Gateway Audit Confirms that Developer Wants $44,249,226.98 for Infrastructure Reimbursement

Unfortunately the worst fear of Forney taxpayer’s was realized on Thursday evening when the City Council publicly received audit results confirming that the developer of the Gateway Project is requesting repayment of $44,249,226.98 in infrastructure cost.

After being provided a preliminary evaluation of the Gateway Project Tax Increment Finance Agreement, the City Council listened intently as McCall Gibson Swedlund & Barfoot PLLC, Managing Partner and CPA Debra Gibson explained the audit findings.

Reportedly, Petro-Hunt Vice-President Alan Bain originally submitted a schedule for reimbursement that totaled $28,434,160.12 however this did not include developer interest.

CPA Debra Gibson explained that she revised the reimbursable amount to $44,249,226.98, which includes $16,164,709.60 in interest, which was calculated at 12%.

 

 

The Gateway Project infrastructure reimbursements are divided into five specific categories:

 

                                                                          Estimated Cost             Estimated Reimbursement

Bridge Engineering and Construction                  $ 12,298,206                    $ 12,272,881

North Gateway Blvd                                            $   6,731,357                    $   6,677,163

South Gateway Blvd                                            $   7,000,457                    $   6,730,333

Water and Sewer - North Side                            $   2,404,139                     $   2,404,139

Developer Interest                                                                                       $ 16,164,710

 

Clearly aware of the taxpayer’s reaction to this council’s latest financial set back, Council Member Robbie Powers who was on the council at the time this agreement was approved was unexplanably absent from this very important meeting.

Council Member Shaun Myers remained quiet throughout the meeting. Myers made no comments nor did he ask any clarifying questions throughout the two hour meeting; right up until Mayor Wilson said, “If we can maintain the public good and benefit then we can work through this.”

Obviously unwilling to hold former City Manager Brian Brooks or former Mayor Darrell Grooms accountable for the financial position the taxpayers are now in; addressing Mayor Wilson Councilman Myers said “We just need to move forward. That’s it.”

Council Member Mary Penn also clearly didn’t want to publicaly discuss who is responsible for putting Forney in a very deep financial hole.

Penn was elected in 2010 shortly before the second amendment to this agreement was approved by the Rozell council. Pretending to be shocked and projecting an innocent demeanor, factually Penn has always known that Brian Brooks was less than ethical in his dealings with the Hunt’s and Darrell Grooms.

Considering the severity of the current situation, the citizens should realize that both Mary Penn and Robbie Powers voted to pay Brian Brooks $183,702.84 in severance pay and then sign him to a non-disclosure agreement with hope of keeping these types of agreements quiet.

However when Brooks’ replacement James Fisher discovered the numerous illegalities associated with the Petro-Hunt TIF Agreement, Penn had to drum up a reason to terminate his employment. So the council paid Fisher $213,928.00 to prevent him from informing the public, and the authorities, about the Gateway Project TIF Agreement.

Penn asked several questions during the meeting however she responded to Mayor Wilson in an obvious protective stance when he suggested that someone clearly messed up.

Speaking directly to CPA Gibson, Mayor Wilson stated “I’m just going to make a comment. We can see from all this that the interest is un-sustainable. The original cost was $12 million dollars for what they put in and we already owe them $9.2 million on it.”

 

Council Member Penn stated “I’d say that’s a moot point for right now. Because we have now hired Don (David) and he is going to get to work on that.”

Council Member’s Penn, Powers and Myers should clearly understand that hiring a reputable economic development expert to further evaluate exactly how this happened, and to advise the council on how best to negotiate a new developer agreement with the Hunt’s, is merely a necessary starting point.

This isn’t like the many times Brian Brooks, and other former employees, just accidentally miscalculated the cost of a street repair or minor project. This is over $40 million dollars that the taxpayers of Forney will have to repay, even if the final cost is reduced due to invoicing errors or unqualified expenditures.

The taxpayers have every legal right to hold this council, past council’s and former employees, responsible for putting them in long-term debt. These elected officials and former employees are not beyond legal accountability.

And it’s certainly not a “moot point” or unreasonable for the taxpayers of Forney to expect all the elected members of this City Council, to be as outraged by this situation as they are.

Any current council member not concerned or outraged by a 40 million dollar debt should immediately vacate their council position since it’s obvious that they do not have Forney’s best interest in mind.

 

The photograph on the right is from the Gateway Bridge Ground Breaking Ceremony. Pictured from left to right are Petro-Hunt President Herbert Hunt, former Mayor Darren Rozell, former Mayor Darrell Grooms and TxDOT Project Supervisor Brenda Callaway.

 

REPORT ON APPLYING AGREED-UPON PROCEDURES TO CONSTRUCTION, ENGINEERING AND RELATED COSTS REIMBURSABLE

 

Written by: Denise Bell



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