The city of Federal Way sent a termination letter to contractor Nakano Associates on Feb. 3 after employees presented $3.4 million improvement plans for Town Square Park, $1.7 million over the city’s budget, at a Federal Way City Council retreat Jan. 31.

This isn’t the first time the cost of the park has been in question. The first phase of Town Square Park was completed in July 2014 for $267,000, despite an initial budget of approximately $140,000. The Council had approved moving forward on the project during an April 1 meeting, setting the total cost for the project at a level “not to exceed $200,000,” but ended up reaching a $300,000 budget a few months later.

For several months now, the city has publicly kept the budget for park additions at $1.5-1.7 million.

“After much discussion between the council, the commissioners and the public, we knew what we wanted for our park and were confident we could make that happen in a $1.5-1.7 million budget,” said Federal Way Mayor Jim Ferrell in an interview.

Ferrell said he’d repeatedly told Nakano employees to develop design options for the park in the finalized price range. Yet at the retreat, Nakano employee Ida Ottesen showed designs in a $3.4 million price range.

“I walked into the room during the retreat and saw three different design options and was really excited because they looked wonderful,” Ferrell said. “Then Ida drops a bomb, a jaw-dropping surprise that these designs were $3.4 million. It was so disappointing because not only had we communicated our budget at many occasions, but we went to great lengths to communicate our budget. In my point of view, it was impossible that this could have been misunderstood.”

Ferrell pointed out there had been several meetings and emails prior to the retreat where the $1.5-1.7 million price range was clearly expressed to Nakano employees, including Ottesen.

“It [to me] felt that she had gone rogue and that was disappointing,” Ferrell said. “I knew then that the relationship between the city and Nakano was at an end.”

The Mirror contacted Ottesen for her side of the story, but she declined to comment.

“From a taxpayer point of view, it was a gross deviation from what every communication had been,” Ferrell said. “I was so disappointed Nakano blew by what we can do in a fiscally responsible manner. It’s my responsibility as mayor to be a steward of taxpayer dollars and that’s what I intend to do.”

The Mirror obtained emails from Federal Way Parks Deputy Director Stephen Ikerd and Ottesen discussing the price range for the designs and Ottesen’s presentation at the council retreat.

On Jan. 26, Ottesen wrote, “We will have one option under $1.7 million dollars. The other two will probably be more (we are currently developing costs). Since we still are at a conceptual level, this will be fine as it enables selection of the most important design and park elements that the city and public favors. It also gives City Council an idea of what things cost. The most important thing is that the final master plan concept stays under $1.7 million. A $1.5 million budget for a park of 4 acres is not very much, I’m afraid, but we are doing our best to stay realistic. We will send you work in progress black and white CAD [computer-aided design] drawings (plan view) tomorrow morning.”

Ikerd wrote back at 9:57 a.m. on Jan. 27 with, “It was made clear several times to John (Hutton) and I that we stay in the $1.5-1.7 million range so all three options should reflect that, however, if you want to show some add-ons with associate cost that may be better received? We plan to show your options to the mayor for input before the retreat… maybe this Wednesday, in case we need some last minute tweaks… waiting for an appointment.”

Ferrell said he saw only black and white designs from Ottesen before the retreat, but never had a conversation about finances.

“I had not seen any dollar amounts but firmly believed everything presented to me would be in our $1.5-1.7 million budget and had no reason to believe otherwise,” he said.

In the letter to Nakano, the city wrote they intended to terminate its relationship with Nakano March 5, 2015. The city ordered Nakano to stop all work associated in connection with the Town Square Park design.

“Your presentation at the Council retreat on Jan. 31 did not fulfill the elements of the scope of work outlined in AG No. 14-177A and as further clarified and directed by the staff assigned to the administration of this contract,” wrote Amy Jo Pearsall, city attorney, in the letter. “Your unwillingness to follow the mayor’s and staff’s clear direction led to a presentation that fell far outside the city’s expectations with regard to the budget as well as anticipated designs. Due to your continued unwillingness to follow clear direction, the mayor has directed me to inform you he is exercising his authority to terminate the city’s contract with Nakano. Within the next 30 days, the city expects that all deliveries that have previously been paid for will be forwarded, along with all information gathered at past public meetings, to parks director John Hutton.”

The city does not believe the termination of Nakano will hurt their plans to improve the park.

“Our timeline is still on track,” Ferrell said. “We should have the approval of a design in spring and completion of the park improvements next year.”

Ferrell said the city does not plan on hiring another contractor and will finish their improvements using “in-house” employees, such as Ikerd and John Hutton, director of Federal Way Parks and Recreation. They will individually contract other improvement work, such as building a restroom area.

“We will take a few ideas set by Nakano that we are grateful to have had and move forward,” Ferrell said. “We know what we want to do with our park because the community already told us what they want. We are confident we can produce a great park with everything we need and all within our budget.”