Los Angeles Mayor Antonio Villaraigosa on June 13 released the findings of a new internal city audit of the Port of Los Angeles, which while mostly praising the economic and environmental efforts of the port – the nation's busiest – also found that the port "would benefit from process improvements to increase transparency and ensure continued competitiveness."
The 135-page review, conducted through the office of City Controller Wendy Greuel, revealed that the port needs to improve internal processes to ensure that harbor development projects are clearly defined to provide transparency in budgeting and scheduling.
The review specifically detailed six major port projects that were originally budgeted collectively at just under $20 million, but due to changing project scopes and requirements, eventually ran up a cumulative total of more than $116 million.
“The port has done much to clean up the air, reduce traffic congestion, and complete the San Pedro Waterfront project,” Greuel said. “However, the port could do more with greater transparency and process improvements.”
The largest example of changes and overruns cited in the report was the construction of a new headquarters for the port police force. The project, which began in 2003 as a simple expansion of existing facilities with a price tag of about $6.5 million, grew to a $55 million stand-alone police headquarters located adjacent to the port offices. Another example was a park in the port-area that mushroomed from a roughly 3-acre $900,000 green space with no amenities to a 18-acre $9.5 million park with bathrooms and a parking lot.
Villaraigosa and Greuel called on the port management to immediately revisit policies on change orders and project management to minimize costs and delays in the future.
"Over the past five years, we've delivered nearly $1 billion in capital projects on budget while creating tens of thousands of jobs," port executive director Geraldine Knatz told the Torrance Daily Breeze.
"Our competitive advantage is the superior facilities we build. The audit does point out a weakness in our capital budget reporting process that we recognize, and we are working with our board to implement remedies," Knatz told the paper.
In the report, Gruel also highlighted the need for the port to respond to the competitive challenges facing the port.
“In 2014 the expanded Panama Canal will open for public use. This new avenue for Pacific shipping challenges the status of the Los Angeles [port] as the premier destination for Pacific cargo coming into America, so we need to increase transparency and make the Port of Los Angeles as competitive and accessible as possible,” said Greuel.
Thursday, July 14, 2011
