CA: Bridge audit rips Caltrans

Oakland Tribune ^ | 1/7/05 | Sean Holstege

[NormsRevenge]

State auditors blamed Caltrans for mismanaging the Bay Bridge reconstruction and failing to report obvious cost increases — perhaps in violation of the law — in a blistering 77-page report released Wednesday.

Bay Area lawmakers seized on the findings to call for an overhaul of Caltrans and to question proposals by the Schwarzenegger administration to scrap the region's preferred tower and make bridge users pay for massive overruns.

Schwarzenegger's top transportation officials pointed to segments of the audit that show the elaborately complicated design is responsible for many of those out-of-control costs.

Auditors offered the most complete estimate to date for the full cost to build, engineer and oversee construction of the new eastern span of the Bay Bridge: $5.9 billion. The skyway is costing $160,000 per foot. Extending it could cost $460,000 per foot.

But the audit lays out in detail how Caltrans in 2002, 2003 and 2004 turned to internal and external cost reviews and ignored the findings.

Starting in August 2002, a consultant's mock bid placed the cost of the remaining tower at $934 million. By December 2003, Caltrans' own bridge cost specialist placed the bid at $1 billion and revised it to $1.3 billion in April.

All the while, the agency stuck to its official figure of $780 million. The bid price May 26 was $1.4 billion. "As early as November 2003, when it reported the program's financial status to the Federal Highway Administration, Caltrans should have known that the program would experience large cost overruns," State Auditor Elaine Howle reported.

"It is difficult to understand how Caltrans did not know that it would overspend its support cost budget of $796 million in November 2003, much less support its assertion that it would have savings of $30 million," the report found.

Caltrans backed up the assertion to the FHWA early this year but by August said it needed an extra $556 million for such overhead.

Caltrans stood pat with "grossly insufficient" reserves and also "underreported" costs on the Richmond-San Rafael Bridge retrofit, the audit showed. In November 2003, Caltrans told the feds the complex work would cost $570 million, a month after an internal Caltrans estimate said it was at least $613 million and as much as $648 million. Today, the retrofit is estimated at $955 million.

Much of the problem was Caltrans' own doing. The builder of the 1957 bridge threw construction debris in the water, creating unreported obstacles when retrofit contractor Tutor-Saliba Corp. drilled new piles to strengthen the bridge. Tutor-Saliba was paid an extra $22 million for that.

Auditors blasted Caltrans for failing to follow standard practices to reduce risk and track potential cost spikes.

"Because Caltrans did not regularly update the projected costs of the program, it could not assess whether it was staying within budget," the audit found, pegging the problem to muddled project review meetings.

Between January 2003 and September 2004, a Caltrans group met 29 times to track risks, but only four times in early 2003 did it circulate minutes and follow-up tasks. A higher-level group met eight times in two years but circulated minutes only half the time. Another panel charged with keeping tabs on the project was so disorganized that a Federal Highway Administration project manager didn't even know she was a member and never attended its biweekly meetings.

State Senate President Pro Tem Don Perata said the conclusions are obvious. Calling it a "chronic, systemic problem," he urged reform of Caltrans at a news conference Wednesday.

"This speaks pretty clearly. It is a mess," the Oakland Democrat said. "It would seem to me from beginning to end, this is an indictment of Caltrans, it's project management, cost controls and assessments."

He and other East Bay lawmakers said the audit calls into doubt any Caltrans recommendations to change the design of the new Bay Bridge in mid-construction and to ask Bay Area commuters to pay.

"It strains credibility," Perata said.

Assemblywoman Loni Hancock, D-Berkeley, said, "Everybody now has to expect that Caltrans has a major piece of the responsibility for this."

Sen. Tom Torlakson, D-Antioch, chairman of the transportation committee and a member of the Perata-appointed bridge task force, said the audit "helps the Bay Area say: 'Stop punishing us with $5 bridge tolls.'"

He said he thinks Caltrans violated the law by failing to report spiralling cost, and he expects hearings to address many questions.

But as much as the report blasts Caltrans management of mega-projects, the administration sounded a tone of vindication Wednesday.

"We don't think there are scathing findings," said Transportation Secretary Sunne Wright McPeak. "We are interested in results, not finger-pointing, not politics. We will get a safe bridge completed in a reasonable period of time for a manageable cost. That is our commitment to the public."

She and new Caltrans Director Will Kempton pointed to the audit's findings that five of seven bridge retrofit projects came in on or under budget and that no money was inappropriately misspent. Most important, they said, the design of the tower was the largest cause of inflated costs, even though the report said it was only responsible for one-third of the sticker shock.

McPeak and Kempton took issue with the finding that true costs were withheld. In letters and at a Wednesday news conference, they said early estimates were "speculative" and it was inappropriate to divulge them during the 16-month bid process on the bridge, the longest in Caltrans history.

"No information was intentionally withheld," McPeak said, repeating her past assertion that the cost of the Bay Bridge was not really known until bids were opened.

Kempton said he agreed with the audit's findings that there should be a risk-management program and regular cost reports to lawmakers. He suggested quarterly updates. At Wednesday's news conference he appeared to take the findings to heart.

"They are good recommendations and we will follow them," he said. "There is a risk-management plan under development for this project, and we will name a risk manager."

That may not be enough to assuage lawmakers, who will want to know why 15 years into California's biggest-ever public works project that hasn't happened already. Torlakson said the depth of blundering will help him persuade Southern California colleagues to help pay for the bridge, echoing Perata's call for a statewide seismic bond.

[Iris7]

This story is so sad, and so stupid. So believable. Not just a California story, really, although those folks out there do act like they smoke too much dope.

[monkeyshine]

$6 billion to build a bridge? We are getting ripped off.

[tubebender]

"It strains credibility," Perata said.

Said by someone who has zero credibility!