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City of San Diego overpaid $1.18M for portable showers amid pandemic, audit says

Posted at 10:46 AM, Jul 22, 2021
and last updated 2021-07-23 12:25:13-04

SAN DIEGO (KGTV) -- The City of San Diego overpaid a contractor $1.18 million to rent six portable shower trailers at its shelter for the homeless at the Convention Center during the pandemic, according to a new audit.

The City Auditor's report, released Wednesday, says the city's contractor more than doubled its contracted price for portable showers when the pandemic hit, which the city accepted without seeking council approval. The contractor, unnamed in the report, had a deal with the city for $20,000 per month for the showers, but raised that price to $44,800 amid the outbreak.

The showers were installed at the Convention Center as part of the city's Operation Shelter to Home, which at its highest occupancy housed 1,350 people.

"Although there was a financial management system in place for documentation review and approval, the city paid its portable shower vendor more than double its contracted rate," the audit says. "City management decided to pay the increased rate due to the need to quickly accommodate the influx of people at the San Diego Convention Center.

A June 9 city memo from the Chief Financial Officer Matthew Vespi notes that shower units were in especially high demand and that the city made its best efforts to procure the showers in a fiscally responsible way. The Audit says, however, that the vendor never expressed supply constraints when it quoted the city the doubled price."

Of the $1.18 million, about $721,000 were from CARES Act funds.

The Audit recommends the city's Chief Compliance Officer work with the City Attorney's Office to determine if the city should pursue a refund of $1.18 million from the vendor.

In a response, Vespi agreed that the city should try to get the money back. He also reiterated the need to get the showers operational due to the emergency situation of relocating the homeless to the convention center.

"Subsequently, management has engaged with the vendor to obtain more detail on the shower trailer pricing, and we continue to review that information as appropriate," Vespi said.

The shelter closed in March, after the city served 4,198 individuals over the year.

Leading up to the closure, it worked with residents to find them the best options for their next home. In total, it found permanent or long-term housing for 1,422 individuals and 42 families.

In a statement, the city said shower units were in especially high demand at the beginning of the pandemic, one of several factors that led to higher prices.
It notes, however, that it is examining the transaction and agrees with the auditor to explore whether it can get some of the money back.

"The City has strict internal controls on spending and contract management to ensure we are being fiscally responsible and good stewards of taxpayer dollars," the statement said. "As the City Auditor’s report points out, the City established sound financial practices and a rigorous control framework to ensure that CARES Act funds were expended in accordance with the Act."