Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Capital Improvements topic
No spam. Unsubscribe anytime.
Budget and Finance commissioners press for audit after large CIP cost increases
Summary
Commissioners and public commenters flagged large variances between initial CIP appropriations and final project costs, questioned change-order practices and asked staff for data; a three-member subcommittee was created to draft questions and recommend next steps.
Commissioners on the Redondo Beach Budget and Finance Commission on Monday pressed staff for clearer controls and third-party review after being shown projects where final construction costs far exceeded initial appropriations.
Commissioner Gieske, who requested the item be brought back, told the commission that initial appropriations for a set of completed projects amounted to “almost $10,000,000” while subsequent appropriations totaled roughly $46,000,000, producing substantial cost variances. He singled out one example—project No. 4124 on Anita Street—where the council-awarded contract of about $213,000 grew to a final cost of $711,000 after a series of change orders.
"If we start with 20% and add another 80% through all these change orders, that's really going to hurt us badly in the future," Gieske said, urging a more disciplined approach to scope and bidding.
Public commenter Jim Mueller, who described experience in government construction procurement, said the city appears to be seeing “contractors who get used to the system. They bid low because they know change orders are easy.” He recommended the city track contractors that generate frequent change orders and consider qualifying bidders based on performance history.
Commissioners and staff debated causes for the cost growth. Staff and several commissioners noted legitimate reasons—grant availability, additional desired scope and unforeseen site conditions such as permitting delays—that can increase a project’s scale after initial appropriation. Commissioners said the information provided so far suggests a mix of causes and argued the commission needs more granular, project-level evidence before making formal recommendations.
The commission voted to form a three-person subcommittee to draft targeted questions for the public works director and staff and to identify two or three high-variance projects as case studies. The commission also discussed whether an independent auditor or a process audit (for example, a workflow mapping and a total quality management review) should follow once staff answers the subcommittee’s questions.
The next step agreed on by the commission was to ask staff for the detailed documentation already compiled (engineer estimates, bids, change-order records and funding sources) and to use that material to decide whether a third-party audit is warranted.
The commission’s action was procedural: the subcommittee to draft the follow-up questions was approved by voice vote and members volunteered to serve. Staff indicated it can produce the underlying spreadsheet and links that show project-level documents.
