Judge Mandates Auditor for Reno Pipeline Project

Sat September 20, 2003 - West Edition

RENO, NV (AP) A Reno judge has ordered an independent auditor to examine the costs for moving an underground pipeline to make way for the city’s train trench project.

The city went to court Sept. 8, claiming mismanagement by pipeline owner Kinder Morgan Energy Partners is driving up the cost of the project, which is already $7 million over budget.

“It appears there were far more people on the project than was necessary,” Chief Deputy City Attorney Randall Edwards said. “They had crews sitting around basically not doing anything, or doing very little. A concern has been raised that they rented equipment by the hour as opposed to by the day or the week or the month.”

But Kinder Morgan lawyers said the overruns were necessary to keep the accelerated schedule demanded by the city so it did not delay construction of the trench.

“We were told that ’Cost is not an object; just get it done,’” said Michael Kerr, the company’s lawyer.

An earlier court settlement capped the company’s financial responsibility for moving the pipeline at $2.4 million. New estimates by the Kinder Morgan put the price tag at more than $12 million —twice the original estimate.

Washoe District Judge James Hardesty gave both sides five days to agree on an auditor.

He also ordered the city to continue paying the bills and Kinder Morgan not to stop work on the relocation project.

Hardesty said he will decide who’s responsible for the overruns after reviewing the auditor’s findings.

The 2.1-mi. (3.3 km) train trench project is designed to lower the railroad tracks through downtown Reno to separate motorists and pedestrians from trains. Construction began late last year on the $282-million project and is expected to be finished by early 2006.

The overruns for the pipeline relocation would be paid from a $26.5-million contingency fund and would not put the project over budget.