Since the inception of my political blog, one story I have followed very closely has been the disastrous ART Bus project having published numerous articles. With that said, I compiled a list of the articles for easy reference. Below are the links that can be click on to read the articles:

https://www.petedinelli.com/2019/12/06/halt-art-bus-system-before-someone-gets-killed-a-case-for-negligent-design-find-alternative-uses-for-art-platforms/

https://www.petedinelli.com/2019/11/26/as-art-to-start-bus-service-bus-ridership-plunges-anticipate-art-failure-find-alternative-usage-of-bus-stop-platforms/

https://www.petedinelli.com/2018/12/13/city-go-play-on-the-freeway-and-art-bus-platforms/

https://www.petedinelli.com/2019/07/18/john-b-strong-damage-from-the-failed-art-project-goes-far-beyond-just-central-avenue/

https://www.petedinelli.com/2018/12/10/mayor-keller-better-late-than-never-on-art-politics/

https://www.petedinelli.com/2018/12/06/call-your-bookie-place-your-bets-on-delivery-of-new-buses-for-art/

https://www.petedinelli.com/2018/11/21/your-bus-drivers-need-to-learn-how-to-drive-proven-technology/

https://www.petedinelli.com/2018/11/19/when-you-hire-a-lawyer-you-keep-your-mouth-shut-depose-berry-riordan-rizzieri-on-art-bus-project-under-oath/

https://www.petedinelli.com/2018/11/14/arts-proven-technology-another-berry-big-lie/

https://www.petedinelli.com/2018/11/08/4762/

https://www.petedinelli.com/2018/11/02/keller-new-art-buses-unsafe-at-any-speed/

https://www.petedinelli.com/2018/08/22/on-to-the-next-republican-elephant-pile-of-dung-to-clean-up/

https://www.petedinelli.com/2018/06/11/give-art-work-to-city-attorney-nm-attorney-general-and-district-attorney/

https://www.petedinelli.com/2018/06/04/want-a-divorce-hire-a-lawyer/

https://www.petedinelli.com/2018/03/07/to-be-clear-funds-were-never-guaranteed-that-was-simply-never-the-case/

https://www.petedinelli.com/2018/01/15/vowing-to-fix-problems-required-to-fix-by-law/

https://www.petedinelli.com/2018/01/10/this-project-is-a-bit-of-a-lemon/

https://www.petedinelli.com/?s=Special+Grand+Jury&submit=Search

https://www.petedinelli.com/2018/01/22/mayor-keller-should-scrap-art-bus-project-and-find-alternatives/

https://www.petedinelli.com/2018/05/04/albatross-rapid-transit-art-around-mayor-kellers-neck/

https://www.petedinelli.com/2017/12/14/leaking-new-civic-plaza-fountain-symbolizes-berry-administration/

https://www.petedinelli.com/2017/06/27/another-lie-from-the-city-hall-liars-club/

https://www.petedinelli.com/2017/03/16/biggest-lie-the-check-is-in-the-mail/

https://www.petedinelli.com/2017/03/13/the-city-hall-liars-club/

https://www.petedinelli.com/2017/02/22/remember-election-time-who-carried-the-mayors-water-on-art/

https://www.petedinelli.com/2017/02/17/hidden-costs-of-berrys-white-elephant/

https://www.petedinelli.com/2017/02/12/art-bus-project-funding-still-in-doubt/

https://www.petedinelli.com/2017/01/03/sneaks-we-is-when-funding-art-bus-project-and-capital-projects/

https://www.petedinelli.com/2016/11/18/art-bus-project-destroys-historic-route-66/

Mayor Tim Keller and APD Interim Chief Michael Geier are reporting progress in all areas of compliance with the Department of Justice’s Court Approved Settlement Agreement (CASA).

https://www.kob.com/albuquerque-news/city-provides-update-on-apd-compliance-with-doj-agreement/4945092/#.Wx7tkjcyFBl.facebook

APD acknowledged in the most recent a report filed with the Federal Court that a backlog of use of force investigations exists that are over 120 days old or had not been closed.

In response to the use of force backlog, APD defined and prioritized a review of the backlog and identified processes supervisors will have to follow when reviewing the investigations.

According to a court filing by city officials, the Albuquerque Police Department is developing a new streamlined use-of-force policy that was created with input from the community.

The “streamlined use of force policy” is nothing new in that it was already announced with great specify in mid-March:

https://www.petedinelli.com/2018/03/13/streamlining-apd-use-of-force-investigations/

Further, APD announced that Internal Affairs was divided into two sections: Internal Affairs – Force and Internal Affairs – Misconduct.

Interim APD Chief Michael Geier said of the changes:

“We take seriously the monitor’s recommendations to address use-of-force reviews so we can understand the magnitude of past problems. … We want objectivity and consistency in use-of-force investigations to ensure we are holding officers to the standards required under Constitutional policing.”

