ORCA Pool Grant 3: More Data
[Blogger Note: This is part 3 in a series on the ORCA pool grant. Part 1 covered the status. Part 2 covered certification. This part provides some interesting background data on some of the issues in the first part.]
The ORCA contract was signed by Curtis Schrader effective May 7, 2004.
Labor Standards
Exhibit D of the ORCA contract lists the Applicable Laws and Regulations. Part II, Labor Standards, specifically mentions the The Davis-Bacon Act. Marfa signed a contract to follow the Davis-Bacon Act, as amended. From the wikipedia entry on this act: "The Davis-Bacon Act of 1931 is a United States federal law which established the requirement for paying prevailing wages on public works projects."
At the completion of the pool project, the city sent many closure documents to ORCA. One of these required documents was the Final Wage Compliance Report. One of the questions on this Attachment 11-S is: "Were any workers paid less than the Davis-Bacon rates that applied to this project?" The NO box is checked. Four subcontractors are listed on the document including Weather's Electric. The document is signed by Florencio Sauceda on September 6, 2006.
The letter from ORCA to Lanman of February 2, 2007 described the deficiency as, "It appears that Wither's Electric underpaid their electricians. The wage decision applicable for this contract required a payment of $12.14. Workers were paid $10.00. The TxCDBG Implementation Manual states in Chapter 11, Federal Labor Standards provisions (Attachment 11-E); Section A.1 (i) Minimum Wages...Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed..."
In Section 11 (Subcontracts) of the ORCA contract, Part D says, "The Contractor (City of Marfa) shall maintain a retainage in the amount of five percent (5%) of each construction or rehabilitation subcontract entered into by the Contractor until the Office determines that the Federal labor standards requirements applicable to each subcontract have been satisfied." It appears that this was not done. Weather's Electric was paid $54,000 for material and labor for the project. I don't know how much of this included labor rates below the Davis-Bacon Act. This might cost a few thousand dollars to remedy. It is unclear who would pay this now.
In summary, Marfa signed a contract that agreed to pay required minimum wages; Sauceda signed a document stating that the city and the contractors did pay these minimum wages, and ORCA says that it appears this is not the case. Furthermore, it appears that the city did not retain 5% of each subcontract until ORCA determined compliance with the federal law.
Chlorination System
As mentioned earlier, it has been reported that the chlorination system has never functioned. Mr. Robert Silva, Public Works Director, confirmed this yesterday. This was perhaps the most important part of this project. I understand that the city is reviewing the documentation on the equipment today. Perhaps a simple fix is possible. Perhaps it is defective. Perhaps it was the wrong piece of equipment in the first place. The city has been hand-mixing chlorine chemicals since the project was completed.
One of the close-out documents is the Certificate of Construction Completion. The document certified that a final inspection was done on August 31, 2006. It is signed by Tom Greenwood, William Stolte (President of AllStar), and David Lanman.
The document makes two relevant claims:
"The work has been completed in accordance with the plans and specifications and all addenda, change orders and supplemental agreements thereto, with the following exceptions: no exceptions ."
"The Contractor (All Star I&E) has presented on behalf of itself and its sureties, satisfactory evidence that he or she will repair, replace and make good any faulty workmanship and/or materials discovered in the work within a period of Twelve months from this date as provided in the Contract."
In summary, all parties agreed that all equipment was working on August 31, 2006 and that it is warrantied for 12 months. Marfa has a few months to sort this out.
Pay Raise
In case there was any question about the purpose of the $12,500 pay raise that Sauceda received, please see the City Administrator Report from the August 25, 2005 council meeting:
"Florencio P Sauceda Evaluation: ...Mr. Sauceda states that due to the fact that a change in his duties from not participating in grants to participate in grants he requests compensation, which is the difference from the former Administrator and the Interim-Administrator and would like for Council to consider a raise. Mayor Pro Tem Dobay states that he would like to move to authorize negotiations between Mayor Lanman and another Councilperson on behalf of the Council and the City Administrator on his salary. Councilmember Petrosky seconds the motion. No opposition. Unanimous vote. “Who is the other councilmember?” asked Mr.Sauceda, the Mayor Pro Tem Dobay is the answer. Motion carries."
