Audit of City of Alexandria Reveals Nearly $800,000 Improperly Spent In Cost-Sharing Agreements with Subdivision Developers According to an audit published on October 18, 2006, the City of Alexandria improperly spent nearly $800,000 in illegal cost sharing agreements with subdivision developers. The auditor explains:
"We examined 14 cost share ordinances and the related development agreements for the period June 2000 through April 2005 and found the following: 1. The City paid $186,913 to construct two water crossings in violation of City charter requirements or state bid law. 2. The City paid $51,527 for a portion of a residential street and a water line relocation in violation of Article VII, Section 14 of the Louisiana Constitution. 3. The City provided materials or reimbursed developers for construction expenses valued at $555,892 but could not provide proper documentation to support its legal obligation to incur these costs. 4. The City did not record the development agreements with Rapides Parish Clerk of Court within 10 days of entering the agreement as required by state law. 5. None of the 14 adopted cost share ordinances met the public notice requirement."The audit singled out a handful of projects, including the Coty Drive expansion. From the audit:
"One of the projects was the construction of a bayou crossing over Bayou Robert to align Coty Drive with Bruyninckx Drive. Instead of letting the project for public bid, the City entered into a development agreement for $198,861 with V&V Properties. On October 20, 2004, six days before the City entered into the development agreement, V&V Properties invoiced the City $126,285 for the completed bayou crossing. After reviewing the invoice, the City’s engineering office determined that only $53,633 of the invoice could be supported. Mr. Darrell Williamson, former director of planning, stated he told V&V to stop working after he learned they started the work before the ordinance was passed or the development agreement was signed, which lead to the difficulty in verifying some of the items V&V invoiced. Mr. Williamson eventually approved a $96,115 payment for the bayou crossing. The use of a development agreement in this instance effectively circumvented both the Public Bid Law and the City Charter."The audit explains that State bid law requires that any project over $100,000 must be let for public bid and that the City Charter requires any project over $7,500 must be let for public bid. It is clear that on numerous occasions, the City's agreements violated both laws. The audit makes specific recommendations on how to remedy the problem:
"The City should review and/or implement new policies and procedures with regard to development agreements to ensure each agreement is for eligible work that can be done under a development agreement and is properly documented. The City should also: (1) comply with the state Public Bid Law when procuring public works projects; (2) comply with the City Charter’s bid requirements when procuring public works projects; (3) ensure each development agreement to be considered by the City Council is properly noticed; (4) file each development agreement with the Rapides Parish Clerk of Court; (5) develop written procedures and requirements for the consideration of development agreements, to include the projects the City will consider cost sharing with the developer. (6) only pay for work that is consistent with the scope of the ordinance and the development agreement; and (7) document the incremental cost of projects to ensure the city is paying the fair value of the improvements. Finally, the City should continue to seek an Attorney General’s opinion as to when the state Public Bid Law applies with regard to development agreements."To download and read a copy of the full report, click here. Babs Zimmerman filed a report here. And Billy Gunn just filed one here.
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Tuesday, October 24, 2006.
