If all of the considerations included in an recent draft audit report about the funding of a Fort Smith sports complex had been followed, it would have been called wisdom, good government and proper fiduciary responsibility.
That all these are now identified as missed opportunities speaks volumes about the status of the project -- i.e., it's a publicly funded mess. And the draft audit by the city's Internal Audit Department describes city decisions and processes that helped create the mess. It was born of, at least, an inattention to details and what appears to us as a political desire to toss a public infrastructure project to a favored son of Fort Smith. It also appears city directors were more than willing to risk the public's money with less due diligence than they would exercise if they were spending their own.
What’s the point?
A failed sports complex project in Fort Smith, funded in part with public money, is an example of how a city should not pursue public infrastructure.
The River Valley Sports Complex at Chaffee Crossing was supposed to be a tournament-quality, eight-field baseball/softball complex that would serve as a local amenity and a draw for sports tournaments that many towns covet for their overnight hotel stays and local spending on retail and dining. These days, what's been built looks more like a weed-covered ghost town because the promised work failed to meet deadlines. City officials also say the work that was completed is in some cases shoddy.
State Sen. Jake Files of Fort Smith and his business partner, Sebastian County Election Commission member Lee Webb, formed the nonprofit group called River Valley Sports Complex Inc. and approached Fort Smith leaders in 2014 with a $4.3 million plan to build the sports complex. City voters had authorized sales tax revenue of $1.6 million to go toward development of such a park. Files and Webb proposed building the park with the city's money, on city land, and with plans to cover the rest of the project with donated work, materials and money.
Four city directors voted for the project in 2014. City Director Kevin Settle opposed it, saying Files' and Webb's plans were incomplete. Another director abstained, saying he was uncomfortable with financing for the project and wasn't satisfied with the way Files and Webb planned to operate the complex. A third member of the seven-director board was absent.
The original completion date was May 2015.
Flash forward to 2017. By then, the city had paid out more than $1 million. The year started with the city giving the park builders a deadline to report how and when they planned to finish the park's development. By February, the directors canceled the city's contract. By May, the city joined a lawsuit over the sports complex, claiming breach of contract, hoping to recover the costs to the city. That lawsuit had been filed earlier by several contractors who claimed they had done work for the project but had not been paid.
In late October, the city's draft audit became available. City directors and Mayor Sandy Sanders expressed disappointment Webb and Files had allowed the project's timeline to slip repeatedly. The audit's authors noted, too, that the city was unable to get all the information sought, in part because federal law enforcement authorities are investigating the way the project was handled.
In the midst of these problems is the possibility of deception. The audit report said Files acknowledged he prepared and submitted three bids, ostensibly from different companies, for waterline work and later asked if he could get legitimate bids and resubmit them. Also entangled in this mess is the statewide controversy over the Legislature's General Improvement Fund, from which grants have been given to projects approved by individual state legislators. Files, it appears, helped direct more than $26,000 in GIF money to the sports complex project. An associate told FBI investigators Files had her open a bank account into which the money could be deposited. The money went to Files' FFH Construction Co., but he gave her nearly $3,500 in "reimbursement" and "Christmas bonus."
The waterline work was never done, according the audit.
The questions just kept coming. More shortcomings were reported, and city directors were right to end the arrangement. But the audit also rightly points the finger toward the Fort Smith board of directors in the form of a dozen recommendations for future projects.
Among them:
• Directors should always follow city policies and procedures.
• They should listen more to research and advice from city employees involved in city operations and transactions. In short, the board of directors had some warning and ignored it.
• Insist on performance and payment bonds. Webb and Files essentially said "trust us," so the board advanced the project with no performance bond.
• Use a city employee versed in construction to monitor projects.
• Require the project manager to report monthly to the city directors.
These are all steps cities across Arkansas have used to protect the public's interests in projects. City leaders interested in protecting the public follow such standards all the time. In Fort Smith, city directors got slack because of who was involved and because of the promise of a major sports complex at a fraction of the price other cities have paid.
But you get what you pay for.
City directors have a lot of introspection to do, and perhaps the audit is the best first step they can make in preparing for a better future and in cleaning up the mess they've helped create.
There's nothing wrong with trust, but it must be accompanied with accountability. When a city pursues a project with shortcuts and lax supervision, it's a strikeout for everyone, especially the public.
Commentary on 11/05/2017