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APPROVE A MOTION AUTHORIZING AN AMENDMENT TO THE MASTER ON-CALL BUILDING PROFESSIONAL SERVICES AGREEMENT
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to authorize the City Manager to:
1. Amend the existing Professional Services Master Agreement with the following professional firms:
a. 4LEAF, Inc., Fair Oaks, CA;
b. Bureau Veritas North America, Inc., Sacramento, CA;
c. CSG Consultants, Inc., Sacramento, CA;
d. West Coast Code Consultants, Inc., San Ramon, CA.
2. Increase funding by $400,000 for a revised total contract amount not to exceed $2,100,000 across the entire vendor pool; and
3. Exercise the second and final extension option of the contract for one (1) year.
It is also 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
Community Development Departments typically contract for varied types of on-call services. This is due primarily to the cyclical nature of development. It is the Department’s strategy to maintain a balance between permanent staff and on-call staff for project types that are not consistent from year to year. In the past, if workloads increased consistently in a three-year period, adding full-time staff was considered. However, the Great Recession, and now COVID, has made predicting construction cycles more challenging. Therefore, it is the Department’s practice to fully staff more predictable project permit types and augment with on-call services as needed. In the past four years, the demand for building code plan review and inspection services has outpaced staffing levels. While the Department added three full-time positions in the building safety group during that time, there is still increased demand for on-call building inspectors, plan examiners, and structural engineers during peak periods. Furthermore, the Department has a need for specific expertise that is not needed in a full-time capacity. Structural Engineers and Certified Access Specialists (CASp), for example, are necessary for operations but are only needed on a case-by-case basis. Therefore, it is more logical to have these types of consultants on-call when needed.
In addition, the Department faces further challenges in that the market for full-time staff remains highly competitive and multiple 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 an amendment to the Professional Services Master Agreement with the four (4) professional firms as detailed above increasing the contract amount by $400,000 for a total amount not to exceed $2,100,000 and exercise the second and final option to extend the agreement by one (1) year with an expiration date of June 30, 2022. The Department will initiate a request for proposals for new contract services before this contract expires in 2022. 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.
DISCUSSION
Background
City Council approved a three-year Professional Services Master Agreement on June 20, 2017 (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 $480,000 across all consulting companies for the term of the contract.
Development activity began increasing substantially following the execution of the original agreement (Table 1). To address this, in addition to the department adding full-time staff, City Council approved two contract amendments, one each in 2018 and 2019, increasing the contract amount to a new total of $1,700,000.
Table 1. - Development Valuation 2016-2022
|
Fiscal Year |
Valuation |
|
2016 - 17 |
$308 million |
|
2017 - 18 |
$408 million |
|
2018 - 19 |
$433 million |
|
2019 - 20 |
$448 million |
|
2020 - 21 |
$600 million (estimated) |
|
2021 - 22 |
$618 million (projected) |
Staff utilized contract services during this time for plan reviews and inspections. In addition, several large projects are anticipated over the course of the next fiscal year including the City Hall Renovation at the Waterfront Towers, the Northeast Library project, 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 will require an additional $400,000 over the course of the next fiscal year (FY 2021-22).
Construction projections are based on permit activity trends and known projects. The estimates for the remainder of FY 2020-21 and FY 2021-22 assume an increase in permit activity and corresponding increase in building valuations. Currently there are 108 permits that are approved pending payment, with a combined valuation of $54 million. There are an additional 923 permits in for review with a combined valuation of $126 million. Actual permit activity for the first eight (8) months of FY 2020-21 surpassed estimates.
Present Situation
Development activity has continued to increase, particularly in the residential and industrial sectors. Although the department has added full-time staff to manage more predictable, long-term development needs, there is still a need for on-call services related to the more cyclical aspects of development. Projects requiring plan review have increased in both volume and complexity. The increase in activity directly leads to an increase in daily inspection stops. Contract services are necessary to supplement permanent full-time staff and to maintain service levels. Extension of the current contract through FY 2021-22 is the last extension allowed under the original contract. The department plans to initiate a request for proposals in the fall for new contract services beginning FY 2022-23.
FINANCIAL SUMMARY
Table 2 below outlines the expenditures for the contract. $294,474 has been expended so far in FY 2020-21. The remaining $364,885 for the fiscal year is sufficient. Based on the updated projections, there is a need for an additional $400,000 and a one (1) year contract extension (Attachment D - Proposed Amendment #3) to provide adequate service levels through FY 2021-22. As this will be the last allowable extension of the original contract, any excess funds not expended will be allocated back to the Department budget.
Table 2.
|
|
Total Contract |
Fiscal Year 2017-2018 |
Fiscal Year 2018-2019 |
Fiscal Year 2019-2020 |
Fiscal Year 2020-2021 |
Remaining Balance |
|
Total Amounts |
$1,700,000 |
$270,406 |
$398,885 |
$371,350 |
$294,474 |
$364,885 |
Pending approval of the FY 2021-22 Annual Budget, funds have been requested in the Development Services Fund, Community Development Department, Building and Life Safety division to sustain the $400,000 increase to the contract. There is no impact to the General Fund, or any other unrestricted fund, from this action.
Attachment A - Master Services Agreement 2017-06-20-1103 NP
Attachment B - Master Services Agreement Amendment 1
Attachment C - Master Services Agreement Amendment 2
Attachment D - Proposed Master Services Agreement Amendment 3