Mayor Tim Keller for his part said of the changes:

“Our administration is owning the responsibility of transforming law enforcement and creating a new APD. … We instituted the most extensive restructuring of APD in recent history, so that every taxpayer dollar we invest in the Department will result in an institutional commitment to community policing.”

The last announcement of an “extensive restructuring of APD” occurred a mere two and a half years ago on December 14, 2015 when then APD Chief Gordon Eden announced a reorganization of APD to get 80 more sworn police officers on the street and created the positions of Major.

The goal was again to renew APD’s commitment to community policing.

https://www.abqjournal.com/691340/apd-overhaul-to-put-cops-in-community.html

On December 15, 2015, APD had 836 sworn police and the goal was to grow APD to 1,000 for community policing and it never happened.

Under Mayor Tim Keller, APD currently has 898 sworn police officer positions filled and the APD budget commencing July 1, 2018 has funding for 1,040.

If performance history of APD’s academy is any indication, the city will be lucky to have 950 sworn police officers by this time next year.

DIVIDING A PROBLEM CREATES TWO PROBLEMS

The announcement that APD Internal Affairs has been divided into two sections, Internal Affairs – Force and Internal Affairs – Misconduct, should be viewed with great skepticism.

APD dividing Internal Affairs into two separate function will only create two sets of problems.

APD has consistently shown over many years it cannot police itself which contributed to the “culture of aggression” found by the Department of Justice.

The APD Internal Affairs Unit needs to be abolished and its functions absorbed by the Office Independent Council or Inspector General office in order to ensure and achieve true civilian oversight of APD.

The investigation of police misconduct cases including excessive use of force cases not resulting in death or nor serious bodily harm should be done by “civilian” personnel investigators.

The function and responsibility for investigating police misconduct cases and violations of personnel policy and procedures by police should be assumed by the Office of Independent Council in conjunction with the City Human Resources Department and the Office of Internal Audit where necessary.

“Deadly use of force” cases would continue to be investigated by the Critical Incident Review Team and the final reports with finding and recommendations submitted to the Police Chief for implementation and imposition of disciplinary action.

CONCLUSION

Self-proclaimed progress to the reform measures is something we have heard way too often during the last 3 years when it comes to the DOJ reforms only to find they were not true.

There were 5 times the Federal Monitor issued his status report that he took issue with APD management and reported resistance to change and the reforms by APD.

Just a few weeks ago, Interim Chief Geier and Mayor Tim Keller made proclamations that APD followed “all policy and procedures” and APD “did everything it could” in a child abuse case and the collection of the blood-stained garments of a 7-year-old child.

The APD Officer said he could not collect the child’s garment nor tag it into evidence and proceeded to trash the evidence.

The Mayor and the Chief were forced to reverse themselves when it was revealed that APD did not act on all the information it had access to from the Children Youth and Family Department.

As a result of media scrutiny, Mayor Keller also went so far as to apologize and ordered an Internal Affairs Investigation and announced major changes in policy when dealing with child abuse cases.

At the time of his apology to the Albuquerque Journal editors, Mayor Keller had this to say about APD:

“There are still lots and lots of issues at APD. The deep-seated bunker mentality culture goes right down to every unit and shows up in a different way. It’s just a realization that reforming APD in reality is going to be a unit-by-unit exercise and that is going to take years.”

During the March 15, 2018 day long status conference hearing on the consent decree, it was announced that the Federal Monitor would suspend preparing his six-month reports until November of this year.

The Federal Monitor also committed to provide “technical assistance” to APD as opposed to performing audits and gathering data.

Instead of preparing his usual 500-page boiler plate audit report, Federal Monitor James Ginger has been focusing on helping APD build the procedural infrastructure to be able to comply with the reforms.

Federal Monitor Ginger did not issue his seventh progress report in May, but instead is supposed to issue a “mini-report” in August of this year.

Both Mayor Keller and Chief Geier would be wise to let the Federal Monitor make the pronouncements in November if APD is in compliance before they try and take so much credit themselves and telling the public APD has made so much progress with the reforms and how committed APD is to the reforms.

A 73-page Office of Inspector General (IG) report found that former Mayor Berry’s Chief Operations Officer Michael Riordan allegedly “threatened” to terminate the city’s $22.9 million contract with the manufacturer of the special-order ART buses.

Michael Riordan was said to have demanded a new bus be delivered in time for Berry to ride and have a photo op before he left office so he could say ART was up and running.

https://www.abqjournal.com/1182905/report-company-sent-faulty-art-bus-due-to-city-pressure.html

The entire June 6, 2018 Inspector General report on the ART Bus project can be read here:

https://drive.google.com/file/d/1fA-D6dk6lp3DZgQzQCWVEVbziQ2vXov/view

According to the Inspector General report, then Chief Operations Officer Michael Riordan “was adamant about having a bus transported to the City before the end of the Mayor Berry administration.”

An Albuquerque transit employee told the Inspector General that “core processes on manufacturing buses was altered to ensure delivery of the first bus by the deadline.”

