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AUTHORIZE THE EXECUTION OF A PROFESSIONAL SERVICES AGREEMENT WITH QUALIFIED PROFESSIONAL SERVICES FIRMS FOR ON-CALL CONTRACT SUPPORT FOR BUILDING CODE PLAN REVIEW, STRUCTURAL ENGINEERING PLAN REVIEW, AND INSPECTION SERVICES
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RECOMMENDATION
It is recommended that the City Council approve a motion to authorize the City Manager to execute a Professional Services Agreement with the following professional firms for on-call contract support for Building Code Plan Review, Structural Engineering Plan Review, and Inspection Services for a total not to exceed amount of $2,500,000 across the entire vendor pool:
• CSG Consultants, Inc., Foster City, CA
• BPR Consulting Group, LLC, El Dorado Hills, CA
It is further recommended that Council authorize the City Manager to take all necessary and appropriate actions to carry out the purpose and intent of the motion.
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Summary
Due primarily to the cyclical nature of development, the Community Development Department (CDD) regularly contracts for various types of on-call services. It is the Department’s strategy to maintain a balance between permanent staff and on-call staff to support project types that are not consistent in volume from year-to-year. In the past, if workloads increased consistently in a three-year period, adding full-time staff was often considered as a solution. However, the Great Recession, and now COVID, have made predicting construction cycles more challenging. Therefore, it is the Department’s practice to fully staff more predictable project permit types and augment full-time City staff with on-call services on an as-needed basis.
In the past five years, the demand for building code plan review and inspection services has outpaced staffing levels. While the Department added four (4) full-time positions in the building safety group during that time, there continues to be increased demand for on-call building inspectors, plan examiners, and structural engineers during peak periods.
Further, the Department requires the services of an array of various experts that are not needed in a full-time capacity but are accessible through consultants. Structural Engineers and Certified Access Specialists (CASp), for example, are necessary for operations but are only needed on a case-by-case basis.
Lastly, the CDD faces additional challenges recruiting full-time staff, as the hiring market remains highly competitive, and positions have remained vacant for longer periods of time. On-call services provide a needed flexibility to address these challenges.
Staff recommends Council approve a motion to authorize the City Manager to execute a Professional Services Agreement with the two (2) professional firms as detailed above for an initial three-year term with an option to extend the agreement for up to two additional one-year periods. The cost of additional on-call services is paid for by the permit fees collected for projects and there is no impact or additional cost to the general fund. Compensation under the proposed agreement is limited to a cumulative amount of $2,500,000 for all vendors.
DISCUSSION
Background
As part of fiscal year budget development, the continued use of consulting services was determined to be the most appropriate way to address increasing development activity and increased demand for Building Division services. These services include building code plan review, structural engineering plan review, and inspection services. Augmenting staff in this way allows the building workgroup greater flexibility to provide high-level customer service in response to the demands of cyclical development activity without reactively over-hiring permanent staff.
City Council approved a three-year Professional Services Master Agreement on June 20, 2017, and three subsequent amendments in 2018, 2019, and 2021 (Attachment A), with four (4) companies to provide on-call building plan review and inspection, engineering plan review, and floodplain management services. The approved compensation for services and reimbursable expenses totaled $2,100,000 across all consulting companies for the term of the contract. That current contract will expire on June 30, 2022.
Development activity increased substantially over the life of the current agreement (Table 1). Permit valuation has largely increased due to the volume, type, and complexity of projects as the economy improves. Although valuation for FY 2021-22 is projected at a slightly lower pace from that of FY 2020-21, valuations remain robust.
Table 1. - Development Valuation 2017-2023
|
Fiscal Year |
Valuation |
|
2017 - 18 |
$408 million |
|
2018 - 19 |
$433 million |
|
2019 - 20 |
$448 million |
|
2020 - 21 |
$682 million |
|
2021 - 22 |
$670 million (projected) |
|
2022 - 23 |
$683 million (estimated) |
Maintaining a Professional Services Agreement with several vendors affords the Department the ability to quickly change the scale and scope of staffing support levels to respond to workload demand while maintaining high levels of customer service. Fees are collected from the applicant before any plan review or inspection services are performed. Due to an improving economy and the tightening of the labor pool in specialized building services, having a pool of qualified firms will allow the City to provide a better spectrum of services and enable the Department to respond to short-term increases in building activity, staff vacancies, and adhere to established timelines, policies, and legal requirements.
