Macemon Complaint

April 22, 2013

Members of the Board of Ethics City of Racine 730 Washington Avenue Racine, WI 53403 Dear Members of the Board of Ethics: I wish to file a Complaint alleging violations of Section 2-581(f) 4 of the City of Racine Code of Ethics. Mark Yehlen, in his official capacity as Commissioner of Public Works of the City of Racine, violated the following section of the City of Racine’s Code of Ethics: (f) Misconduct in office. Public officials and employees are prohibited from: 4) Intentionally falsifying an account, record book, return, certificate, report or statement in the officer or employee’s official capacity.

Mark Yehlen, Commissioner of Public Works, violated the specifications and instructions of the City of Racine official RFP # 18 as it pertains to the Racine City Ordinance (see attached RFP # 18). Mark Yehlen falsified information to the Racine Common Council during the discussion of Change Order # 1 and #2 (see attached Architect letter, ARC Contract document, Change Order #1 and #2). Yehlen stated there would not be any more change orders.

The ARC letter instructs to “Allow a period of two (2) working days during the period of demolition for the City to determine, consider, and direct the final extent of common walls demolition.”

A problem also needs to be addressed where existing footings at 1514 and 1518 Washington Ave. are exposed to the weather. Additional work to the neighboring roof at 1514 Washington Ave. was required to repair damage from the demolition (see attached Racine Merchandise Mart and Carlson Roofing letters).

Mark Yehlen falsified information to the Public Works and Services Committee. Yehlen stated, “the bricks were deteriorating on Linea Anthony building, 1514 Washington Ave.,” however they were not.

Mr. Yehlen appeared before the Racine Common Council and falsified information despite what was instructed for contractor’s responsibilities as specified in RFP # 18, saying, “The interior was unsafe to take the building down manually, so the building had to be taken down by front loader” (see attached Architect letter).

Mr. Yehlen’s statement to the Racine Journal Times, that I “read too far into” the specifications, was a false statement. To the contrary, “In the construction business, specifications are sacred documents” (see attached Katt letter). The bid document states, “Please read these specifications very carefully as they will be strictly enforced” (see attached RFP # 18). RAZA violated the ARC Contract and caused damage to the surrounding buildings and/or businesses. The ARC Contract stated, “Provide the City representative with a written plan for removing the building prior to commencement” (see attached ARC Contract). RAZA took down the building with a “backhoe.”

It is the City of Racine’s responsibility to assure Specifications are adhered to and all documents by the Contractor(s) are in place prior to commencement.

The falsified information purported by Mr. Yehlen persuaded the vote of the Racine City Council and has resulted in economic harm to Macemon and Sons Inc., which was seeking the bid on 1516 Washington Ave., and to the public who ultimately bear the cost as taxpayers or consumers.

I am asking for the City of Racine to reform the city’s Purchasing Department practices as it relates to their Request for Proposal procedure and enforcement of violations as it pertains to Bid Instructions and Specifications.

I, the complainant, declare under oath that the information is true to the best of my knowledge.

Dated this ____ day of ____________, 2013 Complainant:

___________________________ Signature State of Wisconsin Racine County Subscribed and sworn to before me by ______________ on this ____ day of ____________, 2013.

___________________________ Notary Public Commission Expires: _______________________

April 22, 2013

Members of the Board of Ethics City of Racine 730 Washington Avenue Racine, WI 53403 Dear Members of the Board of Ethics: I wish to file a Complaint alleging violations of Section 2-581(f) 4 of the City of Racine Code of Ethics. Kenneth D. Plaski, in his official capacity as Chief Building Inspector of the City of Racine, violated the following section of the City of Racine’s Code of Ethics: (f) Misconduct in office. Public officials and employees are prohibited from: 4) Intentionally falsifying an account, record book, return, certificate, report or statement in the officer or employee’s official capacity.

Kenneth Plaski, Chief Building Inspector, violated the specifications and instructions of the city of Racine official RFP # 18 as it pertains to the Racine City Ordinance (see attached RFP # 18). Ken Plaski falsified information to the Racine Common Council during the discussion of Change Order # 1 and #2. Mr. Plaski submitted a letter to the Racine Common Council purporting false information (see attached Plaski letter).

