home

O

riental Town Commissioner Warren Johnson has identified almost $20,000 spent on the Town Hall renovation that the Town Manager/General Contractor Bob Maxbauer had not included in the total of what the project cost. The money instead came from other departments, throwing into question the ultimate cost of the Town Hall renovation.

Oriental’s Town Hall which had its grand re-opening earlier this month. Now, the reckoning for how much it cost. THe Town Manager, who also served as General Contractor promised it would come in under $289,000. A Town Commissioner says there were almost $20,000 in costs that were paid out of other departments rather than the renovation budget.

Johnson outlined those concerns about costs in a memo emailed last Monday February 11 to fellow Commissioners, the Mayor and Town Manager.

Mayor Bill Sage meanwhile is dismissing Johnson’s concerns as being “a scant few points.” Sage’s response to Johnson is that it’s up to the Town Manager — who supervised himself as the General Contractor — to account for the spending as he wished.

Promise to Stay Within Budget Challenged By Johnson’s Findings

Johnson says the $19,981 spent on the Town Hall project – mainly for labor but also for material – came from the Town’s Public Works and Administrative budgets. Dipping in to those budgets, would make the Town Hall renovation appear to cost less than it actually did.

Commissioners last year allocated $289,000 for the Town Hall renovation. There was no independent oversight during the project. Bob Maxbauer, acting in the self-supervisory dual role of Town Manager and General Contractor, said that the project would come in at or under budget.

Town Commissioner Warren Johnson.

Then last month Maxbauer requested $10,000 more be allocated to pay for additional charges. Commissioners approved that extra spending at their meeting on February 5, days before the grand re-opening of the building.

That $10,000 cost overrun and the $19,981 in spending not applied to the project as outlined by Johnson add up to the project coming in at 10% over budget.

Johnson has also noted that some parts of the project – such as the landscaping and parking lot improvement – have not been done even though $14,000 was allocated for that. Fulfilling those aspects of the project would likely push the overruns even higher.

Concerns Laid Out In Meeting With Town Manager/General Contractor

Johnson – and fellow Commissioner Michelle Bessette – had met with Bob Maxbauer on Thursday February 7 to go over the invoices and charges for the renovation. Johnson laid out his remaining concerns in a memo to fellow commissioners in an email on Monday February 11. (TownDock.net sought that email from Town Hall under the NC Open Records Act, on Thursday February 14, and received it, in hard copy form, on Monday February 18. A scan of Johnson’s memo to fellow commissioners may be downloaded here. )

Biggest Discrepancy: Paying People From Other Budgets

Johnson’s biggest point of disagreement with Maxbauer is the $11,600 in salary paid to Laura Penninger, whom the Town Manager/General Contractor had hired in the fall as his Project Manager/Project Assistant.

Town Manager Bob Maxbauer at left and in foreground, Laura Penninger, the Project Manager he hired partway through the Town Hall project. She was paid $17 an hour but not from the project budget. Instead, $10,600 in pay came from the Public Works and Administration budgets. She remains an employee, one of 5, besides Maxbauer in the offices of Oriental’s Town Hall.

In his memo to fellow commissioners, Johnson said that since Penninger “worked exclusively on the Town Hall project,” her salary – approximately $17 an hour — should have come from the renovation budget.

Instead, $5,600 of Penninger’s salary came from the Public Works budget, and the remaining $6,000 from the Administrative budget. Johnson says that after he challenged that accounting, Maxbauer told him it was a “judgment call” and that he paid Penninger from the Administrative budget because of “the increased amount of invoices as a result of the Town Hall project.”

“Judgment Calls”

Johnson says the Town Manager also claimed to be making a “judgment call” when $3,500 was drawn from the Public Works budget to pay employees working on the Town Hall project in the last 2 weeks of January. Johnson says that the Town Manager told him he tapped in to the Public Works fund to pay them because “three of the workers were going to be employed later for Public Works duties” and that Maxbauer considered their employment on the Town Hall project to be “a recruiting expense.”

Johnson writes in his memo that he expected those employees’ labor for the first week of February would also be coming from the Public Works budget, even though they worked on the Town Hall project. (Johnson’s memo did not cite a figure, but half of the $3,500 for two weeks would be $1750 for one week.)

“It’s not right,” Johnson told TownDock.net in an interview earlier this month about the bookkeeping for the Town Hall project. “If I didn’t ask for a special document called the General Ledger,” Johnson said, “I’d have never known.”

Altogether, the labor costs outlined by Johnson for work done on the Town Hall project – but billed to other departments – run up to $16,850. They are:

Project Manager: – $11,600
Public Works Employees 2 wks Jan 2013 – $ 3,500
Public Works Employees 1 wk Feb 2013 – $ 1,750

Johnson says he contested some other charges – for materials and services – that were charged to other departments. He says the Town Manager agreed to change the bookkeeping so that approximately $3,000 would be shown to have been part of the Town Hall Project.

