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City Auditor examines WTP4 construction manager’s history

Tuesday, August 16, 2011 by Michael Kanin

The City of Austin‘s City Auditor’s office is taking a look at the firm in charge of Austin‘s Water Treatment Plant 4 (WTP4) project.


At the request of Council Member Bill Spelman, audit staff examined an audit performed by City of New Orleans Inspector General Edouard Quatrevaux of work performed by MWH, the WTP4 Construction Manager at Risk. According to Auditor Kenneth Mory, his office concluded, “what happened in New Orleans was not relevant to what’s happening in the City of Austin.”


MWH also managed a utilities expansion effort in Cape Coral, Fla., and Mory said he expects to complete a study of problems there in the coming weeks.


That news came as the City Council’s Audit and Finance Committee met to discuss the auditor’s involvement in the cost evaluation of the treatment plant project that aims to settle the question of just how much it will cost to mothball the facility for five or ten years. Mayor Pro Tem Sheryl Cole, who chairs the committee, told her colleagues that she believed the ongoing conversation was beneficial.


“I know that there is a considerable amount of discussion in the community that no amount of information is going to persuade one side or the other because their heels are dug in,” she said. “Frankly, I just don’t believe that.”


Still, Council Member Laura Morrison pointed out that, even if the auditor produces a set of figures that could aid the Council with a decision about whether the expense of halting the facility is an acceptable risk, each Council member would have a different read of those numbers. “Whatever number you come up with, it may mean different things to different people,” she said.


Morrison is a steady opponent of the facility.


Both the New Orleans question and the Cape Coral expansion effort found their respective ways into a letter signed by four very vocal members of the anti-plant movement. In the letter, Austin Sierra Club Vice Chair Roy Waley, Save Our Springs Executive Director Bill Bunch, and Sharon Blythe and Ted Moorman from the Stop the Shafts group ask Council members to “postpone further work” on the facility “until there is a complete and independent audit of Austin Water Utility and MWH’s management and construction of the project.”


In addressing the Council Monday, Bunch pointed to the Cape Coral project and the fact that the same MWH official who manages Austin‘s treatment plant effort also ran the show in Florida. “There were systemic problems with hiding information, over-billing, and billing for things that were not allowed to be billed…to the city,” he said.


However, an audit of the Cape Coral project performed by the forensic accounting firm of Kessler International seems to indicate that the problems with that effort were more local in nature. It’s concluding “Recommendations” section begins by noting that the firm “encountered issues that it believes require systematic reform within the city.”


The report cites a lack of diligence on the part of Cape Coral officials in “monitoring vendors and accurately responding to citizen complaints,” and continues on to point out specific problems with that city’s Public Works and Auditor departments.


In a statement that could be used as ammunition for both sides of the debate in Austin, the report’s authors also question whether the City of Cape Coral was capable of the oversight necessary to turn complete management of a project over to one contractor.


The Austin Water Utility elected to move forward with the construction manager at risk method of project management. That process allows the city to appoint a private company as manager to directly execute the completion of a project. However, utility officials have control over the ultimate decisions.


The Austin City Council’s bulk award of over $300 million in funds to complete work on the plant effectively ended Council discretion over individual contracts.


Council Members expect to receive a written report on the costs of mothballing the project from CDM Engineering on Thursday but the item is not on the Council agenda.


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