City audit finds project costs often ballooned over initial estimates


Audit found 29% of the projects it reviewed had costs go at least 50 percent higher than original estimates.

Austin Public Works Department says it could conduct additional training on estimating the costs of projects.

Austin officials initially priced the Shoal Creek storm drain improvement project at about $1 million. But when the final bill was paid, the project actually cost Austin taxpayers about $7 million.

The renovations to City Hall and the City Council Chambers to make room for the larger, 11-member council that took office in 2015 was originally priced at $1.4 million. The costs soared to $6.4 million.

Those two projects were just a few in an audit of Austin’s Public Works Department released last week that found almost one-third — 29 percent — of the 48 projects it reviewed had costs balloon at least 50 percent higher than the staff’s original estimates.

“The City often did not prepare accurate project cost estimates or collect reliable data to do so,” the audit said.

ALSO READ: Your Austin tax dollars at work. Slowly, that is

The Public Works Department agreed with most of the findings in the audit and noted it could conduct additional training on estimating the costs of projects, and that the department has been making improvements since October 2016. It estimated full implementation of improvements by October 2018.

Public Works Director Richard Mendoza also noted in a memorandum responding to the audit that initial cost estimates are made with varying amounts of information about the project.

The audit of Austin’s capital project delivery was among the inquiries the city auditor’s office had scheduled for this year after previous audits, including one of the airport’s expansion, unearthed issues, according to a city spokesman.

Auditors reviewed a sample of projects and did not seek comprehensive data on the difference between initial cost estimates and final price tags for all capital improvement projects. Nor did auditors examine how these projects ballooned from the staff’s original cost considerations.

But the audit found flaws in the Austin Public Works Department’s quality control review process. In some cases, the department’s staff ignored the quality review process altogether, which sometimes led to change orders or increased project costs to fix issues that should have been identified earlier.

Of a sample of 48 projects, the audit found that 18 — 38 percent — were never submitted for review to the Public Works Department’s division that checks quality control. Those projects included a pedestrian bridge and the Turner Roberts Recreation Center.

ALSO RISING: How Waller Creek Tunnel costs topped $163 million

And of those sample projects that were submitted for review, that division failed to look over quality control plans for 39 percent of them.

In other cases, high-profile projects faced expedited or limited reviews.

For instance, management authorized staff to ignore comments made by the quality control division about the designs for the new Central Library.

“As a result, staff submitted designs for bid and construction without subjecting them to the full quality management process,” the audit said.

The library project saw its costs grow from $90 million to $125 million as its opening was delayed repeatedly. It is set to open Oct. 28, nearly a year after the original target date.

In another unspecified case, a project manager successfully convinced management to forgo quality management inspections because it would create “burdensome” delays, the audit said.

VISIT VOTETRACKER: See how your Austin City Council member voted on key issues

The Public Works Department appears to have improved its review process in recent years, but the audit still found a substantial number of projects did not undergo the full quality review process, which includes three reviews of designs along with the quality control plan.

In the new Central Library’s case, the auditors found that two oversights in the design phase led to about a $32,000 cost increase.

For instance, city had to fork over $14,557 more for the library project after a contractor discovered that design documents did not provide a power supply for portions of the library’s fire protection system.

“Many of the change estimates (and accompanying cost increases) we reviewed for the New Central Library stemmed from missing, unclear or conflicting items in the New Central Library designs that a quality review may have caught,” the audit states.

RELATED: Austin’s new Central Library opening delayed — again — to late this year

In every case auditors reviewed, the Public Works Department also allowed contractors to begin performing unauthorized work before those change orders were approved. For example, contractors performed $66,500 of work in 2015 on an erosion control wall for the Waller Creek Tunnel without approval. This happened five months after the Public Works Department had assured the City Council that it would follow the change order process, the audit said.

The audit also questioned the autonomy of project managers, who can approve new work with little oversight. In one unspecified project, a program manager agreed to allow $82,653 of steel work for the Central Library to be performed despite the manager believing the city was not getting a fair price. The manager ultimately agreed because he thought it would be better to accept the costs than face further delays in the beleaguered project.

The city has little it can do to recoup costs and could face litigation if the Public Works Department backed out on paying for the contractor’s completed work, the audit said.

In response to the audit, the Public Works Department’s staff said they would implement a leaner quality management process and streamline the change order process with the input from an already existing city staff team.

Reader Comments ...

Next Up in Local

Texas Digest: Baby hippo dies at Dallas Zoo

DALLAS Hippopotamus born at zoo exhibit dies The first hippopotamus born at a new Dallas Zoo exhibit has died. Zoo officials said a female hippo gave birth early Saturday to her first calf, but she did not help the newborn to the surface of the pool soon enough, The Dallas Morning News reported. Harrison Edell, the zoo’s vice president of animal...
DPS trooper is shot east of San Antonio
DPS trooper is shot east of San Antonio

A Department of Public Safety trooper was shot in eastern Bexar County while pursuing a suspect around 3:20 p.m. on Sunday, according to the San Antonio Express-News. The incident occurred near Interstate 10 and Graytown Road, SAEN reports, and a suspect may have been shot as well. The Express-News reports that San Antonio police and Bexar County deputies...
Third-graders in Missouri selling raffle tickets for AR-15 weapon
Third-graders in Missouri selling raffle tickets for AR-15 weapon

Selling raffle tickets to benefit an athletic team is not new, but having an AR-15 semiautomatic weapon as the prize is drawing heavy criticism in the wake of the shooting at a Florida high school that killed 17 and injured dozens, The Kansas City Star reported. Third-graders in the southern Missouri city of Neosho were selling the tickets to...
John Kasich rips Congress, urges 'common-sense gun laws'
John Kasich rips Congress, urges 'common-sense gun laws'

Ohio Gov. John Kasich, who signed laws making it legal to carry concealed weapons at daycare facilities and college campuses, said he has “no confidence” Congress will approve what he called “common-sense gun laws” in the wake of a mass shooting last week at a Florida high school. During an interview Sunday on CNN’s &ldquo...
2 kids dressed as 'tall man' unable to gain admission to 'Black Panther'
2 kids dressed as 'tall man' unable to gain admission to 'Black Panther'

Two kids decided they wanted to go to the new Marvel superhero film “Black Panther,” but they didn’t want to pay for two movie tickets. So, they tried to dupe the movie theater’s manager. The duo went to the theater disguised as one “tall man” under a trench coat, but unsurprisingly, their plan didn’t work...
More Stories