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A Government Money Pit Grows Wider

Thursday April 28th, 2016   •   Posted by K. Lloyd Billingsley at 5:45am PDT   •  

SacSkyline_MLAs we noted in March, the Sacramento headquarters of the California State Board of Equalization, known among reporters as a “24-story money pit,” sprung two leaks during heavy rains. Floors 10 and 22 both had a history of leaks and other troubles, but these were apparently unaddressed, despite more than 20 reports calling for action. Even those fixes, however, would have been insufficient. In addition to leaky windows, the building features mold, burst pipes, falling glass, a bat infestation, and traces of toxic substances. Over two decades bureaucratic bosses have spent some $60 million on the building, but in 2014 the cost to fix everything was another $30 million – excluding the cost of moving employees during repairs. Now the intrepid Jon Ortiz of the Sacramento Bee shows how the BOE problems have led to even more waste.

The BOE board had their offices on the 23rd floor of the structure, but in 2007 water leaks forced a cleanup of floors 22 and 23, so the board had to leave the building. Jerome Horton, BOE chairman, moved to the ninth floor of the U.S. Bank Tower. Then last fall Horton moved to the 21st floor, which offers a view of the Capitol Mall and full-length glass walls bearing the BOE seal. Horton took the opportunity to redecorate. As Mr. Ortiz notes, he packed the lavish suite with more than $118,000 of designer furniture including 24 white leather chairs, 21 cabinets with glass doors and “top-silver undertrim,” eight metal coat racks. “With delivery and installation of $12,000,” Mr. Ortiz explains, “taxpayers spent slightly more than $130,000 to outfit Horton’s office.” Other board members were much less extravagant but Ortiz finds it unlikely that any of it would have been necessary if the board members still had offices in the BOE headquarters.

The $60 million to fix that building would not have been necessary if the building had been properly constructed. It wasn’t, because politicians were looking the other way, and there’s no recourse because politicians were asleep at the switch, allowing the statute of limitations on defective construction to run out in 2002. Assembly members have considered a new facility costing $500 million, plus the debt on the BOE building, in the range of $70 million. As this disaster confirms, government money pits have a way of getting deeper and wider.

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April 2016