HealthFirst project manager unable to provide details of hours worked for federal review

A building bought for HealthFirst at 496 Southland Drive.
A building bought for HealthFirst at 496 Southland Drive. Herald-Leader

Documents requested as part of a federal review of the $11.7 million public health clinic project on Southland Drive don't substantiate the 40-hour work week required in Ted J. Mims' contract as project manager.

Mims has been paid $150,000 so far on the project. Construction was originally scheduled to be completed by October 2013 but has yet to begin.

Since September, the federal Health Resources and Services Administration has been reviewing the terms of Mims' hiring and employment on the tax-funded project.

A letter from HRSA to HealthFirst dated Sept. 23, 2013 asked for reports and status updates stipulated in Mims' contract, along with copies of work calendars and emails related to construction.

Jack Cornett, chief financial officer for the Lexington Fayette County Health Department, has reviewed the documents Mims submitted to HRSA. They do not show that Mims worked 40 hours week, Cornett said. In fact, it's impossible to determine how much Mims worked, he said.

"He may have worked 80 hours a week," Cornett said, "we just don't know."

Mims remains under contract with HealthFirst.

Dr. Steve Davis, interim Healthfirst executive director, said it was unclear how Mims' contract would be affected by a vote Monday by the HealthFirst Board of Directors to renegotiate the Southland deal.

Following HRSA's request for documentation from Mims, HealthFirst told the Lexington developer that he must provide documentation showing the hours he has worked on the project before any further payments will be made, Cornett said.

Mims has received two payments of $75,000 for project. The last invoice was submitted shortly before former Executive William North resigned under pressure in September along with most of the HealthFirst Bluegrass board of directors. Mims is paid $15,000 a month for his work as project manager.

HealthFirst Bluegrass has also paid Mims and his business partner Greg McDonald about $250,000 for rent on the two buildings at 496 Southland Drive that will be torn down. Mims is a minority owner of the land that was to be the site of the health clinic.

How Mims was hired for the job is also under review by HRSA, and the special review team has also asked for documents relating to the hiring process. In July, a report by Kentucky State Auditor Adam Edelen had questioned HealthFirst's financial stability and whether Mims had been pre-chosen for the project manager job without competition, and whether he had a conflict of interest as part-owner of the land.

In a letter to HRSA, Mims said documentation of how he spent his time was not required in his contract with HealthFirst, but he provided emails, budgets and calendars related to construction. He also wrote that "other items included in my 40-plus hour work spent per week may not be documented within the calendar such as numerous phone conversations, discussions, impromptu discussions and planning sessions in and out of my office."

The calendars submitted to the federal officials by Mims show only a broad outline of the tentative schedule of the project, not specific dates when meetings or discussion occurred.

Mims' lawyer, Richard Getty, said "my understanding is that he (Mims) was paid a flat fee on a monthly basis." If Mims said he worked 40 hours a week, Getty said, "I'm sure he did. I know Teddy and I know he worked his tail off on this project."

According to the calendar submitted to HRSA by Mims, bids were to be put out for the Southland project in March 2013.

Although Mims' last invoice covered the March through August work on the project, it has been stalled since January 2013 when HealthFirst announced it needed to complete an environmental and historical impact survey of the properties. An outside firm was hired to survey the historical and environmental impact and a final agreement on how to mitigate those issues has not been reached.

Mims also told the federal officials that he had no role in setting the pay scale for the project manager job and had no conflict of interest and is "still working diligently to move this project forward."

Elizabeth Senerchia, a spokeswoman for HRSA, said Monday the review is still underway and there is no estimate of when it will be complete.

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