The IG report described two city employees interviewed who recounted a “tense” and “unusual” phone call between then-city Chief Operating Officer Michael Riordan and top executives from the manufacturer.

According to the Inspector General’s report the first bus delivered in August 2017, was assembled by the manufacturer using a “frame intended for buses being built for [another city’s transit authority].”

Frames intended for the Albuquerque’s buses had not yet been shipped nor received by the manufacturer.

The Inspector General found that the bus manufacturer used “parts and pieces” intended for another city’s buses for the first ART bus delivered.

The city employee further reported that the first bus was moved to whatever assembly station was available to ensure it was assembled in time in order to get it shipped to Albuquerque before Mayor Berry left office.

The last 4 sentences of the 72-page Inspector General’s findings and report is worth quoting relating fraudulent activity:

“The inspection was proactive in nature and not due to any allegations that were made. While this inspection didn’t identify instances of fraud, it is important to note that it doesn’t mean fraud did not occur. The inspection did identify several problems that offer opportunities to improve and could be vulnerabilities for fraudulent behavior. City leaders should consider the problems identified and recommendations made to develop a more efficient and stronger procurement process that will help prevent and deter fraud, while also ensuring more quality and confidence in the products and services that the taxpayer funds. This is essential to protecting the public’s trust.”

PROBLEMS WITH THE BUSES DELIVERED

After a full 7 months since former Mayor Berry dedicated the project as “up and running” Mayor Tim Keller reported the electric busses still do not hold a charge and the city is in “contract negotiations” with the manufacturer.

The electric buses delivered are supposed to operate for 275 miles but they cannot go more than 180 miles before they need charging, which means more buses or more bus stations are needed.

One month after taking office, Mayor Keller and his CAO Lawrence Rael did a press conference and a few of the many problems with the buses were outlined including:

• Some of the buses could not be charged because the charging system doesn’t work.
• Axles on the buses were leaking oil.
• The buses had not gone through the certification process required in order for the city to be reimbursed for the buses by the federal government. Rael said one of the ART buses put through the certification process did not pass.
• A third-party certification officer wouldn’t certify the chargers that have been installed. “The chargers themselves are not operable because they’ve used what looks like Chinese equipment and probably a different standard for how they built these boxes,” Rael said.
• Fully charged batteries on the buses are supposed to last for 275 miles, but the testing the city did indicated that the charge is only good for 200 miles, which means that the city will need additional buses for ART unless the problem was resolved.
• Restraint belts that are used to keep wheelchairs locked in place while they’re in transit are in different locations in almost all the buses.
• The battery cages that house the bus batteries were already starting to crack and separate.

In the last update of the project, Keller said the city is looking to “divorce” itself from the manufacturer and in the process of renegotiating the contract with the manufacturer.

Keller went so far as saying the buses were like the children where custody is being fought over.

You do not try and take custody of someone elses kids and Keller needs to tell the manufacturer to come and pick up their buses the city can’t use.

If a “divorce” is what Keller really wants, he needs to hire a good lawyer, file suit and seek civil damages for breach of contract for all the delays and breach of warranties relating to the buses.

Keller still desperately clings to hope the busses will be up and running by September or by the end of next year.

After review of the city’s Inspector General’s report, both the Mayor and the City Attorney’s office need to forward it to the New Mexico Attorney General’s Office for review to determine if there has been any violation of the New Mexico Unfair Trade Practices Act, or for that matter, fraudulent activity.

THE NEW MEXICO UNFAIR TRADE PRACTICES ACT

Over forty years ago, the New Mexico legislature enacted the Unfair Trade Practices Act. (57-12-1 to 57-12-24, New Mexico Statutes)

The entire statute can be reviewed here: https://law.justia.com/codes/new-mexico/2006/nmrc/jd_ch57art12-10897.html

The New Mexico Attorney General has primary responsibility to enforce the Unfair Trade practices Act. (57-12-15, Enforcement)

Under New Mexico the statute, unfair or deceptive trade practices and unconscionable trade practices in the conduct of any trade or commerce is prohibited. (57-12-3)

As used in the Unfair Trade Practices Act [ 57-12-1 NMSA 1978]:
…
C. “trade” or “commerce” includes … offering for sale or distribution of any services and any property and any other article, commodity or thing of value, including any trade or commerce directly or indirectly affecting the people of this state;

D. “unfair or deceptive trade practice” means an act specifically declared unlawful pursuant to the Unfair Practices Act … , a false or misleading oral or written statement, visual description or other representation of any kind knowingly made in connection with the sale, lease, rental or loan of goods or services … .or mislead any person and includes:
…
(6) representing that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used or secondhand;

COMMENATARY: Berry’s photo op bus would seem to fall into this definition.

