July 12, 2012The abortive $72 million airport area high school planned by the Guilford County Board of Education has become a money pit for overall spending on the school board's $457 million building program by not being built.
According to Guilford County Schools financial records, the search for 100-plus acres for the high school, and a middle school that would eventually be built on the same property, cost $179,910. But the high school project has been assigned $488,737 in costs, despite the facts that the school board never found land for the high school and the high school may never be built.
The largest amount of land-search costs attributed to the high school project was paid to Sandra Taylor and Imperial Construction and Development LLC. The two are mostly interchangeable; Sandra Taylor and her husband, Richard, are listed as managers of Imperial Construction and Development LLC with the North Carolina Secretary of State's Office, and Sandra Taylor is listed as the company's broker-in-charge with the North Carolina Real Estate Commission. Richard Taylor is listed as a manager of the company, and also as the qualifying broker for two other companies: Richard Taylor, Broker and Florida Acquisition & Appraisal Inc.
The Taylors and Imperial Construction and Development are listed as having been paid a total of $83,827 attributed to the high school project $48,982 for Imperial Construction and Development and $34,845 for Sandra Taylor.
The Taylors and Imperial Construction and Development are somewhat mysterious figures in the school board's search for land if only because Guilford County Schools has apparently never displayed them in public meetings, or specified in any great detail what the couple and their company have done for the school board.
School board members said they have used third-party brokers to approach property owners to keep the fact that the school board was the potential purchaser of land. However, in at least three cases both potential sites for the airport area high school and the first site for the southeast area elementary school the school system was dealing with experienced developers (D.H. Griffin Construction and Samet Corp.), and a bank, BB&T, all of whom would have been aware the potential buyer was the school board.
Guilford County Schools has presented the Guilford County Board of Commissioners, High Point, Kernersville and southeast Guilford County residents maps showing that the school board had considered dozens of sites before deciding on the one that was absolutely perfect.
Officials in each jurisdiction, southeast Guilford County residents and some school board members alike have expressed doubts that Guilford County Schools seriously looked at even a fraction of the properties it claimed to have considered. In most cases, the school board rapidly snapped onto a property it decided it just had to have and in the cases of the airport area high school and the southeast area elementary school, changed its mind only under intense pressure.
Sandra Taylor and Imperial Construction and Development worked for the school system under a series of contracts in which the school board would pay her or her company up to, at various times, between $8,000 and $8,500 a month. If that amount was paid out over four years, Sandra Taylor and her company would have made about $400,000 during that period. Guilford County Schools could not confirm how much Taylor and her company were paid in total.
Guilford County Schools Chief Operations Officer Andy LaRowe said the record of the school board's payments to the Taylors is confusing because of their incorporation as Imperial Construction and Development, and because Richard Taylor was also hired.
"Over the span of time that Sandra Taylor provided consulting services related to land acquisition and property issues, she worked under a consulting agreement under her name," LaRowe wrote. "There was a point that GCS [Guilford County Schools] needed additional services related to seeking out and evaluating prospective properties for the 2008 bond projects. For a short period of time, we contracted separately with Richard Taylor, (Sandy Taylor's husband) who operated a company named Imperial Construction. When Sandy Taylor's contract was renewed, it was renewed under the name of Imperial Construction and Development."
The five projects of the 27 on the building program list for which land was needed were the airport area high school, the southeast area elementary school on Lee Street, McNair Elementary School on Yanceyville Road, the Haynes-Inman special education school in Jamestown and the proposed, but unfunded, airport area middle school.
LaRowe wrote that the payments to Sandra Taylor and Imperial Construction and Development were for services rendered, not retainers. He wrote, "Sandy Taylor's invoices were allocated to all 2008 Bond projects requiring land acquisition."
That would be the five projects listed above, plus other projects that needed smaller real estate services, such as handling easements and rights-of-way.
Some of the invoices from Sandra Taylor do seem to be for specific amounts attributed to specific work for specific land acquisition projects. But numerous invoices, despite LaRowe's statement, appear to be more in the nature of retainers. That is, Taylor invoiced the school system for the full $8,000 or $8,250 for the month, and the invoices list 27 account numbers the exact number of projects on the project list for the construction program.
Apparently, those payments to Taylor are being spread among all the 27 bond projects.
Some of the payments to Taylor or Imperial Construction and Development are stamped "Direct Pay," meaning they were payments made without purchase orders that had to be approved by former Guilford County Schools Chief Financial Officer Sharon Ozment.
The high school plan, which became increasingly misnamed as possible sites for the high school moved further and further from Piedmont Triad International Airport, would have built a 125-acre high school and middle school complex somewhere in western Guilford County.
The plan also included spending an additional $2 million to pay for part of the land, which would have been used later to build a middle school costing unknown millions more. Only the land, not the construction cost, of the middle school is included in what would be a total of $74 million.
The school board tried to buy two sites for the high school.
According to the financial records, the school system spent $77,585 on its effort to buy the first site.
The first site was on land south of I-40, near Boylston Road just east of Bunker Hill Road between the High Point city limits and the interstate.
High Point officials killed that site, which was on land that High Point will eventually annex and plans to use for industrial development, by refusing to guarantee sewer service for the site, which forced the school board to look for land north of I-40.
The school board then optioned land in the Triad Business Park in the part of western Guilford County that has been annexed into Kernersville. The Kernersville Board of Aldermen voted unanimously on June 5, 2012 to deny the zoning changes necessary to build the school in the industrial park.