In addition, several large and complex projects are anticipated over the course of the agreement including the City Hall Renovation at the Waterfront Towers, continued buildout of residential subdivisions, affordable housing developments, and several million square feet of industrial development. To properly support the projected construction activity with plan review and inspection services, the forecasted rate of expenditure is anticipated to require $2,500,000 over the term of the agreement.
Construction projections are based on permit activity trends and known projects. The estimates for the remainder of FY 2021-22 and FY 2022-23 assume a steadily high volume in permit activity and corresponding building valuations. As of April 12, 2022, there are 106 permits that are approved pending payment, with a combined valuation of $74 million. There are an additional 278 permits in for review with a combined valuation of $462 million.
Present Situation
On February 4, 2022, a Request For Proposals (RFP) was posted to the City’s Bid Flash web page. Nine (9) RFP submittals were received on March 24, 2022, from the following vendors:
• 4LEAF, Inc., Fair Oaks, CA
• Bureau Veritas, Sacramento, CA
• BPR Consulting Group, El Dorado Hills, CA
• CSG Consultants, Sacramento, CA
• Interwest Consulting Group, Inc., Roseville, CA
• Shums Coda Associates, Inc., Pleasanton, CA
• TRB and Associates, Inc., San Ramon, CA
• Lakeside Consultants, Phoenix, AZ
• West Coast Code Consultants, San Ramon, CA
An evaluation panel reviewed the submissions and recommended two (2) out of the nine (9). The selection was based on the strength of the proposals, experience with the work required, understanding of Stockton Municipal and State Codes, ability to provide quality control checks, qualified staff, consultant capacity, customer service, and the total hourly rate cost to the City.
Each selected firm’s proposal, proposed staffing, and standard rate schedule for services, are included in Attachment B. The Professional Services Agreement (Attachment C) will apply to both firms for services over a three (3) year period, on an as-needed basis, with the total aggregate compensation paid to both firms not-to-exceed $2,500,000.
This level of contract capacity will allow the Department to adjust resources as necessary to provide high-quality, timely services. The CDD continues to implement process improvements while monitoring workload and demand to ensure that full-time and contract staffing levels are appropriately balanced, re-evaluating these needs annually. Authorizing the City Manager to execute the Professional Services Agreement will allow the CDD to continue to meet service delivery goals in an efficient, timely, and professional manner.
FINANCIAL SUMMARY
Table 2 below outlines the expenditures for the current contract to-date. Based on the updated projections, current contract expenditure rate, and historical expenditures, there is a need for $2,500,000 across the vendor pool for the Professional Services Agreement to provide adequate service levels through FY 2024-25.
Table 2.
|
|
Total Contract |
Fiscal Year 2017-18 |
Fiscal Year 2018-19 |
Fiscal Year 2019-20 |
Fiscal Year 2020-21 |
Fiscal Year 2021-22 (through February) |
Remaining Balance |
|
Total Amounts |
$2,103,158 |
$270,406 |
$398,885 |
$371,350 |
$561,101 |
$239,760 |
$261,656 |
Pending adoption of the FY 2022-23 Annual Budget, funds will be available in the Development Services Fund, Community Development Department, Building and Life Safety division for $944,640. The remaining $1,555,360 is expected to be appropriated and funded from the same account according to the schedule below in FY 2023-24 and FY 2024-25. There is no impact to the General Fund, or any other unrestricted fund, from this action.
FY 2022-23: $944,640
FY 2023-24: $944,640
FY 2024-25: $610,720
TOTAL $2,500,000
Attachment A - 2017 Professional Services Master Agreement 2017-06-20-1103 NP
Attachment B - Firm Proposals
Attachment C - Professional Services Agreement