GALVESTON — The city has asked a district court to take control of more than $700,000 being claimed by more than two dozen businesses.

The money is what’s left of grant funds given to the city by the state to pay for disaster recovery work managed by housing contractor Consolidated Concepts Inc. However, the funds are also at the center of a dispute between the business and various subcontractors and material suppliers it had hired to help with repair and construction work.

According to a court filing made the city Friday, 27 subcontractors and material suppliers are seeking payment from the $700,684.94 in grant funds the city was holding. The money also had been requested by Consolidated Concepts itself, JP Morgan Chase and a bond company.

In the filing, city lawyers said Galveston had “no way to determine the proper allocation” of the funds between all the competing groups.

Consolidated Concepts Inc. was hired by CDM Smith, the company that managed the city’s disaster recovery housing projects from 2009 until January 2012. During that time, according to the city’s filing, complaints began to arise about Consolidated Concepts not properly paying its subcontractors.

Because of that, the city arranged a program that would allow it to issue joint checks to pay both Consolidated Concepts and the subcontractors at the same time.

However, at some point, the company stopped participating the program, leaving the city with hundreds of thousands of dollars that it could not pay.

The city’s petition claims that “CCI stopped negotiating those checks and they have since gone stale.”

The petition says the city is making no claim to the money.

“The City is not responsible for the conflicting claims and merely seeks to have the funds delivered to the parties to which they are rightfully payable,” the petition says.

The city has not filed similar requests to the court for contractors Compass Pointe Homes and J.C. Cantera Homes, which also were dropped from the recovery program and were being paid jointly with subcontractors.

At last week’s city council meeting, Assistant City Attorney Donald Glywasky said the city has a check payable to J.C. Cantera. However, the council ordered Glywasky to delay giving the money to the company until more information could be obtained about its own payments to subcontractors.

A pretrial hearing on the Consolidated Concepts petition is scheduled for March 6 in Galveston’s 56th Judicial Court.

Contact reporter John Wayne Ferguson at 409-683-5226 or john.ferguson@galvnews.com.

(5) comments

Miceal O'Laochdha

Just like post-Katrina New Orleans.

FEMA passes federal taxpayer money to the State, the State passes it to the City, the City passes it to CDM Smith (this player sounds familiar, might want check for a new Orleans/Katrina connection there), CDM Smith passes it to Consolidated Concepts (what a beautifully vague and intangible company name) and they pass it to subcontractors, who actually do some sort of work.

Each entity skimming something as the money passes thru, there is little left for the subcontractors (actual workers), and little or no clear legal means to ensure they even receive the crumbs that are left for them. These Subs are probably the only local workers involved in scoring the FEMA gold in the whole chain, (unless Consolidated Concepts Inc. turns out to be cloaking the name of someone we might know locally).

This process was acted out over and over in New Orleans and the legal aftermath is still dragging on, long after the FEMA cake has been eaten by everyone except workers and the folks who live there. Process repeats itself for Hurricane Ike at Galveston; for Hurricane Sandy on the Jersey Shore and Long Island. And, the Dire Wolf, having collected his dues, hides in the corner, waiting to emerge again after the next storm.

Gary Miller

miceal o'laochdha

You described the progressive "service fee" system. The other names are waste, fraud, theft and government compassion.

On average 68 percent of every government budget is skimmed off by the progressive service fee system.
On average 3 or 4 percent of every service fee is donated to the politician(s) who worote the bill.
Skiming $100 and giving a politician $4 is very profitable for each.

Did you think these agencies were staffed by volunteers? Did you think only elected officials could skim money from government budgets?

Miceal O'Laochdha

Yes IHOG, I suspect you and I are adrift in the same canoe, here in the "Creek of Reality". It too has other names...

Others may call us cynical but, we know we are probably not cynical enough.

One more addition to your list of names below, if I may: "FEMA Camp-Followers".

It came to me one day while reading the Times Picayune back in 2007 and I think it hits the mark too.

Gary Miller


You no fun miceal o'laochdha.

Can't you find something in my post to object to?
Sverige is more fun.
He, She or It as case might be always objects with liberal talking points commited to memory.
I can't usually find anything in your or Geroix posts to object to.
Honest debate is hard to do when we agree.

Miceal O'Laochdha

Actually, I have often been told that I tend to play "Devil's Advocate", ever since I was just a wee lad.

I will put renewed effort into finding objectionable materials in your posts IHOG but, as you say, there are others who already tend to fill that need.

Welcome to the discussion.

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