Audit finds oddities, not role, in deal for firm tied to county executive

Updated: 03/05/09 07:46 AM
By Matthew Spina, News Staff Reporter

Erie County auditors found no sign that County Executive Chris Collins interfered to steer county work to one of his companies, but the auditors did cite a couple of oddities in his Purchasing Division’s procedures:

• The company, Volland Electric Equipment Corp. of Cheektowaga, was allowed to begin fixing motors for the county’s sewer system even without a signed contract.

• The county gave the work to Volland based on its price for select jobs that might never be done. For everything else, Volland would have charged an hourly labor rate $15 higher than its nearest competitor’s.

After the County Legislature cried foul, Collins this week removed Volland from county government work and said that to avoid the appearance of a conflict, he will ask all companies in which he holds a stake to refrain from county business.

County Comptroller Mark C. Poloncarz said his auditors found no evidence that Collins exerted any influence in the hiring of Volland Electric. The comptroller also said Volland was indeed the low bidder under the rules established by the county purchasing staff, which the county executive controls.

But Poloncarz suggested that before seeking new bids for motor repairs, the purchasing staff should base its decision more closely on the work that will be done. He said the purchasing agents should apply more weight to a company’s labor rate and its markup on parts, not a set of hypothetical repairs.

A Collins spokesman, Grant Loomis, said the purchasing staff will consider the suggestion but would have to examine whether it would then have to change its bid requests for all repair services that the government buys each year.

Poloncarz said the county executive’s purchasing staff should have sought the Legislature’s approval before awarding the work to Volland Electric. The decision to send the Volland bid directly to the state-appointed financial control board for its consent triggered the loudest protests from county lawmakers.

Poloncarz said the county sewer system was hiring a company for a technical service — fixing motors — so the County Charter, the county Administrative Code and definitions in state law required the County Legislature’s OK.

The comptroller said the government was not simply buying items, such as paper, office supplies or road salt, so this was not a “purchase order” free of any legislative role, as Collins’ purchasing staff contended. Poloncarz said similar disagreements have arisen before, and he called on the Legislature to clarify its definitions of purchase orders and technical services.

Either way, Poloncarz said, the purchasing staff bypassed the Legislature because it believed that its approval was unnecessary — but not to conceal the hiring of a Collins company. Collins holds a minority share of Volland Electric and once served as its treasurer.

The purchasing officials did not draw up a contract for Volland because they were treating the company’s service as a simple purchase. Similarly, they didn’t draw up a contract in 2006, when they last hired a company to fix the sewer system motors. That was two years before Collins took office as county executive.

Collins’ team met the auditor’s findings with this statement: “The comptroller’s investigation and subsequent report reaffirm the county executive’s position that Volland Electric was the lowest responsible bidder and that this administration acted in full accordance with county law,” Loomis said.

“As the comptroller points out, this contract has been historically designated as a purchase order, which is not subject to Legislature review. The Collins administration welcomes the Legislature to execute its duties under the Charter and make any appropriate changes to these contract categories.”

The work in 2006 went to Armor Electric of Buffalo, which then was allowed to extend its service for two more years before having to bid again, for 2009.

Armor bid the same amounts it had offered in 2006. But Volland’s president and chief executive officer, Christopher Graham, said recently that he looked up Volland’s bid from 2006 — as any bidder would have been allowed to do — and beat Armor’s offer.

Volland would have been able to collect up to $90,000 this year fixing the sewer system’s motors as needed. If Volland had received two annual extensions, the county’s work would have been worth up to $270,000 over three years.