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Is a contracting scandal brewing at Denton City Hall or is it no big deal? No one is saying.

Denton City Council members filed out of an emergency, closed-door session with somber faces Friday morning. For nearly two hours, they had scrutinized city staff interactions with the two companies now working on the city’s largest-ever capital purchase.

But after their briefing on the Denton Energy Center contracts, council members said nothing publicly and took no action. According to City Manager Todd Hileman, there is more to come, but he declined to elaborate.

“[We have] an ongoing analysis of the procurement of contracts related to the Denton Energy Center. There are questions we are working our way through,” Hileman said. “It’s too early to make any statements.”

The Denton Energy Center is a natural-gas fired power plant being built on the city’s west side. The city issued $265 million in revenue bonds late last fall to pay for the project.

However, the exact contract amounts with the two companies in charge of erecting the power plant have never been disclosed publicly. Wärtsilä, a Finnish manufacturer of ship engines, has one of the contracts to supply Denton Municipal Electric, or DME, with 12 natural gas-powered engines. Burns & McDonnell, an engineering firm based in Missouri, has the other contract to design and build the power plant that houses the engines.

DME recommended the project to help Denton walk away from coal-fired power and to negotiate renewable energy contracts on its own terms. But DME officials also told the City Council that they planned to generate electricity at the Denton Energy Center whenever it was profitable to do so.

When the City Council narrowly approved the Wärtsilä and Burns & McDonnell contracts on a 4-3 vote in September, the project did not have broad support. Since then, only one of the project’s supporters — Dalton Gregory — remains on the City Council.

Gregory declined to say whether current troubles caused him to reconsider his support of the project.

“I’m not going to make any speculations or comments because of the nature of the meeting,” Gregory said.

No one at City Hall was talking publicly Friday about whether city policies or state laws may have been broken during the process leading up to award of contracts to Wärtsilä or Burns & McDonnell.

No DME employees were in the briefing with the City Council. The only employees present along with Hileman were the city’s internal auditor, Craig Hametner, two assistant city attorneys, and  assistant city managers Bryan Langley and Mario Canizares.

Gregory’s former opponent, UNT English professor and civic gadfly Deb Armintor, said she was walking down the hall when she peeked through a curtain into the meeting room and saw a slide that said two DME employees had been placed on administrative leave. Another source close to the meeting, who declined to be named, confirmed that what Armintor saw was true.

The Denton Record-Chronicle requested copies of employee disciplinary documents Friday, but the city doesn't have to release those records for 10 days.  

Kristi Widmar, spokeswoman for Burns & McDonnell, the Missouri-based engineering firm on the power plant project, declined to comment. She referred all questions to city officials.

Wärtsilä’s manager for global media relations, Sari Luhanka, said in an email to the Record-Chronicle that the company was committed to following laws and regulations wherever it conducts business.

“We require all our employees to comply with internal rules and guidelines as well as laws and regulations,” Luhanka wrote. “We also have strict internal processes to ensure that the rules, guidelines, laws and regulations are followed, and all this applies also to the project in Denton.”

Wärtsilä began aggressively marketing its natural gas-powered engines to U.S. utilities as a flexible backup for wind and solar farms more than 10 years ago. The company hosts the Flexible Power Symposium every year, bringing in engineers and analysts to highlight their product as well as discuss utility issues.

Two DME employees attended the symposium before the city announced its plans for the Denton Energy Center. Other city records showed Wärtsilä representatives came to Denton in May 2015 to visit with DME officials.

In addition, DME previously hired Burns & McDonnell for consulting work on other projects. Specifically, the company helped DME secure air permits from the Texas Commission on Environmental Quality for the power plant before DME went ahead with the project. 

Hileman has reorganized many areas of the city and DME has not been immune to change. Galen Gillum transferred from overseeing DME’s capital projects to supervising all of the city’s capital projects. DME spokesman Brian Daskam now serves as a public information officer for the entire city.

DME General Manager Phil Williams did not return a call Friday afternoon about the continuing reorganization of his department. 

The City Council is on hiatus and not expected to meet again until July 18. Hileman confirmed that would be the soonest the council could revisit the issue.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881.

FEATURED PHOTO: Denton Municipal Electric general manager Phil Williams addresses the City Council on Sept. 13, 2016, about the gas plant planned for Denton's west side.
DRC file photo