(7) representing that goods or services are of a particular standard, quality or grade or that goods are of a particular style or model if they are of another;

COMMENATARY: Berry’s photo op bus would seem to fall into this definition.
…
(9) offering goods or services with intent not to supply them in the quantity requested by the prospective buyer to the extent of the stock available, unless the purchaser is purchasing for resale;

COMMENATARY: There has only been partial delivery of the buses.
…
Where a jury finds that the party charged with an unfair or deceptive trade practice or an unconscionable trade practice has willfully engaged in the trade practice, the court may award up to three times actual damages (treble damages) to the party complaining of the practice. (57-12-10, B)

Attorney’s fees and costs can also be awarded to an aggrieved party. (52-12-10, C)

COMMENTARY

Notwithstanding any of the threats from the city, the bus manufacturer had the legal obligation to manufacture what was ordered in accordance with specifications under the purchase contract.

Further, the bus manufacturer did not disclose to the city what they were doing and what they were going to deliver when it came to Berry’s “photo-op” bus.

Based on the many problems identified with the buses and the findings of the City Inspector General’s report, it can be argued that the unfair trade practices act has been violated.

After reading the Inspector General’s report and all the irregularities found, it would be wise if the Albuquerque City Attorney’s office, and for that matter, the New Mexico Attorney General, to take the time to consider initiating a claim under the New Mexico Unfair Trade Practices Act, Section 57-12-1 et. seq. for city taxpayers.

The City of Albuquerque also has the private remedies available to it.

Litigation is why we have a city attorney’s office as well a risk management department.

It would be appropriate for Mayor Keller, City Legal and the Risk Management Department commit City’s resources in putting forth an effort to make taxpayers whole on the ART Bus project.

The Mayor and the City Attorney should also consider forwarding the Inspector General’s Report to the Bernalillo County District Attorney and request the convening of a special grand jury.

The city should at least make a reasonable attempt to hold the Berry Administration accountable for the disaster know as ART that has cost over $135 million and has destroyed historic Route 66.

“This is essential to protecting the public’s trust” quoting the Inspector General report.

For more blog articles on ART see:

https://www.petedinelli.com/?s=Special+Grand+Jury&submit=Search

https://www.petedinelli.com/2018/01/22/mayor-keller-should-scrap-art-bus-project-and-find-alternatives/

https://www.petedinelli.com/?s=albatross+around&submit=Search

https://www.petedinelli.com/2018/01/10/the-lemons-and-lies-of-berrys-art/

College has a four-year curriculum to earn a degree.

When you’re the only student in the class, there is no bell curve grading and you rise and fall in grades with your own accomplishments.

June 1, 2018 marks Mayor Tim Keller’s anniversary for his first semester of his freshman year of his four-year term in office.

KELLER’S REPORT CARD AND CLASSES

Based on the list of accomplishments for Mayor Keller’s first 6 months in office, following are the classes and assigned grades:

PUBLIC RELATIONS: “A” because Mayor Keller attends all required public functions, appears to enjoy them all and makes himself available to the public. He represents the City in such a manner citizens can take great pride with the image he portrays as he appears and speaks always with a smile on his face and a grin in his voice.

EXPLANATION: Public Relations is like gym class. It is easy to get an A and it sure can raise your grade point average amongst voters and go a long way to get you re-elected.

APPOINTMENTS OF DEPARTMENT HEADS: “B” for being able to assemble a management team to coincide with his philosophy and to carry out his programs.

EXPLANATION: Appointing of department heads is considered an easy A because you surround yourself with people you like and they owe their loyalty and living to you. There is no problem making appointments based on political loyalty as long as the person appointed is qualified and can do the job. Political appointments need have a proper vetting process because they can make or break an administration. The grade was brought down to a “B” for Keller’s failure to have a proper vetting process in place for City Clerk and City Attorney.

PUBLIC SAFETY: “C” for proposing an APD expansion plan and indications he has the ability to work with the public safety unions of police and fire which have now approved contracts. The grade in this class has been reduced by the fact that Albuquerque continues to have high crime rates and the murder rate is out of control.

EXPLANATION: Public Safety is probably the hardest subject for any Mayor to undertake with any good grades usually very difficult to attain unless crime rates are down. High crime rates can make any one a one term mayor.

APD REFORMS: “D” for not going above and beyond to do more than making a commitment to implement reforms required under the Department of Justice Consent Decree.

EXPLANATION: This is probably the third hardest subject for Mayor Keller to tackle given APD’s history of resistance to the consent decree reforms. Mayor Keller’s grade was brought down for failing his first test to take issue with APD Chief Geier and defending APD’s evidence gathering in a child abuse case saying that no policies nor procedures were violated. The Mayor and Chief’s defense reflects nothing has changed with APD management.

ECONOMIC DEVELOPMENT: “F” for his total failure to outline any economic development plan to bring new industry and jobs to Albuquerque.

EXPLANATION: This is the second hardest subject, second to Public Safety, for any Mayor to tackle and affects virtually every citizen and the taxes they pay. If you do not bother to take an exam, you should expect a failing grade.

