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MWH sold the city Bio-solids processing equipment for $14 million...
But wait, that’s not all you get, as this fiasco gets even better….
Would Martha Stewart order and pay for furniture to be delivered to a house that was not yet built?
The equipment was ordered, paid for with city money, then shipped to the Southwest reclamation plant.
But, a funny thing happened on the way to the new Biosolids Building…. it wasn’t built or funded yet.
So there the $14 million worth of equipment sits, out in the open, loaded on pallets...
wrapped in plastic, waiting for a building to be constructed, that funding was never approved for.
That might be the end of our story, except for the fact that MWH wanted $40 million...
to build a 45 ft tall building with six ft CBS walls, with the remainder finished in metal.
Some people in the city finance dept and a certain young business manager thought that $40 million might be a bit on the high side.
So MWH struck out certain items and came back at $32 million, sounds good eh?
To Bin or not to Bin… MWH eliminated several items, the most important is called as a bin activator.
Bin Laden or Activator? Biosolids come in three forms, final pellets, liquid or cake sludge, preprocessing each is a viable source for revenue.
A bin activator facilitates trucks loaded with cake sludge from other county’s plants to dump their loads at the plant. We take their sludge and turn in into money.
Don’t let them eat cake… Alas, no bin, no revenue from Cake sludge, and that’s a 33% revenue loss on the operation.
But that’s not all folks… this MWH offer gets even better…
In early 2007, Bonita Springs finished a new bio solids building (all CBS construction...
which was almost the same height with half the square footage and half the equipment (1 train, 1 dryer).
Interesting enough, the equipment came from the same manufacturer chosen for the Cape. Can you guess how much BS paid for half the equipment?
$2 million, not half of $14 million. How about the building cost, and mechanical installation of the equipment?
Can you say another $4 million? Add another $1 million for incidentals and you get a grand total of $7 million out the door.
If you DOUBLED this price to $14 million for twice the building and equipment, you get what the Cape paid for the equipment alone.
No building with MWH, that’s an EXTRA $30 million without our buddy Bin.
Out the door, $14 million vs $47 million, sounds like MWH’s standard 3X markup strikes the good citizens of the Cape again.
Who approved ordering equipment for delivery to a building that was unapproved? Where was the cost oversight on this project?
The Cape could manage this project and do the build out internally for around $13 million...
then pay engineers $2 million for the mechanical install of the bio solids equipment.
Oh, and one other thing, the BS building did not have a bin activator either.
Incidentally, the equipment vendor is now threatening to void the three-year warranty.
MWH is trying to use the warranty ploy as a way to coerce the city into approving their plans.
The city could still do for $15 million what MWH is essentially attempting to extort out of them for $42 million.
Coercion and extortion, sounds like the Soprano’s do run this town.
Regarding current MWH activity in Cape Coral...
The Nattering One has cultivated some unique sources over the years.
This time we have come across some inside information that needs to be shared with the public.
Please bare in mind that in all three of these cases, city employee's at both plant's...
have been adamant in their complaints about MWH's lack of engineering and refusal to rectify the situation that MWH directly caused.
Peroxide Blonde Design?: Both Everest & SW water reclamation plants have a malfunctioning sodium hypochorite (bleach) system & untenable bleach building's.
The skids where the VFD's (variable frequency drives) & pumps sit are a maintenance & operational nightmare.
VFD's were placed directly on the pumps, on the ground, open to the elements (rain) and separated by only 6-8" inches.
Because of the spacing and due to the pump/drive combo positioning the skids are almost impossible to maintenance or repair.
The VFD's & pumps are not even water resistant, so last year, 8 of 10 pump drives failed with the first seasonal rains.
Next to monitoring for dissolved oxygen, sodium hypochlorite levels are extremely critical to the process of reclaming waste water for safe public use.
These buildings and pump skids are a $750K disaster that MWH still refuses to take ownership of and insists that the city must pay to rectify.
Bar Screens: MWH replaced perfectly functioning 2 year old bar screen systems at both Everest & SW.
The new bar screens cannot perform allowing large clumps of debris to enter each plants process...
causing both plants massive deragging and maintenance problems downstream.
True Grit Blast? The grit system at SW Reclamation can only capture 45% instead of 95% of the grit as guaranteed.
