John Paisley, Jr., has pored over more than his share of questionable contracts in his nearly five-decade career as an attorney.
But Paisley insists that nothing in his professional experience prepared him for the queasy feeling he recently got when he first glimpsed the fine print in a series of contracts which the Alamance-Burlington school system banged out earlier this year with an out-of-town mold-removal specialist.
As a member of Alamance County’s board of commissioners, Paisley had actually released the funds for these multi-million-dollar arrangements with Creedmoor-based Builder Services, which the school system had called in over the summer after it discovered pervasive fungal growth in a number of area schools.
“As we have discussed” [Stevens informs the county’s governing board in his email cover note providing copies of the contracts] “the contracts between ABSS and Builder Services appear not to include a defined limit on expenditure. As a matter of law, such contracts are not permitted to be entered into by school systems in North Carolina.”
– County attorney Rik Stevens
In fact, he and his fellow commissioners initially set aside more than $16 million to secure this firm’s services in August and September of this year. Then, earlier this month, he joined a bare majority of the county’s governing board in approving another $5.2 million to cover additional costs that Builder Services had invoiced the school system over and above its original estimates for the work it had done.
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Paisley, who currently serves as the chairman of Alamance County’s commissioners, made no bones about his own displeasure before he grudgingly voted to free up these additional funds on December 5. Since then, however, Paisley has turned his disgust up to 11 after finally getting a glimpse at the terms of the school system’s contracts with Builder Services.
“They were horrid,” he declared in a subsequent interview. “Had I seen the contracts beforehand, I probably would’ve voted against the [extra appropriations].”
A growing concern
The school system, for its part, didn’t exactly fall into the arms of Builder Services immediately after it learned that there were unhealthy levels of mold on some of its campuses.
In fact, the school system’s administrators initially retained Whitsett-based Sasser Restoration to deal with the problem when the first signs of fungal infestation appeared in a couple of area schools shortly before the fall semester had been scheduled to start. But as high levels of mold were detected in more and more locations, the school system’s administrators resolved that they needed a firm with greater manpower and resources to minimize the inevitable delay in the resumption of classes.
The school system top-brass ultimately threw their lot in with Builder Services after Steve Carter, the vice chairman of Alamance County’s commissioners, introduced them to someone he had previously met from the firm. Yet, it wasn’t until the tail end of August that the rest of the commissioners agreed to loosen the proverbial purse strings so that the school system could formally hire the company.
The school system would go on to formalize its first contract with Builder Services on Monday, August 28. Under this incipient agreement, the company agreed to undertake various mold removal efforts at one middle school and two high schools in return for an estimated sum of $3.5 million.
Over the course of the next four days, the school system signed seven more agreements with Builder Services, tacking on more schools and additional remedial measures to the scope of the contractor’s work, while increasing the estimated size of its fees to $12,218,495. One week and five contracts later, this sum had ballooned to $16,268,245 – putatively putting a period on the company’s mold remediation efforts. Meanwhile, the need for extensive HVAC cleaning prompted the chairman of the Alamance-Burlington school board to endorse another seven agreements in early October, bringing the estimated price tag of all this work up to $20,030,245
The county’s elected leaders were initially privy only to the most basic details about these 20 or so agreements. Yet, this minimal information still brought Paisley’s blood to a boil when the school system’s administrators approached him and his fellow commissioners in late November to request some additional revenue to settle their bill with Builder Services.
In particular, the commissioners’ chairman was incensed that none of these agreements included any hard-and-fast limits on the company’s potential fees. Instead, they merely provided estimates – or “rough orders of magnitude” to borrow the contractor’s jargon – which weren’t always in line with what the school system was ultimately charged.
In order to get more information about the school system’s obligations to Builder Services, Paisley recalled that he requested copies of the company’s actual contracts – which he insisted were initially ignored by the school system. The commissioners’ chairman added that he finally took the matter to Alamance County’s attorney Rik Stevens, who brokered a deal with the school system’s lawyers that eventually bore fruit less than a week before Christmas.
On December 19, Stevens dispatched these documents to the board of commissioners – and to Paisley’s chagrin, the details were far more devilish than he had inferred from the broad strokes.
For starters, Paisley contends that these contracts violate certain statutory requirements, which demand that school systems obtain pre-contract audits to ensure that they have sufficient funds to cover the obligations which they assume. Although the school system’s finance director had bedecked each of these agreements with a stamp to certify that they have indeed been subject to the statutorily mandated “preaudits,” Paisley argues these financial reviews couldn’t have taken place as described due to the absence of any caps, or ceilings, on the school system’s costs.
“There was no audit,” he bemoaned in an interview, “and had there been any audit, they would’ve known they were not in compliance with the North Carolina state statues.”
As your attorney…
Paisley’s objections on this score were also shared by the county attorney in an email that accompanied his dissemination of the contracts to the commissioners.
