After warning Modesto about Hwy 132 financial risks, Caltrans goes down another road

Looking north from Maze Boulevard is a section of North Dakota Avenue that will become part of the new Highway 132 alignment in west Modesto in March 2018.
Looking north from Maze Boulevard is a section of North Dakota Avenue that will become part of the new Highway 132 alignment in west Modesto in March 2018.

Modesto’s auditor advised city officials in a July memo not to use Meyers Nave — the law firm Modesto hired in 2014 to serve as its city attorney — for the legal work on a roughly $100 million project to realign and upgrade a stretch of Highway 132.

Monica Houston wrote that doing so could expose the city to the risk of fraud, waste and abuse.

She based her July 19 memo in part on a review of emails among Meyers Nave, Modesto and the California Department of Transportation. “Caltrans is steadfast in its decision that such use (Modesto using Meyers Nave) is subject to and not in compliance with state and federal competitive bid process requirements,” Houston wrote.

But it turns out Caltrans was not so steadfast, and it appears it may have been a case of the left hand not knowing what the right hand was doing at the transportation agency. Houston’s memo is one of the reasons that her work is under scrutiny.

While Caltrans District 10 office in Stockton had told Modesto that if it used Meyers Nave it would have to obtain the firm’s services through a competitive process if it expected Caltrans to reimburse the city for its legal costs, the district changed its position after being questioned by The Bee.

Here is what District 10 spokesman Rick Estrada said in a September email to the newspaper: “The Department (Caltrans) also alerted the city that the insertion of Meyers Nave into this agreement (between Modesto and Caltrans for the Highway 132 project), without the competitive bidding process, would put the project’s federal financing at risk due to bypassing the competitive bid process.”

Here is what Estrada said in an email this week to the newspaper: “Caltrans has determined that the City of Modesto does not need to competitively bid a legal services contract related to the State Route 132 West Project.” And when asked whether Caltrans would reimburse Modesto for its legal costs if it used Meyers Nave without going through a competitive process, Estrada wrote: “That would be accurate.”

District 10’s answer changed after The Bee provided it with an Aug. 1 email an attorney in Caltrans Sacramento headquarters sent to Meyers Nave, saying legal services were not subject to competitive bidding. The attorney was responding to Meyers Nave’s request for clarification.

Meyers Nave’s position for more than a year had been that Modesto had appointed it as its city attorney and therefore could do the Highway 132 work. Caltrans District 10 had taken the position that Meyers Nave was a consultant and would have to compete for the work just as the city’s other Highway 132 consultants had done.

In the end, the Modesto City Council on Sept. 4 awarded a contract worth up to $2 million to another law firm for the Highway 132 project after the city in July issued what is called a request for proposals for legal services. Councilman Mani Grewal has said Meyers Nave’s estimate to do the work was $200,000 to $300,000 less.

Lindgren — who is the principal in charge of Meyers Nave’s Sacramento office — said his firm and the city took the most conservative approach by issuing the request for proposals, which is a competitive process, when his firm and Modesto could not resolve the question in time with Caltrans over whether Meyers Nave could do the work.

Lindgren said Friday he was pleased Caltrans agrees with Meyers Nave. “The City Council hired Myers Nave because we were able to perform almost all of Modesto’s legal work,” he said. “And that includes helping the city build roads.”

The legal work on the Highway 132 project includes acquiring the property for the new alignment.

Houston — whom the City Council appointed as city auditor in April — declined to comment and referred questions to her attorney, Jacq Wilson.

“As the mayor has said, we believe government needs honesty, transparency and the fear of God,” Wilson said Friday. “Miss Houston is here to restore the public’s trust. We don’t want a controversy. She just wants to do her job.”

Wilson said he recently started representing Houston but said her July 19 memo was based on Caltrans clearly stating Modesto needed to obtain the legal services through a competitive process.

Houston has found herself in the center of a political fight among council members, with some claiming Houston, who is African-American, has been subject to harassment, retaliation and even racism. Other council members say that is not true and claim Houston has attempted to overstep her authority and did not have all the facts when she wrote her July 19 memo.

The Highway 132 project entails realigning and upgrading about four miles of the highway from Highway 99 to Dakota Avenue in west Modesto. The project — a partnership between Modesto and Caltrans — is being funded through a variety of sources, including local, state and federal money. Construction is expected to start in June 2019.