The Norman Transcript

December 22, 2012

County’s legal bill approaches $70K

By Mick Hinton
The Norman Transcript

NORMAN — Cleveland County commissioners voted Thursday to pay a Washington, D.C., tax attorney, about $65,000, for representing the commissioners as they await results of an Internal Revenue Service audit, in the works since last February.

“In the end, this could be money well spent,” Commissioner Rod Cleveland said recently. Cleveland confirmed Thursday that the county has not received word from the IRS regarding the status of the audit and when it will be completed.

Commissioners, meeting as trustees of the Cleveland County Justice Authority, approved tax attorney Brad Waterman’s $65,256 invoice without any discussion. On Nov. 19, the trustees approved a payment of $4,280 for Waterman’s work from July 1 to August 31, 2012.

Waterman is considered a tax expert in dealing with the IRS. Waterman told The Transcript that he has been representing “folks across the country in connection with the IRS for nearly 36 years.”

County officials have been reluctant to discuss financing for the new jail at U.S. 77 and Franklin Road until the IRS audit is completed.

Meanwhile, a separate audit of the $52 million bond issue passed by voters in 2008 indicates that the money can be accounted for. This annual audit was done by a private firm hired by the state to review Cleveland County Justice Authority expenditures as required by bond indentures.

The state commissioned the private firm, Rahhal Henderson Johnson, Certified Public Accountants of Ardmore.

Their report accepted by the trust authority in November shows that nearly $19 million in bond proceeds is being held in reserve, due in part because sales tax revenues to pay for the bonds have surpassed estimates. In 2008, county voters approved a one-fourth cent sales tax to generate revenue to pay off the bonds. That tax is generating more than $500,000 per month. Commissioners have pledged to remove the tax once the jail is paid off.

The jail, which opened to prisoners in February 2012, could hold as many as 580 prisoners if all of the jail “pods” were opened.

As of June 30, 2012, there was $18,990,420 held in reserve, according to a review of the bond issue audit.

On Feb. 16, the IRS informed the county that it was going to audit the $52 million bond expenditure. In November, IRS agent Kurt J. Ochsner came to Cleveland County and interviewed county officials. Ten months after being notified of the audit, the county still has not received a report from the IRS.

Waterman said that an IRS audit taking that long doesn’t necessarily indicate that there is anything wrong. He said his experience indicates that lately the IRS has been concerned with funding for detention centers across the country. County officials contend that the IRS audit is “routine” and not out of the ordinary, although it follows on the heels of a taxpayer petition questioning where all the bond money has gone

Justice Authority trustes to date have approved the following major expenditures, according to records provided to The Transcript.

· $25,387,914 paid to Timberlake Construction for building of the jail.

· $1,615,107 paid to Ben Graves Architects In Partnership (AIP).

· $1,269,945 paid to Dolese Brothers Inc.

· $1,046,600 paid to Glenn Floyd Law firm for services as bond counsel.

· $520,000 to R. Lindsay Bailey, counsel for the justice authority.

· $520,000 to Marshall Hawkins, financial adviser with Governmental Finance of Oklahoma Inc., a private firm.

· $393,471 paid to Wes Brannon, who served as the county’s on-site manager.

Other costs include:

· $2,231,544 for jail maintenance and operations as of June 30.

· $1,240,711 paid to buy land for the jail.

Executive Editor Andy Rieger contributed to this report.


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