I empathize with blogger and community activist Vish Viswanath who was escorted from the February 21 City Council meeting by a uniformed City of Laredo police officer — presumably for using the word “hell” or pointing at people when he’d been cautioned not to. He was there to bring the City’s attention to its failure to ascertain that contractors who are awarded City projects are bonded and have current insurance policies for general liability, auto, and Workman’s Compensation.
I was reminded of my own appearances with members of the Rio Grande International Study Center before Councils of the past under Mayors Saul Ramirez, Betty Flores, and Raul Salinas. As we pointed out the City’s lack of environmental diligence — just as when Viswanath pointed out an egregious shortfall that could spell liability for the City — the eyes of the Council members would invariably roll back in their heads with a lack of interest and/or as in the Rauliato, they would wander backstage for another piece of taxpayer funded Tres Leches cake (with Splenda).
Some on this council and others in city governance and management were loathe to hear, in the Shakespearean paraphrase of District VII Council member George Altgelt, that “something is rotten in the state of Denmark” as he introduced an insurance compliance agenda item co-sponsored by Council members Charlie San Miguel (District VI) and Nelly Vielma (District V).
According to Viswanath — whose appearance before Council was intended to shed light on the City’s flawed safety nets for tracking the insurance compliance of contractors — the lapsed insurance policies of Sunset Pools came to the City’s attention after he made an open records request on January 25, 2017 to ask for Sunset’s proof of insurance. The City responded to him on February 7 that Sunset, a business owned by Juan Ayala, had been reinstated by its insurance carriers on January 26, the day after Viswanath’s request.
Viswanath maintained that it was his open records request, and not the due diligence of the City’s engineering, risk management, or legal departments that alerted the City to a contractor without insurance and also prompted Ayala to take care of his insurance problems.
Sunset Pools is the contractor for the $1.3 million Lazy River/Sisters of Mercy Pool on Zacatecas, a project for which a recent $196,000 change order was approved.
In an exchange with Altgelt, City engineer Rogelio Rivera confirmed that though Sunset’s insurance paperwork had been vetted by project engineer Juan José Cutiño when the contract was inked in 2016, the company’s insurance had indeed lapsed, something contractor Ayala refuted repeatedly later in the meeting to Altgelt and Vielma.
Rivera confirmed that the lapse in all coverage except for Workmen’s Comp came to the City’s attention after Viswanath’s open records request. Assistant city manager Robert Eads affirmed that only the Workmen’s Comp insurance had not lapsed. Rivera said that Sunset’s work on the South Laredo pool was halted.
A vast amount of speechifying by members of the Council ensued, enough surely to launch a hot air balloon, and as tempers moved from blanched to poached, there seemed to be consensus among some on the Council that as long as no accidents had occurred or claims had been made during Sunset’s insurance lapse on the $1.5 million project — and as long as Sunset’s insurance had been reinstated — that the discussion at hand was a waste of time.
The discussions that ensued, including a soliloquy and a love letter to City contractors by District VIII Council member Roberto Balli, seemed not to take into account that the City engineer and an assistant city manager had just confirmed to Council that most of Sunset’s coverage had indeed lapsed. Balli and District IV Council member Albert Torres danced around the need to establish a City policy for diligent oversight for insurance compliance, a measure that would protect the City and taxpayers from liability. Torres would come around in a long-winded way in the end.
Ignoring the City engineer’s assessment that some of Ayala’s coverage had lapsed and was not renewed for a period of “three or four months,” Balli told Ayala, “We could have looked into all of this without bringing you here. Our contractors are valuable to us,” he said, adding, “Business relationships are built on trust and respect, and I’m not trying to shame anyone over this. What we are seeing today is an agenda item placed on the agenda at the last moment without gathering facts, and although we’re saying we did this to look at the procedures, there were other ways to look at the procedures without bringing someone forth to smear Mr. Ayala. I’m not saying that is what you were trying to do, but I think that was the end result. He feels he was brought here, and he was smeared, even though he had all the insurances. I’m going to take his word for it (that none of his insurance had lapsed) because no one on this Council knows any better. We need to be careful with our contractors and not put them through this unnecessarily.”
Torres admonished the Council about courtesy and decorum during Council meetings, though it seemed he was likely talking about courtesy to Ayala and not Vish Vishwanath.
District I Council member Rudy Gonzalez, taking Balli’s lead, apologized to Ayala as though to say, “Sorry you let your insurance lapse and so indelicate that we had to bring it to your attention?”
