Tag Archives: contractor

City of Gary Says Sheraton Project is Neighborhood Stabilization

19 Dec

by Ken Davidson

At last night’s meeting of the Gary Redevelopment Commission, the Board approved a contract for environmental monitoring of the Sheraton Hotel project. The contract was awarded to Shrewsberry and Associates, LLC of Indianapolis. Shrewsberry and Associates has strong ties to State democrats, including former Chairman of the Indiana House Ways and Means Committee William Crawford. Crawford came under fire for not disclosing his financial interests with the Firm when he was appointed to Ways and Means. Shrewsberry no longer lists its Board of Directors on its website or in public filings that are readily available.

The original Request for Proposals for the demolition called for the contractor to include asbestos remediation and monitoring within the proposal. This additional cost was calculated into the bids submitted by others who were not aware that the Board would later hire another firm and pay that firm separately.

All of this is not unusual for Gary. Although the above is questionable, at best, the Gazette receives reports of such irregularities on a semi-consistent basis. What makes this proposal astounding is how the City apparently plans to pay for the additional cost. The Gazette has learned that the City has included the Sheraton Property in the 2014 Neighborhood Stabilization Plan.

The Neighborhood Stabilization Program (NSP) was established by the Department of Housing and Urban Development (HUD) for the purpose of stabilizing communities that have suffered from foreclosures and abandonment. Through the purchase and redevelopment of foreclosed, abandoned and short-sale homes, the program’s goals is being realized.

The grant information provided by the City appears to reference this purpose:

[NSP] appropriates $2,717,859 for the purpose of assisting in the redevelopment of abandoned and foreclosed homes.The grant program is commonly referred to as the Neighborhood Stabilization Program (NSP).

The Times of Northwest Indiana Legal Notice 12-19-2013

The Notice goes on, however, to list the “neighborhood surrounding the old Sheraton Hotel and its adjoining garage located at 465 Broadway” as an area of additional need. The Sheraton is not only a commercial property, it lies in the major commercial zone of the City. Sitting between City Hall and a Township owned office building, the structure is blocks from any residential structure. The neighborhoods that SHOULD receive relief under the program will not receive the funding intended for them. In fact, it seems likely that Gary will end up repaying another very large grant to the Federal Government.

With 10,000 abandoned homes, one would think that every cent of the NSP funds would go toward rehabilitation of residences.

Gary Airport Authority Fails to Comply with Davis-Bacon; Other Legal Requirements

21 Nov

by Ken Davidson

The Indiana State Board of Accounts has issued a comprehensive report indicating that the Gary Chicago Airport Authority (GCIA) failed to comply with the Davis-Bacon Act which requires prevailing wages be paid on public works projects. The stunning finding was just one of many findings by the Board. In so finding the Board stated:

Davis-Bacon Act

Airport Management relies upon paid consultants to ensure compliance with the Davis-Bacon Act
(payment of prevailing wages).

1. The contractors submitted payment applications to the Project Engineers. Before the Project
Engineers approved the payment, the Project Engineers must receive the certified weekly
payrolls from the Contractor. The Project Engineers stated that they ensured the wages paid
equal or exceed the applicable prevailing wage rates. However, no indication was made on
the copies of the certified payrolls or other forms of documentation maintained as evidence
that such reviews were conducted.

2. A system of controls to ensure all certified payrolls were received did not exist.

3. The management of the Airport Authority did not receive any correspondence from the paid
consultants to ensure compliance with the Davis-Bacon Act.

Additionally, the Board pointed out that the GCIA was required to repay nearly $10 million to the Regional Development Authority because it failed to properly account for the money. It appears that this finding may result in an additional $10 million in Federal and State grants requiring repayment. The Board found that the Authority billed invoices to the RDA, the US Department of Transportation and the Indiana Department of Transportation and received reimbursement from each. The system was supposed to provide a total of $9,917,559.93. Instead the GCIA received that amount from both Federal and RDA coffers.

