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Taxpayers hosed by city airport vendor

Contractor hijacked at least $44,000 of hydrant water

Photo of "unrelated vendor" filling water truck from city hydrant
Photo of "unrelated vendor" filling water truck from city hydrant

An unidentified city contractor has been tapping fire hydrants for an undetermined but substantial amount of free water over more than a decade at Montgomery Field and Brown Field airports says a December 28 report by city auditor Eduardo Luna.

"On May 4, 2017, the Office of the City Auditor received an anonymous Fraud Hotline report alleging that a City vendor for the City’s two general aviation airports has been using water from City hydrants without paying for several years," per the report.

"Our investigation determined that the allegation was substantiated. It also appears that the vendor may have violated the San Diego Municipal Code section regarding use of water from a City fire hydrant."

According to the document, "the City’s contract with the vendor did not require the vendor to pay for the water and City staff directed the vendor to use the water without a meter for approximately ten years at a potential estimated cost of $44,000."

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Adds the report, "However, we note that the water rates have not been constant for the past ten years and there is no way to know how much water was actually used."

Making matters worse, "a new contract, which was out for bid during our investigation, did not address water use, and did not include a reference to the City’s Fire Hydrant Meter Program."

Even after a would-be bidder for the new contract noted the lapses, airport officials failed to change the proposed agreement to deal with water costs and usage, says the report.

"Although a different vendor raised the question at a recent pre-bid conference, Airports Division staff did not provide that information to the Purchasing and Contracting Department to be included as an addendum to the contract."

"As of the date of this Fraud Hotline Report, City staff had not included the water use information in the draft amendment to the contract."

Luna's audit cites a city code section saying, "It is unlawful to use City water from a fire hydrant for purposes other than extinguishing a fire without prior authorization from the Department and installation of a fire hydrant meter, regardless of knowledge or intent.”

Additionally, "Use of water from any fire hydrant without a properly issued and installed fire hydrant meter is theft of City property. Customers who use water for unauthorized purposes or without a City of San Diego issued meter will be prosecuted."

As a result of the auditor's findings, the report says, the Public Utilities Customer Support Division will investigate whether "an Administrative Citation or Administrative Warning is warranted based on the information contained in the confidential version of the report and take the appropriate action."

Officials have also vowed to change the terms of pending contracts to address fire hydrants and water usage payment requirements, with an implementation deadline set for June 30, 2018, according to the report.

"Our investigation determined that the vendor’s prior contract did not contain any reference to the City’s Fire Hydrant Meter Program and did not address payment for water use."

In all, says the report, auditors "made four recommendations to hold the vendor accountable, update City’s policy, recover costs, and include payment for water use in the new contract. City management agreed to implement all four recommendations."

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Photo of "unrelated vendor" filling water truck from city hydrant
Photo of "unrelated vendor" filling water truck from city hydrant

An unidentified city contractor has been tapping fire hydrants for an undetermined but substantial amount of free water over more than a decade at Montgomery Field and Brown Field airports says a December 28 report by city auditor Eduardo Luna.

"On May 4, 2017, the Office of the City Auditor received an anonymous Fraud Hotline report alleging that a City vendor for the City’s two general aviation airports has been using water from City hydrants without paying for several years," per the report.

"Our investigation determined that the allegation was substantiated. It also appears that the vendor may have violated the San Diego Municipal Code section regarding use of water from a City fire hydrant."

According to the document, "the City’s contract with the vendor did not require the vendor to pay for the water and City staff directed the vendor to use the water without a meter for approximately ten years at a potential estimated cost of $44,000."

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Adds the report, "However, we note that the water rates have not been constant for the past ten years and there is no way to know how much water was actually used."

Making matters worse, "a new contract, which was out for bid during our investigation, did not address water use, and did not include a reference to the City’s Fire Hydrant Meter Program."

Even after a would-be bidder for the new contract noted the lapses, airport officials failed to change the proposed agreement to deal with water costs and usage, says the report.

"Although a different vendor raised the question at a recent pre-bid conference, Airports Division staff did not provide that information to the Purchasing and Contracting Department to be included as an addendum to the contract."

"As of the date of this Fraud Hotline Report, City staff had not included the water use information in the draft amendment to the contract."

Luna's audit cites a city code section saying, "It is unlawful to use City water from a fire hydrant for purposes other than extinguishing a fire without prior authorization from the Department and installation of a fire hydrant meter, regardless of knowledge or intent.”

Additionally, "Use of water from any fire hydrant without a properly issued and installed fire hydrant meter is theft of City property. Customers who use water for unauthorized purposes or without a City of San Diego issued meter will be prosecuted."

As a result of the auditor's findings, the report says, the Public Utilities Customer Support Division will investigate whether "an Administrative Citation or Administrative Warning is warranted based on the information contained in the confidential version of the report and take the appropriate action."

Officials have also vowed to change the terms of pending contracts to address fire hydrants and water usage payment requirements, with an implementation deadline set for June 30, 2018, according to the report.

"Our investigation determined that the vendor’s prior contract did not contain any reference to the City’s Fire Hydrant Meter Program and did not address payment for water use."

In all, says the report, auditors "made four recommendations to hold the vendor accountable, update City’s policy, recover costs, and include payment for water use in the new contract. City management agreed to implement all four recommendations."

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