Rio Nuevo will have more public oversight, as the City Council voted unanimously Tuesday to conduct an outside audit of the embattled Downtown redevelopment district.
With the Legislature threatening to cancel the tax-increment-financing district or slap heavy reforms on it, the council voted 6-0 for a special audit of Rio Nuevo.
Council members said it would clear up misconceptions and give more accountability for the more than $100 million the city has spent on Rio Nuevo over the past 10 years.
However, the outside audit will be conducted by Heinfeld and Meech, the same auditors who have audited the city's books — including Rio Nuevo's finances — for years.
Councilwoman Karin Uhlich said this audit will be different because it will focus only on Rio Nuevo and be more in-depth than the typical audit.
In a second vote, the council turned down a motion by Uhlich to strip City Manager Mike Hein of his ability to run Rio Nuevo, and hire someone else to run the redevelopment district that is expected to bring in more than $600 million until it sunsets in 2025. Only Uhlich and Councilwoman Regina Romero backed the move. Councilman Steve Leal was absent.
Several council members cited the surprise nature of the motion, including Councilwoman Nina Trasoff, who said, "I strongly object to a motion of this gravity being brought this quickly."
Her criticism reflected an increasingly sore point among council members, including Uhlich, who have frequently expressed irritation with their colleagues over last-minute surprise proposals on a variety of major issues — proposals they felt should have been hashed out among themselves before putting them on the public table.
The council also unanimously passed a Romero motion to hold quarterly public hearings on Rio Nuevo, as well as better publicizing meetings of the Rio Nuevo Multipurpose Facilities District Board, which is supposed to approve Rio Nuevo spending.
Mayor Bob Walkup called the audit, "a very good step."
But Councilwoman Shirley Scott questioned how the audit could be seen as "unbiased" when the city will be paying the auditors with either Rio Nuevo or city funds. Scott also questioned the cost, which couldn't be answered Tuesday, although the city can spend up to $50,000 without another council vote.
Scott said the Legislature may want to fund the audit since "they've expressed such intense interest."
Larry Lopez, president of the city's police union and a frequent critic of Rio Nuevo and the city, said the audit is a good thing. However, he said someone else other than the city's current auditor needs to be conducting it.
Trasoff said she voted for the audit even though she thought it wasn't needed because it could help clear up some "really bogus" information about Rio Nuevo.
She questioned spending Rio Nuevo money for something that is ostensibly a study, rather than spending it on the project itself.
Uhlich said taking away Hein's authority on Rio Nuevo could be good for Hein because it would allow him to concentrate on the budget crisis.
City Attorney Mike Rankin said even if the council approved the stripping of Hein's authority, it wouldn't take effect until the Rio Nuevo board and the South Tucson Council approved it as well.
Trasoff said the Rio Nuevo board provides good oversight but needs more visibility. "This is no board of pushovers. They are far from a rubber stamp," she said.
There are two members appointed by Tucson — Anne Marie-Russell, executive director of the Museum of Contemporary Art, and Jeff DiGregorio, owner of Downtown's Royal Elizabeth Bed and Breakfast Inn. But a weighted voting system gives them the power to override the two members from South Tucson, former Pima County Supervisor Dan Eckstrom and Roman Soltero, a former City Council member.
The board did not meet for nearly 11 months between September 2007 and July 30, 2008, when it met three days after an Arizona Daily Star investigation revealed for the first time the city had spent $77 million on Rio Nuevo.
Hein didn't comment much until the end of discussion on the second vote, when he said he was "a little surprised" about it and not sure whether he should be "giddy or depressed."
He also said the worst possible thing for the council to do was to delay the vote for a week, because he and his staff would "not know how to move forward in the interim." Instead, he pressed them to vote Tuesday.
"This is no board of pushovers. They are far from a rubber stamp."
Nina Trasoff, member of Tucson City Council