Saturday, August 25, 2007

Ratepayers pay "No receipts? No problem: Town pays CH2M Hill's bills anyway"

Still reeling from the $2.4 million costing of a single borehole strangely abandoned, Toowoomba ratepayers become aware of the excesses of CH2M Hill, their water consultants, in other places.

Water and wastewater issues in Toowoomba have never passed the "smell test" since the involvement of CH2M Hill. This article gives some insights into another city's issues with the firm Toowoomba has paid over $500,000 in fees for no tangible return.

No receipts? No problem: Town pays company's bills anyway
Mooresville Tribune
Wednesday, August 22, 2007

While Mooresville taxpayers wrestle with rising utility bills, largely to pay for the expansion of the town’s wastewater treatment plant, the company hired to design the project has been paid more than $150,000 for expenses ranging from airline tickets and $176 hotel rooms to chewing gum and $4.65 Starbucks coffees.

Many of the expenses turned in by the company, CH2M Hill, had no receipts and non-itemized receipts, but the town reimbursed them anyway, a Tribune examination shows.

Town Manager Jamie Justice and Engineering Supervisor Tonia Wimberly, who authorized payment of the expenses, said they are all “reasonable, customary travel expenses.”

Town Commissioner Chris Carney disagrees.

“It appears that CH2M Hill has lived a country-club lifestyle on the Town of Mooresville’s bank account,” he said this week.All commissioners have been asked by the Tribune to respond to the expenses by late this week.

After learning of the expenses, Carney – who has consistently spoken out and voted against the town’s hiring of CH2M Hill – said he met with Justice and Wimberly and looked through some of the company’s expenses.

“Coming from somebody who’s never built a wastewater treatment facility, I don’t know how much it costs to travel, but one would think – especially since the town touted CH2M Hill’s expertise in this field – that the firm’s employees would be more readily available and we wouldn’t have to fly them all over the country to study our facility design,” Carney said.

The town board, when it originally began negotiating with the firm in 2004, also touted CH2M Hill for being a “local firm.”

But from August 2006 to June 2007, CH2M Hill billed the town nearly $49,000 in air transportation; almost $49,000 in hotel rooms from Charlotte and Raleigh to Florida, Oregon and Ohio; three months’ rent for two Florida condominiums, each at $1,750 per month; nearly $23,000 in car rentals; about $17,000 in travel and business meals; about $3,200 in auto mileage; almost $4,000 in gas and parking and thousands more dollars in grocery-store purchases, breakfast and catered lunches for CH2M Hill’s “working meetings” (including those held in Charlotte); Starbucks coffee purchases and Brachs candy at $5.61; “cowboy cookies” at $2.99; $15 tips to hotel housekeeping and other “travel-related” expenses, such as toll fees and cab fares.

“They seem to have stayed a little more extravagantly than they should have – it does seem to be excessive,” Carney said.

"But there’s no way to sit here and really figure out what expenses you would need to travel; this may have been the way with any firm.

“But what I CAN see with layman’s eyes,” Carney said, “is that they’ve spent a lot of money that they don’t have receipts for. And we don’t pay money when they don’t have receipts.

Commissioners don’t get to do it. Town employees don’t get to do it. Why would an outside firm get to do it? That’s ridiculous. It should have never been allowed to happen, and it falls directly on the shoulders of the two people who signed off on the expenses (Wimberly and Justice).”
Carney said he has suggested to Justice that the town seek reimbursement for all the undocumented expenses that the town paid “because they don’t match our reimbursement guidelines in town policy.”

Undocumented expenses
The town’s travel policy applies to “all employees of the Town and non-Town employees on official Town business … to help ensure that public funds are expended for travel only when it serves a public purpose.” And per that policy, all employees must submit receipts for reimbursable expenses, according to the town’s director of administration and finance, Maia Setzer.

