HomeMy WebLinkAbout08/03/1993, C-5 - ADMINISTRATIVE STREAMLINING/CHANGE ORDER IMPROVEMENTS IIIB^INlll�llllll�l�l�n�lll MEETING DATE:
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cityo1" san lugs oBispo
COUNCIL AGENDA REPORT ITEM NUMBER: J�
FROM: Ken Hampian, Assistant City Administrative Officer b
Mike McCluskey, Public Works Director,,�t..
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 fust 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. The report was originally placed on the July 20th agenda, but was continued
to August 3 in order to resolve some internal issues to the contract change order policy.
The primary change establishes strictly dollar threshold approval limits as opposed to dollar
and percentage limits.
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
IN Quarterly CIP Project Status Tracking Report
■ Quarterly Council Referral Tracking Report
IN Quarterly "Preview of Coming Attractions"
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city of San Lu.4- OBISPO
COUNCIL AGENDA REPORT
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
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). It should be emphasized that the
decrease in "paper reporting" will not decrease the internal tracking of progress.
2. CIP Proiect 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.
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����i�►tiH��►IIIII�p IIOl city of San k _ OBISPO
COUNCIL AGENDA REPORT
One final note on this category: While input from all departments is needed to
prepare the above reports, coordination and preparation of the documents is
completed in Administration, which was reduced in staffing proportionately more
than any other City department (25%). Therefore, the reduced report preparation
requirement will assist this department in meeting higher priority workload demands.
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
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"sokeletop" alternative resolution be incorporated
within each community development„stafl`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 opposed to adopting often perfunctory/"standardized" findings
drafted by staff in advance of the hearing).
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1i111118�JJJJJJJfll CTCV/ of San Lu.s OBI SPO
COUNCIL AGENDA REPORT
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 (normal time is 25 calendar 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 the "cost to carry" is factored into every bid by contractors.
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. Thus, the contractor will be able to receive payment on any given
Friday, once the progress payment has received staff approvals rather than the current
practice of the Friday following Council "approval'.
As with progress payments, change orders are placed on the Council agenda for "approval'.
In fact, the change orders have already been approved and once again Council action is only
"ministerial". As a result, the entire existing change order review and approval was reviewed
for efficiency and effectiveness. Most change orders 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. More significant change orders take a greater amount of time
to negotiate and 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 amount 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 Public Works Director, or his designee. 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 new standard agenda item requesting
Council acceptance of the project will be prepared to include information regarding all
change orders occurring during the course of the project.
���i�i�►�H�(VIIiIIIuIp ���B�U city of san LL s oBispo
COUNCIL AGENDA REPORT
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
5. Proposed Change Order Policy
\stream.rpt
C 5-
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. Recons 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 Hampian(Coordinator)
Community Development Jeff Hook
\broadst.93
r-S G�
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.
FI......RE........
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.
.......................................
P.ERSO:NNEL
............ .. .. ....... ..
......................................
......................................
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.
.......................
P. LIC
.......................
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.
.................................................
0,090C WORKS
REVIEW AND ANALYZE THE FEASIBILITY OF ACQUIRING SURPLUS RAILROAD
RIGHT-OF-WAY FOR BIKEWAYS (D-84).
Status: The Public Works Director has assumed the role of negotiator with Southern
Pacific and has succeeded, after significant effort, in locating the appropriate SP
personnel to work with.
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Resolution 'B"
RESOLUTION NO. (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. Findings. 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:
. ,........ :<
(Lound. spe.Mes di to ased
SECTION 2. (Approval)(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
e-5-1
Section 225
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 cope 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
o Ensure appropriate authority and accountability in the approval of change orders.
o Minimize the time needed to approve a CCO, in order to avoid project delays.
O Establish a system whereby the organizational level at which approval is given is
commensurate with the size of CCO and size of project.
o 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 Public
Works Director or City Administrative Officer (or CAO approved designees) 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 an individual CCO amount, not the aggregate
amount of all CCO's.
4. Authorization limits apply to CCO's for increases in contract amounts only.
5. When the aggregate amount of CCO's reaches 75% of the contingency, the
awarding authority shall be informed of the status of the project and the
sufficiency of funding to complete the project.
ATTACHMENT 5
6. Work shall not be broken up into multiple CCO's in order to circumvent this
policy.
7. All CCO's must be in writing and approved by the appropriate contract parties
consistent with the authorized limits established herein.
8. A copy of each approved CCO shall be transmitted promptly to the Finance
Department.
9. If a situation occurs where immediate approval of a CCO is necessary to avoid
delay; and, the CCO is an integral and mandatory component of the project; and,
costs associated with delay of the project (work) due to this policy would be
excessive, then the CAO may grant approval of the CCO.
10. The Project Manager shall be responsible for carrying out this policy.
B. Authorization Limits
1. Public Works Director/approved designee; not to exceed $25,000.
2. City Administrative Officer; not to exceed $50,000.
3. City Council; greater than contract or $50,000.
\ccocchang.2