HomeMy WebLinkAbout1999-02-01 City Council (3)City of Palo Alto
City Manager’s Report
TO: -
ATTN:
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS AND
ADMINISTRATIVE SERVICES
DATE:FEBRUARY 1, 2000 CMR:406:99
SUBJECT:INFRASTRUCTURE MANAGEMENT PLAN PROGRESS,
STAFFING ANALYSIS, AND STAFFING REQUIREMENTS
REPORT IN BRIEF
In 1998, staff presented a proposed General Fund Infrastructure Management Plan
(IMP) to Council. This ten-year, $100 million plan prioritized $95 million in work on
City buildings, facilities, streets, sidewalks, medians, parks and open space areas. A
preliminary estimate of $5 million for staffing needs was also included in the plan.
Council earmarked specific funding sources for $74 million in infrastructure work and
directed staff to return with an infrastructure staffing and implementation plan as well
as options for raising the balance of needed funding. This report focuses on staffing
needs.
An engineering consulting firm was retained to review current staff’mg levels devoted to
capital work, assess the .staffing impact of the IMP and other capital work, and evaluate
citywide processes that affect the implementation of capital projects. Using benchmark
data, industry-wide standards for the amount of capital work that can be accomplished
by staff, and a comparison with its best practices model, the consultant determined
optimal staffing needs and a variety of desirable organizational and process
improvements.
One of the consultant’s primary recommendations is to decentralize the implementation
of IMP capital projects. The additional staffing resources needed to accomplish IMP
projects are spread among three groups; the Community Services Department, the
Public Works Facilities Managemem Division, and the Public Works Engineering
Division. The additional staffing needed in these three areas is a total of 6.5 new
positions. The estimated cost of adding these positions is $612,000 per year in salary
and benefits. Staff is also recommending that flexibility be added to upgrade two
positions in the Engineering Division at a maximum annual cost of $20,000.
CMR:406:99 Page 1 of 13
Staff has developed an implementation plan for bringing in new staff. One position is
recommended immediately, with the remaining 5~5 positions to be added as part of the
2000-01 Proposed Budget. Adding one position now will allow staff to focus on the
process improvements recommended in the consultant study, prior to hiring the additional
5.5 Siaff members.
CMR:406:99 Page 2 of 13
RECOMMENDATION
¯ Staff recommends that the Finance Committee:
Direct staff to return to the City Council with a Budget Amendment Ordinance
(BAO) to amend the Table of Organization to add One (1.0) new FTE to begin
implementation of the City’s Infrastructure Management Plan.
o Direct staff to incorporate the remaining Infrastructure Management Plan staffing
requirements into the 2000-01 Proposed Budget.
BACKGROUND
In 1998, staff presented a proposed General Fund Infrastructure Management Plan (IMP)
to Council (CMR:19i:98). This ten-year, $100 million comprehensive plan provided
infrastructure financing options and prioritized work identified in prior City reports on
Buildings and Facilities (CMR:466:96), Traffic and Transportation (CMR:297:97), and
Parks and Open Space (CMR:409:97). The proposed IMP consisted of $95 million in
infrastructure projects and a preliminary estimate of $5 million for staffing to accomplish
the plan objectives (See Attachments A and B). At that time, Council approved a ten-
year $74 million IMP with the following components:
¯ a prioritization of existing over new facilities for purposes of infrastructure
funding, with new facilities being funded from new revenue sources, yet to be
identified
¯a methodology for prioritizing infrastructure work
¯dedication of 75 percent or $4.6 million per year of the existing Capital
Improvement Program (CIP) to infrastructure projects; augmenting CIP
spending by $1.0 million per year through use of budget savings; utilizing the
General Fund Infrastructure Reserve for $13.0 million; and utilizing half of the
projected revenue growth from new development projects (approximately
$0.95 million per year).
¯the development of an IMP staffing augmentation and implementation plan
The Council did not approve staffs recommendation to seek voter approval for an
increase in the Transient Occupancy Tax that was expected to raise approximately $21
million for infrastructure work. Instead, Council directed staff to discuss this proposal
and other revenue raising options with the Chamber of Commerce. During the past year,
several informative meetings have been held with the Chamber of Commerce’s
Government Action Committee to discuss alternatives for raising necessary funds. As a
result of these discussions several revenue raising options to close the $21 million
infrastructure funding gap, such as a Business License Tax or a Utility User’s Tax
extension, will be presented to the Council in the near future.
CMR:406:99 Page 3 of 13
Based on Council’s approval of $74 million in infrastructure funding over 10 years and
the .approved prioritization methodology, departments have developed detailed work
plans for the City’s buildings, facilities, medians, sidewalks, streets, parks and open
space. Projects in the first two years were carefully reviewed by senior management and
incorporated in the 1999-2001 capital budget. Subsequent work plans will be used in
forthcoming capital budgets. Staff also hired a consultant to pursue the Council-
approved recommendation to determine augmented staffing needs.
DISCUSSION
A well-known and experienced engineering fn’m, Black and Veatch (B&V), along with
another consultant from The Resources Company, were hired to perform the staffing
study. B&V specializes in engineering, information technology, and management
consulting. B & V also has special expertise in institutional planning, program
management, and strategic financial planning.
The consultants were retained to assess the level and type of staffing resources required
to implement the IMP (which represents a spending increase of 60 percent over prior year
infrastructure spending levels), as well as to complete all backlogged and ongoing CIP
work. In addition, the consultants were asked to gauge the impact of various City review
and internal processes that affect both a project’s progress and the amount of staff time
devoted to a project. These include, for example, board and commission reviews as well
as purchasing and engineering procedures. The contents of the consultants’ analysis,
along with its recommendations, are provided in the attached report (Attachment C).
Before discussing the consultants’ recommendations, it is important to understand what is
not addressed in the staffing study. It does not include staffmg for new, and as yet
undefined, infrastructure projects such as the Library Master Plan, construction of
downtown parking garages, implementation of the Storm Drainage Master Plan, a new
Public Safety.Building; Infrastructure Module 4 (Bridges and Parking Lots) which has
yet to be completed; or ramping up to a $95 million infrastructure effort from a $74
million program should additional funding be identified. When each of the above
projects moves forward, a thorough evaluation of any incremental staffmg needs will be
conducted. While it is anticipated that the initial study and planning for anew project
can be accommodated by the staffing recommended in this report, it is expected that new
staff will be needed to complete the design and construction phases for major new
infrastructure projects.
Methodology for Determining Staffing Needs
The primary, quantitative basis for the consultants’ staffmg recommendations rests on an
analysis of capital work completed in benchmark cities and on a comparison to industry’
wide standards regarding how much capital work a full-time equivalent (FTE) can
complete per year. The cities selected for benchmarking either were geographically close
to Palo Alto or had similar characteristics such as being university towns with high levels
of education and public participation in civic affairs. Data was gathered from such
CMR:406:99 Page 4 of 13
Califomia cities as Mountain View, Santa Clara, and Davis. Data was also collected
from Corvallis, Oregon. The benchmarking data showed (Table 1 in the attached B&V
report) that capital expenditures in 1997-98 ranged from a low of $.68 million to a high
of $1.4 million per productive FTE. (A productive FTE is the time that an employee
spends directly on capital projects; it excludes, for example, training, vacation, counter
time with the public, and time spent on administrative duties.)
Excluding Palo Alto, the average capital expenditure per employee in the benchmarked
cities was $1.02 million. While there can be variation from year to year in capital
expenditures per productive FTE due to the timing and mix of large and small projects,
the amount of community involvement, and the complexity of individual projects,
empirical benchmark and industry data supports the conclusion that a productive FTE
should accomplish around $1.0 million of capital work each year. Data from 1997-98
shows the City completing $921,000 of work per productive FTE in the Engineering
Division.
It is interesting to note that cities fitting Palo Alto’s demographic profile were below the
$1.0 million average. Cities with universities such as Corvallis and Davis show CIP
expenditures per productive FTE of $897,000 and $680,000, respectively. It can be
concluded that in cities with participative citizenry and where projects are meticulously
reviewed, projects become more time consuming. Engineering staff’in Palo Alto spend
considerable time in the initial efforts to define the scope of a project and on the City’s
various public review processes.
