Southtowns Record

Town of West Seneca - Capital Project Management (2019M-195)

Government
Town of West Seneca
Posted by publisher
Mar 6, 2020
Kind
State audit
Topics
Budget and taxes, Audits and oversight, Parks and recreation

Publisher's summary

The Board did not properly plan and manage the capital project and clearly inform taxpayers when the estimated cost and scope of the project changed. In addition, the Board was not fully transparent on the anticipated project costs. As a result, original estimates were $9.8 million and increased by more than $3.6 million after competitive bids were received. When inaccurate costs are included in project estimates, there is an increased risk that the Board may issue more debt than necessary to finance the project because funding is available to pay for costs that were not within the original project scope. Finally, Town officials did not ensure an itemized project budget outlining revenues and expenditures was maintained in the accounting records and periodically updated.

Original document

Text · page 6 of 14

and the high ceiling space for the recreation department. The memo stated that
the additional work would require an additional borrowing of $2.2 million.

The Supervisor told us this change allowed for the mechanical room to be
moved to the second floor, the addition of unfinished space for future offices on
the second floor and an increase in ceiling height for the recreation department
to allow for a half-court for basketball. However, Town officials were unable to
provide us with documentation showing, nor could we find evidence in the Board
minutes, that the Board adopted another resolution to effect these changes and
increase the estimated cost of the project before soliciting bids or starting the
project. However, the October 31, 2016 architectural plans provided to us by
the engineer included the additional work and these plans were included in the
contract documents provided for contractors to inspect when preparing their bids.

Figure 1: Comparison of the Board’s Maximum Cost Estimates with Post-Bid
Estimates
  Board Approved  Post-Bid
  Project Element  Maximum Cost  Estimate  Difference
  Estimate (May 2016)  (January 2017)
Repairs and Construction  $7,865,045  $11,895,100  $4,030,055
Furnishings and Contingency  $1,967,000  $1,551,030  ($415,970)
Total Costs  $9,832,045  $13,446,130  $3,614,085

Although the initial plan included some first floor unfinished office space,4 we
question whether $3.6 million (37 percent) in additional costs over the original
estimate was within the overall scope of the original project plan established
by the Board and presented to the public. Town officials and the engineer were
unable to provide us with an amended budget reflecting the added costs due to
these changes.

The increase in cost, and the change in plan were documented in the Board
minutes only after the bids were received. Additionally, we found no evidence
that the engineer’s memo explaining the increase in cost was made available to
taxpayers, because it was not documented in the Board’s record of proceedings.
In addition, the post-bid project estimates and subsequently updated budget
were not prepared in the same itemized format as the original estimate. For
example, the original estimate itemized the different elements of the building,
thereafter updated estimates were presented based on total bid amounts for each
contractor’s trade.5

4 First floor cubicles and a mechanical room.

5 General, mechanical, electrical, plumbing and fire protection contractors.

4  Of f ic e of t he New York State Comptroller