DATE: Saturday, September 27, 1997          TAG: 9709270411
SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

SOURCE: BY TOM HOLDEN, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   75 lines

BEACH STILL UNRESOLVED ON BOARD CONSOLIDATION

The Community Services Board's executive director is gone, but the issue leading to his forced departure Thursday remains unresolved.

Dennis I. Wool resigned after a painful public examination of his role in the planned consolidation of board operations from several rented spaces around town to a city-owned site on Bonney Road.

Before the project can proceed, City Councilwoman Reba S. McClanan said Friday, City Council will need to dig into the project's finances to ensure that it will not become more expensive.

``It seemed to me that if something like this had happened to someone in an earlier stage in their career, then I suppose there might be some explanation,'' she said of the board's decision to seek Wool's resignation. Wool had been executive director almost 14 years.

``But for a long-term, experienced person to mislead the board and council is fairly serious. I can't say that I disagree with any of it,'' she said.

The plan involved the purchase of three properties on Bonney Road and the anticipated renovation of two of them to create a central campus for the board's services.

The board oversees a network of services for people and families dealing with mental illness, mental retardation and substance abusers, serving about 8,000 people last year.

Before the city bought the properties, Wool hired an architect to evaluate the cost of renovating them. The architect's report helped set the debate about renovation expenses and was the basis in part for Wool's request to have the city fund part of the project.

Last December, City Council appropriated $12 million for the project, believing that is what the project would cost. But expenses began to rise almost immediately. First the cost rose to $14 million after the city added expenses to cover contingencies, an increase not related to Wool's decisions.

When a final project architect was hired, he found that the total project costs, after renovation, would be $19 million, far higher than Wool thought they would be. Wool said he had no reason to doubt the original architect's report, saying the news hit him ``like a truck.''

Wool had argued that he had reason to believe the original estimate to renovate was accurate and realistic, but letters made public this week show that the architect had only offered a partial evaluation. A more detailed evaluation was never ordered, even though Wool used the early findings to persuade City Council to spend the money.

The board managed to lower the cost to $18 million before deciding two weeks ago to raze the buildings and start over. That would move the total project cost to $17.2 million - $3 million more than the city expected to spend.

To pay for those added costs, the board suggested that it could dip into its contingency fund and secure funding through lease-revenue bonds that needed City Council approval. The additional costs would not cost taxpayers more money, but the added costs caught City Council off guard and made its members angry.

Moving to a new location, while widely agreed to have its merits, would also more than double the board's operational expenses, a fact that worries E. Dean Block, the city's director of management services.

Donald V. Jellig, the Community Services Board's chairman, has assured City Council that the new costs associated with the potential move will not seriously affect the delivery of services or the board's ability to pay its bills.

In an effort to strengthen his claim, Jellig has promised City Council a complete financial plan for the board, and has ordered that a copy be delivered to each City Council member.

City officials said Friday they are anxiously awaiting that report, which will outline both immediate and long-term costs associated with consolidating board operations at the Bonney Road location.

Once in city hands, the plan will be sent to Block and Patricia A. Phillips, the city's director of finance, for a complete review.

``I want to make sure that Patti and Dean go through it with a fine-tooth comb,'' said City Councilman William W. Harrison Jr., who has been critical of the board's planned construction project. ``The board has expressed confidence that their financial projections could carry this, and to make certain that it is the case, we're going to review it.''

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