From Michael Graham, City of Tucson Public Information Officer, responding to an email I sent to Maximiliano Torres, the point person for City of Tucson Modern Streetcar Project Business Outreach:
The Federal Transit Administration project security and safety requirements include visibility into and out of, as well as around a construction site. Allowing objects, posters, streamers, signs to remain on the fences obstructs visibility into and out of the construction zone. The fencing is a traffic control device and there are restrictions against placing items on traffic control devices.
An email from the City of Tucson was sent to David Aguirre at 2:35 p.m. yesterday informing him that the contractor would be removing the artwork, saving it, and returning it to Mr. Aguirre to redistribute to the artists who made the artwork.
Of course, one would have to imagine that keeping the fences art free might be a challenge in the long run, but time will tell.