Attorney general's office issues opinion about BPW practices
By LARRY HILLIARD Ledger Staff Writer larry@gaffneyledger.com

When the Gaffney Board of Public Works decided several years ago to design and build a public golf course, the approach was simple - create a nonprofit corporation to fund and oversee the project.

But the utility didn't have the authority to create the corporation to build the golf course, according to an opinion issued this week by South Carolina Assistant Attorney General Cydney Milling.

The attorney general opinion found the utility's purpose, under the legislation that established it, was to provide electricity and water to the City of Gaffney and didn't allow for the creation of a separate corporation.

The utility's inability to locate an underwriter has derailed the golf course project.

Board of Public Works General Manager Donnie Hardin said the utility followed its own legal opinion when it formed the corporation to build a golf course.

"While the opinion disagrees with the formation of the corporation, it twice references the lack of jurisdiction to make factual determinations," Hardin said. "The Board's decision to form the corporation was based on research and legal advice from the McNair Law Firm."

He added the Department of Treasury also signed off on the creation of the corporation.

The legal opinion also addressed questions regarding the utility's disposal of real property and auditing and bonding procedures.

State Rep. Dennis Moss (DGaffney) sought the opinion in response to questions from his constituents, including Dr. Sam Orr, a vocal critic of the Board's spending practices.

Orr has questioned the Board's appropriations for the golf course project and a new digital scoreboard at the Gaffney High School football stadium.

The utility allocated approximately $440,000 from its general fund for legal fees and a preliminary design for the golf course. Board officials have said the money would be reimbursed from the golf course operations.

Last summer, the Board voted 4-1 to appropriate $150,000 for the new football stadium scoreboard. The utility's name and logo will appear near the top of the scoreboard. Utility officials defended the expenditure, saying it fit into their community-interest mission.

Orr said although he hadn't had time to study the 5-page opinion, he wasn't surprised with its conclusion.

"I've been concerned for a long time that the financial expenditures of the Board of Public Works are illegal and beyond their statutory power," Orr said. "I still believe the scoreboard expenditure is something illegal although that question wasn't presented to the Attorney General."

Orr also challenged the utility's impending transfer of a tract of land at Lake Whelchel to the county for a soccer complex.

Several years ago, the Board purchased 150 acres adjacent to Lake Whelchel, known as the Clary estate. At the time, Board officials said the additional acreage was needed if the utility wanted to raise the lake level. The action was also taken to stop a housing development from popping up near the lake, utility officials said.

The Board plans to convey a portion of that property to the county for a soccer complex.

But the Attorney General Office's opinion suggested the statute only allows for the disposal of real property if it's necessary for the Board's operation. For example, if the Board needed to purchase additional land to expand its facilities.

Hardin said no decision has been made on how the property will be conveyed.

"The Board has made a commitment to provide land for the Cherokee County Recreation District to build a soccer complex on a portion of its land at Lake Whelchel and the Board will honor the commitment," he said. "However, the exact amount of property required and how the property will be provided has not been determined. The decision will be based on advice from our attorney when the recreation district has more specific plans."

Hardin said the utility will likely enter into a long-term lease, rather than transfer title to the recreation district.

Moss also asked the Attorney General's Office if the state law required the Board to be audited.

According to the opinion, legislation passed in 1940 requires the legislative delegation or Gaffney City Council to appoint an accounting firm to conduct a semi-annual audit.

Hardin said the utility has been hiring its own independent auditor to perform a sixmonth financial review as well as a comprehensive annual financial report. Hardin said he would be happy to allow the city to pay for the audits, rather than the Board.

Lastly, Moss asked the Attorney General's Office if the utility's commissioners are required to be bonded. The opinion found the commissioners must obtain a bond in the amount of $10,000. Hardin said the utility surpasses the requirement, with a bond amount of $25,000 for each commissioner.