July 2016.

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http://www.ocregister.com/articles/city-722815-project-report.html

NEWPORT BEACH – The city may have overpaid on its costly civic center by $1.2 million in a project that lacked proper oversight and construction practices, according to a preliminary independent audit.

The report cites City Staff’s lack of guidance to the project’s architect and program manager as one of several factors the cost for the decade-long project rose from a projected $49 million in 2005 to $140.2 million when it was completed in 2013.

Harris & Associates and R. W. Block Consulting were hired by the city last year to review the construction process the civic center, which has been dubbed the “Taj Mahal“ by some.

The council voted 4-3 July 5 to file the draft report and direct city attorney Aaron Harp to seek reimbursement of the $1.2 million from construction firm C.W. Driver. after the audit findings were presented.

Council members Tony Petros, Ed Selich and Keith Curry voted no.

Curry said the council should give C.W. Driver time to respond to the draft report before requesting the difference in funds.

“Before we go sending our lawyers off to collect imaginary money we think people owe us, what we probably ought to do is give C.W. Driver the opportunity and and our staff the opportunity to react to the draft that we got five or six days ago,” he said.

Incomplete financial and missing monthly reports, two-thirds of which are not accounted for, could be factors of the project’s inflated cost, said Allyson Gipson, vice president of Harris & Associates.

“We don’t know if they got lost… if they were never prepared, but there are gaps in the knowledge,” Gipson said. “The documentation wasn’t completely there.”

The draft report details a conflict of interest in having C.W. Driver act as the project’s program and construction manager. The program manager acts on behalf of their client while the construction manager focuses on their own financial interest.

“Utilizing the same firm for both roles is not a best practice as these two functions typically serve competing financial interest,” according to the report.

City staff did not appear to properly track the project’s development from design through construction, according to the draft.

“We did not find an city policies or procedures that provided guidance on the required aspects for managing large capital projects,” the report states.

A spokeswoman for C.W Driver declined to comment.

The project grew tremendously in scope from a proposed 72,000-square-foot City Hall with a community room, new fire station and 350-space parking garage when the idea was floated in 2005. The original proposed location was on the same land as the old City Hall on the Balboa Peninsula.

A group of residents pressured the then City Council to relocate the project to its current spot in Newport Center.

Then came the amenities. A 450-space parking structure, dog park, a bigger community room, a footbridge, emergency communications center and public gathering room with a kitchen and cluster of giant rabbit statues.

In response to the backlash, four new council members were elected after running on a platform of fiscal responsibility.

In response to their findings, the draft recommends better accountability of documentation such as monthly reports, change orders and payment applications.

“Overall, I am glad that an audit has been done,” City Managaer David Kiff said. “I thought that it had some solid recommendations and I thought that the firm that did the work was diligent and thoughtful.”

The final report could be available before the end of the summer.

Contact the writer: 714-796-2478 or lcasiano@ocregister.com

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http://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-herdman-20160715-story.html

Newport Beach City Council candidate Jeff Herdman’s position on a city advisory board means he is not eligible to serve on the council until a year after he leaves that board, according to a letter from City Clerk Leilani Brown.

Herdman, a longtime Balboa Island resident, is bidding in the November election to replace termed-out Councilman Ed Selich representing District 5, which includes the island, Newport Center and a portion of Big Canyon. Also vying for the seat are community activist and businessman Mike Glenn and local businessman Lee Lowrey.

The winner is scheduled to take over the seat in December.

If Herdman wins, Brown said, he would be ineligible to serve at that time.

“Based upon my review of the city charter and in consultation with outside counsel, I have determined that city charter Section 710 prevents Mr. Herdman from occupying the position of city councilmember for a period of one year after his service on the Civil Service Board is complete,” Brown wrote in the letter circulated Thursday.

Herdman has been on the board since he was appointed in 2014. His term expires in June 2018.

The letter came roughly two weeks after Balboa Island resident Bob McCaffrey claimed in a complaint to the city that Herdman is ineligible to run in the November election because of his position on the Civil Service Board, which advises the City Council on personnel matters and conducts appeal hearings for city employees in disciplinary matters.

