Denver is engaging in “unacceptable and troubling” financial practices by approving vendors’ work contracts after the contractors have started or completed their work, according to the Denver auditor.
The delay in finalizing contracts on one occasion allegedly led a city department to alter and falsify documents, as well as pay the contractor late, said Denver Auditor Dennis Gallagher.
Meanwhile, Mayor John Hickenlooper’s office said they know there’s an overall problem with how long it’s taking some contracts to get final approval and are looking to address the issue.
After completing an authorized $30,015 on-call contract for branch grinding and wood recycling work, Aesthetic Tree Service submitted an invoice to the city dated May 30. According to the auditor’s office, Denver Parks and Recreation on July 6 sent a contract to amend the original contract, which Jeff Opgenorth of Aesthetic Tree Service said he thought was to order more work. But the amended contract — which scheduled a work order to be completed between Aug. 24-Sept. 11 —was actually for the work that Opgenorth had already completed in May.
‘Confusing and frankly outrageous’
“This sequence of events is confusing and frankly outrageous,” said Denver Auditor Dennis J. Gallagher in a letter to the Denver City Council.
Opgenorth said the city then told him earlier this month that they only put in for $11,790 for his original contract, and were trying to figure out a way to get him his money through the series of seemingly non-existent work orders.
“And I said, ‘Really, and it’s now three months later since you called me to do work and now you figured that out?’” he told them in response.
As of yesterday, Opgenorth said he hadn’t been paid by the city for any of his work. Denver Parks and Recreation declined comment yesterday afternoon, but check the Web site today to see their response if they provide one.
Common problem
Opgenorth’s problems with his city contract are not an anomaly. Though it’s against policy for a city department to give the go ahead to contractors to begin work before the contract is finalized, this is what has happened in 75-percent of the cases this year, according to Gallagher.
“The city’s attitude often has been, ‘Well, it’s not a big deal if somebody starts work before the contract is signed because they’re the ones who are at risk of not getting paid,’” said auditor spokesman Denis Berckefeldt. “That’s just not a good way to do business — you need to be as good as your word.”
Berckefeldt attributed the problem to two factors — the culture within many city departments unofficially says it’s OK to give the go ahead to contractors before the contract is finalized, and the city’s process to get contracts signed is extraordinarily cumbersome.
Before a contract is finalized, it has to get five or six signatures from different community leaders, as well as have the language approved by the city attorney. The process often takes nine months and is done almost entirely by paper.
The city needs to move “into the 20th century” and consider electronic signature and processing for the contracts, which would speed up the process exponentially, said Berckefeldt. Additionally, he said the city should consider reducing the amount of people who have to sign off on the contract.
For their part, Hickenlooper’s office said they are going to “consider everything to get the best ideas on how to fix this.”
Repeat problem
The auditor’s office looked into problems with city contracts three years ago. At the time, a quick survey found that around 84 percent of the contracts that were arriving on the auditor’s desk were for contracts that had already passed the start date.
The auditor then sent a letter to Hickenlooper about the issue, and afterwards noticed that fewer contracts with passed start dates were coming across his desk, according to Berckefeldt. However, problems started creeping back up and came to a boil earlier this month over a city contract with the Colorado Coalition for the Homeless. The coalition had started working on a project on April 1 even though the contract was just coming before the city council this month.
Denver City Councilman Charlie Brown said it’s not possible to run a city this way and that from now on he will vote against every work contract that is already underway when it comes before the city council.
“It’s so frustrating that we can’t seem to resolve this issue and it’s been out there for years,” he said. “I just hope this is the last time it pops up.”
