Settlement reached in 2007 Witch Creek fire - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Settlement reached in 2007 Witch Creek fire

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SAN DIEGO (CNS) - The city will recover $900,000 in a settlement stemming from alleged over-billing by two contractors for debris removal following the 2007 wildfires, Councilman Carl DeMaio announced Friday.

"This is not a simply case about the potential waste of taxpayer dollars; it is also offensive that private companies would seek to exploit for their own profit the misfortune of those who lost their homes in the 2007 fires," DeMaio said at a news conference.

The Witch Creek and Guejito fires destroyed 365 Rancho Bernardo homes in October 2007, and the city hired contractors to help residents with the clean up. Residents could use the contractors provided by the city or ones selected through insurance companies.

The city did not have a proper plan for fire debris removal and rushed to hire contractors, DeMaio said.

Billing inaccuracies were brought to the city's attention by residents pointing out that bills from city-hired contractors were much higher than those from private contractors doing the same type of work.

"What should have been a simple program to help residents in their time of need turned into a costly comparison for taxpayers," DeMaio said.

The original costs were expected to be $658,000, or an average of $28,000 per home, but the debris removal ultimately cost the city $1.6 million, with some bills costing nearly nine times what privately retained contractors charged to clear identical lots.

The City Auditor discovered several instances in which contractors submitted inaccurate invoices to the city after allegedly removing excessive amounts of debris in order to increase their billing numbers, DeMaio said.

"Today's settlement not only recovers taxpayer funds, but it sends a clear message that we will hold city contractors accountable for the cost and quality of all work they perform in the City of San Diego," DeMaio said.

The federal government reimbursed the city more than 90 percent of the clean up amount billed to the city, and some of the funds recovered will be returned to the government.

The city sued the contractors using outside counsel working on a contingency basis, claiming they violated the California False Claims Act, which sanctions companies that defraud government programs, in this case the Federal Emergency Management Agency, which reimbursed the city.

The contractors, Granite Construction Company and A.J. Diani Construction Co., did not admit any wrongdoing as part of the settlement.

The federal government declined to pursue a case against the contractors and the state attorney general decided not to press criminal charges.

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