Audits clear city in Burlingame error |

Audits clear city in Burlingame error

Carolyn SackariasonThe Aspen TimesAspen, CO Colorado

ASPEN City officials didnt intentionally misrepresent the costs of Burlingame Ranch and the affordable housing project is on budget with all money accounted for, according to the results of two independent audits.Aspen city government paid for the services of two firms, which investigated the performance aspect of the project, as well as its finances. The audits took nearly two months to complete. The results of the financial audit, conducted by the citys certified public accountants, McMahan and Associates, LLC., conclude that city officials kept track of all significant construction costs associated with the first phase of Burlingame Ranch.The project costs were properly documented, reviewed and approved by city staff and appropriately relate to the Burlingame projects construction contract, said Paul Backes, a CPA with the firm.He added that with respect to city financiers reconciliation of Burlingame costs, the revenue numbers are accurate and can be relied upon for project analysis and decision-making.Denver-based Alvarez & Marsal, which investigated the citys performance of managing the project, identified no significant deficiencies in project oversight or delivery, according to the report.But the firm did find that city government failed in communicating with the public on how the costs have risen millions of dollars, including a 2005 brochure given to voters that said the total cost of the project was $74.3 million, with the overall taxpayer subsidy being $14.7 million. But city officials now say the total taxpayer subsidy will be $85.5 million.The number used in the brochure was the construction bid to build housing only and didnt include other costs of the project such as land, infrastructure, and design and engineering work. City officials have said those costs should have been included and was a mistake. They have since apologized for it.According to City Halls business process manager, Barry Crook, the language error accounts for $25.3 million of the increase in the total cost of Burlingame. Construction inflation accounts for another $32.9 million, and City Council changes to the project account for $11.8 million. Those council-ordered changes were discussed in public meetings, officials said.However, the miscommunication extends further than a mistake, the report suggests. Alvarez & Marsal concluded that the following issues caused miscommunication with regard to Burlingames costs: turnover of city staff to oversee the construction and design team contract; lack of knowledge with new city personnel managing the project; lack of formalized policies and procedures for development oversight; and the lack of a formalized communication plan.The firm concluded that no one intentionally misrepresented the facts or costs associated with Burlingame based on interviews of nearly two dozen people, including past and present city employees, as well as former and current elected officials.Critics of the Burlingame process and costs were interviewed but say the investigation and audit process was flawed in that only three people on the list of people interviewed were involved with the dissemination of the brochure.I dont know you could make that conclusion based on interviewing three people from that era, Mike Maple said.Marilyn Marks, the person who found the discrepancy in the brochure, said she is troubled that her name is on a list thats associated with the firms findings.Marks said when she was interviewed by Jason Smith, the firms project director, she wasnt asked whether intentional misrepresentation of the facts had occurred. Marks hasnt said that facts were intentionally misrepresented but has called for a special investigation by outside counsel to determine if there was intentional deception. The City Council has denied that request.And while its unclear what the substance of the conversations were with those interviewed, its been suggested that people were asked if they intentionally misrepresented Burlingame costs and their answers were then followed up on with others who were involved.Several improvements were recommended by both firms, with McMahan and Associates suggesting that the city government adopt a more formalized process for preparing voter information and utilize an integrated project management software program.Alvarez & Marsal recommended several policy changes, including establishing a separate department that handles the development of large, multimillion-dollar capital improvements. The firm noted that the city didnt have the resource capacity to manage a large-scale project like Burlingame.The firm also suggests that current policies, procedures and reporting capabilities were not designed to meet the needs of large-scale development projects. To address that, the firm recommends that a separate development department be staffed with asset managers experienced in architecture and construction.The firm realized that numerous breakdowns in communication occurred during Burlingame between the general contractor, the asset management department, the city managers office, the City Council and the community. The project has spanned multiple city administrations, further exacerbating the communication problems. The recommendation is to develop a communication plan for future development projects.Mayor Mick Ireland said the audit results are sufficient to move forward, and said if critics have evidence to the contrary, they should provide it or bring the matter before the district attorney. City officials will begin considering the firms recommendations as soon as possible, Ireland added.Both audit reports can be viewed on the citys website,, or during the citys open house on Burlingame, which will occur Tuesday between 11 a.m. and 2 p.m., and from 4 p.m. to 6 p.m. in the basement of City

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