Fee waiver at issue for city, county

Wednesday, September 28, 2011

Construction contracts for Lewisburg's $13 million sewage treatment plant expansion and holding tank say there's no fee for construction permits, but the building official wasn't told.

Waiving fees for such a project - one of them would cost $22,710 - is a decision that's beyond his pay grade, Marshall County Building Official Don Nelson said last week when he took the question to a county committee.

On Thursday the committee decided to punt. Committeemen want more information, so they voted to get some instead of deciding to issue a recommendation to the county commission.

The situation arose late this past summer when contractors for the project at the city sewage treatment started calling Nelson. They understood that the fees would be waived.

City leaders "wanted this situation," Nelson told the Building and Codes Committee about how his office works in Lewisburg. "The building inspector is not on the city payroll, but we inspect projects and collect fees in the city" as well as the county.

"The engineer just assumed that these fees were waived," Nelson said. "He made an assumption that was in error. Nothing was worked out...

"When this came to light, I called Lewisburg Electric Service asking if they were waiving fees; 'Absolutely not.'

"I'm not in a position to waive fees," Nelson said Thursday night during the committee meeting.

Reached by telephone on Monday, Greg Davenport, the project engineer from J.R. Wauford & Co. who designed the treatment plant expansion, declined to express a personal opinion. He did refer to contract language and raised a few points about bidding and costs.

"There was no oversight on my part," Davenport said calmly. "I put that in there to avoid contractor markup.

"Profit and risk would have been added if a contractor included permit fees in his markup," the engineer said. "Any fee would be in the contractor's bid.

"The contract document says the contractors have to get the permit, but that there's no fee for the permits," Davenport said. "And it seemed like a way to save the city some money."

As for a county building official inspecting projects in a municipality, Davenport said, "I've talked to some of my cohorts here and this is the only type of arrangement that we're aware of."

As a result, it might appear that the municipality would have been able to waive fees for construction permits.

Meanwhile, there are no adequate facility fees being charged because expansion of a sewage treatment plant is a public project, Nelson said.

"I answer to you all," he continued. "But what you have to be careful about is setting a precedent."

Lewisburg Water and Wastewater Superintendent Kenneth Carr also stated that the construction contracts state no fee shall be charged for permits on the site.

Furthermore, the city utility is paying J.R. Wauford & Co. to serve as the city inspector on the project, he said. The firm is well experienced in such projects.

"And a precedent, in our opinion, has been set," Carr said. "The city didn't charge the county for the jail (connection to water and sewer service) or for Oak Grove School...

"We spent something shy of $1 million" to extend sewer service to Oak Grove, Carr said.

"If this department is willing to put out $1 million, then the county could waive $22,710."

County Commissioner Sheldon Davis, who also serves as the county school system's maintenance supervisor, said he understood why the committee was meeting.

Carr: "We're not here to punch anyone in the eye."

Nelson: "Whatever is worked out, is worked out."

Carr invited committeemen to come see the big hole dug by a contractor for the collection tank and, after additional conversation, Davis said, "We need to set back and see what we've done in the past."

Commissioner Seth Warf moved to have county officials gather and report facts that apply to the situation and the vote was unanimous.

"We'll have another meeting on it," Davis said.

There was no immediate decision on where and when that next meeting might be held.