Consultant wants 440 pct. hike in water commission contract

Ancillary costs related to the DuPage Water Commission's recovery from accidentally spending down its $69 million reserve fund continue to grow.

The board today will consider a request to increase a loan consultant's $5,000 contract to $27,000, a 440 percent increase. Don Zeilenga, a water commissioner and recently appointed commission treasurer, suggested the contract increase for Connecticut-based Public Sector Group.

"It will be up to the commissioners what action they want to take," Zeilenga said in an e-mail to other commissioners. "It was my initiative to bring it to the board."

Zeilenga wrote to the board that Phil Peloquin, a financial analyst with the agency, reported putting in 290 hours on the recent $40 million loan agreement with Northern Trust Bank. At the consultant's rate of $300 an hour, that amounts to $87,000 worth of work, the memo states.

"Based on my discussion with Mr. Peloquin, he is suggesting an additional $20,000 beyond the original $5,000 (contract) and also $2,000 for travel expenses," Zeilenga wrote.

Commissioners said the memo was the first they'd heard of the consultant's overruns.

"If he did more work he should have alerted us," commissioner and Woodridge Mayor Bill Murphy said.

The contract was awarded March 26, and Peloquin's work concluded May 21, according to the commission's paperwork. With weekends excluded during that time, based on the consultant's figures, Peloquin averaged 7 hours of work a day on the commission's loan agreement. Zeilenga said the loan agreement was complicated due to the release of a forensic audit that detailed how the commission misspent its reserves. Peloquin's analysis of that report added to his workload, Zeilenga said.

Water commission attorney Maureen Crowley said the commission is not required to pay any additional expenses to the agency and travel expenses were not part of the contract.

Several commissioners expressed surprise at the request.

"I'm very troubled by a $5,000 estimate turning into a $90,000 bill," said Commissioner Tim Elliott. "I'm very skeptical, but I want to hear more about it."

Zeilenga said the additional work that Peloquin put into the agreement and negotiations with the bank resulted in a $124,000 decrease in interest payments over the planned one-year repayment of the loan.

"I don't know how we can pay this when they never came to the board saying it was going to take more than the $5,000 in the contract," said Commissioner Liz Chaplin. "This isn't like the (forensic audit) bill where we knew we were being charged $500 an hour."

Peloquin's work also resulted in an improved bond rating for the commission, Zeilenga said.

"The $5,000 rate got a tremendous deal for the amount of effort he put in on this job," he said.