Audit rakes county over purchase

Officials cost taxpayers millions because they didn't do their homework, it says

By MIKE DONILA, Times Staff Writer
Published August 31, 2007

When county leaders four years ago agreed to buy Belleair's wastewater collection system, they were told it would cost almost $6-million to fix and bring online.

That cost is now closer to $23-million, according to an audit made public Thursday that said the purchase probably "wasn't in the best interest of the county."

The county's utility directors, though, say the 38-page report released by the Pinellas County Clerk of the Circuit Court's internal audit division "exaggerates" its findings and is "unfair." Further, they say, examiners did not interview the correct county employees.

County officials stress that Pinellas will not raise customer rates to cover the additional costs to fix the wastewater system, a move the audit predicted would be needed.

Instead, the county will use money in its $58-million capital improvement fund for sewer services to foot the one-time bill.

That, however, did not appease county auditor Bill Melton, who investigated the spending.

He said local leaders failed to diligently look into just what they were buying and how much it would cost to make operational. They should have looked over their own system, too, he said.

"I'm concerned about the way this purchase was handled," Melton said Thursday. "I'm amazed at the lack of due diligence. They didn't do an in-depth analysis."

Faced with a leaking wastewater treatment system that was polluting Clearwater Bay and would cost millions to upgrade, Belleair leaders in 2003 sought help from the county. Figuring they could fix it at a good price and make some money from the new customers, Pinellas leaders agreed to buy the system and take over the service.

They planned to phase out the Belleair system and transfer the operations to another facility and then tap that onto the county's system. The county would also add pipes to reroute reclaimed water back to Belleair to use at the town's private golf courses, which had a contract with the town. This overall plan would cost about $5.8-million.

A short time later, though, the county learned that Belleair's system, as well as its own, needed more work than initially believed.

"We had to change the scope of the project, we had to reroute pipes, lengthen pipes, improve the overall system," said Mike Sweet, director of engineering for the county's Utilities Department. "That cost an additional $4 -to -$5-million."

He said the cost of construction materials and labor also increased in the next few years, particularly in the wake of Hurricane Katrina. That, he said, drove the amount up another $11-million.

The project, which includes replacing the treatment plant, fixing pump stations and laying new pipe, should finish by year's end.

"We didn't mismanage, we didn't not plan and we didn't not know what we were doing," Sweet said.

He did concede that "to some extent maybe another project wouldn't get done" because the county has to use improvement funds to cover the difference in the final cost and what was initially projected.

The county's wastewater system serves more than 70,000 accounts in the unincorporated area and a number of Pinellas' smaller cities.

The internal audit division of the clerk of the circuit court, which routinely audits the county's Utilities Department, does not have enforcement authority. But county and audit officials are expected to meet in the upcoming weeks to talk further about the audit.