DeKalb may have paid for work not done

HOW WE GOT THE STORY

The Atlanta Journal-Constitution is digging into how contracts are awarded in DeKalb County, especially its water and sewer department. A special-purpose grand jury released a report in August after a yearlong investigation found evidence of widespread corruption in DeKalb contracting. Reporter April Hunt requested invoices on a troubled sewer plant expansion to see how the county had paid millions for shoddy work.

A TROUBLED HISTORY

DeKalb County agreed to pay the lowest bidder, Desmear Systems of Tucker, $7.7 million, to blast and clear away granite for an expansion of the Snapfinger wastewater treatment plant. Work was to begin on July 30, 2012, and be completed in nine months. But problems emerged almost from the start. Some key moments:

• December: DeKalb determines the construction bond on the project is fraudulent and orders work to stop.
• March: Work begins again, under a new bond. The county grants Desmear an extension to June 30. Desmear requests a second delay, through August 2013, citing rain and weather. DeKalb refuses. The county also notifies the company that it will enforce a penalty of $1,000 per day if the June 30 deadline is not met.
• Aug. 26: A representative from Desmear notifies the county that the project will not be completed until February 2014.
• Sept. 4: County inspectors visit the site and notice problems with the retaining wall being built. An internal review begins.
• Week of Sept. 16: The Atlanta Journal-Constitution begins asking about the awarding of the contract to Desmear, after revealing discrepancies in the company's financial information.
• Sept. 19: In response to AJC questions, DeKalb County officials confirm several instances of poor work and lax oversight at the Desmear construction site and uncertainty about oversight on the project.
• Sept. 20: DeKalb County orders all work to halt at the Desmear site, as an internal investigation continues.
• Sept. 26: DeKalb County says the Desmear project will be rolled into a second phase of its sewer construction plan, which likely means Desmear won't be given a chance to complete the job.
• Oct. 7: Invoices requested by the AJC show an outside engineer and two high-level county managers signed off on $5.8 million of work by Desmear, despite indications that not all of the work had been done. None of the invoices include inspection reports on the quality of the work.

Everyone who pays to flush a toilet in DeKalb County has chipped in on $5.8 million that the county OK’d spending on a troubled sewer project – though some of the work paid for has yet to be done.

Invoices obtained exclusively by The Atlanta Journal-Constitution show that customers of the county’s water/sewer system – who are bankrolling a $1.35 billion system overhaul through increased rates – paid for oversight failures at every level of the $7.7 million excavating contract at the Snapfinger wastewater plant.

The engineer from a joint-venture firm hired to monitor the project as well as two high-level county workers, also both engineers, repeatedly signed off on the invoices without inspecting quality.

DeKalb is paying DeKalb Water Partners, the company overseeing management of all the overhaul projects, $15 million. Rudy Chen and Hari Karikaren, both assistant Watershed directors, earn about $114,000 and $119,000 annually. Among problems they missed:

• Monthly invoices that fail to mention problems now known, such as water quality violations and construction accidents.

• Payments for 100 percent of hauling needed – to the tune of $2.6 million – although the next line on the chart of progress attached to that invoice shows that more granite must be blown up to begin leveling the site. The county paid even though as recently as last week, huge chunks of rock had yet to be hauled away.

• Invoices submitted without any inspection notes, photos or other information that would indicate if the project was on target or where problems occurred.

“You would expect to see more detail,” said John Miller, a retired civil engineer and co-chairman of a citizen advisory committee for the $1.35 billion overhaul, who had not seen the invoices until contacted by a reporter.

The AJC began asking about the Snapfinger project and the company doing it after that company, Desmear, a small Tucker firm, was named in an August grand jury report that looked into corruption in county contracts.

The company’s president gave CEO Burrell Ellis the maximum campaign contribution, $2,500, as it was preparing to bid on the Snapfinger project. Ellis has since been indicted on 15 counts of bribery, extortion and conspiracy for allegedly pressuring vendors to contribute to his campaign and punishing those who did not give.

Neither the company nor its president has been accused of any crime. Ellis denies any wrongdoing. But Desmear’s contract was troubled from the start.

Even as it submitted regular invoices to be paid for work it said it had completed, Desmear admitted it would not meet the extended deadline of June 30, records show.

Officials pulled the plug on the job on Sept. 20, citing shoddy work that included a structurally unsound retaining wall meant to protect the plant expansion and several hundred nearby homes.

The most recent invoice and payment in July, the last monthly cycle before the AJC began asking questions, show Desmear considered the wall 44 percent done. The county paid $682,000 on a wall that it now believes may need to be redone.

“Frankly, I am appalled at that,” interim CEO Lee May said. “My commitment is we will get to the bottom of it, and this sort of thing will never happen on my watch.”

Based on the invoices, May has ordered an internal audit to match how much the county has spent with how much work has been done at the site.

The county is also reviewing steps toward firing Desmear. But May said officials have yet to decide how to address apparent failures from DeKalb Water Partners. Representatives from Jacobs Engineering, which leads the joint venture, did not return phone calls seeking comment.

Also unclear is what action the county may take against the two Watershed managers. May had pledged to fire wrongdoers but said Monday that he is still working to determine responsibility.

The potential loss of the managers could be devastating to DeKalb, too. Massive turnover in the past year included the Watershed director and his boss, the head of public works. They left just days before the county awarded the Desmear contract.

Chen, who oversees water/sewer technical services, is a 9-year-veteran of DeKalb. Karikaran has worked for DeKalb for seven years and heads the department’s public works division.

Sally Sears, the other co-chairman of the advisory committee, has asked the county to provide updates at its quarterly meeting this month.

The committee has two groups that might have spotted problems, or could have at least asked questions, if more information had been provided during its last meeting in July, she said.