The school system spent $102,324 on its effort to buy the Kernersville site. That brings the total to the $179,910.
The records of the Guilford County Schools Facilities Department or of its Financial Department on construction issues seem to be a shambles, as was the case with an earlier investigation by Ozment and The Rhino Times into the finances of the construction program.
In a June 28 email from LaRowe to Ozment, LaRowe said it was difficult from the records to even tell which payments were associated with which projects.
"This was not an exact science with the information we had to work with," LaRowe wrote. "In some cases we could attribute costs directly to one property or another. In other cases we determined the difference based on the date the Board decided to move from the first property to the second property which was September, 2010."
The breakdown of the direct cost of the airport area high school project leaves, however, the sum of $308,827 assigned to the high school project by Guilford County Schools unexplained.
The secret recipe for spending almost a half-million dollars on not buying a school is the decision by Guilford County Schools to distribute the cost of some program and project management costs of the overall $457 million program among the 27 projects on the construction program list, and others among the five land-acquisition projects.
"The Airport Area High School project ordinance along with the Airport Area Middle School land ordinance has a total of $484,117 expended as of June 6, 2012," LaRowe wrote. "This includes the amount above ($179,910) plus a proportionate share of payments to consultants that have provided services for the 2008 bond program rather than a single project (i.e., program management). The amount applied to each project is based on its relative size in respect to the total bond program."
The school board did not hire an overall program manager for the building program, although it has hired numerous consultants.
Spreading the cost of outside consultants across all the projects, whether or not they worked on them, seems an odd way of accounting for them. It would seem to be much easier to accept invoices and issue purchase orders on specific accounts for each consultant. It would also seem to be easier to audit, something Guilford County Schools has had problems with during the construction program.
The $308,827 assigned to, but mostly not spent on, the airport area high school project is hard to isolate from the $179,910 spent on the land search for the high school, as Guilford County Schools has not yet indicated which consultants fall into which category. But some costs are fairly easy to identify.
There are 33 vendors listed in the summary of the $488,737 spent, some were issued only a few payments and some were paid scores of times.
The recipient of the largest amount of money from the high school project is Construction Contract Administration LLC (CCA), the company of Dennis Cole the former "manager of standards and design" for the school system, even though he was a consultant, not an employee with whom Guilford County Schools severed relations in June 2011. School officials said they severed relations with Cole and his company for cause; Cole denied it.
Guilford County Schools assigned $102,000 in payments to CCA to the high school project, even though Cole and CCA were long gone by the time the financial analysis was compiled on June 14, 2012.
Cole and his company were paid $1.4 million over a several-year period without a vote of approval by the school board. School board policy requires a board vote on consulting contracts of more than $150,000; Cole and his company were paid more than $150,000 every year for several years in a row.
The second largest amount of money from the high school project was $91,237 paid to Morris-Berg Architects of Charlotte, the architects chosen for the high school project by the school board's Architecture Selection Committee. That money was clearly part of the $179,910. Morris-Berg prepared conceptual drawings of the proposed high school and middle school for both sites considered by the school board. The drawings were used primarily in attempts to sell the idea of putting the schools on the two sets of properties to municipalities and to would-be neighbors of the schools.
The $91,237 paid to Morris-Berg was only a fraction of what the company would have been paid had the high school-middle school complex gone through as planned.
"Total contract value for design services related to the Airport Area High School is $2,754,500," LaRowe wrote. "Morris-Berg has provided services to date including evaluation of prospective sites, preliminary design layouts, and assistance with various due diligence requirements. Morris-Berg also prepared for and attended several meetings related to the rezoning efforts with the Town of Kernersville."
Guilford County Schools paid Cole directly for some services without purchase orders just as Taylor was occasionally paid, and doing so required Ozment's signature. Cole and his company were paid through a tangle of purchase orders, invoices and direct payments so complicated that School Superintendent Mo Green and Ozment wound up launching an investigation of the financial controls in the department, which had no internal financial manager.
Three Guilford County Schools employees or contractors involved in the construction program have resigned, or been pressured to leave, after allegations of misconduct since the construction program began in 2008.
The Taylors could not be reached for comment. Guilford County Schools did not provide a number for the couple and the only number listed for them returns a disconnected signal. Guilford County Schools administrators said the last contract with the Taylors or their company expired on June 30, 2011, and, based on a decision made several months ago, will not be renewed.
The next largest payment on the list goes to Davenport Transportation Consulting of Winston-Salem, for preliminary road-change designs. All the sites purchased, and some of the schools being renovated as part of the construction program, require road-design changes, either to satisfy the North Carolina Department of Transportation or to provide roads within the school's property.
Guilford County Schools never released the results of Ozment's investigation into the financial management of the Facilities Department. Guilford County Schools Chief of Staff Nora Carr, asked for the results again on Tuesday, July 11, said that Ozment made her report on the investigation to the school board in closed session and there were no paper or electronic records of the result of the investigation, and Guilford County Schools has never released the results of the investigation.
In a July 3 email, LaRowe referred to "a report that [Ozment] was working on related to the status of capital projects funds."
The cost of the airport area school or any other project of the construction program has apparently not been an issue with school board members until recently. At school board meetings, board members sometimes ask if projects are under their inflated budgets the school board built in large contingency funds and what turned out to be imaginary 7.5 percent inflation into each project but never ask if those budgets were justified in the first place.
After the collapse of the airport area high school plan, school board members Kris Cooke and Darlene Garrett each asked for a breakdown of the cost of the land search for the airport area high school.