Columbus City Council voted unanimously in executive session Tuesday night to abandon its plan to seek about $250,000 in federal disaster reimbursement for reconstruction of the Sim Scott Park community center.
During a press conference Wednesday, Mayor Keith Gaskin said he has asked the State Auditor’s Office to investigate whether the project followed state bidding laws.
The community center and senior center at Sim Scott Park, located on 20th Street North across from Hunt School, were destroyed in a Feb. 23, 2019, tornado. The city opted to rebuild one structure that combined the two buildings under one roof rather than rebuild separately, as well as re-orient the building to face the street. The buildings previously faced the parking lot.
Insurance payouts funded most of the construction, with the city originally intending to apply for disaster reimbursement from the Federal Emergency Management Agency to help pay any costs beyond insurance.
Sim Scott was “unique” in that there was insurance covering some of the damaged property, City Attorney Jeff Turnage said. The total amount of damages for Sim Scott was just more than $1 million, and about $740,000 was paid out from Travelers, the city’s insurer. That left $285,000 eligible for reimbursement.
“If we spent all of that ($285,000) at Sim Scott we would get 87.5 percent reimbursed — 75 percent from FEMA and 12.5 percent from (the Mississippi Emergency Management Agency) and then our part would be the remaining 12.5 percent,” Turnage said. “We have about $250,000 in play.”
The new building came in at the approximate cost of $550,000, and the rest of the insurance money was spent for needs at other parks, Turnage said. He likened it to getting a check from a car wreck: there was no legal requirement the insurance money be spent at Sim Scott specifically.
However, the decision to divide the money means the work at Sim Scott is not eligible for FEMA reimbursement.
“(Spending the money at other places) would make it iffy, at best, to get that other $250,000 or so that we could have gotten,” Turnage said at the press conference. “Rather than submit and have it get clawed back, the council just decided, rightfully, I think, to walk away from the FEMA application. Spending that money elsewhere just disqualified the city from getting it back from FEMA. As far as I understand it, it was legally expended, just not for storm-related damages.”
Gaskin, however, noted that while his staff was gathering information on the Sim Scott project for the Fiscal Year 2020 audit, possible irregularities were discovered in how contracts were awarded.
J5 Global was the project manager for storm recovery.
“On the surface, it looked, I don’t know if suspicious is the right word, but it looked like we might not have been following proper procedures,” Gaskin said. “Everything may have been fine, but it was enough that our accountants told us it looked like that was going to be a citing in an audit and there could have been an issue with the federal government.”
Turnage said that, based on a spreadsheet provided by Joe Dillon, the city’s hazard mitigation coordinator, some of the bids looked “suspicious” at first. State purchasing laws require at least two quotes for work costing between $5,000 and $50,000, and sealed bids for projects $50,000 or more. As an example, Turnage said that one contractor handled nine components of the Sim Scott rebuild.
“This one contractor had $120,000 in work,” Turnage said. “There were never any sealed bids. The suspicion was maybe it was split up to avoid that requirement and the time delays associated with bidding. We heard from the engineer from J5, Darrell Winters, (Tuesday) night, and he had a lot of explanations for why it was done the way it was done and they seemed reasonable to me. There were several changes during the contract, for instance changing the occupant load. When they did that, they needed to put a firewall in to separate the two parts of the building and that wasn’t contemplated at the outset.”
J5 parted ways with the city earlier this year, terminating its arrangement with the city on June 30, the last day of former mayor Robert Smith’s administration.
J5: City’s poor record keeping key part of problem
Winters, as well as J5 President Antwann Richardson, told The Dispatch on Wednesday the way the city spent its insurance money and poor record keeping were at the root of the problem, not how bids were awarded.
“The two issues are being muddled together,” Richardson said. “If you’re not involved in these processes regularly, it can be very confusing, especially with the FEMA process. Why they pulled that (FEMA reimbursement) application has nothing to do with the bid process.”
FEMA only reimburses in cases where the insurance money isn’t enough to fund repairs, both Richardson and Winters said, echoing what Turnage noted at the press conference.
“The money that they spent on the building, insurance paid for that, so FEMA could not reimburse them for that money,” Richardson said. “They were given more than enough. (Reconstruction) was cheaper than what they got. They can’t get reimbursed because they had enough money.”
“They know they spent money on things beyond the Sim Scott community center, and therefore they were not comfortable requesting reimbursement from FEMA because the money was not solely spent on Sim Scott,” Winters added. “It was spent on other items.”
Winters said the city’s records were also not well kept, and the city couldn’t clearly document where money was spent beyond the building.
“That has nothing to do with their questions about the bidding process,” Richardson said.
Richardson and Winters disputed the account of the bid process put forward at the press conference. The city, in an effort to save money, acted as its own general contractor throughout the storm recovery effort, they said. J5 solicited quotes for projects and passed them along to the city, which then made the decisions on awarding contracts.
“The city decided, and it was our job to carry it out,” Richardson said. “They decide how they want things procured. They chose to do breakout packages.”
The city took the low quote “without exception,” Winters said, and many contractors got more than one contract. The low bids would go on the docket at the city council meetings and be approved, and the chief financial officer would issue a purchase order for the work.
“They kept talking about one contractor getting a lot of work,” Winters said. “There were at least eight contractors that had multiple tasks awarded to them for low quotes. The whole construction process was fluid, and there were a lot of changes. (Turnage) mentioned one of them, the firewall. Every time a change was made, that required us to go get somebody to perform that change order.”
“Obviously it’s cheaper for the contractor on site to do the work, because he doesn’t have to mobilize,” Richardson said. “But when something was added, we did get multiple quotes.”
Gaskin “jumped the gun” in calling the state auditor, Richardson said.
“It boils down to the lack of record keeping that the city had,” he said. “Once they got the explanation, then it made sense. In the executive session, when they got everyone together and they brought all the pieces together, I think he realized in that moment how it all fit. That probably should have happened before.”
Council responds to Gaskin calling state auditor
Richardson wasn’t the only one who felt Gaskin jumped the gun by calling the auditor.
Moreover, in Gaskin’s press conference, he said he had made that call last week. The council didn’t learn about it until executive session on Tuesday, Ward 2 Councilman and Vice Mayor Joseph Mickens said.
Still, Mickens stopped short of criticizing the decision.
“People do things differently,” he said. “Somebody might make a right turn to get to my house, somebody else may make a left. It was a decision he felt like he had to make, but I feel like this could have been a problem we handled in house. There may have been smoke, but it might have been smoke we could have put out.”
Ward 5 Councilman Stephen Jones was more pointed.
“I don’t support it,” he said. “I think we’re putting the cart before the horse. J5 came in (Tuesday) night and explained to us why they did it the way they did, and they have records to back it up. Everything was done legally. … (Gaskin) should have consulted us first and let us discuss it. You’ve got to get all the facts before you put this stuff out there.”
Gaskin told The Dispatch he contacted the auditor on Friday and notified the council on Monday he had done so.
Ward 3 Councilman Rusty Greene said he thought the city had a problem at first, but now isn’t as worried. As far as Gaskin calling the auditor, he said, “better safe than sorry.”
“When it first came up I thought we had a problem,” he said. “I’m not as concerned now after hearing about the process. It doesn’t sound to me like we did anything malicious, and I think they were making good business decisions and saving us money.”
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 41 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.