The pay raise was given without council approval. I am not sure the effective date. Council did not act on this matter until well after the fact, October 11, 2005:
"Discuss, Consider and Ratify Action by Mayor Lanman and Mayor Pro Tem Dobay on City Administrator Sauceda-Salary Increase. Councilmember Petrosky makes a motion to ratify the action taken and to leave the raise in the amount given which is $6,200.00 thru February 2006. The annual amount is $65,000.00 Mayor Pro Tem Dobay seconds the motion. Councilmember Garcia and Councilmember Chavez oppose. Motion is tied. Mayor Lanman breaks the tie and approves the action taken. Motion carries."
The amount of $6200 through February 2006 suggests that the raise was effective August 25, 2005 when Lanman and Dobay awarded the raise without council approval.
The "change in his duties" that Sauceda discussed related to a strange deal between Marfa and Presidio and Tom Nance and a sewer cleaning machine. That sounds like a good subject for another blog!
The ORCA contract was signed by Curtis Schrader effective May 7, 2004.
Labor Standards
Exhibit D of the ORCA contract lists the Applicable Laws and Regulations. Part II, Labor Standards, specifically mentions the The Davis-Bacon Act. Marfa signed a contract to follow the Davis-Bacon Act, as amended. From the wikipedia entry on this act: "The Davis-Bacon Act of 1931 is a United States federal law which established the requirement for paying prevailing wages on public works projects."
At the completion of the pool project, the city sent many closure documents to ORCA. One of these required documents was the Final Wage Compliance Report. One of the questions on this Attachment 11-S is: "Were any workers paid less than the Davis-Bacon rates that applied to this project?" The NO box is checked. Four subcontractors are listed on the document including Weather's Electric. The document is signed by Florencio Sauceda on September 6, 2006.
The letter from ORCA to Lanman of February 2, 2007 described the deficiency as, "It appears that Wither's Electric underpaid their electricians. The wage decision applicable for this contract required a payment of $12.14. Workers were paid $10.00. The TxCDBG Implementation Manual states in Chapter 11, Federal Labor Standards provisions (Attachment 11-E); Section A.1 (i) Minimum Wages...Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed..."
In Section 11 (Subcontracts) of the ORCA contract, Part D says, "The Contractor (City of Marfa) shall maintain a retainage in the amount of five percent (5%) of each construction or rehabilitation subcontract entered into by the Contractor until the Office determines that the Federal labor standards requirements applicable to each subcontract have been satisfied." It appears that this was not done. Weather's Electric was paid $54,000 for material and labor for the project. I don't know how much of this included labor rates below the Davis-Bacon Act. This might cost a few thousand dollars to remedy. It is unclear who would pay this now.
In summary, Marfa signed a contract that agreed to pay required minimum wages; Sauceda signed a document stating that the city and the contractors did pay these minimum wages, and ORCA says that it appears this is not the case. Furthermore, it appears that the city did not retain 5% of each subcontract until ORCA determined compliance with the federal law.
Chlorination System
As mentioned earlier, it has been reported that the chlorination system has never functioned. Mr. Robert Silva, Public Works Director, confirmed this yesterday. This was perhaps the most important part of this project. I understand that the city is reviewing the documentation on the equipment today. Perhaps a simple fix is possible. Perhaps it is defective. Perhaps it was the wrong piece of equipment in the first place. The city has been hand-mixing chlorine chemicals since the project was completed.
One of the close-out documents is the Certificate of Construction Completion. The document certified that a final inspection was done on August 31, 2006. It is signed by Tom Greenwood, William Stolte (President of AllStar), and David Lanman.
The document makes two relevant claims:
"The work has been completed in accordance with the plans and specifications and all addenda, change orders and supplemental agreements thereto, with the following exceptions: no exceptions ."
"The Contractor (All Star I&E) has presented on behalf of itself and its sureties, satisfactory evidence that he or she will repair, replace and make good any faulty workmanship and/or materials discovered in the work within a period of Twelve months from this date as provided in the Contract."
In summary, all parties agreed that all equipment was working on August 31, 2006 and that it is warrantied for 12 months. Marfa has a few months to sort this out.
Pay Raise
In case there was any question about the purpose of the $12,500 pay raise that Sauceda received, please see the City Administrator Report from the August 25, 2005 council meeting:
"Florencio P Sauceda Evaluation: ...Mr. Sauceda states that due to the fact that a change in his duties from not participating in grants to participate in grants he requests compensation, which is the difference from the former Administrator and the Interim-Administrator and would like for Council to consider a raise. Mayor Pro Tem Dobay states that he would like to move to authorize negotiations between Mayor Lanman and another Councilperson on behalf of the Council and the City Administrator on his salary. Councilmember Petrosky seconds the motion. No opposition. Unanimous vote. “Who is the other councilmember?” asked Mr.Sauceda, the Mayor Pro Tem Dobay is the answer. Motion carries."
