Commission may reimburse $44,000 to TDOT from Little River Railroad grant

The Blount County Commission could be on the hook to reimburse the state of Tennessee $44,000 in federal grant money because of a botched bid process on an outbuilding constructed at the Little River Railroad Museum in 2005.

If the commission chooses not to reimburse the money, the state Department of Transportation can hold $170,000 in funds earmarked for the Great Smoky Mountain Heritage Museum.

Budget director Steve Jennings explained to Blount County commissioners during their monthly agenda meeting that the funds were part of a federal grant used for work at the Little River Museum and the Heritage Museum.

“This last item I put under the category of ‘tough pill to swallow.’ It is to settle an audit by the Tennessee Department of Transportation Audit Monitoring Group regarding an administrative error associated with a Little River Railroad Museum construction grant applied for in 2002,” he said. “There was an improper application of bidding rules.”

Jennings said Don Headrick Construction won the bid with a $55,000 contract. “According to Don Headrick, Little River Railroad purchased the material for the job and deducted the material price from the bid price and paid Don Headrick just for the labor to build the building. There was really no harm done, but TDOT Audit Monitoring Group said that once the structure of the bid changed, all the original bidders should have been allowed to bid ‘labor only,’ so therefore they’re asking us to write them a check for $44,000,” he said.

Commissioner Scott Helton asked if there was any recourse, and Jennings said he and previous budget director Dave Bennett had each tried to work something out but TDOT refused. “They’ve dug in their heals. They have $170,000 in Heritage Center money they’re holding,” he said.

Commissioner Mike Lewis asked if there was any appeal process for the commission to use. “I believe the appeals process has been exhausted,” Jennings replied.

The budget director said that it appeared the county was responsible for allowing the mishap to occur even though East Tennessee Development District was paid $9,000 to administer the grant. “In the correspondence I’ve received, I believe it was a Blount County decision, not a Little River Railroad decision. Their board may have approved purchasing the material, but the flow pattern leads me to believe it was a county decision,” he said.

Commissioner Holden Lail asked if ETDD could be held liable, and Helton asked why Little River Railroad wasn’t held liable. “We’re saying Little River Railroad would be held harmless,” Helton said. “If the board voted to do the bid differently, they should absolutely share some of the blow.”

Jennings said if commissioners felt the ETDD and the museum should share in covering cost of the reimbursement, that could be researched.

Commissioner Monika Murrell said it appeared the county had made a mistake. “We got a grant, and now we’re going to have to pay this back because we didn’t keep up our end of the bargain,” she said.

Commissioner Kenneth Melton requested the county attorney be present at the commission meeting on Oct. 21 to answer questions, and Jennings said he would work to get answers by that time.

Lewis said the commission should act. “This is probably something we should pay but then we should look for reimbursement,” he said.

Commissioner Gerald Kirby made a motion to pass the measure to pay the $44,000 onto the regular commission meeting with the caveat that legal advice on recourse be sought from the county attorney. “We need to move this onto the full commission,” he said of the measure that passed 19-0. Commissioner Peggy Lambert was absent and commissioner Shawn Carter Sr. resigned in early September after due to concerns about the Hatch Act.

Also to be addressed on at Thursday, Oct. 21, meeting will be a replacement for Carter. Three candidates have submitted resumes and a desire to fill the seat in District 1. Nominations will also be taken from the public at the Oct. 21 meeting. Qualified candidates must then be nominated by a sitting commissioner in order to be considered.

The three candidates to date are Tab Burkhalter, Geneva Williams Harrison and David Cummings.

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