10:24 PM PDT on Friday, April 29, 2011

The Press-Enterprise

Riverside officials are disputing allegations that management staff bypassed city procedures to steer contracts to City Manager Brad Hudson’s friends, and that employees who spoke out were berated and threatened with termination.

The allegations came in an email sent to Riverside City Council members last month. City officials confirmed the email was from deputy city attorney Raychele Sterling, who is on administrative leave.

Reached Thursday, Sterling declined to comment and referred questions to her attorney, Russell Perry, who said, “I cannot comment on the nature of my representation of Ms. Sterling at this time.”

In a March 23 email to the City Council, Sterling wrote that public works employees told her they were directed by their superiors to assign projects to a particular firm because its head “is a personal friend of the city manager, and the city manager wants him to receive as many projects as possible.”

In one instance, employees said they were told to change the results of a scoring process so a chosen firm would win a contract worth about $10.5 million, according to the email.

City officials initially refused to discuss the email, citing attorney-client privilege and personnel issues. But on Friday, Chief Finance Officer Paul Sundeen responded at length, saying he looked into the allegations recently and believes they are baseless.

Sundeen said that Hudson has requested an outside investigation into the allegations. Rancho Cucamonga-based law firm Cihigoyenetche Grossberg Clouse is conducting the investigation, which could take about a month.

Claims of favoritism

Sterling’s email alleges that an engineering and planning firm, Albert A. Webb Associates, has received disproportionately more work than other firms that are part of a consultant panel assembled by the city.

For some services, the city will interview and then select several firms and put them under contract on an as-needed basis. City records show Webb Associates is one of three firms on such a panel for environmental services for Riverside Public Utilities, and one of six firms with contracts for up to $3 million in work for community development.

It was not clear which panel or which specific jobs the email referred to, but Sundeen said he found no evidence of favoritism toward Webb.

“The whole idea of a panel is to rotate the work among (the firms),” he said.

“My review of contracts showed that Webb … only were selected for two projects out of 22” over a two-year period, Sundeen said.

He could not immediately provide details of how much those contracts were worth or what they were for.

Matthew Webb, president of Albert A. Webb and Associates, said in an interview Friday that he is a Riverside native with ties to local officials.

He has known council members William “Rusty” Bailey and Chris Mac Arthur for decades and is friends with Hudson.

But Webb said it’s the company’s work, not friendships, that wins them the contracts, and they’ve bid on many over the years that they didn’t get. The firm has some smaller recurring contracts with Riverside, but it won just one of four bigger city projects it bid on last year, Webb said.

In 2010, 4.2 percent of the company’s business was with the City of Riverside, Webb said. The company has a role in the $10 million sewer plant expansion project overseen by Camp, Dresser and McKee — the project in which score-fixing was alleged. The firm also oversees a handful of smaller contracts for the city dealing with special assessment districts.

Beyond Riverside city contracts, Webb said about half the firm’s business is from government agencies such as water and sewer districts. The rest comes from residential and commercial development.

As the largest engineering firm in the city, Webb said it makes sense the company gets many contracts.

“I am surprised they are raising an issue,” he said when asked if his friendships could influence the firm being chosen for city jobs.

“With every one of our clients and every project we do, we try to do the best project we can.”

Scoring sheets

As to the complaint that employees were made to change bid evaluation results, Sundeen said the scoring sheets that Sterling refers to “were at a preliminary point in the selection process” and did not yet include a review of bidders’ references.

Once the references were checked, the scoring sheets were updated and a different firm emerged as the leader.

The email also alleges parks employees said they were told to set aside some of their budget “to subsidize the City Hall cafe,” because the operator was Hudson’s friend and “was not making enough money.”

Sundeen said the cafe operator was given two marketing contracts and it wasn’t improper.

“I reported to the City Council in closed session that I believe that all of the accusations are unsubstantiated and without merit,” Sundeen said.

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