State Audit Finds Problems In Texarkana Development Deal

A state audit of the city of Texarkana's dealing with a hotel and water park developer found numerous apparent violations of state law and has been forwarded to the local prosecuting attorney.

The "Review of Selected Transactions" (PDF) was released Wednesday afternoon by the Division of Legislative Audit. Its findings called into question the dealings of Harold Boldt, who was fired and re-hired as city manager in 2013, with Dr. Hiren Patel, the developer of a hotel, convention center and water park complex who was not identified by name in the audit.

"DLA review revealed inadequately documented construction expenditures totaling $4.14 million … and noncompliance with various state laws, as well as city codes, ordinances, policies, and agreements," the report said.

The DLA also noted "several other unusual transactions authorized by the City Manager," including paying $2.95 and $3.50 per SF for land that Patel had bought for $1.50 per SF only days or months earlier and then giving an acre to Patel at no cost.

As Arkansas Business has previously reported, the city agreed to refund Advertising & Promotion Commission taxes to the hotel and water park, waived a $15,000 building permit and sold water to the complex at a reduced rate.

"However," the audit said, "there was no indication that the City Manager benefitted personally from these transactions, which were approved by the [City Board of Directors] and or A&P Commission."

The only transaction that appeared to have benefitted Boldt personally was the city's annual contribution to his retirement plan at the beginning of each year, "before salary is actually earned," rather than at the end of the year, as was the case with other city employees.

In a response attached to the audit, Boldt said he thought he had the authority to take various actions in the interest of "economic development."

"I have worked diligently during my tenure as City Manager to make Texarkana, Arkansas, a better place to live for our citizens," Boldt wrote. The DLA's finding that he did not personally benefit from the transactions "goes to show that it was never about me, but the City as a whole."

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