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Red flags with ex-county employee go back three years

By John Frank and Barbara Behrendt, Times Staff Writers
In print: Sunday, August 31, 2008

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Three years ago, red flags about a former public works employee's association with private contractors began appearing, according to new documents unearthed by the St. Petersburg Times.

But the signs were disregarded by top county officials.

In a sharply worded memo dated April 7, 2005, the county's purchasing director suggested that Bill Busch, the county's pavement management coordinator, appeared "to be acting as an advocate" for DAB Constructors Inc., one of many contractors the county pays to maintain its roads.

"That is very disturbing to a person in my position," wrote Jim Gantt. "I have brought this to your attention before and it again appears to me that favoritism is being afforded one vendor over another.

"In summary," Gantt continued, "Machiavellian manipulations of contracts for the benefit of using agencies and contractors are very dangerous courses of action."

The memo — sent to Public Works director Charles Mixson and then-County Administrator Gary Adams — doesn't name Busch, but he was the target, Gantt confirmed in a recent interview.

What happened next illustrates how Busch's cozy relationship with private contractors could remain unchallenged for years until the Hernando County Sheriff's Office launched a criminal investigation into his conduct earlier this year.

Adams responded to the memo by reprimanding Gantt for demeaning a fellow county employee and violating the chain of command. An official warning was placed in Gantt's personnel file.

Busch's personnel records reflect no mention of Gantt's concerns, indicating he likely avoided rebuke.

"My feelings were that Mr. Busch employed favoritism to a number of contractors," Gantt said after being pressed on the memo. "He expedited paperwork, signed off on projects, got payments through and wrote favorable specs to companies."

Those same allegations are the focus of the criminal investigation concerning Busch's ties to KMS and Associates, a private company that did significant work for the county. DAB, the Brooksville contractor Busch worked with closely in the past, is not a part of the case.

A Times investigation recently disclosed that Busch pushed the county to use KMS-affiliated road products at the same time he began negotiating post-retirement employment with the Ohio company, according to internal documents and e-mails.

Even after retiring Jan. 2, he returned to his county desk part time while also serving as a marketing coordinator for KMS and operating its Florida office from his Spring Hill home.

Busch remained a county contract employee until July 9, when his work computer was seized and his bosses were questioned as part of the criminal investigation.

Now, fresh details are revealing a more complete picture about how Busch used his county position to the benefit of private contractors and what his supervisors in the Department of Public Works knew about the situation. And at least one central character suggests county officials were aware of Busch's conflicting arrangement.

Big money

The controversy centers on the county's pavement management program, which is responsible for inspecting and maintaining 1,000 miles of residential and collector roads. In the past eight years, the county spent more than $50-million in tax money to improve road conditions.

It was Busch's job to help determine which roads needed help, and what kind of help.

He joined the county's Public Works Department on Nov. 13, 2000, after spending 10 years as the pavement management coordinator for Lakeland.

From the start, records indicate that he promoted products and services supplied by the company he would eventually join.

Just 15 days after arriving in Hernando, Busch appeared before the County Commission to introduce MicroPAVER, a computer program that would help the county assess, inventory and rank its roadway needs.

"This is just a tool," Busch said. "If you use it properly, you can build something really good with it."

Dating to 2002, the county contracted with KMS to collect data for the program, paying more than $100,000.

As the cost of repaving roads increased, Busch proposed that the county use a new — but largely unproven — product called RePLAY. Made by BioSpan Technologies in Missouri, it is a soy-based spray treatment designed to rejuvenate and extend the life of roads by restoring the moisture to the asphalt surface.

Busch persuaded the county to test the product in September 2006 using Ohio Pavement Systems Inc. The company's president is Joe Kindler Jr., the son of KMS president Joseph Kindler.

In internal documents, Busch told his bosses that the product demonstration — offered to the county at a discounted price of $5,000 — was a success. But Gregg Sutton, the assistant county engineer and Busch's immediate supervisor, recently acknowledged he couldn't tell how well it had worked.

If such misgivings about the product arose at the time, they weren't documented. Two months later, Busch — with Mixson and Sutton's approval — wrote a bid for a project to improve 75 miles of county roads. The specifications were tailored to companies that supplied RePLAY.

This concerned county purchasing officials, who preferred a competitive method open to all possible products. But they signed off after Mixson insisted.

"People should listen when flags started to be thrown up because we threw up a lot of flags," Gantt, the purchasing director, said recently. "Bureaucracies are put in place sometimes for a reason … because it's not our money.''

But the bid process soon began to fall apart. On Dec. 28, 2006, a competing company, Pavement Technology Inc., challenged Busch's specifications. Company president Colin Durante demanded that the county consider alternative products, specifically his company's asphalt rejuvenator, Reclamite. Questions developed about how to compare the products, and, eventually, the bid was canceled Jan. 18, 2007.

In a memo to county purchasing officials, Busch dismissed Durante's assertions about Reclamite as "salesman talk."

Busch tried again the following week, submitting a revised bid intended to give alternative products a fair shake. But the specifications still included a few points that favored RePLAY.

