PORTLAND, Ore. (PORTLAND TRIBUNE) — The reconstruction of the Portland Building is over budget and not complying with equity goals set by the City Council, according to an interim audit of the project released by the City Auditor’s Office on Wednesday.
Mayor Ted Wheeler and Chief Administrative Office Tom Rinehart dispute those findings in an unusually strong response to the audit, however.
The audit says the project is currently estimated to cost $214 million to complete, not the $195 million limit approved by the council. The additional costs will pay for furnishings, technology equipment, and tenant improvements necessary to complete the project, the audit said.
“While the public narrative about the Portland Building focused on activities tied to the $195 million budget, this does not include components critical to delivering a functional building,” said the audit, titled, “Portland Building Followup: Greater public transparency needed about project costs, trade-offs, and missed equity requirement.”
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But, in their response, Wheeler and Rinehart insist the furnishings, technology equipment and tenant improvements were never included in the original $195 million budget, and that the council was briefed on all of them.
“The project has been transparent about additional initiatives proposed outside of the construction budget and the return on investment for each of them,” their response said.
The audit also said the city has not yet spent the 1 percent of construction costs set aside for community benefit grants, even though grant applications have been received.
“No funds were spent in support of disadvantaged workers and businesses. There has been no report to Council about the status of these activities or results since 2016,” the audit said.
But Wheeler and Rinehart reply that the funds will soon be spent by Prosper Portland, formerly known as the Portland Development Commission, through a process known to the council.
“In short, the opportunity, though delayed, will be realized,” their response said.
In addition, the audit said the Portland Building Community Oversight Committee appointed to keep track of the project has not been able to fully track the spending.
“Over the years, the project team has been transparent about each individual budget request, but there has been no presentation of the collective Portland Building costs that result from these piecemeal decisions. As a result, budgets the project team presented to Council and the Portland Building Community Oversight Committee did not include the entire work managed by the City or its contractors,” the audit said.
But the response from Wheeler and Rinehart includes a link to a May 15 letter from the committee praising the project staff.
“Rest assured, our committee (and we understand with the Council’s blessing and actual votes) has been fully briefed on each of these matters prior to a decision being made,” said the letter, signed by the five committee members.
Wheeler oversees the Office of Management and Finance, which is headed by Rinehart and is in chanrge of the project. Although all audits include responses from those in charge of the bureau of project being audited, it is unusual for them to push back so hard. Most admit the shortcomings identified in the audits and say work is already underway to resolve them. But Wheeler and Rinehart appear to be flatly disputing many of the audit’s findings, and they are not promising to do anything different in the future.