The pay raise was given without council approval. I am not sure the effective date. Council did not act on this matter until well after the fact, October 11, 2005:
"Discuss, Consider and Ratify Action by Mayor Lanman and Mayor Pro Tem Dobay on City Administrator Sauceda-Salary Increase. Councilmember Petrosky makes a motion to ratify the action taken and to leave the raise in the amount given which is $6,200.00 thru February 2006. The annual amount is $65,000.00 Mayor Pro Tem Dobay seconds the motion. Councilmember Garcia and Councilmember Chavez oppose. Motion is tied. Mayor Lanman breaks the tie and approves the action taken. Motion carries."
The amount of $6200 through February 2006 suggests that the raise was effective August 25, 2005 when Lanman and Dobay awarded the raise without council approval.
The "change in his duties" that Sauceda discussed related to a strange deal between Marfa and Presidio and Tom Nance and a sewer cleaning machine. That sounds like a good subject for another blog!
posted by RobC at 12:51 PM
12 Comments:
Rob, one more date you might want to include is the date that the council gave the 'left over' $9000. to Greenwood as a bonus, if memory serves.
What a mess!
I guess there was $9000 left over because the workers were under paid.
Are there more than two choices here? Did Sauceda knowingly sign the documents that contained false information or did he not read or understand them before he signed them? That is, did he lie or is he stupid? I would suppose that he doesn't carry any professional liability insurance that would protect the city from his mistakes? I would suppose that there would be no way to dock his salary for whatever Marfa is going to be called to account for or for getting the extra salary paid to him between the time the study/negotiations were voted on by council and council approving the extra salary. And I would suppose that there wouldn't be any way to deny him the $27,000 severance should the city decide they don't need his services any more?
I like the theory that the $9000 was leftover from underpaying the workers, but not even I can go that far! Either Flo did not know the finances well enough to realize that engineering was budgeted at $32,000 and not $22,000, OR Flo knew that but was trying to get Greewood to underbid so he could use the money elsewhere. We will never know.
After talking to Tom Greenwood, I believe that his expenses were probably reasonable. Unfortunately, it looks inappropriate because it was done in an inappropriate way. Like everything else. (the police chief/enforcer car for example)
Greenwood agreed to do the job for $6,000 and he said he overspent that because he also hired Naismith Engineering as his subcontractor. When Flo and/or Tom found another $9,500 in the grant, they worked a deal with council to give it to Tom. Appearance of propriety matters. La Vista is more important for ethics than weeds.
Found it. 9/19/06 Blog
"And the extra $15,000 for the pool is covered by the grant funds. The MAC is over by more than $5,000, most of this is in electricity. How did we misbudget electricity by $5000?"
And: Blog Thursday Oct 12, 2006 "A $9,500 Bonus". Covering the June 13,2006 meeting when council awarded it to him. "Chavez: I make a motion that we allocate the $9,500 to pay for professional services of Tom Greenwood, architect.
Martinez: I second it.
Lanman: I hear a motion, and a second. Any further discussion on the matter? There you go Tom. So be it.
Two observations ... Second, I never did hear a vote on the tape, just a motion and second..."
Even old stuff can be facinating reading. The grant was $231,000.
Five percent would be $11,500.
Blog Thursday Oct 12, 2006 "A $9,500 Bonus". Covering the June 13,2006 meeting
There had been a request from GSWW for additional services for redesign of the pool in the amount of $6,000 and it was understood that that $6,000 would come from the $231,000 designated by ORCA for the construction funds. The way the grant was set up there was $231,000 for construction and $32,000 for design and inspection fees. $16,500 had been paid by the city for design fees to GSWW when I came on board.
But I didn't know about the remaining $15,500 which was earmarked for the inspection fees. So both Flo and myself were under the impression that all of my fees would have to come from the available construction fund. So I kept it kind of a ridiculously low price because I didn't want to eat into the construction fund. As it turns out, there is $15,500 there of which I have been paid $6,000. So there's $9,500 remaining in ORCA funds for professional fees. And I am requesting rather than giving it back to the state, that we actually use it so I can both compensate myself and the engineers on the project. We still spent more hours than what was available. I'd rather let the council decide to use that money rather than send it back to the state.
