Undergrounding Fallout Leads to Contract Scrutiny at City Council Meeting October 17
City Council approves “final” preliminary undegrounding audit report
At its meeting on Monday, Oct. 17, the City Council unanimously accepted the Preliminary Report of the Audit Subcommittee on the 2009 problems associated with the Piedmont Hills Underground Utility District (PHUUD), which resulted in the expenditure of approximately $2.3 million in City funds.
Although Mayor Dean Barbieri and Vice Mayor John Chiang comprised a majority of the three-person subcommittee, City Attorney Tom Curry stated it was appropriate for the two Council members to vote on the report. The report did not investigate the roles of staff members or the City Council in the cost overrun, as this is part of ongoing litigation with the engineering firms. The subcommittee stated further study is needed, and their report could not be final until litigation is settled.
At the Council meeting, Vice Mayor Chiang recommended suspending underground utility districts indefinitely until there are guarantees the City will not be at risk. Council member Margaret Fujioka proposed holding a public hearing on the current undergrounding moratorium and the City’s undergrounding policy. Council member Garrett Keating requested that staff prioritize the report’s recommendations and emphasized the need for better staff-Council communications. Given the protracted nature of litigation and a Council change in March when Mayor Barbieri leaves office and Fujioka is either reelected or replaced, the Council did not determine the future makeup of an investigative committee. A resolution adopted unanimously by the Council directed staff to provide prioritized recommendations for future actions by the Council, to hold a hearing on the current underground moratorium and the City’s undergrounding policy, and to have thorough review of Department of Public Works contracts.
In closed session, the Council dealt with the City’s undergrounding lawsuit with the project engineers.
During the open session agenda, the Council approved an agreement to designate the City Administrator as Piedmont’s representative to work with 11 other cities in shutting down the failed Alameda Community Action Program (ACAP) joint powers organization. Never a beneficiary of ACAP, but a member of the organization for decades, Piedmont has been required by the joint powers agreement to pay more than $100,000 for the financial failure of ACAP. The total amount of Piedmont’s liability is indeterminate at this point.
Later in the meeting, in a markedly careful review, two contracts came under detailed Council scrutiny. One was for the purchase of emergency vehicles. The other was for a consultant to determine if any toxins had contaminated soil around the former gasoline storage tanks next to City Hall. In both instances, the Council exhibited caution in their evaluation of the contracts and requested additional information from staff.
Hopefully Monday night was a harbinger of a new era of oversight of contracts by City Council. However, unlike the PHUD undergrounding contracts, Council was actually shown these contracts which were relatively simple and did not contain a complex scope of work. It remains an open question how Council will review complex contracts such as for the Blair Park proposal and other large projects. Staff will certainly be more diligent however Planning Commission review and third party review can only help. The recent report of the Audit Committee provides guidance on this as well. Fundamentally, City Council will need to set the standard for oversight.