Audit will review $140 million Newport Civic Center project

Construction practices and rising costs associated with Newport Beach’s often-criticized Civic Center project will come under scrutiny in coming months.

The City Council voted unanimously Tuesday night to launch an audit of the municipal building project, which ended up costing about $140 million.

An independent firm will conduct a review during the next several months and report its findings to the City Council. The cost of the audit will be capped at $100,000, the council decided.

The firm will put together a final report by March detailing the city’s oversight of the project, the processes that went into the construction of the Civic Center, the costs compared with industry standards and the effectiveness of the cost controls.

When the project began in 2008, its price tag was estimated at $107.6 million. City officials initially planned to redevelop the old City Hall site at the entrance to the Balboa Peninsula. The project eventually moved to the more upscale area of Newport Center, where the new Civic Center opened in May 2013.

Costs swelled as the scope of the project expanded, eventually including a 17,000-square-foot expansion of the central library, a 14-acre park and a 450-space parking structure.

The audit will review the construction contracts and subcontractor bids, determine whether delays increased costs and consider whether the final cost of the Civic Center was affected by using C.W. Driver, a Pasadena-based company, as both the lead contractor and project manager.

Mayor Pro Tem Diane Dixon and council members Scott Peotter, Kevin Muldoon and Marshall “Duffy” Duffield were among the project’s harshest critics before they were elected to the council in November. When they took their seats in January, city staff provided a look into the construction project and posted change orders and other documents on the city website.

Still, Dixon and Muldoon called for an independent audit of the project in April.

The request followed a city inquiry into whether Assistant City Manager Steve Badum failed to report gifts from companies doing business with the city. A confidential memo from City Manager Aaron Harp and the City Council identified C.W. Driver as one of the businesses that may have provided gifts to Badum.

The city sent a complaint about the matter to the Orange County district attorney’s office for review. The office has not filed charges against Badum.

Dixon said the audit is not a “witch hunt” but will be a way for the city to decide how best to embark on large construction projects in the future.

“This is not an aspersion against staff,” she said. “There is nothing to be afraid of and nothing to run from. It should have been done.”