Grand Jury: Bobo audit should go ‘to fullest extent’
by Erin Dentmon
edentmon@cherokeetribune.com
December 19, 2012 11:38 PM | 1700 views | 4 4 comments | 8 8 recommendations | email to a friend | print
CANTON — In presentments filed Dec. 18, the September term of the Cherokee County grand jury made its recommendations about the failed business deal between the county’s Resource Recovery Development Authority and Ball Ground Recycling, owned by Jimmy Bobo.

The grand jury recommended that the Cherokee County Board of Commissioners not limit the cost of the forensic audit into the RRDA’s dealings with BGR to the $75,000 they had proposed and any investigation conducted after the audit be “pressed to the fullest extent.”

The grand jury also recommended the BOC continue its civil suit against Bobo and the BOC/RRDA add non-elected citizen members to the RRDA who are not county employees as recommended by the May 2012 grand jury.

County administration should include the complete assets of the RRDA on the county books and subject them to audit, according to the presentments.

The January 2013 grand jury should continue investigating the matter as well as the circumstances surrounding Cherokee Office of Economic Development’s purchase of land from Bobo.

As for the purchase of the land, the grand jury’s presentment states that Bobo purchased 61.21 acres of land on Ball Ground Highway for a total cost of $3,531,537. The grand jury found that the RRDA purchased 35.85 acres of the land for $3,684,999 in 2007, with the remaining acreage being retained by Bobo.

On Wednesday, county commissioners said they will develop an official response, but some commission members gave their initial impressions regarding the presentments.

Commission Chairman Buzz Ahrens said in an email that he found some of the grand jury’s comments and recommendations somewhat unusual, such as those regarding the Cherokee Office of Economic Development’s purchase of land on Highway 92 from Bobo.

Commissioner Jim Hubbard said the commission takes “great issue” with some of the grand jury’s presentments.

“Several of the presentments show a lack of knowledge of the county procedures currently in place,” he said in an email.

The grand jury stated in the presentments that it found that no other RRDA had been created in the state for the purpose of relocating a private business and said it did not find any examples of other RRDAs being established to recover a waste substance that did not adversely affect public health, according to the presentments.

The grand jury found the original discussions and agreements between the BOC and Bobo regarding the formation of the RRDA and establishment of the new recycling facility to be “murky and virtually undocumented.”

Language in the bond documents “arguably prohibited the lessee from realizing a profit on the sale of land to Cherokee County/RRDA,” according to the presentments.

The grand jury found that the county commission established County Manager Jerry Cooper as the de facto project administrator for construction oversight of the BGR facility and that Cooper was solely responsible for validating the disbursement of funds for BGR construction.

He also said some of the grand jury’s statements regarding disciplining county employees to be open-ended and “unsettling.”

Ahrens said the RRDA approached the BGR construction as a private construction project and did not disburse county funds but rather guaranteed the debt.

As for the management of the project, Ahrens said Cooper knows how to manage and execute county projects, and the grand jury’s referral to the ACCG construction guidelines “is pretty far off base.”

Commissioner Harry Johnston said in an email that the commission may consider the grand jury’s recommendation to increase the budget for the forensic audit if needed and will consider ways to widely publish the audit findings.

He noted that the grand jury was not suggesting that commissioners acted criminally but did cite shortfalls about the oversight of the construction project.

Johnston noted that the grand jury “seems to want someone to be punished.”

He said the county employees most responsible for lapses in oversight are no longer with the county. He said Cooper is not to blame and had no part in the county entering the deal with Bobo.

The county’s attorney at the time handled the deal, which Johnston said was inherited by Cooper, who assigned the county’s senior finance official at the time to validate the use of funds.

“In hindsight, we should have brought in someone with the experience and time to more fully oversee the project, as we have now done for the parks program. But failing to do that was as much the BOC’s error as the county manager’s,” Johnston continued in his email, adding that the commission did not want to spend the money that would have required.

The Cherokee County Board of Commissioners formed the RRDA in 2006, and commissioners served as board members of the RRDA.

The RRDA issued $18.2 million in revenue bonds to relocate Ball Ground Recycling from its former location on Blalock Road to its site on old Highway 5.

Bobo was under a lease agreement with the authority to pay $100,000 a month over 30 years in bond payments up to the amount borrowed to purchase land and equipment for the operation, which the authority owns under the agreement. Bobo stopped making the payments in 2011.