McCaffrey said he intends to support Lowrey in November.

Herdman said Friday that he does not intend to suspend his council campaign and is working with a lawyer to take “appropriate steps to put the matter to rest.”

He also said he doesn’t think he needs to leave the Civil Service Board before the election.

“I’m too far along in my campaign to let this clear form of harassment stop me,” he said. “I have a constitutional right to run for City Council, and the voters in the city of Newport Beach also have a right to vote for who they think is the most qualified candidate. It is just sad that the McCaffrey machine here in the city is trying to take my right, as well as the voters’, away.”

McCaffrey is chairman of a political action committee known as Residents for Reform, which supported “Team Newport,” a slate of council candidates consisting of Diane Dixon, Kevin Muldoon, Scott Peotter and Marshall “Duffy” Duffield who swept the four available seats in the 2014 election and now constitute the council majority. McCaffrey donated funds to the slate.

Herdman has been critical of Peotter, Muldoon and Duffield since they were elected.

This isn’t the first time McCaffrey and Herdman have bumped heads.

Herdman has suggested in published letters to the Daily Pilot that the city request that the California Fair Political Practices Commission conduct a full audit of all the candidates in the 2014 election to examine their “independent expenditures, slate mail committees and other expenditures spent to influence the election.”

In April 2015, Herdman sent a letter to the FPPC alleging that a campaign contribution Peotter received violated the Political Reform Act and city code. Peotter denied wrongdoing.

Last November, McCaffrey filed a complaint with the FPPC against Herdman, alleging that he failed to submit a mandatory form before soliciting and accepting donations for his council campaign. Herdman denied violating the law.

McCaffrey said Friday that he filed the new complaint because he believes everyone should follow the rules.

“He can do whatever he wants to do,” McCaffrey said of Herdman continuing his campaign. “Although it seems like the honorable thing to do would be to give the money back to his benefactors.”

Section 710 of the city charter states that no Civil Service Board member, “while a member of the board, or for a period of one year after [the person] has ceased for any reason to be a member, shall occupy or be eligible for appointment to any salaried office or employment in service of the city.”

The provision aims to curb conflicts of interest when ruling on employee matters.

A City Council member receives $1,274 in monthly compensation; the mayor receives $1,808, according to city documents. But whether the money is a salary or a stipend is a point of contention.

McCaffrey said in his complaint that he believes a council position is a salaried office and that the charter means Herdman cannot serve.

Herdman has said the money paid to council members is reimbursement for expenses incurred.

“I’m sure that when the voters approved the city charter amendments two elections ago, it was never their intent to prevent any individual from running for office who is a member of the Civil Service Board,” Herdman said. “They did not create a de facto qualification or a hidden qualification stuck in unrelated charter provisions that would prevent someone from running for City Council. That would simply be unconstitutional.”

Hannah Fry, hannah.fry@latimes.com

Twitter: @HannahFryTCN

http://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-herdman-20160715-story.html

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Newport Beach City Council candidate Jeff Herdman’s position on a city advisory board means he is not eligible to serve on the council until a year after he leaves that board, according to a letter from City Clerk Leilani Brown.

Herdman, a longtime Balboa Island resident, is bidding in the November election to replace termed-out Councilman Ed Selich representing District 5, which includes the island, Newport Center and a portion of Big Canyon. Also vying for the seat are community activist and businessman Mike Glenn and local businessman Lee Lowrey.

The winner is scheduled to take over the seat in December.

If Herdman wins, Brown said, he would be ineligible to serve at that time.

“Based upon my review of the city charter and in consultation with outside counsel, I have determined that city charter Section 710 prevents Mr. Herdman from occupying the position of city councilmember for a period of one year after his service on the Civil Service Board is complete,” Brown wrote in the letter circulated Thursday.

Herdman has been on the board since he was appointed in 2014. His term expires in June 2018.

The letter came roughly two weeks after Balboa Island resident Bob McCaffrey claimed in a complaint to the city that Herdman is ineligible to run in the November election because of his position on the Civil Service Board, which advises the City Council on personnel matters and conducts appeal hearings for city employees in disciplinary matters.