“As we have discussed,” Stevens informs the county’s governing board in this missive, “the contracts between ABSS and Builder Services appear not to include a defined limit on expenditure. As a matter of law, such contracts are not permitted to be entered into by school systems in North Carolina.”
Stevens goes on to address a whole host of other potentially dodgy provisions in his email to the commissioners.
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“I would never, even in an emergency, advise my clients to sign such unfair contracts.”
– County commissioner chairman John Paisley, Jr.
“I would never, even in an emergency, advise my local government client to sign a contract like this. . . I have reached back out to [the school system’s attorney] Adam Mitchell to find out if he reviewed these before they were signed and have not received a response.”
– County attorney Rik Stevens
Among the sticking points for Stevens are clauses that indemnify both parties in these agreements, subject the schools to an annual interest rate of 18 percent for any late payments, impose a 3-percent “small tool fee” on top of other assorted charges, and demand that all tools, even if owned by the contractor, should be charged to the customer at a per-hour rate.
Stevens also slams these agreements for apparently leaving the schools on the hook for rental cars, air travel, hotels, and meals for “out-of-town” workers and for their apparent silence on a state-level requirement that demands contractors use the federal E-Verify service to confirm the social security numbers of their laborers.
The documents which Stevens passed on to the commissioners nevertheless reveal that the school system’s administrators did have the foresight to address some statutory requirements with their prospective mold-removal contractor. One item that pops up in these papers is a signed acknowledgement from a Builder Services executive that convicted sex offenders are generally prohibited from setting foot on school grounds – although this same passage alludes to an exemption that exists for schools which are “closed for renovation.”
In any event, Stevens insists an agreement with so many apparent pitfalls would never have made it past his desk without some substantial revisions.
“I would never, even in an emergency, advise my local government client to sign a contract like this,” Stevens asserts. “I have reached back out to [the school system’s attorney] Adam Mitchell to find out if he reviewed these before they were signed and have not received a response.”
The county attorney went on to note that Sandy Ellington-Graves, the chairman of the Alamance-Burlington school board, had apparently signed the initial contract on August 28 – the same day that the school board held the first in a series of meetings with the commissioners to secure the funds to pay for this work.
Stevens added that this timeline doesn’t seem to allow for Mitchell’s review of the agreement he got a glimpse of an early draft ahead of the school board’s joint meeting with the commissioners.
‘We’ve moved on’
Yet, the kaleidoscopic complaints of Stevens and Paisley have, so far, done little to disturb the serenity of the school system’s top-ranking elected official.
In an interview with The Alamance News on Wednesday, Ellington-Graves reiterated the school system’s oft-stated position that the “crisis” it faced with mold infestation justified the costly expenditures it ultimately incurred.
“Our priority was to get the work done and get the kids back in schools, safe and open. . . My understanding is that the invoices have been paid, and we’ve moved on to other things.”
– ABSS school board chairman Sandy Ellington-Graves
“Our priority was to get the work done and get the kids back in schools, safe and open,” she elaborated.
Ellington-Graves went on to acknowledge that she has heard nothing recently about these arrangements from the school system’s own legal counsel.
“My understanding,” she added, “is that the invoices have been paid, and we’ve moved on to other things.”
In the end, Paisley and his fellow commissioners didn’t receive the county attorney’s caveats until the day following the regularly-scheduled meeting where they signed off on the funds to pay off the school system’s outstanding balance with Builder Services.
In addition to the texts of these agreements themselves, the commissioners have also received some of the correspondence that the school system’s administrators exchanged with Ben Bass, an executive vice president with Builder Services, in the runup to the approval of each contract. These missives include a generic letter that Bass sent to the school system’s representatives alongside his drafts of the contracts.
“Thank you for allowing Builder Services to prepare an emergency services plan for your facility,” these cookie-cutter epistles uniformly state. “Please be assured that our entire staff understands your situation. Keeping this in mind, it is our plan to mitigate your facility, with your direction as quickly and efficiently as possible.”
With Builder Services on the job, the school system was ultimately able to have all of its campuses certified as mold free and ready for use by the second week of September – admittedly two weeks later than the original start date for the current school year.
But if he had his druthers, Paisley insists that he would have readily given up some of the speed and efficiency of Builder Services in order to better safeguard the financial interests of Alamance County’s taxpayers.
The chairman of Alamance County’s commissioners contends that the school system already had a blueprint such a fiscally-prudent arrangement in its contracts with Sasser Restoration, which were negotiated under similarly urgent conditions. Paisley, who has been forthcoming about the fact that his son-in-law is an employee of this Whitsett-based firm, nevertheless insists that the school system would’ve done better to have stuck it out with Sasser rather than transfer its business to Builder Services.
In any event, Paisley is adamant that the school system’s administrators failed the ultimate test when they retained the Creedmoor-based company under the contractual terms that they ultimately accepted.
“I would never, even in an emergency, advise my clients to sign such unfair contracts,” he said in an echo of Stevens’ remark to the commissioners.