Compass Pointe payments criticized

Rules not followed when agency paid for road work at golf course, auditor says


September 24, 2004|By Liz F. Kay | Liz F. Kay,SUN STAFF

The Anne Arundel County auditor has told county officials that they failed to follow proper procedures in paying $380,000 to the quasi-state agency developing the Compass Pointe golf course for road improvements.

In a letter yesterday to County Executive Janet S. Owens and members of the County Council, auditor Teresa Sutherland said that county officials from two departments - public works and parks and recreation - made a direct payment to the Maryland Economic Development Corp. before the county had signed a grant agreement for the work.

In addition, officials did not disclose the road improvements to council members or the county executive during discussions of the budget for the 2004 or 2005 fiscal years.

"In neither year did they disclose that MEDCO was taking this action and we were going to pay for it," she said.

The company, which funds economic development projects with state bonds, received a $1.1 million loan in June for the $17 million golf course project. Only 27 of the 36 holes are open for play due to construction delays caused by weather and other problems.

The State Highway Administration required MEDCO to make $521,000 in road improvements, including acceleration and deceleration lanes and other changes on Fort Smallwood Road at the entrance to the golf course.

The county reimbursed MEDCO $380,000 from contributions by developers of subdivisions adjacent to the project.

However, Sutherland said there was no written agreement on file before the payment was made.

"The county should always have a signed contract before it disburses funds," Sutherland said.

Work began on the project in summer 2002, she said. Payment was made in May, although the grant agreement was not signed by MEDCO until July and by the county this month.

"The county always intended to pay the money after the grant agreement was signed," wrote county spokeswoman Jody Couser in an e-mail. "However, there was a mix-up with two different departments being involved, and the money was paid first.

"The grant agreement was in fact signed," the e-mail continued, "however, the timing of events occurred out of the preferred order."

The county Office of Law issued an opinion Wednesday stating that the county did not have to undergo a competitive bidding process because this was a grant agreement.

According to that analysis, the cost of the improvements was not included in the revenue bonds issued by MEDCO to fund the golf course.

The county reimbursed MEDCO through a pool of funds set aside by developers of nearby subdivisions for a connector road between Fort Smallwood Road and Mountain Road. That road has not been built, and developers have received some of those funds back.

Councilwoman Barbara D. Samorajczyk described the situation as "very troubling to me."

"After the work was finished and inquiries were made, the auditor was not told about this project," she said. "I have never heard of a grant being used to pay for road improvements," she added later.

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