INTERIOR, ENVIRONMENT, AND RELATED HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS ONE HUNDRED NINTH CONGRESS SUBCOMMITTEE ON INTERIOR, ENVIRONMENT, AND CHARLES H. TAYLOR, North Carolina, Chairman ZACH WAMP, Tennessee NORMAN D. DICKS, Washington NOTE: Under Committee Rules, Mr. Lewis, as Chairman of the Full Committee, and Mr. Obey, as Ranking DEBORAH WEATHERLY, LORETTA BEAUMONT, CHRISTOPHER TOPIK, and GREG KNADLE PART 9 OVERSIGHT HEARING: JOHN F. KENNEDY CENTER 20-805 Printed for the use of the Committee on Appropriations U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 2005 COMMITTEE ON APPROPRIATIONS JERRY LEWIS, California, Chairman C. W. BILL YOUNG, Florida JAMES T. WALSH, New York CHARLES H. TAYLOR, North Carolina DAVID L. HOBSON, Ohio ERNEST J. ISTOOK, JR., Oklahoma HENRY BONILLA, Texas JOE KNOLLENBERG, Michigan JACK KINGSTON, Georgia RODNEY P. FRELINGHUYSEN, New Jersey ROGER F. WICKER, Mississippi RANDY "DUKE" CUNNINGHAM, California TODD TIAHRT, Kansas ZACH WAMP, Tennessee TOM LATHAM, Iowa ANNE M. NORTHUP, Kentucky JOHN E. PETERSON, Pennsylvania RODNEY ALEXANDER, Louisiana DAVID R. OBEY, Wisconsin ALAN B. MOLLOHAN, West Virginia PETER J. VISCLOSKY, Indiana NITA M. LOWEY, New York JOHN W. OLVER, Massachusetts DAVID E. PRICE, North Carolina CHET EDWARDS, Texas ROBERT E. "BUD" CRAMER, JR., Alabama JAMES E. CLYBURN, South Carolina JESSE L. JACKSON, JR., Illinois CHAKA FATTAH, Pennsylvania FRANK M. CUSHING, Clerk and Staff Director (II) ISSUES, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE KEITH CUNNINGHAM, ANALYST IN CHARGE, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE MICHAEL M. KAISER, PRESIDENT, JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS OPENING STATEMENT OF CHAIRMAN TAYLOR Mr. TAYLOR. The Committee will come to order. Today we welcome Mark Goldstein, Director of the Physical Infrastructure Issues for the General Accounting Office; and Michael Kaiser, President of the John F. Kennedy Center for the Performing Arts. This is an oversight hearing that focuses primarily on how the Kennedy Center has managed the $204 million in construction money this Subcommittee has provided in the last several years. The GAO testimony raises concerns about construction management problems, including significant consistent cost overruns, unresolved major life security issues, and possible fire safety problems. We will first hear from Mr. Goldstein and then Mr. Kaiser, and then the members can ask questions. We ask you gentlemen to summarize your remarks. Your entire statements, of course, can be put in the record. At this point I would like to recognize Mr. Dicks, the Ranking Member, for any remarks he would like to make. OPENING STATEMENT OF CONGRESSMAN DICKS Mr. DICKS. Mr. Chairman, as you know, this is the first hearing before the Subcommittee for the Kennedy Center in five years, and it is the first appearance before the Committee of the Kennedy Center's current president, Michael Kaiser. I look forward to discussions this morning about the important issues raised by the GAO regarding financial management of construction projects and fire safety at the Center. (1) Mark Goldstein, the author of the GAO report, and I met two weeks ago to discuss the GAO's concerns, and I spent time yesterday personally touring the Kennedy Center, discussing the GAO findings with Mr. Kaiser and his staff. I would encourage all Members to go over to the Center so they can get a firsthand view of the issues, as well as an understanding of the very real progress which has been made in renovating this 34-year-old building and upgrading its fire safety and accessibility. Mr. Chairman, after meeting both with GAO and the Center staff, and touring the facility, it is clear that the Committee will hear two very different views this morning, especially with respect to the Kennedy Center's approach to meeting its responsibility to ensure public safety in case of fire. I believe GAO, in preparing the report, has done a thorough review, relying on fire prevention consultants and construction engineers who they trust. The Kennedy Center, in some cases, has chosen different strategies than those recommended by the GAO, based on its own studies and the recommendations of its consultants. I won't pretend that I have answers to the very complex technical questions which are raised by these studies, but I do want to say at the outset that based on my discussions with both witnesses and my personal tour of the facility, the Kennedy Center has taken its responsibilities for public safety very seriously. They have assigned very experienced people to task and have hired highly trained and credentialed consultants to help them design and install state-of-the-art fire safety equipment and procedures. They have made major changes in