Last fall, the city of Sacramento signed contracts worth $3.5 million with Advantage Demolition & Engineering to install 3,300 water meters. Two weeks ago, the city abruptly terminated the contracts when it learned the company was not bonded, as it claimed when it submitted its bids. Apparently, disarray in the city’s long-troubled Utilities Department continues.
Because the problems surfaced early and the company apparently did the work it was paid to do, Sacramento may not be out any money.
Nonetheless, the incident should raise fresh alarms about city management. Two years ago, the Utilities Department lost track of 4,500 water meters, the result of bad record-keeping, an audit concluded. Most “missing” meters were eventually located.
More recently, the county grand jury warned that Sacramento may have used utility ratepayer funds improperly to pay for general government expenses, a violation of state law that could cost Sacramento $21 million. A taxpayers group has sued.
In the latest Utilities Department snafu involving Advantage Demolition, the city never bothered to verify if the company was bonded as it claimed. Incredibly, it did not do a background check. Had it done so, it would have learned that the company’s owner filed for bankruptcy protection for another company he owned in 2001 and that since then has had several tax liens filed against him, including three state tax liens totaling $46,000.
Because the water meter installation contract was funded in part by $22 million in federal stimulus money, the fraudulent bond certification has triggered both state and federal probes. That’s embarrassing.
The water meter installation is one of the city’s most high-profile infrastructure projects. It’s been mishandled repeatedly. Each mistake produces a new round of excuses from city management and promises to do better. The time is long past for the City Council to demand accountablity and take action to prevent further snafus.