The engineering firm Freese and Nichols recently paid the city of Fort Worth $1.5 million for claims related to three Panther Island bridges that are no stranger to news coverage.
The payout is related to multiple amendments the firm made during the bridges’ design process, raising the total cost of the project.
The project has been criticized for mismanagement and cost overruns that have plagued the bridges since design began. The money won by Fort Worth didn’t stay in the city’s coffers for long. In the same council session, council members immediately agreed to pour that money back into the bridges’ construction budgets. Tarrant Regional Water District will contribute an additional $3.5 million to the North Central Texas Council of Governments over 10 years to pay Freese and Nichols for cost overruns related to the project.
While the city doesn’t plan to exclude Freese and Nichols from future contracts, the bridge saga has muddied the waters on the benefits of the relationship, according to District 9 council member Elizabeth Beck.
“In work session, we talked about choosing the best value in our bidding process,” Beck, whose district includes all three bridges, said. “And so certainly when you’re talking about choosing the best value, previous experience would absolutely come into play.”
Brian Coltharp, CEO of Freese and Nichols, described some cost overruns as normal parts of construction that designers can’t always anticipate.
“When things come up on that project or any project, we all come to the table and talk through those things. That’s exactly what happened,” Coltharp said. “Those changes are within the reasonable realm of what we see as an industry.”
The bridges are one of the best examples of cozy relationships between government officials and Freese and Nichols employees that may have led to a less competitive environment for contract bids for the Panther Island work, said Lon Burnam, a former state representative and a leader of the Water District Accountability Project.
Critics have also pointed to close familial and professional ties between employees at Tarrant Regional Water District and Freese and Nichols as evidence of potentially unfair contracting practices.
The million-dollar paychecks to Freese and Nichols are a drop in the Trinity River compared with the long history of taxpayer dollars paid out to the engineering firm since their inception in the region over a century ago, according to contracts obtained by the Report.
The Freese and Nichols political action committee, separate from the funding behind the engineering firm itself, contributes money to Tarrant Regional Water District board members.
“One of the purposes of the accountability project is to hold these sweetheart relationships accountable,” Burnam said.
The at-times symbiotic relationship between local government entities and Freese and Nichols extends into personnel matters. Tarrant Regional Water District employees have reported a bevy of personal relationships with Freese and Nichols associates, far surpassing conflicts of interest reported by other contractors.
Across the country, engineering firms like Freese and Nichols receive about 80% of their business from government agencies, said K.N. Gunalan, a former president of the American Society of Engineers.
Freese and Nichols has secured over $19.5 million from TRWD since 2017
As an engineering firm specializing in infrastructure, especially in the areas of water management and environmental engineering, Freese and Nichols helped establish the White Rock Lake and Lake Worth Reservoirs. Since then, the firm has expanded to over 28 offices nationwide.
Since 2010, the firm has received over $19.5 million in contracts from the water district. The water district has awarded over $115.7 million in contracts since 2017, according to the Tarrant Regional Water District’s website. Freese and Nichols have received $2.6 million in contracts from the district during the same time, accounting for around 2% of the agency’s total contract spending.
Tarrant Regional Water District does not have a go-to engineering firm, said Sandy Newby, the district’s chief financial officer.
“We just send out requests for proposals and whoever sends back the best response based on what project we’re trying to do gets the work,” Newby said.
But Burnam said Freese and Nichols and Tarrant Regional Water District have had a cozy relationship for years.
“They are a reputable firm, but the relationships between public sector organizations and Freese and Nichols are way too cozy, and there isn’t any oversight,” he said.
The bulk of Freese and Nichols’ income from the water district stems from the organization’s pipeline projects. Tarrant Regional Water District owns four major water sources: Lake Bridgeport, Cedar Creek Reservoir, Eagle Mountain Lake and Richland-Chambers Reservoir. About 250 miles of corresponding pipelines move water from those lakes into Tarrant County.
Freese and Nichols was tapped as the project manager for the district’s signature Integrated Pipeline Project in January 2010. Since then, the integrated pipeline project alone has netted the company $8.2 million. Freese and Nichols is not the biggest firm on the project, Newby said; two other engineering firms received the bulk of contracted funds for the pipeline.
The project will deliver water from Cedar Creek and Richland-Chambers in East Texas to Tarrant Regional Water District and Dallas Water Utilities. The two agencies share the cost of the billion dollar project.
“We’ve been honored to serve multiple roles on the integrated pipeline project as one of dozens of companies involved in this complex project, which has involved multiple phases spanning several decades,” Freese and Nichols communication coordinator Linda Campbell said.
Families split between water district, Freese and Nichols
The company’s ties with the water district don’t stop at frequent contracts. Multiple water district employees have reported familial relationships with Freese and Nichols employees in conflict of interest disclosure forms.
The number of connections between water district employees and Freese and Nichols employees isn’t necessarily problematic, Gunalan said, as long as those relationships are properly disclosed.