Based on their analysis of City operations and processes and comparative information,
the consultants concluded that City personnel could accomplish around $950,000 of
capital work per productive FTE. This represents an improvement over the City’s
historical performance that the consultant believes can be. accomplished through process
improvements. Although this is slightly below the benchmark and industry average, it is
realistic given public, commission, and board involvement in the City’s capital projects.
This ratio, combined with available productive time for different City infrastructure
personnel, was used to project staffing needs.
Decentralization of Infrastructure Work
The bulk of the City’s infrastructure work has been accomplished by the Engineering and
Facilities Division (Facilities) of the Public Works Department (PWD), including work
on the City’s recreation facilities, park pathways, open space parking lots, and major park
renovations. With the growth of infrastructure work identified in the IMP (e.g., medians,
islands and planters, building perimeter landscaping/walkways, and new open space
projects), the consultants recommend allocating work and new staffing to the Community
Services Department (CSD). The consultants found that community service departments
in other cities were implementing capital projects successfully and believe that model can
be employed in Palo Alto.
CMR:406:99 Page 5 of 13
To date, Parks’ supervisory personnel have been overseeing capital improvements such
as playground replacements and irrigation improvements. While this work has moved
forward, it has impacted the ability ofParks Division managers to supervise their
personnel and oversee park contract work. Moreover, this work is more characteristic of
maintenance projects than larger scale capital projects. The Open Space Division has
never had a consistent budget for capital work, so the IMP represents a clear increase in
workload and. a need for personnel to plan and administer projects. The recommendation
to decentralize capital work to CSD is intended to give personnel who manage CSD
facilities and who interact with the public using those facilities, more flexibility and
responsibility for implementing needed repairs.
Another important recommendation is that the PWD Facilities Division be given a clearer
and more active role in all major facility projects. The consultants concluded that IMP
capital projects related to various facilities that have substantial electrical/mechanical
components such as the Civic Center, Community Theater and Cultural Center, can be
effectively handled by the Facilities Division rather than the Engineering Division, with
augmented staffing. Since the Facilities Division already handles smaller CIP projects
and is responsible for maintenance work, the consultants recommend enhancing the role
of this Division by assigning it responsibility for all IMP projects related to City
facilities. Toward this end, the report recommends additional staff’mg in Facilities and
the use of contract staffing or available engineering staff when peak work periods are
encountered. Overall, decentralizing responsibility leads to stronger project ownership,
greater accountability, and to more efficient use of Engineering Division staff on major
infrastructure projects.
Consultant Staffing Recommendations
Based on the projection of capital work for the next 5 years, the consultants recommend
5.0 FTE for direct project work and 1.5 FTE in clerical support for a total of 6.5 FTE. In
Tables 3 through 6 of the consultants’ report (Attachment C), the type of capital work as
well as the number and level of staff necessary to complete that work are presented.
Current staffing levels and recommended incremental staffing are displayed. As stated
above, the expected productivity ratio of $950,000 per productive FTE was used to
determine necessary staff’mg levels. At the bottom of each table, the expected
capital/infrastructure expenditures per productive FTE are shown.
The augmented staffing recommende~ by the consultants is summarized below.
Department/Division FTE Position Description . Projected
Salary &
Benefit Costs
Public Work: Engineering 1.0 Senior Project Manager $125,000
Public Works: Engineering 1.0 Engineer 95,000
Public Works: Facilities 1.0 Senior Engineer*115,000
Public Works: Facilities 0.5 Clerical 29,000
CMR:406:99 Page 6 of 13
Community Services 1.0 Program Manager 95,000
Community Services 1.0 Engineer/Landscape Architect 95,000
Community Services 1.0 Clerical "58,000
TOTAL 6.5 $612,000
*The B&V study shows an Engineer position which staff recommends upgrading to
Senior Engineer (see discussion below under Facilities Division).
A summary of the rationale for the staffmg changes recommended by the consultant
follows.
Public Works Department
Engineering Division: One of the key positions recommended by the consultants is a
Senior Project Manager. This position .is needed to meet the capital workload projected
for Engineering and to more efficiently defme, plan and transmit projects to the other
Engineering staff. As th~ recent Downtown parking structures process shows, a
significant amount of engineering time is devoted to determining the scope of a project,
preliminary study and design, public outreach, and board and commission reviews. The
consultant recommends hiring a staff member who has the skills, independence and
leadership qualities to guide a major project through its early, conceptual stages to a point
where the scope and pre-design work is sufficiently defined for staff engineers to
implement. The skill-set of most engineers is best suited for implementing projects
whose scope is well defined. By having a new Senior Project Manager, it is anticipated
that complex projects can be more promptly defined and delegated to staff engineers. In
turn, the engineers can complete their projects in a more efficient and timely manner.
Numerous cities have similar positions, which are successfully used to facilitate project
implementation. The Senior Project Manager should have the knowledge, skills and
abilities to:
¯Manage and develop concept plans for major, complex projects
¯Communicate clearly and effectively with the public, City Council and City
departments involved in the CIP process, as well as facilitate meetings and
discussions on new projects
¯Understand a project’s policy and financial implications
¯Demonstrate leadership skills that can move projects forward
¯Negotiate contracts and oversee project management
¯Provide insights and recommendations to improve City processes
An additional 1.0 Engineer also is required for planned capital work. As with the Senior
Project Manager, this position is required to meet the $950,000 per productive FTE
target. As shown in Table 3 of the consultants’ report, the addition of 2.0 FTE to the
Engineering Division will result in a capital project to productive FTE ratio of $1.05
CMR:406:99 Page 7 of 13
million in 1999-00. Based on projected work, this ratio decreases somewhat from 2000-
01 through 2003-04. Depending upon the workload of engineering staff during these
years, the consultants recommend exploring the reallocation of this engineer to the
Facilities Division when the Facilities’ productive FTE ratio is high (e.g., 2001-02).
The consultants also identified the need for more flexibility in the hiring and promotion
of engineering staff. They recommend the City maintain the ability to hire and promote
among the Assistant, Associate, and Engineer classifications to improve its ability to
attract and retain qualified engineers. Currently the City has four levels of job
classifications for engineering staff with progressive increases in responsibility as
follows: Assistant Engineer, Associate Engineer, Engineer, and Senior Engineer. The
Senior level is a management position which supervises staff in the other three
classifications. The City’s current system does not permit movement between
classifications unless-a vacancy occurs. B & V recommends changing this to allow
movement from Assistant to Associate to Engineer as staff members gain experience and
demonstrate competence in accomplishing projects. Promotion to the Senior Engineer
level would continue to be based on a competitive selection process as vacancies occur.
Facilities Division: The consultants recommend a 1.0 FTE Engineer with an
electrical/mechanical background for Facilities capital work. Staff recommends
upgrading this position one level in the engineering series to Senior Engineer. In
assessing the existing organizational structure in Facilities, staff believes an engineer in a
management level position who can supervise others is necessary for the successful
completion of IMP projects. This is consistent with the current structure in PWD
Engineering where Senior Engineers supervise a team of lower level engineers and
technicians to accomplish capital projects. Further, recruiting at a Senior Engineer level
will attract more experienced candidates. Staff recommends a Senior Engineer given the
leadership role for the position, and the responsibility for in excess of a million dollars in
capital projects each year.
In addition to direct capital project management, a 0.5 clerical position is proposed for
the Facilities Division. During their research, the consultants identified a lack of clerical
support to handle additional contracting and associated record-keeping work. With the
significant increase in the size and number of capital projects, staff is also planning to
evaluate the Facilities Division Manager position for salary equity. Any changes would
be incorporated into the 2000-01 Proposed Budget for Council consideration.
With one engineering position added tO Facilities, Table 4 of the consultants’ report
shows an expenditure to productive FTE ratio of $734,000 in 1999-00. This ratio
accelerates quickly to $903,000 in 2000-01 and to $1.6 million in 2001-02. Rather than
adding permanent staff in the year 2001-02, the consultants recommend using contract
services to cope with the peaks in projected facility work. Moreover, as previously
mentioned they recommend evaluating the possibility of reallocating Engineering
Division staff to Facilities during this time period.
CMR:406:99 Page 8 of 13
Operations Division: This Division is responsible for all sidewalk repair work. Funding
for this activity is more than doubling, increasing the responsibility of the 2.0 existing
FTE_overseeing this function. Since this work is contracted out and the design for
sidewalk work is relatively straightforward, no additional staff is required. -The
consultants recommend, however, that two positions be reclassified from Technicians to
Assistant Engineers to match the new level of responsibility created by the IMP. These
reclassifications were incorporated into the 1999-00 Adopted Budget.
