City Attorney’s Report Raises Red Flags About Project

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A community center expansion and remodeling in Irvine faced the “perfect storm” when the project ran into a large number of change orders, including defective architectural plans, the addition of an unauthorized tai chi patio area and inaccurate staff reports, Interim City Attorney Richard Jones said at Tuesday night’s City Council meeting.

Jones was asked in April to investigate the community center project at Northwood Community Park after Councilman Jeffrey Lalloway raised questions about staff reports and change orders, saying that the numbers didn’t add up.

Jones agreed and said as much in a report that notes several problems. He declared staff reports to be “ambiguous and inaccurate,” the result of which being a loss of confidence from the council members in the information provided.

Councilwoman Christina Shea went a step further, saying that having so many factual errors in the staff reports is evidence that staff intentionally fabricated information.

“I can’t make the decisions if I understand at all that my staff would be lying to me in a report,” said Shea, a Republican who has long been one of the most outspoken players in Irvine politics. “We can’t make good decisions with false information.”

Councilwoman Beth Krom, one of two Democrats on council, took issue with Shea’s assumption, saying that the evidence showed only that numbers were added up incorrectly.

“I just don’t like using words like ‘lied’ unless there is proof that people lied,” Krom said.

According to Jones’ presentation to the council, the staff had asked for money to cover $1.7 million in cost overruns on a $4.1-million project. As of Tuesday night’s meeting, which included approval of another $30,000 for the project, cost overruns had been reduced to $1.3 million, the presentation showed.

Jones said that at least one red flag for council members was a lack of communication between field staff and senior management regarding many of the change orders that field staff believed they had authority to approve.

Money was moved among project elements such as construction and design “masking the actual costs incurred,” Jones stated.

Another reason for the cost increases was the addition of a tai chi area, which city documents at the time stated was directed by the Irvine Community Services Commission and had a budget of $183,000. Neither was true. The actual budget for the improvement was $83,000.

Also, plans from the project architect, Tustin-based Kishimoto Architects, were apparently deficient, leading to more project change orders, Jones said. More than 62 percent of the change orders were attributable to errors and omissions in the project, he said. Council members will likely meet behind closed doors to discuss a possible lawsuit to recover the additional cost from those errors.

Jones, appointed interim city attorney by the Republican council majority earlier this year, recommended many revisions to city policy to ensure that such problems don’t arise again.

Among the recommendations:

  • A policy requiring council approval for change orders that “modify the nature and scope of the project.”
  • A policy to control movement of funds between different project elements.
  • Thorough description of project expenditures in staff reports.
  • Special charts or spreadsheets to track expenses.
  • Policies defining the oversight role of on-site project managers.

City Manager Sean Joyce reaction to the report was contrite. He said he agreed with its findings and that many policy changes have been implemented. He assured the council that communication failures would not happen again and that “we will never intentionally mislead you.”

“I’ve learned a lot and we’ve learned a lot in this organization from this case study,” Joyce said. “We are pleased to have a road map for how we will improve.”

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

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