“If the employee cannot obtain a receipt (they are strongly encouraged to at least try to get a duplicate), they must write their manager a statement indicating what was purchased and whether or not the purchase was in accordance with the town’s policy,” Setzer stated.
When asked how the town handles reimbursement to a town employee who habitually (two or more times a month) turns in expenses without a receipt, Setzer said: “That has never happened.”

In addition to hundreds of undocumented meal expenditures, CH2M Hill submitted an expense for $603.04 in lodging, with a note stating the receipt was lost. Another submission from CH2M Hill stated: “Lost receipts for travel-parking & gas in the amount of $244.88.” Wimberly and Justice paid them anyway.Another CH2M Hill employee submitted to the town a handwritten note for lost lodging receipts totaling $561.77. The firm submitted a parking expense with no receipt for $22; $56.31 and $22.90 expenses with no receipt for “supplies”; an $8 expense, with no receipt, for “water plus snacks for field work” and a $2.31 expense, with no receipt, for bottled water.

One employee in particular, in one month, submitted 70 expenses – ranging from 64 cents to $36.36 – with no receipts. Those expenditures were included in a two-page itemized list of 126 meal expenses with lost receipts. Atop that list, CH2M Hill added: “Lost receipts for meals in the amount of $321.16.

These expenses are within the Town of Mooresville expense guidelines.”

The company and/or its employees added a similar disclaimer to many other expense submissions, adding that the company “does not require receipts from employees for items under $25.”

Also, despite CH2M Hill turning in several non-itemized receipts, Setzer said, “by policy, itemized receipts are required” by the town. However, if an employee cannot obtain an itemized register receipt, the town requires a hand-written itemization of purchases, she said.

CH2M Hill did not always supply a handwritten itemization on its submitted receipts. For example, a receipt from Azteca restaurant in Charlotte for $56 contains no itemization of purchases or the number of people in the party. Likewise, CH2M Hill submitted a $104.76 unitemized restaurant bill at 42nd Street Oyster Bar in Raleigh and a $94.77 charge at an undisclosed restaurant with no documentation of items purchased.

Setzer is not responsible for signing off on contract payments.Wimberly said that in the town’s original contract with CH2M Hill, CH2M Hill was allowed to follow federal standards regarding the submission of expenses without receipts for purchases under $25.

“During the initial phase of the contract,” she said, “CH2M Hill was not directed by the project manager to submit receipts per the town’s standard, instead the federal standard was used. Under the federal standard, receipts under $25 do not have to be submitted.”

Wimberly said only when the contract was amended in July 2006 did the town require CH2M Hill to produce receipts for all purchases, regardless of the amount. “When the amendment was being negotiated, the town directed CH2M Hill to begin submitting receipts per the town’s standard in addition to all other federal standards for submitting receipts.” None of that is reflected in either the original or amended contract. The contract merely states in Section 7.4 that airplane tickets, meals and lodging associated with out-of-town travel must have “prior approval of the town’s project manager.” Wimberly has been the town’s project manager since mid-2006.

CH2M Hill’s significant travel expenses began in August 2006. Wimberly acknowledged that CH2M Hill continued to submit undocumented receipts – more and less than $25 – even after the July 2006 amendment, and the town continued reimbursing them.“We were bringing the team together, and there were a bunch of new people,” she said. “They’re used to doing federal. It’s taken a while to get everybody trained. You’ll see some stumbles.”

