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Grant funding misspent; birding trail built on land given to Hartley
Thelma Grimes/San Pedro Valley News-Sun
The city misspent thousands of dollars of grant funding to build a birding trail in North Benson and subsequently learned that the land on which the trail was built had mistakenly been given to a private owner.
As a result, much of the money spent to build the trail had to be reimbursed to grant providers. In an email to Benson City Manager Glenn Nichols, City Finance Director Jim Cox states, "The birding trail project ball got dropped, and what we spent was not in accordance with the grant budget."
While the city is still sorting out who fumbled, one thing is for sure, Nichols sent out two checks amounting to more than $12,000 to reimburse the U.S. Fish and Wildlife Service, and Kinder Morgan SFPP, L.P.
On Oct. 2, Nichols signed a check for $7,817.68 to the U.S. Fish and Wildlife Service, and a separate $5,000 check to Kinder Morgan. Both agencies provided the city with grant funding to build what is commonly referred to as the birding trail in north Benson between the San Pedro Golf Course and the Wastewater Treatment facility.
Nichols spoke about the situation briefly at the Oct. 8 City Council retreat, but referred to the issue as "complicated." He informed the council Monday night that the checks were sent out.
Emails between city staff members show staff started looking into the grant issues as far back as July.
A July 16 email to Cox from Denise Wolford of the city accounting department gives some idea of the discrepancy.
"I got the agreement sent from (Kris Randall, of the Wildlife Service); you aren't going to like what it says. I know I don't," Wolford said. "I doubt she'll pay for the rock, they were supposed to borrow the mulcher and hand-make the trail, among other things."
The email ends with an illustration of a stressed out face looking at his watch and sweating.
The following day, Cox sent an email to Nichols informing him of the situation.
"The birding trail project ball got dropped, and what we spent was not in accordance with the grant budget," he said. "The grant has ongoing maintenance and reporting responsibilities, so we can't just close it out. The good news is that we haven't been reimbursed for any non-qualified expenses. The bad news is there is $17,000 left on the grant and we have spent $30,000 plus that won't be reimbursed."
According to city records, Wolford continued to communicate with Randall, and even got the Wildlife Service to give the city an additional year to sort out the situation and finish the project per grant specifications.
Nichols said that's not possible since officials found out the land where the birding trail is located is no longer owned by the city. It was inadvertently signed over to San Pedro Golf Course owner Tom Hartley in the $4 million lawsuit settlement in July 2008.
Nichols, who was not city manager at the time, said the past administration and city attorney must not have reviewed the legal settlement, and the land owned by the city was "accidentally" included in the signed agreement.
City staff is still looking into how the land was turned over to Hartley in the settlement, and they are getting some answers through two separate land surveys conducted by former City Councilman Ted Amox.
Hartley paid Amox in 2005 and again in 2008 to survey the land. The city did not do its own survey. While details are still being sorted out, city officials think Amox had the land the birding trail sits on as Hartley's property in both surveys.
The land description, according to the grant, is "14.4 acres and is located within a 100-acre tract owned by the city of Benson along the San Pedro River. The parcel is said to be abandoned cropland located within the city, just north of Interstate 10, adjacent to the golf course and wastewater treatment ponds, and includes a one-mile reach of the river."
Nichols said the situation is still being investigated, but there is no way the city can spend federal grant dollars on land that is now privately owned.
City Attorney Michael Massee weighed in on the matter in an Oct. 15 email.
"The city made some improvements to a birding trail, a parking lot, to land it owned near the San Pedro River that was encumbered by a 99-year lease as part of the golf course operated by Arizona Golf Systems, L.L.C, whose principal is Tom Hartley," Massee said. "The city legally still owned the land and therefore the requirements in the federal grant that the land had to be public, I think, technically were met. However, when the city later decided to settle Mr. Hartley's claims against the city by conveying to him the reversionary interest in the 99-year leasehold, this part of the golf course property was not carved out of the legal description. So the birding trail's inclusion within the property conveyed does not appear to be a "mistake" in the legal sense that would allow for a corrected legal description to be substituted."
However, a legal substitution won't be as easy, as Hartley's attorneys are already looking at what they would get in return for turning the property back over to the city.
In a letter to the city, Spencer Smith, Hartley's attorney, referred to an upcoming meeting with city staff.
