Fresh Water, Foul Sewage
By not paying a vendor’s bill, Baltimore jeopardized its drinking water, Inspector General finds
“If the water treatment chemical supply had been exhausted, an emergency health crisis would have ensued,” OIG Cumming says about a payment issue that was not publicly disclosed by the Scott administration
Above: Surface scum floats on Lake Montebello, which is used as a sediment pond for impurities removed from the Montebello water filtration plants. (Mark Reutter)
Three months before last month’s outbreak of E. coli, the 1.8 million customers of Baltimore’s water system narrowly escaped “an emergency health crisis” owing to the city’s failure to pay a vendor’s bill.
Last June, the municipal water system ran “critically low” of a chemical used to prevent drinking water from picking up lead, copper and other contaminants while running through the city’s aging water mains, Inspector General Isabel Mercedes Cumming said in a summary report released today.
“If the water treatment chemical supply had been exhausted,” she wrote, “an emergency health crisis would have ensued,” citing an official who compared the incident to Flint, Michigan, where corroding water mains allowed lead to leach into the municipal water supply, sickening families and especially children.
A Public Works supervisor in Baltimore pleaded with the vendor for an extension when the city was two days away from running out of the critical material, the report notes.
Baltimore’s close call with undrinkable and potentially unsafe water was never publicly disclosed by the Department of Public Works, which owns the system, or by Mayor Brandon Scott, who repeatedly cites his policy of transparency.
Both came under criticism by City Council members for delaying and underplaying the high E. coli readings found over the Labor Day weekend at three water testing sites in West Baltimore.
DPW director Jason Mitchell has blamed the fecal contamination on aging infrastructure, noting also that the precise cause may never be found.
But Cumming’s report indicates that the bureaucratic inertia at three city agencies – Public Works, Bureau of Procurement, and Bureau of Accounting & Payroll Services (BAPS) – posed a far greater threat to public health.
Invoices not Paid
The underlying cause was the failure by the procurement office to act on a vendor’s request for a price increase before the contract was renewed last December by the Board of Estimates.
(The report does not name the vendor, but The Brew has identified the company as Greer Industries of Morgantown, WV., which supplies calcium oxide or quick lime to the treatment plants. The company could not be reached for comment today.)
“The OIG investigation revealed the vendor never received a response to those emails,” Cumming wrote. “The BOP procurement specialist informed the OIG that he did not receive or review a price escalation request from the vendor.”
Keasha Brown, acting city purchasing agent, likewise stated she did not recall reading the vendor’s emails with the price escalation letter attached.
On May 11, the vendor informed both a water bureau supervisor and BAPS manager that, after months of getting no response and facing $77,000 in past-due invoices, the company would “pause” deliveries of the chemical.
For about two weeks, the vendor made good on the threat, and the city’s supply of the chemical at its treatment plants reached a dangerously low level – OIG Report.
For approximately two weeks, the vendor made good on the threat, and the city’s on-site supply of the chemical at its three treatment plants – Montebello 1, Montebello 2 and Ashburton – “reached a critically low level.”
“On June 8, the DPW supervisor asked for an extension to make the payment because Montebello Plant 1 would be out of the water treatment chemical without a delivery by June 10,” the report says.
“The vendor agreed to deliver the water treatment chemical, but stated it must receive a minimum payment of $43,834.70 by June 13, 2022.”
Emergency Payment at Last Minute
On the deadline day, now-retired Finance Department Director Henry Raymond granted an emergency procurement request for a six-month contract extension with the vendor. The department used its procurement credit card to pay most of the overdue invoices.
On July 22, Keasha Brown signed the emergency contract, which granted the vendor’s price increase from August 1 through the end of 2022.
OIG investigators found emails in 2021 and early 2022 from the vendor requesting the price increase, but no evidence that procurement ever responded or approved the increase.
At the same time, the city did make some payments to Greer reflecting its requested price increase (even while its overall payments to the company were past due). Cumming later determined that the finance department had overpaid the price increase by $4,685.65.
City is “reviewing the process”
In response to the report, DPW Director Mitchell and incoming Finance Director Michael Moiseyev said they agreed with the OIG’s findings.
(Created to root out waste, fraud and inefficiency, the OIG can only report its findings to Mayor Scott and agency administrators, who have the power to decide what, if any action, will be taken.)
In this case, there were no reported repercussions to staff, only a pledge to do better next time.
Moiseyev said BAPS will “develop standard operating procedures instructing personnel on managing vendor invoices during pricing disputes,” while the procurement office “is reviewing the process for vendor contact during contract renewals and will work with the Law Department to review existing contractual language regarding the time frame for when vendors must submit price escalation requests.”
For DPW’s part, Mitchell said a new “chief of internal operations” has been hired to help improve communications with vendors.
The agency will additionally “escalate its needs with the Department of Finance to ensure a swift resolution to procurement and payment-related challenges as noted in the report.”
Mitchell and Moiseyev, in their response, made no mention of the public health implications of the incident.