CLEARWATER — Questionable overtime expenses. Unauthorized purchases. A top manager who made racist and homophobic remarks at work. And a longtime director who became “too cut-throat” to make changes.
These are among the problems city administrators have identified in Clearwater’s gas system as the utility has come under increasing scrutiny over the past year.
When the city council debated selling the system last month, ultimately deciding against the idea, the deliberation focused primarily on long-term revenue.
But now that Clearwater Gas will remain under council oversight, City Manager Jon Jennings says he will oversee a number of changes.
In May 2021, the city’s internal auditor found that “extremely excessive” overtime was being paid to a small group of employees and that a lack of controls created “a high risk of fraud, waste and abuse”.
In December, the city’s purchasing division discovered unauthorized purchases of gas meters and that a contractor had been paid more than the terms of the contract for the past three years, according to human resources reports.
And last month, a senior executive was fired after making highly inappropriate comments in the workplace.
After Jennings arrived in November, at least four high-level Clearwater Gas employees retired or were laid off.
Jennings said he would also scale back the utility’s sponsorship program, which since 2015 has paid out more than $2.3 million in taxpayer dollars to businesses and nonprofits in exchange for exposure. the brand of gas and the access of city officials and their guests to events.
“I would say it’s a cultural adjustment in terms of professionalizing everything we do,” Jennings said of her changes. “We’re going to keep the business and we’re going to run it like a business. From my perspective, we need to make sure we have both the staff and the policies to make sure we manage it appropriately and effectively.
Clearwater Gas System has approximately 90 employees and serves 31,000 customers in Pinellas, Pasco and Hillsborough counties. Each year, the utility pays into the city’s general fund at least 50% of its net income, a dividend that has averaged $3 million a year over the past decade.
On May 16, Jennings fired Kristi Cheatham Pettit, the system’s longtime marketing and business development manager, after a profane incident.
As she drove to the information technology department on May 3 to drop off her cracked iPhone, Cheatham Pettit launched “a rant of vulgarity and bigotry,” according to a witness statement.
She asked an employee if he “was from Jew-Jersey or Jew-York”, according to her statement.
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Another TI member reported that Cheatham Pettit used a homophobic slur when referring to a Clearwater Gas employee. And while referring to a person who was Puerto Rican, she said “Rican cellphone,” according to a witness statement.
Jennings fired her after she missed a meeting to discuss her firing or resignation, according to emails. Cheatham Pettit did not respond to a phone call or text message seeking comment.
In March, Clearwater Gas chief executive Chuck Warrington announced his retirement, effective July 1, after a meeting with Jennings.
During Warrington’s 30-year tenure, Clearwater Gas tripled in size, becoming the fourth largest municipally-owned gas utility in Florida. But in May 2021, an internal audit found the utility had no documentation or process to substantiate whether excessive overtime paid to some employees was “necessary, valid, or cost-effective.”
Auditor Jeh Mohr found that 85% of the utility’s overtime went to nine of the 16 employees in the construction and maintenance division.
Management responded in writing that “setting meters and installing service lines required specific professional qualifications that not all operating personnel possessed”. However, the audit found that some employees who did not receive overtime had higher certification than the few overtime hours granted.
Mohr also found that management did not properly document work to justify overtime and had no process for distributing overtime evenly among the workforce.
As a result, nine gas maintenance employees individually received between $12,000 and $47,000 in overtime in 2020, compared to $1,200 and $9,500 for the other seven, according to the audit.
In a July 2021 memo, Deputy City Manager Micah Maxwell recommended that former City Manager Bill Horne “consider transitioning” Warrington out of public service because “he is clear that leadership has become too deeply entrenched in its current mindset to effect the required change”.
Instead, Horne asked Maxwell to develop a plan for the gas system to correct the problems in the audit. Horne died in August of a suspected heart attack three weeks before his scheduled retirement.
On May 3, two gas system employees received disciplinary notices citing their alleged misconduct related to the 2021 overtime audit. Comptroller Janet Dorrough retired June 1 ahead of a disciplinary hearing, and the chief of the gas section, Bob Jaeger, retired June 3 instead of being fired.
Dorrough’s memo also states that in December the system purchased 40 gas meters without following procurement procedures, making it an unauthorized purchase. The memos also indicate that in 2019 Dorrough and Jaeger were allegedly involved in a verbal agreement to pay a contractor for more work than was specified in the contract.
In July 2021, Maxwell, the deputy city manager, wrote in a memo that it was clear that the management of the gas system was “focused on driving sales and growth of the system, and that focus has become central to the culture of the organization.
Warrington responded Friday saying, “We were trying to keep up with the builders, with all the people wanting to move to Florida, and there were some procedural issues with that, but we cleaned that up.”
Jennings said he expects the gas system to continue to grow, but with more oversight.