Canal Street costs misrepresented, audit finds

March 5, 2007 -- Department of Public Works officials knew the Canal St. reconstruction and extension project would cost far more than budgeted, but kept that information from decision-makers, according to a new audit.

The audit also ripped the city's project planning and oversight, and said the rising costs of the Canal St. extension -- which ultimately cost $53 million -- drained money from other DPW projects.

"At least nine capital street projects were delayed due to the Canal St. project," the audit said.

Canal St. was reconstructed from 6th St. to 25th St., and then was extended west to Miller Park.

Ald. Michael Murphy, who requested the audit, said he supported its recommendations for improvement.

"We make decisions based on the information we receive by city departments, and if that information is misrepresented to us, then we have a fatal flaw in the system," he said.

The project was budgeted for $20 million, but DPW officials actually thought it would cost closer to $40 million, the audit said.

"DPW staff allowed this misrepresentation to persist, providing no clarification or correction that the $20 million figure was a gross underestimation of what it would actually cost to construct the project" according to the audit, conducted by the city comptroller's office and Sage Consulting Group, of Denver.

Common Council President Willie Hines called the Canal St. a "giant sponge" that pulled funds away from scheduled bridge repair, sewer work and paving work.

"Clearly, the lack of accurate project oversight and cost management has cost the city dearly," he said. "Appropriate steps and actions must be taken to prevent this from ever happening again."

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