State attorney general called to investigate city redevelopment

Former Carson City Auditor Sue Johnson called for the Nevada Attorney General's Office to investigate the city redevelopment program because of problems including unapproved spending, lack of oversight and mismanaged projects.

She said at a city audit committee meeting Tuesday that "it is clear the redevelopment process is deficient" judging from an audit she presented this month questioning how more than $500,000 was spent.

City Manager Larry Werner and City Economic Development Manager Joe McCarthy have said the redevelopment authority and its staff are a public agency separate from the city and as such they don't have to follow city policy when doing redevelopment work.

The redevelopment authority can adopt city policy if it wants, Werner said, but right now it is only regulated by the state law that created it.

Policies managing how the redevelopment program operates will be implemented next year, he said.

The audit will now go to the board of supervisors for review. The city doesn't have an auditor now, so Richard Staub, supervisor and member of the audit committee, will defend it.

Staub argued that redevelopment staff are city staff and the idea that they don't have to follow city policy is "ludicrous."

"You're coming to us with a premise I believe is untenable," he told Werner.

Chief Deputy District Attorney Melanie Bruketta said she agreed with Werner that the redevelopment authority hasn't violated any state or city laws. That doesn't mean she agrees with the "business practices" of the redevelopment staff, however, she said.

But Johnson said in her audit that the redevelopment staff of McCarthy and City Deputy Economic Development Manager Tammy Westergard did violate city policy when they did things that included:

- Giving about $75,000 to MacWest Marketing for advertising without a clear contract or approval between 2005 and 2008. Westergard, who was hired by the city in 2007, used to work at MacWest.

- Spending $26,000 on design fees for Daddy Dick's Tavern in 2005, a business that seemed to have closed before the work could have been done.

- Paying Steven Saylor about $48,000 between 2005 and 2008 apparently for marketing services even though he had no license to do business in Carson City.

Werner and McCarthy haven't responded to problems properly, Johnson said after the meeting, and an outside agency needs to look into what redevelopment has done.

McCarthy, who was hired by the city in 2002, makes about $100,000 a year. Westergard makes about $60,000 a year.

The redevelopment authority helps attract, retain and expand business in two zones downtown and on the south side of the city. It is funded by part of the property taxes collected in those zones.

- Contact reporter Dave Frank at dfrank@nevadaappeal.com or 881-1212.