Penny Tax’s Dirt Road Program Under Fire

June 6, 2016

Investigative Reports

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Dirt road

Disputes over schedules, fees threaten progress of rural arm of program

If foul things roll downhill, now is not a good time to be downslope of Richland County Council.

Consider:

  • If it does not reach a resolution soon with the Department of Revenue, Richland County faces the possibility of running out of penny tax money in July since DOR has frozen disbursement of penny tax-collected funds over grave concerns about its management and a lack of corrective action on the part of council since concerns were first raised;
  • the penny tax program and certain associated individuals remain under both SLED and FBI investigations, The Nerve confirmed over the weekend, for public corruption and misuse of taxpayer dollars; and
  • the county itself is the subject of a lawsuit filed May 5 questioning the legality of the tax itself, the potential loss of which could jeopardize the entire program and result in tens of millions in potential lawsuits.

With scrutiny on the penny tax program at an all-time high and a grand total of two sidewalks completed solely by the county’s program development team (PDT) to show for the more than $126 million collected since 2013 and more than $68 million spent, on Tuesday night Richland County will decide whether or not to pull the plug on the lead contractor for the dirt road paving program – the Dennis Corporation – after having sent the firm a list of concerns that emerged from meetings of the Dirt Road Ad Hoc Committee chaired by councilwoman Julie Ann-Dixon.

The Dennis Corporation was awarded a contract worth $3.9 million in May 2015 to handle the dirt-road paving portion of the penny tax program, which was organized to operate separately from the PDT, which is comprised of ICA, M.B. Kahn, and Brownstone.

Like the PDT, the Dennis Corporation receives a flat monthly program management fee. Unlike the PDT, that amount is considerably smaller ($33,130 to the PDT’s $500,000), and also unlike the PDT’s extensive reimbursable practices first reported by The Nerve, the Dennis Corporation does not receive reimbursement for food or even mileage even though its projects are spread out to rural areas in every corner of the county. And finally, the Dennis Corporation differs from the PDT in that it’s on a two-year contract as opposed to a five-year one.

At issue for council, according to insiders, is the fact that no roads have yet been paved. A review of documents received by The Nerve under the Freedom of Information Act shows that when the contract was awarded, a list of 142 roads had been identified and prioritized, and Dennis held public consent/denial meetings in each district – plus an additional 10 meetings that disgraced former council member Kelvin Washington demanded for his district at $7,000 a clip. The latter meetings were approved by Richland County Transportation Director Rob Perry.

Perry did not return phone calls or text messages for this story.

After the consent/denial meetings, a total of 36 roads were removed from the list due to residents voting against them being paved, lowering the value of the contract by $684,000. Preliminary work began to survey the remaining roads, and documents show that work has been finished. In fact, records show that the Dennis Corporation – which does not pave roads but does all the surveying and engineering work necessary to allow the county to bid out the paving – fast-tracked the first road on the list so that the county could bid it out early. Dennis’ work was completed last November; paving work just began earlier this month.

Dan Dennis, owner of the Dennis Corporation, did not return phone calls or messages left for this story. A contractor who does business with the county and is familiar with the dirt road paving program said the Dennis Corporation’s timetables are completely normal, if not above-average.

“Truth be told, they probably deserve a medal for getting done what they have,” said the business owner who did not wish to be identified because he has ongoing work with Richland County. “Dirt roads are different animals . . . some people don’t want their roads paved for whatever reasons, the engineering challenges are significant because they’re not beautiful, straight-line city streets and when the floods hit in October, so many dirt roads in Richland County were washed out or washed away.

“Anyone in our business understands the challenges the flood brought on. I may be wrong, but my understanding is that they’re still on schedule to complete their two-year contract.”

Another issue arose between Dennis and the county over a dispute as to who is financially responsible for geotechnical engineering (soil testing) that cost approximately $2,000 per road.

Dennis has contended that the costs were to be borne by the county; the county believes the cost was figured into the engineering total for each road ($17,650) and a copy of the contract reviewed by The Nerve shows conflicting language in different sections that supports each conclusion.

Should Dennis bear the cost, with approximately 106 roads to be paved the value of the contract would decrease by another $212,000, lowering it to nearly a million dollars less. To mediate this issue, the Dennis Corporation hired attorney and former Columbia mayor Bob Coble of Nexsen Pruett, but sources inside county government say those efforts have fallen on deaf ears.

Regardless of how Tuesday’s council decision goes, the county will run out of money to pay all its penny tax contractors in July if no agreement is reached. If that happens, The Nerve has learned, DOR has promised Richland County it will keep the buses running by releasing the specific amount of money required to do so (29 percent of the taxes collected).

The Nerve also has learned, however, that county council may not disburse all the released funds to the bus system since council is only required to disburse 29 percent of whatever is disbursed by DOR.

“That means council could only give 29 percent of 29 percent to the buses,” a source close to county council said. “I’m not saying they will, but I’m also saying don’t be surprised if they did.”

Reach Aiken at (803) 254-4411. Email him at ron@thenerve.org and follow him on Twitter @RonAiken and @TheNerveSC.

  • truthbetole

    hmm

  • Brigid

    So Richland County Council would stick it to the taxpaying citizens who depend on the buses by refusing to fully fund them with whatever they get, to…make it look as if the Department of Revenue are the bad guys.

  • TrikkiNikki

    Considering Dennis Corp is the prime and they should be using a geotech firm as their sub, they should have included that cost in their contract. Needless to say, I’m not surprised considering all of the other screw-ups dennis corp has had in the past.

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