LAWRENCE - An “under-performing” building inspector and a commissioner overwhelmed by his job allowed hundreds of building permits to fall through the cracks before reaching city assessors over a recent two-year period, causing $33.4 million worth of new development to go unreported, an audit released yesterday concluded.
The damage was much less than initially feared when the blunder was uncovered in October, the audit reported. The city was able to bill for all but $31,852 of the $300,000 in property taxes that went uncollected. But the audit cited several failures in the building department that allowed the oversight, including a new commissioner distracted by the task of learning how his department works, an inspector who did not walk 349 building permits down a flight of stairs to the tax assessor at City Hall and a paper record-keeping system that allowed all of it to go undiscovered for as long as two years.
Powers & Sullivan, the Wakefield accounting firm that conducted the audit for the city, said recent improvements in the Inspectional Services Department have reduced the likelihood of similar blunders in the future. It did not identify the enhancements, but the City Council in January approved spending $126,000 for computer software that will automatically transmit data on building permits to tax assessors.
Mayor William Lantigua, City Council President Frank Moran and Sandy Almonte, the chairwoman of the council’s personnel committee, did not return phone calls yesterday seeking comment on the audit’s findings.
Committee vice chairman Daniel Rivera, who is running for mayor, said the improvements aren’t enough.
“I still think he should be removed as department head and put back down the line,” Rivera said about Building Commissioner Peter Blanchette, who oversees the Inspectional Services Department and was a building inspector before Lantigua promoted him to run the department three years ago. “It just reflects again on this administration. They think that process and software are the problem. Really, it’s the people running the departments that are lacking in training and qualifications.”
The Powers & Sullivan auditor who prepared the report, who was not identified in the document, said Blanchette’s attention to building issues was diverted by the time it took him to learn his other responsibilities, including inspecting food-service establishments.
“He did not initially understand the importance of the relationship between the activities of his department and that of the assessor, and his introduction to the new roles and responsibilities of the position contributed to that oversight,” the report said. Blanchette “did not have a clear understanding” that the failure to inform assessors of new development would affect the property taxes they collect, and he failed to monitor the inspector who issued the 349 permits and then allowed them to sit on his desk between July 1, 2009, and June 30, 2011, without walking them over to the tax assessor.
“The root of the issue centers around the performance of one inspector, Mr. Lawrence Hester, who did not follow through on his responsibilities,” the audit said. “With that said, there was no mechanism in place to manage and monitor the productivity of an inspector and to (e)nsure that paperwork was completed and submitted in a timely manner.”
The audit also found that the number of building permits Hester issued fell 97 percent from 2010 to 2011, but did not elaborate.
Hester is one of just two building inspectors in the city, so a significant drop in his productivity could cause a similar drop in residential and commercial development. Nevertheless, data Blanchette provided last week shows building permits issued by his department increased 6 percent between 2010 and 2011, to 994 permits.
Hester was put on paid leave Oct. 5, a few days after his failure to report the 349 permits became public. He returned to work Dec. 19, and was paid his $54,000 annual salary for all but one of the 10 weeks he was on leave.
Hester, 58, has a history of suspensions, administrative leaves and one termination by previous mayors, and an equally long history of getting them overturned. He also has a history of filing civil service and discrimination grievances against the city. Few, if any, have stuck.
Most recently, when he returned from his 10-week administrative leave in December, Hester presented Blanchette with his own allegations of wrongdoing in the department, including alleged discrimination, and a list of demands and labor grievances. Among them, he demanded to be reimbursed for the five days he was not paid during his 10-week leave.
The Powers & Sullivan report does not say whether auditors tracked the hundreds of thousands of dollars the city was due when it issued the building permits. It does not suggest any criminal wrongdoing.