Fort Smith Internal Auditor launches audit of River Valley Sports Complex, Sen. Files cites ‘future legal ramifications’

Fort Smith Internal Auditor Tracey Shockley has launched an audit of the River Valley Sports Complex (RVSC), the estimated $6 million project, of which the city agreed to contribute $1.6 million, now halted after numerous delays.

Lee Webb, a Fort Smith businessman and chair of the Arkansas Economic Development Commission (AEDC), and state Sen. Jake Files, R-Fort Smith managed the project. Webb and Files entered into the agreement with the city in 2014 with a target completion date of June 10, 2015. Substantial completion after the second extension pushed the next date to July 22, 2016 with an opening day of July 31. After the project did not meet that deadline, other dates followed — one in mid-October 2016 and one in mid-December, the city claims.

At the recent Feb. 7 Board meeting, city directors voted unanimously to terminate the city’s contract with Webb and Files.

Shockley’s audit is the next step in determining the future of the eight softball fields at Chaffee Crossing. Webb and Files drew approximately $1 million of city funds while overseeing the project on a pay-as-you-go arrangement so no funds would be expended until milestones had been completed. However, some vendors, like Brian Busby of B&A Electric, have reported unpaid invoices. Busby approached the Board and Fort Smith City Administrator Carl Geffken at a recent town hall meeting looking for answers. Geffken acknowledged Busby’s company was owed $156,000 on the project.

When questioned about his talks with Webb and Files, Busby said as far as he could tell, “Mr. Files’ opinion right now is that since his contract has been terminated,” he was no longer liable for expenses of the project. Files was not at the town hall meeting to respond to Busby’s understanding, but Geffken said the assumption, if true, was incorrect.

“Some vendors have been told to change their bills and submit them to the city since we have terminated the contract,” Geffken said. “I have since notified the principals of the RVSC that in no way does termination affect their liability having hired these contractors in following through with what is necessary.”

“The city is not assuming liability regarding what has been done on the site,” Geffken said, noting he understood the difficult situation that created for vendors. “At this point, we’re auditing the work that’s been done, the monies that have been paid, and I do know the Board is very interested in the results of that audit and then turning around and making sure that our local vendors – whatever harm has come to them – can be potentially mitigated.”

Geffken added he could “only say ‘potentially,’ because at this point, we’re still looking to see where our $1 million went to.”

‘LEGAL RAMIFICATIONS’
On Wednesday (March 8), Deputy City Administrator Jeff Dingman said he anticipated the Board to discuss the results of the audit at a future study session, but did not have a clear idea of when it would be finished.

“It’s still going to take some time because it needs to be done methodically and needs to be done as completely and thoroughly as possible,” Dingman told Talk Business & Politics. “We need to make sure everything is dealt with correctly. The city’s money is certainly at stake, but there’s also the money of the subcontractors, so there is going to be a lot of interest in this.”

Dingman continued: “In terms of securing the materials and things like that, I think we’re through a lot of that, but she (Tracey) still has questions on different invoices and records. Without us getting fully into it, our agreement was with them (RVSC). Whoever they made agreements with to do the work, that’s between them. That’s the only position we can take right now.”

On the $6 million estimate, Dingman explained the numbers were “extrapolated” from the two softball fields and concession stand at Ben Geren Park, which combined totaled $1.5 million.

“So just an extension of that expense is what it should cost as a minimum, but it’s hard to put an estimate on it, and that’s part of the problem.”

Talk Business & Politics reached out to Sen. Files about Geffken’s remarks. Files said he could not comment on the record because of possible future legal ramifications, but remained vigilant in his defense he and Webb “haven’t profited or done anything wrong.”

“I realize that a part of this is because I’m an elected official,” Files said, adding that he was “willing to visit with anyone, who wants to call me and talk about it.”