In an interview after the February 21 Council meeting, Viswanath said that the lack of insurance was grounds for rescinding the contract with Sunset Pools and that the lapse in each insurance policy bore a fine of $2,000 every day. “In another city,” he said, “that would happen quickly. And what if an accident had occurred during the lapse in coverage? The City of Laredo would have been responsible, and the company with no insurance? They would file for bankruptcy and disappear,” he asserted.
“There were many discrepancies on the Sunset insurance declarations. Some did not list the City as the certificate holder, some lacked specificity for the project they covered, some were for projects other than the one underway, and some lacked the signature of the issuer of the policy,” Viswanath said.
“No one has taken responsibility for allowing a contractor with cancelled or lapsed insurance to continue to work on a City project. Why should a contractor decide to become current with insurance policies based on an open records request? What was the motive to look away from Sunset’s lapsed insurance?” he asked. “Was it inefficiency, sloppiness, or cronyism? How could the paperwork go through so many departments and not be caught? This was just one contract — there are probably others that are just as bad,” he said.
Viswanath said he had only spoken for several minutes from the podium before being escorted from the meeting. “Being thrown out of the meeting bothers me deeply. I’m a taxpayer, and I have First Amendment rights to speak up. This sends a clear message about citizen participation in government. I found Balli’s sarcasm offensive. He demonized me and said I was grandstanding. What’s the relevance of that to what was actually being discussed?” he asked.
SIDEBAR
Matters that come before Council often reveal the character of those at the table and those who come before it, especially matters that are belabored, complicated, or politically charged.
Who answered straight-up about the lapsed Sunset Pools insurance policies? City engineer Rogelio Rivera, who also offered a solution to avoid the same predicament in the future — contractors will have to submit proof of insurance with invoices to the City of Laredo.
Who feigned umbrage for his people worse than Marlon Brando in the old classic movie Viva Zapata! District II Council member Vidal Rodriguez, asked “What’s the issue going on here? Is it that you guys are against the development of South Laredo?”
He continued, asking, “Everything is good, up to date, transparent? The City is saying everything is going all very well, everything is going according to plan. Is it South Laredo or the builder?” the Council member asked.
Who wanted to kill the messenger? Balli had earlier told Viswanath, “Don’t wave your finger at me! Hold on, I’m talking, sir!”
He lamented the loss from his life of 30 precious minutes and said, “We spent over 30 minutes on this so that Mr. Vish could have a platform for himself and bring attention to himself at the cost of one of our contractors.” He also referred to Viswanath’s open records request as “bossier” because it suggested the project should be stopped. For the record, Balli himself consumed about eight of those 30 minutes.
Who asked more than once how many insurance policies a contractor needed and what those policies were called — though it had already been stated several times? Balli and Torres.
Who said, “I don’t understand what’s going on here?” Mayor pro-tem Alex Perez twice and Rodriguez once.
Who is enamored of his own voice and wants to be the alpha male on Council? Alas, so many choices, so little time.
Whose legal acumen cut across the jabberwocky of her peers to ask cogent questions and to bring the real matter at hand to a vote? It was Council member Vielma, who as she answered Ayala’s contention that the City was violating the terms of his contract by not giving him written notice for claims or questions about the project, replied that only claims had to be submitted in writing.
“These questions are very legitimate if we are investing $1.5 million in a project, so that our investment is protected and taxpayer money is protected. We are able to bring up any questions regarding process and management of the money while you are under contract with the City. So I don’t think we are in violation of your contract,” Vielma said, stressing that it was the contractor’s responsibility to inform the City of insurance coverage. “It is not for us to be fetching for confirmation of insurance,” she added.
“Mr. Ayala, did your insurance lapse for four months?” she asked.
“No, it never lapsed,” he answered.
“So you got a new policy after the request (open records) for information was made?” Vielma continued, referring to a policy renewal dated the day after Vishwanath’s January 25 open records request.
“We went ahead and changed some policies,” Ayala said, referring to savings gained by changes in coverage.
Vielma would ask him once more, “Is it your testimony today that your insurance never lapsed?”
Vielma framed a motion that made it a contractual obligation for a contractor to keep the City current with its insurance coverage and that the contractor not have a tax liability to the City.
Vielma’s motion, coupled with the proviso Rivera announced earlier for contractors to attach insurance documents to monthly invoices and San Miguel’s suggestion that insurance declarations mailed to a city employee in a specific department at a specific address, will go a long way to rectify issues with contractors carrying out City projects without insurance.
After much dialogue and posturing — some of which illuminated vast ideological and perhaps ethical differences among the Council members — the motion passed unanimously.
