The Wausau Finance Committee on Tuesday declined to approve payment to a petroleum company for tank fueling-related work for Metro Ride after some alders objected to frequent changes made by the company – and city staff’s response to the matter.
The committee asked finance and Metro Ride staff to investigate and potentially bring a representative from the company to explain the cost increases related to the work.
“We got the invoice in October; we are just finding it about now after the director left – on his last day,” Finance Committee member Doug Diny said. “This just doesn’t smell right. I don’t want to impugn once person or the contractor…It appears he (the contractor) had his cake and eat it too.” Diny was referring to the memo written by the outgoing Transit Director Greg Seubert to the Finance Committee on Jan. 15, a day before his retirement.
The alder added that the contractor, referred to as Northwest Petroleum, was initially the lowest bidder and subsequently came in as a high bidder after a re-bid and went from $21,000 to nearly $75,000.
City documents refer to the company using two names. Last year, the company was referred to as “Midwest,” but this year the documents, except on page 70 of the meeting packet, refer to “Northwest Petroleum.” City Finance Director Maryanne Groat did not respond to this newspaper’s request for clarification.
The company’s conduct and the staff’s response to it raised several questions for members of the Committee.
Finance Director Groat told the committee she did not look into the communication from Seubert in time and that staff just found out about the invoices recently.
The approved budget for the project was already modified last year after Northwest Petroleum Service told Metro Ride the company needed more money to complete federally-mandated tank fueling work. The work involved replacing pipes, fuel dispensers, overhead lights and associated construction.
Diny, who last year had objected to sole-sourcing the project to Northwest without an official request for proposals, said on Tuesday he would not approve the payment until he knows why there have been frequent changes made by the company and what exactly took place.
After getting the contract, the company then increased the price for the work. And it is asking for more again, Diny added. “We need to know the moving parts here,” the Dist. 4 alder said.
His position was backed by alders Sarah Watson and Michael Martens, who also demanded answers. Committee Chair Lisa Rasmussen agreed that the matter requires investigation.
Groat said she was not clear about what the committee was asking the staff to do, since the work was completed and invoice submitted. However, she too noted that once the contract was awarded, the company started to make changes.
Metro Ride too expresses surprise too
It is not just alders who appear shocked by the company’s conduct.
“When the project was substantially complete, Northwest sent two invoices – one for the original bid amount and one for the revised bid amount,” the now retired Transit Director Seubert wrote to the Finance Committee on Jan. 15. “I contacted them on the same day to point out the error.”
After the company sent another invoice, Seubert said he understood that the second cost estimate represented a total project cost, not the difference. The company agreed to take another look at the project. The company’s project manager has now offered a credit of $4,150, Seubert wrote in his memo.
“I was very surprised when the second estimate from Midwest came in as high as it did,” Seubert said. “I never imagined that their intent was to add it to the first estimate. I don’t recall that scenario ever being discussed.” As a result, the pending invoices exceed authorized project budget by $17,996.41. Unclear is why the former transit director would refer to Northwest and Midwest in the same memo.
While making the budget modification request last year, Seibert said the petroleum company had told staff when it broke ground near the fuel storage tank, they noticed a proprietary pipe from a company that is out of business. That required replacing the piping, prompting the cost increase that required a budget modification, Seubert had told Finance Committee in June last year.
The committee agreed to hold the payment until they received more information.