Bud Schardein, pulling the strings at MSD?

(Editor’s note: In a 2011 investigation, former Kentucky Auditor Crit Luallen found Metropolitan Sewer District was plagued by suspect business practices and conflicts of interest. In their report last December, Luallen’s investigators found that one MSD manager awarded $530,000 worth of contracts to personal friends. From the audit: When asked about the contracts, the manager said: “That’s what you do in business, help each other out — help people you know.”)

Last week, Louisville Mayor Greg Fischer announced his approval for the merger of the Louisville Water Company and the Metropolitan Sewer District.

As of this writing, there is no formal plan to merge the two entities. The mayor has simply stated his support for the idea.

The merger raises many questions, not the least of which is duplication of some services and the fulfillment of supplier contracts.

In Louisville, nothing gets done without the approval of a few big power brokers. That system, however, often creates huge conflicts of interest that go unreported by local media and therefore remain unnoticed by citizens who continue to shell out big bucks to flush the “best tasting tap water in the country” down the toilet.

A deal as simple and routine as a contract to provide something like ready-mix concrete to MSD could end up costing ratepayers thousands of dollars more than it should because of insider connections.

Simple, really.

But when you dig into a “simple” story that is as complicated as this one, you’ll have a headache worse than a tequila hangover.

First, lets muddy the water:

In the 1960’s brothers Bill Abel Jr and Bob Abel began working in the family construction business and would eventually take it over. The company became what is known today as Abel Construction Company, one of the most well-known outfits in Louisville.

The Abel family also started a concrete company that is still in business today as Advance Ready Mix. Bill Abel Sr. and Bob Abel both passed away unexpectedly in the 1990’s.

According to a 2010 article in Business First, Bill Jr.’s sister, Camilla, was eager to work in the family business – a move her father Bill Sr. first resisted by saying the nearly all-male construction trade wasn’t right for a woman. Shortly before the death of her uncle Bob, she left her customer service job at General Electric and went to work with the concrete company.

After the death of her father, Camilla Schroeder became president of Advance Ready Mix.

In 2002, Camilla Schroeder (then Camilla Fizer) was recognized with an award by MSD as a “DiverseWorks Champion.”

Her brother Bill Abel Jr manages the family concrete company and owns the family construction company.

Earlier this year, Advance Ready Mix bought competitor Pearce Ready Mix, which September 2011, had a $250,000 contract to supply MSD with ready mix concrete on an “as needed” basis.

MSD officials have stated that after acquiring Pearce, Advance Ready Mix was “unwilling” to fulfill the terms of Pearce’s deal to supply the sewer district, so the contract had to go up for bid.

In a stunning turn of events, the contract to supply ready-mix concrete on an “as needed” basis was won by Advance Ready Mix at a cost of $330,000 – $80,000 higher than MSD paid in the Pearce contract.

Advance submitted the lowest bid of three concrete companies, but was selected using a points system.

During the time between the re-bidding and awarding of the 2012 contract, Advance Ready Mix was utilized to provide concrete to MSD through a separate contract with the Louisville Water Company. MSD states the price was even higher using that method.

One of the deciding factors in MSD awarding the contract to Advance was the fact that Advance is classified as a woman-owned business. That earns the company extra points, and in this case won the contract.

Several insiders have alleged Camilla Schroeder is only a figurehead who is in place to gain business from governmental agencies for Advance because of Advance’s designation as a “Women-Minority Contractor.”

While there is no evidence to support that claim, Advance Ready Mix and Abel Construction’s powerful connections certainly put it in a better position to win contracts from local government.

To wit: An internal MSD document on the June 2012 short-load, ready-mix concrete bid lists none other than Ed Glasscock as the “registered agent” for Abel Construction Company, Inc.

Remember: Abel Construction is owned by the guy who “manages” Advance Ready Mix, and that guy’s sister is president of Advance.

And that’s the same Ed Glasscock who acts as lead counsel for the Louisville Arena Authority (owner of the KC Yum! Center) and serves on the University of Louisville’s Athletic Association (main tenant of the arena.)

Abel Construction Company built the U of L men’s basketball and women’s volleyball practice facility at the KFC Yum! Center, the Papa John’s Cardinal Stadium expansion and the Trager Indoor Training Facility for the University of Louisville’s athletes.

Advance supplied concrete for the KFC Yum! Center. The company and its president Camilla Schroeder are listed as “donors” to the Cardinal Stadium expansion.