ACCOMPLISHMENTS GRADES BASED UPON

Mayor Keller’s accomplishments the first six months that his grades are based on can be summarized as followings:

1. Appointed experienced city hall people like James Lewis, Lawrence Rael and David Campbell to key positions and woman to executive positions including Sarita Nair as Chief Administration Officer, Shelle Sanchez as Cultural Services Director, Mary Scott as Human Service Director and Ana Sanchez as Senior Affairs Director and Nyka Allen as Aviation Director.

2. Appointed a new Interim APD Police Chief and Interim Deputy Chiefs who are either retired or from within APD and shuffling and reorganizing the APD command staff and personnel staff. These interim appointments have stabilized the department somewhat.

3. Publicly committed to a federal judge in private and a court hearing to implement the Department of Justice reforms which are required under the Court Approved Settlement Agreement (CASA). The Federal Monitor is now providing “technical assistance” to APD and APD now has a compliance bureau.

4. Signing a city council-initiated $55 million dollar a year tax increase. Keller broke a campaign promise not to raise taxes without a public vote. The increased tax revenues raised is going towards a projected $40 million deficit. 80% of the new tax revenues are dedicated to public safety.

5. Submission and enactment of a $577 million balanced general fund budget with highlights including increases in funding for more police, increased funding in social services and youth programs and $1.5 million to address the backlog of more than 4,000 untested rape kits. APD has 898 sworn police when you include a recent graduating cadet class. The 2018-2019 approved budget funds 1,040 full time sworn police officer positions.

6. Proposed an $88 million-dollar APD police expansion program over 4 years increasing the number of sworn police officers from 898 positions filled to 1,200, or by 302 sworn police officers, over a four-year period. Keller has vowed to return to community-based policing.

7. Attempting to salvage the $135 million ART bus project calling it “turning lemons into lemonade”. Keller has yet been able to secure the $69 million federal grant funding from congress after going to Washington and lobbying for a commitment.

8. Negotiating a $8 million settlement with the Albuquerque firefighters union, ending a pay raise dispute that dates back to 2011 when the previous administration was at impasse with all the City Unions.

9. Successful negotiation of a two-year contract with the police union providing for $12.2 million dollars in hourly wage increases and longevity pay increases to experienced police officers.

10. Announcing implementation of major changes to the city’s twenty five-year old DWI vehicle forfeiture program in response to a federal court ruling in a pending case. The policy change includes the city not seeking ownership of a vehicle and sell it at auction unless the suspect is convicted of DWI.

11. Signing a symbolic decriminalization of pot ordinance and a symbolic City Council resolution reaffirming Albuquerque is an “immigrant friendly” city as opposed to a “sanctuary city”, with both initiatives being city council initiatives and not the Mayor’s.

12. Mayor Tim Keller has taken photo ops to a new level by attending protest rallies to speak at, attending marches, attending heavy metal concerts to introduce the band, running in track meets and participating in exhibition football games as the quarterback and enjoying re-living his high school glory days, and posting pictures and videos on FACEBOOK. People can take great pride with the positive image Mayor Keller is portraying.

SIX LOW TEST SCORES

Mayor Keller was given low scores in 6 tests that have affected his grades:

1. Vetting and appointment missteps with a City Clerk nominee and City Attorney. The first City Clerk nominee withdrew her acceptance of her appointment because her financial problems and tax lien problems. The City Attorney was evetially appointed had not applied and was appointed after the job posting closed and interviews were conducted.

2. Appointment of a 5-member selection committee and process for a permanent APD Chief with no representatives on the chief’s selection committee from the general public, the city council, American Civil Liberties Union, APD Forward, the District Attorney’s Office nor Public Defenders Office, nor any Hispanic, Native American or other minority groups nor communities affected by police actions. There is no representation on the selection committee from any one of the stake holders in the Court Approved Settlement Agreement (CASA).

3. Mayor Keller failed his first major test in dealing with APD in the evidence gathering of a child abuse case where the blood-stained underwear of a seven-year-old child was collected by the child’s teacher and the clothing was thrown out and not tag by APD. Initially, both Mayor Keller and Interim Chief Geier insisted that no one with APD violated any policies or procedures and said that officers and detectives did everything they could with the information they had at the time. After extensive media coverage, an Internal Affairs Investigation was announced. Keller then announced policies changes after meeting with the Albuquerque Journal editorial board giving an apology.

4. Since taking office on December 1, 2018, Mayor Keller has been trying to clean up the $135 million-dollar disaster known as the ART Bus Project. The Keller Administration itself created a problem with the ART buses when it took delivery of at least 10 of the buses in California where the buses were assembled. Instead of being shipped by rail, the buses were driven across country and sustained damages which may not be covered by the warranty or have voided the warranty.

5. Since January 1 of this year, Albuquerque has had 35 murders and counting. Mayor Keller failed to address the community on what he will do about the city’s murder rate, if anything can be done, other than hiring more cops to patrol our streets and increase APD response times to 911 emergency calls.

