A Civic Center Chairy Tale

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I have written several times about the infamous $1,073 chairs purchased for the Newport Beach City Hall.

After multiple requests, I finally received the invoice from the city dated March 1, 2013.

Tara Finnegan, Public Information Manager for the city of Newport Beach, said that the Orange County Register article stating the $1,073 price tag was based on a quote the city received in 2012. She said the actual invoice price paid for those chairs was $957 each.

However, there were more surprises for taxpayers in that furniture invoice.

Twenty-three other chairs characterized in hand written notes on that invoice as “executive” conference room chairs were purchased for $1,159.50 each. A conference room credenza was purchased for $6,052.86. A conference room table wins the prize for most expensive item on the invoice at $10,609.21.

One hundred plastic “side” chairs were bought for $176.58 each (I found alternative chairs for $30.99 each on BizChair.com).

The city paid the seller a design fee of $6,900 and a project management fee of $1,700. I wish I could charge my customers $8,600 for the privilege of buying my products. “Champagne wishes and caviar dreams,” as Robin Leach used to say on “Lifestyles of the Rich and Famous.”

Conference rooms in large or medium sized law firms or court reporting services have nice facilities with professional looking furniture. I’ve talked to various lawyers and court reporting service executives about furniture costs. For $3,500 they can buy a professional conference room table that can accommodate 12 to 15 people, a conference room credenza, and 10 conference room chairs.

Several city council candidates I talked to disagree with the city’s free spending on furniture.

City Council candidate Diane Dixon responded, “I bought two ergonomically correct leather chairs at Overstock.com for my home office at $399 each, and I didn’t get the government rate. Someone advocating for the taxpayer needs to be sitting at that $10,000 table and making the decisions. I will wear the green eyeshades for the taxpayer.”

Why could private citizen Dixon buy high-end specialty chairs for significantly less than the city? It’s amazing what you can save when you spend money as if it was “your” money.

City Council candidate Kevin Muldoon added, “These expenditures are great examples of unwise spending of taxpayer funds. This indicates a much bigger problem with city spending.”

Many taxpayers are outraged that government would buy high-end “designer” furniture rather than lower priced generics. Someone I know who is involved in California politics (but wanted to remain anonymous for business reasons) quipped that the “city’s excessive spending on luxury furniture [is opulence] that one might find in the headquarters of [New York City investment bank] Goldman Sachs (oh wait, didn’t they sell the bonds that financed the [city hall] deal)?”

Bob McCaffrey from Residents For Reform suggested, “Next time the city buys furniture, maybe they could go to IKEA.”

City Council candidate Scott Peotter pointed out that credit furniture purchases more than doubled the invoice costs.

According to a February 2014 article in the OC Register, the city hall project cost is $142.2 million.

According to the Certificate of Participation documents on the city’s website, the city financed $128.4 million. Taxpayers will pay for the project costs and interest totaling $297.4 million. So financing the project increased the percentage cost to taxpayers by 109 percent.

Amortizing the 109 percent interest cost to each individual purchase, the $1,159 chairs actually cost taxpayers $2,424, the $6,052 credenza actually cost taxpayers $12,657, and the $10,609 conference tables actually cost taxpayers $22,188.

One of the justifications for purchasing the $957 chairs was their projected useful life of 12 years. But taxpayers are paying for them for 30 years—that’s 18 years after their projected useful life.

More fiscal discipline is likely to be imposed on the city after November’s elections. How much will depend on how many reform or status quo candidates are elected.

 

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