McCaffrey said he intends to support Lowrey in November.

Herdman said Friday that he does not intend to suspend his council campaign and is working with a lawyer to take “appropriate steps to put the matter to rest.”

He also said he doesn’t think he needs to leave the Civil Service Board before the election.

“I’m too far along in my campaign to let this clear form of harassment stop me,” he said. “I have a constitutional right to run for City Council, and the voters in the city of Newport Beach also have a right to vote for who they think is the most qualified candidate. It is just sad that the McCaffrey machine here in the city is trying to take my right, as well as the voters’, away.”

McCaffrey is chairman of a political action committee known as Residents for Reform, which supported “Team Newport,” a slate of council candidates consisting of Diane Dixon, Kevin Muldoon, Scott Peotter and Marshall “Duffy” Duffield who swept the four available seats in the 2014 election and now constitute the council majority. McCaffrey donated funds to the slate.

Herdman has been critical of Peotter, Muldoon and Duffield since they were elected.

This isn’t the first time McCaffrey and Herdman have bumped heads.

Herdman has suggested in published letters to the Daily Pilot that the city request that the California Fair Political Practices Commission conduct a full audit of all the candidates in the 2014 election to examine their “independent expenditures, slate mail committees and other expenditures spent to influence the election.”

In April 2015, Herdman sent a letter to the FPPC alleging that a campaign contribution Peotter received violated the Political Reform Act and city code. Peotter denied wrongdoing.

Last November, McCaffrey filed a complaint with the FPPC against Herdman, alleging that he failed to submit a mandatory form before soliciting and accepting donations for his council campaign. Herdman denied violating the law.

McCaffrey said Friday that he filed the new complaint because he believes everyone should follow the rules.

“He can do whatever he wants to do,” McCaffrey said of Herdman continuing his campaign. “Although it seems like the honorable thing to do would be to give the money back to his benefactors.”

Section 710 of the city charter states that no Civil Service Board member, “while a member of the board, or for a period of one year after [the person] has ceased for any reason to be a member, shall occupy or be eligible for appointment to any salaried office or employment in service of the city.”

The provision aims to curb conflicts of interest when ruling on employee matters.

A City Council member receives $1,274 in monthly compensation; the mayor receives $1,808, according to city documents. But whether the money is a salary or a stipend is a point of contention.

McCaffrey said in his complaint that he believes a council position is a salaried office and that the charter means Herdman cannot serve.

Herdman has said the money paid to council members is reimbursement for expenses incurred.

“I’m sure that when the voters approved the city charter amendments two elections ago, it was never their intent to prevent any individual from running for office who is a member of the Civil Service Board,” Herdman said. “They did not create a de facto qualification or a hidden qualification stuck in unrelated charter provisions that would prevent someone from running for City Council. That would simply be unconstitutional.”

Hannah Fry, hannah.fry@latimes.com

Twitter: @HannahFryTCN

OP/ED: Taj-Ma-City-Hall Audit

By Scott Peotter | Special to the NB Indy

We Needed an Adult in the Room!

The city’s auditors of the Taj-Ma-City-Hall made a presentation of their draft report last week. The bottom line? The City went over its own inflated budget by $29.3 Million and there is $1.2 Million in apparent overpayments that were paid to CW Driver. It seems the Previous Council couldn’t say no to anything.

Oh–and the project was $149M, not $142.5M. But what is a few Million amongst friends? In private industry people actually get fired for this.

Fox Watching the Hen House

The City’s team was made up of CW Driver as the Program Manager (Owner’s Representative) and CW Driver as the Construction Manager, so you had CW Driver watching CW Driver on behalf of the city, or in other words, we had the fox watching the henhouse.

It appears that CW Driver was hired as the Program Manager for $2.3 Million. This was done through a Request for Qualifications process (RFQ) and CW Driver was selected from several competing firms. Then it appears as though CW Driver was extended the Contraction Manager contract which started at $14.5Million without any bid, RFQ, or RFP process (in other words it was a sole source contract), but we are not sure because we do not seem to have the documentation.

