In search of clarity for Curry Street Promenade, Part 1

If you have taken part in the events going on in downtown Carson City this summer — such as the Friday night concerts on 3rd Street or the farmer’s market on Saturday mornings — then you have witnessed the Curry Street Promenade in action.

Though most would agree that the events are a great benefit for our downtown, the process by which this project came about is a strange one, tainted with managerial missteps, missing budgets and political indifference.

The Curry Street Promenade is a small fraction of the city’s overall expenditures. But it serves as a unique window into how the city has handled its oft-criticized redevelopment initiatives up to this point, and has spurred reforms to try and correct the problems.

The $75,500 of city redevelopment funds that make the Curry Street Promenade possible was approved on April 15 by the Board of Supervisors, after having received a recommendation from the Redevelopment Authority Citizens Committee on April 5.

At the April 15 meeting, Supervisor Pete Livermore objected to proceeding with the funding, pointing out that the application submitted for the funds did not contain any costs breakdowns or a pro-forma budget to show how the money would be spent. The same point was also made during public comment by Day Williams, one of the candidates vying to replace Livermore on the board.

Williams said he had requested the budget and cost breakdowns from Joe McCarty, head of the Office of Business Development, which is the entity that manages the Curry Street Promenade and submitted the allocations for the funding. McCarthy called Williams’ request “offensive” and did not produce the information.

What very few people knew at the time was the information Williams was seeking didn’t exist.

The other four members of the board were not swayed by the lack of a budget, and voted to approve the funding anyway. After the vote, Mayor Bob Crowell instructed City Manager Larry Werner to collect the missing information. It was a request that sent Werner on a three-month odyssey to create a budget after the fact for a project that had never had one.

A Breakdown in Process

The fact that this collection of events had no budget is something Werner said should not have happened, and will not happen again if he gets his way.

“I can’t excuse it,” Werner said. “This is not the kind of quality work we expect here.”

Those applying for redevelopment funds for special events like the Curry Street Promenade are required to submit information on how that money will be used, including cost breakdowns and pro-forma budgets. For instance, if you look at the application for $10,000 to help fund the Carson City Rendezvous, you will see a marked difference between that and the application for the Curry Street Promenade.

The fact that OBD oversees these requests and requires this budget information from other groups stands in stark contrast to the application the department itself submitted for the Curry Street Promenade, minus that information. To the outside observer, they had one set of rules for themselves, and another for everyone else.

The reason for these requirements is party due to the controversy exposed by an audit of OBD, released in December 2008, that found multiple problems with the department’s processes and faulty record keeping.

The audit found that “there is a very clear deficiency in the ‘checks and balances’ of the Redevelopment process…” and that controls incentive programs and projects “have either been compromised or ignored at times.”

In addition, the audit stated that, “The absence of a competitive bid process puts at risk the independent selection process of whom the City conducts business with. The noted findings impact the degree of integrity in which the Redevelopment process has been managed by the City staff and departments.”

OBD’s response to the audit was to say that because the redevelopment fund is not subject to the city’s standard policies and processes, that they didn’t violate any of those policies and processes. Essentially, they said they didn’t break any rules because they had no rules, a stand that was widely criticized at the time.

But, the department did agree that it needed to establish rules and processes to govern its actions, so the problems cited in the audit would not happen again.

Yet, only a few months after this scathing audit report, OBD submitted requests for $45,000 for the farmer’s market and pop-up park, and $30,000 for the street concerts that encompassed the 2009 version of the Curry Street Promenade, without formal budgets. It was approved. (see details of 2009 event)

The Black Hole

Shortly after the April 15 approval of funding for the 2010 Curry Street Promenade, I approached Werner to inquire about getting the budget numbers for this project. But as the weeks and months went by, it became evident that there was a problem.

Supervisor candidate Williams filed an official request for the information under Nevada Revised Statue 239, and eventually received a document that contained copies of invoices for the previous Curry Street Promenade events, but no budget.

After struggling for more than two months, and with the Curry Street events already taking place, Werner sent me an email on June 29 that stated, “I'm beginning to think that this a black hole...”

Werner explained he had a budget for the farmers’ market portion of the event, managed by Linda Marrone. But he was missing firm numbers from the Brewery Arts Center covering the street concerts and pop-up park.

I asked Werner how OBD, working without a budget, was able to come up with the $75,500 figure to request in the first place. He said they just took what they spent last year and asked for the same amount. Of course, they didn’t have a budget to work from last year, either.

What Werner does have at present is something he wouldn’t classify as a budget. While he is “reasonably certain” that there are no major problems with the numbers he has, Werner said this situation has led him to have a “heart-to-heart” talk with the OBD about changing their procedures. “This is not the way we are going to do it next year,” he said.

Werner admitted that situations like this project, and those highlighted by the audit report, spawn speculation among the public that unethical or illegal activities are taking place. “We have to follow procedure to make it fair for everyone,” he said.

Moving Numbers

One of the problems Werner cited with the numbers he has from BAC is that they are not quite settled. He said the BAC Executive Director John Procaccini signed a contract committing to put on his portion of the events for $43,000. But after submitting a pro-forma budget at Werner’s request in the aftermath of the funding approval, Werner said that Procaccini is now asking for more money to carry out his portion of the events.

The BAC budget sheets are a bit confusing to understand. The sheet covering the street concerts concludes that there will be a $20,250 gross profit to BAC, minus $5,500 in general and administration to end with a $14,750 net profit to BAC, marked as “20% PCT of Gross.”

But Werner pointed out that this budget sheet left out the cost of the pop-up park. Another budget sheet submitted for that portion shows a cost of $13,500, which Werner said was missing a cost estimate for administration. He estimated that this would put the true cost at $14,700. When you add in this figure, it brings the net profit for BAC down to $50.

Werner said if BAC does need more money to show a more reasonable profit, they may have to go back to the Board of Supervisors with an additional request.

I emailed Procaccini last week to confirm this, but have not heard back.

What’s Next?

This first part of the story focused on what happened with the Curry Street Promenade. Part 2, scheduled to publish next week, will ask the question of why this happened, and how to prevent it from happening again.