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Taxpayers paying the price for delayed road project

When Clark County commissioners agreed recently to pay $2 million to settle a lawsuit filed by Fisher Sand & Gravel, there was no discussion by any of the commissioners. Nary a word about two years of litigation in which their integrity was questioned by a federal judge.

Silence is typical when elected officials are on the paying end of a court case.

U.S. District Judge Robert Jones made up for their silence when he gave the settlement his final approval Sept. 8, stressing that the losers in this case were the taxpayers.

The litigation involved a contract dispute for a road project. Commissioners rejected a low bid by Fisher Sand & Gravel in favor of a bid from Las Vegas Paving Corp. that was $5 million higher. The commissioners preferred a higher bid from a union company to a lower bid from a nonunion company.

Jones analyzed the litigation. He condemned the commissioners as a group, and Commissioners Steve Sisolak and Tom Collins in particular, for violating Fisher’s due process rights through their repeated attempts to deny Fisher the bid and award it to Las Vegas Paving.

The litigation went all the way to an appeals court before a settlement was reached requiring Jones’ approval.

Under the agreement, Fisher was paid $2 million by the county, the county gave Las Vegas Paving a $116.8 million contract, and Las Vegas Paving paid Fisher another $3 million.

Essentially, Fisher obtained the $5 million profit it would have received if it had won the contract, without doing the work. Sweet.

The folks in northwest Las Vegas win improvements on the Las Vegas Beltway between Decatur Boulevard and Tenaya Way. However, the road improvements could have been finished by now, instead of just beginning, if the bid that went out in 2008 had been approved the first go around.

In rejecting the lowest bidder, Sisolak and Collins used information from union advocates that disparaged Fisher so the county could eliminate the company as a responsible bidder. Then they allowed those objections and complaints to be made on the record without giving Fisher an opportunity to respond, Jones said.

That’s the violation of due process rights that Jones blasted in an earlier hearing, where he said the commissioners “corruptly” showed favoritism to Las Vegas Paving because Fisher isn’t a union shop.

This time Jones was more cautious:

“The county commissioners felt for whatever reason, nefarious or innocent, that they needed to accept the bid of the union shop.”

By determining Fisher wasn’t a responsible bidder, the county blocked the company from bidding on future projects in Nevada. An important part of the settlement is that the county, like the kid in a playground, takes that back.

Do the math. The county is paying $5 million more than necessary, plus a $2 million settlement, or $7 million. The legal fees and costs, including a short-lived related lawsuit by Collins, ran just shy of $150,000, the county told me, although Fisher’s legal fees and costs hit the $1 million mark.

In an effort to argue that taxpayers aren’t the losers, the county said $120 million set aside for the project earned interest during the dispute. For its part, Las Vegas Paving argued that prices have gone up, so the company essentially is doing the project at cost.

The judge didn’t buy it. He said he was still skeptical “and concludes the taxpayers are the losers.” He also suspected Las Vegas Paving might find a way to shift its $3 million settlement cost to the taxpayers.

Do I have to remind anyone that First Transit’s bid to run the public bus system is
$50 million less than Veolia but is in dispute before the Regional Transportation Commission’s board?

See a pattern here? Staff recommends the lowest bidder, and politicians say no, and get sued.

And who ends up paying the price? You got it. The taxpayers.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call 702-383-0275. She also blogs at lvrj.com/blogs/morrison.

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