Rio Nuevo’s frequent closed-door sessions raise suspicions - Inside Tucson Business: Top Stories

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Rio Nuevo’s frequent closed-door sessions raise suspicions

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Posted: Friday, December 23, 2011 12:00 pm

The Rio Nuevo Multipurpose Facilities District board's frequent closed-door meetings have begun to raise questions about secrecy and what the group intends to do with the millions of dollars in taxpayer money it has banked.

The board, which has met regularly since the Legislature wrested control of the downtown redevelopment authority from the City of Tucson in 2009, has spent much of its meeting time in closed-door executive sessions.

Executive sessions are a privilege state law affords public bodies for the purpose of discussing certain issues prescribed in statute, such as legal matters, contracts, negotiations for purchases and specific personnel issues.

"They are not a government, they are a taxing district, and doing the people's business with the people's money behind closed doors," said Tucson City Councilman Steve Kozachik.

Since first empaneled on March 16, 2010, the Rio Nuevo board has met 45 times and held at least 29 executive sessions.

A review of the minutes from the Rio Nuevo board shows the total running time of all those meetings has been 165 hours and 25 minutes. During that time, the board has spent nearly 54 hours in executive session, a full third of all meeting time spent behind closed doors. The actual time spent in executive session is probably greater because the minutes on the board website for at least five meetings do not reflect when executive sessions began and ended.

"It appears to me that this public body needs to be careful that it only utilizes executive sessions as it pertains to the law," said Craig Morgan, an attorney who specializes in media and public records law with the Phoenix law firm Stinson Morrison Hecker LLP.

Morgan said most governments don't actively seek to violate open meetings law, but often do so inadvertently. Even so, he said, the perception of secrecy can stain a government and cause the public to lose trust.

State law allows for public bodies to go into executive session, with approval from a board majority, to discuss personnel issues, documents exempt from public records law, negotiations to sell or purchase real estate, legal strategies in court cases, contract negotiations, international negotiations, negotiations with Indian tribes or for legal advice.

Governments can face penalties for violating open meeting laws if it's proven that the intent was to deprive the public of information. In such cases, public officers can face fines or removal from office.

Lesser penalties apply for other violations.

"The consequences are that any legal actions taken during executive sessions are null and void," Morgan said.

The Rio Nuevo board has discussed in executive session on at least 15 occasions an intergovernmental agreement with the city; at least 12 times discussed a lease agreement for the Rialto Theater; and numerous discussions about "legal representation and requirements for a district."

The board also has discussed its budget in executive session as it did on June 23, according to meeting minutes from the Rio Nuevo website. Rio Nuevo has a budget of about $12 million and one full-time employee.

The board has about $13 million in cash at its disposal in its own bank account and a second account maintained by the city. Sales tax dollars that fund the district also roll in monthly.

By way of comparison, the Pima County Board of Supervisors, which sets policy for a government with a budget of more than $1.1 billion, 14 departments and more than 7,000 employees, met this year 33 times and called 20 executive sessions.

Most of the supervisors' executive sessions were called to hear legal advice on the dozens of lawsuits involving the county or to discuss tax settlements. The county also has received legal advice on a protracted, multi-year lawsuit with the Town of Marana over control of portions or the wastewater treatment system.

In 2011, the board of supervisors spent about 10-and-a-half hours in closed-door executive session.

The previous Rio Nuevo board, which convened infrequently, held 73 meetings between July 1999 and November 2009. That board went into executive session four times during its 10-year history, spending a total of two hours in closed-door sessions.

"If you look at the previous board, it was managed by the City of Tucson and was basically a rubber stamp," said current Rio Nuevo board member Rick Grinnell.

He agreed that the new board has spent much time in executive session, but said it was necessary because of the complexity of its legal issues with the city and the various contract negotiations it's involved in.

"Everything we do has a legal ramification," Grinnell said. "I wish we could just come out and lay it out for the public."

Board member Jonathan Paton also said it's the legal issues the board faces that require the extensive use of executive sessions.

"Most everything we do at the moment is covered under a legal or accounting basis," Paton said. "Once some of these legal issues are resolved there won't be a reason to go into executive session."

The board has recently begun mediation with the City of Tucson in an effort to stave off a lawsuit the Rio Nuevo board filed. That suit seeks to gain $47 million and a handful of city-owned properties near downtown.

The board also has been at odds with its own bank, Wells Fargo, which administers the accounts set up by the previous board to manage the bonds Rio Nuevo sold to fund projects.

Board members have accused Wells Fargo and the city of withholding financial information. Both Wells Fargo and the city have denied the claims.

Grinnell said he understands that the public might view the board with suspicion, particularly in light of the past actions of Rio Nuevo under city direction.

"I think the public, and justifiably so, has become cynical," Grinnell said.

One reason for that, he said, lies in the history of Rio Nuevo, which is not something many people look back on with pride.

Under the direction of some current and former council members and former city managers, the district spent at least $230 million in the first decade for design and consultation work that rarely resulted in completed projects.

Actions of the city-directed board are the subject of a state attorney general's office investigation.

"The entire history of Rio Nuevo is tainted with the suspicion over where taxpayer money was spent," Kozachik said. "This board was supposed to be different. In fact, to the extent that they hide behind executive session, fail to post on their web site how they're spending taxpayer money and won't comply with legitimate records requests, they're a continuation of the Rio history."

Contact reporter Patrick McNamara at pmcnamara@azbiz.com or (520) 295-4259.

 

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