The findings of a recent State Board of Accounts audit of the Columbus Redevelopment Commission echoed similar findings in an audit last year of the city of Columbus.
In the 2011 audit of the city, state auditors alleged that the city failed to follow public bidding and other laws when it paid nearly $500,000 to help finish construction of two private restaurants in the publicly owned Fourth Street parking garage.
According to the audit, the city also violated the law by issuing money for the restaurant construction before the work was done and without receiving an itemized bill for the work.
City officials and their advisers said at the time that issues brought up in the state audit were the result of misunderstandings and have been resolved.
Beginning in 2008, the Columbus Redevelopment Commission leased the publicly owned parking garage at Fourth and Jackson streets to Columbus Downtown Inc., a not-for-profit corporation created specifically to handle the leasing of parking and restaurant space in the garage.
City officials have said they created CDI to expedite downtown development and provide better control of the types of businesses that settle in the city’s center.
However, minutes of a Columbus Redevelopment Commission meeting from May 7, 2007, reveal that the Redevelopment Commission also wanted to use CDI to avoid public bidding laws. Such laws require that the city obtain proposals from multiple companies to get the best value for taxpayers.
Instead of requesting multiple proposals, the Redevelopment Commission paid nearly $500,000 to help the owners of Bistro 310 and the Garage Pub & Grill complete construction. The owners of the restaurants chose the contractors who did the work.
“No documentation was presented for audit that would indicate the bidding process took place as required by the Public Works Laws,” the state board of accounts wrote in the audit.
Todd Austin, an accountant who conducts audits for the state board of accounts, said the board noted in its audit areas in which it perceived the city did not comply with state law or guidelines.
Officials have a right to respond, Austin said, but they don’t have to.
The response from Columbus officials, which is included in the audit, deals with some of the board’s findings but does not address the alleged failure to bid, the alleged failure to secure itemized bills or the failure to issue the money only after the work was completed.
Ed Curtin, executive director of the local commission, said at the time that rules are different for the redevelopment commissions than for other public bodies.
“We were able to enter into a grant agreement for an amount, and our understanding based on attorneys with the State Board of Accounts was that we issue the funds in advance,” he said.
The violation of bidding laws that is alleged in the audit resulted from misunderstandings, said Bruce Donaldson, an attorney from Barnes & Thornburg, the Indianapolis law firm that helped create CDI.
Donaldson said at the time that the $500,000 awarded to finish the spaces now occupied by the Garage Pub and Bistro 310 was authorized under a different state statute that allows redevelopment agencies to pay a designated third party for commercial improvements without a bidding process.
Austin said field examiners generally follow up in the next year’s audit on alleged noncompliance from the previous year, but the city’s alleged failure to bid in 2010 is a “past event (that) can’t be fixed.”
Payments before work
State auditors also found that “some of the payments were made prior to expenses being incurred and were for lump sum amounts instead of actual project costs at the time of payment.”
The auditors’ report said that according to Indiana law “the fiscal officer of a governmental entity may not draw a warrant or check for payment of a claim unless … there is a fully itemized invoice or bill for the claim … (and) the fiscal officer audits and certifies before payment that the invoice or bill is true and correct.”
The city did not respond to that allegation. Then-Clerk-Treasurer Brenda Sullivan could not be reached.
Senior Reporter Paul Minnis contributed to this report.