When the Arizona Board of Regents (ABOR) agreed to implement the 15 recommendations made by Arizona’s Auditor General Lindsey Perry for the board’s real estate policies, it wasn’t very clear how or when the changes would happen.
However, ABOR’s executive director John Arnold and Arizona’s Deputy Auditor General Melanie Chesney both confirmed to the Downtown Devil on Wednesday that they will meet in six months to review ABOR’s progress towards a stronger real estate and business policy.
Chesney said her department plans to follow up with ABOR in six months to review documents, interview people and examine other aspects that will help determine where ABOR stands in the implementation process.
If ABOR hasn’t made the necessary changes after six months, Chesney said there will be another follow up 12 months later.
Arnold said that the policymaking will fall largely on two ABOR subcommittees — Property Oversight and Finance and Capital Resources.
According to a report, ABOR was granting lease agreements through Arizona’s top three universities — Arizona State University, the University of Arizona and Northern Arizona University — that gave lessees property tax benefits and allowed them to make payments to the university.
However, it explained that these tax benefits weren’t provided for all lease agreements.
While two Arizona State University projects — Mirabella and Marina Heights — were given tax benefits, a contractor for a Northern Arizona University project had to pay $1.4 million in personal property taxes between 2009 and 2018 because the improvements made on the property remained under the ownership of the contractor rather than being transferred to the university, according to the report.
One thing the Auditor General recommended was to draft a written guide that definitely lays out their real estate policies, including the university’s main objective for the project and ensuring that the private entity receiving tax benefits is meeting performance standards.
The report also stated that the board has revised its policy so that they’re considering tax and economic impact, but that they’re still failing to properly and consistently implement it.
That could potentially lead to universities reporting insufficient analyses and allowing ABOR to enter into contracts that would be of greater benefit to a private company rather than the public, according to the report.
The report also discovered ABOR didn’t have a full list of their properties after comparing data from the Arizona county assessor’s and treasurer’s records.
The Auditor General suggested that ABOR work towards completing a list that encompasses all the properties under the board’s watch.
In response to the report, the board responded in a press release October 16, suggesting that they will implement the recommendations made by the auditor general.
“As always, our mission is to ensure these institutions are operating in the best interest of the Arizona students and families we serve,” ABOR Chair Larry E. Penley said in the press release. “We thank the Auditor General for these recommendations to strengthen our already robust governance of Arizona’s public universities.”
Contact the reporter at jklein11@asu.edu.
