DATE: Tuesday, September 23, 1997           TAG: 9709230245

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY TOM HOLDEN, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   82 lines

3 ON COUNCIL BALK AT PROJECT'S HIGHER COST THE PRICE TAG TO CONSOLIDATE AN AGENCY'S BRANCHES HAS INCREASED BY $5.2 MILLION.

Three City Council members say that they oppose giving any additional money to help the Community Services Board finance a project that would consolidate its operations on Bonney Road.

Their positions are the first indication of the overall mood of the council, which will get a report today from the board's top executives, explaining how their agency's moving plans have changed and gotten more expensive since the council's approval of the project last December.

``I suggest they cut back on the project and stay within budget,'' said Councilman Louis R. Jones.

City Council will take no action at its meeting today, but members are anxious to hear from Community Services Board Executive Director Dennis I. Wool, who made the original pitch to the council for the project; James P. Duffy, the board's director of finance and administration; and board chairman Donald V. Jellig.

The three will appear at the 2 p.m. city manager's briefing and are not scheduled for the evening's formal council session.

At issue is how the board's planned $12 million project to consolidate its operations from several sites around the city to a common campus on Bonney Road ballooned to an estimated $17.2 million.

``I'm not a real happy camper about this,'' Councilwoman Reba S. McClanan said Monday. ``And most of the people I talk to in the public are not happy about the way this has gone. I made it clear when I spoke to Dennis (Wool) when he wanted to do this that I had no intention of spending any more money. I have not changed my opinion.

``I don't like the way this sat for four months, since June, when we were not told there were any problems. . . I am calm, compared to what I was like last week when this came out. Money is tight. These (Community Services Board) programs are needed, but. . . we have severe money problems here.

``I think it's up to us to determine where we ought to go, not them,'' she said.

The board provides services to about 8,000 residents with substance abuse, mental health and mental retardation problems through several rented sites across town, the largest of which is at the Pembroke Office Park.

The board sold its consolidation plan to the council last year on the rationale that the existing buildings on the property - a six-story hotel, retail furniture store and private residence - could be renovated to meet their programs' needs.

The board contended that purchasing the land and buildings would, in the long run, cost less than the lease costs that the board now pays to house those services in several locations.

Citing escalating rent costs that today top $522,000 and could rise to more than $700,000 in three years, the board last year embarked on a plan that would centralize its operations on the Bonney Road property. In doing so, it would stop paying rent, acquire a permanent and larger site, and build in room to expand as demand for its services grows.

But the set of figures the board used to persuade the council to appropriate $12 million for the project were later found to be flawed. The project later was found to cost more than $19 million. The board scaled it back to $18 million. At that point, it then decided, two weeks ago, to scrap renovation plans, tear down the buildings the city bought, and start over at a total project cost of $17.2 million.

To do that, it would need more money, some of which would come from the board's reserves and some from bonds it wants the city to authorize. It is this additional bonding authority that the council appears reluctant to approve.

The bonds would be issued by the Virginia Beach Economic Development Authority. But the authority will not act unless given approval by the City Council.

``The city is not the bond-issuing authority,'' Councilman Jones said. ``Economic development is not going to issue them unless the City Council approves it.''

Councilman Linwood O. Branch III said last week that he would not support such a request.

``The project needs to come in at, or under, the original estimate,'' he said. ``That is what I'm going to be looking for. The project will have to be changed or revised in some way.'' ILLUSTRATION: Color photo

Reba McClanan KEYWORDS: COMMUNITY SERVICES BOARD

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