PAHOKEE — The Palm Beach County Office of the Inspector General (OIG) issued a 32-page “Contract Oversight Report” Tuesday, Feb. 11, stating that City Manager Chandler Williamson made a series of improper actions in administering over $2 million in state grants for renovation of the marina on Lake Okeechobee.
The Florida Department of Economic Opportunity (FDEO) grants, which totaled about $2.3 million, came with a strict set of guidelines that had to be fulfilled every step of the way, with compliance to be documented appropriately in a series of “deliverables.”
In summary, this is what the OIG reported:
• Finding 1: Payment of $150,000 to Technomarine Construction Inc. (TCI) was improperly made because the state did not permit any prepayment and work had not been completed; plus, no documentation was supplied to the city and no competitive bidding was conducted as required. These are now considered questioned costs, and the charge, brought in a private complaint, was substantiated. Further, the OIG referred this matter to the FDEO’s inspector general because the department now may seek to recoup that amount from Pahokee.
• Finding 2: The city and Mr. Williamson failed to abide by state statutes requiring a payment and performance surety bond.
• Finding 3: The city violated its own ordinances and the FDEO grant agreement by not soliciting competitive bids for services outlined in that TCI design-build contract.
• Finding 4: City Manager Williamson violated Pahokee’s ordinances by executing a $1.2 million addendum with Technomarine and allowing the company to proceed with work that had not been approved by the Pahokee City Commission or the city attorney.
The OIG found sufficient information to recommend that the Florida Department of Legal Affairs review whether the issue of Technomarine’s first pay application (for the $150,000 advance) constituted a false claim, illegal under state law. Its report also makes 10 recommendations to “assist the city in strengthening internal controls and enhance compliance.”
After the city canceled all contracts with TCI in late April 2018, Pahokee demanded repayment of all but $25,000 of the advance. The company refused to pay. The city filed a lawsuit, and a final judgment was entered May 29, 2018, ordering Technomarine to repay $125,000. To date, that amount still has not been paid, and the company has filed for bankruptcy protection.
According to the OIG report, the City of Pahokee officially responded to the office’s findings with a six-page letter from Mr. Williamson stating that the city commission accepted the report and recommendations. It further detailed his and other city officials’ actions to comply with the OIG’s findings and abide by its recommendations going forward, including staff training and the institution of new city policies.
Technomarine CEO Erik Sanderson responded to the OIG report’s findings and the city’s responses in a letter from his legal representative, Beltrano & Associates of Jupiter. Aldo Beltrano defended the company’s submittal of the $150,000 pay request, saying it was presented “upon the city’s insistence that it be prepared a certain way to satisfy reporting requirements to the state, purportedly because the city needed to show the grant money being spent within a certain amount of time. … the city was pretty clearly steering this process.”
Attorney Beltrano’s letter goes on to state that City Manager Williamson “represented that he was authorized to enter into that” $1.2 million contract in his managerial capacit Neither the commissioners nor the city attorney had approved, according to the OIG’s findings.
Mr. Beltrano’s letter states, on behalf of Technomarine:
“TCI had no reason to question Mr. Williamson, and the fact that he overstepped his authority does not relieve the city of its contract obligations. TCI suffered approximately $300,000 in lost profits when the city essentially pulled out of the agreement and entered a stop work order.”
The lawyer’s missive goes on to claim that the company spent $8,500 in addition ”that the city did not pay for preconstruction services that TCI performed.”
Technomarine’s then-president, Jat Talton, was offered the opportunity to submit a response to the OIG’s report but did not do so.