Irvine council to consider issuing subpoenas for Great Park audit

Irvine city leaders on Tuesday will consider whether to issue subpoenas to help auditors continue their investigation into the financial management of the Orange County Great Park.

An audit presented to the council early this month raised questions about spending, contracts and oversight of the planned 1,300-acre park and noted that auditors were stymied by uncooperative employees and contractors and lack of access to information that city officials deemed to be outside the audit’s scope.

About $215 million has been spent on the ambitious park plan, but only 230 acres have been built.

Arguing that it was out of options, the council majority last year abandoned part of the park’s grand design and instead approved a developer’s proposal to build a golf course, sports complex and other amenities on 688 acres in exchange for the right to construct thousands of additional homes along its perimeter.

The audit faulted Great Park leadership for allowing contractors to use excessive change orders, not fully vetting major vendors and paying a communications and strategy firm $6.3 million under contracts for the park’s design.

One contract, for the construction of a preview park, was originally bid at $1.7 million but ended up costing $9.4 million. Another, for tree care, was bid at $395,330 but ultimately cost $913,758, according to the audit, which was performed by forensic accounting firm Hagen, Streiff, Newton & Oshiro Accountants.

The report also found that about 38% of all contracts for amounts more than $100,000 were awarded without competitive bids.

Auditors said they were unable to answer some questions because several key players, including park designer Ken Smith and a former Great Park employee, refused to speak with auditors.

The expanded audit would allow a council subcommittee made up of council members Christina Shea and Jeff Lalloway to issue subpoenas to witnesses and for documents that “may be necessary to complete the investigation,” according to a city staff report.

Shea and Lalloway are longtime critics of the park’s financial management under council members Larry Agran and Beth Krom, who helped steward the project from its inception until last year when they lost their council majority in the city’s elections.

Lalloway said he was disturbed that contractors refused to speak with auditors, though some had offered to answer questions in writing.

“I think the public has a right to know where all that money went,” he said.

Agran called the additional investigation, which would cost up to $400,000, a waste of money.

“They didn’t seem to me to find anything to warrant going ahead,” Agran said.

He was particularly critical of one of the audit’s main findings: that $38 million in tax increment revenue collected by the city’s redevelopment agency was not handed over to the Great Park. In fact, he said, it was simply set aside as required by law.

paloma.esquivel@latimes.com