6. There have been repeated mis communications, conflicting communication or no communications at all by the City’s public information officers on major news stories. Albuquerque appears to have a Mayor whose PIOs have no idea what his decisions are, nor understanding what his directives are, what he wants said to the media nor what he wants his top executives to be saying.

CONCLUSION

Trajectory indications from Mayor Keller’s first six months in office, the media relations, the executive appointments made and the accomplishment are that Albuquerque is set to have another uninspiring approach to government filled with extensive photo ops, ribbon cuttings and social media communications.

Mayor Keller has three and half years left in office to get his grades up, but if his first semester grades are any indication of what we are in store for, he may not graduate to any higher office let alone be re-elected Mayor come 2021.

ABQ Report: Berry’s Administration Might Have Broken IRS Rules on ART Payments

June 7, 2018

By Dennis Domrzalski, ABQ Reports

Former Mayor Richard Berry’s administration appears to have violated federal tax rules in the way it paid for the $135 million ART project, according to a report on the ART project released Thursday by the city’s Inspector General’s office.

The entire report can be read here:

https://drive.google.com/file/d/1fA-RD6dk6lp3DZgQzQCWVEVbziQ2vXov/view

The city had to pay for ART construction out of its own funds because it still hasn’t gotten A $75 million grant from the Federal Transit Administration that is was hoping for. To pay for the construction, which is basically complete, the city appears to have used general obligation money that was approved by voters and dedicated to specific projects.

But exactly which capital projects were raided isn’t known because Berry’s administration commingled capital projects funds into a single account and paid for ART out of that fund, said the report by IG David Harper.

“The City funded the construction of ART in part using funds derived from GO Bonds that taxpayers intended to be used for other projects based on the bond descriptions at the polling booths,” The City’s bond counsel advised that bond funds need to be used for the intended projects within three years per IRS rules.”

In addition, the 73-page report said that Berry’s administration threatened the company that is building ART’s 20 electric buses if it didn’t get the city at least one bus before Berry left office on Nov. 30, 2017. Berry’s administration threatened to cancel its $23 million bus contract with the company, BYD, if it didn’t deliver the city a bus before Berry left office, the report said.

The bus that BYD did deliver to Berry’s administration was built on a chassis for another transit agency and wound up not meeting Albuquerque’s specifications, Harper’s report said.

And, Harper’s report said that BYD and ART’s contractor, Bradbury Stamm Construction, might have violated the city’s ethics policies by buying meals for city employees working on the ART project.

So far the city has spent $108.1 million on ART. Some of that is from federal grants and city revenue bond money. But if the city doesn’t the the FTA grant, it could be more than $90 million in the hole for the project, the report said.

So far, the city has paid Bradbury Stamm $87 million.

Here are the report’s main findings:

1. The City funded the construction of ART in part using funds derived from GO Bonds that taxpayers intended to be used for other projects based on the bond descriptions at the polling booths. The City’s bond counsel advised that bond funds need to be used for the intended projects within three years per IRS rules.

2. The City expended possible restricted funds without a federal grant agreement in place. Should the federal government not provide a grant to reimburse the funds used, there will be considerable financial ramifications. The City may not have followed GASB (Government Accounting Standards Board) standards for accountability regarding restricted funds and avoiding “negative cash” flows. The City does not have a contingency plan should the federal government fail to provide the anticipated $75 million.

3. On 30 May 2018, FTA Region 6 advised that federal funding could not be used for the electric buses until a bus completed and passed the Altoona Testing in Pennsylvania and the remaining buses were modified to match the bus that passed testing. On 30 May 2018, the Assistant Maintenance Manager, DTF, advised that a bus was at the Altoona Testing site in Pennsylvania, but testing has not started on the bus. He said the testing is expected to begin within the next week. He said that the testing for diesel buses typically last about 13 months, but testing for the electric bus will probably require additional time due to the need to recharge the batteries. Therefore, it appears that federal funds for the buses will be delayed a minimum of 13 more months for the testing and additional time for the remaining 19 buses to be modified.

4. There were several quality issues that impacted buses and may have contributed to the delay in delivering buses. The City has been engaged with BYD to address the problems and also is considering options to ensure there is proper and fair contractual consideration.

5. Typically, the first item that is provided by a contractor should be the “First Article” that is used by the purchaser to assess and determine if there was compliance with all specifications. This did not occur in the purchase of the BYD buses and in fact, City officials knowingly “accepted” a bus that was manufactured on a platform and to the specifications of a bus intended for the AVTA, with the intent of using the bus for public relations, which included a publicity event involving the former Mayor and other publicly elected leaders and officials. This was not within the contract and may have contributed to the further delay of receiving buses that complied with the contract. As indicated in the report, this was described as a “loan.” However, the BAA Audit report characterizes the bus as the “first production bus in the order, VIN 38022, which was delivered to the City on August 7, 2017.”

6. The Mayor addressed the public shortly after beginning his term regarding several challenges with the buses (including the batteries) and construction from both an ADA and non-conformance perspective; BSC has corrected most of the ADA issues and continues to correct non-compliant situations.

