Huntersville Paid Former Elected Official $97,025 For No-Bid Jobs

If the newly elected Huntersville town board thought they wouldn’t have much to worry about over the next two years, they can think again. Adopting a new policy requiring stricter thresholds than currently required by state law for when formal and informal bids have to be approved by the town board would be a good place to start. By taking the lead and becoming the first town in North Mecklenburg with a policy on bid thresholds, the new town board would be doing their part to help protect Huntersville taxpayers against corrupt town officials in the future.

Ron Julian was an elected member of the Huntersville town board from 2007-2015. He was an appointed member of the town’s board of adjustment before that. He is currently licensed by the state as a general contractor with a limited building license (License #54760). As a long-time public official and licensed general contractor, you would fully expect Mr. Julian to be very familiar with the laws and regulations regarding submitting bids, including the thresholds under which formal or informal bids are not required. It was this knowledge of bid thresholds, combined with his relationship with former Huntersville town manager Greg Ferguson, that resulted in Mr. Julian and his wife being paid $97,025 by the town for demolition and repair work from August 2016 through January 2017.

According to the UNC SOG, under North Carolina law (specifically Article 8 of Chapter 143, sections 129 and 131), local governments are required to bid out purchases of “apparatus, supplies, materials, and equipment” costing $30,000 or more, and contracts for construction or repair costing $30,000 or more. Local governments do have the ability to adopt stricter thresholds than state law that would require bidding on other types of contracts or for contracts costing less than $30,000. If Huntersville had already adopted a policy requiring oversight by the town board of contracts less than $30,000, it’s highly likely the contracts discussed below would have been awarded to a business other than Teron Service, Inc.

Teron Service, Inc. (“Teron”) is a North Carolina business incorporated by Julian and his wife, Teresa Julian, in 1996. You can view the company’s annual reports filed with the NC Secretary of State’s Office here. Mrs. Julian is listed as the company’s President and Mr. Julian is listed as the Vice-President. The nature of the business is listed as “consulting.” Teron holds a valid contractors license through Mr. Julian. There is no website that I could find for Teron, but according to the company’s listing in the Huntersville Chamber business directory the focus of the business appears to be property management. I was unable to find a listing for the company in the Lake Norman Chamber’s business directory for some reason.

In June 2016, a proposal for demolition work was submitted by Mr. Julian on behalf of Teron to the Town of Huntersville [see below]. The proposal listed 13 properties to be demolished at a total cost of $142,600.00. This proposal did not include the cost of any asbestos surveys. The former town manager never informed the town board that he was awarding demo work to a former town commissioner.

Teron June 2016 Proposal

Pursuant to a records request, the earliest record I was provided of any discussions about the demo work awarded to Teron was an email from town employee Michelle Haines to then town manager Greg Ferguson dated July 25, 2016. Haines’ email to Ferguson stated, “Here [sic] a letter that you can print and send to Ron to move forward with demos on the first 4.” The letter below was attached to the email. If the initial demo proposal from Julian was dated June 17, 2016 and the first record of any discussion about this work that I was provided was dated July 25, 2016, how did the demo proposal come about to begin with? How would Mr. Julian know to submit a proposal for demo work if the town manager had not issued a public request for proposals?

Teron ltr 7-25-16

Despite submitting a proposal to demo 13 properties, Teron was only paid for demo work related to 7 properties: 6 per the original proposal and 1 additional property located at 8824 McIlwaine Rd. related to construction of the new fire station. The six properties from the original proposal the town paid Teron a total of $63,400 to demo were: 102 First St. (1,000 sq. ft.), 101 3rd St. (915 sq. ft.), 307 N. Main St. (1,050 sq. ft.), 309 N. Main St. (906 sq. ft.), 311 Main St. (900 sq. ft.), and 201 Walters St. (1,778 sq. ft.). The town paid Teron $29,500 to demo the McIlwaine property (2,931 sq. ft.). [see checks/invoices below] Interestingly, none of the Mecklenburg County demo permits for the seven properties above listed Teron as the contractor. Each permit listed “Black & Sons, Inc. W C”, a contractor based out of McDowell County that has an H classification license – which covers grading and excavating work, but also allows them to perform demo work. Black & Sons, Inc. has been in the demo business for over 20 years and regularly does work in Mecklenburg County. So why wouldn’t the town just hire Black & Sons, Inc. directly to perform the necessary demo work?

Teron checks (redacted)

The monies used to pay Teron came from four different funding sources according to the town. There may be some explanation for why so many different funding sources were used to pay for this demo work, but this is just one example of why I encourage elected officials and residents to go through the budget line-by-line, so questionable payments like these can be scrutinized in a more timely manner.