Community Services Department
The IMP discovered a backlog of infrastructure work for the Parks and Open Space areas.
With the backlog and additional work such as median and building perimeter
landscaping, CSD faces a significant workload. Between new work levels and the
proposal to decentralize capital work, the consultants are recommending the addition of
2.0 FTE in Community Services for project management. These positions will add
technical expertise that CSD currently lacks and will allow the department to handle
larger capital projects. They consist of 1.0 Program Manager and 1.0 Professional
Engineer/Landscape Architect.
Organizationally, these new positions would be located in a new section within CSD
reporting to the Director. The Program Manager will be responsible for directing,
managing, and coordinating all capital activities. The Landscape Architect will plan and
implement capital improvement projects and manage associated projects. A Landscape
Architect’s skills will enhance the. ability of the City to aesthetically plan improvements
to its parks, pathways, medians and open space areas.
With the addition of 2.0 FTE, the projected capital workload as shown in Table 6 of the
consultant’s report is $1.0 million per productive FTE. Similar to their findings in the
Facilities Division, the consultants discovered that clerical support will be needed to
handle contracting, record keeping, and other administrative work. They recommend the
addition of a 1.0 FTE clerical position with the appropriate skills .to complement the
technical expertise of the two new positions.
Proposed Implementation Plan
Staff has developed an implementation plan that breaks down the consultants’
recommendations into specific tasks and actions. The implementation plan has four key
elements: a plan for. the implementation of the process changes suggested by the
consultant; a plan for phasing in the new staff recommended by the consultant; an
evaluation of broader organizational issues that will be critical to the success of the IMP;
and the establishment of performance measures to track the City’s progress in
implementing the IMP.
CMR:406:99 Page 9 of 13
Action Plan for Process Changes
The consultant offered a number of important process change recommendations to
improve staff productivity and enable the capital process to work more effectively. The
consultants’ projections of increased productivity, which were used to project staffing
needs, were based on an assumption that process changes would be implemented by the
City. While it would be desirable to pursue every process change immediately, priorities
were established to focus the City’s resources. Attachment D includes a matrix that:
summarizes each process change; defines the actions staff plans to take to implement the
change; identifies the lead department; and indicates the timing for completion of the
process change. Those process changes that are of high priority are described below.
A citywide team, with representatives from the City’s Attorney’s Office, the
Planning Department, the Administrative Services Department, PWD and CSD
will evaluate options for streamlining the City’S capital projects process. An
example is expanding the use of design-build contracts to speed up project
delivery.
Work with City Council, boards and commissions, and senior City
management to provide Planning Department staff with more authority in the
design approval process for minor capital projects, such as replacement in-
kind, maintenance, and repair projects. Examples of such work are lighting,
fencing, bridge repair, and landscaping. Planning staff should be empowered
to evaluate these projects to ensure consistency with ARB design criteria and
with previously approved City projects, thereby expediting the design approval
process.
Prevent repetitive and time-consuming bids and legal reviews by pre-
qualifying a set of vendors for anticipated projects or by combining the City’s
requirements into long-term contracts instead of bidding each unique
requirement individually. Staff will evaluate this approach for both consulting
engineers and construction contracts. Within six months, staff will evaluate
the current capital program to identify opportunities for long-term contracts.
Master service agreements will be in place for selected projects in 2000-01.
Develop uniform approaches to design, contracting, and construction
management. An updated Construction Contract Administration manual will
be completed in 1999-00, prior to the majority of new staff starting work. New
sections of this manual will be added to cover the design phase of projects in
2000-01.
Phasing Plan for New Staff
The proposed phasing plan is designed to implement the high priority process changes
prior to adding a majority of the new staff. In 1999-00, staff proposes adding the Senior
CMR:406:99 Page 10 of 13
Project Manager in PWD Engineering. The Senior Project Manager position is key to the
successful execution of the City’s major infrastructure capital projects. In addition, this
position is critical to several of the high-priority process improvement recommendations,
including the establishment of well-defmed roles and project priorities for those involved
in the capital improvement program. This position will either lead or be involved in the
process changes that are planned to standardize, streamline, and improve the
effectiveness of the City’s capital project process. PWD staff has already started
developing a new database to improve tracking for project schedules. The new Senior
Project Manager will complete and implement the new system prior to the addition of
staff in 2000-01.
Staff proposes adding all other new positions for PWD and CSD in 2000-01. A phased
staffing plan provides for additional time to evaluate broader organizational issues before
all of the necessary staffing changes are finalized. Limited time was spent by the
consultant on understanding the organizational structures of CSD and PWD and on
departmental goals and objectives that go beyond the hMP. As a result, there may be
other staffing configurations, reporting relationships, or organizational structure changes
that would improve the ability of PWD and CSD to take on the additional IMP workload.
Prior to finalizing the IMP staffing recommendations that would accompany the 2000-01
budget, staff plans to complete the evaluation of these broader organizational issues.
Staff plans to include the remaining IMP staffing needs (5~5 FTE) and any additional
organizational changes resulting from this evaluation with the 2000-01 Proposed Budget.
A summary of the proposed staffing plan by fiscal year is provided below: "
Department/Division Proposed Additions 1999-00 Proposed Additions 2000-01
Public Works: Engineering 1.0 Senior Project Manager 1.0 Engineer
Public Works: Facilities 1.0 Senior Engineer
0.5 Clerical
1.0 Clerical
1.0 Project Manager
1.0 Engineer/Landscape
Architect
Total ProposedlMP Staff 1.0 FTE 5.5 FTE
’ Community Services
Establishment of Performance Measures to Monitor Completion of Capital Work
A critical piece of the IMP is the establishment of performance measures to track the
City’s progress in completing infrastructure capital work. With the 2000-01 Budget, staff
plans to incorporate new impact measures for that purpose. As one example, staff will
utilize the industry-wide standard measurement of dollars completed per productive FTE.
CMR:406:99 Page 11 of 13
RESOURCE IMPACT
The yearly ongoing salary and benefits costs-for the Senior Project Manager position
proposed at this time total $125,000. In 1999-00, the salary and benefit costs will be
approximately $52,000 since it is anticipated that the staff will be hired in February 2000.
In addition, the one-time costs (computer, furniture, and training) for the position-will
total $6,000. This brings the total cost in 1999-00 to $58,000. While a full year of
infrastructure/capital projects was incorporated in the capital budget, progress on the
staff’mg analysis was more detailed and time consuming than anticipated. Therefore,
approximately a half-year of staffing costs ($300,000) was included in the 1999-00
Adopted Budget. These funds will be more than sufficient for fiscal year 1999-00 as
personnel are hired and deployed.
As indicated in prior staff reports and presentations on the IMP to Council, the original
estimation of $500,000 per year in staff’mg costs for a $95 million infrastructure program
was preliminary. This estimate was provided in the spirit of forewarning Council in the
early stages of the IMP that incremental staffing would be needed. Whenever a capital
program is increased by 60 percent, staffing augmentation is inescapable. With the
assistance of B&V, staff has now completed a more accurate appraisal of staffing costs.
The ongoing staffing costs (salary and benefit cost) of the new 6.5 FTE necessary to
implement the IMP is $612,000 per year. This includes the cost of upgrading the new
Engineer position in PWD Facilities Division to a Senior Engineer position as
recommended by staff. There will be an additional one time cost for furniture and
equipment (approximately $6,000 per FTE).
In addition to the new positions, the consultants recommend restructuring positions in the
Engineering Division to create more flexibility in the hiring and promotion of
engineering staff. Staff concurs with the consultants’ recommendation and has evaluated
the cost of making this change for the positions in Public Works Engineering. The
Engineering Division currently has two Associate Engineer positions that would be
affected. The incremental cost difference in salary and benefits is $10,000 per year for
each Associate Engineer position. Based on the current staffmg levels the maximum cost
impact is $20,000 per year. In the future the PWD will evaluate each opening and fill it
at the most appropriate level depending on the needs at that time.
POLICY IMPLICATIONS
This report is consistent with Council’s established infrastructure priority and with budget
guidelines.
