City Council digs deeper into ‘unorthodox' construction funding

Among the council's concerns are nearly $4.7 million in change orders internal auditors believe should have been approved by the city's procurement department. Auditors also concluded in their December report that city officials processed two bank loans taken out during the construction, totaling $24 million, without going through the city's financial controls.

One key aide involved in the construction management, senior policy adviser David Edwards, conceded some aspects of the process to build the facilities were "unorthodox" but said no laws were broken.

"Look at the outcome," Edwards told council members. "It got done."

The explanation didn't satisfy some council members. Councilman C.T. Martin accused Edwards of "poor, inept management" and being "arrogant." Councilwoman Yolanda Adrean said dual financial controls between the mayor's office and city departments were necessary, particularly during a time the city was struggling with budget shortfalls and many taxpayers had lost confidence in Atlanta's fiscal management.

"There is pain," said Adrean, a certified public accountant. "There is damage."

The comments came during a four-hour meeting to discuss the audit's findings. Edwards stayed on with new Mayor Kasim Reed in part to make a presentation to the council about the audit. Edwards said this week should be his last with the city.

Martin and Councilwoman Natalyn Mosby Archibong filed legislation last month requesting a more detailed audit of the construction project and the proposed sale of City Hall East. Leslie Ward, who leads the audit department, said her staff is doing additional research on the prior work and asked the council to wait until they're done before considering an additional audit.

In all, the cost of construction of the three buildings, which were completed last year, has been estimated at about $106 million. One earlier cost estimate, according to auditors, was $80 million. City officials said the new facilities were necessary because the current headquarters, City Hall East, a massive building on Ponce de Leon Avenue that was once a warehouse, were outdated.

The city had hoped to sell City Hall East to developer Emory Morsberger for $26 million to help fund construction of the new facilities. City officials said negotiations with Morsberger are ongoing. Some Parks, Recreation and Cultural Affairs employees still work in the building.

Councilwoman Keisha Lance Bottoms asked Edwards why he didn't keep the council in the loop about some aspects of the project. Edwards said he didn't think council approval was needed to implement the change orders and some other financial transactions.

"There was never a council solution we could identify," he said.

On Wednesday, council members requested all financial records involving the change orders.

As for the bank loans, Edwards has said the process for managing the funds was flawed. However, he insisted the city received every item it purchased through the process.

Councilman Ivory Lee Young wondered if the costs associated with the project and the delay in selling City Hall East were partly responsible for the council having to raise property taxes last year. He suggested the city should have explored more creative ways to finance the construction.

Edwards insisted the city wound up making "very good decisions."

"We failed the taxpayers," Young countered.

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