Backing from city staff appears to keep intact contract for disaster consultant once called 'Mr. $475-an-hour'

CEDAR RAPIDS - City Manager Jim Prosser and his staff on Monday beat back questions from two new City Council members and, in the process, appeared to keep disaster consultant John Levy's contract with the city in place.

The city's latest contract with Levy - the first one began in the first days after the June 2008 flood and initially had Levy portrayed in headlines as “Mr. $475-an-hour” - will conclude at the end of June and won't be extended, Prosser noted Monday.

Prosser, Dave Elgin, the city's public works director, and Rob Davis, the city's public works engineering manager, on Monday all told the City Council's Procurement Committee that Levy and his firm, Base Tactical Disaster Recovery, had performed adequately in contracts with the city.

Greg Eyerly, the city's flood-recovery director, also complimented Levy, but, at the same time, Eyerly noted that Levy's charges on his most recent contract with the city are higher than the Federal Emergency Management Agency guideline.

Specifically, FEMA's standards say the agency will pay between 3 and 6 of project cost for construction management services and, perhaps, 6 to 9 percent if some of that work involves architectural work. To date, the Levy firm's charges stand at 15 percent of the project cost. However, that percentage may drop if the construction costs that his firm is overseeing climb, Eyerly noted.

Levy's role at City Hall long has been portrayed as the consultant with Hurricane Katrina experience who would push FEMA to make sure that the city got all that it deserved in disaster funding.

Levy apparently did push - so much so, that Eyerly noted that Levy had come to sometimes “rub” FEMA representatives the wrong way.

“I can be pretty collaborative (when working with FEMA),” Eyerly said of himself. “John, less so.”

He said the city now “scrubs” Levy's input and then presents it to FEMA.

City Council member Chuck Swore, chairman of the council's Procurement Committee, questioned Prosser, Elgin and Davis about why a local company hadn't been hired last July to oversee some of the smaller reconstruction projects of the city rather than giving Levy a new contract to do that work. Davis noted that the contract called for someone with flood and FEMA experience so the city could be sure that all the damage would be fixed in accordance with FEMA requirements.

Levy's first year of work with the city centered on his experience in filing claims with FEMA to pay for damages to the city's public buildings and infrastructure. Since July 2009, his contract has centered on construction management.

Swore was satisfied to learn that Levy will play no role in large construction projects yet to come, including the library, Paramount Theatre, the Veterans Memorial Building and Central Fire Station.

Council member Don Karr, one of four council members on the Procurement Committee, wasn't at all satisfied with what he heard Monday, though Swore said the committee will accede to Prosser's recommendation and keep Levy's contract in place.

Karr checked off the hourly rates that Levy's firm charges the city: $235 an hour for Levy and per-hour charges of $200, $195, $150, $125, $93 and $55 for other staff. Most of the costs will be reimbursed by FEMA, city staff said.

Karr noted that Levy's contract calls for periodic flights back home for Levy and his staff as well as car rental charges. Levy is renting a Dodge Charger, Karr said.

“This is obnoxious,” Karr said of the costs.

Back in June 2008, Levy showed up at City Hall with disaster experience from Hurricane Katrina even as flood water in Cedar Rapids was receding. Levy's message was the same as what other disaster cities had told Prosser: Work hard to document the damage to make sure you get what you deserve in federal flood-disaster relief.

Levy was then an executive with an entity called Globe Midwest, and after the city hired him, he achieved a measure of celebrity when it became noted that the city was paying the firm $475 an hour for Levy's services.

In the first three months after the flood, the city paid Globe Midwest $691,000.

The city had a parallel contract for other flood-recovery duties with a second disaster-services firm, Adjusters International, to which the city had paid $645,000 in the first three months of recovery.

In September 2008, the city put the contracts up for new bids. Several firms competed, but Adjusters International won one contract, and Levy, who created his own company, Base Tactical Disaster Recovery, won the second contract. The new contract, at least at its inception, called for Levy's new firm to get paid $225 an hour for his services.

In May 2009, the city reported that Levy's contract from Oct. 1, 2008, through June 30, 2009, would pay his firm $786,400.

Figures released on Monday by Eyerly put the Levy firm's charges at $804,894 for its work for the city of Cedar Rapids since July 1, 2009.

Prosser pointed at the example of the city's flood-damaged library, in which FEMA's early conclusion was that it had not been damaged nearly as much as the city believed it had been. Levy's ability to help the city build its case will end up bringing millions of more dollars to the city that it otherwise would have gotten on the library alone, suggested Prosser.