TIME LINE
After direction is received from the Finance Committee, staff will proceed to the full
Council in January for approval of a Budget Amendment Ordinance to amend the Table
of Organization for the Senior Project Manager position. Upon Council approval, staff
will immediately launch a recruitment effort. Staff will fold the remaining infrastructure
staffing needs into the 2000-01 Proposed Budget.
CMR:406:99 Page 12 of 13
Staffwill return to the Finance Committee with options to fund the remaining $21 million
of the ten-year infrastructure plan in the near future. Because this stage of the plan will in
all likelihood require a vote by the community on increasing an existing tax or creating a
new tax, staff plans to introduce it with a series of presentations to the Council Finance
Committee on the City’s long-range financial projections. The first presentation will be
made in the Spring of 2000.
ENVIRONMENTAL REVIEW
This report on infrastructure staffing does not require California Environmental Quality
Act (CEQA) review. Individual pro~ects, however, have been and will be subject to
environmental review as they are developed. It should be noted, however, that most
replacement or reconstruction of existing facilities will be Categorically Exempt. New
projects (which are not included in this recommendation, such as a new public safety
building) will require further review.
ATTACHMENTS
Attachment A:Total Funding Sources Over Ten Years
Attachment B:Infrastructure Management Plan Costs Over Ten Years
Attachment C:Consultant Report: "Infrastructure Management Staffing Review"
Attachment D:Action Plan for Process Changes
PREPARED BY:Kent Steffens, Assistant Director of Public Works
Joseph Saccio, Manager Investments and Debt,
Administrative Services
DEPARTMENT HEAD:
~’)-"~--~’~-~ATDir~Ztor, Addnistrative Services
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
i~iLrectoEN~r oS~ ~rks
/ City Manager
CMR:406:99 Page 13 of 13
ATTACHMENT A
TOTAL NEEDS OVER 10 YEARS = $100 MILLION
$9.5
$46.0
$13.0
$10.0 $21.5
[] Current CIP Infrastructure Funding ~ Revenue Growth
[] Infrastructure Reserve ¯ Increased Taxes
¯ Augmented CIP Funding
ATTACHMENT B
Infrastructure Management Plan Costs Over Ten Years
MODULE
I Buildings & Facilities
II Traffic & Transportation
III Parks & Open Space
IV Bridges & Parking Lots
EXISTING
NEEDS
$ 6,419,000
16,595,000
9,444,000
TBD
COSTS OVER
TEN YEARS
$27,418,000
26,418,000
8,350,000
TBD
TOTALS
$33,837,000
43,013,000
17,794,000
TBD
Total $32,458,000 $62,186,000 $94,644,000
ATTACHMENT C
BLACK & VEATCH CORPORATION
6 Venture, Ste. 315, Irvine, CA 92618 (949) 753 0500 Fax (949) 753 1252
October 6, 1999
Ms. Melissa Cavallo
Assistant Director
Administrative Services Department
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94303
Dear Ms. Cavallo:
In accordance with our agreement, we hereby submit our Report on the Infrastructure
Management Staffing Review. The report provides documentation of the study
undertaken and presents our findings and recommendations regarding capital projects
assignment, staffing additions and changes, and process changes we believe are necessary
for the City of Palo Alto ("City") to effectively implement its $74 million Infrastructure
Management Plan.
We wantto express our appreciation to you, members of your staff, and others in the City
for the extraordinary cooperation extended during the study.
We appreciate the opportunity to serve the City and look forward to assisting the City in
future endeavors.
yours,
& Veatch and
Company
Boomhouwer
Regional Manager
TABLE OF CONTENTS
INTRODUCTION/SCOPE
A. Background
B. Scope of Staff’mg Study
PROJECT APPROACH AND METHODOLOGY
CURRENT STAFFING ANALYSIS
A Public Works
B. Community Services
C. Administrative Services
RECOMMENDATIONS
A. OVERVIEW
B. STAFFING RECOMMENDATIONS
1. Public Works Staffing Recommendation
2. Community Services Staffmg Recommendation
3. Administrative Services Staff’mg Recommendation
4. $95 Million IMP Program
5. Cost Impact to City
C. PROCESS RECOMMENDATION
Overview
1. The Project Process
2. Def’mition of Roles and Priorities
3. Contracting and Procurement
4. Standards for CIP and IMP Design and Management
5. Increase "Client Service"
6. Fewer Meetings
7. Delegation of Work
8. Scope Creep
9. Training
CONCLUSION
APPENDIX A - PROJECT PLAN
APPENDIX B - CIP BENCHM KING ANALYSIS
1
1
1
4
5
6
7
7
7
7
9
13
15
16
16
17
17
17
18
19
19
20
21
22
22
23
24
TABLES
TABLE 1
TABLE 2
TABLE 3
TABLE 4
TABLE 5
TABLE 6
TABLE 7
TABLE 8
TABLE 9
TABLE 10
CIP Comparative Analysis
CIP Summary Data
Projected Expenditures and Staffing Requirements (Engineering)
Projected Expenditures and Staffing Requirements (Facilities)
Projected Expenditures .andStaffing Requirements (Operations)
Projected Expenditures and Staffing Requirements (Community Services)
Staffing Cost Analysis (Engineering)
Staffing Cost Analysis (Facilities)
Staffing Cost Analysis (Operations)
Staffing Cost Analysis (Community Services)
EXECUTIVE SUMMARY
The City of Palo Alto will implement a $74 million Infrastructure Management Plan
(IMP) over the next ten years. This report recommends staffing and work assignments
for the proposed IMP and other capital work. The objectives of the study are to review
existing Capital Improvement Program (CIP) staffing levels, review the City’s approved
IMP, review work flow processes and recommend staffing to support CIP/IMP work
loads.
The major recommendations for the successful implementation of the $74 million dollar
IMP and other CIP projects are summarized below:
¯Assignment of IMP/CIP capital projects to departments that had not previously
handled major CIP projects, such as the Community Services Department.
¯Reallocation of facilities oriented capital projects from Engineering to the Facilities
Division within the Public Works Department.
Addition of six and one-half new positions - one senior level Project Manager and
one Engineer* in Engineering; one Engineer and a half-time clerical position in
Facilities; and one Program Manager, one Professional Engineer/Landscape Architect
and a clerical position in Community Services.
¯Two position upgrades from Technician to Assistant Engineer in Public Works -
Operations.
In addition, the following process changes are recommended:
¯Establish well-defined roles and project priorities for those involved in IMP and CIP
capital projects.
¯Streamline the contracting and procurement process.
¯Establish and implement standards related to IMP and CIP design management.
¯Develop and adopt a client-focused approach in all activities.
¯Minimize the time spent by CIP engineers on meetings, through delegation of
responsibilities and streamlining information processing.
¯Establish and implement a mechanism to empower lower level staff to deal with and
make decisions on change orders and progress payments.
¯Establish and adopt measures to control "scope creep".
¯Provide adequate training for capital projects by establishing a Project Management
Academy.
While the IMP capital projects staffing recommendations should be reviewed and
implemented quickly, process improvement recommendations should be prioritized.
* We recommend that the position initially be filled by an Assistant or Associate Engineer
and the City adopt a more flexible promotion policy.
City of Palo Alto Capital and Infrastructure Management Staffing Review
I.INTRODUCTION/SCOPE
A.BACKGROUND
In 1998, the Palo Alto City Council approved a ten-year, $74 million General Fund
Infrastructure Management Plan (IMP), which represents an increase of $28 million
over current capital spending levels. The City may also increase this initial $74 million
funding to $95 million in the future.
The City of Palo Alto (City) realized that in taking on the additional IMP capital projects,
that current staffing levels in key departments (Public Works and Community Services)
would not be adequate to plan, manage and implement the IMP capital requirements in
addition to ongoing Capital Improvement Program (CIP) projects.
Further, the existing CIP program is currently backlogged; and current staff may not be
adequate to support even the existing levels of CIP projects.
The purpose of this study was to develop a staffing plan that will help ensure the
successful implementation of Palo Alto’s proposed $74 million IMP and its overall CIP.
B. SCOPE OF STAFFING STUDY
The City hired Black & Veatch and The Resources Company to conduct an infrastructure
staffing review of the key departments - Public Works Department, Community Services
Department, and Administrative Services Department (Purchasing) - involved in
managing and implementing capital projects.
