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After 15 years of delays in dredging, still no answer

By John Frank, Times Staff Writer
In print: Sunday, September 21, 2008

At high tide, water driven ashore by Hurricane Ike floods property owned by Manuel LLC. Neighboring residents have argued that the land is too low for development.
	[RON THOMPSON | Times]

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Frustrated by cost overruns and perpetual delays, state and county officials met in December to muscle the Hernando Beach channel dredging project into motion.

The long, painful permitting process required to dump dredged sand and rock had met its latest obstacle: upset homeowners who lived near the preferred dump site.

The $9-million project had been 15 years in the making, yet this meant more delays — potentially another one to two years.

By the end of the meeting, those gathered concluded that the preferred spoils site on Eagles Nest Drive faced "insurmountable difficulties." Getting a permit was unlikely.

County officials vowed to change course. So why — nine months and thousands of dollars later — is the county just now considering an alternate site?

The simple answer is stubbornness. County officials — especially Gregg Sutton, the county's dredge project manager — refused to recognize the problems with the first site and failed to heed the homeowners' threat of legal action. The delays contributed to the recent suspension of Sutton's boss, public works chief Charles Mixson.

So now the county finds itself worried, charting a completely different course on a narrow deadline. Sutton said he steadfastly clung to the Eagles Nest option because it was the most economical. But any further delays could cost more — the loss of a $6-million state grant.

No cash, no dredge.

County commissioners recognized the problem Tuesday and voted to explore a second option: dumping the 50,000 cubic yards of dredge spoil at the former wastewater treatment plant on Shoal Line Boulevard.

But official documents, internal e-mails and interviews conducted by the Times reveal that this predicament was avoidable. The records also indicate far deeper problems:

Costs to county taxpayers now top $770,000 even though dredging is months from starting.

• County officials failed to involve a key federal regulator, yet asked local lawmakers and the governor's office to help them expedite and circumvent the standard permitting process.

• Two county-paid consultants who questioned favorable treatment to a private company were fired or transferred at the behest of a county official.

• And county auditors said the project's cost comparisons lacked the documentation to find them credible.

Call it the Great Hernando County Boondoggle.

The long wait

Lost amid all of this nonsense is the widespread agreement that the dredge is needed. The sticking point is the spoils site.

The channel, which was last dredged in 1984, is clogged, making it difficult for boats to travel, especially at low tide. The current plan is to lengthen, widen, deepen and straighten the passageway to the Gulf of Mexico.

The work is expected to help the county economy, boosting commercial interests on the water and recreational boating.

The dredge was initially hatched 15 years ago with the Army Corps of Engineers as the lead agency. But a more ambitious corps project crumbled in 2005 when residents raised cost and environmental concerns.

Hernando County resumed the task, pitching a smaller version. Sutton said he began looking for a spoils site later in 2005 — about the same time Brooksville engineer Cliff Manuel began the permitting process for a residential development on two parcels his family owns on Eagles Nest Drive.

A list of disposal site options was given to a consultant, who selected the Manuel property because it was closest to the dredge and considered the cheapest.

For a token $10, Manuel agreed to let the county put the wet sand and debris on his Eagle Point development, with both parties apparently unconcerned about the surrounding fragile wetlands and the frequent floods at high tides.

In exchange, the county would leave 3 to 3 1/2 feet of fill on the property, making the land easier to develop.

The permitting process quickly hit obstacles, especially when the first plan proposed filling wetlands on the site. A later plan suggested less damage to wetlands and gave Manuel additional fill for another coastal residential development nearby.

The final plan, Manuel and Sutton said, would not have any effect on wetlands. But they acknowledged in recent interviews that this wasn't exactly true. A small amount of wetlands — about 0.05 acres — would be filled, but not enough to require mitigation.

Environmental concerns were consistently cited as the basis for the residents' objections to the site. They also were concerned that putting spoil material on the property could jeopardize public safety because of the vulnerable coastal location.

The residents' concerns about flooding piqued the interest of officials with the Federal Emergency Management Agency, who had been not contacted by county officials, even though they play a regulatory role. FEMA is now requiring the county to do a $44,000 flood study before it puts fill on the Manuel site.

Sutton said that it never occurred to him that the federal agency had a stake in the project.

'A huge freebie'?

Like Sutton, other county officials insisted on pursing the Eagle Nest site, even as residents and experts began to raise questions.

Residents think the county was trying to satisfy the prominent Manuel family to the detriment of taxpayers. They cite an e-mail exchange in October 2007 among county employees and consultants as evidence.

At the time, Sutton was negotiating permit details with Manuel, who was balking at a request concerning potential wetland mitigation requirements from state regulators. Manuel's position irked consultant Hugh Verkerk of Halcrow, a Jacksonville engineering company.

In an Oct. 4 e-mail to Sutton and another consultant, Verkerk states that he would hate for the latest glitch to derail the dredge project. "I'm not sure if the Manuels are attempting to hold Hernando County hostage to affect a means to their own ends or if they have a legitimate claim," he wrote.

"But my opinion on the matter is that the Manuels would not on their own try to develop that site because it would be double difficult and twice as expensive for a private individual," the e-mail continued. "Hernando County has in affect given them a huge freebie here. When this project is done, the Manuels will be in possession of a piece of property that will have doubled in value without raising a finger, or opening their wallet."

Verkerk recently said he was fired from the company, in part, because Sutton called his boss after that e-mail was sent.

"Mr. Verkerk … made some impolitic comments and was promptly dismissed," Sutton said, refusing to address the content of the e-mail.

Jason Evert, a biologist with consultant Dial Cordy, agreed with Verkerk's assessment in a follow-up e-mail.