7. The inspection disclosed concerns with the BAA Audit Report in that there are assertions and references to documents that do not exist, to include the “Resident Inspector Report.” This is problematic that there were certifications appended to the Report that affirmed the report existed and that the City had inspectors validating the BAA status.

8. The City’s approach to providing inspections of the assembly process did not appear to be sufficient and lacked continuity. The City did not establish selection criteria based on the complexities of conducting inspections of a new product – electric buses, but rather selected employees who volunteered to travel for a two week period. The City did not provide any formal training and did not develop an inspection checklist specifically for the electric buses. The City did not develop a manual or guide for use by the inspectors during the inspection process.

9. The City awarded several contracts to complete the ART project, with the two most significant contracts being awarded to BYD for the electric buses and BSC for the construction. The City used solicit offerors using an RFP and then selected the contractors using an “Ad Hoc Advisory Committee” (commonly referred to as a selection or evaluation committee). In a “post-TASER” environment (a prior OIG investigation focused on allegations of favoritism and conflicts of interest involving a former police chief for the APD and TASER, the company that provided on-body cameras to APD), it is important to go great lengths to ensure there is not even the appearance of partiality, biases and undue influence in the selection processes. The inspection disclosed that both Ad Hoc Advisory Committees included high level City appointed officials and deputy directors to the appointed officials, rather than including more disinterested, but technically qualified, members, such as professors for the local universities, members from City commissions, and officials from county or state agencies that have similar services.

10. The inspection disclosed concerns regarding ethics and impartiality in the contract administration process. A senior official at BYD purchased at least one meal for almost all inspectors and even twice for one inspector. While the value of the meal from the point of view of the inspector may have been de minimis, the value of funds expended by the BYD official were significantly more in the aggregate and furthermore, blurs the line of avoiding even the appearance of impartiality in the inspection process.

11. In addition to the prior observation, inspection activity revealed that BSC provided meals and other items free of charge to senior level City officials, to include an elected official and appointed official. As before, while any individual meal may have been considered de minimis to the employee, in the aggregate, the cost to BSC was potentially substantial considering the venue. Again, it is important for both City employees and contractor personnel to go to extreme lengths to avoid the appearance of biases, conflicts and partiality. This is especially true given the contract was ongoing at the time and most likely, BSC will compete for future contracts.

https://www.abqreport.com/single-post/2018/06/07/Report-Berrys-Administration-Might-Have-Broken-IRS-Rules-on-ART-Payments

In a unanimous 9-0 bi-partisan vote, the Albuquerque City Council approved a resolution supporting a proposed economic development project that would include $2.7 million in financial incentives for a sports and entertainment complex to be built at the former Beach Waterpark site.

For the past 14 years, the property at Montano and I-25 has been a dirt lot.

As part of a resolution, the City Council supported funding of $500,000 from the city’s general fund to provide economic development assistance for land, building and infrastructure at the proposed site.

The $2.7 million in incentives will include gross receipts tax revenues of $2.3 million and capital improvements funding of $326,000.

Originally, $500,000 was going to come from the city’s Local Economic Development Act funds, but the Keller Administration objected to the funding.

https://www.abqjournal.com/1180698/city-council-agrees-to-back-proposed-topgolf-complex-ex-resolution-includes-500000-from-the-citys-2018-general-fund.html

Topgolf, a Dallas based corporation, will be the recipient of the incentives.

Topgolf promises to build a three-story tall netted driving range, with a bar and kitchen.

City councilors are working on what Topgolf will have to give to the city in return, before the council gives final approval of the project.

Topgolf has yet to commit in writing what it will do for the city in exchange for the incentives.

The city council believes the golf complex will create 300 construction jobs and another 350 service jobs.

Efforts are being made to reach a final agreement on the terms of the proposed project participation agreement before the development commission meets to approve the project and before the city council gives the project final approval.

KELLER ADMINISTRATION OBJECTIONS

The Keller Administration wants the entertainment company to play by the rules before it can receive $2.7 million from the city.

Economic Development Director Synthia Jaramillo said Topgolf was “breaking the rules” when it comes to the city incentives being offered.

Jaramillo claimed that Albuquerque won’t win by promising millions to the entertainment complex without demanding much in return.

One of Jaramillo’s major concerns is Topgolf will primarily provide low-wage, part-time jobs.

According to Economic Development Director Synthia Jaramillo:

“Topgolf is an entertainment venue, therefore it does not qualify as economic-based company. … So, when we’re talking about economic-based jobs, those are jobs or employers that provide higher wage jobs.”

https://www.kob.com/albuquerque-news/topgolfs-future-in-albuquerque-up-in-the-air/4935953/?cat=500

Given the lack luster performance of Keller’s Economic Development Department and given Albuquerque’s extremely high unemployment rate, the projected 600 jobs that the Topgolf project will likely produce is nothing to sneeze at, even if not the high paying jobs the Keller Administration wants.

