Friday, December 16, 2005
Tricentennial Tower Costs Could Soar Over Budget
By Dan McKay
Journal Staff Writer
The Tricentennial Towers project is approaching $1 million in costs and could bust its new budget, according to a report released Thursday.
Internal auditors say they discovered costs for the project invoices totaling about $78,000 that will push the towers' expense above the budget approved by city councilors last month.
"The City of Albuquerque has overspent or overcommitted the City Council's maximum approved cost," the auditors reported.
The council adopted a resolution Nov. 7 capping the cost at $840,000, plus 5 percent for contingencies. That was after early estimates some several years old and somewhat vague put the project at $370,000 to $500,000.
The project cost is about $919,000, not including contingencies, according to the report by the city Office of Internal Audit and Investigations.
John Castillo, Albuquerque's director of municipal development, defended the city's handling of the project. He said the $840,000 approved by the council is for construction only, and the extra costs cited by auditors are probably related to design.
Thus, he said, the project is still within budget.
"What they approved is related to construction," Castillo said Thursday.
The resolution doesn't specify what costs are capped. It says the council "approves the design and location of the Tricentennial Towers and approves the present designation of funding for the project, total amount not to exceed $840,000, plus 5 percent contingency."
The internal audit was launched at the request of City Councilor Debbie O'Malley, who was chairwoman of the council budget committee until recently.
The two 65-foot towers will stand near Interstate 40 and Rio Grande Boulevard. They are intended to commemorate Albuquerque's 300th birthday and serve as a beacon to Old Town. The towers are under construction and should be done in the spring.
In Thursday's report, auditors said they had discovered $78,000 in previously paid invoices. The report didn't say what the invoices were for or whether they were related to design.
Auditors said their concerns "need to be addressed and resolved by the Department of Municipal Development prior to further construction and installation of the Tri-Centennial Towers."
In the report, auditors also suggest the city mishandled the project by adding it to an on-call contract. The towers should have been done through the city procurement code, which might have required competitive bids, auditors said.
The city "procurement code should have been followed prior to the project being awarded to the on-call contractor since the City of Albuquerque does not own the right-of-way location of the Tri-Centennial Towers," the report said.
City Attorney Bob White said no rules prohibit the way the project was handled.
"In my opinion, the on-call project was appropriate," White said. "It was legal pursuant to the contract."
A spokeswoman said Mayor Martin Chávez wanted to review the report before commenting.
The project grabbed attention in recent months for its escalating cost and funding source. The administration had planned to use street and drainage funds but later switched to money for median and interstate improvements.
A report from auditors last month also said the mayoral administration should have sought council approval for the project earlier. City officials have said council approval wasn't needed, but they sought it anyway to help defuse the debate.
The bulk of the cost increase into the $840,000 range has been attributed to rising steel and concrete prices.