Citizens for Better Government
Blount County Tennessee
How the Road
Department Building will cost millions and increase our taxes
Blount County Finance Director David Bennett and the Mayor Cunningham
are asking the Commission to rush into multi-million dollar real estate deal with
absolutely no plan. What started out as a project to build a new 27,000 sq.
foot building for the County Road Department “at no cost to the taxpayers”, has
turned into the acquisition of a new campus, for most County departments, that
will cost the taxpayers at least $7 million before it is done. Beneath the
surface, this nonsense is being propelled by an initial project that got to be
33% over budget before the foundation was poured; a real estate agent, who is
part of a powerful political family, closely allied with the Blount County
Machine; an artificial, rushed, decision time frame being pushed by Bennett; and,
a lack of any plan.
Unless some rational planning starts immediately, the result
will be significant tax increases, a major addition to the County debt burden and
a fiasco far greater than the County’s infamous purchase of an auto race track
a few years ago.
Here is how this mess developed.
- When Road Superintendent,
Bill Dunlap made his original presentation to the Commission, he proposed
to swap the Road Dept land for a brand new facility, to be built by the
developer to Dunlap's specs. This new facility was to be located on land
leased from the City of Alcoa. In his presentation, Dunlap highlighted the
fact that he had waited patiently, for many years, for the value of the
land to reach a level that would permit the construction of a new facility
"at no cost to the taxpayers".
- When the Road Dept. land deal
was presented to the Commission for approval, it was accompanied by almost
no information - no appraisal, no approved plan for the new building, no construction estimates.
The Mayor assured the Commission that a valid appraisal of the land
existed, and that he would provide copies. When copies were provided,
weeks later, the appraisal turned out to be three years old - which may
explain why similar pieces of property in the county were selling for more
than three times what the county received. Bennett said there was no
building plan in the presentation to the Commission because the developer
would no longer be involved in the construction of the new building.
Instead, the deal was changed to allow the developer to buy the land for
$3 million, and the county would take the money and build for a new
building at no cost to the taxpayer.
- Bennett's Oct 31, 2008 letter
to the Commission indicates that construction was started on the project.
Apparently, no valid estimates were made prior to the start of
construction, because Bennett admits that after spending $769,000 on the
project, they put the building out for bids, and received a low bid of
$3,276,000. This brings the total cost of the project to $4,075,000. This
is $1,075,000 or 35% over the budget for the project - making a mockery of
Mayor Cunningham’s, Finance Director Bennett’s and Dunlap's "no cost
to the taxpayers" commitment.
- Last year them Mayor and
Bennett made lots of accusations against the Public Building Authority and
announced that they would take over responsibility for construction of new
County and School buildings. Significantly, this is the first project to
bypass the PBA and use the Mayor/Bennett's new "system" for construction.
Busting the budget by 35% before even pouring the foundation on their
first project does not bode well for the future.
- With the original proposal
hopelessly over budget, Bennett and Cunningham are proposing an new scheme
for the Road Dept facility. The Mayor and Bennett propose that the County
buy the Ceramaspeed facility, a manufacturing / warehouse, being shut down
by a manufacturer. The initial price is $2.7 million. Bennett admits that
another $250,000 will have to be spent to modify the facility to meet the
Road Dept's needs, bringing the total to $2,950,000. Add the $769,000
wasted on the original project and we get an new total of $3,719,000. This
approach still puts the project 24% over budget - hardly "no cost to
the taxpayers". This also does not account for the loss of the taxes
from the Ceramaspeed property, which will exceed $1 million over the life
of the building.
- The Ceramaspeed facility is
huge – over 150,000 square feet. Unfortunately, only 6000 square feet of
the building is fitted out for offices. The remainder is warehouse and
manufacturing space. Bennett says the Ceramaspeed facility could be used
for other County needs. Installing the partitions, ceilings, electric, air
conditioning, plumbing and carpets to turn the balance of the space into
office space that could be used by other County departments could easily
add another $4 million to $6 million to the cost of the project. But, no
specific additional space needs have even been approved by the Commission.
Where is the plan for the County's future space needs? (Could it be used
for the 911 facility?) No judgement can be made on the future usefulness
of the remainder of the Ceramaspeed facility until such a plan is
- The Commission was told that
since most of the facility will be empty while only the Road Dept.
occupies the buildings, the current $20,000 per month utility bill can be
reduced to just $1100 per month.
An $1100 per month utility bill for a 150,000 square foot facility would
be sufficiently amazing as to attract national attention for energy
- Nobody has said anything
about how many additional workers from the County Buildings department
will be needed just maintain this huge, mostly empty, facility with its 23
- It may be noteworthy, that
the real estate broker promoting the Ceramaspeed building, who stands to
make close to a $250,000 commission, is from a powerful political family,
closely allied with the Blount County political machine.
So here we go again. The original project was started without a plan and is out
of control. Nearly $1 million that should have been spent fixing roads is now
needed to bail out the project.
On top of all this, the County is being asked to
increase its overhead and, ultimately, add millions to its debt burden at the
very moment that our country is on the brink of the worst recession in 70
years. Mind you the County has already doubled its indebtedness since 2002.
Who will pay the down this debt? The taxpayers,
will through a tax increase. All this at a time when we desperately need
another new school in the County.
How will Commissioners explain tax increases to
unemployed taxpayers, and school overcrowding to parents?
The result could be a fiasco far worse than the infamous racetrack purchase.