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Police station's cost triple

Alderman Michael Murphy plans to introduce a measure to create stronger safeguards for future large-scale projects after an audit revealed that the 3rd District Milwaukee Police Station’s costs tripled.

Photo courtesy of GPD/Gilbane

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.”


23 changes


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.


Incremental budgeting


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.”


Process defended





































Project   cost


Land   acquisition $2.9   million
Building   construction $28.8   million
Infrastructure $4.5   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
Total $64.1   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.”

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