This page contains a single entry from the blog posted on January 19, 2011 9:43 AM. The previous post in this blog was Pushing envelope on open meetings law suddenly gets spendy. The next post in this blog is Metro "reporter" cuts loose in off hours. Many more can be found on the main index page or by looking through the archives.

E-mail, Feeds, 'n' Stuff

Wednesday, January 19, 2011

213% cost overrun on Portland's mission creep "water house"

In assembling his empire, Fireman Randy has some mighty expensive taste:

Leonard pitched building the Water House... In October 2009, Shaff, the bureau administrator, told the council that the city would spend $200,000 on the house and sell it for $400,000. That sale price, he said, was the median value in the area. However, data from the Regional Multiple Listing Service pegged the median value in that ZIP code then at $211,000.

The city also had no budget for the house, said Tom Klutz, the bureau's project manager. Klutz put one together only after The Oregonian requested one in December, just weeks before the house was finished.

Klutz's budget shows the city's costs far exceeded estimates. The city expects to spend $625,367 on the house, including $413,060 on contractors and supplies, and $212,307 on staff time. Contractors donated an additional $154,016 in materials and labor, and city officials estimate the land is worth $105,000...

Real estate broker Tony Matic, who reviewed sale prices in the area, said the Water House would sell for well under $300,000, a loss of hundreds of thousands of dollars to ratepayers.

Curiously, less than a month ago the city apparently told Willamette Week that the house cost about $310,000 to build. The price seems to have doubled in just a few weeks.

It's a mere part of the Water Bureau mission creep story, the rest of which is pretty capably told here. (He left out the fact that the water bureau also enforces the city's mandatory biodiesel rules -- another questionable idea having nothing to do with water. Water runs whatever The Boss tells it to run.) It might be time for the water ratepayers to take some sort of action -- symbolic, legal, or otherwise.

Comments (22)

What were Water Bureau staff doing to rack up $200K in staff time?! Watching the contractor pound in every nail?

Stop the hate speech!

Hey, I'm sure that homes sell for over 3 times the median price all the time in that neighborhood (snicker)

How many code enforcement officers could we rehire for $625,000? I know, I know, "different pots of money" right? Then why is the water bureau building a house?

Are there no responsible project managers in the city of Portland? Are the ones who are competent blind to the errors and mistakes of their professional peers?

Let me relay an anecdote.

My spouse works in the private sector and is a certified project manager (sort of like a CPA, but for project/program managers). She must take annual classes/training to keep her certification.

At a recent session held in Portland, she met a husband/wife team who have their own project management consulting business. They have several contracts with the City of Portland,, and say that business is booming. Thhey have to turn away business, becuase they simply don't have the time/resources to handle them all. Not that they are too difficult to handle, as they said the work is quite easy. They've never been questioned, nor run up against any auditors challenging their work.

They also both happen to be members of a minority group, and bragged how they get many plum contracts with the city due to their minority status.

A shame.

"The city also had no budget for the house"

Speaks volumes about the need for cost accounting down at PWB.

Be thankful its a house, if Randy had his way it'd include neon.

"Tony Matic, who reviewed sale prices in the area, said the Water House would sell for well under $300,000"

One more thing, the house is on 132nd & Russell, try closer to $200K.

And oh by the way, Oregon comes in #7 in this article titled "The Eight States Running Out of Homebuyers". A choice quote: "In December 2010, 35% of listings in Portland, the state's largest city, had price reductions."


No budget for this project until it was almost completed? I think this is a good occasion to remind ourselves of this lecture from Daniel Davies' One-Minute MBA course: "Avoiding Projects Pursued By Morons 101".


Project manager certification means nothing except that you can pass an exam and spout a specific POV about how project management should be done. However, possessing the certification does not mean you have skills or real world knowledge to be a good project manager and adhere to the iron triangle. Commonsense does not apply when most PMPs (at least the ones I am familiar with) are involved.

And what is most pathetic is the the local chapter of the largest US project manager organization held up the Portland tram project as a glowing success in one of their monthly meetings. The presenters were of course the project managers of the tram project. What a joke considering the issues of budget, schedule, and lack of buy-in for a lot of stakeholders.


Good points.

