In his 26-year career overseeing public works in Friend, Patrick Gates routinely turned to an Iowa distributor for supplies to keep the city operating.
Generally, whatever his handful of employees would ask for, Gates would get from Stephen Weihs.
Friend paid Weihs' firms — Central States Lab and Metro Chemical — nearly $1.45 million for products ranging from pool chemicals to paper towels in the past five years, according to .
"When I come around, they bought it," Weihs said in phone interview.
Not until he saw the report released this week did Gates realize Friend had been paying hundreds of thousands of dollars more for items Weihs routinely sold to other Nebraska towns for much less, he said.
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"I’m sick," said Gates, who was fired last month. "I can’t believe that I was that stupid, but I guess I’d have to say that’s what I was."
While the audit was pending, the city suspended Gates and City Clerk Debbie Gilmer and stopped buying from Central States Labs and Metro Chemical.
Auditors learned Friend had paid Weihs more than $100,000 for 21 barrels of liquid live enzyme between 2016 and 2019, the report found.
A new vendor sold Friend the same chemical for one-tenth of the price.
Auditors calculated the city could have saved more than $87,000 on that product alone had Gates not relied on a sole distributor, the report said.
Comparing identical purchase orders that five other Nebraska cities and villages made from Weihs' companies, auditors found Friend never paid a lower rate or even the same rate.
For example, in 2017, Friend bought a pallet of sewer lift station degreaser for twice the price the city of Madison paid Central States Labs for an identical order.
When informed by the auditing team that a Nebraska village had paid more than $7,000 for a single barrel of a weed killer used at golf courses, a chemical distributor responded "Oh, my god, who would be dumb enough to buy it?â€
In August, an attorney representing Friend contacted Nebraska State Auditor Charlie Janssen's office and told staff about the town's concern over high-dollar purchases Gates made from Weihs' companies, which operate from the Des Moines area.
Alarmed about the prices for chemicals bought to maintain Friend's city pool, council members asked another city about its pool chemical prices and learned the town was overpaying.
Gates and Gilmer made the purchases, which were approved by the City Council.
Auditors laid blame on the vague purchase descriptions provided to the council for review before it voted to approve such payments.
"This glaring and constant deficiency rendered the City Council virtually incapable of making knowledgeable and fully informed decisions regarding approval of the claims presented," the auditors said.
None of the individual purchases exceeded the $100,000 threshold that requires competitive bidding under state law, Gates said.
Gates said he just continued the practice in the Utilities Superintendent Office of buying from Weihs when he took over 26 years ago.
In recent years, he felt some chemicals' prices seemed high but he just thought they were expensive. He didn't research prices online, he said.
And when he'd noticed some shipping upcharges, he would ask about them, and Weihs always had the answer, Gates said.
"I made the mistake of trusting him," Gates said.
Weihs said he can charge what prices he sees fit, and Gates never sought competitive pricing.
Both Gates and Weihs said they only knew one another through their business dealings, and auditors didn't find any other relationship between them, the city or Weihs' companies.
Though the report raised the possibility of impropriety, each man denied any wrongdoing.
"There was nothing kicked back," Gates said.
The report suggested the vague purchase descriptions provided to Friend's City Council ran afoul of state law and could represent official misconduct, a state misdemeanor whereby a public servant knowingly violates state law or state regulation in his or her official duties.
State Patrol investigators have also been investigating the purchasing practices in Friend, agency spokesman Cody Thomas said. He declined to discuss specifics of the investigation.
Gates said he turned over bank statements to state investigators because "there was nothing malicious about what I did."
Friend City Council Chair Shane Stutzman didn't respond to a request for comment Friday.
In its response to auditors, the city issued a statement: "The City Council for the City of Friend placed tremendous trust in its employees to act in an ethical and fiscally conservative manner. Unfortunately, the (Auditor of Public Accounts) identified a number of deficiencies in the city’s internal controls, oversight, and claims approval processes. The city has implemented the APA’s recommended protective measures to ensure sufficient accountability and review processes are in place going forward."
Mayor Jewels Knoke, who was elected in 2018, declined to answer questions, but thanked the auditor's office for help in the matter.
"We are taking measures to make sure that nothing like this happens again," Knoke said.
Gilmer didn't respond to a request for comment, and Knoke declined to comment on her job status.