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Audit reveals poor stewardship over county contracts
An audit of county wastewater contracts
with Key West Resort Utilities, released earlier this month by the
Monroe County clerk of the court, sets off more alarms than a thunder
clap in a parking garage.
The scenario that emerges is a private
company receiving taxpayer dollars for a public project that has sloppy
and/or inadequate oversight by local government. In fact, the contracts
Monroe County signed are so vague, ambiguous and lacking in safeguards
as to raise the question whether the apparent ineptitude might instead
be intentional.
And that is just the financial aspects of
the county's dealings with the private utility. You might recall that
the firm's plans for the Stock Island wastewater collection project
magically morphed into a new configuration in the minutes that preceded
their final approval by the Monroe County Commission. Retiring County
Administrator Jim Roberts took the heat for this apparent
bait-and-switch — he said he couldn't remember who provided the plans —
but an explanation of the "confusion" has never been forthcoming.
Court Clerk Danny Kolhage's audit cites a
laundry list of problems with the county's financial dealings with Key
West Resort Utilities. For instance, there is no escrow agent or escrow
agreement for use of a $1.2 million escrow account for sewer service for
the county jail and nearby county properties. "The ... funds were
withdrawn at the sole discretion of KW Resort Utilities Corp.," states
the audit report.
The county administrator's response: "The
administration concurs that future contracts should be more clear in
reference to the intentions of the county commission," adding that he
will ask the county commission to budget for a "contract monitoring
position."
On two occasions, the utility withdrew
payments from the escrow account then billed the county for the same
payments. This apparently was possible because of the absence of the
aforementioned escrow agent, as required by the contract.
The county administrator's response (this
may sound familiar): "The administration concurs that future contracts
should be more clear in reference to the intentions of the county
commission," adding that he will ask the county commission to budget for
a "contract monitoring position."
The audit further notes that "the
agreement is ambiguous as to how the [detention center] capacity
reservation funds were intended to be expended."
In fact, the law firm Steel Hector &
Davis, which reviewed the contracts for the county in July 2001, sent
the county attorney a nine-page memo outlining potential problems with
the agreements and making suggestions. According to the county
administrator, that memo — which should have been a warning shot across
the bow — was ignored by the county.
The audit cites a report from an
engineering firm that, in its review of the Stock Island sewage
collection system, noted high administrative and legal fees — nearly 10
percent of the project cost. Those fees went to companies owned by KWRU
owner Bill Smith, including Smith's law firm that apparently is not
licensed to practice in Florida.
Many of those expenses are not documented
and the county, at Kolhage's urging, is withholding payment. One of the
companies, Green Fairways Inc., told auditors it was its first public
project and its personnel "did not realize the paperwork that was
necessary."
Bottom line: The county's handling of this
wastewater project is inept, at best. The county administrator's
responses are hardly reassuring — weak assurances that oversight
measures will be taken in the future.
The Monroe County Commission has been a
lousy steward of taxpayer dollars with this project, which likely will
require millions of dollars more in public money before the mess is
cleaned up. It's little wonder that Mr. Smith, who also holds the lease
for the Key West Golf Club, chose to honor Commissioner Sonny McCoy with
a bust at the club's first hole.
It's never been clearer that the county
commission should quit trying to micromanage and manipulate wastewater
treatment projects in the Keys.
And that someone on the county payroll
should be taking a much closer look at county contracts. |