The vendor was the only vendor which would guarantee 95%, the same vendor whose "teacup" systems failed miserably in the Cape a few years ago.
The system failed the initial test, so the vendor hired an “outside” firm and claimed passage of a dubious 2nd test.
City employees witnessed the 2nd test failure, nevertheless, MWH stood behind the vendor’s vailed legal threats.
Excessive grit entering the system would not only cause excessive downstream maintenance and process issues...
but it would also cause premature catastrophic failure of the new biosolids centrifuge systems at SW reclamation.
More to come on the Southwest Biosolids fiasco in our next post.
According to the United States Public Interest Research Group, as of year end 2008...
15 roads in the U.S. had been privatized, and another 79 roads in 25 states were being considered for some form of privatization.
States and municipalities eager to find ways to finance transportation, and facing large budget deficits, are increasingly considering public-private partnerships to fill the void.
Misinformation: MWH performs quality work that the City could not manage to perform.
Reality: MWH has spent all of the citys contingency money to fix their engineering mistakes.
This has left the city without critical funds to finish the reclamation plants with much needed improvements.
Reality: The City Council will revisit the UEP in their next session with several financing alternatives...
and one alternative which removes MWH as the contractor while issuing the contract for a rebid.
Removing MWH is a good start but... don’t let these politicians sell your future’s out again.
Keep the pressure on and make them take their time, reevaluate the assessments and rather than go with an outside contractor, do the job in house this time.
Create a future for the Cape or destroy it through gross mismanagement & taxation, the choice is yours.
Misinformation: MWH doesn’t need all the trouble here in the Cape, they have plenty of work elsewhere.
Reality: The Cape Coral project is MWH’s largest, worldwide, with the exception of Australia.
This job is so big that MWH hired a telemarketing firm to call North residents in an attempt to sway their opinions with a disinformation campaign.
Misinformation: The City needs to use a contractor to perform all the work because of liability issues.
Reality: The City can take out Errors & Omissions & Liability policies at a fraction of the cost of hiring ANY at risk contractor such as MWH.
Since 2000 this would have saved the taxpayers hundreds of millions of dollars paid to MWH, which now have to be paid back to keep the city solvent.
The City could have hired competent staff to manage and oversee city employees on the projects. This would have created thousands of infrastructure jobs.
Infrastructure jobs are the key component to a durable economic base.
A durable economic base would have been much more resililent than the service economy based on vapor loans.
Instead, the Cape decided to avoid taking ownership and pay extra to OUTSOURCE.
Now the chickens have come home to roost and the future economic costs will be enormous.
Misinformation: Doing just water in the NW instead of water/sewer/irrigation is cheaper.
Reality: Three separate pipes, three separate trenches, three separate paving jobs, three separate upheavels to achieve what you could have done in one fell swoop.
Yes, the pipes are still in separate trenches, but it’s easier to get the crew to dig, lay and bury all three at once. A single upheavel, reduced costs and your done.
Misinformation: We should move ahead with the UEP now, because later it will be more expensive.
Reality: If the City elimates MWH, the rebid would come in at 35% less.
Better yet, if the city does the right thing by taking this job on internally, taxpayers will save 66%.
That means water/sewer/irrigation for $6K upfront, not $18K.
Not to mention the incalculable benefit of creating a durable economic base in the Cape, which will reap multiple benefits for years to come.
Misinformation: De-salinization is the way to go, why are we bothering rebuilding the RO & reclamation plants?
Reality: At one time the SW RO plant was the largest in the world.
Pulling from our aquafiers rather than the Gulf allows us to pass water through the membranes at lower pressure.
Less salt means lower pressure, which means the pumps use less energy and reduces the cost per gallon by seven fold.
Misinformation: The Cape doesn’t need reuse water for irrigation.
Reality: 40 to 60 percent of all water usage is for lawn irrigation.
Without the reuse water from Cape water reclamation plants, the residents would already have caused massive salt water intrusion into the aquafiers and wells.
Would you send Martha Stewart to do your shopping? Probably not, unless price was no object….
As Martha would go to the most expensive market she could find (Whole Foods or Bristol Farms) and pick only the highest priced name brands off the shelf.
What would normally be a $100 basket, suddenly becomes a $300 basket.