Durante's company again asked for a few clarifications, but submitted a bid. When the proposals were opened Feb. 28, 2007, his company offered the lowest price at $556,000.

But Busch and Mixson refused to award Durante the contract, instead recommending Freisthler Paving Inc., a RePLAY supplier connected to KMS, priced nearly $300,000 more. Mixson didn't like Reclamite because it is an oil-based product that could cause pollution; it doesn't compare to the "green" RePLAY, he said.

Purchasing officials would not approve the higher-priced contract. At a stalemate, Mixson asked the county commissioners on May 15, 2007, to reject all bids, citing a different reason: "insufficient funding."

The impasse put the RePLAY issue to rest for a few months. In the meantime, Busch repeatedly referred work to KMS' Kindler in messages written from his county e-mail account. One client Kindler picked up was the Brookridge community, which paid $10,000 a mile to test 3 miles of roads inside the private subdivision.

"It's very expensive," said Ed Kolbe, president of the homeowners association. "We thought we'd give it a try, but we decided it was too expensive and unproven."

In late September and early October, Busch also started to negotiate employment with KMS, anticipating his retirement at the end of the year. E-mails indicated he would make about $56,000 a year, with the bulk coming from sales commissions. He was expected to sell about $500,000 worth of RePLAY asphalt rejuvenator a year and $86,000 worth of MicroPAVER computer software and support, according to one exchange.

Later, in October 2007, county commissioners approved a priority list ranking which roads needed the most upgrades. Busch and Mixson still wanted to use RePLAY to rehabilitate the roads. But this time they circumvented the bid process and took a proposal directly to the County Commission.

At the Nov. 27 board meeting, Mixson told commissioners that RePLAY was the best product on the market and it would save the county money in the long run.

Commissioner Rose Rocco asked about other products, but Mixson assured her they did adequate comparison tests. "The bottom line is that (Reclamite) doesn't penetrate the asphalt as well as this product," he said. "We've verified and done that."

Records don't reflect that any comprehensive tests were actually completed, but commissioners approved the sole-source contract.

It didn't take long for the bid to flounder. Again, Pavement Technologies objected.

In a letter dated Jan. 8, Durante wrote to the county's Purchasing Department, administration and commissioners saying the sole-source RePLAY bid constituted "unsubstantiated favoritism to a single manufacturer."

Durante's attorney, Lannie Hough Jr., of the Carlton Fields law firm, filed a formal protest and threatened a civil lawsuit in a letter dated Jan. 18.

Busch and Mixson were not deterred. Days later on Jan. 23, they recommended awarding the RePLAY contract to Ohio Pavement Systems, which offered the lowest bid at $115,000. But after a meeting with county administration and the legal department, Mixson unexpectedly reversed course. He suggested canceling all bids to permit further testing of asphalt rejuvenation products.

Investigation begins

By this time, Busch was working part time for the county as a contract employee while selling RePLAY to other local governments in Florida.

His supervisors — Mixson and Sutton — deny that they had any knowledge of Busch's double-dipping.

"Probably when the Sheriff's Office initiated their investigation was the first time I became aware of the potential problem,'' Sutton said. "I had no idea. This was a complete shock and a surprise.''

But Joe Kindler Jr., the president of Ohio Pavement and the son of the KMS owner, said Busch's supervisors knew about his arrangement with KMS. They even tried to compensate for the conflict.

"There was no interaction with KMS directly," he said. "They kept (Busch) at an arm's length (from those deals) because it would look suspicious.

"Nothing was secretive whatsoever," he continued. "Bill Busch was not trying to sneak around. Everyone was on the up and up and everybody there knew."

Kindler defended the RePLAY product and said the ordeal comes down to a competing company, Pavement Technologies, trying to maintain its territory in the face of competition. Busch, he said, is getting unfairly blamed when the heat should focus on his supervisors.

"He's been a stand-up and very honest gentleman," he said. "It's a common practice in our industry as well as others to hire people from the public sector."

When told of Kindler's statement, Mixson said Thursday that he would not make any further comment because the issues are under criminal investigation.

County Administrator David Hamilton chided Mixson when the Busch arrangement was exposed. He said he expects more from his department heads and that Mixson should have known about Busch's divided allegiances.

On Friday, Hamilton suspended Mixson for two weeks without pay and put him on probation.

All of this leaves the important pavement management program's future in a state of uncertainty.

Top county officials are recommending a redesign of the bid process for the inspection contract because Busch helped devise the specifications as a county worker. Then, wearing his KMS hat, he attended the bid opening Aug. 20, where his firm posted the lowest bid.

What will happen with the product RePLAY is also in question. Busch, in his final days, worked to formulate a test to compare RePLAY and Reclamite. But now it is indefinitely on hold.

Busch's attorney said recently that none of his client's conduct warranted criminal charges. The Hernando County Sheriff's Office has not said when it expects to conclude its investigation.

John Frank can be reached at jfrank@sptimes.com or (352) 754-6114.

Barbara Behrendt can be reached at behrendt@sptimes.com or (352) 848-1434.