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 available.
• 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 efficiency!
• 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 acres.
• 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.