"The purpose of the meeting will be to discuss possible future expansion of the City of Benson's wastewater treatment plant and its impact on Mr. Hartley's property, possible relocation of sludge and wastewater storage ponds or lagoons, possible transfer of property from Mr. Hartley to the City of Benson for future expansion of the wastewater treatment plant, possible resolution of the city's need to acquire property for its birding trail, and possible initiation of a request for rezoning of a portion of Mr. Hartley's property to a more dense residential use."
Hartley has said he plans to build condominiums on the golf course property. The most recent city oversight might make the process easier.
Since he came to Benson in 2004, Hartley's attorneys have been able to capitalize on several city mistakes. At first, Hartley had signed a 99-year lease agreement with the city to build the golf course, and the city promised the wastewater treatment facility would produce enough effluent to water the golf course.
However, the city's estimates were wrong and there was not enough water. Through a lawsuit, Hartley took full ownership of the golf course property, and to this day, the city still provides water.
Now Hartley may again capitalize on city mistakes, as he moves forward with building condos.
The city misspent thousands of dollars of grant funding to build a birding trail in North Benson and subsequently learned that the land on which the trail was built had mistakenly been given to a private owner.
As a result, much of the money spent to build the trail had to be reimbursed to grant providers. In an email to Benson City Manager Glenn Nichols, City Finance Director Jim Cox states, "The birding trail project ball got dropped, and what we spent was not in accordance with the grant budget."
While the city is still sorting out who fumbled, one thing is for sure, Nichols sent out two checks amounting to more than $12,000 to reimburse the U.S. Fish and Wildlife Service, and Kinder Morgan SFPP, L.P.
On Oct. 2, Nichols signed a check for $7,817.68 to the U.S. Fish and Wildlife Service, and a separate $5,000 check to Kinder Morgan. Both agencies provided the city with grant funding to build what is commonly referred to as the birding trail in north Benson between the San Pedro Golf Course and the Wastewater Treatment facility.
Nichols spoke about the situation briefly at the Oct. 8 City Council retreat, but referred to the issue as "complicated." He informed the council Monday night that the checks were sent out.
Emails between city staff members show staff started looking into the grant issues as far back as July.
A July 16 email to Cox from Denise Wolford of the city accounting department gives some idea of the discrepancy.
"I got the agreement sent from (Kris Randall, of the Wildlife Service); you aren't going to like what it says. I know I don't," Wolford said. "I doubt she'll pay for the rock, they were supposed to borrow the mulcher and hand-make the trail, among other things."
The email ends with an illustration of a stressed out face looking at his watch and sweating.
The following day, Cox sent an email to Nichols informing him of the situation.
"The birding trail project ball got dropped, and what we spent was not in accordance with the grant budget," he said. "The grant has ongoing maintenance and reporting responsibilities, so we can't just close it out. The good news is that we haven't been reimbursed for any non-qualified expenses. The bad news is there is $17,000 left on the grant and we have spent $30,000 plus that won't be reimbursed."
According to city records, Wolford continued to communicate with Randall, and even got the Wildlife Service to give the city an additional year to sort out the situation and finish the project per grant specifications.
Nichols said that's not possible since officials found out the land where the birding trail is located is no longer owned by the city. It was inadvertently signed over to San Pedro Golf Course owner Tom Hartley in the $4 million lawsuit settlement in July 2008.
Nichols, who was not city manager at the time, said the past administration and city attorney must not have reviewed the legal settlement, and the land owned by the city was "accidentally" included in the signed agreement.
City staff is still looking into how the land was turned over to Hartley in the settlement, and they are getting some answers through two separate land surveys conducted by former City Councilman Ted Amox.
Hartley paid Amox in 2005 and again in 2008 to survey the land. The city did not do its own survey. While details are still being sorted out, city officials think Amox had the land the birding trail sits on as Hartley's property in both surveys.
The land description, according to the grant, is "14.4 acres and is located within a 100-acre tract owned by the city of Benson along the San Pedro River. The parcel is said to be abandoned cropland located within the city, just north of Interstate 10, adjacent to the golf course and wastewater treatment ponds, and includes a one-mile reach of the river."
Nichols said the situation is still being investigated, but there is no way the city can spend federal grant dollars on land that is now privately owned.
City Attorney Michael Massee weighed in on the matter in an Oct. 15 email.
