Two Mesa Lift Station Pumps Were Replaced Five Years Ago?

2015-07-15a

The July 7, 2016 Beaumont City Council Agenda contained two Items regarding the Sewer Plant: Item 3.c. Utility Authority Financial Report; and Item 8.o. Emergency Pump Repair at Mesa Lift Station.

The City claims $72 Million in Sewer Machinery & Equipment on their Financial Statements. Former Finance Director Bill Aylward admitted and provided verification that the $72 Million listed as Machinery & Equipment is forged, the money was instead funneled to Urban Logic, and equipment was never purchased.

Finance Director 4th Melana Taylor claimed to have a depreciation schedule and ‘some receipts’.

City Manger 3rd Warne stated that “no one was intentionally committing fraud”, which is code for “just play dumb”.

Council unanimously Approved the fraudulent Utility Authority Financial Report.

Agenda Item 8.o. requests an Emergency Contract because all four (4) pumps at the Mesa Lift Station have failed.

City Engineer/Public Works Director Amer Jakher explained to Council that the pumps were old, in constant repair, and inefficient.

Councilman Lloyd White questioned why the situation became so deteriorated before it was brought to Council, but the Mesa Lift Station was brought to Council several times.

January 25, 2016 Mesa Lift Station Pump Rental: http://www.ci.beaumont.ca.us/documentcenter/view/26990

May 3, 2016 Council Approved Agenda Item 8.D to repair Mesa Lift Station Pump #3 for $18,248.40: http://www.ci.beaumont.ca.us/documentcenter/view/27522

The Mesa Lift Station is a perfect example of the results of Beaumont’s fraudulent financial statements.

Lift Station pumps are ‘machinery & equipment’ with a useful life of 15-20 years. It is the duty of the Finance Department to record the assets and properly calculate the useful life and deprecation.

In 2015 former City Manager Alan Kapanicas calculated Beaumont’s assets and depreciation. Kapanicas recorded 10 Lift Stations with a useful life of 30 years. Doubling the useful life allows the City to leave the asset on its books, which falsely inflates their assets, but does not extend the actual life of the equipment.

Kapanicas’ depreciation schedule lists the age of the Mesa Lift Station at ‘5 years’. Jakher stated that all four of the the lift station pumps are old.

Turns out that in 2010 the City of Beaumont claimed that they purchased two new efficient pumps for the Mesa Lift Station and they even put out propaganda:

2010: Mesa Lift Station Variable Frequency Drives

The City of Beaumont recently installed two 250 horse-power “variable frequency drive” (VFD) pumps at Mesa Lift Station, the newest sewer lift station to come online. This life station provides service to the communities located on the Western boundaries of the City, including Tournament Hills and Fairway Canyon housing developments. By installing VFDs on the two pumps currently operating at the life station, the City of Beaumont’s public works department was able to save approximately 375,972 kWh annually. http://www.ci.beaumont.ca.us/documentcenter/view/2218

The City recorded the Mesa Lift Station’s machinery and equipment cost at $4,180,000. Removing 5 years from a 30-year depreciation records the value of the Mesa Lift Station is recorded at $3,483.333.33.

But apparently the pumps were never purchased, or they were purchased and installed in other town, so the $3.483 Million is a fraudulent number plugged into the Sewer Machinery & Equipment to give the appearance of Assets that do not exist.

Since the FBI Raids; the Beaumont City Council has paid:
$33,800 to Interwest Consulting
$1,396,761 to Utility Partners
$180,000 to Willdan Engineering
$520,000 to Wildermuth Environmentals
$197,000 to Xylem Water Solutions

Councilman White complains that Jakhar didn’t notify Council, but Council has paid a lot of Engineers to assess the sewer plant in the last year. Paid, but never received a report or asked for a report.

Interwest Consulting was going to come back with a report on the condition of the sewer plant, but never came back. Willdan Engineering was going to come back with a report on the condition of the sewer plant, but never came back. Wildermuth told Council that they’re ‘really close’ to Title 22 Compliance last year, pocketed his check, and never came back.

