Audit finds Newport Beach overbilled by $1.2 million for civic center


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 [email protected]

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