[page]

$16,000 In Spending: Something Of Concern Or A “Scant Few Points”?

In a response to Johnson’s memo, the Mayor characterized Johnson’s concerns about the Town Manager spending from other budgets as “your disagreement on a scant few points.” Sage wrote a five-paragraph email to the Town Board and Town Manager saying that it is “remarkable” to “have this few questions by Board members” about the spending.

(To download a scan of the Mayor’s full email from a hard copy provided by Town Hall, click here.)

Mayor Bill Sage (in a photo taken at at Town Board meeting last fall.) At left, Commissioner Johnson who has been challenging the accounting and bookkeeping on the Town Hall renovation project.

The Mayor suggested that the charges could have been billed to either budget but that “Bob is the one making the decision.” The email went on, “his judgment prevails.”

Sage wrote that Maxbauer had made the decisions “as the town’s budget and finance officer and as construction supervisor”. By wearing those two hats, Maxbauer was in effect overseeing his own budget and answering to no independent oversight.

No Independent Oversight During Project

Early last year, at its January 2012 retreat, Maxbauer presented the Town Board with his ideas for the renovation. As he laid out the plan, he told the Board to not consider what it would cost. When Johnson pressed, Maxbauer quoted a range of $100,000 to $200,000.

In February of 2012 at another meeting, as he went through an hour long presentation of the design he put together without an architect, Maxbauer said the price would be $300,000.

Oriental Town Manager Bob Maxbauer who was also the General Contractor for the Town Hall Project. There was no independent oversight during the project, and the Mayor is signalling that approach should continue. Commissioner Warren Johnson has been challenging Maxbauer’s accounting. The Mayor says had Maxbauer has the final say on the matter.

At that time he pressed the Town Board to let him be the General Contractor on the grounds that a General Contractor hired from the private sector would add 25% to the overall cost of the project. Two board members, Warren Johnson and Michelle Bessette initially countered that that would put too much on his plate as Town Manager, but in the end, the Board agreed to let him to be the General Contractor.

In a typical project, the General Contractor would answer to the Town Manager – the Town’s finance officer – if plans changed or costs ran higher than anticipated during the construction. On Oriental’s Town Hall project, there was no such oversight. Only occasional questions at several Town Board meetings from Commissioner Johnson, to which Maxbauer gave assurances that the project would keep to its $289,000 budget.

That budget is now $299,000 after the Town Board gave Maxbauer the additional $10,000 he sought at the February 5 meeting. Against that backdrop come Johnson’s concerns that the appearance of keeping within budget was done by dipping in to other departments’ budgets. Johnson says he’s “interested” to see what happens next. Other Commissioners could press for an accurate accounting Johnson seeks or they let things be as the Mayor suggests so that the Manager’s “judgment prevails.”

Oriental’s Town Board on the dais, a new feature in the meeting room in the renovated Town Hall. Warren Johnson, second from left has challenged the Town Manager’s accounting of the project. Mayor Sage, third from right has said the final decisions on the accounting should be the Town Manager’s who was also the General Contractor.

A separate issue before the Board is how the Town will ultimately pay the price tag. The bulk of the money paid out came from the Town’s reserve fund, leaving less of a cushion for emergencies such as hurricanes. The Town did apply for FEMA money, post-Hurricane, which could defray $76,000 from the now $300,000+ cost of the building. The Town is also considering taking out a loan, as interest rates are low. That is likely to be discussed at the Town Board’s retreat on February 22-23.

Other Budgetary Concerns Spelled Out By Commissioner Johnson

In his memo to his fellow Board members, Warren Johnson also cited some other concerns.

One was that the Town continues to pay Terry Croom $200 a week for the monitoring he does at the Town’s water plant. Last year, the Town paid for the Town Manager, Bob Maxbauer, to take a course so that he would become certified to carry out that monitoring and save the town $10,000 a year. Maxbauer passed that course last summer and was to take on the job Croom had been doing starting in September. He has not and the Town continues to pay Croom $800 a month. When asked about it at a late fall meeting, Maxbauer said that he had too much on his plate with the Town Hall project. An estimated $4,000 would have been paid to Croom since September, money the town was to realize in savings after paying for the Manager to get his certification.

Warren Johnson at a recent Town Board meeting.

Johnson also noted that he had to co-sign a payment on the Town’s credit card to which no receipts were attached. He said he signed it because he wanted the Town to avoid a late payment fee. Johnson noted that the town had accrued a late payment fee twice in the current fiscal year.

Johnson also noted that the Town’s Vegetative Debris program, for which $4,000 was budgeted last July, has not started. In that program, which the Town Manager touted at last winter’s Town Board retreat, residents could leave their lawn clippings and branches in a container at curbside for pickup. (They currently have to haul such yard waste to the dump in Grantsboro and pay to do so.)

Posted Wednesday February 20, 2013 by Melinda Penkava