FINAL REPORT - San Bernardino Superior Court

Section 3: Power Plant Developments
In June 2004, the City began procuring no-bid professional services from Carter and Burgess, an
architecture and engineering firm, to design, develop, and construct, a cogeneration power plant
to service the energy needs of certain tenants at the Foxborough Industrial Park. The project was
undertaken by the City without a thorough assessment of risks, a formal business plan or budget,
or sufficient controls in place. Through a series of mishaps the project was never completed,
resulting in the loss of tens of millions of dollars in public funds. Ultimately, the City was
awarded $52 million as a result of civil trial litigation against Carter and Burgess and its parent
company, but this award, even if fully paid, would still leave the City with approximately $40
million in losses.
Recommendations
The Victorville City Council should:
3.1. Draft and implement planning policies and procedures for all City and SCLAA capital
projects. Such policies should incorporate best practices, including an independent
evaluation of risks and fiscal impact.
3.2. Draft and implement capital project controls, policies and procedures for all City and
SCLAA capital projects. Such policies should incorporate best practices such as:
a. Establishment of a project plan, including a project budget, which is periodically revisited
and formally approved by the City Council and/or SCLAA Board of Directors
in open sessions. The policies should also include requirements for implementing
performance measures that are regularly reported to the Council during the life of a
project.
b. Establishment of procurement controls, including requirements for competitive
bidding, increasing levels of control over approval of professional service contracts
based on cost to the City, and standard documentation requirements for the payment
of invoices.
3.3. Schedule a workshop on transparency in municipal government, including an information
session on the requirements of the Brown Act. Following the workshop, the City Council
should establish policies to ensure that its operations are consistent with the requirements
of the State Government Code relating to open meetings and best practices, as they relate
to government transparency.
Costs and Benefits
The costs associated with these recommendations would include staff time to prepare policies
and procedures for consideration and approval by the City Council, as well as for preparation of
a workshop on the Brown Act. The benefits of these recommendations would include stronger
controls over the planning and implementation of costly capital projects, which would help
reduce the risk of: (1) initiating poorly planned projects; (2) projects going over-budget; and, (3)
the loss or misuse of public funding.
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Harvey M. Rose Associates, LLC