This is how is works when there is plenty of money floating around and nobody is watching the till.
You want to spend $750K to install a security system for the Kismet North RO? $450K for card readers? $300K for networking and cameras?
Do you really think terrorists would even bother coming to Cape Coral? Much less the water plant?
Couldn’t you have your in house people do this for around $250K on equipment? Yes you could.
A $30 Million Bio Solids Building for the Southwest Water Reclamation Plant?
The city bought $17 Million in equipment and have it sitting on palettes under tarps with no building. Simply brilliant, but don’t blame the city.
Blame the at risk contractor MWH for spending the cities money like this. This is what happens when money flows freely, and nobody is watching the till.
The city could manage this project and build the structure for under $10 Million, but they are afraid to. Why?
The city fathers are afraid of taking ownership because of the risk involved with a new process...
and the three year warranties on equipment which MWH will not honor if they don’t build the structure.
This is what insurance is for. The insurance premium would be far less than the $20 million in tax payer dollars saved.
MWH’s behavior sounds more like blackmail and bullying through FUD (Fear, Uncertainty & Doubt).
This is what happens when the people in control can’t grow a pair. They shake at the mention of liability and would rather point fingers and delegate for blame’s sake.
Nobody in this town wants to take ownership and MWH likes it that way.
The city fathers are afraid of a redux of the CDM (Can’t Design Much; Cost’s Double the Money) fiasco in the late nineties.
That was then, this is now. Nobody likes finger pointing, and everybody likes to delegate. Too bad, because when the going gets tough, the tough get going.
Hire the best project managers on the city payroll that money can buy. Manage the job and build the infrastructure by creating durable economic jobs.
Build a durable local economy by hiring local Lee County and Cape Coral citizens as city employees at prevailing labor rates.
The 2008 budget deficit was $17 million; 2009 will be on the order of $26 million (when the anticipated revenues dematerialize);
2010 will be even worse coming in at around $35 million (after bond downgrades and another wave of foreclosures).
The solution: The city fathers cannot outsource all the work and risk, while in effect taxing the citizenry to death.
Go to the $250 Million Lee County surplus for a temporary loan, take ownership and complete the following tasks.
The city should be allowed to move forward with the UEP ONLY IF:
1. MWH is removed and the assessment amounts are downscaled by 66% with in-house labor.
2. The project must be performed in-house with a majority of city mgmt & local labor; creating a durable economic base.
3. NO infrastructure assets are sold/leased to service ANY debt.
4. In the future, reduce deficit ridden fire & police payrolls.
The city father’s need to grow a pair, take ownership, and take back the process and risk from MWH.
Is this asking too much from the city manager (Terry Stewart, not Martha), head of finance and utilities director?
Is it asking too much from the part time pay city council with full time side jobs that have a conflict of interest? (developer, attorney, real estate agent).
From the track record so far, it seems like Martha Stewart has a bigger pair than all the city fathers combined.
Let's see what happens at the vote tonight.
Tonights meeting is a work shop. Wonder if anyone will ask MWH about their triple estimated assessment costs?
Better yet, will anyone ask MWH about their triple excessive +$30 million price tag on the Southwest Water Reclamation Bio Solids Building?
That's right, it could be yours for only $10 million, but will anyone ask?
The public has been in an uproar with the City Council voting to proceed with the utilities expansion...
bringing water, sewer & irrigation at an upfront cost of $17K (financed $34K) to SW Areas 6,7; and water to North 1 through 8 at $6K (financed $10K).
The Nattering One muses... these heady cost estimates are based upon calculations used by the incumbent contractor MWH...
during the last surge in commodities & service prices during 2003.
Rebar, concrete, services & labor all cost far less today than during those halycon boomtown days.
In fact, the city could cut costs by 66%. How?
Fire the carpetbagger locusts at MWH, manage the project, hire permanent employees from Cape Coral & Lee County at prevailing wages to work the project.
Re-estimated costs based on this scenario prove that MWH is attempting to gough the public AGAIN while employing out of area labor at half the going rate.
Taking fiscal responsibility & ownership by bringing this project in house would help to build a durable economic base and save the taxpayers countless millions.
Will the City step up? Will Mark Mason, Terry Stewart & Chuck Pavlos man up? Will the Citzens of the Cape wise up?
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