The money pit

The croton filtration plant in Van Cortlandt Park is now nearly $2 billion over budget. File photo by Claudio Papapietro

Filtration plant cost overruns ‘can’t be accounted for’

By N. Clark Judd

A city Independent Budget Office analysis has found that skyrocketing construction costs for the Croton filtration plant cannot be completely accounted for by the reasons given by the city agency undertaking the project.

Findings from the IBO, released on Oct. 16 at a Croton Facilities Monitoring Committee meeting, indicate that about $661 million of a $1.2 billion increase in construction costs and just under half of the rise in the total price tag of the controversial project can’t be explained by inflation and a nationwide uptick in the cost of largescale projects

The Croton plant and associated work is now expected to cost water rate payers $3.08 billion by the IBO’s reckoning. In 2003, when the project’s environmental impact statement, or EIS, was first drafted, city Department of Environmental Protection officials estimated it would cost $1.3 billion.

Neither the IBO nor the DEP, which is building the massive plant under Van Cortlandt Park to treat water coming to the city from the Croton watershed upstate, has provided a concrete explanation for the increases in cost that can’t be attributed to inflation.

“What we did find … [is that] construction costs, that’s of the basic plant construction, have more than doubled since the EIS in 2003,” said George Sweeting, a deputy director at the IBO, at the Oct. 16 committee meeting. “We tried to look at how much of it is due to general construction cost escalation, sometimes known as inflation, and our sense is that explains about 45 percent of that increase.”

DEP First Deputy Commissioner Steven Lawitts has repeatedly said that rising material costs, a weakening dollar and a rise in the cost of labor were the primary reasons the project has so monumentally increased in price.

Longtime watchdogs of the project say the IBO findings reinforce their belief that the city had deliberately understated the project’s cost.

“It’s what in the private industry they would call fraud,” said Anne Marie Garti, a local resident who has protested against perceived waste in the Croton project for years.

Walt Matystik, an attorney and associate provost at Manhattan College who teaches environmental law, found fault with the report itself.

“The game seemed to be to blame as much as possible on inflation and take the spotlight away from potentially misleading cost under-estimates made in 2003,” said Mr. Matystik.

During the meeting, Mr. Sweeting cautioned that his office’s work was not an audit, and his ability to go further than simply crunching budget numbers was limited because neither he nor anyone who works for him is an engineer.

“We did not offer firm conclusions” as to what drove the remainder of the project’s cost increases, Mr. Sweeting said on Oct. 17. However, he speculated that the limited number of bidders qualified to take on the massive project combined with the building boom occurring when the contracts were let between 2004 and 2006, likely played a role.

Mr. Sweeting also said that the design was modified after the project’s environmental impact statements were approved. Since his analysis used figures from the impact statements, developed in 2003 and 2004, as a baseline, changes that increased the cost affected his report.

Mr. Sweeting asserted that proposed designs for the plant at other sites, such as the muchdiscussed Eastview industrial park in Westchester County were essentially the same as the Van Cortlandt Park site. Additional site preparation costs in the park — necessary because the plant is being built underground in an area soaked with groundwater of its own — notwithstanding, he said, it would be fair to assume that the plant’s cost would have ballooned no matter where it was built.

Plant development costs at Mosholu Golf Course where Jerome Avenue borders Van Cortlandt Park, increased by $1 billion. Only about 39 percent of that increase could be attributed to the nationwide rise in the cost of construction projects, said Mr. Sweeting.

At this time last year, work on the clubhouse and first tee at Mosholu Golf Course, which are getting facelifts as part of the project, was expected to cost about $27 million. Estimates for fiscal year 2009 now say that work will cost almost $107 million.

The anticipated cost to rehabilitate the New Croton Aqueduct to carry water from the filtration plant was $55.5 million in 2003, but is now estimated to be over $140 million.

“Off-site” work, including the much-discussed construction of an underground chamber across the street from the Bronx High School of Science to monitor and control the flow of water from the Croton system, ballooned in cost from about $40 million to almost $172 million between 2003 and the IBO’s most recent estimates.

The city comptroller’s office is conducting an ongoing audit of the Croton project.

This is part of the October 23, 2008 online edition of The Riverdale Press.

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