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Montgomery County, Maryland Sued by I.M.P. Over Illegal Funding of Silver Spring Music Hall

The Montgomery County, Md., Administration has been sued by Bethesda, Md.-based I.M.P. over illegal funding of the Silver Spring music hall. The illegal funding is the latest in a series of clandestine moves that have been discovered in the Administration's activities to build the Silver Spring music hall without following proper procedures as detailed in the lawsuit. The lawsuit was filed in the Anne Arundel County Circuit Court as part of a lawsuit against the State of Maryland.

LAW SUIT ALLEGATIONS CONCERNING MONTGOMERY COUNTY

The law suit states that The County's Chief Administrative Officer told the County Council that the County would not spend a penny more than $4 million on the music hall and that all costs were capped at $8 million. To assure that no additional County funds would be spent without further approval by the County Council, an Agreement between the developer LDG Inc and the County states several times that the County must obtain council approval to use more County funds on the project. The County has failed to seek the contractually required appropriation and therefore lacks the appropriate funds necessary to pay for the project. Under the terms of the Agreement, the project may not begin until the County Council through a budgetary appropriation approves all necessary funds. The Agreement further states that once construction begins, the County is liable for millions of dollars in damages to LDG Inc. should an unacceptable condition, such as improper funding, stop the project.

According to the suit:

COUNTY HIDES CONSTRUCTION COSTS

The County has yet to release to the County Council or the Maryland General Assembly the construction budget for the project. Documents produced solely in response to a subpoena in this lawsuit reveal that the County has known since 2008 that the construction estimates for the music hall exceeded $8 million. In other words, the County knew the price tag was millions of dollars more than the $8 million cap when it testified before the County Council in March 2008 seeking approval for $ 4 million and promised that the County would never pay a penny more. Knowing the project was millions of dollars over budget, the Administration nonetheless denied to the County Council there would be a cost overrun. In addition, the County consistently refused to produce construction cost documents to the Maryland General Assembly despite several specific requests for the documents and a statutory requirement to provide such documents.

A cost overrun of $3.2 million was revealed on August 10, 2010 in lawsuit documents. In short, the Administration hid the cost overrun from legislators and the public for more than two years. Most significant, the documents revealing the cost overrun were produced just after the Montgomery County Council recessed for the next seven weeks.

The Administration's deliberate failure to provide construction costs figures is an attempt to avoid the necessary legislative hearings to appropriate the additional funds because the Administration intends to avoid public discussion, debate, and perhaps censure regarding the handling of this project.

CONSTRUCTION ACCELERATED AND STARTED SECRETLY TO HIDE COSTS AND AVOID COUNCIL REVIEW

As part of its attempt to avoid the required legislative hearings, the Administration also accelerated plans for a groundbreaking of the music hall when it realized the cost overrun would become public.

Last spring, the County Administration bragged to the County Council that an aggressive date for groundbreaking was set for the fall, most likely in October 2010. When a lawsuit was filed in June challenging the use of State funds, the groundbreaking was moved to September 11, 2010 -- just days before the primary election for county executive and county council. After the subpoena was served on the County Administration requiring production of construction cost documents in July 2010, the groundbreaking was moved to September 2, 2010, leaving little time for review or action by anyone once the County finally revealed the construction costs on August 10, 2010.

The County Administration revealed on Wednesday Aug. 31 the construction actually began secretly several days prior, before the groundbreaking, thereby precluding any budget review or interference by the County Council before the legal agreements finalized. Nevertheless, the Administration breaches several provisions of the Agreement unless it obtains an additional appropriation approved by the County Council. There was sufficient time for the Administration to fulfill its required funding obligations prior to the original planned groundbreaking in October 2010. For instance, the County Council is scheduled to reconvene on September 24, 2010 when the Administration can ask the County Council to appropriate the additional funds at that hearing or at later hearings. The Administration also may seek County Council approval at that time to cover the $3 million cost overrun for the new Silver Spring library. A Council hearing on the music hall appropriation as required in the Agreement enables a public discourse on the expenditure of County funds at a time when the County faces a large deficit and has cut back extensively on county services.

COUNTY COUNCIL IS LEFT WITH THE TASK TO INVESTIGATE ADMINISTRATION'S ACTIONS AND UNCOVER WHO BENEFITS FROM THE GAMESMANSHIP

In conclusion (and not part of the lawsuit) efforts to delay the ground breaking were intended to (1) provide time to pursue Council approval for additional funding and (2) to avoid possible County liability if the funding is ruled illegal. Those efforts were blocked when the County admitted only in a court proceeding on Wednesday, Aug 31 that it already had started construction. It turns out the "groundbreaking" was a ruse to divert attention from the fact work had begun. It is actually just a ceremonial event for speeches and photographs. The County Council is now left with the task of finding out what the Administration has done to rush this, including why $3.2 million has been magically procured for the music hall while the Silver Spring library budget is slashed by $3 million. The Council is also left with the task of uncovering who is benefiting from the Administration's music hall gamesmanship.