OR: WHEN IS A LOW BID NOT A LOW BID AT ALL
By Sharon Burton
Trying to understand what is going on with the city-county utility commission feels like that moment when you’ve had too much caffeine, not enough sleep and your mind is too fuzzy to comprehend the task you are attempting to accomplish.
Fuzzy might not be a good word for it because that might instill images of soft, cuddly kittens or puppies. There is nothing going on with the Columbia-Adair Utilities District that is soft nor cuddly.
Last Thursday’s meeting was heated, to say the least. Probably the most heated official meeting I’ve attended in my 30 years of news reporting. People swore, they did the “stare-off” and things got personal…real personal.
Commission Chairman Tim Baker said his family’s jobs have been threatened (he refused to elaborate when questioned following the meeting). Board member Larry Russell Bryant asked why there is a need for a board if everything is going to be handled by politics and the process to approve a project is nothing more than a rubber stamp for the governor and people who raise money for him. Bryant even went on to say his bank account was suddenly frozen by the state that very day, and he wondered where that came from.
Board member Mike Newton criticized the work of Hodgenville attorney Damon Talley and said he didn’t know more than he did before Talley performed $12,000 worth of work for them. And there were several tense moments between Newton and Baker, once when Baker called the meeting a dog and pony show.
Like I said, it got personal; it got ugly.
Through all the emotional rhetoric, I tried to understand where each board member was coming from. I’m a facts-driven person and a solution-driven person. I don’t spend much time on a problem before I am trying to work out a solution. Thursday night during the meeting, I struggled to pin down the problem. I admit, sometimes I oversimplify, but most problems really have simple beginnings. Go back to the beginning, and you can often find a solution. Of course, by the time things get to where they are with the utility commission, people have often forgotten where it all started.
WHERE DID IT START?
I recall a number of conversations last year where people told me they were concerned the utility district would become another hospital nightmare, with too much money being spent that taxpayers would get stuck with down the road.
One area of concern was the fact that Monarch Engineering had enjoyed a couple of decades of competition-free business. Whenever the utility commission signed up for another seven-digit project, Monarch Engineering automatically got the job.
I can’t speak for the former judge-executive or current judge-exec Mike Stephens, but I bet they were hearing the same concerns I was. For whatever reason, when board positions came open during the past year, new faces were added to the mix.
The reshaping of the board was taking place at the same time the utility commission received $4 million in funding to replace downtown water lines. I doubt anyone would argue against the dire need for this project – the commission inherited the antiquated lines after taking over the city’s waterworks.
Unfortunately, everything came to a head while the downtown project was ongoing. The board had approved a portion of the improvements but not the entire $4 million project.
I didn’t understand why the board only approved a fourth of the project so I asked that question during the meeting Thursday night. Members were having their heated discussion (part 1) during the public comments, so I decided to chime in with a question.
Lenny Stone, manager of the district, wanted to answer the question. He said on a previous project the contractor who submitted the low bid provided substandard work and went bankrupt before completing the project.
Stone said he decided it would be a good idea to break the $4 million project into sections, so if there was a similar scenario they wouldn’t have the whole project up in the air. The board agreed.
So the board voted to accept bids on a “base” contract for downtown and add an “alternate” contract for Longhunters subdivision. Stotts Construction, from Columbia, submitted the low bid for the “base” job and got the contract (read further, but keep in mind this is the low bid for the “base” portion only.)
Once the downtown (base) portion was complete, the board signed off on the alternate as well.
After that work was complete Monarch Engineering and Stone came back to the board to get approval for a third section as a “change order.” The board voted yes pending approval by the state Public Service Commission and the Kentucky Infrastructure Authority, which is helping finance the work.
Two months later they rescinded the vote. They had not yet received approval from KIA or PSC.
Here’s an important difference between the alternate section already completed and the third section that is currently in limbo:
When the original base portion was approved by KIA and PSC, the “alternate” was part of that process. So it was approved as well.
Talley, the attorney, told the board he did not believe KIA and PSC would approve the third section as a “change order.” The third section was never part of a bid process and he recommended that the board seek bids on it.
