Writers to the Pilot have recently expressed some concern (and relayed some misunderstandings) about the city's budget and the Civic Center project. I apologize in advance for the length of this letter – but I recognize and appreciate that Newport Beach taxpayers want and need to know where their money is going. Transparency is important to the City Council and to me, too.
So bear with me, please, and let me try and help with some clarification:
Q: Did the city have a $10 million budget shortfall?
A: It was $8 million. The City Council directed me to address it without significantly impacting services. We worked hard at it, and closed fiscal year 2009-10 in the black.
Q: Is the Civic Center happening at breakneck speed?
A: Gosh, it sure doesn't seem so. At my count, there have been at least 32 public meetings about this project over about 2 ½ years. If that's too fast, then we are guilty as charged. But 30 months of planning and designing the Civic Center, to me, seems long. A good, deliberate public process takes time.
Q: Has the process been transparent?
A: Respectfully, it doesn't take a Freedom of Information Act request to find our website, the Central Library, the City Clerk's Office or the council meetings.
Here's how transparent this has been:
•Twelve open and public meetings of Civic Center Design Committee in 2008 and another three meetings in 2009 held in the Central Library and in the Council Chambers with agendas, minutes and an opportunity for the public to comment each time.
•One of the Design Committee's public meetings was an all-day session on a Saturday (Sept. 28, 2008 ) and taped, cable-cast and Web-streamed on NBTV and the city's website, advertised three times in the Daily Pilot (and one front-page story about that day), to allow the public to see the five design submittals. One was chosen later by the current City Council .
•Four public meetings, including two of the City Council, where the "general design parameters" of the Civic Center project were discussed. These parameters, which have been on our website since May 2008, determined the current scope of the project.
•At least 16 public meetings of the Newport Beach City Council where the Civic Center Project or its contracts have been on the agenda, presented and/or discussed.
•One (recent) town hall-style advertised public meeting held at the Central Library (June 27, 2010) where council members, the design group, and staff made presentations and took questions.
NOTIFICATION AND WEBSITE
•All of the minutes, reports, contracts, the environmental impact report (EIR), and other studies of the Design Committee and the City Council have been on an easy-to-find page on the city's website — much of it since spring 2008. It's here: http://www.newportbeachca.gov/index.aspx?page=102
•We've used nearly every communication tool available to us — the Newport Navigator, NBTV, our website, the city manager's community newsletter, media relations, even signage on site and at the Central Library (on the stairway to the 2nd Floor — hard to miss!) to tell the community about the project.
Q: How did the project get to be more than just a City Hall?
A: Remember that "City Hall in the Park" always included a park. It was and is a big 14-acre park, and I don't think the park's cost was ever described with the Measure B campaign. Back in 2008, the City Council adopted design parameters that proposed:
•Digging the City Hall building down to get underneath a View Protection Plane (protecting public views from MacArthur). This excavation added about $6 million to the cost estimates.
•Instead of a huge flat parking lot over valuable parkland, having a 450-space parking structure, with 350 spaces dedicated for the park and city hall, and 100 for the underparked Central Library.
•Adding a second entrance and connection to the Central Library.
•Having a community room and a disaster preparedness room.
The Civic Center's EIR, reviewed in public for 45 days and adopted in public by the City Council on November 24, 2009, covered all of these elements per CEQA requirements.
Q: Are the design and construction management contracts transparent — and how do they work?
A: These too have gone to the City Council in open and public meetings. The City hired CW Driver Inc. on Jan. 13, 2009, to do pre-construction services, after a Request for Qualifications ("RFQ") process involving 24 firms. The "Guaranteed Maximum Price Contract" ("GMP") with CW Driver is a public record.
The architect, Bohlin Cywinski Jackson ("BCJ"), was hired to coordinate the design and to sub out civil engineering, landscape engineering and more). BCJ's contract went to the City Council in a public session on January 13, 2009.
Q: How does "Construction Manager @ Risk" contracting work?
A: Admittedly, this can be confusing. But I think it's actually more transparent (a lot more) than hiring one firm to do it all. It starts with this principle: Cities don't build buildings often, while the private sector does. Therefore, cities should contract out projects like the Civic Center to companies with a proven track record — and if they can, they should contract out the risk, too. That's what we did.
Q: Is the contract in the range pricewise of where it should be?
A: For a GMP contract with a Construction Manager @ Risk, yes. Remember, the contractor is taking on a significant risk, unlike a "design-build" or "multiple prime" contracts where the city could be left with additional management costs and the risk of cost overruns. There is a price to transferring that risk from the city — it ranges from 3% to 7% profit with these types of contracts. Ours is 3.25%.
Q: Is there a rush?
A: One factor that is very clear that is that delay in this 30-plus-month-old project will only make the costs higher, not lower. Interest rates are at all-time lows and favorable federal bond provisions expire at the end of the year. Construction costs have fallen almost 30% off their highs but are likely to rise with an improving economy. Stopping and then remobilizing will add millions to the cost. The council has the ability, and indeed has already "value-engineered" the scope of the project (dropping a million dollars off of the design for the parking structure, for instance), to ensure that the project meets the affordability policy of impacting the annual general fund budget by no more than 5% for this and all other major capital projects. This ensures the project can be undertaken while continuing the kinds of quality service that our residents expect.
I'm sorry for the long letter and long explanation, but this is a complex process, and Newport Beach taxpayers deserve to know how it works. I appreciate your interest in learning about it. If anyone has any questions about this project, or the financing, please don't hesitate to e-mail me at email@example.com.
Dave Kiff is city manager of Newport Beach.