Wednesday, February 16, 2000
Stadium bill up $14.3M
That's just for starters, as costs mount
BY DAN KLEPAL
The Cincinnati Enquirer
The sticker price for building Paul Brown Stadium is expected to go up by $14.3 million this morning to cover cost overruns.
But that's only for starters so Hamilton County officials can continue paying the bills and keep construction on the Bengals' new home moving toward an August completion.
The county will, however, get a bit of good news this morning: Construction managers are expected to say that the stadium will be open in time for the Aug. 19 preseason game.
County commissioners will likely agree to increase the budget for the football stadium at their regular meeting this morning, said County Administrator Dave Krings.
Over the next few months, county officials will have to approve more spending as much as an additional $31 million to finish the project.
We have to increase the funding so we can pay the subcontractors, Mr. Krings said Tuesday. I feel the commissioners are comfortable with the $14.3 million figure. At any rate, we'll have increase it by that amount.
Mr. Krings' decision was reached after two intense days of meetings between county staff and the people building the stadium. The meetings revolved around cost overruns which first came to the public's attention on Monday.
The overruns are a result of hundreds of individual pieces of the overall stadium project increasing in scope and cost, and will add significantly to the $287 million price that residents were told would be their maximum contribution.
The overall cost, which includes buying the land and paying architecture fees, was $404 million before the overruns were discovered.
A construction audit found that a lack of oversight, a rushed schedule and poor record-keeping led to change orders being routinely pushed through without proper scrutiny.
And the rising costs won't end there, because hundreds of changes already are working through the system that have not been figured into the bottom line, according to PricewaterhouseCoopers auditor Howard Green.
Also adding to that bottom line will be overtime that inevitably will be paid as the August deadline approaches, Mr. Green said Monday.
Some of the additional money needed to finish the stadium estimated to total between $35.9 million and $45 million may be recovered by the county for taxpayers.
But that won't come until much later, if at all. The county will have to negotiate, and possibly sue, the parties building the stadium to get that money back.
Word that the stadium will be open on time will come as a $2 million relief, because taxpayers would have to pay that amount to the Bengals for each preseason game played in Cinergy Field if the stadium isn't ready.
I heard that people would say that, "By God, the stadium will be done by Aug. 19,' Commissioner John Dowlin said. Tomorrow the whole crew will make a presentation to us.
The whole crew includes NBBJ Architects, construction manager Turner Barton Mallow D.A.G. and stadium project manager Getz Ventures. Each is expected to give its account on the cost overruns associated with the project.
Also part of the crew is the county's financial consultant, Ted Ricci of Public Financial Management, who is expected to answer questions about how the additional cost will affect the county's ability to issue bonds to build the Reds a new home.
PricewaterhouseCoopers looked at a sampling of the change orders pushed through on the project and found that no one took the responsibility to determine who was responsible for the changes or how much the change would cost.
Many of the problems can be traced to the architect, according to Mr. Green, because bids were accepted on contracts before the final drawings were complete.
Then, with final drawings in hand, the magnitude and cost of the job increased without anyone tracking who was responsible and how much more it would cost.
The paperwork was in such a bad state that the construction manager couldn't answer many of the auditor's questions. In many cases, the auditor had to rely on interviews rather than documents to figure out what happened.
County officials spent nearly a year negotiating a so-called guaranteed maximum price, of $287 million.
But Mr. Green's audit found that many of the drawings used to negotiate that price were poorly developed and there were loopholes so that many of the add-ons were billed to the county.
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