Lawrence to seek audit on Rock Chalk Park; delays final payment

City commissioners Tuesday took the first step toward ordering an audit of public funds spent on the Rock Chalk Park sports complex, while also delaying an approximately $1 million infrastructure payment for the controversial development in northwest Lawrence.

Commissioners at their weekly meeting unanimously agreed that an audit could help ease public concerns over the process that was used to build about $12 million worth of infrastructure at the park without seeking competitive bids on the work.

Mayor Mike Amyx and Commissioner Jeremy Farmer were directed to begin working with city auditor Michael Eglinski on developing a scope of what the audit should examine. Eglinski, though, is not expected to conduct the audit. Rather, the city will ask him to provide a list of recommended auditors who have no connection to the city or Kansas University.

The audit discussion came up as commissioners were trying to determine whether to make a final payment of about $1.06 million for legal fees, interest expenses and other “soft costs” that a private development group led by Lawrence businessman Thomas Fritzel is seeking reimbursement for as part of his work on the public/private partnership that built the project. Commissioners decided to withhold that payment for the time being.

Amyx and Farmer said they believed the payment should be withheld until the audit is completed. The other three commissioners said they were fine withholding the payment for the time being but may change their position depending on how long the audit will take.

Commissioners said they hope an audit can be completed by early February, but several questions still remain about what the audit will examine. Officials at the Kansas University Endowment Association — the other partner in the project — have a contract that gives the association the ability to receive copies of “accounting entries, books, correspondence, instructions, drawings, receipts, subcontracts” and a variety of other documents held by Bliss Sports II, Fritzel’s private company that was awarded the no-bid contract for the infrastructure work.

Amyx said he’s not ruling out seeking access to those documents currently held by Bliss.

“I think if we are going to do a comprehensive audit, we need any and all information that the audit team believes is warranted,” Amyx said.

Also unclear is whether the audit will be able to address concerns members of the public have voiced about the commission’s decision to proceed without a bid on the infrastructure project. Commissioners originally thought the recreation center portion of the project would cost about $18 million to build and were prepared to pay that price without a bid on the project. But after public outcry, commissioners put the recreation center out to bid, and the low bid was about $10.5 million. At nearly the same time, commissioners also were faced with moving ahead on about $12 million worth of infrastructure work. Despite the surprisingly low bid for the recreation center, commissioners did not require a bid for the infrastructure work, largely because KU Endowment officials objected to a bid process, commissioners have said.

On Tuesday, City Commissioner Bob Schumm — one of the leading proponents of the project — said it is now “unknowable” whether a bid on the infrastructure would have reduced the project’s overall costs. But he said he hopes an audit will confirm that the city paid a fair price for the infrastructure work that was conducted at the site.

“I hope it goes a long way to easing the public’s concerns,” Schumm said.

In other business, commissioners:

• Met for about two hours in executive session to discuss a personnel matter. During the meeting, City Manager David Corliss read a public apology for his “mistake” in placing the disputed Rock Chalk Park payment on the city’s agenda last week in an obscure manner. After the executive session, Amyx said the commission had nothing to report about the personnel matter. Amyx also again apologized for failing to recognize how the Rock Chalk Park item was presented on last week’s agenda.

• Unanimously approved the placement of 12 East Lawrence properties onto the city’s Register of Historic Places.

• Directed staff members to craft language related to the Affordable Care Act and how Kansas hospitals should be better reimbursed for care they provide to low income residents that are not being covered due to the state’s decision to not expand the Medicaid program. Once approved at a future meeting, the language will be added to the city’s Legislative Priorities Statement that is given to area legislators. City Commissioner Jeremy Farmer also wants language making it clear the city does not support legislation that would give businesses the right to refuse service based on a customer’s sexual orientation or marital status.