CLEVELAND -- City auditors say that Cleveland Public Power's handling of a $1 million contract short circuited regulations and overcharged taxpayers, Channel 3 News has learned.
CPP hired Terry the Plumber on a two-year contract worth $160,000 to replace plumbing and gas lines at buildings it owns. The company was also supposed to repair water and sewer lines that CPP workers damaged while servicing electrical poles.
But auditors said the deal ballooned to almost $1 million after the power company altered the contract without any authorization from City Council.
"Who's running the show over there? Who's in charge?" said Councilman Mike Polensek. "Anything over $50,000, you've got to come to Council on it. They didn't do any of that."
The power company did not offer any explanation as to why the contract more than quintupled in price. But it said that the person overseeing the contract has been removed.
Terry Kordiak, who owns Terry the Plumber, said that the auditors were just plain wrong.
"There was nothing fundamentally done wrong," Kordiak said. "The commissioner knew exactly what was going on. In fact, they okayed all of my bills."
Kordiak said the accounting system used by CPP was unable to properly track his work.
Auditors, however, said that CPP conducted little to no oversight of Terry the Plumber's work -- even though it was supposed to do daily checks.
They also found that CPP vastly overpaid Terry the Plumber's workers. It paid everyone -- from laborers to truck drivers to backhoe operators -- at the plumber's rate. That's the highest rate allowed under the contract.
"Not only have we spent a million dollars, but we don't even know if the work was done and done properly," Polensek said.
Worst of all, auditors said, the contract was flawed from the get-go because Terry the Plumber messed up the bid by not providing proper documentation.
"It is mandatory that the materials catalog and price list be submitted at the time of bid. This contract should not have been awarded."
CPP said it's working with the city law department to recover an unspecified amount of money from the contractor. They also said the law department is looking at possible connections between Terry the Plumber and City Hall.
"I suspect someone at City Hall knows Terry the Plumber very well," said Councilman Brian Cummins.