County officials improperly paid more than $500,000 for road improvements at Compass Pointe Golf Course in Pasadena by not opening the work up for competitive bidding, a move the county auditor yesterday stopped short of calling illegal.
Teresa Sutherland said the $521,746 payment was "improper" - county law prohibits contracting for services without competitive bidding - and that officials also failed to disclose the spending to the County Council.
In addition, the check was cut for the projects without any contract in place specifying what work would be performed by the Maryland Economic Development Corp., the quasi-public entity that oversees the golf course construction, according to correspondence between top county officials.
"Clearly it was improper to pay MEDCO before we had a signed grant agreement," Mrs. Sutherland said. "It was also improper for the administration to give a verbal authorization."
The golf course, which opened at half capacity with 18 of 36 holes unfinished in October, has been plagued by delays and operating shortfalls.
On Monday, Mrs. Sutherland reported that $3 million in county money was diverted to the golf course over the last four years without legis- lative oversight.
The council has also approved a $1.1 million interest-free loan to keep the golf course on track this summer.
Officials have since discussed taking over the course from MEDCO, which helped secure money to build it and owns a lease to run its operations.
Two years ago, MEDCO started work on the road improvements in anticipation of the county building a connector road through the golf course from Mountain Road to Fort Smallwood Road.
The $2.8 million road was never built, but MEDCO already had begun adding an entrance to the golf course at Fort Smallwood Road from where the connector would let out. It also began work on acceleration and deceleration lanes, storm drain improvements and utility relocations.
MEDCO demanded to be paid $521,746 for the work, and got $380,000 in May.
"Common sense" dictates that someone told MEDCO the county would pay for the roadwork using money contributed by developers to build the connector road, said Recreation and Parks Director Dennis Callahan. But he did not know who authorized the work.
Mr. Callahan recommended MEDCO get paid - almost two years after the roadwork project started.
Mr. Callahan admitted that there was "sloppiness involved" in the transaction, but he said the work was MEDCO's responsibility. He said none of the grants was competitively bid on the project, and dismissed questions about the work.
"I think this whole current issue is much ado about nothing," he said.
"The fact is they did the roadway, it met state specifications, and they got paid for the work."
The county refunded the money to the developers of the two subdivisions surrounding the course because the connector road they paid for was never built.
A formal grant agreement was not signed until July of this year, and the county still owes $141,746 with no spelled-out way to pay the bill.'That's pretty bad'
The handling of the road is one example of a pattern of activities by County Executive Janet S. Owens' administration that Councilman Barbara D. Samorajczyk said were kept from legislative oversight.
This spring, Mrs. Sutherland and Ms. Samorajczyk, D-Annapolis Roads, asked county officials for an update on the status of the road project. They were told that there was a study planned, but no one mentioned that work had been done.
"It was a failure to disclose when direct inquiries were being made, to the degree that they were misrepresentations," Ms. Samorajczyk said.
In a statement this morning, administration spokesman Jody Couser said no harm was done by the county in approving the money before a contract was signed.
"The grant agreement was in fact signed, so any attempt to make this into something more than a timing mistake puts form over substance," Ms. Couser said. "There was absolutely no harm to the county - things just occurred out of the preferred order."
In a series of e-mails obtained by The Capital, county officials expressed concerns about how it would look if the public found out the project was in jeopardy.
On Jan. 30, project manager Alan Levy told then-executive director of MEDCO Hans Mayer the checks would go out as soon as possible.
"Hopefully, this will keep the issue out of the news for a few days," Mr. Levy wrote in an e-mail to Chief Administrative Officer Bob Walker and other top officials.
Mrs. Sutherland began making inquiries about the spending on road improvements this summer. That prompted a string of e-mails where county officials expressed concern about whether the money was properly authorized.
"This looks bad," Senior Assistant County Attorney Patricia Logan wrote in an e-mail to Mr. Walker dated July 14.
Ms. Logan wrote that she didn't know money was spent with no contract in place. The Office of Law is responsible for drafting such agreements.
"I'm still not certain how this payment could have been authorized and slip by us," Mr. Walker replied 12 minutes later. "You're right, it does not look good if we do not have this signed Agreement (sic) in hand."
Mrs. Sutherland wrote Ms. Logan that she would like to get a list of laws the administration didn't "comply with."
"I can't believe we paid someone $380,000 to do work with us with no bids, no contract, etc.," Mrs. Sutherland wrote in an e-mail the next day. "That's pretty bad. The fact that it's MEDCO just makes it smell worse in the current environment."A mix-up
Ms. Logan said the money was technically for a MEDCO project and not a county project, and therefore not subject to the competitive bidding requirement.
Ms. Samorajczyk wants to hire an outside law firm to verify that.
Mr. Walker instructed Mr. Levy on July 15 to get an agreement signed right away, calling the authorization of money without a contract a "mix-up."
"Make sure we are consistent in whatever we say on this matter," Mr. Walker wrote.
Mr. Callahan explained in a July 13 e-mail to Mr. Walker that he made a "verbal commitment" to using the developer money to keep the project moving. But he said that came long after work began on the improvements.
"Someone had to do the improvements for the course to open," Mr. Callahan wrote.
Although talk of taking over the golf course just surfaced this week, the idea has been circulating for months.
In a May 27 e-mail, Mr. Levy wrote that "In my humble opinion we should throw MEDCO out, refinance the deal at a lower rate which would allow us to borrow more to get the courses completed, and pay outstanding invoices."
Source: The Capital (Annapolis, Md.)
