– Fort Myers, Florida – Southwest Florida
March 3, 2010

Auditor return splits Cape

By Brian Liberatore

1:10 A.M. – The last time Michael Kessler was in Cape Coral, he kicked up a cloud of suspicion that still hangs over the massive utility expansion project.

His return, some hope, will clear the air.

“It will get cleaned up one way or another,” said Mayor John Sullivan. “Either everything was OK or it wasn’t. If it wasn’t OK then I think we’re owed some money.”

Sullivan and three councilmen Monday voted to bring back Kessler, a New York City-area auditor to finish his 2006 investigation into a decade-old utility project. That 80-page audit brought allegations of bid rigging as Kessler said he was denied vital information that kept him from completing the report.

Opponents of Kessler’s return fear the city is wasting the $60,000 it will cost to bring him back.

Kessler said he wouldn’t pursue an audit unless he could access the records he needs.

“Either we have a solid plan before we go down there or we don’t go,” Kessler said. “It would be foolish to just spin our wheels.”

There is no guarantee Kessler will get the information he was denied by the contract manager four years ago or even how much of the data still exists. And even if Kessler finds the city was overcharged, ratepayers might never recover any money. The state sets a five-year statute of limitation on contract discrepancies. The contract Kessler would be examining ended in 2004.

The City Council still needs to come up with the details of the audit. The council Monday approved the money to bring back Kessler but so far hasn’t established the scope of the audit or the time frame.

Kessler said he was still waiting to hear from the city for specifics.

A fast exit

Kessler left Cape Coral in 2006, leaving the podium during a meeting to catch a flight before the council bombarded him with dozens of questions about his $130,000 investigation into utility expansions in the Southwest 1, 2 and 3 assessment areas – an area that includes about 8,400 properties. Single-family homeowners in those areas paid special assessments between $9,846 and $10,943 for sewer, water and irrigation utilities.

Kessler’s report alluded to bid rigging, prompting a look from the FBI and other U.S. Department of Justice agents. After four years no charges have been filed.

“I haven’t had any contact with them in years,” said former City Manager Terry Stewart. “And I’m confident that I never will.”

Missing data

Kessler told the city he had finished his work based on the information he had. But he needed more information to complete parts of the investigation. He wanted to prove MWH, the company overseeing the project, was appropriately billing the city for its employee time.

The company provided records to Kessler but blacked out bank account numbers, Social Security numbers and information about hours worked on other projects. The result was a box full of documents with heavy black lines obscuring much of the information.

Sullivan put a handful of the redacted documents on the city’s projector system Monday to illustrate his skepticism.

MWH officials said they would cooperate, but wouldn’t say if they would give up the employee records Kessler previously requested.

A dead horse?

Councilman Marty McClain blasted Sullivan’s plan on Monday, deeming it a personal agenda. Sullivan and Deile, who voted for the audit, have lawsuits against the city over its utility expansion program. Sullivan pointed out that both suits regarded the Southwest 4 area while Kessler’s audit focused on the Southwest 1, 2 and 3 areas.

Separate audits by R.L. Townsend & Associates, and PricewaterhouseCoopers showed “MWH has completed work according to standards of business integrity, and contractual obligations,” an official company statement read.

Despite the two other audits and the city management’s insistence Kessler’s claims were bogus, skepticism over the project has continued because of high costs that had property owners in another assessment area paying over $19,000. It was stopped last year.

Kessler gets definitive answers.

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