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APPROVE AN AMENDMENT TO PROFESSIONAL SERVICES CONTRACT FOR INTERIM MANAGEMENT SERVICES WITH INTERWEST CONSULTING GROUP, INC.
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RECOMMENDATION
It is recommended that the City Council adopt a motion authorizing the City Manager to execute Contract Change Order #2 to the agreement with Interwest Consulting Group, Inc. for assistance in the capacity of Interim Deputy Director of Water Resources for $100,000.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion. The total contract amount is not to exceed $174,999.
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Summary
The Deputy Director of Water Resources position has been vacant since September 2016. Due to the vacancy, the City entered into a contract on October 17, 2016, with Interwest Consulting Group, Inc. (Attachment A) to provide Interim Deputy Director services for $60,000 while the recruitment of a new incumbent was conducted. In June 2017, Contract Change Order (CCO) #1 (Attachment B) was approved to add $14,999 to the contract due to an extended recruitment. Subsequently, CCO #2 (Attachment C) is requested for City Council approval an additional $100,000 with an extension of the termination date to June 30, 2018, bringing the total contract amount to $174,999. The recruitment has been underway since December 2016, applicants have been reviewed, and it will take additional time to find the right qualified applicant.
DISCUSSION
Background
Interwest Consulting Group, Inc. was founded in 2002 and has been providing consulting services to public agencies for more than a decade. This California-based company has extensive experience in providing staff augmentation services at the senior and executive management level for California cities.
The Deputy Director of Water Resources position was vacated in September 2016, creating an immediate need for staff augmentation of this critical position in a crucial period for the Water Division. Thus, the City of Stockton contracted with Interwest Consulting Group, Inc. on October 17, 2016, for Interim Deputy Director services for $60,000 with no specified end date. The CCO #1 was approved to add $14,999 to the contract, bringing the total contract amount to $74,999, and ensure continued professional services through June 2017. Unfortunately, the executive search has not yet resulted in a successful hire.
Competition for qualified applicants in utilities is very high, and the recruitment is taking longer than anticipated. Additionally, water treatment facilities are regulated and ranked by state and federal authorities. The size and complexity of Stockton’s water delivery system puts it into in the category with the highest level of requirements, which in turn raises the expectations of a new Deputy Director.
The Municipal Utilities Department (MUD) began the process to recruit for this position in early December 2016. To expedite the search for a qualified permanent replacement for the Deputy Director of Water Resources vacancy, the City hired a recruitment firm, conducted extensive advertising and deployed the Director and senior executives to water industry meetings in various locations to recruit. Similarly, the last recruitment for the Deputy Director of Wastewater extended for more than 18 months. Intense recruitment efforts will continue for the Deputy Director of Water Resources.
Present Situation
Due to the extended vacancy, there continues to be a need for staff augmentation services from Interwest Consulting Group, Inc. to oversee some of the day to day water treatment operations, engage in projects and planning, and assist in the recruitment of a Deputy Director.
MUD is currently requesting CCO #2 to add an additional $100,000 with a new contract termination date of June 30, 2018. Once approved by the City Council, the new total contract amount will be $174,999.
Once the position is permanently filled, the contract scope will allow for overlap of staff and on-call services from Interwest Consulting Group, Inc. to ensure proper coverage of the division’s workload.
FINANCIAL SUMMARY
The amount for CCO #2 of $100,000 will be funded from the salary savings realized by the Deputy Director of Water Resources vacancy and the Professional Services budget that was approved and funded in the Fiscal Year 2017-18 Adopted Budget. The Interwest Consulting Group, Inc. rate for interim management services is $140 per hour for the Advisor (See Attachment A). The Advisor is expected to be on site two to three days per week. In addition, the Advisor will also be available to attend Water Advisory Group and Water Committee meetings as directed. The need for contract services is not expected to extend beyond June 30, 2018. The total for services and expense reimbursement is estimated not to exceed $174,999. The difference in cost is similar between Interim Deputy Director services and a permanent City employee when considering available hours and total compensation over the contracted period.
Attachment A - Professional Services Contract
Attachment B - Contract Change Order #1
Attachment C - Contract Change Order #2