Town’s former planning director penalized

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RICHMOND — A state board for professional regulation ruled Tuesday that the town of Culpeper’s ex-planning director/head engineer blurred the line between public and private business, at times getting compensated twice for the same project.

Consequently, the 13-member Virginia Board for Architects, Professional Engineers, Land Surveyors, Certified Interior Designers and Landscape Architects unanimously suspended the engineering license of George Charles “Chuck” Stephenson for six months and fined him $5,000.

The board cited three violations of its administrative code in handing down the suspension and fines related to: conflicts of interest ($1,500 fine), competency for assignments ($2,500) and use of seal ($1,000).

“The evidence suggests Stephenson’s public employment and his private business were substantially intertwined,” the board wrote in its consent order.

Not an architect

Stephenson, a resident of Culpeper County’s Boston area, worked for the town of Culpeper for 18 years before resigning in April so he could “pursue construction 100 percent,” he said at a June hearing in Richmond.

He referred to his home-based business, Designs Unlimited Inc., which was formed in 2006 and through which he prepared architectural drawings for various projects in Culpeper.

The board, in handing down its largest monetary fine of $2,500 for the “competency for assignments” violation, chastised Stephenson in its June report for preparing architectural drawings without an architect’s license, saying that he “knowingly and blatantly” did so and that his conduct was “very serious.”

The board listed the following projects for which Stephenson did architectural designs without an architect’s license and for which he was compensated through Designs Unlimited:

- Six Brothers Mini Mall
-Culpeper Christian School
- Fisher Auto Parts
- Meadowbrook Shopping Center
- Providence Bible Church.

Providence is the same church that sold the town its building on Old Brandy Road last year; the building will soon be under renovation as the new police station.

In his defense, Stephenson argued, the “Engineering definition is so broad and open-ended compared … to architecture that it appears that engineers are allowed to design structures.”

He told the board that through his lifelong work in the construction business and with the town he managed a variety of building projects, interacting with architects and engineers, so that he came to understand the building codes well enough that he felt confident in performing structural design.

Conflicts of interest
Last spring, Stephenson partnered to form a second private business, Smart Choice Construction, also based in Boston, Va., he said in June. At the same time, Stephenson led the town’s 12-member Department of Planning and Community Development through growth the likes of which Culpeper has never seen.

Combine overlapping public service responsibilities with his private business matters and herein lies the conflicts of interest, the board ruled.

Self-employed Culpeper architect Michael Lysczek, a longtime member of the town’s Architectural Review Board, claimed the same when he filed a written complaint against Stephenson with the Department of Professional & Occupational Regulation in October, sparking the investigation.

In the complaint, Lysczek cited 13 projects for which he felt Stephenson violated the state’s professional regulations.

“He was using his position with the town for personal gain,” Lysczek, present at Tuesday’s meeting in Richmond, said afterward. “He was getting work from people who were coming up to the third-floor office with zoning questions.”

In at least two cases, Lysczek wrote in his complaint to the state agency, Stephenson “was successful in taking work away from my office.”

“He was in serious violation of the laws that govern our professional practices,” he said Tuesday of why he filed the complaint.

Personal issues?
Stephenson, in a letter to the state agency in December, said Lysczek, for the past 20 years, has had “personal issues with me … designing structures” in Culpeper, adding, “Due to this, I no longer prepare designs that are reviewed by the ARB so as not to have to deal with the individual any more than necessary.”

But in its report, the board said it found that Stephenson had, in fact, used his town hall office and town staff for some of his private design work.

“One of the letters submitted by Stephenson in his own defense was from a client who stated that he would often meet and conduct business with Stephenson in (his) town office and that he would frequently pick up drawings or documents given to him by (his) receptionist,” the board report said of a letter from Michael Jolly, president of Jolly Construction in Brandy Station.

While Stephenson, in June, acknowledged using his office to conduct private business meetings, he said they occurred before or after working hours. He denied that his receptionist was involved, but acknowledged leaving plans for his clients in the reception area for pickup.

The state board ultimately ruled that Stephenson was being compensated by the town and his private clients for services pertaining to the same projects, saying his use of town resources — office space and town staff — was a form of compensation.

Stephenson further denied any conflict, saying as town planning director he worked only with site issues like parking lots or sewage and drainage, and not with building permits and other building construction issues. The latter, he said, completely falls under the purview of the Culpeper County Building Department, which operates under a separate governmental entity.