Ball Ground Recycling filed for Chapter 11 bankruptcy in May, and Bobo was forced to vacate the property.

According to the presentments, the grand jury found language in the bond documents that appointed BGR and Bobo as the “true and lawful agent” for Cherokee County in the arrangement.

According to the presentments, Cooper disbursed the funds “based on the design architect’s signature alone.” The design architect was hired by Bobo and not contracted by the county, the grand jury found.

The grand jury found that the BOC/RRDA and Cooper did not adhere to the Association of County Commissioners of Georgia’s construction guidelines, which follow state laws regarding local government public works construction.

The grand jury also found that the BOC/RRDA and Cooper did not take advantage of the ACCG’s outline regarding setting up and managing construction projects.

According to the presentments, the assets of the RRDA were not carried on the Cherokee County ledger books from 2007 until present and were not subject to audit.

The grand jury found that the Cherokee Office of Economic Development purchased a 53-acre property on Ga. 92 from Bobo in 2009 at a cost of $5,273,730.

The grand jury was informed by law enforcement that an investigation into the matter would only be possible after a forensic audit of the concerned parties, and that a subsequent investigation would not be automatic.

The grand jury also recommended:

The BOC pay to publish the complete results of the audit in the county’s legal organ (the Tribune) and in the Cherokee Ledger News;

* The unaccomplished recommendations from the May 2012 grand jury be continued;

* BOC employees be held accountable or disciplined to their actions in the RRDA/BGR matter;

* Cherokee County citizens be diligent in oversight of elected officials;

* All new real estate purchased by the county be appraised by a licensed independent appraiser to assure the county is paying market prices;

* All new capital assets purchased by the county be immediately added to the county’s ledger books; and

* Research be done to ensure that all capital assets owned by the county are currently on the ledger books.

Johnston said the county did not follow procedures for local public works projects because the construction contract did not call for the construction to be handled as a public works project.

Johnston said the grand jury “seems unusually focused” on the way the RRDA’s assets were recorded.

“It’s not customary or necessary to directly record financial data of an affiliated entity like the RRDA directly in the automated accounting system used by the primary government entity itself. Rather, those affiliate records are maintained separately and consolidated with the primary government records when audited financial reports are issued,” he said.
Comments
(4)
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Robert Reid
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December 22, 2012
Has anyone verified whether the Bobos ever created new jobs with any of the RRDA money? Maybe that was what caused the BOC to give them the moon and the stars.
Robert Stewart
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December 21, 2012
Cherokee County business owners: Why aren't you pounding on desks at the BOC about the ridiculously-favorable arrangement the Bobos received? Has the county government made you an offer to create a special branch of quasi-government that committed to wait on you to find land on which to relocate your "nuisance" business, pay you a handsome profit on that land a year later, go into debt $18 Million on your behalf, allow you to self-develop the site withs zero oversight, provide a 30 year lease with ownership reversion at maturity, and all of this with no obligation to personally or corporately guarantee repayment? Don't you want to know how to arrange such a thing for yourself?
doug thomas
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December 21, 2012
this article shows a small "sample" of how bad the BGR/recycling "relocation deal" was & is! what colossal folly!

the tremendous taxpayer costs are barely hinted at. per the reporter, the officials now tell us: "the grand jury is at fault; they just don't understand complex county gov't!" tch. tch. tch.

well, neither do ocunty officials! aparently. how many multi-millions of taxpayer money has been cheated away foolishly, by "deal making" people, who should never play "real estate monoploy" using public taxpayer funds! all the over-priced over-paid "land deals" indicate minds asleep, or not even caring. or ever blaming someone else.

ahrens was quoted in months back as blaiming the bad economy for the entire problem! as though he & the other commissioners had no responsibility to think at all, or to just blindly follow what a county attorney says to do, with all judgment & prudent thought just tossed out the window.

all this smells really bad, is costly, reminds us of gov't failures near & far. let americans wake up & smell the coffee.

Luke Fuller
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December 20, 2012
If ACCG guidelines had been followed on the project, would the BOC have learned before it was too late that the county paid Bobo, et al, an 81 percent premium on the land when documents prohibited the county's lawful agent from profiting on the RRDA's purchase of that land?
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