$7,000 in discrepancies found so far in $118 million Palo Alto public safety building project

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Palo Alto’s city auditor is examining every change order and invoice associated with the construction of new $118 million public safety building, but so far is finding truly minor discrepancies.

While construction is at an early stage — work isn’t scheduled to be completed until June 2023, the firm Baker Tilly has so far uncovered some relatively significant errors and discrepancies, a recently released audit reports.

These issues have cost the city more than $7,000 in additional costs, Palo Alto Online reports.

“One dates back to 2017, when the city’s construction manager, Nova Partners, billed the city for an estimator at a rate of $175 per hour rather than the agreed upon amount of $160 per hour. This resulted in an overcharge totaling $6,975, according to the audit.”

Public Works assistant director Holly Boyd said the city had included credit for that amount on the contractor’s recent invoice, resolving the issue.

In another case, the audit found the general contractor Swinerton Builders requesting a duplicate charge for $356.77 for equipment, money that has also since been reimbursed, city staff reported.

These charges are relatively minor, allowing that the firm has reviewed more than $22 million in expenditures, Baker Tilly representatives said during a Dec. 14 project update to the City Council’s Policy and Services Committee.

“They either have been corrected or are in the process of being corrected,” said Baker Tilly representative Robert Zellmer.

The firm plans to perform the monthly audits for the next few months. Then it will be up to the council to decide whether to maintain the practice for the project’s duration, the Palo Alto website reported.

“Our intent is to have a conversation about continuing with this effort over time,” said City Auditor Kyle O’Rourke, principal for public sector advocacy at Baker Tilly.

The new police building at 250 Sherman Ave. is adjacent to the newly built garage at 350 Sherman Ave. Construction started last June.

The three-story structure will house the Police Department, the emergency dispatch center, the Office of Emergency Services and the administrative offices of the Fire Department. The project also includes a public plaza on Birch Street and a meeting room.

To reduce the risk of costs increases later, the city’s contractors have been relying on a construction management software to look closely at coordination of different building systems, Public Works Director Brad Eggleston said at the Dec. 14 meeting. He said that process has led to a number of change orders already.

“We’re dealing with some issues upfront early in the project that should make things go more smoothly as we get later into the project and avoid having those come up as issues while we’re actually building those parts of the project,” Eggleston said.

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