News

City Council approved $6.8 million for street work. Why did Modesto spend $9 million?

Lucerne Avenue near High Street in Modesto, Calif. is pictured Monday afternoon (09-11-17). The City Council approved spending $6.8 million for repaving work, but Modesto spent $9 million for the work. An example of repaving is seen here on Lucern Avenue.
Lucerne Avenue near High Street in Modesto, Calif. is pictured Monday afternoon (09-11-17). The City Council approved spending $6.8 million for repaving work, but Modesto spent $9 million for the work. An example of repaving is seen here on Lucern Avenue. jlee@modbee.com

Officials are pointing to human error by employees no longer with the city for Modesto paying for $9 million worth of street repairs while the City Council had authorized $6.8 million worth of work.

The City Council is expected to discuss this matter at its Tuesday meeting.

“The fact is we’ve done something we shouldn’t have,” interim City Manager Joe Lopez said. “We are trying to rectify the situation and are putting processes in place to make sure it does not happen again.”

This matter is included on what is called the consent section of the council meeting agenda. Consent items are voted on all at once without discussion. But Mayor Ted Brandvold pulled this item from consent to ensure a full, public discussion before the council voted on it. He also said he is concerned the city report on this is not as clear as it should be.

And after the meeting, the council will meet with the Riverbank City Council at 7 p.m. in Riverbank for a workshop to talk about how they might work together on the big planning and infrastructure issues they have in common.

Lopez said Modesto officials discovered the spending problem about a month ago as part of a review of all of the city’s contracts and how it administers them. That is also about when the council meet in closed session to discuss “public employee discipline.” Lopez declined to say whether the two are related.

He expects the review will be concluded by the end of the year and its findings and recommendations will be discussed at a public meeting. He said officials have not found another example in which the city has paid for more work than what was authorized, but he said the review has found deficiencies that need to be addressed.

The city report says in September 2012 the council approved a contract for asphalt repairs for $3.7 million over five years and then increased that amount by $3.1 million in December 2014 for a total of $6.8 million over five years. Modesto-based Garrett Thompson Construction Co. was designated as the primary contractor and United Pavement Maintenance as the secondary contractor and Patch Crew as the third.

The work is for repaving the street after crews dig it up to replace a water main, install a water line and similar work.

The report says the finance employees made clerical errors by authorizing payments of $11.6 million in 2012 instead of the $3.7 million and then in December 2015 increased the agreement for Garrett Thompson Construction by an additional $1.784 million. Officials could not find any council authorization for the increase.

“Due to staff turnover of positions that both created and approved these transactions in the Oracle accounting system, management has not been able to determine the reasons for these actions and must conclude it was due to human error,” according to the city report. Lopez declined to identify the former employees and said the city has not interviewed them. He said the review of this matter should be complete in about a month.

The council will be asked to increase the agreement by $2.8 million, which is for the $2.2 million already spent, $306,000 to Garrett Thompson Construction for work it has not been paid for, and $310,000 for work the company is expected to perform through Sept. 24, which is when the current agreement ends. Modesto is in the process of issuing a new contract for the street work.

Modesto paid Garrett Thompson Construction $8.75 million of the $9 million for the street repairs.

“This is all news to me,” Garrett Thompson said when told about how the city exceeded the amount authorized by the council. “Trust me, I did the work. I didn’t know they went over budget.”

He said instead of being asked to do one project, the work has been performed through a series of purchase orders issued by the city. Acting Utilities Director Will Wong said his department checks that the work is done and to the city’s specifications before sending the request for payment to finance.

The council meets at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St. The workshop is at 7 p.m. at the Riverbank Community Center, 3600 Santa Fe St.

Kevin Valine: 209-578-2316

  Comments