The town’s travel policy also sets “guideline” amounts for employees to spend on meals. In-state, the guideline amount including gratuity is $7 for breakfast, $15 for lunch and $20 for dinner. Out of state, the guideline amount including gratuity is $10 for breakfast, $15 for lunch and $25 for dinner. Wimberly said CH2M Hill employees have submitted expenses for Starbucks coffees on several occasions “in lieu of breakfast.” She said she couldn’t prove through documentation – but she “remembers” – that the employees didn’t have the Starbucks coffee as well as breakfast.Actually, a $4.60 Pumpkin Latte was ordered at 2:23 p.m., according to the submitted receipts. A $3.50 Mocha frappuccino and a $4.30 peppermint mocha frappuccino were purchased at 2:27 p.m.One employee purchased four coffees, with extra shots of espresso, four days straight, totaling $4.34 a day. Those purchases were made in the morning.Meanwhile, another employee ordered a non-espresso-based coffee and a muffin for $3.34. “We can’t force people to eat healthy or eat at all,” Wimberly quipped. She said town staff is also allowed to “expense a coffee for breakfast.”The town’s travel policy also states that receipts must be turned in for meals to be reimbursed. If the cost of a meal exceeds the guidelines, a supervisor must authorize reimbursement. CH2M Hill employees have billed the town for several meals that exceed the guideline amount, including a meal on Nov. 1, 2006 at the Villa Antonio in Charlotte for $289.16. An itemized list of people who attended the dinner is not included on the receipt, but six dinners were ordered, from $23 veal saltimbocca and $26 lobster ravioli to a $36 “special”. Additionally, the bill included six “dessert plates” at $8 a piece and a $44 tip. The cost of that dinner “actually wasn’t that bad considering where it was and the amount of work that was done,” said Wimberly, adding, “and, yes, we have desserts sometimes.” CH2M Hill has also billed the town for a $27 ribeye steak, a $100.11 dinner, apparently for three people, at the Bally Hoo Grill in Gainesville, Fla. – including appetizers and $23.95 “bimini stuffed grouper” – and a $118.43 meal, including two $26 New York strip steaks, at Harper’s Restaurant in Charlotte. “Why are we feeding CH2M Hill in Charlotte?” asked Carney. “Don’t they have an office in Charlotte? We’re their customer. We paid them $4 million to do their business and for them to eat out, too? It doesn’t make sense. “If they’re working on our project, why aren’t they staying in Mooresville hotels and eating in Mooresville restaurants if they’re wanting to talk business? Who works for who here?”

Justice and Wimberly said the town provided CH2M Hill a total allotment of $282,000 to be used for “reimbursable” expenses in the overall not-to-exceed $4.374 million contract that the town awarded CH2M Hill last July for the design of the wastewater treatment plant expansion. That amount included the $520,000 that the town had previously awarded CH2M Hill to conduct the preliminary engineering report with environmental assessment (PER/EA) for the project.

When the town originally hired CH2M Hill in 2004, one reason town commissioners gave to hire the firm instead of the firm that was recommended by town experts was that CH2M Hill is a local firm.

But in addition to all the travel-related expenses, the town has paid $3,500 a month ($1,750 each) for two Florida condominiums, from April through June. Wimberly said on Friday that the town continues to pay that monthly expense.Justice said the decision to put CH2M Hill employees in condominiums, and pay their grocery bills, was a “business decision.”

He said, “It was cheaper for the rate payers” to pay for condominiums and groceries “than to put some of the design members up in hotel rooms” and pay three meals a day.Wimberly said even if the town had chosen a different firm to design the wastewater treatment plant expansion, it would be paying for the employees to travel.

CH2M Hill’s design center is in Florida, Wimberly said, which is why the design team members have been housed there since April. “No matter who we chose to do the project, it was going to be designed in another state,” she said.In addition to paying the rent, Mooresville’s sewer customers are also paying for the CH2M Hill employees’ groceries, including facial tissue, lotion, sponges, a dust pan and brush, dishwashing detergent, Healthy Choice meals, organic fruits and vegetables, various cleaners, clothes hangers and Extra Winterfresh gum.

“We could have been spending $50 a day on meals. You have to think about that,” Wimberly said.“The gum was covered in groceries. It was good for the buck-99.” When asked about the two packs of clothes hangers that the employee purchased, Wimberly said she had not seen that purchase. When the Tribune provided her with a copy of the receipt, Wimberly snickered. “A 10-pack of hangers for $1.19, with a coupon,” she said.

“We just counted that toward meals.”

Hotels CH2M Hill employees as of June 29 have billed the town nearly $49,000 in hotel stays since last August. One company official billed the town $394.24 for a two-night stay in a Westminster, Colo., hotel, including tax and breakfast. The base room charge was $176 per night.

