title
AMENDMENT TO THE PROFESSIONAL SERVICES MASTER AGREEMENT FOR ON-CALL BUILDING SERVICES
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Authorize the City Manager to execute an Amendment to Professional Services Master Agreement 2017-06-20-1103-NP to increase the overall contract amount by $520,000, bringing the total to $1,000,000 for the three-year contract term; and
2. Authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
On June 20, 2017, the City Council approved a Professional Services Master Agreement for on-call building plan review and inspection, engineering plan review, and floodplain management services (Attachment A - Professional Master Services Agreement 2017-06-20-1103-NP). Development is cyclical, and during an improving economy, the demand for building plan review and inspection services can outpace staffing levels. Because of this cycle, adding permanent staff to meet the increased demand is not always prudent and can lead to overstaffing when the economy is in decline. A combination of modest staffing increases and additional contracted services was included in the FY 2016-17 budget, and proposed again in the FY 2018-19 budget.
The increased development activity exceeded prior estimates and current resources are insufficient to manage the additional workload. More contracted services are recommended to maintain the current service levels for the remainder of the contract, which ends July 25, 2020. The contract limit would be increased by $520,000 for a revised three-year compensation limit of $1 million. The original contract was awarded following an open Request for Qualifications process and four firms were selected to provide on-call services. Staff recommends adoption of the proposed resolution to address the workload associated with increased development activity.
DISCUSSION
Background
As part of the fiscal year 2016-17 budget, a combination of modest staffing increases and consulting services was determined to be the most responsible way to address increased development activity and increased demand for the Community Development Department. This approach avoids over-hiring of permanent staff in response to cyclical development activity by using consultants to augment staffing and procure specialized planning services that would not be economical to provide by hiring permanent specialist staff. The combination of modest staffing increases and contracted services is also recommended in the FY 2018-19 budget to address the workload associated with continued development activty increases.
City Council approved a three-year Professional Services Master Agreement on June 20, 2017, with four (4) companies to provide on-call building plan review and inspection, engineering plan review, and floodplain management services.
• 4Leaf, Inc., Fair Oaks, CA
• Bureau Veritas North America, Inc., Sacramento, CA
• CSG Conultants, Inc., Sacramento, CA
• West Coast Code Consultants, Inc., San Ramon, CA
The approved compensation for services and reimbursable expenses was $480,000 total across all consulting companies. The agreement structure is an integral part of providing high-level services to the public. The on-call building services support is used to mitigate the work created by the influx of development activity when permanent City staff reaches near capacity and needs additional resources to provide necessary service to the public.
Present Situation
Of the original $480,000 contract amount, $320,000 was allocated for Fiscal Year (FY) 2017-18, with the remaining $160,000 to be made available during FY 2018-19. This original amount averaged to $13,333 per month. Currently, using the highest rate charged for services by any of the vendors in the past four months, the estimated average is approximately $27,000 per month.
The funds projected for the contract were based on the building industry valuation standards of approximately $340 million. Current projection for FY 2017-18 is estimated to be approximately $500 million, which is a significant increase over FY 2016-17 (Table 1.). This increase in construction activity required a corresponding increase in the number of building inspection stops. To address the increase in permit activity and inspections needed, especially during this peak period, staff utilized contract services for plan reviews and inspections at a higher than expected rate to supplement city staff. The staff is projecting a need for an additional $520,000 to be added to the last two years of the term of the agreement. This increase, added to the remaining $160,000, will result in $680,000 available funds for the remainder of the contract term to address this higher peak level of permit activity and meet customer needs.
Table 1.
|
Fiscal Year |
Valuation |
Annual Percentage Change |
|
2013 - 14 |
$153 million |
|
|
2014 - 15 |
$212 million |
39.0% |
|
2015 - 16 |
$306 million |
44.5% |
|
2016 - 17 |
$334 million |
9.2% |
|
2017 - 18 |
$411 million (as of April 30) $500+ million (estimate for end of FY) |
23.0% |
FINANCIAL SUMMARY
This is a 3 year contract and the annual costs are displayed in the table below. There is sufficient budget allocated in FY 2017-18 and planned for FY 2018-19 in the proposed budget to cover the first 2 years of the contract. Final year (FY 2019-20) appropriation will be budgeted through the annual budget process.
|
Fiscal Year |
Budget Allocation Account |
Amount |
|
FY 2017-18 |
Building Division (048-1830-510) |
$320,000 |
|
FY 2018-19 |
Building Division (048-1830-510) |
$400,000 |
|
FY 2019-20 |
Building Division (048-1830-510) |
$280,000 |
|
|
|
$1,000,000 |
Attachment A - Professional Master Services Agreement 2017-06-20-1103-NP
Attachment B - Amendment Master On-Call Building Professional Services Agreement