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Audit criticizes sale of old Ribera school

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By Barry Massey
The Associated Press

SANTA FE — Legislative auditors criticized the state on Monday for spending nearly $600,000 to renovate an abandoned school house in northern New Mexico and later selling the still unfinished building for $39,000 to a non-profit group that originally donated it.

The project began when Democrat Bill Richardson was governor, but Republican Gov. Susan Martinez’s administration last year approved the sale of the old school in the community of Ribera in San Miguel County.

A report by Legislative Finance Committee auditors said the Department of Cultural Affairs poorly managed the capital improvements to the school that dates to the 1800s and was last used for a pre-school program in the 1970s.

The department manages the state’s museum and historic sites.

Auditors faulted the agency for selecting a contractor in 2009 to do the school improvements, although the company’s owner several months earlier had been convicted of embezzlement in an unrelated case. The company, Omni Development Inc., wasn’t barred from state procurement contracts until June 2012, however. Martinez took office in 2011.

The state Board of Finance last October approved the sale of the school to the non-profit group Los Pueblos Community Council, which originally promoted the renovation project and plans to use the building as a community center. The group donated the school to the state in 2009 — two years after obtaining $600,000 from the state to renovate and preserve the building. Federal grants also were provided for the project.

Auditors said there were questions whether the sale of the building violated the New Mexico Constitution’s anti-donation clause, which bars the state from making donations to private individuals or entities. Auditors have sent a letter to the attorney general’s office outlining their concerns.

Cultural Affairs Secretary Veronica Gonzales defended the sale of the building, saying it was the best course of action.

“The project was placed under DCA without proper planning and without proper funding,” she told the Legislature’s Revenue Stabilization and Tax Policy Committee that reviewed the audit.

“The cost to the state would have been significantly higher if we had continued improving the structure and had attempted to cover operating costs for programs without a statewide mission,” she said.

The property was appraised at $39,000. She said the building — at the time of the sale — lacked a floor, roof, windows and doors, and some walls weren’t complete. Gonzales said it would have cost an additional $1 million to complete the renovations.

State money went to stabilize walls, remove a roof with asbestos and other work. But auditors said the state’s procurement code was violated because there was no competitive bidding before Omni was selected for the job.

Auditors also said there wasn’t documentation for change orders for work, and the state shouldn’t have paid $9,000 to remove an underground tank used to store heating oil.

Sen. John Arthur Smith, a Deming Democrat, said the state lacked good oversight of capital improvements.

“We’re having somebody make off with a ton of taxpayer dollars,” Smith said.