Redo?: Ordinance would roll clock back on mishandled purchase

Posted: Friday, November 27, 2009

Following an early August purchase deal between the Kenai Peninsula Borough and Sterling-based Chumley's Inc. gone afoul, two assembly members are seeking to turn back the clock.

Assemblymen Gary Knopp, of Kalifornsky Beach; and Charlie Pierce, of Sterling; are cosponsoring an ordinance to authorize the sole source purchase of vehicle maintenance equipment for Central Emergency Services from Chumley's Inc., and waive the requirement to file a Notice of Intent to Do Business form with the borough.

But the assembly president has concerns about the idea and its timing.

The ordinance will be introduced at Tuesday's assembly meeting. The move could impact the assembly's discussion on taking disciplinary action against the administration for the gaffe.

The problem transaction got its start this summer when Hugh Chumley, the borough mayor's chief of staff, failed to file a form stating his potential conflict of interest in an $18,000 transaction between Chumley's Inc. and the borough.

Chumley would have been required to sign the form 10 days prior to the Aug. 6 purchase, per borough ordinance.

The sale included a truck tire-changing machine and a wheel balancer among other equipment that CES needed to perform work on its vehicles after Chumley's Inc. ended a maintenance contract with them.

Chumley said in a Nov. 11 interview that he has been "divesting" himself of his interests with the borough since he took his job with the borough.

Chumley's Inc. returned the $18,000 to the borough on Nov. 10 after the administration was made aware of the mistake. He also made a gift of the equipment to the borough.

At the time, at least one assembly member, Gary Knopp, said he felt Chumley's Inc. should not have returned the money.

"Some paperwork was mishandled and not submitted as code requires," Knopp said on Thanksgiving Day. "My feeling is that we pay him for the equipment or that he takes the equipment back. Otherwise we're exploiting the situation."

Knopp said the idea of Chumley giving the equipment to the borough is unethical, in his opinion.

"If the body should decide they don't want to pay the money back I will be coming forward with a resolution in the future to return the equipment," he said. "We either need to pay for it or return it."

Pierce said he was cosponsoring the ordinance because he believed the ordeal was an honest mistake, saying he didn't believe the borough's purchasing or legal department had been aware of Chumley's partial ownership of the company.

He also said it was understandable that Chumley would not have been aware of the necessary paperwork as he is new to the position.

"I hope the rest of the assembly sees it the same way I do," Pierce said. "I don't think there was any intentional wrong-doing."

Information about the necessity for borough employees to make a disclosure if they do business with the borough is noted in contract documents.

Pierce and Knopp said the ordinance would only apply to the $18,000 purchase.

A copy of the check dated Nov. 10 from Chumley's Inc. to the borough provided to the Clarion showed that $19,800 had been returned.

The additional funds returned by Chumley appeared to be for additional equipment he sold the borough in a separate contract not previously disclosed, according to papers that accompanied the copy of the check provided to the Clarion.

Pierce and Knopp said they did not know what the additional $1,800 was for, and the administration did not immediately respond to written questions submitted Tuesday night.

Assembly President Pete Sprague said he wasn't sure how the ordinance might affect the body's discussion of potential further action regarding the purchase.

"I have real concerns about introducing this ordinance at this time," Sprague said.

Dante Petri can be reached at dante.petri@peninsulaclarion.com.



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