By the time the board rescinded the vote, they had realized something else: when David Bowles of Monarch Engineering and Stone brought the measure before the board, the rates were based on the higher alternate rates instead of the base rate. Board member David Jones said he did not realize that when he made the motion to approve the change order.
Interestingly, except when the board rescinded its vote, there has been ZERO conversation about this. I obtained a copy of the original bid last week, and found the whole thing rather eye-opening.
While Stotts Construction got the low bid on the “base” portion of the project, there were three other companies with lower bids on the “alternate” portion of the project. In fact, if you add the base and alternate bids together, Stotts Construction was underbid by three other companies.
When quoting the cost of the alternate section alone, Stotts Construction’s bid was more than double the lowest bid, going from $361,200 to $764,700.
But the board approved the project based on the “base bid.” Later, Bowles and Stone wanted to complete the project based on the higher “alternate” bids but continue with the same contractor?
It’s easy to see why Talley thought it was appropriate to rebid the next phase. Board member Newton said the information Talley presented was useless. I found it rather insightful.
The board, however, isn’t even arguing over the price. I’m not sure they even care. It all goes back to the moment that Monarch Engineering came off the payroll. Bowles, the engineer, exited after the board rescinded its vote to continue with the third section of the project.
If they send the project as is to the state and it’s approved, does that mean Monarch comes back on board?
Then of course, there is Stotts Construction. It’s difficult enough given the fact that Barry Stotts, a Stotts Construction manager and son of the owners, is on the utility board. According to the powers that be, there is no conflict there because Barry does not directly benefit from the decisions of the board. He did, however, personally sign on behalf of Stotts Construction the summary sheet for the downtown project.
He has abstained from any votes pertaining to a project where Stotts Construction has bid. That made a difference Thursday night when two of the five board members (Jones and Newton) voted to send the project to KIA and PSC for approval, and two (Baker and Bryant) voted no. Motions fail on tie votes.
It’s common knowledge that company owner Junior Stotts is the go-to guy in the county for Gov. Steve Beshear. That’s the kind of stuff nobody talks about, the behind the scenes politics. But it is real, and it’s reasonable to question if PSC and KIA would approve a project because the governor says to (if the governor even would) or if they would instead recognize the fact that this section of the project was never legally bid.
You don’t have to use your imagination to understand Bryant’s comments about the need for a board if it’s all about politics anyway.
Add to the mix that Junior Stotts is supposedly leading the way for $10 million to come to Adair County to build a portion of the Heartland Parkway, and you can see where the original purpose of the entire conversation could quickly disappear into a haze of politics.
As a side note, there’s plenty of support for Stotts Construction here, and it feels kind of like what Mayor Curtis Hardwick is going through. All Hardwick did is win an election, and he is now fighting to keep the office. All Stotts Construction did was bid a project, and now they are the epicenter of a growing conflict.
Judge-Executive Mike Stephens is heavily involved in the conversation. He now says Bryant was improperly appointed to the board because the appointment didn’t fall into a timeframe outlined by Kentucky law. Because the appointment missed the legal window, state law says PSC would make the appointment. Stephens has contacted PSC per Kentucky statute. Will Bryant be at Tuesday’s meeting and be allowed to vote? I don’t know.
So here we are.
Will PSC and KIA approve the project, even though the section in question was never bid and would be constructed at a higher rate than the approved “base” bid?
We will probably find out. The board will meet again Tuesday morning and word is there will be enough votes to send it on to Frankfort.
Maybe that’s for the best, because this debate is taking too many wrong turns. Get this project over with and move on.
I do hope, however, when the wounds start to heal that we are left with a board determined to do the right thing. Our utility district has brought safe, abundant drinking water to thousands of homes across this county. They have been aggressive in meeting the needs of our consumers, and we don’t want to lose focus of that.
Of course, we also want the district to be fiscally responsible. We pay for every foot of waterline they lay–whether it’s local, state or federal money–it was taken from some hardworking American.
They can provide rural water AND allow for competition to get the best price when spending our money. Transparency in government is like a drink of clear water, refreshing and necessary for healthy living.
I’m not sure who will be left standing after this fiasco is over, but I know we will all be paying closer attention to this board and the work of this district.