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Article published Jul 27, 2007 Opening of new schools in doubt
By Bonny C. Millard of The Daily Times Staff
Whether or not two county schools under construction will open on time remains up in the air. Although both contractors say construction is on schedule, a dispute the County Mayor’s office has with the project manager could jeopardize that. Union Grove Elementary and Middle schools are slated to open in August 2008. The middle school will help overcrowding at William Blount High School because the current William Blount Middle School will become a ninth-grade facility, and the elementary will relieve Friendsville Elementary School. They are located on Old Grey Ridge Road. The projects are being overseen by the county Public Building Authority at the direction of the school board. County Mayor Jerry Cunningham and Dave Bennett, assistant county mayor and director of accounts and budgets, sent a letter dated July 16 to Robert Ramsey, chairman of the Blount County Commission, regarding a contract between the PBA and the school board. The letter was copied to all of the commissioners and was also sent to Director of Schools Alvin Hord and Blount County school board members. “I was somewhat surprised at the tone of the letter,” school board Chairman Mike Treadway said when asked about the letter. “I’m really concerned about all these issues delaying the opening of the schools. “It’s imperative that we get these schools open August ’08. Any delay either by the county or the PBA will seriously jeopardize the opening of those schools.” The letter says the PBA is trying to usurp County Commission’s authority by modifying the contract and has sent it back to the school board for its approval. The issue of a written contract came after Cunningham took office in September 2006. Prior to that time, the school board had authorized the PBA verbally to enter into contracts with the contractors. It was a similar arrangement that the school board had with the PBA, a nonprofit organization, when Carpenters Elementary School, which opened this past school year. Cunningham demanded that a written agreement be drawn up between the two bodies. The school board attorney initially said that the school board and the PBA had an implied contract, but then he withdrew as attorney on that particular issue, citing a conflict of interest because he also represents Cunningham as county mayor. The school board initially approved a written contract with a 2-percent fee for the PBA’s services. However, before that contract was sent to the PBA for its approval, the board revised the fee to only $275,000. The school board sent the contract to the Financial Management Committee for its stamp of approval as required by the Financial Management Act of 1981. (The county returned to the County Budgeting Law of 1957 effective July 1.) PBA board members never signed that agreement, which would not make it a valid contract. “That would be indicative that there’s is not a contract, if they (PBA) didn’t sign off on it,” Ramsey said. Implied contract In May, the PBA board voted to continue working on the implied contract, and then in July, voted to send the contract back to the school board with a request to increase its fee to about $557,000, which represents about 2 percent of the total of both projects. This contract was signed by PBA Chairman Harry Kidwell and is on the school’s board agenda’s for its Aug. 2 meeting. The school board has already agreed to pay $275,000. The PBA’s costs for work from March 2006 to May 2007 is $269,416, some of which has already been paid to the PBA. In the contract, the PBA agreed to turn back any money that is above its actual expenses. Cunningham’s letter said that by waiting until after July 1, the PBA tried to “circumvent County Commission oversight.” However, until January of this year, Bennett’s office had to approve of all of the PBA’s expenditures and cut the PBA a check to pay its bills. The PBA has documentation of the checks Bennett’s office issued to the PBA. The payroll checks of PBA employees were also cut, at that time, by Bennett’s office. In January, County Commission voted to make the PBA a separate entity. When contacted Wednesday about the situation with the PBA, Cunningham declined to discuss the issue, referencing an investigation by the Tennessee Bureau of Investigation into claims that the PBA spent county money illegally. “Until that investigation is over, it’s probably not appropriate,” Cunningham said. Cunningham, a former U.S. Attorney, announced at a Financial Management Committee meeting in April that he had referred that matter to District Attorney General Mike Flynn to ask the TBI to investigate the PBA and that the TBI was looking into the situation. However, TBI spokeswoman Kristin Helm said Wednesday that the TBI was not investigating the PBA and never had been. Flynn was out of his office this week and unavailable for comment. Ramsey said County Commission is working to resolve the issues and has a called workshop with the PBA and school board on Aug. 7. “I don’t know where we’re really headed with this,” he said. Ramsey said he feels that most of the commission respects the PBA and its board members, and that they are knowledgeable about the construction industry. Substantial savings had resulted from using the PBA’s services, he added. Those commissioners also want to keep the PBA. “The Commission is very cognizant of the importance of the Public Building Authority,” Ramsey said. Cunningham has suggested that using the PBA is an extravagance and that the budget and finance department could do the same job for less money, Ramsey said. If the contract conflict is not worked out, then the schools probably won’t open on time, he said. In a September 2005 Daily Times article, Bennett, the county finance director, said the PBA saved the county about $13 million because it was able to get lower interest rates than the county. “Really, as far as what we’ve used the PBA for good in the past, it’s still there,” Bennett said Wednesday. “We continue to talk about using them as a conduit for those variable rate bonds that have saved us millions of dollars. “As far as I’m concerned, when the PBA was operating at its best was when the jail was built. It operated with a volunteer board and no staff.” “That $13 million is simply using the PBA board (as a facilitator),” Bennett said. “There is no staff time. I handle all the bonds myself through my office.” Facing the future School board member Don McNelly, who has sat on the School Construction Joint Committee for four years, agreed that millions of dollars had been saved. From working on the committee, McNelly said he found the PBA to be honorable men who worked for the good of the county and the board worked for no compensation. They also have resources and skills to oversee the projects. “I’m not sure the schools can replace the PBA,” McNelly said. “I began to appreciate the expertise that they represent and the quality of people who served on the board. The maintenance program they have set up is so much better than what we’ve had historically.” In April, Kidwell sent a letter to Cunningham addressing some of the issues that the mayor had with the PBA. The letter suggested that if Cunningham had any questions about the PBA, he could call or come by the office. Kidwell said Thursday that Cunningham has never responded to that letter. “As of today, he’s never contacted us,” Kidwell said. The public, department heads and commissioners are welcome to come to the office or call if they have questions, Kidwell said. Commissioner Mike Walker said he had not seen Cunningham’s letter yet but said he had some concerns about the PBA. The PBA was formed to perform services for the county but has been outsourcing to other entities such as the cities of Alcoa and Maryville cities, Walker said. The PBA’s original intent was to oversee bricks and mortar projects and not other areas such as furniture or technology procurement. Walker said he has a problem with the PBA receiving fees for those services when the school system already has someone in place to do that. The operational procedures and overhead have also changed, he said. Commissioner David Graham said he is concerned that the current situation will prevent the schools from opening on time, which will also affect William Blount High School. “I don’t know what’s going on between the county mayor’s office and the PBA, but what I do know is that we have 1,800 William Blount students in a school built for 1,300,” Graham said. The county has a plan in place to relieve the overcrowding with the two new schools opening, he said. Treadway said he would like to see the issues resolved because any time delay will keep the schools from opening on time. “The schedule we have right now is so tight,” Treadway said. ... “Any kind of delay would really hamper the effort of getting us open August of ’08. “I hope there’s some sort of compromise that we can come to prior to either party (County Commission or PBA) taking legal action because I don’t think that would be in the best interest of the county at all.” Daily Times staff writer Joel Davis contributed to this article.