Another Oops! $411,000 Spending Error

oops-signItem 18 on Tuesdays agenda deals with The discovered “error” of spending nearly double the authorized amount and the purchase of items not authorized by council.

Staff has by error not verifying the spending limit of $500,000 and thinking it was $1,000,000 just went on spending and not clearly understanding the scope of the authorization purchased thousands of dollars of items that were not authorized.

The list includes what appear to be common fittings but some amounting to more than $60K and although a small amount what appears to be 20 common plumbing tools (one handed wrench) which were purchased 20 units at $75 each. As a test item I would like to see justification of the need for 20 wrenches and that we did get a fair price.

My questions would be to know that persons responsible for their “honest mistakes” “inadvertently” are held accountable. I am sure as a supervisor people are disciplined over far less than $411,000.00 errors.

This has a bad odor in that ordering the misc parts was not in the original agreement and amounted to several tens of thousands of dollars funneling to one supplier could just be laziness, hurried expediency, or a sign of seeking favors, gifts or kickbacks.

Overall it is not likely to be a waste of money. The city surely does need to be changing water meters and you cannot do it without meters and fittings (and wrenches). BUT it is a glaring error and should be a chilling revelation to the Finance Director, City Manager and Council as to how many errors have passed without discovery, how many are yet happening now and that this lack of control and accountability which enables theft, fraud and inefficiency that is costing the taxpayers and utility customers untold sums of money as been found. I would think this type of error along with the revelation of fact that basic finance functions (bank reconciliations) were not completed, would be damaging to our credit rating and should be handled in a manner to send the message that this will not be happening in our city anymore.

I want to be loud and clear that this cannot continue, and that it must be addressed. I am sorry that working in the government sector does not afford the privacy and anonymity given in the private sector but once you take a public position even a city board or become a candidate for office your words and actions are subject to public record and if you are not comfortable with that scrutiny you should not participate.

Newton White   

It is not my place to question the manager of the specifics that job first belongs to our council members. I call upon them to take action, but should we not see them addressing this when the item comes on the agenda

9 thoughts on “Another Oops! $411,000 Spending Error

  • May 23, 2014 at 11:59 pm

    Newton, you obviously are clueless about the technical aspects of public utility operations. This current meter replacement program is a cluster #######. Ken Parker chose this program to get out the door with his pension without telling council how bad things really were. A holistic fix would expose Parker’s negligence and council would not let him out the door with his retirement. He promoted an incompetent and engaged all the incompetents in the city as his yes men to go along with his program.He even engaged the godfather of his assistant city manager’s children as a consultant and manager of the meter replacement program.
    Since then two of the incompetents were fired for malfeasance or misfeasance, the ex-public utilities director and the ex-field crew superintendent. The previous field crew superintendent was promoted by Ken Parker to assistant utility director even though he has problems counting to ten.
    Now an incompetent city manager has replaced Parker who has hired a group of FCCMA retreads that were fired or forced to resign for malfeasance or misfeasance in their previous positions. Now they have taken Parker’s screwed up program that was engaged in with no due diligence and continued it with their retooled dream team. Any of the senior technical staff in public utilities feel bad for the citizens of Port Orange but they have been disenfranchised by Parker and the current Lifesaver CM.
    Unfortunately the city has been losing millions of dollars of revenues for years now and will continue to lose millions of dollars of tax payers revenue as long as the current direction continues and as long as the Lifesaver and his MIT’s continue to be employed by the city.
    Pay attention to Richard Woodman’s posts as he will break this down and make it easily understandable.

    • May 25, 2014 at 7:17 am

      The top two people in the utilities department along with the along with the guidance of the CM have been overseeing and directing the replacement of meters. Mr. Matus clearly explained the incompetence behind the misappropriation of the money It has long been known by many in utilities that the approach that has been taken by management in replacing meters is wasteful and designed to cover their asses. They can tell everyone whatever they want and people believe them. The average layman would not know that they are being fed a line of BS if it is packaged up real nice. I think it is finally becoming clear to many that we can’t trust the mayor, the CM and most of their little troopers called upper management. It is time to wake up!

  • May 24, 2014 at 12:58 pm

    Oh…Come on guys…stop being “negative”..they are trying their best..God help us if this is their best!
    In the company I worked for for 20 years a much smaller misuse of company resources would have led to a very short and brutal exit interview….starting with “we will accept your resignation immediately…and ending with….please put your keys on the desk”…Come on Port Orange..this is business. This would never be tolerated in the private sector. Never!
    Perfect segue to my still unanswered question….where are all those internal controls many of us have been asking about? How exactly did this happen? Taxpayers deserve a comprehensive explanation and to be told who will be held accountable. What is the sequence of events that lead to this? I hope the council will demand an explanation and not sweep this under the rug. Honest mistake? Or incompetence.
    I certainly hope the Audit and Budget board will revisit the discussion about the need for an external audit of internal controls.
    Dianne Templeton Gardner