"I strongly believe that if the Manuels continue on this course, they are either (1) not being completely forthcoming with their future plans and/or (2) are trying to take advantage of the people of Hernando County via a difficult political situation regarding the dredge project," Evert wrote. "I also hope I am not speaking out of turn, but I am growing increasingly frustrated that my (our) efforts over the last 18 months are being 86'd by someone who is taking advantage for personal gain."

Two weeks ago, Evert was removed from the Hernando contract for this e-mail and others he sent to county officials.

Again, Sutton acknowledged playing a role but declined to address the implications in the message. "That's not what we hired the environmental sub-consultant to do," Sutton said. "We don't need people like that helping us with the project."

But in an interview, Evert cautioned against taking his comments out of context. "From having been on the inside, I never saw any evidence that anything shady was going on," he said.

Getting some answers

It still sounds suspect to Richard Doyle, a homeowner who lives adjacent to the Eagle Nest site. He thinks the county has been following through with a "hidden agenda" to help Manuel.

"It's another example in Hernando County of blowing the taxpayers' money to help an individual," he said.

Doyle is among the numerous homeowners who challenged the permitting process after the state granted the county a prepermit this summer.

Joe Murphy, conservation chairman for the Hernando County Audubon Society, expressed similar concerns. "We think the county should do what is best for the environment, not just for a handful of politically influential families," he said recently.

Sutton rejected the implication of their remarks. He said the county was not doing anything wrong by making a deal to use Manuel's property.

"We're not giving away fill to the Manuels," he said. "That is part of the compensation in return for allowing us to use their site."

The county never even considered asking Manuel to pay for the material, despite its value, Sutton acknowledged. The deal easily received County Commission approval.

Manuel, president of Coastal Engineering Associates, said in an interview at his office that the consultants' commentary didn't match reality. He said he plans to develop the site whether he has the sand from the dredge or not.

As for the land doubling in value, Manuel questioned that analysis. "It's pretty valuable already," he said.

Likewise, he dismissed the residents' comments. He said they just didn't want a development near their homes. "They stated they want it to stay as it is," he said. "But just because they're upset doesn't mean they're right."

Another point of contention that piqued residents' suspicions was the cozy way in which Manuel's engineering firm participated in the project.

Coastal worked jointly with the county's consultants to delineate wetlands from uplands. In one case, they also examined one area and determined it showed no wetland vegetation. But a state Department of Environmental Protection employee later found some at the same site.

In at least one case, county officials did push back. Manuel wanted to make the county do more work to leave the site in development-ready condition when the dredging was complete.

But Sutton didn't incorporate that work into the project. "The lessor of the site, it's not really appropriate for them to dictate the terms," he said.

Manuel said his dealings with the county are genuine. "There is nothing being done with Hernando County on this project or anything else we're involved in which is not transparent and available to the public," he said.

Cost questions

But that's not exactly true. Despite a review by county auditors, questions still remain about cost comparisons that provided the justification for the selection of the Manuel site.

Top county administrators and county auditors launched the review in May after Hernando Beach resident Doug Baumbauer unearthed the critical e-mails written by the consultants after a public records request.

Audit director Peggy Prentice and Clerk of Court Karen Nicolai both announced they had conflicts of interest because of personal connections to the project.

Prentice's husband is a close friend with a staffer in Manuel's firm, and Nicolai said she lived in Hernando Beach and has a vested interested in the dredge project.

Prentice assigned assistant auditor Colin Engels and a finance office staffer to conduct a narrow review — she's adamant that it's not a full audit — focusing only on the cost calculations. She told Engels it would take a half-day to complete.

Engels found documents supporting Sutton's cost estimates in just seven cases, according to internal working papers obtained through a public records request.

In the vast majority, Sutton couldn't provide anything to verify his projections.

"Due to lack of support documentation, the auditor is not able to provide a reasonable level of assurance that the financial figures in the cost comparison are credible," Engels concluded.

Yet that's not exactly what Baumbauer, the complainant, was told. A letter drafted by Engels and Prentice stated that "some cost estimates" lacked documentation, but Sutton's explanation for the cost estimates "appeared to be logically assumable."

The review was never publicly released, and it's unclear if County Administrator David Hamilton ever saw the report.

Prentice said she didn't see a discrepancy between the review's findings and the letter.

One thing the review didn't consider is the severance fee issue. The sand dredged from the bottom of the channel technically belongs to the state. If used for the public good, it's free. But the plan to give it to the Manuel family forced the county to pay a $62,500 severance fee.

Sutton's public statements about the cost issue also contradict.

Based on his unverifiable cost estimates, he repeatedly told residents opposed to the Manuel site that it was the "most economical" option and the alternatives were too costly.

Yet just last week, as the commission considered an alternate site, he changed his tune. He told commissioners the alternate site was the best deal.

Likewise, he told residents that any change would cost the county the $6-million state grant. Now he says he was misinformed. "It was a mistake," he said.

Going forward again

All of this drama unfolded in the last few years, partly in public, but largely behind the scenes, and led to last week's decision to pursue an alternate path to what the county administrator called the infinity plan.

But county officials were quick to caution that both spoil dump sites remain under consideration. And Manuel said he plans to aggressively pursue the use of his property.

The ultimate goal is a safe channel, Sutton said, even though "that's often lost in all of the particulars of who shot who and all of the subplots."

He continued: "We think we have a way now to unstick this log jam. … I'm an optimist, and I think we're going to get this thing done. That's my mandate."

Barbara Behrendt can be reached at behrendt@sptimes.com or (352) 848-1434. John Frank can be reached at jfrank@sptimes.com or (352) 754-6114.