Nor has Council demanded an account of the money paid.

Beaumont City Council Transcript 07/07/2016

2:13:30 Lara: That brings us to Item 8.o. Award of Contract Emergency Mesa Lift Station Pump Repair to Houston Harris.

2:14:00 White: I thought as a Council moving forward we were trying to do as many RFPs that we could. Provide more competitive bidding, something that we could that previous Councils didn’t do. So in this one we have exemptions to competitive bidding and I understand the reason. My question is; it appears from the Report that this is not one repair, but it’s been a series of failures or problems with machinery or equipment that has brought us to an exigent situation. So my questions is; why one of these earlier repairs didn’t come before us with an RFP to do something such as this?

2:15:00 Public Works Director Amer Jakher: Before we move forward I would like to make a correction. It’s not to Houston Harris. It’s two Contracts that we are Awarding. One is for $117,500 and that’s for the SCW Contracting Services. The other one is for Xylem $166,337.49. Somehow it says ‘Houston Harris’ on the title, but it’s not.

White: What’s the total between the two Contracts?

Jakher: The total between the two Contracts is $283,837.49. $166,337.49 is for the Purchase of the Pumps. Installation of the Pumps is $117,500.

2:16:00 Jakher: To address the questions. What normally happens in the process that we have set up in the purchasing policy requires us to the bidding process for anything over $10,000. If there’s an emergency there is provisions in our Code that allow the City to spend the money for that emergency. We’ve had failures before at this Station. There were repairs done. Some of them, prior to when I was here, some of the purchasing policies were not being followed. It repairs would be done, contractors were hire, and construction completed. Since I’ve been here we’ve been trying to follow the purchasing policy. If an item comes up that requires legitimate repair, emergency repair, we’ll bring it to the Council and get that done. If it’s not an emergency item then we go out to bid and anything that’s less than $10,000 we get three bids and get the work done, anything over three bids [$10,000] requires full bidding and getting that done.

2:17:00 Jakher: What’s happening in this case is that all [4] of the pumps have are failing. We had one pump working and that requires manual operation. So basically what we’re doing right now is that we’re renting two pumps, diesel pumps, and working the lift station through that. The emergency or the urgency in this is because that we had a failure of one of the pump that caused the other pump, the last pump to fail to as well. The pumps that are there are dated, we’ve been repairing them, they’re not very efficient pumps. My goal is to at least replace two of them with efficient, more up to date, newer pumps. The thing is; we can’t get a Warranty over three months on the work that we get done, so along with this I’m requesting some money for and Engineering Firm, which is NV5, it’s the Engineering Firm we currently contract with for inspections and other services, to help us to make sure the pump they’re putting in are the right pumps.

2:18:00 White: I’m not arguing that at this point we need to award these Contracts because it’s become an exigent circumstance. My question is, the way I read it, consist of four pumps; currently all four pumps have failed. Pump #3 had previously failed and is under repairs while Pump #4 leaks and can be used manually. Pump #2 failed on June 19th. So the way I read it was that on June 19th the last pump failed and as you just explained; when that pump failed it made the only remaining pump fail. Why this wasn’t brought up to us to repair those first two pumps when it wasn’t an exigent circumstance, we could do an RFP and follow the bid process then these two pumps would not have put us in a position that we’re issuing two Contracts for $280,000 competitive bid process.

2:19:00 White: You also said that NV5 is another $35,000 again without any kind of RFP. We’re now over $300,000 into this with no RFP. I thought as a Council we wanted to stop doing this kind of purchasing.

Jakher: We did bring the pump 3 back to Council for Approval. We were in the process of repairing, as we were in the process of repairing the pumps the other pumps failed. And we were going to repair the 4th one. The ideal was to go ahead and start designing and do the replacement of the 4th one and go through the RFP process and replace that 4th one, but at that time we had two working pumps and one pump had failed. We had another pump that had some other issues. What happened since then is that all the pumps have failed. It just came about too quick.