Editor’s Note: The following article concerns the FairPlex construction budget the Uvalde Leader-News touted as being “on target.” The concerns raised by Comm. Raul Flores (who has 20 years of financial experience) initiated a need for La Voz to seek a detailed explanation. La Voz is allowing the commissioner the freedom to fully explain his concerns and present them, unedited, to La Voz readers.

 by Raul Flores
Uvalde Co. Commissioner; Pct. 4

 

At the Uvalde Commissioners Court meeting held on May 9, 2011, the court was presented a recommendation by John Graves to award a contract to Krueger Construction Co., which had been negotiated for the construction of the county’s multi-purpose facility for $2,519,579 and $207,632 for the renovation of the existing pavilion.

Although, there are two separate facilities, only one contract was awarded for both. It was then I voiced concerns about the unavailability of financial information that would show us the financial status of the county projects.

It was very difficult for me to approve, vote on, and award the contract for the construction of the Multi-Purpose facility and renovation of the pavilion without being provided any budget analysis reflecting the balance of all county projects at the Fairplex.

I was not willing to vote blindly without any financial information to determine whether we had sufficient funding available from all sources to cover the cost of the Multi-Purpose facility and Pavilion that were submitted for our approval.

Alice Chapman, the county auditor, said that the budget committee had met twice and came up with the recommendations that the contract for both facilities were well within the budget, and reiterated by Co. Judge Bill Mitchell.

However, neither the county auditor nor county judge, as well as other members of the budget committee present at the meeting, provided any written or verbal budget analysis information as to the amount of project commitments encumbered, and the remaining balance available.

I, therefore, abstained from voting to award the contract to Don Krueger Construction Co. for both facilities in one contract for the above stated reasons.

I would have voted to award the contract to Don Krueger, Inc .if adequate financial information had been provided to Commissioners Court indicating that funds were available to cover the cost of the above stated projects – because I am in favor of supporting all Fairplex construction & renovation projects – but I was not willing to participate and vote for a contract with a combined price tag of over $2.7 million when there is a lack of transparency and disclosure of responsible fiscal accountability.

Prior to the Commissioners Court meeting of May 9, 2011, I had made previous requests for financial budget analysis information that would have disclosed the status of each awarded project or all projects combined.

No written or verbal budget information was ever provided to Commissioners Court. The only response that I would receive was that the county projects were well within the budget, or that we had the funds in the bank.

At the Commissioners Court meeting of Jan. 24, 2011, we approved and awarded three utility improvement contracts. In the absence of any budget analysis data being provided, before voting to award each individual contract, I asked whether there was enough funding available for each project.

The County Auditor responded that there was sufficient funds in the bank to cover the cost of each individual project. Upon said response, we then proceeded to unanimously approve the lowest bid of $769,159.60 for the Sewer System Improvements.

This is contract # 1 to Alvin E. Stock Contractor, Ltd. This project is funded by a Colonia grant of $500,000 and funds from the certificates of obligation.

The second contract that we awarded was for the On-Site Improvements, EDA contract #2, in the amount of $557,780 to Qro Mex Construction Co., Inc. who submitted the lowest bid. This contract is to be funded by an approved EDA grant of $1,126,066.

The third contract awarded was for the FairPlex On-Site Improvements, contract #3, in the amount of $5,624,925.20 to Alvin E. Stock Contractor, Ltd. who submitted the lowest bid for this project. This contract is to be funded by the $25 million Certificates of Obligation funds.

LA Voz: How did you finally determine that the Fairplex expenditures were not in line with the revenues?

 I arrived at my decision over a period of under four months, and various meetings with the individuals noted below. On Feb. 4,2011, I met with the county auditor to discuss the financial status of the county projects and to request an updated budget balance of all county construction projects awarded and encumbered.

She informed me that she kept ledgers of project expenses incurred, but did not keep track of the amounts encumbered for each project.

I informed her that I had started the preparation of a preliminary financial analysis of all the sources of funding allocated for the projects at the FairPlex and the encumbrance amounts of construction projects awarded, but that it was an incomplete analysis because I did not have all of the encumbered costs.

I asked her to look at my incomplete financial analysis and asked if she could fill in some of the missing encumbrances made, in an effort to update the information and have a more informative financial analysis to guide and base my decision when it came time to consider approval of the multi-purpose building and pavilion.

On March 31, 2011, I again visited the county auditor to check to see if Chapman had updated my preliminary financial analysis with the prior encumbrances or commitments that were missing so that I could make a better determination about the financial status of all the projects at the FairPlex.

She informed me that she had been unable to update my financial analysis because she did not have complete records of change-orders or other encumbrances made, and related directly to the projects, but not identified by individual project.

