A long-simmering dispute among Deschutes County commissioners over fees paid to real estate agent of record Steve Scott ratcheted up a notch or two Thursday on Bend.com, as Mike Daly said he will request an internal audit to determine whether Scott is being overpaid for the work he performs for the county. “This is government we are talking about,” Daly wrote. “We cannot use the ‘good old boy’ method to conduct public business.” Fellow Commissioner Tom DeWolf, in turn, accused Daly of lobbing “unfounded charges based on misinformation.” Daly was on the losing end of a 2-1 vote Wednesday as colleagues DeWolf and Dennis Luke voted to have Scott involved in negotiations over the city of Redmond’s $1.7 million offer for about 123 acres of county-owned land east of the city but within Redmond’s urban growth boundary (bend.com/AR-13088). If the deal goes through, Scott will be paid 1 percent of the sale price, or about $17,000. Daly has been disgruntled, to put it mildly, ever since he learned that Scott had earned more than $500,000 in commission fees from sales of county land since 1999 (bend.com/AR-12217). In a posting to Bend.com on Wednesday evening, Daly said he wanted to “expand on” what he said at the meeting earlier in the day, “to better clarify my position.” Daly wrote that he met with Redmond Mayor Alan Unger and the city’s planning director in Redmond on Dec. 1 and “discussed the best way to accommodate the new door company (Suburban Door of Tualatin) who had made us an offer for 35 acres of the 125 acres of county-owned property.” He said the planning director “recommended the best way to carve out smaller parcels to accommodate mixed-use clients would be to file a subdivision plat on a portion of the property. This would allow for the maximum flexibility in the development of the property.” A few weeks earlier, Daly said, Scott had recommended to commissioners “that the property be partitioned into three large parcels (which) would have cost about $12,000 and would not have accomplished our objective. I considered this to be bad advice and was successful in convincing Commissioner DeWolf to reconsider the decision.” Daly said that at his meeting with Redmond’s mayor, “we discussed the fact that Redmond should own the property and therefore would have the maximum flexibility to develop it. I told him that I would be open to selling the property to them under terms which would not hurt their general fund and pay for the property as they sold it to the clients who would open businesses and provide jobs. I told him I thought the other commissioners would be open to this too.” Daly said he wrote an e-mail to his colleagues, advising of his meeting with Unger “and gave them a heads up that Redmond would be in touch with us.” A telephone conference call with the mayor followed at which they ‘worked out some preliminary ideas on how to structure the deal, and the last thing was I suggested that they do the math and give us a written offer,” which was sent by Unger last Friday. “At no time was Steve Scott involved in this deal, as I had made it a point to keep him out of it, to try to save the county money. I was blindsided yesterday (Tuesday) when (county Administrator) Mike Maier brought him into the meeting when we discussed the deal from Redmond. He did not have a listing agreement to sell the property and was not actively trying to market the property.” “Everything had been put on hold because of the sudden flurry of offers we had on the property from developers,” Daly wrote. “I have been here three years, and to my knowledge, he hasn’t done one thing as far as working on getting this property ready to sell, other than the one time he came in and gave us what I consider bad advice. I will leave it up to (the) readers to decide if he earned his $17,000 commission.” DeWolf details Realtor’s involvement DeWolf posted a response to Bend.com on Thursday afternoon, giving the parcel’s history from his perspective. He said the 125 acres was one of the parcels identified to be sold to help pay for the Becky Johnson Community Center in Redmond and the new county Human Services Building in Bend, without having to ask taxpayers for more money. “Steve Scott’s involvement with this parcel dates back to the year 2000, when he managed the proposal from Duke Energy for several months to acquire all 125 acres,” DeWolf said, referring to a controversial proposal by the energy firm to build a gas-fired power plant on the site. Commissioners “declined to sell and removed the property from the market,” DeWolf wrote. DeWolf then detailed various transactions, such as a partition to donate 5 acres of the original 170 acres to the Humane Society of Redmond for its new shelter. “Steve negotiated and sold a 40-acre parcel to the city of Redmond,” the commissioner wrote. “We did a lot line adjustment to create this 40-acre parcel. Steve received a 10 percent commission on this sale. What remained was 125 acres.” When Weyerhaeuser declined to renew a lease for 40 acres of the property, “Mr. Scott negotiated a new lease with B&S Logging of Prineville for this ground,” DeWolf wrote. “More recently, he negotiated a 10-year lease with Hap Taylor and Sons and a lease with a radio station for another five acres.” Last year, DeWolf said, commissioners “directed Steve to work with the city of Redmond regarding their interest in the 125 acres. We felt then that Redmond should control this property. They declined to move forward at that time.” “Over the past three years, Steve has worked closely with county staff to determine the best way to market the remaining 125 acres,” DeWolf wrote. “He has been to untold numbers of meetings with the commissioners, our administrator and property manager. There have been numerous discussions with potential buyers, but the property has been off the market since we declined Duke Energy’s interest.” DeWolf said state law dictates that “you can’t sell land that is not a legal lot of record,” created through partitions and subdivisions. “We currently have one legal lot of record, just over 1,900 acres in size.” He said he supported partitioning the 125 industrial acres inside the UGB “because industrial land is a whole different