As Mayor Fischer consults with interested parties about the consolidation of the Louisville Water Company and MSD, onlookers express hope that these type of contracts will be more heavily scrutinized in the future.

“You never hear about any questionable deals when you’re talking about the water company,” says one insider. “It seems like every time you turn on the news it’s something terrible about the sewer district. The ‘good old boys’ club, that type of thing. But maybe this merger would fix all that.”

It is unclear if any merger would indeed “fix” the problems plaguing MSD. And while the facts laid out here do not conclusively prove that Glasscock had anything whatsoever to do with Advance Ready Mix winning the MSD bid, these are all too-convenient coincidences involving Louisville’s power elite.

Insiders hint at as much, saying that while it doesn’t prove anything, “it never hurts to have a name like ‘Ed Glasscock’ on your paperwork.”

So it seems they are all in one big bed together.

Except it’s one of those filthy, vibrating beds that costs a quarter to operate.

Possibility City.

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Brian Tucker is a lifelong Louisvillian. He is the founder of The Valley Report, and has been writing on Southwest Louisville's political environment for several years.

16 thoughts on “Keeping it in the family: Will merger with Louisville Water Co. simply expand MSD tradition of sweetheart deals?

  1. This story starts out on a very good subject because the merger of MSD and the Water company has the potential to create many problems like the article suggests. In the long term than merger may be a good idea but until MSD straightens out its house and proves that they have overcome all of the problem areas recently identified they should remain separate.

    The story then completely goes off focus and starts making allegations about inappropriate behavior and dealings by one of the biggest local construction companies. This is despite the fact that the article even stated they were the low bidder on a recent contract for MSD without the points system even being considered! The fact that the new contract is higher than the previous one with Pearce probably shows that there were some hidden improprieties with the previous contract.

    The fact they have a relative of one of the founders families in a management position in order to qualify as a woman owned business is completely irrelevant. Many companies use means much more underhanded than this in order to fall into one of the categories they get special treatment in the bidding process. It’s more a problem with the system than it is with the companies.

    The author of this article needs to stick to insuring that information included in articles are based on fact instead of allegations (probably from competitors).

  2. This story starts out on a very good subject because the merger of MSD and the Water company has the potential to create many problems like the article suggests. In the long term than merger may be a good idea but until MSD straightens out its house and proves that they have overcome all of the problem areas recently identified they should remain separate.

    The story then completely goes off focus and starts making allegations about inappropriate behavior and dealings by one of the biggest local construction companies. This is despite the fact that the article even stated they were the low bidder on a recent contract for MSD without the points system even being considered! The fact that the new contract is higher than the previous one with Pearce probably shows that there were some hidden improprieties with the previous contract.

    The fact they have a relative of one of the founders families in a management position in order to qualify as a woman owned business is completely irrelevant. Many companies use means much more underhanded than this in order to fall into one of the categories they get special treatment in the bidding process. It’s more a problem with the system than it is with the companies.

    The author of this article needs to stick to insuring that information included in articles are based on fact instead of allegations (probably from competitors).

  3.  This is based in fact. Here’s an experiment you can perform to prove it: Go out and start yourself a ready mix concrete company and go try to win a bid from MSD. Then, go hang around the other owners of ready mix concrete companies and listen to what they are saying. Then check out who is doing favors for whom and why your business isn’t getting any work.

    An $80,000 increase for delivery of relatively small loads of concrete comes out of YOUR pocket, and for no good reason.

    So will a Water Co.-MSD merger taint the water company with these practices rather than fix them? That is the question if one is smart enough to read between the lines I have drawn.

  4.  This is based in fact. Here’s an experiment you can perform to prove it: Go out and start yourself a ready mix concrete company and go try to win a bid from MSD. Then, go hang around the other owners of ready mix concrete companies and listen to what they are saying. Then check out who is doing favors for whom and why your business isn’t getting any work.

    An $80,000 increase for delivery of relatively small loads of concrete comes out of YOUR pocket, and for no good reason.

    So will a Water Co.-MSD merger taint the water company with these practices rather than fix them? That is the question if one is smart enough to read between the lines I have drawn.

  5. Brian, that bid was the lowest bid that MSD received so really there was no impropriety in the bidding process. Neither you nor I know what terms in the Pearce contract were not acceptable to Advanced. It could be kicked back payments or any other number of things. Maybe they really didn’t know how to calculate their expenses for deliveries of this type and that’s part of the recent they needed to be sold!  

