The city must improve its management and long-term planning on large endeavors like the Burlingame affordable housing project, according to the results of an independent performance on the project released Monday.
But other than a chain of communication that could be improved, the audit conducted by the New York-based firm, Alvarez and Marsal, didn’t find reason to believe the city intentionally misled citizens on Burlingame’s costs.
The audit found “no significant deficiencies in project oversight or delivery,” and “no intentional misrepresentation of costs associated with Burlingame Ranch Phase I.”
However, the audit recommended numerous ways the city could improve its processes in regard to long-term projects like Burlingame.
Under the heading Key Issues: Business Process Improvement, the audit states, “The current policies, procedures, technology tools and reporting capabilities were not designed to meet the needs of large scale development projects.”
One key to future success for the city’s long-term development projects, according to the audit, would be to hire a professional construction manager from the private sector who could handle big-picture oversight. Another suggestion is to form a city department specifically to handle development, unlike the status quo where development is handled by the asset management department.
“While we do not believe our recommendations would have had a material impact on the overall cost of Burlingame Ranch Phase I, they may have mitigated project-related miscommunications and improved overall stakeholder understanding of the broader Burlingame development,” the audit said.
Alvarez and Marsal’s investigation included interviews of key stakeholders including Burlingame critics Marilyn Marks and Mike Maple as well as Shaw Construction, past and present City Council members, and past and present city staff.
Controversy over Burlingame erupted in May when a city-appointed budget oversight committee resurrected a 2005 brochure that listed Burlingame’s total costs at $74 million with a $14 million taxpayer subsidy — numbers that did not include infrastructure, soft costs and other costs known to the city at the time. Had all the costs been included, the number might have jumped up to the $160,000-per-unit-subsidy range, but that number is still being hammered out. Since 2005, the city has increased costs at Burlingame through council-directed changes such as beefing up green building, improving handicapped access and lowering the sale price of the units. The total cost for the project, while still unknown because the city does not have an estimate, nor a final plan for nearly 200 units that could still be built there, could reach $138 million with an $85 million taxpayer subsidy.
The 84 units of Burlingame Phase I were completed at a cost of about $40 million and within 5 percent of the signed contract with Shaw Construction to construct the units.
A financial audit, performed by Avon-based McMahan and Associates LLC, found that the city kept track of all significant Burlingame Ranch Phase I construction costs, according to a statement from the city of Aspen.
The auditors concluded that the brochure was developed by then-Assistant City Manager Ed Sadler. The auditors agreed with the city’s explanation of the brochure, which was that it was intended to communicate the cost of the “sticks and bricks” construction at Burlingame in contrast to other affordable housing options.
The results of the performance audit, and a second audit that focuses on the accuracy of the city’s most recent numbers on Burlingame, will be presented at two open houses today in the basement of City Hall. The events will take place from 11 a.m.-2 p.m. and from 4-6 p.m.
curtis@aspendailynews.com