Caulfield defends opposition to management bonus

by Frank DeLoache and Josh Lanier

HUNTERSVILLE – By a 3-2 vote Monday night, Dec. 6, the Huntersville Board of Commissioners turned down a $42,917 bonus to the company that manages Huntersville Family Fitness and Aquatics for the town.

In speaking against the bonus recommended by Town Manager Greg Ferguson, Commissioner Beth “Danae” Caulfield took pains to say she and her family are members of the center and enjoy going there. But Caulfield did not mention that she worked at the center full time for two months before she was released by the center in the first week of July 2009. She also did not mention that her son still works at the center.

On Tuesday, Dee Jetton, the aquatic center’s director and representative of Health & Sports Works, Inc., the management company, said she has to wonder if Caulfield’s past employment at the center might have “tainted” her ability to consider the bonus issue fairly. But Jetton said the town staff and commissioners will have to decide how to proceed.

Reached at her home Tuesday afternoon, Caufield said her previous employment at the aquatic center “did not have anything to do” with her comments or her vote Monday night. She also pointed out that Mayor Jill Swain’s son, like hers, works as a lifeguard at the aquatic center.

Caulfield later e-mailed a lengthy statement to the Herald Weekly, saying in part:

“The decision to run for town board was made long before I was let go from HSW (Health & Sports Works) … My decision to run was based on exactly what this issue is about. I expect a steward over my tax dollars to not make flippant decisions, to take the time necessary to research the matter so that it is based on the facts and to have the guts to stand up to the status quo and safe guard OUR money.”

Town Attorney Bob Blythe said state law governing conflicts of interest primarily only apply when a financial gain is at stake. The statutes wouldn’t require Caulfield to disclose her previous employment.

At Monday’s meeting, Caulfield said she opposed the bonus based on her understanding of the original management contract signed by the town. In her e-mail, she said, “The condition for a bonus payment in our contract is, ‘based upon HSW successively obtaining established goals pursuant to the long range financial plan for the facilities.’ One of the expressed goals is to ‘improve financial results of the project by setting forth a business plan that will achieve break-even or better.’

“They are also to provide multi-year projections, which I have never seen, and goal number five is to ‘increase dollar-per-member and dollar-per-non-member collections.’ I have never seen any data showing that this has been accomplished and aimed at. We pay HSW management company $153,750 a year to manage the facility, and we expect them to stay within the budget that is set, which is over $3 million dollars. A bonus isn’t given for staying within one’s budget but for going above and beyond and, in this case, to meet the goal of breaking even or better… and this has not been met.”

But Jetton said none of the previous town boards has called on the management company to make enough to repay the town’s $5 million investment. Jetton said she was “shocked” by Caulfield’s comments and felt Caulfield did not accurately portray Health & Sports Works’ current contract.

Swain also seemed caught off guard by Caulfield’s comments, noting at one point, “It would have been nice if you would have brought that up” in an earlier evaluation session.

Commissioner Ron Julian, who voted for the bonus, also remarked, “I’ve got no love of (Health & Sports Works), but I don’t think anyone could run it any more efficiently. And the main thing is I don’t want it to cost the Huntersville taxpayer more. I don’t want to run (Health & Sports Works) off.”

Commissioner Charles Jeter also spoke against awarding the bonus, and Commissioner Ken Lucas  joined Jeter and Caulfield in voting against the bonus. Julian and Mayor Pro Tem Sarah McAulay supported the bonus.

After a lengthy discussion Monday night – and a legal question of what the town can do with the bonus money – commissioners agreed to hold a second work session on the aquatic center on Dec. 20, where they will hear from Jetton and Blythe.

As part of Health & Sports Works’ contract, the town pays a $150,000 annual management fee but withholds another $50,000, which serves as a bonus pool. The staffs of the town and the center evaluate the center’s performance, and Ferguson recommends  the bonus he thinks appropriate.

At a previous work session, Jetton reported that the aquatics center met the bottom line of the 2009-10 budget approved by commissioners, and actually operated at $8,000 less than the town approved. The aquatics center also cut by 26 percent – or $133,875 – what the center needed from the town’s hotel and motel tax revenues – compared to 2008.

Jeter has made his position clear before: He’s not satisfied that the aquatics center has not repaid the town any of its initial $5 million investment in its nine-year history. Like Caulfield, Jeter said the center is an asset to the town, and the town doesn’t have any option but to keep operating the center.

But Monday night, Jeter said Health & Sports Works agreed to put the bonus money “at risk” each year, and he proposed applying the recommended $42,900 bonus to the debt.

That prompted Swain to ask if the town board could legally take the bonus-pool money back and apply it to the debt. Eventually, Jeter withdrew his motion to apply the bonus to the debt. The board then defeated the recommended bonus, and commissioners agreed to talk again on Dec. 20.

Based on state-mandated ethics classes all the commissioners completed recently, Jeter said he did not think Caulfield had a legal conflict of interest, since she was not benefiting financially from it.

“Whether or not she had a moral obligation to recuse herself, that’s a question she would have to answer,” he said.