Are there more than two choices here? No.
The two choices are:
1) Flo knew that the subcontractor employees were paid in violation of the ORCA contract and Federal law but he signed a document stating otherwise, or
2) Flo did not know that the subcontractors were underpaid. Before signing that document, he should have looked into the details to know if it was true or not. He was paid to be the grant administrator. Ignorance is not an excuse. Marfa paid him to know.
I believe that his contract requires the city to pay for a bond to cover his actions as administrator.
I doubt there is a way to make him pay personally for his incompetence. That is why people get fired.
His severance pay appears untouchable. In February, Petrosky, Martinez and Rivera thought so highly of him that they gave him a 19 month contract with 5 months severance. Here is the funny/sad thing:
That letter with all the deficiencies was sent to Lanman on February 2, 2007. Sauceda was given another contract on February 13, 2007. At that meeting, neither the mayor nor administrator bothered to tell council about the HUGE problems with the ORCA pool grant. Both Lanman and Sauceda gave reports before the executive session. They both hid the bad news from council.
Who is to blame for this deception? Would council have given Sauceda a contract if he had shared that letter with them first? I doubt it. He deceived council by witholding an important document in order to pad his own wallet. You wallet will make the payment.
Happy?
Re 5:37PM:
Excellent point. That must have been from my transcript. Here is the city minutes for that action item:
Discuss, Consider and Amendment #1-Professional Services, Thomas Greenwood, Architect PLLC. Engineering-$9,500-Marfa Activity Center ORCA-Grant #724509. Mayor Lanman stated that it has been great working with Mr. Greenwood. Mr. Greenwood gave a brief report on the status of the swimming pool. Council member Chavez makes a motion to allocate the $9,500 of professional services to Tom Greenwood. Council member Salgado seconds the motion.
NOTE: We had a motion and a second and no vote! This is classic Lanman at his presiding best. He would get so happy and excited when it looked like he would get his way on an issue that he would declare "So be it!" before asking for a vote.
It seems that council never did vote to give Greenwood that extra $9500 but he got it anyway.
Sloppy sloppy sloppy.
Note this! The minutes clearly indicate that a vote was not taken. Did Sauceda even read those minutes? If he read the minutes but did not bring the matter up again for a proper vote, then he failed his duty. If he did not catch the mistake, he was asleep at the wheel again.
Regarding the payments to subcontractors, I guess there was a third choice, ORCA was wrong in their report. It's hard to say. The issue remains unresolved. The grant records were in such bad shape at the time that Marfa could not provide proper documentation. According to Dan Dunlap, nobody ever told Weather's Electric that this was an ORCA grant project subject to federal regulations. If they paid more than the minimum rate, Marfa got lucky.
As per Update 4 at 840PM, my sincere apologies to Mr. Sauceda re:the labor certification. However, seems he did not send the matching $26,300 and the $263,000 grant draw down cancelled checks in a timely manner either. Has Marfa paid the $26,300 yet. Surely it could not be that hard to find it if it has been.
Well, who hired Weather's Electric? Flo, Greenwood, the engineering firm?
What I learned tonight is that Sauceda was able to find enough time sheet documentation from any public works employee that did work on the project, plus his own excellent grant administration work to find more than $26,000 worth of in-kind work. Mr. Silva did tell me that his department worked on demolition and other aspects of the project. Sauceda added the expense of all benefits paid to employees as well as labor to get to the match amount. All this is probably legal and the way that the grant game is played. Nonetheless, none of this was documented along the way. Here is what Sauceda reported to ORCA when he requested money from ORCA:
Marfa spent $5,000 by 7/15/05
Marfa spent $5,000 by 9/13/05
Marfa spent $5,000 by 3/31/06
Marfa spent $5,000 by 4/25/06
Marfa spent $15,000 by 6/7/06
Marfa spent $26,300 by 7/6/06
Isn't it amazing that Public Works and Grant Administration in-kind work always added up to multiples of $5,000 until we magically reached exactly $26,300!
It seems obvious that Sauceda was making this up as he went along with nothing to back it up. After ORCA demanded proof, he scrambled and found a way to justify it after the fact.
Weather's Electric was a subcontractor to the prime contractor, AllStar I&E.
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