Internal Controls Case Study #2: Urban Logic Hourly Rates

In an earlier post (click here), I provided a history of the contractual relationship between the City of Beaumont and Urban Logic, the consulting firm that has been responsible for running our Public Works, Planning, and Economic Development departments for the last 20 years. In that post, I provided links to the contracts and amendments published on the City’s website. The last amendment the City has posted is from April 1994. The contracts and amendments speak only of a monthly fee and a commission on public projects; there is no mention of hourly rates.

I recently obtained a copy of a letter from the City of Beaumont in response to a Public Records Request made in March of 2011. There were two items in this request that were of interest to me. They are the following:

  • All contracts and agreements entered into between the City of Beaumont and Urban Logic Consultants, Inc. from May 1, 1994 to present.
  • All contracts and agreements entered into between the City of Beaumont and one or more of the following individuals from May 1, 1994 to present: Deepak Morjani, Ernest Egger and David Dillon.

*Morjani, Egger and Dillon are principals of Urban Logic

The City’s official response to the request for these two items was “No such record”.

I have copies of three invoices from three separate years (2000, 2008, 2011) submitted for payment by Urban Logic and paid by the City of Beaumont.

The hourly rates for each position listed have increased in successive invoices. There are two positions that were listed on all three invoices, Principal and Staff Engineer. I am not making any judgment on whether these are market value rates; I am asking how these rates are determined.

The hourly rates for these two positions are as follows:

Position

2000 rate invoiced

2008 rate invoiced

2011 rate invoiced

Principal

$100.00

$175.00

$195.00

Staff Engineer

$55.00

$95.00

$110.00

 

The City’s internal controls for a relationship with a third party consultant should consist of a contract, amendments, and any other agreements. All these documents would provide evidence they were approved by the City Council and on what date they were approved.  These documents should provide a detailed schedule of fees and any modification to the schedule over time. The City has not posted any agreements with Urban Logic since April of 1994 and has stated, in an official response to a Public Records Request in 2011 that no such agreements exist. As of April 1994, according to the City’s documentation and statements, there was no schedule of hourly fees and there was no discussion of hourly rates.

 The internal controls for the Urban Logic relationship are insufficient. We need to have an independent review of all of the City’s Internal Controls, we can’t afford not to.