By MELISSA DOMSIC
mdomsic@record-eagle.com
September 07, 2008 12:00 am TRAVERSE CITY -- The city's contracted wastewater treatment plant operator is embroiled in a lawsuit stemming from a criminal racketeering case that sent East Cleveland, Ohio's mayor to prison. East Cleveland officials last month sued CH2M Hill OMI, alleging the engineering and management firm was part of a conspiracy that involved the city's mayor to improperly secure a multimillion dollar, no-bid contract to run the city's water department. Longtime Traverse City Manager Richard Lewis is slated to leave this month to work for CH2M Hill OMI. Lewis on Friday said he didn't know about allegations involving his future employer, and that it doesn't concern him. Lewis was the point man for a five-year, no-bid contract renewal with CH2M Hill OMI that Traverse City commissioners approved in June 2007. The city and surrounding townships paid CH2M Hill OMI $2.3 million to run the treatment plant in the contract's first year, and contract terms for following years are to be negotiated. East Cleveland's lawsuit and a related federal criminal case do not indicate wrongdoing in Traverse City. But the East Cleveland case concerns some Traverse City commissioners who want to scrutinize past and future contracts with CH2M Hill OMI. "If this firm is guilty of some wrongdoing with another community in terms of a contract, I think we need to make sure that we originally did bargain in good faith, or they did also and there are no issues," Mayor Michael Estes said. Cash for no-bid contract alleged East Cleveland's lawsuit alleges CH2M Hill OMI in 2002 and 2003 funneled money through a consultanting firm and Cleveland businessman Nate Gray to East Cleveland Mayor Emmanuel Onunwor, who convinced the city council to award a no-bid contract for the company to run the city's water department. Gray and Onunwor are in prison after being convicted of racketeering and other related crimes, but CH2M Hill spokesperson John Corsi said the company was never accused of wrongdoing in the criminal case. "We also launched a thorough internal investigation that came to the same conclusion as the U.S. attorney, that there was no evidence that our company engaged in any illegal activity," Corsi said. CH2M Hill OMI no longer runs East Cleveland's water department. In July, Lewis said he planned to leave his post of 17 years to work for CH2M Hill OMI. He began employment discussions with the firm "last winter," Lewis said. He'll work in the Colorado-based company's municipal services division in Atlanta. "It's exciting and a different way to operate local governments," Lewis said. "It intrigued me, but also allows me to use 30 years of knowledge that I can apply in a different format." Lewis said he didn't know anything about the East Cleveland case, but that he's known several CH2M Hill OMI employees for years and expressed confidence in the company. "I don't think this is CH2M Hill OMI's standard operating procedures from everything I've ever known and things that I know right now," Lewis said. "It's not, and so I can't comment on any more but this at this point." 'Cause for concern' Traverse City Commissioner Barbara Budros said "it's cause for concern when the company you're doing business with" is connected to a racketeering case. "It's one of those red flags that says we really need to look at our contract when it comes around for renewal," Budros said. "I'm not saying there's been anything nefarious with our contracts with OMI, but it just says to me we need to take a good look at that when it comes around." Budros, Estes and Commissioner Jim Carruthers were elected to the commission in November, after the June contract renewal. CH2M Hill OMI won a competitive bid process in 1990 to operate Traverse City's wastewater treatment plant. Since then, the city renewed the contract four times without seeking bids from other companies, and in 2001 and 2002 CH2M Hill OMI won bids to design and build a $31 million plant upgrade. CH2M HILL OMI also runs Grand Traverse County's septage treatment plant. City commissioners in 2007 questioned why bids weren't sought for the wastewater plant contract renewal, but opted to stay with CH2M Hill OMI at least another five years because of its knowledge and experience with new, high-tech system upgrades. Commissioner Chris Bzdok on Friday said commissioners and Lewis agreed it was smart to retain the firm without a bid, but to go to a bid process when the contract expires. "Who knows what can come out of the discovery process in that lawsuit, which is against CH2M Hill directly," Bzdok said. "Unless ... something does come out, I think Richard Lewis has a 17-year track record of integrity. (He has) earned the right to be free of speculation and inferences in the absence of evidence." The city's wastewater treatment contract was amended last month to pay just under $2.3 million this fiscal year. The city pays about 45 percent of the bill, and the rest is covered by area townships that use the plant. Shortly before Lewis announced his resignation, he requested that Bob Cole, the city's director of public services, handle the recent contract amendment "because of an appearance of a conflict issue." Cole has since taken over more of Lewis' plant responsibilities. Lewis said he won't have any relationship with Traverse City on CH2M Hill OMI's behalf for at least five years.
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