On Friday, April 8, 2011 I met with Co. Judge Mitchell to discuss whether there was sufficient availability of funding for the multi-purpose building (name now changed to Event Center) and voiced my concern of the lack of budget information on the remaining funding balance.

He informed me that for the upcoming commissioners court meeting scheduled for Monday, April 11, he was recommending the hiring of a construction budget manager, for the purpose of determining the county’s projects financial position and the remaining availability of funds.

Since up to this point I still had not been provided with any budget analysis reflecting the balance of funding from the county auditor or the county judge, I suggested that it would be more fiscally responsible to defer the awarding of the Multi-purpose building and Pavilion contracts on April 11, 2011, until after the hiring of the budget manager.

This was so that he could gather and compile all the necessary financial information to prepare a budget analysis to determine our financial position from all sources of funding and the encumbrance balances of all county construction projects at the FairPlex.

I informed the county judge that I had prepared a financial analysis that reflected all revenue sources for all the county projects and the encumbered commitments for all construction projects awarded which reflected a balance of $2,072,448.

I gave him a copy of my financial analysis and pointed out to him that in my financial analysis I had not included the cost of the architect fees nor the full amount of the engineering service fees because I had been unable to access that information.

If those amounts were known and added to the encumbered commitments, it would reduce the $2,072,448 balance of available funds substantially down to approximately $1.2 million. He then told me that we still had $420,000 and $80,000 from two approved TXCDBG project grants that would be added to the available county project balance to fund the multi-purpose building and pavilion. It was at this point that I realized that we had some serious budget over-runs.

At the Commissioners Court meeting of April 11, 2011 the county architect, John Graves, provided a listing of the bids received for the construction of the multi-purpose building (Event Center). He recommended to the court not to award the contract, but rather to allow him to start negotiations with Krueger Construction Co. for the purpose of reducing their bid of $2,775,000 for the building and their bid of $369,000 for the pavilion by making changes in the design of both facilities.

The court then voted not to approve the award of the construction contract for the facility and the renovation of the pavilion.

After the meeting, I met briefly with Mr. Graves that same day early in the afternoon in his office to convey my concerns about the financial status of the remaining funding to cover the cost of the Multi-purpose building and the pavilion.

At this meeting, I provided him with the same copy of my financial analysis that I had provided Judge Mitchell. According to my financial analysis, even though I still did not have the cost of the engineering services, nor the cost of the architect fees, nevertheless, it appeared as though we were not going to be able to cover the entire cost of the multi-purpose building and pavilion as bided.

I expressed my concerns to Mr. Graves and he responded that he was contemplating recommending a change order of approximately $3 million that would decrease the $5,624,925 on-site improvements contract awarded to Alvin E. Stocks in order to have sufficient funding to construct the multi-purpose building, pavilion and other planned infrastructure improvements at the FairPlex.

He said that the process would be for him to present the project change-order to commissioners court for approval, and then once the bid submitted by Don Krueger for the Multi-purpose building and the pavilion was reduced through negotiations, he would make his recommendation to Commissioners Court to approve and award the Multi-purpose building and pavilion contract to Don Krueger Construction Co.

This further confirmed that we did not have sufficient funds to proceed with the construction of the Multi-purpose building. I was appalled by the proposed $3 million change-order because it would substantially reduce the scope of the approved on-site improvements project at the FairPlex to a skeletal framework of improvements.

That proposed change-order recommendation would have required serious consideration on my part in terms of project priorities whenever said recommendation would be made to commissioners court.

After all of the above events transpired, this brings us back to May 9, 2011.

After the Commissioners Court meeting of May 9th ended, I briefly met with Mr. Graves for a few minutes in the courthouse hallway. I again brought up my concerns that it did not appear to me that we had enough remaining funds to cover the cost of the awarded contract to Krueger Construction Co.

He stated that everything would more or less be within the budget because a project change-order reducing the on-site improvements contract at the FairPlex in the amount of approximately $1 million had already been approved.

This was news to me since this alluded project change-order in the amount of approximately $1 million never came before commissioners court for consideration and approval.

I then asked Mr. Graves if the contractor, Alvin E. Stock, Ltd. had approved the change-order reducing his project contract by $1 million and Mr. Graves answered that the contractor had agreed.

Later that same day after my brief meeting with Mr. Graves, I emailed the county judge to confirm if indeed a $1 million change order reduction to the FairPlex On-Site improvements, contract #3, had been approved by him as stated by Mr. Graves and to let him know that I felt that the change order should have been presented to Commissioners Court before it was executed on March 24, 2011. The judge’s response was that the amount of change was not what Mr. Graves had indicated, but he failed to disclose the amount. In effect both men were less than truthful concerning the amount because I eventually obtained the change order indicating a change of over $4 million.

