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A City Council committee will hold a public hearing Wednesday on findings from the city auditor that the Department of Environmental Services violated policies and procurement laws in awarding contracts to build and operate the HPOWER waste-to-energy plant.
The Dec. 11 audit criticized the department for its use of sole-source and other types of contracts to build, improve, expand and refurbish the HPOWER facility and to hire consultants.
Subsequent to the original HPOWER contract award of $313.7 million, the department began three major capital improvement projects using 79 contract modifications.
The HPOWER plant ended up costing taxpayers nearly $1 billion as of 2013. The city’s waste-to-energy plant, which burns city solid waste and converts it to electricity, is at Campbell Industrial Park.
The department’s methods for awarding contracts resulted in extending HPOWER operator Covanta’s right to run the facility to 47 years from 20 years — for which the auditor said he could not find justification or solicitation of bids.
City Auditor Edwin Young wrote, “Our review of payments prior to fiscal year 2013 indicated ENV (the department) approved many payments that were excessive, questionable, and not fully supported.”
The audit was requested by the City Council.
City Managing Director Roy Amemiya responded to the audit, saying the HPOWER facility is all-inclusive, according to the contract, and that a third boiler expansion project, which cost $324.6 million, did not require competitive bidding and was justified.
Amemiya also wrote that extending the terms of the operating contract is common practice in waste-to-energy contracts in other states.
The City Council’s Committee on Public Works, Infrastructure and Sustainability will hold the informational briefing at 2:30 p.m. Wednesday.
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