In this case, an eye soar vacant lot will be developed after 14 years.

One approach would be is to have Topgolf agree to having a satellite corporate office in Albuquerque with additional high paid professional staff in an effort to have it be an Albuquerque based company.

KELLER’S ECONOMIC DEVELOPMENT DEPARMENT

The mission statement of the City of Albuquerque Economic Development Department states its purpose is to “develop a more diversified and vital economy through the expansion and retention of businesses; develop appropriate industry clusters and recruit target industries; and assist new business start-ups and promote the film and music industries.”

According to its mission statement, the department supports the tourism and hospitality industries through collaboration and oversight of the City’s contractors.

The department also fosters international trade efforts and increased international business opportunities for Albuquerque companies.

The Keller Economic Development Department employs 11 full time employees with an approved annual budget of $3.9 million.

The 2018-2019 city council approved budget for Keller’s Economic Development Department’s only includes funding for the department’s core programs.

Those programs include supporting local businesses, aligning expenditures to keep tax dollars in the local economy “instead of flowing out of state.”

The approved budget also contains funding recruiting new businesses.

https://www.abqjournal.com/1178797/mayor-signs-citys-1-billion-budget.html

The approved 2018-2019 budget for the Economic Development Department alocates $360,000 in funding for continued economic development investments and includes:

$125,000 for Transit Oriented Development (TOD) corridors investment. (TOD is a type of development that includes a mixture of housing, office, retail and/or other amenities within reach of public transportation.)
$55,000 thousand for small business development,
$30,000 for Listen! ABQ. (Listen! Alb is a web site that promotes local music and music events which generate millions for the local economy.)
$150,000 for various local economic development investment projects.

The approved general fund budget for the department includes:

$1.6 million for “economic development” activities
$199,000 for the International Trade Program
$2.087 million for the convention center

COMMENTARY

Albuquerque has one of the highest unemployment rates in the country.

For the last 8 years, the prior administration failed to attract a single major corporation or company to relocate to Albuquerque.

After over six months in office, it is laughable that the city’s Economic Development Director objected so strongly to the Golftop project given the fact that the Department has failed to propose any meaningful economic development programs.

The Keller Administration approved budget of $3.9 million for the Economic Development is so a meager as to be an embarrassment given the fact that the city has a total operating revenue and approved budget of at almost a billion dollars at $955,300,000 for fiscal year 2018-2019.

To add insult to injury, the City Council enacted a one-eighth of a cent tax increase that will generate an additional $55 million a year.

The gross receipts tax increase was enacted by the city council in anticipation of a projected $44 million deficit.

Gross receipts tax revenues from the state are now being reported in excess of what was projected.

The city is seeing a 4% to 6.8% increase in gross receipts tax revenues compared to last year from the state as a result of increase in business activity.

https://www.abqjournal.com/1178079/abq-sees-bump-in-gross-receipts-revenue.html

Candidate for Mayor Tim Keller proposed as a “big idea” creating personal or individual Tax Increment Districts (TIDS), more use of industrial revenue bonds and tax incentives to attract new industry to Albuquerque and create jobs.

As Mayor, Keller failed to seek any major increased appropriation for economic development in the approved 2018-2019 budget.

As far as economic based jobs that provide higher wage jobs, the Keller Administration has yet to announce anything different, nor fund anything different, than what has been going on at city hall for the last 8 years.

Albuquerque can and must expand and find better ways to use financial incentives for economic development such as tax increment districts (TIDS), industrial revenue bonds, and even fund economic development investment programs such as initial startup funding with claw back provisions.

A good start would have been funding a $20 million initial startup fund for new businesses with claw back provisions with the program administered by the Economic Development Department.

The initial start up fund could have been funded by the newly enacted gross receipts tax.

Albuquerque needs to pursue with a vengeance real growth industry like heath care, transportation and manufacturing, and especially the film industry to diversify our economy, and yes, the recreational industry which is what Golftop represents.

New Mexico has some of the finest golf courses in the country on Indian tribal lands and within minutes from Albuquerque.

Public-private partnerships in the growth industries where ever possible should be encouraged and developed.

Albuquerque’s taxpayers must be convinced by Mayor Keller and the City Council of the importance of investing in major projects.

CONCLUSION

The Keller Administration has yet to announce any economic development plan that is any different than the previous administration.

If anything, it is identical.

Mayor Keller has failed to propose any of his “big ideas” he suggested as a candidate.

Before the Director of the City’s Economic Department can be taken seriously, it is suggested that the department get serious about economic development.

The department needs to come up and offer a viable economic development plan for the city to conform with Mayor Keller’s promises made during his campaign.

Until then the city can expect nothing new or different out of the new Keller administration that is any different than what we saw the past 8 years of the failed Berry Administration when it comes to economic development.

Albuquerque needs a community inspired economic development plan.

For more on a “Community Inspired Economic Development Plan” see:

https://www.petedinelli.com/2017/10/12/new-mayor-needs-a-community-inspired-economic-development-plan/