Budget-Busting Project Has Irvine Officials Scrambling

Irvine Council Majority
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An expansion and remodeling of a community center at Irvine’s Northwood Community Park has gone as much as 45 percent over its original budget, and city staff is acknowledging that council members were given misinformation regarding the cost of the project.

The City Council last week tabled a request to approve $500,000 in additional spending on the project, instead directing interim City Attorney Richard Jones to investigate the matter.

The 3-2 vote followed the usual council split, with Republicans Steven Choi, Jeff Lalloway and Christina Shea in favor of the investigation and Democrats Larry Agran and Beth Krom voting no. There was, however, no dispute that the council was presented with incorrect staff reports.

City Manager Sean Joyce acknowledged significant flaws in the management of  the project, including communication failures within the city bureaucracy. He also admitted that city officials have little experience with complicated remodeling jobs.

“It brings me no pleasure to admit where we fall short. We did in this case,” Joyce said, calling the shortcomings an “anomaly” and “one we will work hard to avoid ever experiencing again.”

In 2011, when council members first considered plans to expand and remodel the community center, the agenda staff report said the budget would be approximately $4 million. When the project again came before the council in March, an attached staff report said the budget was actually $5.3 million. The request, tabled for the second time last week, would have taken the project up to $5.8 million.

The staff report from the March meeting states that the community services commission had directed staff to spend $180,000 to redesign the patio area to accommodate tai chi practice. The community services commission had made no such direction, Joyce acknowledged. And the real cost of the patio redesign was $83,278, according to a more recent staff report.

There are also change orders for structural framing, window opening mechanisms, connecting to a water line, ceiling finishes and exterior siding among others, according to the staff. Lalloway said when he obtained the documents he found that the change orders don’t add up to the amount stipulated in the report.

Lalloway estimated that the project has gone 45 percent over the $4 million budget in the original 2011 staff report. Typically, change orders for a public works project range between 10 percent and 20 percent, he said. Change orders of more than 40 percent indicate there is something “seriously wrong” with the project, Lalloway said during last week’s council meeting.

“This situation is deeply disturbing to me, this project in general,” Lalloway said. “It’s contrary to everything I believe in: open, honest and transparent government.”

While not defending city staff’s work on this project, Joyce presented to council members a slide showing that dozens of capital improvement projects have, on average, come in under budget by 6 percent.

Krom and Agran moved to have Joyce review the project and report what went wrong.

Krom argued that Jones, who last month replaced Costa Mesa-based Rutan & Tucker as city attorney, didn’t have enough experience with the city to conduct the investigation. And she challenged the need for such a review, saying that nobody has disputed whether the change orders were necessary.

“Now we have an interim city attorney who knows very little about the city, who’s on his own learning curve, now we’re going to give him the authority to investigate what’s happening in our city?” Krom said.

Lalloway and his Republican colleagues shot down the proposal. Lalloway pointed out that Joyce had signed the inaccurate staff report from March, evidence that the city manager was in no position to investigate his own errors.

“I have complete confidence in our interim city attorney to conduct an independent investigation,” Lalloway said. “And frankly, that’s what we need here, an independent investigation.”

The confusion continued when Councilman Larry Agran questioned whether the project would be halted if the requested budget addition wasn’t approved. Agran argued that officials should approve the additional money because it’s needed to finish the project and will, in any event, probably be granted at some point.

City staffers first said the work on the project would stop but later acknowledged that $1 million remained committed to the project. That work would have to freeze after an unspecified number of days until the $500,000 budget addition is approved.

“It’s really confusing to me,” Choi said. “Five hundred thousand dollars will last for six months of construction … and a million dollar balance is still left … and that will last only several days. So I don’t understand.”

At one point, Joyce pleaded with staffers to provide straightforward and accurate answers.

“When are we going to run out of money?” Joyce asked, referring to the project’s budget.

That question was never specifically answered.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek.

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