Better known as OWIN, the project had already cost taxpayers $29 million and was a political embarrassment: State officials misled lawmakers and then-Gov. Ted Kulongoski about the need for the project and its spiraling costs.
You’d think Kitzhaber’s decision would have stopped the financial bleeding. It didn’t. Records now show the final bill for the OWIN fiasco has climbed to a surprising $55 million—and, WW has learned, this amount still doesn’t include all of the costs.
The OWIN plan called for building or updating 300 radio towers to allow emergency responders across the state to talk to one another, something they can’t always do now. The federal government is requiring public safety radios across the country to switch to new bandwidths. The $600 million OWIN project was way bigger and more complex than was required. But records and audits show OWIN officials convinced lawmakers the feds were indeed requiring the massive new system (not true) and that they had cut project costs (another fib).
In February, Kitzhaber proposed scaling the project back. In June, lawmakers OK’d a plan to replace Oregon State Police and Department of Transportation radios, and to update failing microwave towers. The state also rechristened it as the State Radio Project. The price tag came down a lot but is still a sizable $209 million. (This total includes money previously blown on OWIN.)
Meanwhile, private contractors kept billing the state. One company, Federal Engineering of Fairfax, Va., which came up with the original plan under a $1 million contract, has since billed taxpayers $7.9 million for its consulting work. State employees were replaced with high-priced consultants who cost $250,000-plus a year.
Tom Lauer, who took over the troubled project last year as major projects director for the Oregon Department of Transportation, says OWIN’s rising costs came from commitments the project had made before Kitzhaber hit the brakes. And he says other costs reflect the state’s efforts to change the project’s focus from a sprawling network to a simpler plan to replace radios and equipment.
Then there’s the political mop-up costs. Lawmakers quietly slipped $10.4 million into a spending bill to pay off local public safety agencies who had counted on OWIN to help build their own radio systems.
From 2008 to 2010, OWIN officials wheeled around the state, promising millions to local governments if they joined the project. Many of these promises were only handshake deals, and ODOT officials are still trying to figure out how much money was pledged.
“This hasn’t been an easy thing to untangle,” Lauer says. “This isn’t how we would normally want to go around doing business.”
Lawmakers argued that these local agencies shouldn’t be left hanging. But records show lawmakers haven’t been told about other local governments that have been stiffed by OWIN.
In April 2009, then-OWIN director Lindsay Ball pledged in a letter to the Eugene Water and Electric Board that his agency would split the costs of building two radio towers. EWEB spent $3.2 million to build the towers and now wait for the state to keep its word.
“It’s too bad the state isn’t living up to its commitments, because those funds would be appreciated by our customers,” says EWEB spokesman Joe Harwood. “We haven’t seen the $1.6 million promised. That’s the way it’s been with this—lots of promises, none of them kept.”
Rep. John Huffman (R-The Dalles) says he and other lawmakers worked to shrink the radio project—but he says they have yet to figure out a way to corral the costs of huge state technology and construction projects where bureaucratic momentum has taken hold.
“We try to get some
accountability,” Huffman says. “And we did here to some extent. But you
growl and you bluff, but in the end you’re just teasing a big beast.”