CINCINNATI, OH (FOX19) - Late Tuesday, in an after-hours memorandum, Cincinnati City Manager Harry Black broke news regarding millions of dollars spent to build one of the city's marquee parks: the Smale Riverfront Park. Black, in a 13 page report, told Cincinnati City Council "the City has been potentially placed at risk, financially."
The problems stem from contracted work performed on the $120 million park project. Black, in November, ordered city Chief Procurement Officer Patrick Duhaney to launch an investigation into the Cincinnati Park Board's spending and contracting related to the construction of the park.
Duhaney's investigation uncovered records that showed the Park Board used an "as-needed general building maintenance master agreement" to build Smale Riverfront Park. City procurement rules required such a construction project to be competitively bid and also required the Park Board to ensure each contractor working on the project to be bonded.
That means, each contractor would have enough insurance to protect the city's interest had something gone wrong. Bonding provided protection for the city to ensure taxpayers are protected during and after a project is finished.
The contracts used to build the park, the Duhaney report shows, were only "setup to cover the as-needed routine maintenance and repair needs of existing city buildings…they were not structured for or put in place for new construction or renovation work of the scale and scope" of the Smale Riverfront Park.
THE CITY PURSUES AN INTERNAL INVESTIGATION
After Duhaney reported the contract issues to City Manager Harry Black in November, Black ordered Duhaney to open a larger investigation into the Park Board's spending on the project. One of the initial steps Duhaney took, the report shows, was to contact Park Board Director Willie Carden.
The report shows Duhaney spoke with Carden by phone and then agreed to meet in person.
Carden, Duhaney reported, did not show up for the meeting because of "scheduling conflicts," Duhaney's report states.
On Dec. 10, 2015 Duhaney met with Park Board staff in order to "take a deeper look into the contracting practices of the Parks Board," Duhaney wrote.
What Duhaney uncovered was a contracting situation that "evades the public light," Duhaney wrote in a March 21 letter to Black. The investigation found the Park Board did not competitively bid more than $80 million in construction work on the park project.
PARK BOARD CONTRACTING 'VIOLATES CITY MUNICIPAL CODE'
The City Hall investigation uncovered evidence the contractors used to build Smale Riverfront Park did not provide the city the level of performance bonding required by law, the Duhaney report shows.
The Park Board charged $14,852,548.74 to 12 separate Master Agreements to build the park, the Duhaney investigation shows. The city could only account for $1,670,095.24 in "total bonding" in place to cover that work.
The investigation found $13,182,453.50 in construction work performed on the park was "not bonded." "That violates City Municipal Code, which requires performance surety of 100 percent of a contract for construction," Duhaney wrote to Black.
The city is currently working "on resolving the outstanding bonding discrepancies with the holders of the MAs not expired," Duhaney wrote.
The problem with doing business this way is, Master Agreements "lack the specificity of detailed project scope and specifications," Duhaney reported, "makes it difficult to know which portion of the…park project is bonded."
"As it is currently setup, the City would have a difficult time ascertaining which portion of the project is bonded should any issues arise with respect to the construction work," Duhaney wrote.
The Park Board's conduct also puts the city in another quandary: if something goes wrong with any portion of the construction of the park, "the City may ultimately have a difficult time identifying the contractor or contractor(s) responsible for any construction issues, should they arise, since the project was not contracted to one general contractor" Duhaney wrote.
NO TRANSPARENCY IN THE CONSTRUCTION OF SMALE RIVERFRONT PARK
"Where it stands now, since this project was not competitively bid, it is not transparent as to how these contractors were chosen to provide these services and if the price paid for the work was the most advantageous for taxpayers," Duhaney wrote.
This problem, according to Duhaney, has taken the transparency out of the park project and whether taxpayers got the best deal will never be known.
CITY OFFICIALS YET TO RESPOND
The city manager's office posted the internal memorandum to the city's public web site late Tuesday evening. Once FOX19 NOW discovered the memorandum, just after 5 p.m., City Hall had closed for the day.
We tried reaching Park Board Director Willie Carden by phone and made a trip to his house in order to provide him the opportunity to respond to the city's investigation. Carden never responded to any of our attempts to reach him, although an unidentified woman inside the Carden home flipped our news crew off as we left the neighborhood.
Messages to City Manager Harry Black were not returned. Messages to Black's spokesman, Rocky Merz, were answered with a denial for an interview regarding the Duhaney report. The interview requests were to have Black explain to taxpayers the circumstances surrounding the city's internal investigation into the Park Board.
The city announced in the internal memo that an audit is currently underway into the Park Board and should be finished sometime in May.