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Audit faults town on sewer, roads project - Says Middlebury failed to follow law

 BY MATTHEW O’ROURKE
 REPUBLICAN-AMERICAN
 MIDDLEBURY — Town officials failed to follow proper bidding procedures and acted without authority when they went ahead with a 2006 sewer and roads project in the Washington Drive neighborhood, a forensic auditing firm concluded in a report released Friday.
  

In addition, the auditors were unable to find contracts between the town and subcontrac­tors working on the project.
  

Those conclusions were part of a 12-page report compiled during a nearly five-month in­vestigation by Farmington based Kostin, Ruffkess and Company into sewer and road improvements completed by the town on Washington and Lakeshore drives and Narcissus Road.

 The firm wrote that in its review of various town commission minutes, “it appears that an appropriation for Contract 41 was not approved in accordance with the charter,” and proper bidding procedures “were not followed for both the sewer and road construction projects.”

 The Board of Selectmen voted to pursue a forensic audit in April after officials learned that the town is owed $928,000 by Middlebury Land Associates, a developer building homes in that area. That figure has since grown to more than $946,000.
  

The project, a proposed 118­to 145-unit complex on 144 acres, first came before town land use commissions in 2005 and received approvals later that year. Only four of the 35 homes in the first phase of the subdivision were built. Kostin, Ruffkess and Company was hired for $13,500 to review of all financial records between the town and subcontractors involved in the project, plus the town charter and meeting min­utes from various commissions. Former First Selectman Ed­ward B. St. John, who was also the town’s public works director, signed a contract in August 2006 with the developer calling for the town to complete the work, but he subcontracted many of the improvements, paying companies out of a reserve fund in the town budget.
  

The subcontractors stopped getting paid after Middlebury Land Associates stopped paying the town in September 2007.
  

The charter requires a town meeting to fund projects that are not included in the town’s annual budget. Auditors wrote in their report that several actions — including potential charter violations for authorizing funds without a town meeting — would require an attorney’s opinion before any legal action could be taken.

 St. John maintained his allegation that the audit was part of a “witch hunt” by town officials and questioned the credibility of the auditor’s report. He insisted that the town did complete bids and contracts for the project and said that he left them in the selectmen’s office when he retired in 2007. When asked if he had contacted First Selectman Thomas Gormley about the documents before the audit, St. John said he hadn’t.

 “This is nothing but a witch hunt to stab Ed St. John in the eye,” St. John said Friday.
  

Town officials have argued that the audit was a necessary step in understanding how the project worked before they go to the American Arbitration Association next month to negotiate a payment schedule with the developer.
  

Gormley said it was important that the review be done by someone outside town government.

 “We didn’t want to do this internally; that wouldn’t be fair or just,” Gormley said.
  

Any further investigation into potential violations or wrongdoing will depend on Town Attorney Stephen Savarese’s legal opinions based on the audit, Gormley said.
  

Calls to Savarese were not returned Friday. The auditors said they were unable to find any record of bids being submitted for the sewer line project.
  

They noted that when “documentation for the bid on the sewer line construction was re­quested from the WPCA (Water Pollution Control Authority), we were informed that the Town acted as the general contractor on this project as many others in the past.”
  

St. John admitted that he followed similar procedures throughout his 24-year tenure as the town’s chief executive, but said any charter violations were unintentional.
  

“They should look at all they’ve done if they’re going to criticize charter violations,” he said. “That’s the only bad one we ran into. We should focus on getting the money back.”
  

Auditors also reported they did not find any contracts be­tween the town and Hubble Construction, a Burlington­based company that completed much of the work along Washington Drive. On a separate project Hubble was completing near Glenwood Avenue in 2005, auditors found that the town paid police for pri­vate duty out of a state grant ac­count for a water project near the Timex Corporation on Christian Road.
  

Typically, private contractors pay for police services, which include monitoring and directing traffic.
  

“It is not clear who has the authority to waive the charges for police outside services and how this should have been documented,” the report reads.