The primary objectives of the study were to:
1. Conduct a review of existing staffing levels (numbers and classifications) for current
CIP projects in the Departments of Public Works, Community Services and
Administrative Services.
Review the City’s IMP program and assess its likely impact on departments and
personnel implementing the IMP.
Interview key City personnel (City Manager, Public Works, Community Services,
Administrative Services and Human Resources) concerning the CIP, the IMP, capital
planning and management, .current. workloads, backlogs, and estimated future
workloads.
Develop staffing recommendations to support existing backlogs if any, the current
and proposed future capital workloads, and the effective implementation of the IMP
program.
5. Develop recommendations on alternatives to existing staffing configurations,
City of Palo Alto Capital and Infrastructure Management Staffing Review
workflow processes, organizational structure, and the use of in-house and contract
work.
The infrastructure staffing study was limited to the General Fund IMP capital program
and to selected City departments.
The review did not include:
1.An evaluation of the City’s Utility Department capital projects and Public Works
Enterprise Funds (Refuse, Storm Drainage, Wastewater Treatment)
2.Infrastructure Module 4: Bridges and Parking Lots
3.New Infrastructure Projects (e.g., elementary school playing fields, public safety
building, library master plan improvements)
H. PROJECT APPROACH AND METHODOLOGY
In order to accomplish the objectives of the study,, we conducted a review of background
data. We also held a series of interviews with key administrators in each of the
departments involved in the IMP. After the review of background data and the
interviews, we:
1.Analyzed the current IMP work plan, work processes, workloads, and existing
staff’mg;
Overlaid the requirements of the City’s capital and infrastructure management
(CIP/IMP) projects on our comparative staffing data from benchmarked cities and
determined staffing needs;
2.Developed a specific staffing strategy for each department. The results are included
in this report. A detailed Project Plan is included in Appendix A.
For the purpose of conducting a comparative analysis, a total of eight cities from within
and outside the State of California were selected. The cities selected have similar
characteristics to that of the City (e.g., University towns with a high level of public
involvement and high education levels).
Further, we considered it important to include cities, which are in the geographic vicinity
of Palo Alto (e.g., City of Mountain View and City of Santa Clara). Based on these
considerations and discussions with the City staff, we selected the following cities for the
study:
¯City of Boulder (CO)
¯City of Corvallis (OR)
¯City of Davis (CA)
City of Palo Alto Capital and Infrastructure Management Staffing Review
¯City of Fremont (CA)
¯City of Madison (WI)
¯City of Mountain View (CA)
¯City of Santa Clara (CA)
¯City of Santa Cruz (CA)
Annual Operating and Capital Improvement Budgets were obtained from all the cities
selected ~’~r the study. The Budgets were reviewed, and preliminary information on the
following was gathered:
¯General Fund CIP budget
¯Services provided by Public Works
¯Departments involved in General Fund CIP functions
¯Personnel or personnel hours allocated to CIP execution
After the telephone interviews with all of the cities, five were selected for the final
comparative staffing analysis since three cities, Fremont, CA; Boulder, CO; and
Madison, WI could not provide the requested relevant C]Ia staffing or CIP cost data. It is
important to note that the CIP comparative analysis only applies to the Public Works
Engineering function.
The results of our benchmarking study, shown in Table 1, indicate that the staff
engineering costs as a percent of CIP expenditures for the benchmarked cities range from
5.64 to 9.87 percent. Black & Veatch’s capital project experience in managing and
working on billions of dollars of capital construction projects indicates that the costs for
municipal "supervision" of project design and construction typically average 8 percent of
the total capital project costs. This is a well-established industry standard.
Another method for determining adequate staffing levels is by calculating actual capital
expenditures per employee. Benchmarked cities range from $680,000 to $1,400,000 in
capital expenses per employee. The City’s average (see Table 1) is approximately
$921,000, which is slightly below the average of a million dollars for the benchmarked
cities.
Table 1 shows that the City’s 1997-98 staffing cost as a percent of CIP expenditures was
9.6 percent, which is second highest in the range obtained for the benchmark cities. The
City’s unique approach of extensively involving the community and review bodies in the
capital project process drives up the City’s cost. We believe the City’s total cost as a
percent of CIP expenditures, with procedural modifications discussed herein, could
approach 8 percent (3 percent for design supervision and 5 percent for construction
supervision).
A general finding in all of the cities that were benchmarked was that CIP responsibility
was distributed among various departments such as Engineering, Facilities, and Parks and
Recreation. Such distribution of responsibility leads to project ownership by the various
departments and greater accountability. The City had decentralized CIP workload in the
City of Palo Alto Capital and Infrastructure Management Staffing Review
past, however, at the present time, most CIP work is executed by the Public Works -
Engineering and Facilities Divisions.
The General Fund CIP Expenditures displayed in Table 1 reflect actual CIP expenditures
incurred in fiscal year 1997-1998. The Engineering cost presented in Table 1 does not
include any costs related to administrative support staff.
Corvallis
Davis
Mountain View
SantaCruz
Santa Clam
Palo Alto
TABI~ 1
CIP COMPARATIVE ANALYSIS
5,657,386
4,978,420
20,131,613
2,330,100
15,381,638
3,221,856
318,859
491,537
1,056,126
167,681
857,102
309,445
Nmnlmr of
I)edicated to CIP
FIE
6.31
7.32
14.28
2.78
11.90
3.50
%
5.64%
9.87%
5.25%
7.20%
5.57%
9.60%
CIPPer
Employee
$
897,ooo
1,410,000
838,00~
1,293,0(E
921,00C
In estimating the Full Time Equivalent employees (FTEs) dedicated to CIP, only the
productive time dedicated exclusively to CIP work was used. Consistent with this
methodology, a productive CIP time of 70 percent was used in estimating the City’s
FTEs dedicated to CIP. The 70 percent productive CIP time is based on the information
provided by City staff. (A detailed description of the steps adopted in estimating the CIP
staffing for the benchmarked Cities is included in Appendix B). It is important to note
that in 1997-98, one of the City’s Senior Engineers was acting as the Assistant Public
Works Director and was not handling CIP projects.
IH. CURRENT STAFFING ANALYSIS
Table 2 below provides a summary of new and completed CIP projects for fiscal years
1995-96 to 1998-99 for the Public Works Engineering Division. The table illustrates that
the Public Works Engineering Division was not able to complete the new capital projects
added each year, creating a backlog of capital projeCts. For example, for fiscal year
1996-97, over $6 million of new CIP projects were added, while only $2.2 million of the
CIP was completed.
During the interviews and meetings we conducted, we found that current CIP project
roles, responsibilities and processes are not clearly defined. For example:
4
City of Palo Alto Capital and Infrastructure Management Staffing Review
Fiscal
Year
1995/96
1996/97
1997/98
1998/99
Beginning
Balance
$11,782,823
$11,782,823
$16,942,288
$15,180,955
Table 2
CIP SUMMARY DATA
New
$6,716,236
$5,820,970
$3,1.18,000
Completed
cIP
$2,248,000
$2,444,303
$3,011,616
Change in
Scope
$861,229
($1,015,000)
$395;000
Ending
Balance-
$11,782,823
$16,942,288
$15,180,955
$15,682,339
Which departments and personnel are appropriate to lead project
conceptualization, to finalize project scope, and to oversee design and
implementation?
Which department manages the project and who determines this? What factors
lead to the decision?
When does a project concept become a well-defined project that can be funded,
designed, and implemented?
Who takes the lead on what projects and at what point in the life cycle of a
project?
What are the project standards and processes from project planning through
implementation to post project activities?
In addition, there is a perceived lack of "customer service" from support departments
such as Public Works - Engineering, which often take the lead on the capital projects of
other departments;
¯Who is the client? Who makes the decisions?
A brief discussion of the performance and staffing of the three departments -Public
Works, Community Services, and Administrative Services follows.
A. PUBLIC WORKS
Public Works is organized into three divisions - Engineering, Facilities, and Operations.
The Engineering Division currently has six staff members who handle capital projects.
