BoC releases response to grand jury findings
May 22, 2013 11:47 PM | 1262 views | 1 1 comments | 8 8 recommendations | email to a friend | print
By Joshua Sharpe

jsharpe@cherokeetribune.com

CANTON — During its meeting Tuesday, the Cherokee Board of Commissioners unanimously approved its official response to the presentments of a recent grand jury on the county’s dealings with Jimmy Bobo and his failed business, Ball Ground Recycling.

County Attorney Angie Davis went over important points of the response for the public record during Tuesday’s meeting.

The January grand jury counted as the third so far to look into the deal between Bobo and the Cherokee Resource Recovery Development Authority, which was created in 2006 to guarantee debt on $18 million in bonds to relocate Bobo’s facility to its final location on Highway 5 near Ball Ground.

Since Bobo filed bankruptcy last year, the county has been on the hook for $100,000 a month in lease payments for the facility.

A third-party accounting firm is also looking into the deal in a forensic audit, which could cost the county more than $300,000 when it’s completed.

The January grand jury released its findings and recommendation in April, and since then the Board of Commissioners has been preparing its formal response.

The first finding of the grand jury states that it received “conflicting information” on whether or not the “mass of debris” found by the county after Bobo vacated the original location of his recycling operation on Blalock Road was in fact “unusable” material.

In its response provided to the Tribune on Wednesday, the board states that while it is “unaware” of the conflicting information, “most of the wood debris discovered at the Blalock site was not actually removed.” Instead, the debris was left on the site “per approval of Georgia Environmental Protection Division,” the board’s response says.

The grand jury also reported “conflicting information” was provided on how the final price for the purchase of the Ball Ground Recycling property was derived and that “no records” were provided by the Bank of North Georgia, where Bobo banked during the purchase.

The board also said it had trouble getting these records and has made requests of the bank and Bobo and his companies with no luck.

The January grand jury also found that “there was no separate real estate attorney” representing the county in the bond process.

“This is correct,” the board’s response states. “However, bond counsel had within his firm, a tax partner and a real estate partner” who worked on the bond transaction and closing of the land.

In such transactions in the future, the grand jury recommended the Board of Commissioners use an outside real estate attorney in lieu of the county attorney.

The board wrote that the county attorney’s office was not “involved with or charged to oversee” the land acquisition, but that routinely that office does handle buying and selling of property for the county and is “fully capable of continuing to do so.”

If an outside attorney was brought in, the board states that “unnecessary costs and duplication of efforts and information” would be added to land acquisition processes.

The grand jury also recommended that all members of the Board of Commissioners visit the Ball Ground Recycling facility, as it was unclear whether or not each of them have visited there, and that a sign be placed on the property advertising it for sale.

The board agreed with both recommendations.

It was also recommended by the grand jury that the RRDA meet in conjunction with the board of commissioners bi-monthly.

Before the grand jury presentments were released, these meetings began earlier this year.

One of these joint meetings was Tuesday, before the Board of Commissioners meeting.

During this meeting, the two boards discussed several options for relieving the county of the monthly $100,000 in payments on Bobo’s facility.

They heard from Bryce Holcomb, of Citi Group, who answered questions on what options the county had in refinancing a portion of the debt to lower the monthly payments.

The method of refinancing discussed by the boards Tuesday was a “scoop and toss” method of refinancing the taxable portion of the debt, which is about $5 million dollars, Commissioner Harry Johnston said.

This refinancing could save the county about $400,000 a year for three to five years, but would add on cost later, should the county still be making payments when the period of savings was over.

Holcomb said that about $283,000 would be added on for three to five years after the years of savings.

The county should only consider this method, Holcomb said, if it didn’t think the facility would sell anytime soon.

“You’re not going to save money overall,” he said. “You’re going to lose money overall.”

Most members of the RRDA and Board of Commissioners agreed.

Johnston said this refinancing could lead to lower taxes now, but higher taxes later after the savings period ended, which would in effect pass issues on to future boards.

“I’m not sure we’re inclined to do that,” he said.

Jeff Duncan, a recent addition to the RRDA, said taxpayers aren’t interested in putting off their problems.

“Pushing off today’s problems until tomorrow is kind of the modus operandi these days,” Duncan said. “And I think people are pretty sick of it.”

Johnston agreed.

“We just might as well have the guts to face the music, if it means higher taxes today, that’s the consequence,” he said. “It just doesn’t buy us any real value in the long run.”

Commission Chairman Buzz Ahrens also said he didn’t think the “scoop and toss” method made sense overall.

Another option the boards discussed was bringing in a third party to assist in the sale of the property.

So far, Troy Welker, a new addition to the RRDA, said all offers from major corporations on the facility have been “pitiful.”

To remedy this situation, the boards discussed using a third party to sell the facility or take over the lease — which was another recommendation by the grand jury.

The boards are working on a generic agreement for any third parties and what commission they could expect should they facilitate a sale of the property.
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bug fuzz
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May 23, 2013
The staggering cost, to the taxpayer, for this fiasco continues to grow. Lawyers, forensic accountants, bond salesmen, and bankers have got to be loving this mess. Everyone was protected except for the citizens of Cherokee. This, so called partnership, between local county government and the private sector was never a valid financial enterprise. It continues to appear that all officials involved did all that they could to keep this under wraps. They relied only on the advice of those that would reap the most financial benefit from this, shady from the start, deal. We have been told that the property would be sold for several years now. Don't hold your breath folks. The only thing to look forward to are the trials and convictions.

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