Audit blasts city redevelopment staff

An audit of Carson City's redevelopment program and its governing boards shows that the two-person redevelopment staff has spent unapproved money, paid businesses without first obtaining contracts and operated without a clear policy.

A city supervisor has rejected the findings of the report.

Former City Auditor Sue Johnson said in a report presented to the city audit committee Monday that she found numerous examples of mismanagement when she reviewed work occurring between July 2005 and May 2008 of City Economic Development Manager Joe McCarthy, City Deputy Economic Development Manager Tammy Westergard and the managing Carson City Redevelopment Authority, which is made up of the board of supervisors.

"Based upon the findings of the compliance audit, there is a very clear deficiency in the 'checks and balances' of the redevelopment process and a pattern of consistent findings," Johnson said in the audit report. "This places the city's internal controls over the expenditure of taxpayers' dollars at risk."

The city's redevelopment program is designed to attract and retain businesses in downtown and in the south side of the city, but the audit named several problems with how it is being managed:

- Some projects have been approved by staff with no approval or oversight from the redevelopment authority;

- Oversight of publicly-funded business incentive programs has been circumvented;

- Redevelopment staff several times spent more on services than is allowed under city policy without approval, adding up to more than $100,000.

Johnson pointed out redevelopment staff gave about $68,000 to First Presbyterian Church for help with a building, for instance, even though only about $48,000 was approved.

Johnson reported records seem to indicate that Robin Williamson, a supervisor and head of the redevelopment authority, promised about an additional $91,000. An invoice for about $12,000 was sent to Williamson in 2007 from the church and processed by redevelopment staff. But Williamson said she never promised the church money and was only working to try to preserve an historic building.

The redevelopment authority and staff have also done nothing wrong, she said, and no money has been spent without an understanding from supervisors and the city manager of why the money was being spent.

"Joe McCarthy and Tammy Westergard are incredibly valuable to the city," she said. "They accomplish an unbelievable amount of work in a faster manner."

The supervisors are scheduled talk about the issue at their meeting Thursday.

City Manager Larry Werner said he was surprised the audit was presented to the city audit committee without first talking to him and other managers.

In another situation, redevelopment staff paid Steven Saylor about $48,000 apparently for marketing services, but it is not clear why the money was spent since there was no contract and, at the time of work, Saylor had no license to do business in Carson City.