The Board also found that the GCIA awarded change orders totalling over 20% of the bid price. The law states that change orders cannot exceed 20% of the total bid price.

The report goes on and on, reporting a litany of violations. This report covers the time period before the current board took over. You will recall that the Gazette has reported that Nathaniel Williams was President of the GCIA Board at this time. Nathaniel Williams was also in charge of maintaining the records at the Gary Housing Authority when they lost hundreds of properties to tax sale, failed to make repairs with grants that had been awarded and failed to utilize insurance proceeds to repair burned out properties. Mayor Karen Freeman-Wilson appointed Williams to the Airport position after many of the issues at GHA were discovered.

Allstate Issues Tips to Avoid Insurance Scams After Storms

21 Nov

Gazette Staff

NORTHBROOK, Ill., Nov. 20, 2013 /PRNewswire/ — While most home-repair contractorsare honest and provide quality work, Allstate Insurance reminds homeowners affectedby the recent tornadoes to be on the lookout for workers and companies engaging incontractor fraud.

Here are some ways to avoid getting scammed by contractor fraud in the aftermath ofthe storm.

Be wary of contractors who solicit door-to-door. Work only with established contractors and those who have a solid reputation.

Work only with licensed, bonded and insured contractors and have them provide you with documentation.

Require references and check them out.

Check with your local Better Business Bureau to see if any complaints have been filed against contractors you are considering. Victims of contractor fraud often file complaints.

Don’t feel pressured into signing a contract, and never sign a contract with blanks. A contract should include the contractor’s name, business name, phone number and address.

Avoid payment-in-full up front. Some contractors may require a partial up front payment, but the amount should not exceed approximately 20% of the total estimate amount.

Never let work begin on your home or business until the contract is finalized.

Don’t pay a contractor in full or sign a completion certificate until the job is completed and you are satisfied with the work and avoid making cash payments.

If anyone performs unauthorized work on your property and demands payment, consider contacting authorities.

Never let anyone persuade you to seek reimbursement for nonexistent or exaggerated losses or damages. This is insurance fraud, which is a felony.

Sources Say LS Mayor, Wife Targets of FBI Probe

16 Nov

by Ken Davidson

 

On Friday FBI agents walked into the offices of Lake Station, Indiana at 1969 Central Avenue and ordered all employees to step away from their computers according to sources close to the investigation.  Although the Gazette has confirmed no computers were seized, the FBI reportedly got all the information it needed by using high tech equipment to download from the City servers.  This represents a significant step in an ongoing investigation.  You will recall that the indictment and arrest of George VanTil, the most recent indicted politician in Lake County, was preceded by a similar public FBI raid.  Not only is judicial review in the form of  a warrant required before FBI agents can take such action, the US Department of Justice has strict guidelines dealing with public corruption cases.

Sources say that the crux of the investigation centers around two incidents.   The first relates to using campaign funds for personal use.  Sources tell me this aspect of the case is unclear.  Several point to various expenses which appear to be personal but there is none that stands out when viewing reports of similar local politicians.

The second investigation is related to an “add-on” charge by a street contractor.  According to a source close to the investigation, the Mayor suggested he would get an additional charge approved on a construction project that was in progress.  In exchange, the contractor would pay the Mayor’s wife a sum of money.  Such charges are often scrutinized by the State Board of Accounts as well as Federal Prosecutors because they can be used to award bids to friendly contractors.  In many cases, the bid comes in low and the contractor then submits additional charges which are approved by the municipality.  Other contractors have no opportunity to compete because they are not assured of having additional charges approved later.  In this case, however, sources say the contract was awarded prior to the time of Soderquist’s election.

Soderquist is also on the governing board of the Lake County Democratic Organization.  If indicted, Soderquist would be the second current sitting member who is under federal indictment.

Lake Station Indiana FBI raid

A Lake Station construction contract appears to be at the center of a recent FBI raid on city offices.