The bid document states, “Please read these specifications very carefully as they will be strictly enforced” (see attached RFP # 18). RAZA violated the ARC Contract and caused damage to the surrounding buildings and/or businesses. The ARC Contract stated, “Provide the City representative with a written plan for removing the building prior to commencement” (see attached ARC Contract document). RAZA took down the building with a “backhoe.”

The ARC letter instructs to “Allow a period of two (2) working days during the period of demolition for the City to determine, consider, and direct the final extent of common walls demolition.”

Plaski stated there was a large structural crack at neighboring 1514 Washington Ave. before demolition, which was false. A problem also needs to be addressed where existing footings at 1514 and 1518 Washington Ave. are exposed to the weather.

Additional work to the neighboring roof at 1514 Washington Ave. was required to repair damage from the demolition (see attached Racine Merchandise Mart and Carlson Roofing letters).

The falsified information purported by Mr. Plaski and the violations of the RFP # 18 has resulted in economic harm to Macemon and Sons Inc., which was seeking the bid on 1516 Washington Ave., and to the public who ultimately bear the cost as taxpayers or consumers.

I am asking for the City of Racine to reform the city’s Purchasing Department practices as it relates to their Request for Proposal procedure and enforcement of violations as it pertains to Bid Instructions.

I, the complainant, declare under oath that the information is true to the best of my knowledge.

Dated this ____ day of ____________, 2013 Complainant:

___________________________ Signature State of Wisconsin Racine County Subscribed and sworn to before me by ______________ on this ____ day of ____________, 2013.

___________________________ Notary Public Commission Expires: _______________________

April 22, 2013

Members of the Board of Ethics City of Racine 730 Washington Avenue Racine, WI 53403 Dear Members of the Board of Ethics: I wish to file a Complaint alleging violations of Section 2-581(f) 4 of the City of Racine Code of Ethics. Kathy Kasperson, in her official capacity as Purchasing Director of the City of Racine, violated the following section of the City of Racine’s Code of Ethics: (f) Misconduct in office. Public officials and employees are prohibited from: 4) Intentionally falsifying an account, record book, return, certificate, report or statement in the officer or employee’s official capacity.

Kathy Kasperson, Purchasing Director, violated the specifications and instructions of the city of Racine official RFP # 18 as it pertains to the Racine City Ordinance (see attached RFP # 18), resulting in Change Orders costing the City of Racine $26,144.16. Kathy Kasperson falsified information to the Racine Common Council, Public Works and Services Committee during the discussion of Change Order # 1 and #2. See attached Architect letter which reiterates: “Return structures and surfaces that remain to conditions existing prior to commencement of demolition work. Repair adjacent construction or surfaces soiled or damaged by demolition.” Kasperson also stated, “the work on the Change Order #1 and #2 were [sic] justified because of the bid process in which RAZA placed an exception on their Bid Proposal.”

The bid document states, “Please read these specifications very carefully as they will be strictly enforced” (see attached RFP # 18). RAZA violated the ARC Contract and caused damage to the surrounding buildings and/or businesses. The ARC Contract stated, “Provide the City representative with a written plan for removing the building prior to commencement” (see attached ARC Contract). RAZA took down the building with a “backhoe.”

The falsified information purported by Ms. Kasperson and the violations of the RFP # 18 have resulted in economic harm to Macemon and Sons Inc., which was seeking the bid

on 1516 Washington Ave., and to the public who ultimately bear the cost as taxpayers or consumers.

I am asking for the City of Racine to reform the city’s Purchasing Department practices as it relates to their Request for Proposal procedure and enforcement of violations as it pertains to Bid Instructions.

I, the complainant, declare under oath that the information is true to the best of my knowledge.

Dated this ____ day of ____________, 2013 Complainant:

___________________________ Signature State of Wisconsin Racine County Subscribed and sworn to before me by ______________ on this ____ day of ____________, 2013.

___________________________ Notary Public Commission Expires: _______________________

April 22, 2013

Members of the Board of Ethics City of Racine 730 Washington Avenue Racine, WI 53403 Dear Members of the Board of Ethics: I wish to file a Complaint alleging violations of Section 2-581(f) 4 of the City of Racine Code of Ethics. Ron Hart, in his official capacity as Alderman of the 14th District of the City of Racine, violated the following section of the City of Racine’s Code of Ethics: (f) Misconduct in office. Public officials and employees are prohibited from: 4) Intentionally falsifying an account, record book, return, certificate, report or statement in the officer or employee’s official capacity.