  • May 25, 2014 at 7:49 am

    Don Juan,
    I have taken the time to talk with current and former folks and know very well where we are with our meters aging out, our too little maintenance of lines and pipes and the all too soon need to upgrade our sewer/reclaim plant to meet new standards. Utilities is not the only place suffering from neglect and facing the high costs of doing to little.
    I have no doubt they needed most of the items bought. My focus is that controls and procedures do no exist or were not being followed. Tens of Thousands of dollars were spent without proper authorization and a purchase limit exceeded by nearly double before it was stopped.
    Perhaps if these needs were brought back to council the extent of the problems would be coming out sooner. Perhaps if a better look was taken in 2012 we would not have gone a year with as many as 1798 zero reads, according to the memorandum on 4/22/14.
    Newton White If you want to talk to me I would be happy to hear from you. Online, in person or on the phone…

    • May 25, 2014 at 9:55 am

      There are or there were controls and procedures when I worked there. We kept a tracking sheet on purchases and kept a balance on remaining funds like a checkbook. This was done on a division level and at utilities administration by an office assistant and also by finance. I don’t know if they stopped doing this. It wouldn’t make sense to stop. Maybe administration thinks that they are above following procedures and have the authority to circumvent them. Or they could just be ignorant or lazy.
      This does bring to light a certain level of incompetence. From the beginning of the meter problem it was clear to the technical staff in utilities that we needed to start replacing all the residential meters with Neptune meters but for some reason management kept putting Sensus meters in the ground. Probably to cover their asses and hide the neglect of not having an on-going meter testing and replacement program
      The new management came in and kept on with and perpetuated the same money and time wasting program. We have this type of problem throughout our underground utilities. They have been neglected and/or not properly monitored for years and now all of a sudden we need to spend millions and raise rates.
      If you pay attention to the condition of your utilities you can pay as you go instead of having to react in crisis mode. If anyone has read and paid any attention to my posts on this subject I have explained it in detail.

    • May 25, 2014 at 3:49 pm

      Newton, please do not drink the “koolaid”. The city rate payers have been investing substantial funds in upgrading our public utilities. I do not consider $4,000,000 to $5,000,000 a year in recent times and more in earlier years, neglect.
      If the investments made to date were better thought out/managed, our system would not be facing some of its current problems. The problem is not so much how much has been invested, but rather in how we invested it.
      One could well argue that the zero read meter problem and the reuse difficulties did not result from failure to properly invest, but occurred because of poor decision-making and failure to properly manage these projects. Two observations shape this conclusion:
      First, many believe that our current meter mess is a result of installing defective meters. It was reported in 2012 that a number of the failed meters were installed within the past few years. For how many years and across how many dollars were the same meters replaced? It was only when line level employees complained to a councilman that action was finally taken to stop the insane meter replacement treadmill. This is an example of failure to properly manage. (Bless our courageous employees, if they had not come forth, we have no idea how much longer this debacle would have continued.)
      During the same period as the registers on the meters were not recording, the City entered into an ambitious and expensive program to automate our meter reading program. Millions were spent to provide automated readers for meters that were failing. The millions spent on the automated system could have gone a long way to resolving our no read meter failures. Public utilities should have fixed the meter problem first, before embarking on an expensive new effort. This is an example of poor decision making.
      Second, millions were also spent to upgrade our reuse water system. Two large lakes and associated structures were developed. The plan was to pump surplus reuse water to these lakes during periods of low demand and then pump out of these lakes during period of high demand. Unhappily, this multi-million dollar system does not perform the majority of water pumped into the lakes cannot be retrieved. As a result, potable water is being used to augment the reuse system, and during wet periods we are once again dumping water into our estuary. Currently an additional $2,500,000 has been allocated in a further attempt to get this star-crossed system to work.
      If the meters had been addressed in a timely and cost effective manner, there would not only be cost savings over our current approach, but there may have been a better income stream. How many miles of sewer could be relined, how many miles of galvanized could have been replaced, if we hadn’t built the Lakes?
      So, again, was it “neglect or doing too little” or was it mismanagement and poor planning? Throwing money at the problem has not worked in the past, not certain whether it will work in the future.

      • May 25, 2014 at 4:28 pm

        Right on Mr. Ford
        In reference to your last sentence it’s some of both or mismanagement and poor planning led to neglect and doing too little. The programs that I have outlined are the controls. They help control when, where, how and how much money you spend. They are tools that can be used for budgeting and planning. They give you factual information that someone can’t put a spin on as long as they are honestly administered. I think you pretty much hit the nail right on the head.Thank You

  • May 25, 2014 at 4:55 pm

    Amen. Bad choices and bad Management. No matter how much money you enable bad management with the end result will be the same. I agree once again with Mr. Ford. We have spent plenty of money in utilities well beyond the revenue generated by rate fees.
    There are utilities all over the world that seem to operate for a profit. Some are public and not only do they maintain their infrastructure, they also pay hefty dividends to its shareholders. Port Orange citizens are the shareholders in this case and are getting shafted. I wonder if I mismanaged my income if I could just call Social Security and have them send me some more because I made an oops. We all know the answer to that.
    Money that is well spent is the only answer. Money wasted is money gone. Once again when it all works it’s way out the six figure managers will be gone and we foot the bill.

  • May 27, 2014 at 12:31 pm

    The City Clerk on the CM read file is reaching out to Council for someone to make a motion to move this item #18 off of the consent agenda. This is the $411, 000 Oops. Sounds like a secret meeting to me. Does this pass the sniff test for anybody else out there?


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