The state auditor general’s office has asked the Pine Strawberry Water Improvement District for a host of documents in connection with the peculiar way the district bought and installed 13 generators for well pumps in 2011.
The auditor general opened the investigation of the contract in 2012 due to concerns about the district’s decision to split a single contract into 13 smaller contracts, apparently to avoid state requirements to seek competitive bids on contracts over a certain size.
Critics also questioned the awarding of 13 contracts totaling $80,000 to Hat Creek Electric, which had connections with then-board member Mike Greer.
The letter from George Graham, manager of the auditor’s Special Investigative Unit, asked for 16 categories of documents a public agency would normally accumulate in awarding a competitively bid contract. Items included bids, lists of bidders, public notices, names of employees who evaluated the bids, meeting minutes, evaluation committee notes and determinations in writing that the bid was “fair and reasonable,” all contracts and amendments.
The letter went to District Manager Brad Cole, who works for the consulting firm CH2M Hill.
The auditor general letter also asked for “all documents including monthly reports and invoices related to any payments made from CH2M Hill to PSWID during fiscal years 2010 through 2014, including those for repairs, chemicals and fuel” and for all documents relating to payments from PSWID to CH2M Hill for repairs, chemicals and fuel.
Cole promptly wrote a letter to the board concerning the request. Cole said the auditor general “appears to have the legal authority to have access to the information requested.”
However, Cole said the consulting company couldn’t turn over the requested records without express permission from the board.
“Please be aware that although we are seeking permission from the district to disclose information to the state auditor, we have not done any research regarding the auditor’s request, specifically regarding the legality of the request or if it is in the best interest of the district to provide the information requested. Given the nature of the allegations involved in the state auditor’s investigation, we strongly suggest the district seek the advice of counsel before advising CH2M Hill on how to respond.”
At the last meeting of the newly elected board, one item on the agenda was approval of a request for proposals to find a new district attorney.
The issue of the Hat Creek Electric generators dates back to a time of considerable turmoil in the district.
The auditor general made a similar request for documents in November of 2012 relating to the purchase of the generators plus former board member and treasurer Michael Greer’s use of a district credit card to make personal purchases. Greer later repaid the money and resigned from the board. Charges on the card totaled $9,000 and Greer repaid $2,300.
The auditor general has taken no action nor released any findings on the board member’s credit card use.
The district split the $80,000 contract for well generators into 13 separate contracts, apparently to avoid state regulations that would require formal competitive bids for any contract above $25,000.
Board critics including the group Water for Pine Strawberry raised questions about the contract at the time, noting that Greer at one time owned Hat Creek Electric.
At the time Hat Creek Electric got the 13 contracts, Greer no longer owned it although his name had not been removed from the Arizona Corporation Commission contractor records.
Board critics cited the questions about the credit card use and the contract for the generators in mounting a recall effort against the water board.
However, the water board resigned en masse before the recall backers finished gathering petitions. The Gila County Board of Supervisors took over management of the district until the county could call a special election in May.
That newly elected board will now have to decide how to respond to the auditor general’s request for information.