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Clearwater gas utility due for a ‘cultural adjustment’ following problems

Now that the city has decided not to sell Clearwater Gas System, the focus turns to reforming it.
Clearwater Gas System’s headquarters, on Wednesday, Oct. 13, 2021, at 777 Maple Street in downtown Clearwater. The utility is headed for changes, including more oversight from City Hall.
Clearwater Gas System’s headquarters, on Wednesday, Oct. 13, 2021, at 777 Maple Street in downtown Clearwater. The utility is headed for changes, including more oversight from City Hall. [ DOUGLAS R. CLIFFORD | Times ]
Published Jun. 12

CLEARWATER — Questionable overtime expenses. Unauthorized purchases. A top manager who made racist and homophobic comments at work. And a longtime director who became “too entrenched” to make changes.

Those are among the issues city administrators have identified in the Clearwater Gas System as the utility has come under increasing scrutiny over the past year.

When the City Council debated selling the system last month, finally deciding against the idea, the deliberation was mostly focused on long-term revenue.

But now that Clearwater Gas will remain under council oversight, City Manager Jon Jennings says he will oversee a number of changes.

In May 2021, the city’s internal auditor found “extremely excessive” overtime was being paid to a small group of employees and that a lack of controls created “high risk for fraud, waste and abuse.”

In December, the city’s procurement division found unauthorized purchases of gas meters and that a contractor had been paid more than contract terms for the past three years, according to human resources reports.

And last month a top manager was fired after making highly inappropriate comments in the workplace.

Following Jennings’ arrival in November, at least four high-level Clearwater Gas employees have retired or been fired.

Clearwater City Manager Jon Jennings
Clearwater City Manager Jon Jennings [ City of Clearwater ]

Jennings said he will also scale back the utility’s sponsorship program that, since 2015, has paid more than $2.3 million of ratepayer money to businesses and nonprofits in exchange for exposure of the gas brand and access for city officials and their guests to events.

“I would say it’s a cultural adjustment in terms of really professionalizing everything we do,” Jennings said of his changes. “We are going to retain the company and we are going to run it as a business. From my perspective we need to make sure that we have both the personnel and the policies to make sure that we are running it appropriately and efficiently.”

Clearwater Gas System has about 90 employees and serves 31,000 customers in Pinellas, Pasco and Hillsborough counties. Every year, the utility pays the city’s general fund at least 50% of its net income, a dividend that has averaged $3 million annually over the past decade.

On May 16, Jennings fired Kristi Cheatham Pettit, the system’s longtime marketing and business development manager, after a profanity-laced incident.

While visiting the information technology department on May 3 to drop off her cracked iPhone, Cheatham Pettit began “a rant of vulgarity and bigotry,” according to a witness statement.

She asked an employee if he “was from Jew-Jersey or Jew-York,” according to his statement.

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Another IT member reported that Cheatham Pettit used a homophobic slur while talking about a Clearwater Gas employee. And while referring to a person who was Puerto Rican, she said “portable Rican,” according to a witness statement.

Jennings fired her after she missed a meeting to discuss her termination or resignation, according to emails. Cheatham Pettit did not respond to a phone call or text message requesting comment.

In March, Clearwater Gas executive director Chuck Warrington announced his retirement, effective July 1, after a meeting with Jennings.

Longtime Clearwater Gas System executive director Chuck Warrington speaks at a 2011 city event. He retires effective July 1.
Longtime Clearwater Gas System executive director Chuck Warrington speaks at a 2011 city event. He retires effective July 1. [ City of Clearwater ]

During Warrington’s 30-year tenure, Clearwater Gas tripled in size, becoming the fourth-largest municipally owned gas utility in Florida. But in May 2021, an internal audit found the utility had no documentation or processes to justify whether excessive overtime paid to select employees was “necessary, valid or cost effective.”

Auditor Jeh Mohr found 85% of the utility’s overtime work had gone to nine of 16 employees in the construction and maintenance division.

Management responded in writing that “meter sets and install service lines required specific occupational qualifications that not all operations personnel possessed.” However, the audit found that some employees who were not given overtime had higher certification than the few given extra hours.

Mohr also found management did not properly document work to justify the extra hours and had no process for assigning overtime equally among the workforce.

As a result, nine gas maintenance employees individually received between $12,000 and $47,000 in overtime in 2020 compared to $1,200 and $9,500 for the remaining seven, the audit found.

In a July 2021 memo, Assistant City Manager Micah Maxwell recommended that former City Manager Bill Horne “consider transitioning” Warrington out of the utility because “it is clear that leadership has become too deeply entrenched in its current mindset to effect the change required.”

Instead, Horne asked Maxwell to develop a plan for the Gas System to correct issues from the audit. Horne died in August from a suspected heart attack three weeks before his planned retirement.

On May 3, two gas system employees were given disciplinary memos citing their alleged failures related to the 2021 overtime audit. Controller Janet Dorrough retired June 1 before a disciplinary hearing, and gas section manager Bob Jaeger retired June 3 in lieu of termination.

Dorrough’s memo also states that in December, the system bought 40 gas meters without following procurement procedures, making it an unauthorized purchase. The memos also state that in 2019, Dorrough and Jaeger were allegedly involved in a verbal agreement to a pay a contractor for more work than what was specified in the contract.

In July 2021, Maxwell, the assistant city manager, wrote in a memo that it was clear that the gas system management was “focused on driving sales and system growth, and that focus has become central to the culture of the organization.”

Warrington responded on Friday, saying: “We were trying to keep pace with the builders, with all the people that want to move to Florida, and there were procedural issues related to that but we cleaned that up.”

Jennings said he expects the gas system to continue to expand, but with more oversight.

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