The Eternal Dustbowl

Paying for the sins of L.A.�s water barons has created a half-billion-dollar boondoggle

Comments (0) By Jeffrey Anderson Wednesday, Mar 22 2006

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In a letter to Councilman Tony Cardenas on September 1, 2005, Freeman admitted he gave the city an estimate that was “pitifully low.” He claims he underestimated engineering and environmental costs resulting in change orders to meet regulatory requirements. Baylis and others point to early cost estimates by Parsons Engineering that said the project would exceed $300 million, which it has. But the fact remains that no one in City Hall wanted to confront bad news at the time. In unanimously approving the deal in 1998, the City Council was either misled or had buried its head in the mud.

The backfilling doesn’t end with Freeman. Baylis recently went before the Commerce Committee along with Harasick and Deaton and emphasized that it is the DWP’s project; CH2M Hill is just an important cog in the wheel, they said, noting that the bulk of the money has gone to contractors such as Boyle Engineering and Barnard Construction, which teamed up on a contract that allowed them to design and build simultaneously. But the design-build approach requires a concept and a goal. CH2M Hill developed those aspects, conducted feasibility studies and acted as construction manager — and technical adviser, and environmental consultant, and regulatory compliance monitor. Despite Baylis’ inclination to share the credit — or the blame — some in City Hall question the scope of the initial audit, which targets CH2M Hill. But Patsaouras insists all construction contracts will be audited as well.

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The DWP’s 2003 internal audit of CH2M Hill documents more than $100,000 in duplicate bills, markups and excessive charges. A draft internal audit obtained by L.A. Weekly dated November 22, 2005, states that CH2M Hill employees were using DWP purchasing cards and that CH2M Hill submitted unsupported billings, double billings and charges not supported by the contract of more than $200,000. The recent draft audit also exposed misuse of blanket purchase orders and poor inventory control.

As low as those amounts are, however, the final version of the 2005 internal audit, released to the City Council after claims of mismanagement were exposed, is scrubbed of most of the improper billing. The final internal audit shifts blame for purchasing abuse to DWP employees for “improperly directing [CH2M Hill’s] employees to use DWP purchasing cards.”

According to sources familiar with Phase 1 of the project, which is now being substantially redone, CH2M Hill ignored the advice of its own inspector and DWP waived performance standards as Barnard sought millions of dollars of change orders. A quality-management expert from CH2M Hill named Gentry Karr has been vocal in his criticism of designs that had to be approved by CH2M Hill, the DWP or both, according to two DWP sources and a consultant familiar with the project. “Bad quality, bad design, planned obsolescence [of the managed vegetation component], abandoned pipes and pumps, faulty spillway design,” says a DWP employee, when asked to describe Karr’s criticisms.

Karr appears to have been silenced. He reported attempts to contact him to his bosses at CH2M Hill. He refused to comment. CH2M Hill also recently hired the law firm of Gibson, Dunn & Crutcher to evaluate its performance on the project. The company declined to release the law firm’s report.

Schade and others say they offered advice to CH2M Hill and the DWP about how the lakebed would be treacherous for heavy vehicles, rot out expensive pumps and lead to excessive costs. Like Karr, they say they critiqued the concept and the design. Their advice went unheeded, according to Frank Stradling, a botanist and an economist, and Carla Scheidlinger, a plant ecologist, with a company called Agrarian Research. Scheidlinger also is a member of a group called Owens Valley Committee and used to work for Great Basin. She and Stradling have extensive experience on the lake. “Frank’s been kicking dirt on the lake longer than anyone I know,” Schade says of Stradling, who has callused hands and mud caked on his boots.

“No one ever did a full-lifetime cost assessment,” Stradling says. “We were testing shallow flooding on a small patch and they came by and told us to stop, that we’d be wasting water. Now they’re flooding the whole lake. Only they’re running it like a greenhouse or a grape vineyard with the most expensive high-tech system possible.”

He and Scheidlinger have photographed their own irrigation tests by airplane. “Even after we showed [CH2M Hill] how to get the best results they couldn’t get their system to work,” says Scheidlinger. “Maybe they thought we were dumb. But now they’re retrofitting the thing because it didn’t work the way they designed it. If someone else designed the project then it’s fair to ask who approved that design. Either CH2M Hill is responsible as the primary consultant or they are not. They can’t have it both ways.”

Stradling and sources at the DWP in L.A. and Owens Valley say there was no plan for flood control. Heavy rain flooded the dikes. They had to be rebuilt. A fiberglass main line to the lakebed from the aqueduct was designed without valves, these sources say. When it leaked, the construction company had to channel all the way back to the aqueduct because they could not isolate sections of the pipe. Schade says he too is mystified by decisions that would have to be approved by CH2M Hill or the DWP or both. And that, after more than $20 million in change orders, the DWP has decided to redo much of Phase 1. “They’ve never been out of compliance on air quality once they finally got it done,” he says.