  • Invoice #102116-102: Fire Station ($29,500) – Building Improvements – McIlwaine
  • Invoice #01132017-311: Planning ($7,800) – Contracted Services
  • Invoice #01132017-102: Planning ($8,000) – Contracted Services
  • Invoice #111616-201D: Governing Body ($16,000) – Demo – Anchor Mill
  • Invoice #091816-309: Public Works ($7,800) – Land – 2-way Pair
  • Invoice #091216-307: Public Works ($16,000) – Land – 2-way Pair
  • Invoice #091216-101: Governing Body ($7,800) – Demo – Anchor Mill
  • Invoice #081216: Public Works ($4,125) – Repair Main Building – two-way pair

I’m sure it’s a coincidence the payment for demo of the McIlwaine property was just under the $30,000 threshold that would have triggered an informal bid under NCGS 143-131.

The final payment listed for $4,125 was paid to Teron not for demo work, but for “repairs” to the dwelling at 319 N. Main St. performed in August 2016. The approx. 1,000 sq. ft. dwelling had apparently been damaged by a hit-and-run in July 2016 according to a police report. When competitive bids were later submitted for demo of this property, the bid was awarded to a company that quoted $4,850. The demo permit for 319 N. Main St. was issued by the county on June 27, 2017. To recap, the former town manager decided it was a good use of taxpayer money to spend $4,125 to repair a rental property to collect a few more months of rent (which it had stopped collecting by at least May 2017) only to demo the dwelling less than a year later at almost the same cost.

So why was Teron only paid for demo and repair work through January 2017 despite seven of the properties on the original proposal still needing to be demolished? Could it have something to do with former town manager Greg Ferguson’s sudden resignation on Jan. 9, 2017? The last payment issued to Teron according to records I was provided was dated Jan. 27, 2017 for work performed on Jan. 5 and Jan. 12, 2017.

On March 31, 2017, an email was sent from Ron Julian to Michelle Haines stating, “Attached is the quote for the demolition of the Town Properties. Let me know if you need any additional information.” No attachment was provided to me and it’s unclear if the quote described was the same quote previously provided by Teron in June 2016. Haines next emailed Teron on April 25, 2017 asking for a demo quote for 109 W. Church St. by May 1st and advising this dwelling may contain asbestos. Ron Julian emails Haines back the next day with a quote for 109 W. Church St. On May 11, 2017, Teron emails Haines asking for a status on these projects. Haines emails back the same day and states, “You should receive a letter in the mail from me today or tomorrow. It was determined to re-open the proposals, and if you wish, you may revise your proposal previously submitted. There is a new submission deadline of May 23rd.”

Who determined to re-open the demo proposals and why is unclear from the emails I was provided. But, if this was an attempt by then interim-town manager Gerry Vincent to remedy the wrongs of his predecessor, why did he never take the opportunity to disclose to the town board the payments already made to Teron? It is difficult to believe Vincent, as a long-time, award-winning assistant town manager under Ferguson, did not know about these no-bid contracts being awarded to a former town commissioner. Putting the remaining demo work out for bid was simply the bare minimum required of a competent town manager, and it was to be expected for someone who was interviewing for a job like Vincent was at the time (he was not made official town manager until July 17, 2017). If Vincent failed to inform the town board about this, what else is he not reporting to the town board?

Mr. Vincent is clearly carrying on Mr. Ferguson’s mushroom style of management when it comes to the town board, feed them excrement and keep them in the dark.

Near the very end of the two-and-a-half-hour-long town board meeting on June 5, 2017, the town board voted 5-0 (with Guignard recused) on Other Business Item P. to award demo contracts for seven dwellings to National Recovery & Wrecking Co. There was no public discussion by the board prior to the vote on this agenda item. If you’ll recall, the agenda packet for this particular meeting, which was dominated by the budget vote, was 297 pages. Buried on page 292 were two pages related to awarding of the demo contracts, including a competitive bid matrix from Teron and three other companies (Black & Sons, Inc. was not given an opportunity to bid on this work despite having performed the prior demo jobs) for demo of these seven properties [see below]. Teron’s bid was more than double the second highest bidder and almost 2.5 times higher than the bid submitted by National Recovery. The total eventually paid by the town to National Recovery for demo of seven properties, including a full asbestos abatement inspection, was $43,570.

060517 Demo Proposals

Based on the competitive bids submitted for the June 5, 2017 vote by the town board, it’s clear taxpayers were vastly overcharged by Teron for their prior work. Let’s hope the new board takes immediate action to ensure taxpayers are better protected in the future.

A final note. I have been a resident of Huntersville for four years now. The efforts at this blog are intended to improve transparency at town hall and ensure efficient use of taxpayer dollars, it’s not personal. As everyone is aware, I have been the campaign treasurer for the Danny Phillips campaign for the past two election cycles, so many people are likely to dismiss this as merely an extension of campaign politics. It isn’t. But, if you think the strident opposition by the Julians to Phillips and Guignard in particular during the recent campaign was based on principles and not personal, I have a no-cost transportation alternative to Charlotte to sell you. Mr. Julian paid for voter cards that were handed out at the polls on election day endorsing Melinda Bales, Brian Hines, Joe Sailers, and Nick Walsh. It will be interesting to see whether any of those four will make any public comments about their support by Mr. Julian going forward.

I’ll have more on this story later in the week.

Eric