Bond oversight panel flags project delays, urges stronger planning for Laguna Honda and General Hospital rebuilds

The Government Audit and Oversight Committee heard the 2009 annual report from the Citizens' General Obligation Bond Oversight Committee (GOBOC), which urged more rigorous project planning, better use of Gantt-chart reporting and close monitoring of change orders to keep bond-funded work on time and within budget.

Hunter Stern, who presented the report as the outgoing GOBOC chair, said the committee—s role is "to ensure that the bond revenues that are expended only in accordance with the ballot initiative" and to monitor that funds are used for capital projects rather than administrative salaries. Stern described a shift toward standardized Gantt charts to show initial budgets, timelines, expenditures to date and projected final budgets.

Why it matters: GOBOC cited Laguna Honda as a cautionary example of contractor disputes, design problems and heavy change-order activity that drove cost increases. The committee urged project-by-project oversight for programs that comprise many small projects (branch libraries, Rec and Park) and recommended filling several planning staff vacancies so bids can be issued while market conditions remain favorable.

Public commenters pressed GOBOC for deeper analysis of change orders. Patrick Monette Shaw said public records show a large share of Laguna Honda—s cost overruns were attributable to change orders and site-condition claims and asked the committee to hold a separate hearing to analyze allocations. Stern said GOBOC has reviewed change orders in past reports and that project managers are best placed to explain technical allocations.

Laguna Honda project manager John Thomas responded that historical escalation and a large contractor claim produced earlier spikes in costs; Thomas said he provided Monette Shaw a change-order breakdown via public-records request and defended the project—s disclosures. "So something that had not been seen nor expected by anybody who was on the project at that time," Thomas said of costs that in some months reached very high escalation rates.

Outcome: Supervisors thanked Stern for his service and the committee filed the GOBOC annual report after Supervisor Carmen Chu moved to file; the chair called for objections and the item was filed without objection. The committee also discussed recommendations to increase staffing for capital planning and adopt improved monitoring practices for multi-project bond programs.

Next steps: The report outlines recommendations for further monitoring and a GOBOC plan for reviewing 2008 bond allocations; the motion to file routes the report to the Board of Supervisors record for any follow-up actions.