Alderman Ron Hart falsified statements to the Racine Common Council when he made the following statement, “I talked to the Architect and he stated it was all right to tear the building down at 1516 Washington Ave. with a backhoe” (see attached ARC specifications). The ARC President did not tell Alderman Hart that. The statement was never made.

The falsified information purported by Alderman Ron Hart persuaded the vote of the Racine City Council and has resulted in economic harm to Macemon and Sons Inc., which was seeking the bid on 1516 Washington Ave., and to the public who ultimately bear the cost as taxpayers or consumers.

I am asking for the City of Racine to reform the city’s Purchasing Department practices as it relates to their Request for Proposal procedure and enforcement of violations as it pertains to Bid Instructions and Specifications.

I, the complainant, declare under oath that the information is true to the best of my knowledge.

Dated this ____ day of ____________, 2013

Complainant:

___________________________ Signature State of Wisconsin Racine County Subscribed and sworn to before me by ______________ on this ____ day of ____________, 2013.

___________________________ Notary Public Commission Expires: _______________________

April 2, 2013 Member of Racine City Council City of Racine 730 Washington Avenue Racine, WI 53403 RE: Demolition project at 1516 Washington Avenue

Dear Honorable Members of the Racine City Council,

I have been informed that a vote is forthcoming to approve or disapprove change orders submitted by the contractor for the above referenced project, RAZA of Racine. LLC. I would like to offer my insight into this particular situation as I hope that you will consider my viewpoints in your decision. I was born and raised in this City that I love and have lived here my entire life. I currently live in Wind Point. I am personally invested here by virtue of my business, Katt Construction located at 1434 West Street, as well as properties that I own in the City of Racine.

This is not an easy letter for me to submit as Sam Azarian is a friend and a business colleague of many years. I respect Sam, his family and his business operations. But this issue is very serious and much bigger than our friendship. This is about maintaining integrity in the public bidding and construction process and maintaining the public’s faith in our local governmental operations.

Katt Construction is a commercial and industrial general contractor. We self perform concrete and carpentry. Our firm also performs a certain amount of demolition ourselves. However, if it is larger demolition project, we will typically subcontract that work to a subcontractor such as RAZA or Macemon. Our firm understands the demolition process. When we enter into a subcontract with a demolition contractor, we have to thoroughly understand the contract specifications to make sure our subcontractor is following them.

Reading the recent headline in the Racine Journal Times that Mark Yehlen, the top public works official in the City of Racine is quoted saying “I read too much the specifications” (in reference to Macemon Demolition who was the second place bidder for this demolition project ) troubles me. In the construction business, specifications are sacred documents. No one can ever “read too much” into specifications. Contractors live and die by them. I am sure that Mr. Yehlen understands the importance of specifications and am hoping that his quote was somehow taken out of context.

The bidding documents state: “Please read these specifications very carefully as they will be strictly enforced”. Not reading, understanding and following the plans and specifications could very well wipe out a contractor’s business. The specifications are part of the construction contract between the contractor and owner and must be adhered to.

I have read the specifications and construction documents for this project. The architect, ARC, did a thorough job of writing the specifications and was very clear in his instructions. The means of the demolition process expected by the City was detailed, well thought out and planned.

However, the problem appears to have started after the contract was signed and before the field work for the project had commenced.

The contract says “Provide the City representative with a written plan for removing the building prior to commencement”. If that plan was submitted to the City and it had specifically outlined the process by which RAZA would actually take down the building (with a backhoe) it would have been in direct contrast to the contract documents that state the building is to be taken down in small sections and lowered to ground by hoists, etc. Simply, it would have been glaringly obvious that RAZA was not abiding by the contract. This entire mess could have been eliminated before the project ever started. This is the purpose of a plan of action.

Do any of you know if a plan of action was submitted? This is important critical information for you to know. And if there was, it needs to be reviewed thoroughly prior to making any decisions regarding change orders. If a plan of action was not submitted by RAZA this is in direct conflict with the contract documents! If RAZA had not submitted a detailed plan, then the City should never have allowed RAZA to start the demolition work in the first place. I cannot stress enough how critical this is.

