Port Authority Confessional: Audit Reveals Dysfunction

East
Wednesday, February 8, 2012
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An early model for Frank Gehry's WTC performing arts center. (Courtesy Gehry Partners)

An early model for Frank Gehry's WTC performing arts center. (Courtesy Gehry Partners)

The long-expected audit of the Port Authority of New York and New Jersey is available, and—apart from the opaque bureaucratese—it reads just like the dysfunctional family memoir you might expect. In fact, the word dysfunctional is at the top of the summary letter sent to Governors Chris Christie of NJ and Andrew Cuomo of NY. To wit, the Navigant Consulting assessment concluded that the PA is “a challenged and dysfunctional organization suffering from lack of consistent leadership, a siloed underlying bureaucracy, poorly coordinated capital planning processes, insufficient cost controls, and a lack of transparent and effective oversight of the World Trade Center program.”

Some highlights:

The WTC balloon effect with estimated construction costs launched at approximately $8 billion in 2006 rising to $11 billion in November 2011 (blamed largely on getting ready for the tenth anniversary) and now floating past $14.8 billion—the $3 billion increase of recent months due to “changes in scope and the evolution of design” including foundation site work for the Performing Arts Center to the tune of $200 million, even though the new board claimed at the New year that a site has not yet be decided.

The PA “may elect to curtail development” of elements that owe them money, meaning the 9/11 Memorial. When the memorial was to cost $500 million the port was in for $195 million; now that it may top a billion, the PA is not so sure it wants to pony up $300 million. As a result, “The Port Authority has elected to significantly reduce the construction personnel deployed on the museum portion of the Memorial project and limit the agency’s exposure, ensuring that only certain construction continues prior to the resolution of the cost reimbursement dispute.”

Further, the PA wants to buffer its exposure by “value engineering all possible aspects of the World Trade Center project.” But there is no specific mention of further cutting off the wings at Calatrava’s teradactyl transportation hub.

To further deal with an anticipated debt by the end of 2012 to the tune of $20.8 billion, the PA is turning to employees to start paying for their own healthcare, cut back on overtime and take less vacation time. Quote the drag for police sergeants with a base salary of $103,964 and an overtime add-on of $132, 286.

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