So who was watching CW Driver? Evidently, not the city.

Budget Control? We Don’t Need No Stinkin’ Budget Control!

The Auditors said that the project was poorly run, that there were no apparent budget controls, no oversight, no apparent value engineering (duh!), no updated schedules, no regular project updates, and that there are a lot of missing documents which make it difficult to determine if the city paid more than it should.

We can all relate to people charging us more: “We are in Newport so we can afford it”

The square footage of the Taj went up 25 percent, but that was OK (not) because the cost/sf went up over 50 percent too! But this was never presented at council meetings, modifying the budget up an additional $14.6M accordingly.

You already know about the $1,000 desk chairs (which are not very comfortable by the way), but did you know that the windows at the Taj open and close automatically, depending on the outside temperature? Or that the blinds open and close automatically as the sun changes position? Nice if you can afford it.

If you have walked into the new Library Expansion from the Taj side of the Library and have gone in double doors, I would like to know who thought it would be a good idea to put a column in the middle of the opening? Yes, there is a column that you have to walk around after you walk in the doors.

Which is the Most Expensive Option? We’ll Take Two!

There doesn’t appear to have been any malfeasance in the construction of the Taj-Ma-City-Hall, at least that is what the city’s auditors are telling us. They actually go as far as to say that we got what we paid for. You ordered a custom built Ferrari and you got a Ferrari (not just a Mercedes, or a Cadillac).

Reminds me of the quote from former mayor Rush Hill according to the OC Register of February 21, 2014: “The architects we hired wanted to have the highest opportunity for design awards,” he said. “This was a high-design architect that does things in minute detail that many people don’t even see, but that ends up costing a lot of money. In the end, we did get an award-winning facility, but we paid for it.”

And we are still paying for it!

Scott Peotter is a Newport Beach City Councilman

NEWPORT BEACH, CA – Brad Avery, nationally recognized Director of Orange Coast College’s Marine Programs, today filed the forms required to begin raising funds to replace retiring Councilman Tony Petros on the Newport Beach city council.

OCC’s Marine Program operates The School of Sailing & Seamanship (http://www.occsailing.com/about-us/history/) the nation’s most comprehensive public nautical school. Over almost four decades, the School grew from a small publically-funded sailing program to a nationally recognized maritime school operating almost entirely without public funds. According to Avery, the School’s unique public/private partnership was a result of Proposition 13, which eliminated the program’s public funding in 1981.

“I had two choices when our funding was cut. We could close the program, or we could start charging fees and run it like a business. “ As a non-profit, we also reached out to our community for support.

The level of private giving over the years has been tremendous. We have many Newport Beach residents who are passionate about the ocean, boating and education.” The School now provides low-cost classes for more than 1,500 youth and adults each year. The School’s $1.5 Million budget is almost entirely met by course fees, grants, and private giving through the Orange Coast College Foundation.

Avery, who has served for the past five year on Newport Beach’s Harbor Commission, also volunteers on several non-profit boards. He is president of the 700-member Catalina Island Conservancy Marineros Group, and is a board member of the Santa Cruz Island Foundation. He is also a member of the Board of Advocates for the Oasis Senior Center.

“Brad has served on the Harbor Commission since 2011. He is a longtime boater and former business owner on the harbor and brings wide knowledge of the bay’s complexity to the city council. With over 10,000 boats in the largest recreational harbor in the United States his knowledge will be invaluable as we launch our Harbor restoration program,” declared Councilman Duffy Duffield.

“As a 47-year resident of Newport, I am excited at the possibility to serve on the council and work with residents and businesses to protect and improve the quality of life in this exceptional city.” Avery said.

Avery – Biography

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http://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-herdman-20160630-story.html

Hannah FryContact Reporter

Balboa Island resident Bob McCaffrey made public allegations this week that Newport Beach City Council candidate Jeff Herdman is ineligible to run in the November election because of his service on a city advisory board.

Herdman, a longtime Balboa Island resident, is bidding to replace termed-out Councilman Ed Selich representing District 5, which includes the island, Newport Center and a portion of Big Canyon.

