Downey : Overbilling Offer Reviewed

The Downey City Council decided Tuesday to further investigate bills of a contractor who has admitted overcharging the city more than $13,000 to maintain air conditioning and heating systems at the Civic Center during the past three years.

Weatherite Service Corp. of Industry offered Downey a $15,180 settlement for the overbilling, which it blamed on a computer error and a contractual misunderstanding. The council postponed action on the settlement offer after a former contractor said the city had failed to review receipts that may contain evidence of further overcharging.

The city was alerted to the overcharges last year by Robert Henderson, who owns Hendey Engineering Inc., a heating and air conditioning firm that held the Civic Center maintenance contract before Weatherite.

The city’s contract with Weatherite allows the firm to mark up materials 25% over cost for overhead and profit. Those materials included filters, belts and more expensive items such as pumps. Weatherite had billed the city 70% to 80% over cost for some materials, Public Works Director Bill Ralph said.

Last February, Weatherite regional manager James J. Barnings admitted in a letter to Ralph that his firm charged the city too much because of a computer error. The firm offered a $13,000 settlement, which was rejected last May.

After further review, officials determined that the city was overcharged another $2,179.60, most of which was due to a contractual misunderstanding, Ralph said. The $15,180 settlement offer includes compensation for city staff time to investigate the excessive charges.

Ralph recommended Tuesday that the council accept a settlement of $15,180, terminate the contract with Weatherite and seek new bids.