The town’s travel policy prohibits “excess costs … or luxury accommodations and services unnecessary or unjustified in the performance of official business.” Specific to hotels, the policy states that “at a minimum, travelers are required to stay in hotels that represent the average cost” for the location in which they’re staying.Wimberly said $176 “is relatively cheap” for Westminster, Colo. “You’ve got to put into perspective the hotel rates,” she said. A quick search of Westminster, Colo. hotels on, however, showed many rooms much less expensive than $176 a night, including the Doubletree Denver-Boulder from $90 a night (the current posted rate on the company’s website is $149); the LaQuinta Inn Denver Westminster Mall from $69 a night; the Residence Inn by Marriott Denver North-Westminster from $105 per night; the Comfort Inn Northwest from $81 a night (the posted rate on the hotel’s website for a room with two queen beds is $95 a night; a room with a king-size bed and hot tub is $126) and the Springhill Suites by Marriott Denver Westminster from $99 a night. Separately, a CH2M Hill employee spent $159 ($183.25, including tax) for a one-night stay at the Charlotte Marriott Southpark. Meanwhile, many other CH2M Hill employees paid less than $95 a night at Charlotte hotels, including one for $94 a night ($106.69, including tax) and another for $78 per night ($89.90 including tax). Wimberly said the hotels in which the CH2M Hill employees stayed for $176 and $159 per night “are not luxury hotels.” She said the town, and agencies on official town business, always seeks hotels that offer government rates.

Said Carney: “The biggest problem with this whole situation is that we didn’t follow a process from the beginning that allowed for the citizens to have faith in CH2M Hill being chosen as the company to design the wastewater treatment plant facility.

“The company’s credibility has been tainted from day one, and that has called every one of its actions into question.

It certainly hasn’t been the blueprint for how you go about choosing companies for projects in Mooresville.

“Unfortunately,” Carney added, “it was a company chosen by a prior board.

The wastewater treatment plant expansion is certainly a necessity for Mooresville, so we’re having to deal with decisions made and predetermined costs that we don’t necessarily have the ability to monitor because that is handled at staff level, and we don’t have the expertise to know how much these things like travel should cost.

“The only thing we can hang our hat on is: does it pass the smell test? And this has been the problem from the beginning with this particular firm.”

The town’s engineering and utilities departments in October 2004 unanimously recommended one firm, Black & Veatch, but commissioners selected CH2M Hill.

Of the five finalist firms evaluated by town staff, CH2M Hill was ranked last by each of the evaluators, including Wimberly, who was then the town’s senior engineer.

The team also included Mooresville’s then-Director of Engineering Richard McMillan, then-Utilities Director Wilce Martin and then-Civil Engineer Derek Slocum.

The town board defended its decision by saying that a CH2M Hill project director is a Mooresville resident who worked at the wastewater treatment plant for several years.

Only later was it learned that the CH2M Hill employee and two town commissioners are long-time acquaintances and active members of the same church.

One of those commissioners chose not to seek re-election in 2005. The other, Mitch Abraham, is seeking re-election this fall.

Commissioners Danny Beaver and Thurman Houston – both who voted to hire CH2M Hill for the design last July – are also seeking re-election this year.

McMillan and Martin contended publicly – from October 2004 until Justice fired both men in February 2006 – that CH2M Hill was under-qualified and too expensive for Mooresville’s project.


Anonymous said...

That could have been and could still be Toowoomba.

Just imagine the expense claims if we let them in the door.

And with the current Council, they would have a field day. An open cheque book!

glenisd said...

Toowoomba City Councillors and the Yes voters who were all for CM2Hill
should read all about them. They are a very dodgy firm in America. They are involved in the Recycling Plant that Beattie is building also. It is a matter of public knowledge if you look on the Web.
They have plenty of money to "pay off" people if it is necessary.

Anonymous said...

Glad that somebody bought bottled water to drink