Also vying for the seat are community activist Mike Glenn and Lee Lowrey, a local businessman known for raising money for political campaigns.

Herdman is on the Civil Service Board, which advises the council on personnel matters, conducts appeal hearings for city employees in disciplinary matters and launches investigations of personnel claims by city employees covered by a public safety union.

Balboa Island resident Bob McCaffrey claims that Jeff Herdman’s role on the Newport Beach Civil Service Board makes him ineligible to run for City Council. (File photo)

Balboa Island resident Bob McCaffrey claims that Jeff Herdman’s role on the Newport Beach Civil Service Board makes him ineligible to run for City Council. (File photo)

McCaffrey alleges that, under the city charter, Herdman’s position on the board prohibits him from serving on the City Council. Herdman was appointed to the board in 2014 and his term expires in June 2018.

McCaffrey said the issue at hand is outlined in Section 710 of the charter, which states that “the Civil Service Board shall consist of five members, none of whom while a member of the board, or for a period of one year after [he] has ceased for any reason to be a member, shall occupy or be eligible for appointment to any salaried office or employment in service of the city.”

The provision’s aim is to curb conflicts of interest while ruling on employee matters, according to McCaffrey.

A council member receives $1,274 in monthly compensation, while the mayor receives $1,808 per month, according to city documents.

Whether that money is a salary or a stipend is a point of contention.

McCaffrey said he believes a council position is a salaried office and interprets the charter to mean Herdman cannot serve on the council.

“Herdman should fold his tent now and not embarrass himself with a long and expensive legal battle,” McCaffrey wrote in a news release.

Herdman disagrees, saying the money paid to council members is reimbursement for expenses incurred.

He said he has hired a lawyer to research case law and write a letter to the city clerk showing court decisions that back his stance.

“It is clear to me that the tactics being employed by the opposition are forms of harassment that have resulted in my having to take time away from the campaign to deal with them, to cause me to have to spend money on legal advice and to discourage me from running for an office that I have every right to compete in,” Herdman said. “I think it is critical that my supporters and the community be aware of the tactics being used by the opposition against my campaign.”

Petros drops bid for second term on Newport council

Selich said he believes the charter section was intended to prohibit Civil Service Board members from becoming permanent city employees — not elected council members — for a year after they have served on the board.

“I think some people are making the argument that because the City Council is part of the CalPERS pension and receives health benefits that it de facto makes them a salaried employee,” Selich said. “The next big question is who is going to be the one to interpret it.”

City Atty. Aaron Harp declined to comment, saying he would not be the one to make the determination.

City Clerk Leilani Brown said she is looking into the issue.

This isn’t the first time McCaffrey and Herdman have bumped heads.

McCaffrey is the chairman of a political action committee known as Residents for Reform, which supported “Team Newport,” a slate of council candidates consisting of Diane Dixon, Kevin Muldoon, Scott Peotter and Marshall “Duffy” Duffield, who swept the four available seats in the 2014 election and now constitute the council majority. McCaffrey donated funds to the slate.

McCaffrey said he intends to support Lowrey for District 5 in November.

Herdman has been critical of Peotter, Muldoon and Duffield since they were elected.

In April 2015, Herdman sent a letter to the California Fair Political Practices Commission alleging that a campaign contribution Peotter received violated the Political Reform Act and city code. Peotter denied wrongdoing.

Herdman also has suggested in published letters to the Daily Pilot that the city should request that the FPPC conduct a full audit of all the candidates in the 2014 election to examine their “independent expenditures, slate mail committees and other expenditures spent to influence the election.”

Last November, McCaffrey filed a complaint with the FPPC against Herdman, alleging that he failed to submit a mandatory form before soliciting and accepting campaign donations. Herdman denied violating the law.

To some, the tension between the two Balboa Island residents highlights the changing demeanor in Newport Beach politics.

“Politics seem to have become more contentious and based in ideology,” Selich said. “We’ve never had all this FPPC stuff going on. All of this really doesn’t have anything to do with what’s important in the community.”

Hannah Fry, hannah.fry@latimes.com

Twitter: @HannahFryTCN

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