The contract documents state (very clearly) that the adjoining buildings are to be braced, shored, etc. to protect them from damage during the demolition process. Please see the specifications for the complete list of work directives.

The contract also states that any damage that is done during the demolition process is to be repaired by the contractor at his cost. Of course, there can be unknown or concealed conditions that exist such as underground utility lines or something buried within a wall, those conditions may be considered legitimate change orders. However, the bidding documents for this project state: “Each bidder is expected to examine the site of the work and determine for himself the amount of work involved”.

I have reviewed the change orders from RAZA. Every item he listed is clearly spelled out in the contract. These could not have been unknown conditions.

For example, RAZA charged $3,750.00 for blocking up two openings. The contract states clearly that the openings between the buildings are to be closed up. The contractors were to perform a site visit prior to submitting bids. Unless the openings were completely covered and there was no indication of openings present, this cannot be a change order. I am assuming the openings were visible otherwise it would not have been listed in the specifications.

Page 21516 Washington Ave.

RAZA also charged $11,216.45 for repair of south wall. The contract documents could not have been more clearly detailed. The contract spells out exactly how the contractor is to handle that condition. “Carefully remove brick....provide masonry repair if needed”. The brick veneer is the masonry skin on the outside of the building. This is the first thing you see when you drive up to the building. It is impossible to consider this an unknown condition.

There are several typical methods for protecting the existing brick veneer of an adjoining building during the demolition process. Here is one of them: >

>

>

Sawcut through brick full depth at construction limit.

Make a second sawcut full depth approximately 12”‐18” away from first cut.

Chip out and remove brick veneer from this slot.

By using this method, once the brick veneer is removed from the building to be demolished, it will not affect the brick veneer of the existing buildings to remain. It is up to the bidding contractor to determine the best option to meet the specifications. Means and methods are available for the work that RAZA charged extra for.

There were also charges for repairing a parapet wall ($5,801.71) and roofing work at one of the adjoining buildings ($5,376.00). I am not entirely sure of the context but I believe RAZA said the parapet was deteriorated and that is why it fell and damaged the adjoining roof. These are not legitimate change orders for two reasons: 1. The parapet is the section of wall that extends above the roof and cannot be an unknown condition. If deterioration was present it would have been discovered during the site visit. Due to the age of the building, the typical method of parapet construction was to assemble multiple layers of interlocking brick. The parapets are not a structural component. Therefore, they must be handled with care during the demolition process to prevent damage by providing protection, shoring or working around them by hand rather than by machine.

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2. The contract says “Demolition of buildings which abut adjacent buildings to remain, shall be done with extreme care so that no damage or weakening of the adjacent buildings to remain will be caused by said demolition. Special care should be taken to ensure demolition without damage to roofs or other adjoining parts of adjoining buildings.” “Cease operations and notify the Chief Building Inspector immediately if safety of the structure appears to be endangered.”

Even if the parapet was deteriorated due to weather exposure and age, had RAZA followed the contract and taken down the building with care (per the contract), they would have realized that the parapet might not be stable and should have notified the City to formulate a plan of action prior to continuation of their demolition process. The parapet should never have been knocked over on to the adjoining roof. Further, the structural roof joists bear on and in the walls of the adjoining buildings and the parapet is located directly above the roof system. By using the backhoe method of roof removal it is nearly impossible to know if collateral damage is being done to the adjoining wall as you rip away at the existing roof joists. The damage will only be noticed AFTER the parapet wall falls on to the roof. That is one of the reasons the contract documents were directly calling attention to this specific condition.

Page 31516 Washington Ave.

The newspaper article did not mention that the architect, ARC (who wrote the specification) was consulted about these change orders or extras. Does anyone on the City Council know if this was the case? This is absolutely critical. ARC should have been notified and met with City officials and RAZA to discuss these change orders and offer his professional opinion as to if these were qualified additional charges that should be approved. There should also be documentation of this meeting taking place.

A visit to the site on April 1, 2013 reveals the following: 1. The contract notes to “provide full and complete site cleanup at completion of work”.

Construction and demolition debris is still present including lumber with nails protruding.

2. The rear of the building is open with no fencing. The site has scattered debris and a steel fire escape is hanging from a rope. This area should be cleaned up and fenced off.

