullivan said.
Author - Don Ruane
|
|