The issue of the alluded approved change-order stayed in my mind for almost a week. Therefore, last Monday, May 16, 2011, I decided to visit the county auditor to find out if she had any information concerning the alluded project change-order.

Before touching on the project change-order subject, I told her that the budget analysis prepared the previous Wednesday by the Budget Manager; Carl Esser, had shed some light over some of the encumbered costs which I had been unable to access such as the cost of the architect fees and some engineering fees.

The financial report prepared by Esser depicted a total project cost of $24,986,032 funded by the $25 million certificates of obligation. This left a balance of $13,968 from the issuance of the certificates of obligation and an overall balance of $503,947, which included project funds additions of $420,000 and $70,000 from two other TXCDBG grants.

The county auditor then provided the budget analysis of the EDA grant that had just recently been prepared by the Budget Manager. The EDA project had a remaining balance of $349,094.25.

I told her that in lieu of the balance of $503,947, the additional balance of the EDA grant for $349,094.25, including the earned interest of approximately $750,000. It appeared these combined balances of approximately $1.6 million would not be sufficient to cover the entire cost of the previously approved On-Site Improvements, contract #3 for $5,624,925 awarded to Alvin E. Stock on February 14, 2011. On-Site Improvements, contract #3, for $1,446,042 had been charged and encumbered to the $25 million county project fund, but that still left an encumbered obligation of $4,178,883, which would not be entirely covered by the combined remaining balance of $1.6 million from the above stated sources.

At that point she mentioned to me that a change-order for the On-Site Improvements, contract #3, in the amount of $4,178,883 had been approved by the County Judge, the Project Engineer and the Contractor.

I requested a copy of the project change-order form and confirmed that Judge Mitchell had signed the project change-order since March 24, 2011 without informing Commissioners Court, nor presenting it to Commissioner Court for consideration and approval.

He alone arbitrarily decreased the On-Site Improvements, contract #3, by $4,178,883. By approving that change-order he reduced the project by 74 percent and substantially changed the scope of the FairPlex On-Site Improvement, contract #3, which had been unanimously approved by Commissioner Court.

It is now very obvious that he knew sometime in early March that we had overrun the county construction budget and he executed that change-order on March 24, 2011 to cover the estimated cost of the multi-purpose building and renovation of the pavilion, which would be up for consideration and approval on the next Commissioner Court meeting on April 11, 2011.

As a result of the change-order approved arbitrarily by the county judge, perhaps under the advice of others, commissioners court was denied and deprived of the right to choose which project had greater priority, down-scaling the On-Site Improvements Project at the FairPlex as designed and approved, or the construction of the Multi-purpose building and/or pavilion.

Now, we are left with a skeletal framework of On-Site Improvement to the FairPlex and a scaled-down version of the multi-purpose building and pavilion with modifications that decreased certain items that were included in the final plan reviewed by Commissioners Court, and approved for advertising on Feb. 28, 2011.

The county project was not on target. It had shortfalls after the county awarded the FairPlex On-Site improvement, contract #3, to Alvin E. Stock, Ltd. on Jan. 24, 2011. Otherwise how can a contract awarded for $5,624,925 be reduced to $1,446,042. Remember, this project contract was recommended by the architect and we incurred engineering costs for the preparation of the final plans and specifications.

The change-order in the amount of $4,178,883 approved arbitrarily by the county judge on March 24, 2011 without informing Commissioners Court and without presenting it for approval by Commissioner Court undermines the principle of transparency at the county level and the authority of the Commissioners Court. It also reflects the silence of the other public officials on the budget committee who knew of the executed change-order, but simply kept quiet with the expectation that this issue would slide by without being brought to light.

It also appears possible that the county judge may have acted in violation of Section 262.031 of the local government code, which states that if a change-order involves an increase or decrease in cost of $50,000 or less, the commissioners court may grant authority to an employee to approve the change-orders.

A $4.1 million change-order is exceedingly beyond the $50,000. Nevertheless, I am disappointed that the commissioners court and the public were not informed of the substantial amount of the change-order by means of a posted public agenda notice.

The execution and approval of such an important county financial decision should have come before Commissioners Court. I want to make it perfectly clear that I have never opposed the PairPlex construction projects. What concerns me is the manner in which various individuals, beginning with Judge Mitchell, have been less than open, and at times actively, although subtly, opposed to providing to me, and to the public, a clear and transparent explanation of what was transpiring.

According to Chapman, the finance committee held two meetings prior to the April 9 meeting whereby the contract for the multipurpose and pavilion facilities were awarded. By then, the change order had already been signed, shifting the funds to cover the shortage for the construction of the multipurpose.

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