Officials Defend Rise in Consultant Costs : Long Beach: Public works director argues that the trash plant contract, which rose from $15,000 to $5 million, has saved money.

City management this week leaped to the defense of a trash plant consulting contract that has grown from $15,000 to nearly $5 million since 1982, insisting that the increase was appropriate and reasonable.

Responding to questions raised last week, the city’s public works director, Ray Holland, argued that if anything, the contract with Rigo & Rigo Associates of Berea, Ohio, has saved the city money.

“Other projects have spent that much or more just to get to the point of going out to bid,” Holland told a Tuesday meeting of the advisory board of the Southeast Resource Recovery Facility, the city’s trash-to-energy incinerator on Terminal Island.

Holland said Long Beach had intended from the beginning to use minimal city staffing for the project and instead rely on consulting expertise to oversee the planning and construction of the incinerator, which burns the city’s refuse to produce electricity. Such expertise was not available locally, Holland said, because there are so few trash-burning plants in California.

Moreover, Holland said, the need for Rigo’s services has continued because of the problems the city encountered with the firm that built the plant.

The city alleges in a lawsuit against Dravo Corp. of Pittsburgh that the plant is not operating properly because of Dravo’s construction failings.

Apparently concerned that the contract dispute might give ammunition to Dravo in the lawsuit, the incinerator board of directors and City Council members were surprisingly silent on the matter Tuesday.

The council accepted Holland’s remarks and an explanation from Rigo’s president without comment, along with recommendations from the city auditor that the city tighten up its overall contract consulting practices.

Questions about the Rigo contract are potentially damaging to the city’s position in the Dravo lawsuit, for it was Rigo that concluded that Dravo had not properly built the problem-plagued incinerator.

“Dravo lawyers have to be licking their chops,” a high-ranking city official said earlier this week. “This is like shooting fish in a barrel.”

Holland and City Auditor Robert Fronke said they had found nothing improper about Rigo’s expense billings, which included an average monthly travel budget of $11,050 last year.

“Frankly, I find nothing in there to indicate there was any impropriety or inappropriateness,” Fronke said, while conceding that his office should have asked Rigo & Rigo for more documentation of expenses.

President Greg Rigo provided more such information when asked recently, and Fronke said the city will soon resume payments on the contract--which had been temporarily suspended by Fronke’s office.

Fronke gave the council a computer analysis his office had drawn up of Rigo’s expenses in the last four years, showing an average per-diem expense per person of $127, minus car rental costs, and an average per-meal, per-person cost of $22.

The questions about Rigo were enough to prompt City Manager James Hankla to appoint his own “auditor,” accountant Ed Hatzenbuhler, to monitor the incinerator operation.

Hankla said Monday that he has not lost confidence in Fronke but that in addition to reviewing Rigo’s expenses, Hatzenbuhler will monitor future incinerator spending.

“As far as I’m concerned, the position is permanent. I don’t want somebody not asking for something and then coming back three years later and saying, ‘Whoops,’ ” Hankla said, in an apparent reference to Fronke’s admission that he should have previously asked for more expense information from Rigo & Rigo.

Fronke said it was his understanding that Hatzenbuhler had been added to the plant staff to bolster the administration, not as an auditor.

Coincidentally with the discussion of the Rigo contract, Fronke also presented to the council a report suggesting varied changes in the way the city awards consulting contracts to make the process more competitive. Fronke said he has been working on the report for months, so it was just a coincidence that it was released when questions arose about Rigo & Rigo.

In his report, which the council forwarded to the city manager without comment, Fronke recommends that the city give price greater weight in deciding which firms should get consulting contracts of more than $50,000. The city practice has been to award contracts based on a firm’s qualifications rather than its bids.

Fronke also suggested that:

The City Council be given more information about the number of firms competing for a contract when contracts go before the council for approval.

Contracts be more tightly written to include expiration dates and payment limits.

During the last fiscal year, Fronke found that all city departments spent a total of $13.4 million on consultants.

“Overall, I think they’ve been appropriately used,” Fronke said, adding that the total consulting figure is lower than he expected, because it includes a large number of people who were really part-time workers for various departments, rather than true consultants.