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Public Notices

April 17, 2014

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Cross Anchor Utility Board Members Questioned About A Possible Conflict
Of Interest With Business

Originally published: 2014-01-14 11:06:04
Last modified: 2014-01-14 11:09:50

Board Member Questioned About

A Possible Conflict Of Interest



Amid a call Monday for the Cross Anchor Utility District board members to resign, customers also questioned the board concerning agreements with W&W Engineering and the potential for a conflict of interest.

Cross Anchor Utility District Board member Lynn Foshie is a W&W Engineering partner who owns 10 percent interest in the company, Foshie acknowledged on Monday.

Foshie said he has served as a member of the Cross Anchor board since the 1980s.

W&W Engineering rents the bottom portion of the Greene County Water Office, located on West Andrew Johnson Highway.

Cross Anchor Utility District built the building, but Chuckey Utility District also operates there using many of the same employees and is helping pay off those construction costs, according to Chuckey Board President John Carter.

Foshie said on Monday that W&W began renting the bottom level of the building in 2000 and had made a number of improvements to the building since that time.

He began working for the engineering firm in 2002, following 17 years with Vaughn & Melton Engineering, the firm that, previously, frequently worked with Cross Anchor and Chuckey, he said.

(Since engineering is a professional service, public entities are not required to ask for bids for such services.)

W&W has since taken on that role, and received the contract from the Cross Anchor board in 2011 to aid the district in completing a water-line replacement and master meter addition project.

This $2.5 million project qualified for a State Revolving Loan, which allows the district to pay a low interest rate and also features a $750,000 forgiveness.

On Monday, customers Roger Carter and Kay Swift questioned Cross Anchor board members as to why, in December, they approved for W&W to provide the inspector for the project without questioning how much the per-hour charge would be.

Board members acknowledged that this issue might have been best discussed, but also said that the original contract with W&W from 2011 included an inspector and the per-hour cost was set at that time.

Foshie said that cost is generally $50 per hour, but W&W Engineer David Wykle said he recalled the per-hour price being around $40 per hour.

The district had later pulled the inspector from the contract and instead put into place its own inspector, Willie Collins, one of the four employees now on leave following preliminary audit reports concerning what Certified Public Accountant Mickey Ellis has called "questionable practices by the management."

Collins is the husband of former manager Shirley Collins and the father of Kandie Jennings, who became the acting general manager after Shirley Collins retired. All three, along with Jennings' husband, Bill, were placed on leave in October.

Since these management-related questions arose, the state has had a number of other questions surrounding the project, calling a halt to work until all questions are satisfied, current operations manager Tyson Lamb reported Monday.

He said in an interview following the meeting that some discrepancies have been found, including use of unapproved equipment on the project, as well as small discrepancies on timecards.

Lamb said that the discrepancy totals about $1,500 in overcosts that the district has charged to the project.

The board appointed the W&W inspector in December as part of its efforts to satisfy the state's requirements to get the project back on track, members explained.

However, Swift said use of W&W when they rent office space is a "conflict of interest."

"We don't need no more back-scratching here," Swift said. "We've had enough of that."

Foshie said he has tried to be open about his interests with W&W, leaving the boardroom when the board votes on which engineering firm to approve.

"I said, 'You do what you want to do,'" he told Swift.

Foshie said there are conveniences and cost savings to using an engineering firm that is in the same building.

"We're not trying to gouge anybody," Foshie said.

In comments after the meeting, Foshie added that he would willingly resign, but said he feels he can be of aid to the district in staying to resolve the current controversies before doing so.

"I feel like I need to ride it out to the end," he said. "There's too much of this situation people don't know."

He said he has kept copies of original minutes and financial records at his home and also hopes this will be help to the district moving forward.

"We are technically responsible, but I feel betrayed and lots of emotions," he concluded.

For more information and stories, see The Greeneville Sun.

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