(During 1997-98 only five staff members were assigned to capital projects). Data from
City staff indicates approximately 70 percent of the time of Engineering Division
employees assigned to CIP projects is devoted to the study, design, and construction of
City of Palo Alto . Capital and Infrastructure Management Staffing Review
capital projects. Estimated time allocations for staff assigned to capital projects are as
follows:
Activity Estimated Annual Percent of Total Staff
Hours Time
CIP Related 1,448 70%
Non-Project Related 320 15 %
Vacation, Holiday, Sick Leave 312 15%
ANNUAL TOTAL 2,080 100%
In addition to direct capital work, Engineering Division employees’ time is allocated to:
Non-Project Related Activities: Includes activities such as training, non-
project-related meetings, general response to public queries, public counter
hours (4 hours per engineer per week) plus follow-up regarding issues related
to counter work and division administration.
¯Vacation, holidays, and sick’leave.
Engineering is currently responsible for most of the City’s major projects, from street
resurfacing to golf course improvement projects to seismic retrofitting of buildings. The
Division is also responsible for all major electrical and mechanical projects. Since all of
the engineers in the Division have civil engineering backgrounds, the Division is
currently not suitably staffed to manage electrical and mechanical projects.
The Facilities Division is responsible for smaller projects, such as roofing replacements,
modifications of fire stations, and handling of small electrical and mechanical projects.
The Division currently has a supervisor/project manager and an engineering technician
who devote nearly 43% of their time to CIP projects. In addition, the manager of
Facilities devotes a 17 percent effort to capital work. The Division has no engineers.
The Operations Division currently handles approximately $650,000 of CIP volume, with
two technicians. The Division is responsible for all sidewalk replacement capital projects
within the City. The Division also manages all landfill related capital projects.
B.COMMUMTY SERVICES
The Community Services Department has primarily been involved with maintenance,
program operations, and capital projects such as repairing and replacing irrigation
systems and playgrounds. The Department is currently not directly responsible for any
multiple, large capital projects, although it was heavily involved with the golf course
renovation project. No permanent staff is maintained for implementation of capital
projects. Capital projects completed by the Division are performed by existing staff,
which subtracts time from their heavy operational and administrative duties.
6
City of Palo Alto Capital and Infrastructure Management Staffing Review
C. ADMINISTRATIVE SERVICES
Administrative Services is responsible for handling the City’s purchasing and contracting
efforts. The Department is also responsible for CIP (IMP) budgeting and tracking CIP
(IMP) expenditures. While we believe current staffing levels are adequate for
purchasing, the contracting process that is currently in place is an issue. Streamlined
contracting procedures should help assure existing staff can handle IMP requirements.
The current contracting processes are time consuming and inefficient. More specifically:
¯There is no current use of Master Service Agreements or pre-selected vendors.
¯"Standard and standardized" and multi-year contracts are not used to the extent
fully possible.
¯There are expensive, time consuming, and extensive legal reviews on almost
every contract.
IV. RECOMMENDATIONS
A. OVERVIEW
In order to effectively implement the IMP, we recommend additional permanent staffing
and some significant organizational and process changes. This section presents our
recommendations for the three City Departments that were reviewed - Public Works,
Community Services, and Administrative Services. In the first part of this section,
recommendations regarding the sharing of capital project responsibility between Public
Works and Community Services, the required staffing to execute the workload, and the
cost impacts are discussed. Our recommendations pertaining to other general issues, such
as streamlining contracting and project management procedures are discussed in the
second part of this section.
B. STAFFING RECOMMENDATIONS
In estimating the staffing required to successfully execute the IMP, we gave due
consideration to both quantitative and qualitative factors. The quantitative measures
included volume of CIP work (in dollars) that is being executed by an FTE in other cities,
the City’ s historic volume of CIP work (in dollars) per FTE, and the staff cost that would
be incurred in the execution of IMP work.
In terms of qualitative factors, Black & Veatch assembled a project team with significant
experience in design and construction of infrastructure improvements. The project team
spent time with City staff to understand existing and projected workloads, and City
processes related to CIP/IMP execution. After developing an understanding of the City,
the project team utilized its experience in managing and determining staffing for
City of Palo Alto Capital and Infrastructure Management Staffing Review
thousands of capital projects, to estimate the City’s staffing needs. The project team’s
staffing estimates were validated through quantitative measures.
.Based on the CIP comparative analysis results presented in Table 1, Section II ~oject
Approach and Methodology), and given the inherent differences in the complexity of CIP
work undertaken by the different cities, we believe it is reasonable to assume a ratio of
approximately $950,000 of CIP work per CIP-FTE. The $950,000 CIP per FTE would
represent some improvement in current performance by the City to reach close to the
¯ average level of benchmarked cities. However, taking into consideration the variations inthe duration and complexity of the CIP/IMP projects and consequent fluctuations in the
annual dollar volume of work, we believe an allowance of plus or minus ten percent can
be applied to the $950,000 of CIP work per CIP-FTE, when estimating staff’mg needs.
This ratio of $950,000/CIP-FTE is a key quantitative factor that was used to calculate
FTE staffing required for future infrastructure and capital work. Projected infrastructure
and other capital expenditures as well as staffing needs are shown in Tables 3 through 6.
Tables 7 through 10 provide estimates of in-house staffing costs for a capital project.
Engineering cost is f’n’st computed based on a three percent design and five percent
construction cost and the derived engineering cost is adjusted for salary and productive
time differentials.
Based on our overall review of all the three departments we recommend that six and one
half permanent FTEs be added to the existing staff - three and one-half for Public Works
(includes one-half FTE clerical support for Facilities), and three for Community Services
(includes one clerical staff). In addition, we recommend two position upgrades within
Public Works - Operations.
In our staffing recommendations for Public Works, we suggest that Public Works be
flexible in using the new Engineer position recommended for Public Works -
Engineering, in both the Engineering and Facilities Divisions as and when needed. The
rationale behind the need for such flexibility in the utilization of the new Engineer
position is discussed in the following sections.
It is also important to note that the actual CIP productive time for the recommended
incremental staff will be lower than what is indicated in Tables 3 through 6 in fiscal year
1999-00. The lower productive time is inevitable since the recommended incremental
staff may not come on board until the beginning of the second half of the fiscal year due
to the time involved in the approval and hiring process.
Finally, we identified the need for more flexibility in the hiring and promotion of
engineering staff. Industry-wide, it is common for an engineer to be hired into an entry-
level classification and based on experience and performance, be promoted into more
responsible engineering classifications. It is possible for an engineer to be ready for
promotional opportunities on an annual basis. The City’s current classification system
does not provide for growth within the engineering classifications. When the City hires
an entry-level engineer (assistant engineer), that individual must remain in that
City of Palo Alto Capital and Infrastructure Management Staffing Review
classification until a vacancy occurs at a higher level. In order to improve the City’s
ability to attract and retain qualified engineers, we recommend that the City have the
ability to hire and promote among the assistant, associate, and engineer classifications.
Minimizing remover is critical to the success of the IMP. The effectiveness of the
engineering staff is dependent upon a combination of technical expertise and familiarity
with the City’s infrastructure and capital project process, which only comes with
experience. -.
1. Public Works Staffing Recommendations
a. Engineering Division Staffing Recommendation
As discussed in Section 11I (Current Staffing Analysis), the Engineering Division, which
is currently responsible for most of the CIP projects, has no electrical/mechanical
engineer and has a recent history of backlogs and project delays. Since the Division has
nearly $2.3 million worth of backlogged capital projects, .we believe it will not be able to
support the additional capital projects identified in the IMP with current staffing levels.
In order to help eliminate the possibility of future backlogs, we recommend two
permanent incremental staffing positions and the reassignment of capital project
responsibility.
Based on a thorough review of the various backlogged, on-going, and future projects, and
interviews with City staff, we recommend the following reassignment of CIP/IMP project
responsibility:
¯Assign all facilities-related projects that do not have any seismic factors requiring
specialized engineering expertise to the Facilities Division. Three such projects
namely, Civic Center, Community Theater, and Arts Center should be assigned to
the Facilities Division.
¯Assign to Community Services IMP projects such as lighting, parks, open space,
medians, planters, etc.
With a transfer in project responsibility, Engineering’s annual capital workload will be in
the range of $4 to $6 million. Table 7 presents the CIP/IMP projects for the Engineering
Division for fiscal years 1999-00 to 2003-04. Table 3 presents the staffing required to
execute the CIP/IMP workload over the next five years. Based on the ratio of $950,000
per CIP-FTE and the productive FTE time, we recommend hiring one Senior Project
Manager and one Engineer. With this workload and the addition of two FTEs (Senior
Project Manager and Engineer), Public Works Engineering will have adequate staff to
complete the volume of work shown in Table 3.