Members of the public can view conflict of interest disclosures on the water district’s website. The bulk of the disclosure forms are related to relationships between Freese and Nichols and water district employees.
Mark Jalbert, who works as a senior designer for Freese and Nichols, is married to the water district’s human resources liaison Nina Jalbert. He is also the father-in-law of Courtney Jalbert, an infrastructure integrity manager with the water district.
The district’s human resource manager, Shelby Lyon, is married to Freese and Nichols employee Mark Lyon.
Rachel Ickert, water resources engineering director at the water district, reported Freese and Nichols engineer Mark Ickert as her brother-in-law. Mark Ickert is listed twice as key personnel in two contracts since 2010.
“We build teams based on qualifications and experience, so if Mark was the most qualified, then he would’ve been on the team,” Coltharp, the firm’s CEO, said.
Rachel Ickert previously worked at Freese and Nichols for over a decade. She departed the company in February 2014, and immediately began to work for the water district that same month, according to her LinkedIn profile.
Conflict of interest forms show there were also two other relationships between water district staff and Freese and Nichols employees reported in 2017. One of those staff members, Rachel Crawley, is still employed by the district, and reported that a former spouse worked at Freese and Nichols in 2020.
Engineering firms often have robust processes for weeding out potential conflicts of interest, Gunalan said.
“The American Society of Civil Engineers has a code of ethics that we follow, and every conflict of interest needs to be fully disclosed, absolutely,” Gunalan said. “And you need to sequester yourself from any of those types of evaluations.”
It is common for employees of governmental organizations and engineering firms to form familiar or personal relationships, he added. What is unethical is leaving a government agency to go work for a firm and continue to leverage relationships with your previous employer to win contracts.
“They should have those kinds of written policies in place to alleviate those kinds of concerns,” Gunalan said.
Tarrant Regional Water District does not have a policy in place to prevent former water district employees from leaving the company to work for an engineering firm and then continuing to work on projects involving the water district, Newby said.
“Nor am I aware that we’ve had anyone do that,” she added.
Coltharp said the company follows the processes established by clients when disclosing potential conflicts.
“Every client is a little bit different, but they all pretty much have a conflict of interest form,” he said. “Our policy is to follow guidance given by the company.”
The Tarrant Regional Water District’s recently approved board policies, passed in January, do not directly address familial relationships between district employees and contractors. However, the water district has had a policy in place to address conflict of interest disclosures for years.
The policy defines a potential conflict of interest between a possible vendor and water district employee as:
- A familial relationship
- An employment or business relationship that results in a taxable income of over $2,500
- And/or an employee receiving a gift valued over $100 from the vendor in the last year
Once an employee learns a vendor that fits into one of the three categories has signed or is being considered for a contract they have seven days to file a conflict statement with the district’s records management officer.
Water district board members secure Freese and Nichols donations
In addition to its corporation, Freese and Nichols also operates a separate political action committee, which collects donations from the company’s employees.
The PAC has spent over $8,500 from 2015 to 2021 supporting Tarrant Regional Water District board candidates, according to an analysis of campaign finance reports.
Longtime board member Marty Leonard first received a donation from Freese and Nichols in 2015, during her first re-election campaign. At the time, the PAC gave her $2,500. While Freese and Nichols did not donate directly to Leonard’s 2019 campaign, records show the company’s late vice president, Lee Freese, and his wife, Dana Freese, donated $100. John Freese donated another $100 in the same cycle.
Leah King secured $2,500 from Freese and Nichols during her 2017 campaign, and another $1,000 during her 2021 re-election campaign.
Freese and Nichols gave board member James Hill $2,500 during his 2017 campaign, but did not contribute to his re-election campaign in 2021.
Coltharp said when choosing which candidates to support for office, the company focuses on two things: whether candidates’ values align with the stated values of the company and whether they have a good working knowledge of what goes on in the community.
“One of the biggest values that comes to mind is to act with integrity, which is like I said, when we do work for the public we’re all about transparency,” Coltharp said. “That’s what we want to see in anybody that we support.”
Burnam, with the Water District Accountability Project, said Freese and Nichols have disproportionate influence in elections, similar to police and fire associations.
“They are corporate entities that have a vested interest in how the water district spends their money and they also have a vested interest in them having a weak board,” he said. “They benefit from weak oversight.”
Freese and Nichols have historically been involved with the water district’s biggest projects, ranging from reservoirs to pipelines. As Panther Island – the water district’s biggest project yet – ramps up, members of the accountability project worry about the legitimacy of a robust bidding system.
“I’m not saying there’s anything illegal,” Burnam said. “But what is questionable is that their expenditures are not closely monitored and it makes me crazy that we can’t get … elected officials to be actively engaged in holding government agencies accountable for their spending.”
Emily Wolf is a government accountability reporter for the Fort Worth Report. Contact her at emily.wolf@fortworthreport.org or via Twitter.
Rachel Behrndt is a government accountability reporter for the Fort Worth Report. Contact her at rachel.behrndt@fortworthreport.org or via Twitter.
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