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Audit of 'Taj Mahal' 1st District Court of Appeal courthouse finds 17 problem areas

TALLAHASSEE — Judges at the 1st District Court of Appeal illegally took control of building themselves a new courthouse and added millions to the cost with custom fixtures, etched glass, African mahogany and granite, according to auditors who reviewed the project.

The audit, ordered by Chief Financial Officer Alex Sink, found 17 instances "each of which appear to be violations of and/or inconsistent with'' state law, administrative rules or audit practices by the court and by the Department of Management Services, the state agency that oversees construction and leasing of state buildings.

Initially estimated to cost taxpayers $31 million, the new courthouse now being called a "Taj Mahal,'' is expected to cost more than $48 million.

An advance copy of the audit, slated for release today, was obtained late Monday by the St. Petersburg Times.

Some of the additional costs occurred because no one sought competitive bids for the project and because the judges took control and added high-end fixtures and furnishings.

The auditors, from the state Department of Financial Services, were particularly critical of the "extraordinary use of African Mahogany (Sapele) wood throughout'' the courthouse.

"Records disclose that approximately 102,000 board fee of Sapele (approximately 20 miles) were procured for the Project. We also noted an extensive use of granite throughout the building.''

Auditors made no specific recommendations but suggested the audit be furnished to legislative leaders, the chief justice of the Florida Supreme Court and Gov. Charlie Crist.

Sink was not available for comment, and 1st DCA Chief Judge Paul Hawkes and other judges did not respond to a request for comment.

DMS officials had not seen the audit, but communications director Linda McDonald said in a statement: "The Department of Management Services managed the First DCA courthouse construction project within the legislatively appropriated funds. We welcome the opportunity to review and address any concerns the CFO has about the project once their audit is complete.''

Sink's auditors found problems from the beginning.

Initial legislative appropriations of $100,000 in 2005 and $1.8 million were for the specific purpose of expanding the appeal court's existing courthouse, in downtown Tallahassee. Instead, the money was used to begin designing a new building now nearing completion at Southwood, about 6 miles from the Capitol.

Before legislators had appropriated any money for construction of a new facility, the judges already had an architect designing a new building and had started making visits to out-of-state courthouses.

The judges patterned the new building after the Michigan Supreme Courthouse after taking two trips there, one at court expense for $2,400 and a second that cost the construction manager $12,800 for a chartered plane.

By 2007 the judges were seeking $24 million in one year's budget and indicating they would need an additional $13.5 million in 2008-'09. Unable to get the money in the budget, the judges lobbied for approval of a $33.5 million bond issue and $7.9 million in additional costs. The bond issue was tucked inside a transportation bill approved the last day of the 2007 legislative session.

After the money became available, the judges battled DMS for control of the project, the auditors found.

Authorization for the bonds put DMS in charge of the project. But the auditors found that almost immediately, the judges insisted the court play a major role in every decision.

State law requires that "DMS is responsible for designing, financing, constructing, maintaining and leasing the new 1DCA courthouse,'' the audit said. "Despite the statutory directive, DMS allowed 1DCA to control the Project, ultimately resulting in increased project costs.''

"It is clear that 1DCA viewed itself as the equitable owner of the Project and exercised direct control of DMS and the various contractors associated with the Project. Although the 1DCA was not a party to the construction contract, at the insistence of the 1DCA, the contract provided for an extensive role for the 1DCA with respect to design and construction.''

The audit includes internal e-mails that lay out the struggle between the judges and DMS. Agency officials questioned how they could work with a proposed contract that would give the court veto power over every decision. DMS complained that ceding control to the court would undermine its ability to manage the project.

DMS did not seek competitive bids as required by law for projects valued at more than $500,000, the audit said.

Instead, DMS used a negotiated fee-guaranteed maximum price method, directing Peter R. Brown Construction Inc. to begin construction on the site on Dec. 24, 2008, three months before establishing a guaranteed maximum price, on March 23, 2009.

The auditors found that DMS authorized more than $6.6 million for construction before establishing a guaranteed maximum price. By signing contracts and agreeing to expenditures before the terms of contracts were put in writing, DMS "greatly diminished the state's ability to effectively negotiate a price most favorable to the state,'' the audit said.

The cost to taxpayers went up as the judges ordered expensive accoutrements, the auditors said.

"The total costs of the building significantly increased during the planning phase due to the expanded scope in square feet, custom fixtures and high-end finishes such as granite, etched glass and ornamental woodwork,'' the auditors said. "... As a result of the change in square footage and customization, planned construction costs increased from $33.1 (million) to $36.78 million.''

The auditors also predicted trouble for the future.

DMS has established annual rent for the court at $1.6 million, far short of the annual $2.5 million it will take to pay off the bonds.

Though the Legislature passed a law requiring state agencies to review existing and proposed contracts in 2009, DMS made no attempt to renegotiate the courthouse contracts. Officials at DMS told auditors they thought the possibility of achieving any savings on the courthouse was "remote.''

In addition to luxurious fixtures added to the building, the court's continuing involvement in redesigning the courthouse during construction added more than $1.1 million to architectural and engineering fees, the audit found.

Auditors said the court is in violation of state law for ordering artwork far in excess of the $100,000 maximum allowed for new state buildings. DMS submitted the required notice to the Florida Arts Council, but auditors found: "The notice was misleading. The notice specified that only $100,000 would be spent for art work on the 1DCA Courthouse, notwithstanding the fact that DMS already intended to pay over $500,000 to Barnett Fronczak Barlowe and Signature Art Gallery.''

Auditors also criticize DMS for helping construction managers avoid paying state sales taxes totaling $589,000 by directly purchasing some materials for the project.

Lucy Morgan can be reached at [email protected]

Audit highlights

. Judges from the 1st District Court of Appeal illegally took control of construction of the new courthouse from the Department of Management Services, the state agency required by Florida statute to oversee such projects.

. Decisions the judges made added more than $3.5 million to the cost of the project. Extras included custom fixtures, etched glass, ornamental woodwork of African mahogany and granite trim throughout the building. More than 102,000 board feet of the mahogany — 20 miles — was purchased.

. A state law was violated that requires competitive bids for projects valued at more than $500,000.

. Legislators initially budgeted money for expanding the court's existing building, but the money instead was used to pay for architects and engineers to plan a new building.

. The $1.6 million a year in rent the court is to pay for the new building falls short of the $2.5 million the state must pay to retire the bonds sold to finance it.

. The size of the new courthouse increased from 88,000 square feet planned in its early stages to 108,000 square feet, raising the cost from a projected $33 million to more than $48 million.

Audit of 'Taj Mahal' 1st District Court of Appeal courthouse finds 17 problem areas 10/11/10 [Last modified: Monday, October 11, 2010 11:07pm]
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