3. At the 1514 building, a large structural crack is evident. It appears the footing at the north end of the building has dropped causing the structural crack. This appears to have been an unknown condition as the footing was not exposed until the building was removed. This appears to be a rather serious issue and needs to be addressed immediately. I would suggest consulting with a structural engineer. One method of repair would be to install helical piers under the footing, raise the footing thereby closing the structural gap/crack and then tuck‐point the crack. I believe this is the responsibility of the City.

4. At the 1514 and 1518 I believe another serious issue exists: Both footings appear to be exposed to the weather. State code indicates that 48” of cover is required to maintain stability in freeze/thaw conditions. Again this issue needs to be addressed by an engineer. If the building site is to be backfilled to 48” above the foundation line this would alleviate the issue. This work has to take place prior to the next winter season.

This is also the responsibility of the City.

5. The specifications state: “Return structures and surfaces that remain to conditions existing or better prior to commencement of demolition work”. At both the adjacent 1514 and 1518 buildings, fractured sections of wood beams are still hanging from their beam pockets. These should be removed, cut out and the remaining holes patched in with masonry. Also the masonry at the southeast corner of 1518 needs to be addressed.

This work is not complete. There is an exposed steel beam, jagged masonry, etc.

6. Silt fencing or hay bales are not in place allowing water to run off directly into the storm sewer.

7. Both exterior walls interfacing to the site (walls running north/south) are in very rough shape. It appears that some of this work should be considered unknown as it relates to the interconnections of the buildings. These areas need to be infilled with masonry and tuck pointed to protect the walls from the weather. I believe this condition falls under item 13 (interconnections). The specifications state that “The interconnections at the common walls between 1516 and 1518 Washington are not fully known at this time, the extent of demolition of the walls will be determined during the course of demolition” This should be considered and unknown condition.

Page 41516 Washington Ave.

I cannot imagine what would have happened if one or more of the adjoining walls had collapsed during demolition. The property damage costs would be in the tens to hundreds of thousands of dollars. And if someone had been injured or worse .... the amount would be in the millions. It is also the City’s responsibility to insure that the contractor is following the specifications. If serious damage, injury or a death had occurred in an accident during this demolition project, both RAZA and the City of Racine could be named in a lawsuit.

In the absence of the City not insuring that the contractor (or any project) did not abide by the contract, the City could have opened itself up to untold costs as they could be found liable as well as the contractor. I understand that RAZA has a very experienced crew and his operator is one of the best in the demolition business, but no one is immune from accidents.

With respect to the written change orders I found on line: 1. RAZA is charging $105.00 hour for masons and laborers. This seems very high when compared to industry averages. Note: RAZA is only billing for masons, but on a typical mason crew at least one laborer is present.

2. I do not see any back up information such as signed daily reports, subcontractor invoices (if used) and material invoices or itemization.

3. How does the City control this? There should be a written plan of operation within the City Public Works Department and Purchasing Department on how to deal with change orders once a change order has been initiated.

4. The City should have knowledge regarding standard industry billing rates and should not allow contractors to charge more than the industry average.

As a taxpayer of the City of Racine, I am concerned that the project costs will not stop here. I am wary of the possibility of the following lawsuits: 1.

From the owner of 1516 Washington Avenue: Even though he had orders from the City to remove the structure and the City performed the work for him, the City has the responsibility of being good stewards for the related costs. Once he receives the bill and it is twice as much as the original bid, I would assume he would object to the additional costs.

2.

From the owners of 1514 Washington Avenue: With regards to the structural foundation damage, the exposed footing and the steel fire escape that is being held up with rope as listed above.

From the owner of 1518 Washington Avenue: With regards to the tuck pointing work and foundation issue listed above.

3.

From the City of Racine taxpayers: The City of Racine abused its' fiduciary responsibility.

From Macemon Construction: For expenses and profits due to loss of job.

From pedestrians and the general public: For possible injuries due to safety violations.

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1516 Washington Ave.

In order to protect the interests of the City of Racine taxpayers, I feel that no change orders should be approved or final payment be made to RAZA until a thorough investigation of the entire project is completed. If you have any questions regarding this letter please contact me at my office.

Please know that although my comments put forth in this letter are from my many years of experience in the construction business, they are respectfully from the heart of a caring man who considers this City his home!

Herbert W. Katt

President Katt Construction Corporation CC: Members of City of Racine Council

Page 61516 Washington Ave.