A critical audit of the new 3rd District Milwaukee Police Station, which found that the project will end up costing $64 million, triple its original estimate, has prompted a Milwaukee alderman to pledge to introduce legislation to improve capital project management and oversight.
Alderman Michael Murphy said he plans to introduce a measure to create stronger safeguards for future large-scale projects as a result of the audit of the new police station, which found many problems of oversight and lack of cooperation between city departments involved in its development.
The combined district station and communications center, at North 49th Street and West Lisbon Avenue, was initially proposed at a cost of $20.8 million when first discussed in 1994. By the time the council approved construction in early 1998, the price tag had grown to $30 million. When the station is completed in 2004, the audit estimates the cost will be $64.1 million.
“While the city will clearly benefit from this (project), the audit found significant weaknesses in capital project management that need to be corrected for future project,” the audit by the city of Milwaukee comptroller’s office stated. “After over nine years of development, the project is still not fully operational. The audit found weaknesses in every area of capital project management, namely planning, budgeting, administration and oversight and reporting.”
The weaknesses caused the price of the project to triple, the audit concluded. For instance, the audit cites 23 times in which the scope or cost of the project was increased, from more money for site acquisition to adding a parking structure to buying more advanced technology and computer equipment.
“The primary factors causing this tripling in cases are repeated project-scope expansion and inadequately supported costs estimated,” the audit stated. “Although cost was considered in procurement decisions, overall project costs does not appear to have been a major factor in project planning. In fact, it is unclear if any city department assumed responsibility for controlling the overall cost of the project.”
The building’s construction and technology components were not coordinated, which the audit found has resulted in a currently vacant third-floor dispatching area of the building. Initially, the Police Department and Fire Department planned to share dispatching and records-management systems. However, the two departments could never agree on a system and instead are implementing their own systems, which has resulted in an increase in cost from $3.5 million to $16 million.
In addition, the Milwaukee Department of Public Works failed to enforce performance requirements of the construction-management firm, including status reporting and other services.
The audit also found that the budgeting process used left aldermen with few choices but to complete the project.
“The project was budgeted incrementally, providing the Common Council with little if any opportunity to make informed ‘go-no-go’ decisions,” the audit stated. “A kind of ‘foot-in-the-door’ approach to project budgeting was followed, with vaguely defined components and increasing budgets as the project progressed.”
The audit was also highly critical of the performance of the four city departments that were involved in the project – the Milwaukee Police Department, Milwaukee Fire Department, DPW and Department of City Development.
“Insufficient interdepartmental coordination, passive-contractor oversight and a lack of meaningful status reporting for top city officials adversely affected the project,” the audit stated. “The project was hampered by the overlapping and sometimes conflicting responsibilities of the four departments involved. Disputes arose between the departments, adversely affecting coordination.”
In its response to the audit, Milwaukee Police Chief Arthur Jones said many of the problems were outside of the control of the Police Department.
“Over this long period of time, I think we can all agree that it was to be expected that issues would arise that were beyond the scope of the original project,” Jones said.
“Many of these issues resulted from decisions beyond our control, such as the site selection.”
|Land acquisition||$2.9 million|
|Building construction||$28.8 million|
|Police technology||$17.1 million|
|Fire Department technology||$6.5 million|
|Police radio shop renovation||$2.4 million|
|Police administration building generators||$1.9 million|
Added Mariano Schifalacqua, commissioner of the DPW, “While the report lists a number of process concerns, we believe that this unique and challenging project r
epresents a high-quality product delivered within a reasonable time frame and costs.”
The audit made several recommendations for city officials and aldermen, including,
- Formalize planning and budget requirements;
- Institute progress-reporting standards;
- Report progress on planning, budgeting and reporting standards to the Common Council;
- Revise ordinances, establish citywide standards and assign responsibilities accordingly;
- Strengthen project management and oversight.
“Most of the project cost estimates were not adequate or meaningful for decision-making,” the audit stated. “Nevertheless, these inadequately supported estimates were used to establish annual budget appropriations.”