As can be seen in Table 3, the amount of work per productive FTE ranges from $0.7
million to $1.0 million over the next five years. With the recommended additional
staffing, from fiscal years 2001-02 onwards the volume of CIP workload per productive
FTE in Engineering falls below $950,000. During the same period especially in fiscal
years 2001-02 and 2003-04, the volume of CIP workload per productive FTE, in Public
City of Palo Alto Capital and Infrastructure ManagementStaffing Review
Works - Facilities, increases substantially. We therefore suggest that the recommended
Engineer be made available to Facilities during fiscal years 2001-02 and 2003-04. Such a
measure would help in maintaining the CIP workload closer to the derived benchmark
standard of $950,000 per FTE in both Engineering and in Facilities Divisions. In fiscal
years beyond 2001-02, when the workload per CIP-FrE falls well below the benchmark
standard, the Division can consider accelerating the overall CIP/IMP program to maintain
productivity.
Table 7, estimates staffing costs necessary to implement a capital project. These
estimates are based on the design and construction phases of a capital project. Three
percent for design and five percent for construction were applied to the engin~g costs
in each phase to approximate staffing costs. This methodology was used to validate or
support the staffing levels we are recommending.
As stated in our Scope of Study (Section I-B), this study and its staffing
recommendations do not include major new projects. Multi-million dollar projects such
as an MSC seismic retrofit, a new Public Safety building,or a new parking garage are not
included in this analysis.. We recommend that staffing levels, to include an optimal mix
of incremental in~house and contract staffing, be reassessed when such projects are
considered.
Palo Alto has developed a thorough, but extensive and complex review process in project
development and concept design. Over time this activity has taken increasing and
considerable amounts of City capital project personnel time. The knowledge, skills, and
abilities (KSA’s) required to navigate the policy and public review efforts related to
capital planning and to manage the conceptual phase of projects are often very different
from the skills needed to support engineering design, construction and implementation,
and management of projects. Very different people are needed for these two very
different functions. Examples of the KSAs required for the City’s capital project process
-include: facilitation, communications, concept planning, public outreach and policy
analysis, project negotiation and oversight, contracting expertise, etc.
In light of the problems pertaining to CIP project responsibilities and coordination
highlighted in Section 1II (Current Staffing Analysis), we recommend that a senior level
Project Manager position be created. This position will be responsible for the leadership,
coordination, and management of the conceptual project development phase of projects,
and for the overall management of large scale or complex City capital projects. The
position is being recommended to shift workload related to project formulation away
from the Engineers in Public Works,. so that they can proceed effectively with IMP
implementation.
The Project Manager needs to have the authority, responsibility and resources to be able
to guide project formulation activities between multiple departments and the City
Manager. The position will require knowledge of the overall financial constraints facing
the City, as well as possess an understanding of the role of the various City boards and
commissions, and the City Council. Consequently, the Project Manager position requires
10
City of Palo Alto Capital and Infrastructure Management Staffing Review
a person who is independent, has strong communication skills, and can function at a
senior level in the City.
Some of the major responsibilities for the Senior Project Manager position will be to:
Develop and manage the concept level project management activities of large
scale or complex projects;
¯Help to def’me capital project roles and responsibilities, and, project processes.
In addition, the Senior Project Manager will be involved in a number of internal client
support roles:
¯Help to continue to streamline the contracting processes;
¯Assist in citywide CIP ! IMP planning and coordination;
¯Assist in developing innovative project management tools and methodologies.
Location of Position
Several options for the organizational location of this new and important position were
identified:
¯City Manager’s Office
¯Administrative Services Department
¯Public Works Department
¯Planning Department
In many Cities this position is located in the City Planning Department. However, in
Palo Alto, the Planning Department does not play a major role in capital projects and it is
not recommended that this position be placed in this department.
Locating the position in Public Works is another option since that would provide the
benefit of placing the position close to design and support activities. Since the Senior
Project Manager position will require considerable technical expertise to manage the
conceptual phase of large scale and/or complex projects and will involve significant
coordination with engineers from the Public Works Department, we recommend that the
Senior Project Manager position be located within Public Works. We recommend that
the Senior Project Manager report directly to the Director of Public Works. Table 3,
which shows the required staffing for Public Works - Engineering, includes the Senior
Project Manager position.
11
City of Palo Alto Capital and Infrastructure Management Staffing Review
b. Facilities Division Staffing Recommendations
The Facilities Division has traditionally been involved in smaller CIP projects (less than
$! million) that do not involve any significant civil engineering or structural
considerations. The Facilities Division is also responsible for all the maintenance related
to the various City facilities.
Since the Facilities Division already handles some smaller CIP projects and is responsible
for all the facilities maintenance work, we believe it is logical to enhance the role of this
Division by assigning it all responsibility for IMP projects related to facilities. IMP
capital projects related to various facilities, such as the Civic Center, Community Theater
and Cultural Center, that have substantial electrical/mechanical components, can be
effectively handled by the Facilities Division with augmented staffing. Assignment of
these projects to the Facilities Division will help ensure that these facilities-related
projects are executed in a timely manner. In turn, this assignment will also reduce the
backlog for the Engineering Division. Table 8 presents the IMP projects for the Facilities
Division for fiscal years 1999/00 to 2003/04.
With the assignment of Facilities related IMP projects, the annual workload for the
Division ranges from $1.0 to $3.0 million. The staffing requirements for the next five
years are presented in Table 4. To effectively execute the on-going capital and new IMP
projects, we recommend an incremental staffing of one permanent Engineer position for
the Facilities Division. It is assumed that the new position will be able to devote 75% of
his/her time towards the execution of CIPflMP projects. Since most of the additional
projects allocated to Facilities involve electrical/mechanical work, we recommend that
the new Engineer position have an electrical/mechanical background.
Table 8, which calculates staffing costs necessary to implement a project based on
study/design and construction percentages of project costs, validates or supports the
permanent staffing levels we are recommending for all years except for fiscal years 2001-
02 and 2003-04.
With the assignment of Facilities related IMP projects and the addition of one Engineer,
the amount of work per productive FTE in the Division ranges from $0.7 million to
nearly $1.6 million. The CIP workload per FTE hits a peak of $1.6 million in fiscal year
2001-02 due to the construction phase of the Civic Center project. In fiscal year 2003-04
due to the construction phase of the Cultural Center project the workload per FFE peaks
to $1.3 million. In these two fiscal years, the workload per FTE becomes significantly
higher than the benchmarked $950,000 ratio. We propose two alternatives to effectively
manage the peak CIP workloads in Facilities Division - the first, making staff from the
Engineering Division available to the Facilities Division, and the second, using contract
staffing in Facilities Division.
As suggested in the previous section (section l-a), in fiscal years 2001-02 and 2003-04,
we propose that the new Engineer in the Engineering Division be made available to the
Facilities Division. The Engineer, when made available to Facilities, can assist in the
12
City of Palo Alto Capital and Infrastructure Management Staffing Review
Civic Center and Cultural Center projects. Such a measure would help in maintaining the
CIP workload in Facilities closer to the derived benchmark standard of $950,000 with the
added benefit of not ramping the internal staffing just to accommodate atypical peaks in
_workload.
Another alternative to effectively manage the peak workload in fiscal years 2001-02 and
2003-04 would involve the use of contract staffing. A Project Manager can be hired on
part time contract, to execute large IMP projects such as the Civic Center and Cultural
Center, in fiscal years 2001-02 and 2003-04 respectively. However, since the contract
staff will not be as familiar with the Civic Center HVAC systems and the City processes
related to major CIP projects as internal Public Works staff, we recommend making an
Engineer in the Engineering Division available to Facilities as a preferred alternative.
However, if the CIP/IMP annual workload continues to average at over $2 million,
beyond fiscal year 2003-04, then we suggest that the City reevaluate permanent staffing
needs of Facilities Division at that time.
