Mike Acquesta of Earth Tech appeared before the city council on Monday night to request a contract extension. Earth Tech is currently overseeing the renovation of the raw water intake facilities for the Kerr Lake Regional Water Treatment Plant.
Acquesta has requested a contract extension of $123,663. This would add $38,273 to the cost of construction administration, originally priced at $50,000 and $85,390 for construction observation and inspection, originally slated to be $85,000.
It was the amount of money requested for observation and inspection that confused several members of the council because it includes a total of five months of salary when the extension is only supposed to run for three months.
Upon questioning, Acquesta revealed that an extra two months of salary had been requested to offset the salary of a former city employee who had entered into the employ of Earth Tech during the project. The employee in question could not continue to work for the city and retain his retirement, Acquesta informed the council, and his services were invaluable to the project.
“We didn’t authorize that,” council member Elissa Yount stated.
Acquesta replied: “I think it was the request of the city to keep [the employee] on.” When asked by council member Mary Emma Evans who had made the request, Acquesta stated, “The utilities staff, I guess.”
Henderson has no “utilities” department per se.
“If the contractor had finished on time, I wouldn’t be here,” Acquesta told the council, explaining his rationale for hiring the former city employee.
Henderson Mayor Clem Seifert asked if it were possible to pass the cost on to the contractor. The contractor is liable for $1,600 in liquidated damages for each day it is over its scheduled completion date. City attorney John Zollicoffer informed him and the council that the damages are not payable until the end of the contract, when they must be negotiated or litigated.
During ongoing and confusing debate, Acquesta informed the council that the city currently owed Earth Tech $50,000, of which $15,000 requires the allocation of new funds. It was also determined that the $123,663 is available from the contingency fund, and therefore no new revenue source would need to be found.
Acquesta informed the council that the new anticipated completion date is January 27 of next year.
Seifert stated a need to resolve the issue regarding the hiring of the former city employee by Earth Tech.
In the end, the council voted to pay Earth Tech the outstanding charges and to refer the matter to the FAIR Committee’s December 5 meeting. Since no new contract was authorized, Acquesta is technically in violation of the Sarbanes-Oxley Act of 2002, a law designed to curb public and private financial misdealing by strengthening internal controls.