animal than the balance of the 1,800 acres, which is a mix of Exclusive Farm Use, Surface Mine, Park Reserve and Open Space (zoning).” “It was our property manager (Tammy Credicott) not our real estate agent of record who recommended that we partition the property,” DeWolf wrote. “Steve agreed with the idea, because it is easier to market smaller parcels than a single 125-acre parcel.” Commissioner opposes competing with developers DeWolf said his colleague “is correct that we also could subdivide this (125-acre) property, but it has long been Deschutes County’s policy not to subdivide properties because we were not interested in being a private, speculative developer and competing with private developers. If we wanted to make the maximum profit, we would subdivide and market this property ourselves. That is not a direction I support.” “Ironically, in order to sell this land to Redmond, we will now go through the partition process to create a 125-acre legal lot of record, exactly what Commissioner Daly has opposed,” DeWolf wrote. “Our agent of record will be taking care of this partition work.” DeWolf said Scott “has not received any compensation for the years of work he has put into preparing the remaining 125 acres for sale, other than $3,480 for his work on two leases. … We have never asked Steve to keep track of his time. Occasionally, he works on a contingency, by the hour basis. For that he tracks his time. The real estate industry simply doesn’t keep track of time spent on specific projects because they are not typically paid by the hour.” As DeWolf explained it, the county’s agreement with Scott is that he “works with our staff to prepare difficult properties for sale. Once they are ready for sale, we sign a contract for that parcel and he receives a 10 percent or a lesser negotiated commission, depending upon the circumstances. If they do not sell, he is paid nothing, no matter how much time he has put in.” “Steve Scott has worked hard and diligently for Deschutes County,” DeWolf wrote. “Time and time again, Steve Scott has reduced his fee at times that truly helps Deschutes County’s taxpayers to benefit.” “I firmly believe that hiring Steve Scott has saved Deschutes County taxpayers a great deal of money, and he has brought a level of expertise that simply does not exist on our staff,” the commissioner wrote. “This is not an unusual circumstance. It happens all the time, in both public and private organizations. For anyone to claim otherwise shows they simply do not understand the facts.” “Commissioner Daly appears to claim that he alone is responsible for bringing the city of Redmond to the table,” DeWolf wrote. “I find it astounding that he has been here three years and claims to be unaware of all that has taken place regarding this property.” As for Daly’s “blindsided” remark, DeWolf added, “Commissioner Daly must have been the only one who didn’t know Steve was coming (to the meeting). I knew it weeks in advance, as did everyone else I’ve spoken to about the meeting.” “When you have a piece of land like this, you have an infinite number of options,” DeWolf wrote. “If the city decides not to proceed with this purchase, I will immediately support the partitioning of this land so as not to be in competition with the private sector, but to prepare it for timely sale in 35-40 acre parcels.” “It is my hope that Steve Scott and our county staff can get back to work on their appointed tasks, rather than continuing to answer unfounded charges based upon misinformation,” DeWolf concluded. Daly: Fee doesn’t follow contract terms “Here we go again,” Daly replied, “another one of those ‘He did this’ and ‘he did that’ or ‘he said this or that.’ There is no point in going into this any further.” “I am convinced that the public money to be paid to Steve Scott was not earned by him in this case,” the commissioner wrote. “His contract is very specific in that he must have a listing to be paid a commission. He did not have one. He could be paid $100 an hour for advice. All of those times he met with commissioners about this property, he could have sent a bill for his time and he would have been paid. Apparently, he chose not to do this. His contract is very specific.” “After the (former sheriff) Greg Brown situation, Deschutes County created an internal audit division to look at situations just like this,” Daly wrote. “I plan to file a formal request to have them look at our methods of operation on real estate issues and make a determination. I am sure whatever decision they make will at least change the way we do business around here.” Daly later said he "used a poor choice of words" and was not comparing Scott to the former sheriff. "Steve is a professional in his job, and I have never looked at this situation as a reflection on him personally," the commissioner wrote. "He has done what a majority of the commission has directed him to do. My disagreement is with my two fellow commissioners on policy issues." Daly told Bend.com that “this issue has been simmering for a long time.” “My original complaint was why we even had a Realtor of record,” he said. “Other counties have a professional real estate person on staff and do not pay any commissions. For what we have paid Scott over the past few years, we could have more than paid for a staff person. Other commissioners I have talked to from other counties are appalled at the amount of money we have paid out.” Regarding the meeting at which Daly claimed he was “blindsided” by Scott’s appearance, he said, “I am sure everybody kept a secret from me because they all knew I would have a fit.” Asked about the obvious unspoken undercurrent – that Daly is prepping for this year’s re-election bid – he said, “I am only trying to save the county money. That is why I was elected. I try to base all of my decisions on what I would do if this was my money at stake. The county needs to be run like a business. When I was in business, we watched every nickel, or you would be out of business.” “If I had another commissioner that thinks the way I do, things would be much different,” Daly said. ”I need that second vote. Oh well, maybe some day.”

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