Grand Jury to County: Discipline Employees in Failed Recycling Deal

The Cherokee County Grand Jury once again had harsh words for the Cherokee County Board of Commissioners in its investigation into the failed Ball Ground Recycling venture.

The grand jury on Tuesday released its presentments and findings for the September 2012 term, most of which criticized the county government for how it handled the deal and subsequent fall out.

Among its recommendations are: 

• the county not limit the forensic audit to a cost of $75,000;
• the county pay the cost to publish the audit's full findings in both the Cherokee Tribune, the county legal organ, and the Cherokee Ledger-News;
• the county administration include the complete assets of the Resource Recovery Development Authority on the county's books, which would be subject to audit;
• the county continue in its civil suit against Jimmy Bobo and his brother David.
• for the January 2013 continue its investigation into the failed venure and to also investigate the circumstances in which the Cherokee Office of Economic Development purchased from Jimmy Bobo 53 acres at Highway 92 and James Dupree Road  
• hold employees accountable or discipline employees for their actions in the deal;
• have a licensed appraiser perform an appraisal of real estate the county is considering to purchase; and
• for all new capital assets purchased by the county be added to its ledger;

The county commission in 2006 created the Resource Recovery Development Authority and backed bonds up to $18 million to relocate Cherokee Recycling, later renamed Ball Ground Recycling, to land on Highway 5 just south of the Ball Ground city limits.

The agreement stipulated Manager Jimmy Bobo was to make payments of the bond into an escrow account, but the county learned last year Bobo hadn't been making the payments. That forced the county to pick up the tab, which it will still be responsible for if it does not find a new operator for the site. 

Ball Ground Recycling in late May filed for Chapter 11 bankruptcy, and the company was subsequently forced to remove itself from the property. The county, along with the RRDA, have been in bankruptcy court trying to remove the automatic stay imposed by the bankruptcy filing.

Most of the grand jury's findings didn't uncover new information in the Ball Ground Recycling venture.

The grand jury noted that County Manager Jerry Cooper was established as the de facto project administrator on behalf of the county when the project was under construction.

"The Grand Jury further found that the County Manager was solely responsible for validating the criteria for the disbursement of funds for the BGR construction," the grand jury wrote. "The Grand Jury found that the county manager disbursed the construction funds on the basis of the design architect's signature alone."

That architect was hired by Bobo and was not contracted by the county. The grand jury also criticized the commissioners and Cooper for not utilizing the Association County Commissioners of Georgia's Construction Guidelines "that outlined step by step the way to set up and manage a construction project of this scope."

It also noted the RRDA's assets were not placed on the county's ledger and were not subject to audits.

The county commissioners reached on Wednesday said they wanted to wait to fully review and respond to the grand jury's presentments after newly-elected District 3 Commissioner Brian Poole and District 2 Commissioner Ray Gunnin take office on Jan. 1.

County Chairman Buzz Ahrens did say he found some of the "open ended statements" regarding county employees "unsettling."

He noted the county approached the project like that of a private company building out a subdivision - "a private project."

He also said the county did not disburse county funds.

"Rather, we guaranteed the repayment of an $18 million bond," he said. "Jerry (Cooper) knows how to execute and manage county projects. For the grand jury to refer us to ACCG construction guidelines is pretty far off base."

District 1 Commissioner Harry Johnston added the grand jury essentially wants the county to proceed on its track of recouping money lost in the deal and pursuing back rent payment from the Bobo brothers.

He also said the commission will consider increasing the budget for the forensic audit if needed and "consider the best way" to widely publish the audit's findings.

However, Johnston disagreed with the grand jury's wanting "someone to be punished for getting into the deal and for the lapses in oversight of the project."

"The employees most responsible for those issues are no longer with the county, though their departures were primarily for other reasons," he said. "The county manager is not to blame. He had no part in entering into the deal. That was handled entirely by the county's in-house attorney at the time."

Johnston was referring to former County Attorney Mark Mahler. Johnston noted that once Mahler left the county, Cooper assigned a then-county senior finance official to validate the uses of funds for the project.

In hindsight, the county should have brought someone on who had experience in the area to directly oversee the expenditure of funds for the project, the commissioner noted. 

He also said the project did not call for it to be handled like a county public works project as Bobo was to manage the project and for his companies to do the bulk of the work.

He also took issue with the call for the RRDA's assets to be listed in the general county ledger. He noted it's not "customary or necessary" to directly record financial information for an entity like the RRDA as they are maintained separately.

They are only consolidated with primary government records when audit reports are issued, Johnston added.