Asheville’s biggest capital improvement project in history is already facing trouble. We need to understand what happened, why it happened and how to make sure that it doesn’t happen again.
As someone who has led complex government projects and contract bids, I know how difficult they are to manage. But what appears to have happened with Asheville’s River Arts District Transportation Improvement Project – RADTIP – has left me stunned and concerned about Asheville’s commitment to good management, transparency and equity. We need to understand what happened, why it happened and how to make sure that it doesn’t happen again.
RADTIP, described by the Citizen-Times as “the biggest capital project in Asheville’s history,” sought to add greenways, sidewalks, bike lanes, stormwater improvements, road realignments and traffic roundabouts to the River Arts District and the Livingston Street community. City taxpayers bear the bulk of the expense; federal tax dollars in the form of a transportation grant cover the remainder. The project originated as a plan to improve pedestrian safety in and connectivity to the Livingston Street community, an underserved part of the City, according to a 2014 Citizen Times article. But it grew to a huge transformation of parts of the River Arts District.
Mountain Xpress recently reported that in December 2016 a company the City hired to give a final cost estimate of the project and help advise on bidding and advertising the request for proposal (RFP) estimated the project would cost $56 million. Five months later, that same company would itself be only one of two bidders, bidding $76 million on only part of the initial project, and winning the contract. To recap, the City paid a company to help bid an RFP that the same company later won, and that same company was only one of two companies that bid on it, and that company’s winning bid on only part of the project was $20 million more than the estimate it had been paid to provide to the City on the entire project just five months earlier. The Livingston Street part, which was how this project appears to have originated, did not receive a single bid. Still with me? It gets worse.
Rather than immediately informing City Council of the huge cost overrun while Council was in the midst of budget discussions, City staff did not tell Council of the situation until June 19th – five or six weeks later and five days after City Council passed the new budget. City staff explained that they didn’t notify the public or City Council during that period because their primary concern was to rescale the project on their own in order to still qualify for a federal grant. On June 27th, now aware of the situation, City Council approved a budget amendment to the budget it just passed on June 14th for an additional $6 million of taxpayer money for a scaled down version of the project. The Livingston Street portion of the project was eliminated.
Again, to sum up what we know now:
- The City paid a company to help provide a cost estimate and bid an RFP that the same company later bid on and won.
- The company’s winning bid on only part of the project was $20 million more than the estimate it gave the City for the entire project just five months earlier.
- Despite being the biggest capital project in Asheville’s history, only two companies bid on RADTIP.
- City staff learns of the high bids during the budget process, but does not inform Council until after the budget is passed.
- City Council approves an additional $6 million of taxpayer money for a scaled down version of the project at the next Council meeting following the budget adoption.
- The initial reason for the project, pedestrian safety in and connectivity to the underserved Livingston Street community, was eliminated.
As someone who has experience managing government contract bids, I have several questions and concerns:
- Why was the company that was advising the City on the bid process allowed to itself bid on the contract? In my experience, companies serving as consultants on an RFP would not be allowed to bid on that RFP due to conflict concerns.
- Why didn’t more than two companies bid on such an important and high-profile project? This is a red flag. RADTIP is a signature project for Asheville and I would have expected much more interest.
- Why did the company that told the City the entire project would cost $56 million submit a bid for $76 million – $20 million more – on only part of the initial project just five months later? What changed between December 2016 and May 2017?
- When and why was the Livingston Street plan dropped from the project?
- Why didn’t City staff immediately notify the public and City Council when the bids came back? Were staff directed not to notify the public or City Council and, if so, by whom and why? Why didn’t staff ask for an emergency City Council meeting, deliver the bad news, and inform City Council on a proposed plan forward? As a manager, I always insisted that my staff immediately tell me bad news so that we could inform people and develop a plan to address it. Bad news never gets better with time.
- Given that City staff obviously knew they would need additional funding from City Council, why wasn’t this possibility even raised during budget discussions?
- Where was City Council oversight on this? RADTIP is the biggest capital project in Asheville’s history and needs significant oversight. What was the City Council oversight process and why did it fail?
- What is the plan moving forward to make sure that this does not happen again? Do we not have enough staff to manage this project? Do we need a new oversight process?
- What does this mean for other capital projects the City has in the pipeline? Have we underestimated their costs? Will any of them be delayed or replaced because of the additional $6 million City Council approved for RADTIP?
We need to understand what happened, why it happened and how to make sure that it doesn’t happen again. This experience should also serve as a warning that we must ensure we have the resources and oversight to implement what we say we’re going to do and to be completely transparent throughout the process.