    I’ve worked with most of the major construction companies and concrete companies in the Louisville area as part of my job, have you? Construction is an extremely competitive field every place, not just a Louisville. The companies you singled out are as ethical and competent as any other one in the area and their policies show this. Unless you have undisputable facts you probably would be better off not making these allegations!

    And by the way, putting the Col. designation in front of your name certainly doesn’t impress me nor many others. Many of us could use the same title but don’t see the need to impress.

  6. Brian, that bid was the lowest bid that MSD received so really there was no impropriety in the bidding process. Neither you nor I know what terms in the Pearce contract were not acceptable to Advanced. It could be kicked back payments or any other number of things. Maybe they really didn’t know how to calculate their expenses for deliveries of this type and that’s part of the recent they needed to be sold!  

    I’ve worked with most of the major construction companies and concrete companies in the Louisville area as part of my job, have you? Construction is an extremely competitive field every place, not just a Louisville. The companies you singled out are as ethical and competent as any other one in the area and their policies show this. Unless you have undisputable facts you probably would be better off not making these allegations!

    And by the way, putting the Col. designation in front of your name certainly doesn’t impress me nor many others. Many of us could use the same title but don’t see the need to impress.

  7. Let me stop you right there. I have copies of both contracts between MSD and Pearce/MSD and Advance. Do you?

    You seem to be saying Pearce Ready Mix was being run by fools who didn’t know how to calculate prices. I don’t agree with that.

    Also, I made no allegations.

    The Col. salutation before my name is not there to impress you. I don’t even know you. Let’s stick to the subject.

  8. Let me stop you right there. I have copies of both contracts between MSD and Pearce/MSD and Advance. Do you?

    You seem to be saying Pearce Ready Mix was being run by fools who didn’t know how to calculate prices. I don’t agree with that.

    Also, I made no allegations.

    The Col. salutation before my name is not there to impress you. I don’t even know you. Let’s stick to the subject.

  9. What you have received written contracts, I don’t have them but could easily obtain them if it was relevant. What you don’t have nor know is what behind the door agreements were made as part of that agreement! Concrete is basically a commodity and the pricing is usually very competitive between all suppliers. If Pearce was significantly cheaper with their old contract something was going on behind the scenes.

    If you reread your article I’m sure you’ll see where you made some allegations of improprieties. But since you wrote it you’re probably blind and can’t see them.

  10. What you have received written contracts, I don’t have them but could easily obtain them if it was relevant. What you don’t have nor know is what behind the door agreements were made as part of that agreement! Concrete is basically a commodity and the pricing is usually very competitive between all suppliers. If Pearce was significantly cheaper with their old contract something was going on behind the scenes.

    If you reread your article I’m sure you’ll see where you made some allegations of improprieties. But since you wrote it you’re probably blind and can’t see them.

  11. The new MSD agreement with Advance is $80,000 higher than the previous one with Pearce for exactly the same thing.

    Now, if you are telling me that Pearce was cheaper because they were cheating “behind the scenes”, then we have ourselves a ballgame.
    Prove it.
    Otherwise, knock it off.

    You are out of your element here.

  12. The new MSD agreement with Advance is $80,000 higher than the previous one with Pearce for exactly the same thing.

    Now, if you are telling me that Pearce was cheaper because they were cheating “behind the scenes”, then we have ourselves a ballgame.
    Prove it.
    Otherwise, knock it off.

    You are out of your element here.

  13. Unfortunately I believe in this case you’re the one out of your element. I’ve spent over 30 years as a construction/project manager, what are your credentials in this area?

    I’ve dealt with all the companies you mentioned and many others and can tell you that prices aren’t that much differ between two companies unless there are factors you don’t know!

  14. Unfortunately I believe in this case you’re the one out of your element. I’ve spent over 30 years as a construction/project manager, what are your credentials in this area?

    I’ve dealt with all the companies you mentioned and many others and can tell you that prices aren’t that much differ between two companies unless there are factors you don’t know!

  15. There are plenty of factors YOU don’t know.  The three companies that bid on the concrete contract were tens of thousands of dollars apart. One was over a half-million dollars.

    You seem to be saying it is okay to pay more in MSD charges. There are very few people who agree with you.

    Tell me some of the factors I “don’t know”.

  16. There are plenty of factors YOU don’t know.  The three companies that bid on the concrete contract were tens of thousands of dollars apart. One was over a half-million dollars.

    You seem to be saying it is okay to pay more in MSD charges. There are very few people who agree with you.

    Tell me some of the factors I “don’t know”.

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