As a result, Stephenson told the state board, he did not receive compensation from two sources for the same work because he only deals with site work in his town position and conducts building design in his free time.

Other construction projects in town engaging Stephenson’s private design services in recent years included: the Hilltop Plaza at Route 3 and U.S. 15, the car wash on Sperryville Pike and several Davis Street renovations.

State board: more conflicts
Another cited conflict that arose between Stephenson’s town position and private business matters was the fact that the plans he drew ultimately went to the zoning administrator, one of his subordinates, for approval.

“By virtue of his public office, Stephenson was in a position to influence the approval process for these projects,” the board ruled, and, “It seems implausible that his supervisory role did not have a serious potential to influence the review.”

As part of its penalty, the board also ordered Stephenson to take a class on ethics in engineering. In addition, he was cited for not disclosing, in writing, his commercial business interests to the town and his private clients and not including his name or seal on some of the projects he designed, including the Culpeper Christian School expansion, which ultimately required approval by the town’s Planning Commission.

Stephenson declined comment on the ruling after Tuesday’s meeting but appeared to cooperate with regulatory investigators, as evidenced by his many statements in the 100-plus-page file.

He’s been down this road before, having had a similar anonymous complaint filed against him three years ago.

“I don’t hide the fact that I have a building-design company,” Stephenson said in June. “I have received prior approval from my employer for such and annually file a statement of economic interest form with the state of Virginia.”

Town response
In a 2006 letter to the Department of Professional and Occupational Regulation, former Town Manager Brannon Godfrey said Stephenson filed the necessary disclosure statement with the town in 1991 when he was doing residential projects on the side.

In addition, Godfrey wrote, the town’s personnel policy allows town employees to operate businesses off-hours provided there is no conflict of interest, it does not reflect unfavorably upon the town and is not performed in town facilities.

In an e-mail Tuesday, current Town Manager Jeff Muzzy said he was not yet aware of the regulatory board’s final actions, but that he would certainly review it as the information becomes available. He cited the aforementioned personnel policy.

“After I was appointed town manager, and becoming aware that Mr. Stephenson operated an outside business, I had the clear understanding with him that he would not conduct any business within the town of Culpeper,” Muzzy said. “I have no reason to believe that Mr. Stephenson did not adhere to this understanding.”

When Stephenson resigned from the town earlier this year, he was making $99,736, according to a town spokesman.

According to a 2006 financial disclosure statement Stephenson filed with the town, his business at the time was annually grossing more than $50,000.

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Reader Reactions

Flag Comment Posted by RE3 on September 17, 2009 at 7:51 pm

The conflicts of interest don’t seem to worry the Mayor and Council. For one, the timing of his designing a new facility for Providence Bible Church while he was the town engineer, recommending that the town buy the church’s former facility for a police station is real questionable.  The church is paying him for design, oversight of the construction, and he is a partner in the construction company.  That’s a lot of fees while you are recommending to your full-time employer that they spend tax dollars on buying your “side” client’s property.  Now the town finds out that the roof needs replacing.  Which master was he serving; the taxpayers who were paying his slary and benefits, or the church who was paying him significant fees?

Flag Comment Posted by chachi on September 17, 2009 at 9:10 am

I have followed this story with great interest and based the Board’s actions, suspension of Mr. Stephenson’s engineering license, fines, and required attendance of professional ethics CE training, a case can be successfully made that Mr. Stephenson has knowingly and deliberately engaged in full fledge tax evasions at both the state and federal levels.

How so? “One of the letters submitted by Stephenson in his own defense was from a client who stated that he would often meet and conduct business with Stephenson in (his) town office and that he would frequently pick up drawings or documents given to him by (his) receptionist.  This is “constructive receipt” of rent benefits (using his town’s office to run a for profit business) and service benefits provided by a town paid employee.  Mr. Stephenson was (is) required by law to declare the fair market (FMV) of the “free rent” and personal services provided by other town paid employees as income.  Now what are the chances he did that?  No town/city I’m aware of provides its employees with free rent or other benefits to operate his or her for profit business out of its public facilities.

The town should determine the FMV of the benefits Mr. Stephenson received; prepare an IRS form 1099-MISC covering the period starting in 2006 to April 2009 and provide Mr. Stephenson and both the state and the federal taxing authorities copies of the 1099.  Now what are the chances the town will that?  Hopefully the state Board will forward its findings on to the taxing authorities.

CPA

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