Adage: rats abandoning a sinking ship?

What’s that old adage about rats abandoning a sinking ship?

A call to CH2M Hill’s Charlotte office on Tuesday confirmed that David Wagoner and Mike Osborne are no longer employees of CH2M Hill, the engineering firm that Mooresville’s town board hired in 2004 to study and design the Town of Mooresville's multi-million-dollar wastewater treatment plant expansion.

Osborne was the original manager for Mooresville’s project. Wagoner was the original project director and the initial reason that town commissioners offered for hiring CH2M Hill against the professional recommendation of the town’s engineers and utilities staff.

I was the investigative reporter who covered this issue for the Mooresville Tribune. Here’s a little background, gleaned from my 2004 and 2005 articles:

Of the five engineering firms selected as finalists to enter into negotiations with Mooresville for the expansion project, CH2M Hill was ranked last by all four members of the town’s engineering and utilities departments who independently reviewed and graded the candidates.

The five firms were asked a month before the town board’s decision to submit qualification packages with additional information about their firms to help the town select the most qualified firm for Mooresville’s project.

According to the grading sheet, Black & Veatch – which then-Engineering Director Richard McMillan ultimately recommended to the town board – received a significantly higher score than the other four firms.

CH2M Hill, which the town board ultimately chose, was ranked last by all four people who graded the firms.

The average score for Black & Veatch was 49, while the average score for CH2M Hill was 27.7. The highest attainable score was 55. The lowest was 11.

Despite that, and McMillan’s recommendation, then-Commissioner Alice Lee made a motion that the town instead approve the recommendation of fellow Commissioner Mitch Abraham to hire CH2M Hill because Wagoner, a CH2M Hill official, is a resident of Mooresville and worked at the town’s wastewater treatment plant, Lee said. (As an aside, Abraham had not made that recommendation in a public meeting; Lee later said that the commissioners had discussed the matter during a home visit and telephone conversations.)

Following the Oct. 18, 2004 vote to hire CH2M Hill, Abraham justified his decision, saying: “We feel real comfortable with that firm, and especially David. Everybody’s familiar with him and his work in the past.”

Added Lee: “The fact is that David Wagoner is a local person and was the superintendent of our waste treatment plant for seven years. He has a vested interest in the town, and he would make himself available to us at anytime. Under the circumstances, I feel they would do us the best job.”

Neither Lee nor Abraham mentioned that they are close personal friends with Wagoner and attend his same church. It was only later that Lee said another reason the town hired CH2M Hill was because the Engineering News Record had ranked the firm as the number-one wastewater design firm in the nation.

She failed to mention, however, that the ranking was based on annual sales revenue – or how much money the firm made in a year.

If the money that CH2M Hill intended and attempted (and, at times, succeeded) to make from the Town of Mooresville is any indication – and it is – it’s no wonder the firm was ranked number one in sales revenue.

For example, after the town board hired CH2M Hill, the firm attempted to charge Mooresville sewer customers $564,500 lump-sum for a preliminary engineering report, meaning the town would pay that amount regardless of the actual time CH2M Hill spent on the work.

McMillan baulked, though, telling CH2M Hill that the town would pay the firm on a cost-plus basis, meaning it would reimburse actual hours worked, out-of-pocket expenses and other reimbursable items.

Interestingly, after all the media hype – including a Tribune investigation into the costs that other cities and towns across the southeast paid for similar studies (which wasn’t even close to the amount CH2M Hill tried the charge us) – the Town of Mooresville ended up paying about $244,000 less than CH2M Hill originally tried to charge.

In other words, had McMillan not fought on behalf of Mooresville’s sewer customers, we would have ended up paying CH2M Hill $244,000 more than it actually cost the firm to complete the study.

Then, of course, was the August 2007 Tribune investigation that showed the Town of Mooresville had reimbursed CH2M Hill more than $150,000 for expenses ranging from airline tickets and $176 hotel rooms to chewing gum and $4.65 Starbucks coffees.

Many of those expenses had no receipts and non-itemized receipts, but the town reimbursed them anyway, against its own policy.

From August 2006 to June 2007, CH2M Hill billed the town:

• nearly $49,000 in air transportation,
• almost $49,000 in hotel rooms from Charlotte and Raleigh to Florida, Oregon and Ohio,
• three months’ rent for two Florida condominiums, each at $1,750 per month,
• nearly $23,000 in car rentals,
• about $17,000 in travel and business meals,
• about $3,200 in auto mileage,
• almost $4,000 in gas and parking, and
• thousands more dollars in grocery-store purchases, breakfast and catered lunches for CH2M Hill’s “working meetings” (including those held in Charlotte);
• Starbucks coffee purchases,
• Brachs candy at $5.61,
• "Cowboy cookies” at $2.99,
• $15 tips to hotel housekeeping,
• and other “travel-related” expenses, such as toll fees and cab fares.

In addition to hundreds of undocumented meal expenditures, CH2M Hill submitted:

• An expense for $603.04 in lodging, with a note stating the receipt was lost.
• Another submission from CH2M Hill stated: “Lost receipts for travel-parking & gas in the amount of $244.88.” The town paid them anyway.
• Another CH2M Hill employee submitted to the town a handwritten note for lost lodging receipts totaling $561.77.

The firm also submitted a parking expense with no receipt for $22 and

• $56.31 and $22.90 expenses with no receipt for “supplies,”
• an $8 expense, with no receipt, for “water plus snacks for field work,” and
• a $2.31 expense, with no receipt, for bottled water.

One CH2M Hill employee in particular, in one month, submitted 70 expenses – ranging from 64 cents to $36.36 – with no receipts. Those expenditures were included in a two-page itemized list of 126 meal expenses with lost receipts. Atop that list, CH2M Hill added: "Lost receipts for meals in the amount of $321.16."

In the midst of public scrutiny, CH2M Hill and Mooresville Mayor Bill Thunberg announced they both would launch individual "internal investigations." CH2M Hill eventually "wrote off" $2,500 in undocumented expenses that the town had originally reimbursed. The lavish hotels and other travel expenses were never addressed by either CH2M Hill or the town.

In February 2006, our town manager, Jamie Justice, fired McMillan and Utilities Director Wilce Martin, who also staunchly opposed the town’s hiring of CH2M Hill.

Justice, who was our town manager for only three years, resigned last month per the request of the majority of our town board.

As for the other key players in the CH2M Hill debacle, Lee chose in the midst of the controversy not to seek re-election when her term expired in 2005. That same year, Commissioner Mitchell Mack also chose not to seek re-election, and long-time Commissioner Frank Owens was ousted. Franklin Campbell, who consistently voted against CH2M Hill, resigned from his Ward 2 seat during that time due to family issues. Then in 2007, veteran At-large Commissioner Danny Beaver lost his bid for re-election. Mitch Abraham, however, was re-elected as Ward 1 Commissioner in a virtually non-contested race.

So, in a nutshell, one commissioner remains from the original five who hired CH2M Hill. And the primary reason that the town said it hired that firm – David Wagoner – is apparently no longer employed by CH2M Hill. Neither is the original project manager, Mike Osborne.

Where does that leave the Town of Mooresville sewer customers? Holding the bag in a relationship with a “local firm” that, come to find out, isn’t so local anymore.

There are reasons that government entities are not supposed to make decisions that financially benefit their friends. This, no doubt, is one of them.

So, back to the old adage about the rats being the first to abandon sinking ships: does anyone know the exact wording of that adage? ‘Cause I’ve googled the heck out of it today and can’t seem to find it. I’m just curious.