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Spin Control

Mon., July 6, 2009, 6:20 p.m.

Austin: Track to stay open, contractors to be paid

The operator of the Spokane County Raceway insists he has no plans to shut down the track or shorten the racing season, and all contractors will be paid for work done at the county-owned facility.

Bucky Austin met Monday with County Commissioner Todd Mielke, plus county legal, finance and parks staff, to discuss complaints of nonpayment from contractors and the failure to purchase a performance bond required by his operating agreement. Two large contractors, T.W. Clark and Winkler Concrete, filed notices of liens with the county late last month totaling more than $1 million.

Austin will provide some form of collateral by early next week to protect taxpayers while the bills are examined and payments are sorted out, Mielke said.

In an interview with The Spokesman-Review after the meeting, Austin said he “overspent” by doing construction projects during the first half of 2009 that were required in the first two years of his lease.

About $2 million worth of construction has been done at the track, and about half has been paid, he said. That includes DiPaolo Painting, a contractor mentioned in a June 30 story, who was sent the second half of his payment by overnight mail after the story ran.

Austin said he hopes to work out payment schedules for the rest with the remaining contractors. Some invoices are “barely 30 days old” and the bills average about 45 days. Some bills were delayed in the mail because the racetrack’s address has changed three times since the county acquired it; a change in personnel also meant the track’s financial operations recently moved from the raceway park to his home office in Fife.

“Our intent is to pay them, and to pay them as quickly as possible,” Austin said. Outstanding invoices have to be checked to insure the work was done properly and he wasn’t double-billed. He said he expected to make regular payments and to pay all legitimate claims “no later than Nov. 1.”

John Black, an attorney for Clark and Winkler, called Austin’s promise of payment “good news – if it happens.”

But he was concerned about Austin’s suggestion that contractors might have to wait more than three months for some payments for work already done: “They’re contractors, not bankers.”

Under state laws governing public works projects – which include the work at the track because it is owned by the county – Austin has the right to withhold 5 percent of the bill for any work until he was satisfied it was done properly as retainage, Black said. “But he can’t withhold 100 percent.”

The contractors have filed lien notices with the county because Austin does not have a bond that would serve as security for those bills. Under the operating agreement Austin has with the county, he was required to obtain the bond and the county was required to review it to insure it was adequate. Neither happened.

On Monday, Austin repeated his belief that Tom Clark of T.W. Clark, who served as the project manager, was responsible for making sure the bond was obtained. Austin, who owns a chain of auto repair shops in the Puget Sound area, said he hired Clark to make sure the government requirements were followed, and that would include the bond.

Black disagreed, noting that the operating agreement was between Austin and the county, and that Clark was not involved in that aspect of the projects.

Questions about the type of bond mentioned in the operating agreement were discussed early this spring with the county Purchasing Department, which was required to review it. The department determined that type of bond might not be available, Mielke said.

County commissioners could have amended the operating agreement to correct that problem and require different collateral, if they had known. But they were never told, Mielke said. By early next week, the county expects to have some form of collateral from Austin to guarantee that taxpayers will not be responsible for the contractors’ bills. Austin said he has already given Winkler a deed of trust on property he owns as security for that bill.

Although the Parks Department was monitoring work at the track, commissioners also were not aware that Austin was far ahead of the two-year schedule for required upgrades at the track, Mielke said.

Austin said it made economic sense to do much of the work at the beginning, to avoid paying a second round of setup fees for some of the expensive equipment. It also meant that the facility was in prime condition to make a good impression with racers and spectators for the big drag racing event in mid-June.

“We’re trying to do this right. We’re putting our heart into it,” Austin said. “It’s not an issue of not wanting to pay.”

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