the facility, including installation of new fire alarm and sprinkler systems, and I believe they are open to further changes if they are convinced that such changes are necessary. Any suggestion that they have not taken these public safety responsibilities seriously is, in my view, just not accurate. With respect to cost overrun issues, I am very concerned, as is every member of this subcommittee, about costs for the theater renovations that dramatically exceed the estimates that were presented to the Committee when they were approved. Some of this clearly resulted from poor management by the Center in the mid1990s, when the budgets for these projects were put together, in particular, the failure to provide any contingency reserves in the cost estimates. Mr. Kaiser's testimony indicates that these failings are now a thing of the past, with new people in charge and new procedures for better managing costs. Some of the cost overruns also were, as GAO acknowledges, the result of poor construction when the Center opened 30 years ago and poor documentation by the original architects, making renovation work especially challenging. These failings many years ago resulted in many added costs when the theater was renovated, but that is water under the bridge. What I want to hear today from both GAO and from Kennedy Center is whether current project management is now adequate to avoid further cost overruns. The Kennedy Center is both a powerful symbol and a busy public theater complex hosting almost 3 million visitors each year. Only about 25 percent of the Kennedy Center's budget comes from public funds. This Committee has provided over $200 million in capital funds for construction projects over the last 10 years. The taxpayer has a big stake in ensuring that funds are managed properly and that the memorial and theaters are safe. I look forward to this hearing to see how much progress has been made, as well as learning what additional efforts may be required to ensure the safety of the public and the quality of the Center's productions. Thank you, Mr. Chairman. Mr. TAYLOR. Thank you, Mr. Dicks. I thought you were going to be testifying for Mr. Kaiser there for a moment. I would like to go ahead and get started with Mr. Goldstein. OPENING STATEMENT OF MR. GOLDSTEIN Mr. GOLDSTEIN. Thank you, Mr. Chairman and Mr. Dicks, and other members of the Committee. I appreciate your interest in this issue. I want to thank your staffs for their guidance on these issues. I want to thank the Kennedy Center as well, Mr. Kaiser and Ms. Donlon, and the people who work with them. It is not easy to be audited, and it is not easy to be audited when you are a small organization and you have GAO calling you up all the time, and I recognize that that is an issue at times. We think they have been extremely helpful to us. We have found that the kinds of information they provided to us helped us in how we finished our work. I recognize, as Mr. Kaiser does and Mr. Dicks has already said, that we have some disagreements, and I still appreciate all the assistance that they have provided us all along. I also want to thank GAO staff, which has done a terrific job. I am Mark Goldstein, the Director of Physical Infrastructure Issues for the Government Accountability Office. I am accompanied by Keith Cunningham, the Analyst in Charge of this engagement. We appreciate the opportunity to testify on our work related to the management and oversight of capital projects at the Kennedy Cen ter. Since fiscal year 1995, the Kennedy Center has received almost $203 million in Federal funds for capital repairs and alterations included in its comprehensive building plan. Kennedy Center officials said that additional appropriations totaling $43 million through fiscal year 2008 are needed to complete the planned projects. For more than a decade, we have identified shortcomings in and made recommendations to improve the Kennedy Center's construction, planning, and management processes (see full report on page 92). In the 1990s we reported that the Kennedy Center did not have sufficient staff capability to effectively manage its planned capital improvements. In 2003 we reported that the Kennedy Center needed to strengthen the management and oversight of large construction projects, such as the garage expansion and renovation project. In 2004 we reported that the Kennedy Center has implemented most of the projects in their plan, but would likely not complete its plan by 2008, given the number and size of the renovation projects that remained to be done, anticipated appropriations, and the likelihood that project budgets may increase as designs are completed. Today my testimony will discuss, one, the progress the Kennedy Center has made in completing key capital projects, such as the |