Modesto brings forward more examples of overspending

The City Council is expected Tuesday to again deal with more instances of Modesto buying more goods and services than what had been authorized.

The latest involve Modesto companies Safe-T-Lite and Rank Investigations & Protection.

A city report says Modesto issued what is called a blanket purchase order not to exceed $50,000 to Safe-T-Lite in Modesto’s 2016-17 budget year for tools, signs, equipment, supplies and barricade rentals, but city departments spent $156,389. Spending above $50,000 requires council approval, and it was not asked to approve this.

And the report says Modesto issued Rank a two-year contract in 2009 not to exceed $50,000 for security guards, but staff extended the contract to 2016 and the amount without council authorization. The report says Modesto paid Rank $228,946.

These are the fourth and fifth instances of overspending Modesto officials have brought to the council since September. The problems have surfaced as the city has reviewed its procurement practices, contracts and contract administration. The other instances include Modesto spending $9 million on asphalt repairs though the council had approved spending $6.8 million.

The city is expected to reveal the results of its review – as well as an audit it commissioned – in December.

Officials have said Modesto is putting in place better practices and controls to prevent this from happening again. Officials have not said why the city already did not have adequate safeguards but have attributed some of the overspending to “human error” among former purchasing division employees.

City officials have otherwise been vague on how several city departments – including police and utilities – purchased more goods and services than what had been authorized in contracts approved by the council or through agreements with companies that did not require council approval.

Modesto issued Safe-T-Lite annual blanket purchase orders that were not to exceed $50,000 from at least its 2011-12 through its 2016-17 budget years, but the annual spending exceeded that threshold, according to acting Finance Director DeAnna Christensen. The overspending was $15,000 to nearly $107,000, according to a city report.

Safe-T-Lite owner Scott White could not be reached for comment Monday afternoon.

Modesto issued Safe-T-Lite a $50,000 blanket purchase order in July for its 2017-18 budget year, but the report says city departments already have spent all of that.

City officials are asking the council to increase the purchase order by $115,000 to cover expected purchases through the end of the current budget year.

In addition to the contract that expired in 2016, Modesto issued Rank Investigations & Protection a two-year contract that is not to exceed $50,000. The contract expires In January, but the $50,000 threshold was met in October. City officials are asking the contract be extended through June and increased by $61,000.

City officials are asking the council to approve these requests so, according to city reports, there is no interruption in critical services while the city goes out to bid.

Rank provides security guards at city parks, the city’s three downtown parking garages, Modesto Centre Plaza and at special events.

Rank Investigations & Protection owner Steve Rank said he believes the 2009 contract was to provide security at the city’s Bus Yard and Transportation Center. But he said Modesto then asked his company to provide security at more venues.

Rank said he assumed city officials had the authority to increase the contract. “We want to do it right,” he said. “We as a vendor want to do it right. Everyone is waiting for the city to get this done (its review of its procurement and contract procedures) and get it right.”

The council meets at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St. The council will hold a workshop at 3 p.m. in the chambers to discuss moving council elections to even years.

This story was originally published November 27, 2017 at 5:25 PM with the headline "Modesto brings forward more examples of overspending."