O.C. tollway agency launches outside audit of invoices by consultants who billed $185 an hour to read news

The public agency that manages Orange County’s network of toll roads is ending its multimillion-dollar public outreach campaign with consultants who charged up to $185 an hour to read news stories and has launched an external audit of the consulting bills.

News that the agency would let the contract expire in June without renewing it, a move that one board member said would save $1.5 million, came at a contentious meeting of agency leaders Thursday and follows a Times article last month that detailed some of the questionable payments.

Tollway officials at the meeting also revealed that the agency had launched an external audit of the consultants’ bills.

Christina Shea, an Irvine councilwoman who chairs one of the government agency boards that make up the tollway authority, said a board committee had decided that the Times article and an internal review had raised enough questions to warrant an outside look by Irvine-based Hall & Co.

“We believe this is the proper thing for this agency to do,” Shea said.

The outside audit marks the latest twist in an ongoing battle over whether to extend the Highway 241 toll road south through San Clemente, which staunchly opposes constructing a tollway through the scenic beach town. City officials suspected that the consultants handling public outreach for the project were being overpaid and sued the agency to obtain the bills.

Records reviewed by The Times showed a consultant was paid for 28 hours of work in a single day and others billed approximately 1,300 hours to read news from transportation stories. The agency paid yet another consultant more than $3,000 a month to compile news stories at a rate of $90 an hour.

Some digital media experts also questioned a $380,000 budget in one year to produce content for two small websites and social media accounts for the tollway authority, as well as marketing to specific audiences, saying such work should cost far less.

Jeff Corless, chief executive and president of Venture Strategic Inc., the consulting firm that received the most money, said last month that some costs were incurred from tracking and responding to misinformation put out by San Clemente and a flood of emails he said the city had encouraged people to send. He and other consultants said their bills were fair and had an accuracy rate of more than 99%.

Corless declined to comment Thursday.

Tollway officials said they would not renew Venture Strategic’s public outreach contract when it expires because they are now moving into an environmental review phase.

Mike Kraman, CEO of the two government entities that form the Transportation Corridor Agencies, told board members at Thursday’s meeting that The Times had blown “out of proportion” billings to read the news, saying the contract included the consultants calling reporters’ editors to correct misinformation and exert “tighter control” over how tollway issues are portrayed in the media.

Kraman’s assertion contradicted earlier explanations by a consultant that the bills were for reading news articles to stay abreast of transportation issues nationwide. Tollway officials had previously denied that consultants were billing hours to read news stories.

In an earlier interview with The Times, the consultants also struggled to explain some of their billings. Asked about a day in which his bill showed he had spent seven hours reading the news, Nico Melendez, a consultant with Venture Strategic, pulled up his time sheet, which he said showed he only spent two hours reading news.

Tollway officials at the meeting said the outside audit began last week but did not fully describe its scope. Kraman said the review will include billings for news reading.

“We have an external audit that’s going to take an independent, outside look at all of that,” Kraman said.

After the meeting, agency Chief Financial Officer Amy Potter told a Times reporter that the audit will be similar to an internal review that found that Venture Strategic’s invoices contained errors but that the consultant had actually underbilled the agency by roughly $4,600. The audit will focus on evaluating the invoice approval process as well as determining whether there were double billings.

The review does not include comparing Venture Strategic’s time sheets to its bills or whether the contract prices for tasks such as digital communications were appropriate, Potter said. But she added that tollway officials could expand the scope and that looking at time sheets was a good idea.

The audit will also include a sampling of invoices from Curt Pringle & Associates, headed by former Republican Assembly leader and ex-Anaheim Mayor Curt Pringle, she said.

Board members representing the city of San Clemente at the meeting sought a forensic audit that would look for criminal activity and demanded that the tollway agency seek reimbursement for any improper bills. They also wanted other transparency measures, including opening up closed-door board committee meetings to the public. Opponents of the toll road extension packed the meeting chamber and erupted in cheers and boos as board members debated the city’s proposal.

The board ultimately rejected the idea.