Friday, November 5, 2010

Rio Nuevo audit included Arizona Historical Society

According to an October 30, 2010 Arizona Daily Star article by Rob O’Dell:

Tucson’s Rio Nuevo downtown redevelopment district was beset by mismanagement and lack of financial oversight and internal controls that led a majority of its projects to remain incomplete despite more than $230 million being spent.”

The article goes on to report that the mess was so bad that the State of Arizona became involved. The Auditor General had an out of state auditing firm prepare the following report (online PDF file):

Performance and Financial Analysis of the Rio Nuevo Multipurpose Facilities District

Crowe Horwath

October 29, 2010

Submitted to Debbie Davenport, Auditor General, State of Arizona

Submitted by: Kevin W. Smith, Crowe, Horwath, LLP

AHS involvement in Rio Nuevo apparently began with Rio Nuevo Board of Directors Resolution No: 2005-007 dated July 13, 2005. That document states that the ASM and the AHS were given $110,000 to have the firm of ConsultEcon perform an economic feasibility analysis regarding the relocation of their museums to Rio Nuevo.

Information on AHS involvement is Rio Nuevo is included in Table 1 and Appendix H of the Crowe report.

Table 1:

Arizona Historical Society

Estimated cost: $12,000,000

Actual cost: 1,467,183

On Hold

Attachment H

J021 Arizona History Museum

Design and develop a building program, site plans, and cost estimate to relocate the Arizona Historical Society exhibit halls to the cultural plaza that will be located on the west side of the Santa Cruz River.

Expended through FY 2010: $ 1,467,183

Status: Design Complete. In 2008 the District anticipated its Participation at $45 million

The information is sketchy, but it looks like AHS started with a 12 million dollar budget and spent 1.5 million of that. For that they got “a building program, site plans, and a cost estimate”.

Did the AHS get competing design proposals (normally provided no cost)?

Why did they prepare a 45 million dollar design if they were given a 12 million dollar budget?

Was their Rio Nuevo contractor the same contractor they selected as the sole source contractor for the 5C Arizona Centennial Museum?

Note 1: The Rio Nuevo management report shows 4 payments in FY 2009 and 1 payment in FY 2010 totaling $1,467,182. It does not indicate who the payments were made to. The report does not show the $110,000 for the 2005 feasibility study, indicating the Rio Nuevo records may be incomplete.

Note 2: According to the article cited below, some of the history museum money may have been spent on construction drawings. The 2009 annual AHS report does claim construction drawings were completed.

Teya Vitu, "Rio Nuevo works banks on big revenue hike", Tucson Citizen Morgue, August 7, 2008

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