This is exactly what City of Portland looks for - the credentials, rather than the actual experience and results accomplished!

Our tax $$$ down the drain, literally!

Gotta stop the gravy train.

PS Spouse works for a private company, and her projects come in on time and under budget. Company is quite successful, too.

Fiscal accountability is an unknown term to Randy Leonard. If a project sounds like a good idea or makes him look good, then it will be built, regardless of cost, justification or impact on water rates.

Funding projects not related to the water system using water funds is a tool used by the City to supplement general tax revenue that is constrained by the property tax limitation. Randy has discovered how well this method works, the City Auditor is silent about it and the City Council is complicit because they also benefit by the increase in total revenue available for the City budget.

No one in the Water Bureau is willing to stand up to Randy and risk their job regardless of the fiscal or capital program consequences of these non-mission projects. They know that Randy has a lot of friends that can easily replace them.

It's interesting that NY Times, and other major media has recently been reporting on costs of affordable "green" housing. Several companies in the US are building "sustainable", "green" housing in the $100 to $150 per sq/ft range, excluding land cost. But Randy justifies this "water house" that is coming in at the $400 per sq/ft range. Something isn't right. And more should be made of it.

A not so funny funny abouit the "Water House" is that it was built across the street from the residence of the Chair of the "Citywide Land Use Committee", Bonny McKnight, who also chairs the Russell Neighborhood Association.

Bonny get the vapors whenever any NA gets its back up and vows to take a BDS land ude decision to hearing and oppose the hjeavyhanded planning mafia at BDS.

Bonnie sings "Kumbayah" very very very well, in perfect tune with Randy.
Randy, of course, is the Commissioner in charge of Water and BDS.

Bonny plays the game very well, and, in my not so humble opinion, sells out her constituents on a routine basis.

Mike (one of the many)- I work for a private corporation too. I worked as a PM for awhile until credentialing and supreme political maneuvering became more important than on time, on budget, and requirements met or exceeded and than honesty and integrity in the face of issues. Unless a project is canceled, it is a de facto success. No comment. My employer also heavily uses contractors as PMs, many of whom do not have either business or technical knowledge in the projects they work on. But they get paid while employees teach them whatever they don't but should to get their jobs done.

Klutz, the bureau's project manager.

Pretty much sums it up, right there.

With the latest recalculations of the true cost of the 'Water House', I seriously doubt that Randy will allow the city "to put the house up for sale in early 2012".

Here how it is going to go down - Both Randy and Sam will wait till January of 2012 to see if they can raise money to run for re-election. After getting the reality check of polling and how close of a race it will be for either of them to make it to the General - Do you really think that they will allow this poster child of their inefficient bloat be put on the market as a constant reminder and have it as a politicly fair price and not sell?

*If* someone were to buy the house for 300K, they will be scrutinized for any connections to Randy and Sam (after they just picked up a 800K house at a half-a-million dollar discount). Though they may put it in some sort of land trust to justify the sale.

This house is a political liability in a election year, my guess is that the City will quietly get rid of it this year or money will magically appear to fund this 'wildly popular' program until 2013.

Or we will one day read about how "The Water House Burnt To the Ground".

The statement by Randy the Dandy at the end of the article really says it all!

Last week, Leonard said "the money and density worries were never his focus."

These are the same math skills from Randy we can expect for the unneeded water treatment plant and unneeded covering of the reservoirs...currently exceeding +$1Billion. Hope that cat food for dinner is on sale soon.

I am only surprised that Randy's concubine's acupuncturist's best friend isn't already living in the humble commode.

With regards to my "selling out my constituents regularly", it is clear that the writer of this comment has no clue what I do and how I do it. If he or she wants some factual information, a simple conversation with the many citizens I try to support and help would take care of the confusion. If not, it would be enough to simply leave me out of the discussion entirely, since my role in this issue was nothing like it has been described.

Actually, Nonny Mouse did an accurate job of describing the situation, Bonny.

I am only 25 years old. Born and raised in NE Ptld. This is unreal. I almost just don't even want to know where all the money is going.
Am I going to let #1 Hot Lips Pizza customer Tram and his BFF Blandy run me out of my own city? To be honest I don't know how much more I can take...I'm too young for this.

Clicky Web Analytics