Just before the City Council Audit Committee adjourned Tuesday afternoon, Jacksonville Economic Development Commission Deputy Executive Director Paul Crawford told the committee the JEDC is continuing to work on job creation.
That’s despite questions about the commission’s future role in the City’s economic development and questions about the commission’s performance in terms of contract monitoring and compliance.
“Well, you just created one today. You get the credit for it,” said Council member John Crescimbeni.
He was referring to the committee’s instruction to Deputy General Counsel Steve Rohan to draft legislation to be introduced at last night’s Council meeting that would create another position in the Council Auditor’s Office.
The new position would allow the Council auditor to perform a study of the JEDC’s incentive contracts already in force.
The audit is intended to determine whether the City is owed any money that should not have been paid to companies based on the terms of the contracts and how those funds, if any, might be recovered.
Council Auditor Kirk Sherman said the audits of five incentives contracts already performed revealed improper payments to companies based on new jobs that were to be created under the terms of the agreements.
“That was the area where we found problems,” said Sherman.
Council President Stephen Joost joined the committee Tuesday. Under Council rules, the president is empowered to join committees as a voting member at his or her discretion.
Joost said based on his experience as a former auditor, he would recommend looking closely at JEDC contracts executed in the past two years with a specific focus on the 10 largest contracts.
“Let’s see what happens with those first. Based on the five you looked at, it seems to be a target-rich environment. Let’s see what else we find,” Joost said.
Sherman said for the City to bring in an outside auditor for the investigation of the JEDC’s contracts, it would cost $115 per hour, plus expenses and there would be a learning curve.
Sherman said his staff could “hit the ground running” and that it would be possible to shift assignments within his office to accommodate the JEDC audit.
“We can begin within a week or so,” he said.
The committee ordered the legislation to hire another auditor after a discussion of the agreement with SMG to manage the City’s sports and entertainment facilities. The contract is up for renewal or reconsideration in spring 2013.
It was the subject of a report by the Inspector General’s Office during the administration of former Mayor John Peyton. Some of the report’s conclusions were challenged by Robert Downey, former manager of SMG’s operation in Jacksonville.
“There was a lot of backroom controversy over the Inspector General’s report being sanitized. Did you hear anything about that?” Crescimbeni asked Sherman.
“I heard rumors,” said Sherman.
Crescimbeni said he would support “looking at SMG” and its contract with the City, especially since the agreement will expire in a little more than a year.
“In my book, there was too much politics involved in that audit,” said Crescimbeni.
Joost said that based on the size of the City’s contract with SMG, it should be audited to “make sure they have a clean bill of health.”
Crescimbeni said he hopes the mayor’s office would support putting the facilities management contract out for proposals and bids.
Crawford said the JEDC, which manages the contract with SMG, is going to put the contract out for a Request for Proposal and that the City’s CFO, Ronnie Belton, is “leading the charge.”
The audit committee plans to meet again in three weeks. Sherman was asked to provide a schedule at the meeting of audits being performed and to be performed by his office.
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