Council Committee Recommends Corrective Actions for Utility Program Stricken by Fraud

The City Council’s Municipal Services Committee on Tuesday accepted a report by an independent consultant suggesting the goals of Pasadena’s ill-fated Underground Utility Program should be reevaluated and recommending 13 corrective procedures and practices the city should execute to better control the program and avoid future fraud.

The report by Management Partners indicates UUP needs to be firmly controlled by one city department. The patchwork inter-departmental sharing of responsibilities governing the program was a key factor allowing an embezzlement of $6.4 million from the program to occur and go unnoticed for about 11 years, the report concludes.

Recommending the city give control of the program to Water and Power, the report found that the employees operated in silos with few knowing what roles their colleagues filled or what policies were in place. The two departments each thought the other was responsible for the project.

Danny Ray Wooten, a former public works employee, was arrested in December along Melody Jenkins, his assistant, and Tyrone Collins, who was owner of Collins Electric based in Altadena. The three were charged various crimes related to the embezzlement. The city has since filed a civil suit to recover funds.

A city audit found that Wooten exercised unusual authority over the UUP fund, directing the payment of millions of dollars using little more than apparently forged documents and signatures.

“What is the goal of the underground utility program? Is the goal to do the entire city? It could take 200 years to do the entire City,” Steve Toler said senior manager for Management Partners. “We recommend the City take a fresh look at what the goal is. The ordinance is unclear about what the goal is.”

The main goal of the project communicated in the past by staff was for aesthetics, according to Municipal Services Committee chair Margaret McAustin.

“We are already scheduled to have an analysis of this program and a discussions of whether or not to continue the program itself will be taken up by this committee and the City Council,” McAustin said.

The report listed the possible benefits as lowering operations and maintenance costs, aesthetics and less tree trimming.

The telecommunications and utilities companies have been resistant to the program according to staff because of the complexities of underground wiring. The drawbacks listed in the report include higher construction costs, increased duration of outages and possible liability if someone is injured digging up the wires by accident.

Mayor Terry Tornek said the report was “unhappy reading” saying staff’s fear for their new responsibilities and lack of understanding for the changes indicated by the report was “pretty damning and doesn’t arbor well for the future.”

“The thing I found most striking in this whole report,” Mayor Terry Tornek said, “It became clear that each of the departments thought the other should be a lead. Nobody wanted this in terms of being the lead agency. It’s not typical for city departments to want somebody else to be in charge.”

Assistant City Manager Julie Gutierrez responded by saying at the time of the report the incident was still fresh in everybody’s mind with more conversations about being responsible and accountable.

“The initial fear lingered for some time. It was a black cow over the program. Staff members wanted to keep themselves at arms distance if they could,” City Engineer Steve Wright said.

Mayor Tornek also questioned why so few people were interviewed. 11 city staff were interviewed for the report.

“We don’t have any outside evaluation of how we run this program. The way we get that is from the people who are impacted, the customers and the utilities,” Tornek said. “It’s not a good way to get a view of what’s happening on the ground.”

The Committee recommended the 13 corrective procedures and practices recommended by Management Partners in the report.

District 7 Councilmember Andy Wilson did not attend the meeting, leaving only two members of the committee to hear this item.