April 14, 2013
Rio Nuevo Advances Proposals, Releases Clean Audit
The newly reconstructed Rio Nuevo District Board has released a “clean” audit for fiscal year 2012. According to auditors, the FY 2012 profits totaled $2.7 million dollars. At Monday’s meeting of the District Board, Jim Lovelace, of Beach Fleishman, presented the final FY 2012 audit for board approval. (To view the audit, click here.)
In 2010, the Arizona Legislature took control of the Rio Nuevo District from the City of Tucson and created an independent volunteer board tasked with accounting for TIF monies and facilitating downtown development in a transparent manner. This is the first “unqualified” or clean audit since the legislature took control.
Auditors worked with Rio Nuevo CFO, Bill Allen, to clear the books of construction projects that had long been abandoned and had no actual value. Construction in Progress accounts are used during the period large projects are being built. Once completed the projects are then moved to a capital asset account and depreciated. If a project is abandoned the project costs should be immediately expensed.
Rio Nuevo had several large projects that remained treated as an asset, including the never realized convention center hotel, with a value of nearly $10,000,000. Other terminated projects included an expansion of the Tucson Convention Center and TCC parking garage that were never completed. The TCC’s east entrance project also remained in the Construction in Progress account despite having been completed some time ago. These assets combined for $19,200,000 which over stated the assets of the District.
Consequently the District’s asset base has been reduced by a little over $19,000,000. However, Rio Nuevo won several valuable properties in the settlement agreement with the City of Tucson and as a result the District’s assets will improve in 2013.
The Rio Nuevo Board has begun to develop a Capital Plan. The Board discussed its priorities and the available capital as well as identified projects that deserve further review and further expense. The plan is available at the Rio Nuevo office for public review. It will go to the Board for a vote at the next regularly scheduled meeting.
The District board also heard from TCC renovation project manager Elaine Weaver. The Board voted to approve initial expenses including architect and engineering costs.
Highlights:
• District released first unqualified audit, showing $2.7M of profit in 2012
• District approved architecture consulting fees for TCC Arena
• District instructed attorney to go forward with a settlement agreement with Don Bourn for the Thrifty Block
New businesses continue to be developed through the District; increasing the TIF, which in turn will facilitate more development.