FAIR: Without Checks, Burlingame Became Blank Check For Trouble

September 16th, 2008 at 05:37pm Post Staff 43

[Editor's Note: This news coverage has been underwritten by Factual Aspen Investigative Reporting (FAIR). FAIR has been formed and organized in Aspen, Colorado, as a nonprofit corporation to conduct investigative journalism in the public interest, and to provide accurate, meaningful, and non-biased news coverage based on correct factual information.]

ASPEN, COLORADO (Post Time News)—The Burlingame affordable housing project came unglued in part because key departments within the City of Aspen were all but excluded from the communications, budgeting, and implementation processes.

Post Time News has learned these exclusions were sometimes intentional and sometimes circumstantial, but the net net was the virtual elimination of checks and balances within City government made manifest in the inaccurate Burlingame marketing brochure distributed to voters. Because of the mistakes, Aspen voters subsequently approved the project based on cost estimates for the three phases that were low by an order of magnitude: the brochure estimate for the “total” cost of Burlingame was $74 million; the most recent estimate by City Manager Steve Barwick, including infrastructure costs, was $138 million.

In lieu of such internal checks—according to present and former City Staff and members of the Citizens Budget Task Force—Assistant City Manager Ed Sadler, no longer in the city’s employ, was able to leverage his control of the Burlingame project and the Asset Management Department into a de facto fiefdom that operated with Barwick’s blessing but without meaningful input from multiple departments left out of the Burlingame decision-making process. Attempts to reach Sadler for comment have so far been unsuccessful.

Barwick acknowledged that Sadler was a powerful presence within City government but stressed his strength and stature were a good thing.

“He was responsible for construction, no doubt about that,” Barwick said of Sadler. “You have to have high-level professionals in order to get things done.”

City officials and members of the Citizens Budget Task Force refer to the City’s internal structure as a “stovepipe” organization, wherein departments operate with independence but can at times remain ignorant of what is happening elsewhere among City staff. The City acknowledged the problem and was taking steps to remedy it as early as summer 2006, well before the Burlingame brochure discrepancies came to the fore. Barwick is credited within City Hall with encouraging independence among the municipality’s employees, a posture that makes for “individual initiative and a creative environment,” according to one city worker.

Sadler was described by his former associates as a “consummate bureaucrat” and a highly skilled infighter: for example, he had associates literally sign off on Burlingame plans that went forward without his own signature. He was also described as “confrontational” by more than one of the officials who knew him.

Perhaps the biggest disconnect within City staff came with the exclusion of former City Finance Director Paul Menter, now serving out his final days as a paid City consultant to the Citizens Budget Task Force. Menter said his multiple requests for a simple, single-page, multi-year budget for Burlingame Phase I were ignored by Sadler, who once told a meeting of the Housing Authority that he kept the Burlingame budget in his head. Menter tried to become part of the Burlingame budgeting process but was rebuffed more than once by Sadler.

“The Burlingame project was basically being developed elsewhere in the City bureaucracy,” Menter said. “I did not see the numbers [from the brochure] until it came up with the Citizens Budget Task Force.”

Both Sadler and Barwick came from financial backgrounds and thus brought their own considerable expertise to the project. Nonetheless, like Barwick, neither former Communications Director Linda Gerdinech nor former Finance Director Menter saw the numbers on the brochure before it was given to voters.

“All the stuff around the production of the brochure was not run through finance,” Menter said. “That was not unusual because it was not a TABOR [Taxpayer Bill of Rights] issue that required specific construction costs prepared for compliance purposes. It was really a vote about annexation.”

Gerdinech, then the City of Aspen Community Relations Director, was excluded from the process that ran through Sadler’s office and produced the erroneous Burlingame brochure, in part because she was a “one-person department,” in her words, “inundated by many other projects.” Outside contractor Ben Gagnon, now employed by the City in the Community Development Department, produced the brochure based on numbers supplied by Shaw Construction—numbers that misled voters on the tab for Burlingame because they did not include infrastructure costs.

“I asked if they needed any help,” Gerdenich told Post Time News. “I had no idea what was in the brochure. All I knew is it was taken care of.”

The stovepipe revelations are particularly germane moving forward as the City tries to implement the findings of Alvarez & Marsal, the consulting firm that found: “Numerous breakdowns in communications occurred during the Burlingame project between the General Contractor, the Asset Management Department, the City Manager’s Office, the City Council, and the Community.”

Despite his assertiveness, there is now evidence Barwick and Sadler underestimated the complexity of the project. In one meeting that included Sadler, Barwick said: “What are your worried about. It’s the developers model. All we have to do is cut a check” to Shaw Construction. Shaw Construction did in fact complete Phase One within the $36.4 million fixed contract cost.

Nonetheless, there is now evidence that the City was not institutionally equipped to deal with the complex Burlingame tasks at hand. As Alvarez & Marsal found: “The Asset Management Department oversaw the Burlingame project; however, their normal focus is maintaining city buildings/facilities and conducting capital projects. The Department did not have the resource capacity to manage a large-scale project like Burlingame.” And: “As discussed previously, development is complex and impacts various functional areas including Asset Management, Zoning, and Building Inspections, the Housing Authority, Finance, Accounting, Legal, and Procurement. Communication and collaboration among these departments is an imperative to successful program planning and delivery.”

“No question better departmental coordination would be helpful,” Menter told Post Time News. “It would shine a spotlight into the more general organization structure of the city. Burlingame was a complex fast-moving project. It should have been an interdisciplinary team to make sure all dimensions got managed. But that’s armchair quarterbacking.”

Entry Filed under: Post Time News, Affordable Housing, Aspen City Council