The probe into possible corruption in DeKalb County contracts could end up forcing water customers there to pay more to shower or sprinkle their lawns.
County commissioners last week decided to start over on finding a private company to oversee part of a massive $1.35 billion overhaul of DeKalb’s water/sewer system. The reason: one of the firms on a list of finalists was named in search warrants served in January as part of the corruption investigation.
It will be August before a new bid is in. That threatens DeKalb’s ability to meet federal deadlines to cut the number of sewer spills – delays that may drive up the overall price tag for the work and the rates that are paying for it.
“We shouldn’t have to pay more because of (the investigation),” said Matthew Asamagor, a contractor who has lived in DeKalb for 30 years. “I can’t believe they would do that.”
Commissioners said they were concerned that MWH Americas earned top rankings for the management contract.
The Colorado-based company was not the staff recommendation for the work, despite a top score for technical expertise. DeKalb Water Partners got the nod as the lowest bidder at $15 million.
MWH was one of six companies identified by name in search warrants looking for evidence of bid-rigging, bribery and fraud at the homes and offices of DeKalb CEO Burrell Ellis and his former campaign manager, Kevin Ross.
Commissioners had to keep that in mind when considering that the winning firm would oversee $800 million of public money being spent on sewer work, Commission Presiding Officer Lee May said.
“We are just alarmed about the process,” May said of the 5-1 vote to start over on the contract, with Commissioner Kathie Gannon dissenting. “If we are protecting taxpayers, we have to err on the side of caution.”
The delay is the first clear implication for taxpayers from the investigation. The grand jury’s report remains under seal as Ellis and Ross battle in court to review an advance copy to see if they are named.
It is also the first hiccup in what had been a smooth process between DeKalb and the U.S. Environmental Protection Agency to stop sewer spills from fouling local waterways.
DeKalb had looked to neighboring Atlanta as a cautionary tale when it negotiated a federal consent order in 2010. The county agreed to be under federal mandates after reporting more than 800 raw sewage spills in a five-year period.
Atlanta has spent more than $1.6 billion to comply with the federal crackdown on its sewer spills. Delays are expected to drive the cost over $2 billion before work is complete.
By contrast, DeKalb has so far met or been early on deadlines for $800 million worth of work, slated to last through 2019.
The county needs a private management firm to keep that momentum going, said Ted Rhinehart, deputy chief operating officer for infrastructure. The company would provide full-time staff to handle specifics on 83 separate projects that would overwhelm the 10 engineers on county staff.
“We can tolerate a small delay, one or two months,” Rhinehart said. “If we wait another six months, or a year, it becomes increasingly difficult to get all this work in. As we need more work done in the later years, the (price) could go up.”
DeKalb customers have already seen two years of 11 percent increases to their rates, part of a three-year plan to cover the system upgrades.
This year, that translated into about $7.14 more a month for the average customer using 5,000 gallons of water, up to about $72 for a monthly bill.
Even with the hikes, DeKalb customers pay about the same as those in Cobb and Gwinnett counties. By contrast, customers in Atlanta pay some of the country’s highest water rates — about $150 bills for the same monthly usage.
Emily Williams, a retiree from Stone Mountain, said DeKalb’s increases have been small enough not to have much of an effect on her monthly budget. For that reason, she said she wasn’t concerned what would happen to rates with the latest delay.
“I would rather they do it right,” Williams said of the management contract. “That’s what’s important.”
Ellis, in the audience for last week’s commission vote, said he was disappointed that the delay created the impression the original bid was not done correctly. There were no reported complaints in the process, which followed the county’s existing rules for all would-be vendors, he said.
“We are willing to work with the commission if they desire that process,” Ellis said. “But I do urge them to make a swift decision. There is a lot of money at stake.”
Chief Operating Officer Zachary Williams, who recommended against a delay, said a new request for bids will go out by this week.
In a statement released over the weekend, MWH spokeswoman Meg VanderLaan said the firm was “pleased” to received the highest technical score but had yet to decide if it will again bid on the job.
“MWH will follow the rebidding process with interest and after reviewing the request for proposal, will make its decision regarding resubmittal at that time,” VanderLaan wrote.
Williams said he is setting up a new internal review committee to score submissions, which may still include the other same companies.
May proposed earlier this year that outside experts be brought in to help score submissions, but it’s unclear if the board will hire them.
That would be money well spent, especially if it staves off any possibility of rate hikes, said Tom Schratwieser, a medical supply salesman from DeKalb.
"Bringing in an outside source to make sure you have the blessing to go ahead on this should be the goal," he said. "That, and avoiding any price increases. It shouldn't be this difficult."
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