"The city made some improvements to a birding trail, a parking lot, to land it owned near the San Pedro River that was encumbered by a 99-year lease as part of the golf course operated by Arizona Golf Systems, L.L.C, whose principal is Tom Hartley," Massee said. "The city legally still owned the land and therefore the requirements in the federal grant that the land had to be public, I think, technically were met. However, when the city later decided to settle Mr. Hartley's claims against the city by conveying to him the reversionary interest in the 99-year leasehold, this part of the golf course property was not carved out of the legal description. So the birding trail's inclusion within the property conveyed does not appear to be a "mistake" in the legal sense that would allow for a corrected legal description to be substituted."
However, a legal substitution won't be as easy, as Hartley's attorneys are already looking at what they would get in return for turning the property back over to the city.
In a letter to the city, Spencer Smith, Hartley's attorney, referred to an upcoming meeting with city staff.
"The purpose of the meeting will be to discuss possible future expansion of the City of Benson's wastewater treatment plant and its impact on Mr. Hartley's property, possible relocation of sludge and wastewater storage ponds or lagoons, possible transfer of property from Mr. Hartley to the City of Benson for future expansion of the wastewater treatment plant, possible resolution of the city's need to acquire property for its birding trail, and possible initiation of a request for rezoning of a portion of Mr. Hartley's property to a more dense residential use."
Hartley has said he plans to build condominiums on the golf course property. The most recent city oversight might make the process easier.
Since he came to Benson in 2004, Hartley's attorneys have been able to capitalize on several city mistakes. At first, Hartley had signed a 99-year lease agreement with the city to build the golf course, and the city promised the wastewater treatment facility would produce enough effluent to water the golf course.
However, the city's estimates were wrong and there was not enough water. Through a lawsuit, Hartley took full ownership of the golf course property, and to this day, the city still provides water.
Now Hartley may again capitalize on city mistakes, as he moves forward with building condos.
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Reader Comments
The following are comments from the readers. In no way do they represent the view of bensonnews-sun.com.
not to worry wrote on Oct 29, 2009 8:48 AM:
" If the attorney signed off on a $4 million settlement without reading, surely the attorney will cheerfully refund the amount of money that the city lost. Attorneys carry insurance against that sort of mistake, don't they? "
Clint wrote on Oct 30, 2009 12:41 PM:
" To “ a lot of grass seed.”
There will no further digging as long as the mayor and the publisher are being carried in the same basket. "
There will no further digging as long as the mayor and the publisher are being carried in the same basket. "
wrote on Oct 30, 2009 11:36 PM:
" The property in question was, as the city attorney says, part of a 99 year lease. I disagree with the city attorney that the City was in compliance even then to get the grant. They had no right to develope land already leased to someone else. They can not give public access to land leased to a private citizen. A lease gives a type of ownership during the lease and becomes private property.
Mr. Hartley is not the kind of business owner that we should want in Benson and everyone should boycott his business. He could easily convey that property back to the city but instead wants to blackmail them for special favors.
My advice would be to bite the bullet city officials and pay back the grant. Don't make ANY deals with Hartley or his attorneys. Tell them to keep the land and don't give them a thing.
Hartley and his attorneys are no better than gangsters and have already hurt this city enough at the tax payers expense. Run him out of town. Then Benson needs to hire a competent and qualfied City Manager and City Attorney. Nichols has shown he hasn't got a clue and the attorney is leading this city down a path of laws suits. "
Mr. Hartley is not the kind of business owner that we should want in Benson and everyone should boycott his business. He could easily convey that property back to the city but instead wants to blackmail them for special favors.
My advice would be to bite the bullet city officials and pay back the grant. Don't make ANY deals with Hartley or his attorneys. Tell them to keep the land and don't give them a thing.
Hartley and his attorneys are no better than gangsters and have already hurt this city enough at the tax payers expense. Run him out of town. Then Benson needs to hire a competent and qualfied City Manager and City Attorney. Nichols has shown he hasn't got a clue and the attorney is leading this city down a path of laws suits. "
Hold them accountable wrote on Nov 2, 2009 12:11 PM:
" Benson had a good and ethical attorney in Benavidez, he of course had to go.
It would be interesting to know how much incompetant city attorneys and city managers have cost the taxpayers of Benson to satisfy the powers that be. This would be a true journalistic story Thelma. Holding government accountable. "
It would be interesting to know how much incompetant city attorneys and city managers have cost the taxpayers of Benson to satisfy the powers that be. This would be a true journalistic story Thelma. Holding government accountable. "
Chris wrote on Oct 29, 2009 8:29 AM: