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HomeMy WebLinkAbout07/20/1993, C-7 - ADMINISTRATIVE STREAMLINING/CHANGE ORDER IMPROVEMENTS II�Alulll�llllln�lll�l�l MEETING GATE: ci Ilpl II o san lois oBIspo 7-20-93 N COUNCIL AGENDA REPORT ITEM NUMBER: 4.7 FROM: Ken Hampian, Assistant City Administrative Officer(c� Mike McCluskey, Public Works Directn&,A SUBJECT: Administrative Streamlining/Change Order Improvements CAO RECOMMENDATIONS: 1. By motion, approve the recommended streamlining of various reports and other miscellaneous administrative requirements. 2. By motion, approve fiscal management policy for limiting staff authority for contract change orders, as attached. DISCUSSION: Background As the City moves toward a smaller organization with reduced staffing levels, it is essential that we reevaluate the "way we do things" in a number of areas, and eliminate those activities which do not provide significant benefit. Such prioritization is essential, since trying to preserve a 'business as usual" approach to tasks in the aftermath of major staffing reductions is neither realistic nor possible. Indeed, the first principle set forth by the City Council in the Key Budget Principles section of the recently-adopted budget is 'Be Open to Change and New Ideas". This.report offers ideas for "streamlining" in several areas, but in a way that preserves accountability and, with respect to contract change orders, increases accountability. Reporting Requirements An area that staff feels could be streamlined with minimal impact on the organization or service levels relates to several existing administrative reporting requirements. The need to streamline in this area was highlighted during a recent Management Team meeting which included on the agenda four separate tasks related to reports currently being prepared on a quarterly basis. These reports are: ■ Quarterly Updates on Major City Goals and Objectives ■ Quarterly CIP Project Status Tracking Report ■ Quarterly Council Referral Tracking Report IN Quarterly "Preview of Coming Attractions" The CAO appointed a subcommittee of Management Team members to consider streamlining in these areas consisting of Ken Hampian, Jeff Jorgensen, Mike McCluskey, Arnold Jonas, and Bob Neumann. n '1110►►►1I11111Ip►1city Of San LuIs OBISPO - COUNCIL AGENDA REPORT It is the recommendation of the Subcommittee, with the full concurrence of the CAO and the rest of the Management Team, that while the above reports provide benefit in terms of assuring accountability and follow-up on important City priorities, either the frequency and/or the way in which these reports are prepared can be modified to reduce workload with no loss of reporting of essential information. Thus, the following changes are recommended: 1. Quarterly Updates on Major City Goals and Other Program Objectives: The preparation and distribution of this report should be reduced from quarterly to bi- annually, to run concurrent with the budget (e.g., budget adoption, mid-year budget report). This would mean that four reports would be issued over the two year financial plan period, as opposed to eight. In addition, the format should be simplified from the existing one-page summaries for each major goal (Attachment 1) to two or three sentences which summarize status, similar to the way we currently report on program objectives (Attachment 2). 2. CIP Project Status Tracking (Attachment 3): Distribution should be on the same schedule as recommended above. No change to the format is recommended. Though the report will be distributed less frequently, the staff CIP Committee will continue to meet on a quarterly basis to assure adequate project progress. 3. Preview of Coming_Attractions:. While there is benefit in attempting to anticipate matters to come before the Council in a future quarter, staff does not believe that this benefit outweighs the cost of producing a "preview" report, and .therefore a substitute approach consistent with established work processes is recommended. Over the next few months, as time permits, staff will be working on an electronic approach to preparation of the preliminary agenda (primarily through the use of E- ntail), which can also serve to tentatively schedule items anticipated within the next three to four Council meetings. Such an electronic system would allow staff to easily produce a "preview of pending items" for Council information. Between this new approach and the Goals and Objectives/CIP Status Reports and the Council Referral Report, Council Members should have a reasonably good "feel' for the major items pending and their respective time frames. As is the present case, there will be some major projects for which special schedules should be established. These will continue to be provided to the Council. Agenda Reports In addition to the above reporting modifications, the Management Team also identified some streamlining opportunities related to the preparation of agenda reports. These are relatively minor items, since on the whole it is staff's opinion that the agenda process works well as is. Streamlining suggestions are: 1. Staff will make every effort to prepare reports that are no longer than necessary. Presently, although the vast majority of reports are between one and three pages in c-7- �ti� �r►►I�IIIII�IIp ����li MY Of San LUIS OBISPO NMG COUNCIL AGENDA REPORT length, it is occasionally the case that far longer reports are prepared, particularly related to Planning items. Staff will attempt to keep these lengthy reports to a minimum, without sacrificing important information needed by Council. 2. The inclusion of several "alternatives" to the CAO Recommendation will not be mandatory for every report. While there are usually alternatives to the CAO Recommendation which should be outlined, occasionally there are items that either lack realistic alternatives; in such few cases, the "Alternative" section of the staff report will not be prepared. 3. For Planning items only,the current practice is to prepare a recommended resolution and an "alternative resolution" to allow the Council to either approve or disapprove a staff recommendation"on the spot". This requirement was established several years ago to.help the Council to take either action without the need to completely reword a resolution during the Council meeting. The preparation of alternative resolutions is time consuming for staff. In discussing the approach used by other cities, staff learned that this practice is not universally followed -- some cities prepare such resolutions, but most do not. Staff is recommending that we try a "middle ground" approach between the preparation of fully completed alternative resolutions and no alternative resolutions. Specifically,staff is suggesting that a"skeleton"alternative resolution be incorporated within each community development staff report. This resolution will essentially be prepared in a completed fashion, with the exception of the findings (Attachment 4). If the Council chooses the alternative to the staff recommendation, then the Council, with staff's assistance, will need to make the appropriate findings. In addition to saving staff time, this approach has the added benefit of requiring the drafting of tailored "alternative findings" within the context of public hearing testimony and Council discussion(as oppossed to adopting often perfunctory/"standardized"findings drafted by staff in advance of the hearing). I Contract Pay Estimates/Change Orders A third area identified for streamlining and cost efficiency is the current method by which the City authorizes contract payments and change orders. With regard to progress payments,the current practice is that City Council action is required before payment can be made to the contractor for such payments. Due to the fact that it can take as long as 40 days between the time a contractor makes a progress payment request and the time the City Council.approves the payment and payment is made, the current system actually costs the City additional funds. This is because the contractor must continue making payments to suppliers, subcontractors, and laborers, and may increase the bid in order to compensate for the delay in payments. � � My Of San L"IS OBispO Gia; COUNCIL AGENDA REPORT Because the City has a signed contract with the contractor, the City is obligated to make progress payments to the contractor for work accomplished, and thus it is not really a discretionary item. Thus, the progress payment requests which receive Council "approval', are in reality "ministerial' actions which simply trigger the administrative release of funds - and which also most likely increase project costs. Staff proposes the elimination of progress payment approval by the City Council, while still retaining the ability of interested council members to review the information through the existing warrant list, and to ask follow-up questions, if desired. With regard to contract change orders, most are minor in nature, and decisions should be made rapidly so projects can proceed in a timely fashion and avoid a claim against the City for delay of work. However, more significant change orders should have a higher level of review and approval than is currently the case, including consideration by the City Council for the most major ones. Therefore, staff has drafted a proposed new procedure which links levels of approval of contract change orders to the size of the change order (Attachment 5). As outlined in the policy, minor change orders could still be approved in the field by construction staff and the Department Head (usually the Public Works Director). A higher level of change order would require approval by the City Administrative Officer. Finally, major change orders would require full City Council approval. Additionally when the aggregate amount of all contract change orders equals or exceeds 75% of the funding set aside for such contingencies (regardless of the size of the individual change orders), the Council would be informed via an agenda report. In addition, at the end of the project, a standard agenda item requesting Council acceptance of the project will be prepared to include information regarding all change orders occuring during the course of the project. SUMMARY: With reduced staffing in virtually all departments, 'business-as-usual'is not possible. Things that were "nice to do" with adequate staff shall not always be possible with a downsized organization. Therefore, it is important that we become more focused in terms of prioritizing our staff time in order to assure that the community is getting maximum value from limited resources. Thus, this report recommends streamlining in areas of less importance and investing more time in an area of greater importance, change order management. Staff intends to continue to evaluate other practices and to periodically bring back additional streamlining and administrative improvement recommendations for Council consideration. ATTACHMENTS: 1. Major Goals Status Report 2. Sample Program Objectives Report 3. Sample CEP Status Report 4. Skeleton Resolution ' i 5. Proposed Change Order Policy MAJOR CITY GOAL - BROAD STREET ANNEXATION (B-36). Objective ACHIEVED Initiate proceedings for the Broad Street Annexation in order to enhance the City's land use control over this area and improve the City's financial condition. Current Status Completed. Significant Next Steps None. Key Milestones Percentage Complete Completion 0% 25% 50% 75% 100% Date 1. Determine property owner interest ►►►►►►►►►►►►►►►►►►►►♦ 05/91 2. Hire consultant to update previous environmental analysis ►►►.►►►►►►►►►►►►►►►►* 06/91 3. Complete updated Draft EIR environmental review ►►►►...►.►►.►.►►►►►►♦ 04/92 4. Certify Final EIR ►.►►►►►►►.►.►.►►.►►►♦ 06/92 5. Amend General Plan, pre-zone, and recommend annexation ►.►..►►►►►..►►..►.►►♦ 07/92 6. Negotiate property tax allocations with the County ►►►►►►►►►►►►►►►►►►►►♦ 11/92 7. Review and action by LAFCO ....►►►►.►►..►►...►►♦ 12/92 8. Protest hearings on annexation held by Council ►►►►►►►►►►►►►►►►►►►►♦ 02/93 9. Record of completion filed with County. Annexation becomes effective. ►►►►►►►►►►►.►►►►.►►.♦ 03/93 Outcome/Final Product ANNEXATION OF AREA: Improved land use control and fiscal condition. Responsibility Department: Administration Project Manager: Ken Ham pian(Coordinator) Community Development Jeff Hook \broadst.93 -7t> Page 4 - Other Program Objectives program consists of three elements: 15% rate reduction for qualifying customers; one- time payment assistance for qualifying customers; and hardware retrofit assistance which will facilitate reduced consumption thereby reducing the utility bill. The Council formally approved this program on October 6, 1992, and implementation is already underway. FIRE COMPLETE THE FIRE MASTER PLAN (D-19). Status: The final draft plan has been completed and will be presented to the Citizens Advisory Committee (CAC) for discussion. This has been delayed pending the outcome of budget decisions which can significantly alter plans. Following CAC review, however, it will be brought to the City Council. COMPLETE DESIGN FOR THE REPLACEMENT OF FIRE STATION NO. 1 (E-6). Status: Staff is currently exploring the possibility of moving the project to a site which just recently became available and may be more suited for long-term fire station location. PERSONNEL ASSESS EMPLOYEE CHILDCARE NEEDS AND RECOMMEND APPROPRIATE POLICIES AND ACTIVITIES (D-105). Status: Completed. A City policy on childcare was adopted by the Council in June 1992. The City zoning ordinance has been amended to facilitate provision of childcare. POLICE......L ....................... COMPLETE THE FIVE YEAR POLICE SERVICES PLAN (D-16). Status: A draft is being written which will include budget augmentation and the impact of the Situation Oriented Response Team (S.O.R.T.) on the services plan. The report is to be completed and presented to the Citizens Advisory Committee (CAC). Action on this item is being deferred pending resolution of the City's Budget Review. PUBLIC>SNORKS REVIEW AND ANALYZE THE FEASIBILITY OF ACQUIRING SURPLUS RAILROAD RIGHT-OF-WAY FOR BIKEWAYS (D-84). 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(1993 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO (APPROVING)(DENYING) (insert project designation here) BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: ' SECTION 1. Findines. That this Council,after consideration of_(insert project designation here)_ and the _(insert name of advisory body here)_ Commission's recommendations, staff recommendations; public testimony, and reports thereof, makes the following findings: (council sperafie ,fin'dings us 0 SECTION 2. (Aporoval)(Denial). The request for (approval)(denial) of the _(insert project designation here)_ is hereby (approved)(denied). On motion of , seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was passed and adopted this day of , 1993. Mayor Section 225 Attachment CONSTRUCTION CONTRACT CHANGE ORDERS OVERVIEW When the City awards a construction contract, the need for contract change orders (CCO's) is not unusual. CCO's are required whenever the scope of work changes from that in the original contract or an unknown condition of the site requires a change in the scope of work. Usually a contingency amount is established when the project budget is finalized upon contract award to accommodate limited CCO's. The purpose of this policy is to establish limits of authority for approving construction project CCO's. GOALS ■ Ensure appropriate authority and accountability in the approval of change orders. ■ Minimize the time needed to approve a CCO, in order to avoid project delays. ■ Establish a system whereby the organizational level at which approval is given is commensurate with the size of CCO and size of project. ■ Eliminate potential for approval of a CCO when contingency funds are insufficient. POLICIES A Conditions for Approval of CCO's by Staff 1. Sufficient contingency funds are budgeted and available in order for the Department Head or City Administrative Officer (or an appointed designate) to approve a CCO. 2. The nature of work in the CCO is not significantly different from that in the contract. 3. Authorization limits are based on dollar amounts, or percentage of contract, whichever is less. 4. Authorization limits are based on an individual CCO amount, not the aggregate amount of all CCO's. 5. Authorization limits apply to CCO's for decreases in contract amounts as well as increases. 6. When the aggregate amount of CCO's reaches 75% of the contingency, Council shall be informed of the status of the project and the sufficiency of funding to complete the project. 7. Work shall not be broken up into multiple CCO's in order to circumvent this policy. 8. All CCO's _-ast be in writing and approved by ne appropriate contract parties consistent with the authorized limits established herein. 9. A copy of each approved CCO shall be transmitted promptly to the Finance Department. 10. The Project Manager shall be responsible for carrying out this policy. B. Authorization Limits 1. Project Manager/Department Head: 5% of contract not to exceed $25,000. 2. City Administrative Officer: 10% of contract amount not to exceed $50,000. 3. City Council: greater than 10% of contract amount or $50,000. ccoELLA/mm1 MEE' 3 ,AGENDA -t ;7 DATE ITEM 4, MEMORANDUM July 19, 1993 To: City Council From: Jorouest n Du n Subject: Rco nuance on Agenda Item C-7 - Administrative Streamlining Because we want to slightly modify the section on Contract Change Orders, I would recommend that we continue this item for one Council meeting, to the August 3 agenda. JD:mc C. City Clerk Assistant City Administrative Officer h/memoc-7 Ire...-.