During our evaluations of the Facilities Division, we identified a lack of clerical support
to handle additional contracting and associated record-keeping work. We recommend the
addition of a half (.5) FTE to handle these needs.
c. Operations Division Staffing Recommendation~
Our review of the IMP for the Operations Division indicates a more than 100 percent
increase in CIP projects for the Sidewalk Program. However, since the Sidewalk
Program is a type of project where significant economies of scalecan be achieved in
terms of management of design and construction, existing staff should be able to execute
the higher dollar volume of IMP work.
Our staffing analysis, which is based on the benchmark standards of $950,000 per CIP-
FTE and a productive CIP work time of 70%, indicates that 2 permanent positions will be
required to execute the assigned IMP workload during the next five years. As can be
seen in Table 5, at a 70% productive CIP time, one CIP-FTE in Operations Division will
be able to execute $966,000 worth of CIP/IMP work.
Since the Operations Division already has two technicians with engineering capabilities,
we believe there is no need for any additional staff at this time. However, we recommend
that the two technician positions be upgraded to the level of Assistant Engineers since the
increase in IMP workload would necessitate an increase in supervisory responsibilities
and skills. Table 5 indicates the !MP workload for the next five years and the required
staffing.
2. Community Services Staffing Recommendations
The IMP has introduced new capital programs such as the revamping of medians, islands
and planters, open space projects, and perimeter landscaping. Since Community Services
13
City of Palo Alto Capital and Infrastructure Management Staffing Review
is responsible for maintenance and program operations, we believe the Department
should also become increasingly responsible for capital projects. In some of the cities
that were benchmarked, we found that the Community Services Departments were
involved in implementing capital projects. We recommend that the City’s Community
Services Department handle all capital projects related to parks, perimeter landscape,
medians, islands and planters, and open space. We believe the Community Services
Department’s participation in capital projects will ensure the timely implementation of
Community Services-related IMP projects.
In terms of staffing, since the existing staff members are not directly responsible for the
implementation of large-scale capital projects, addition of new and multiple capital
projects will impact routine operational and administrative duties and consequently create
staffing challenges within the Department. Further, the nature of capital projects is very
different from that of regular maintenance. Therefore, we recommend the addition of
two key technical positions - one Program Manager and one Professional
Engineer/Landscape Architect. As can be seen in Table 6, at a 70% productive CIP time,
$1.0 million worth of IMP work can be executed by one CIP-FTE.
In addition, we recommend the creation of a new IMP Section for the Program Manager,
Professional Engineer/Landscape Architect, and a clerical position. The new staff would
report directly to the Director, and support the IMP requirements of the Parks and Golf
Division, and the. Recreation, Open Space, and Sciences Division. The organizational
chart shown on the following page indicates the positioning of the new IMP section.
We recommend that the Program Manager and Professional Engineer!Landscape
Architect positions be placed at the same level, both positions reporting to the Director.
The Program Manager will have the overall responsibility to direct, manage, supervise,
and coordinate all programs and activities relating to Parks and Golf, and Recreation,
Open Space and Sciences Divisions. Specifically, the individual should possess the
following abilities and experience:
¯Experience in planning, developing, and maintaining services that meet the
community needs and are cost-effective.
¯Ability to provide direction and support to all Community Services divisions in
carrying out CIP/IMP projects.
¯Ability to work closely with other City departments, commissions and committees
serviced by the Community Services Department.
¯Experience in performing community outreach services with local service clubs, civic
groups and other organizations.
The Professional Engineer/Landscape Architect position level will be comparable to that
of an Engineer. Job responsibilities will include supervision and participation in park
planning, capital improvement projects, administration of grant programs and
construction contracts. Our recommendation is to fill this position with a Landscape
Architect. However, labor market conditions may preclude such hiring and thus we also
suggest an engineer could fill the position.
14
City of Palo Alto Capital and Infrastructure Management Staffing Review
lCOMMUNITY SERVICES
ADMINISTRATOR
EXECUTIVE
SECRETARY
IMP
Program Manager
Professlonal Engineer/
Landscape Archltect
Clerlcal
I I I I
Space & Sciences
As mentioned earlier in Section III (Current Staffing Analysis), the Department has no
permanent clerical staff for IMP implementation. Existing clerical support already
contends with heavy workloads and hence is not capable of providing administrative
support for the new capital projects. In addition, current clerical positions do not have
the skill level to provide support to the two new technical positions recommended.
Therefore, we recommend the addition of clerical VIE to the existing clerical staff. The
clerical position is for administrative support to handle the additional contracting and
associated record-keeping needs and thereby enhance efficiency. Table 6 indicates the
IMP workload for the next five years and the required staffing for the Department.
3. Administrative Services Staffing Recommendations
As suggested earlier, staffing levels in Administrative Services appears adequate to carry
out the various administrative tasks related to C~/IMP projects such as purchasing,
overseeing contracting procedures, budgeting and tracking expenditures. Though no
additional staffing is recommended we recommend major changes in the City’s process
related to capital planning and implementation in order to achieve effectiveness and to
obtain the best use of the City’s limited resources.The process changes that we
recommend are discussed in detail in a separate section.
Administrative Services .was one of the four locations considered for the placement of the
Project Manager position. The Project Manager position involves major administrative
responsibilities such as overseeing contracting procedures,, and coordinating with other
City boards and commissions. However, we recommended Public Works as a more
appropriate organizational location for the position, primarily due to the significant
technical level coordination that the Project Manager position entails.
15
City of Palo Alto Capital and Infrastructure Management Staffing Review
4. $95 Million IMP Program
In the event that the IMP budget is increased from $74 million to the planned $95
million, we believe that no major staff’mg changes will be necessary in Public Works
Engineering and Operations for additional streets and sidewalks projects. It is our
assumption that the higher volume of streets and sidewalks projects would be executed
by the same contractor but with an increase in contract funding. Therefore, we do not
foresee any significant increase in supervisory or project management responsibilities.
Similarly, in the Community Services Department, it is assumed that any increase in IMP
allocation for IMP projects such as medians, perimeter landscape and others can be
handled with the same level of contracting with no significant increase in supervisory or
project management responsibilities. Further, the increase in volume of IMP work will
not entail any increase in design work or in materials procurement. Therefore, with the
recommended staffing, Community Services should be able to handle any increase in
allocation. It may be able to draw upon existing staff for some support, which is its
current practice.
In the case of the Public Works-Facilities Division, since there would be a substantial
increase in projects of nearly $860,000 a year, it may be necessary to add another FTE to
handle the increase in IMP allocation. We recommend that Facilities staffing levels be
reassessed in the event that the IMP funding is increased to the $95 million level.
5. Cost Impact to Ci~
The following section highlights the cost impact of the staffing recommendations.
Direct IMP Cost Impact: Our recommendations have a significant but reasonable cost
associated with them. Recognizing from the benchmarking survey that it takes
approximately one employee to oversee implementation of approximately $950,000 of
CIP/!MP, to implement a $74 million infrastructure plan, the following FTE and costs are
recommended. The cost includes an allowance for benefits, but not for office space,
equipment, and furniture.
¯Public Works - Engineering: One high level project manager - $125,000
¯Public Works - Engin’eedng: One Engineer - $95,000
¯Public Works - Facilities: One Engineer - $95,000
¯Public Works Operations: Upgrade of two Technicians - $18,000
¯Community Services: One Program Manager - $95,000
¯Community Services: One Engineer/Landscape Architect - $95,000
The total estimated annual cost of the above is $523,000. The full annual cost would not
be realized in fiscal year 1999-00 since the positions will probably come on board only
during the second half of the fiscal year. Further, additional cost savings are also
16
City of Palo Alto Capital and Infrastructure Management Staffing Review
possible by initially f’dling the Engineer position in the Engineering Division with an
Assistant or Associate Engineer.
Indirect IMP Cost Impact: The recommended lerical positions provide administrative
support for the IMP. The projected indirect cost is as follows:
One Clerical Position for community Services - $55,000
o .5 Clerical Position for Facilities - $27,500
Total indirect IMP cost is estimated at $82,500.
C. PROCESS RECOMMENDATIONS
Overview
We identified several process changes which could result in some "quick wins" for the
City. While a detailed process review is beyond the scope of this study, we wish to
present some high level insights that we have observed.
1. The Project Process
The City’s process for the design and implementation of capital projects needs to be
reviewed and streamlined. The scope of Public Works managed projects within the City
is not radically different from the scope of Public Works projects for other cities of
comparable size. The difference between Palo Alto and other cities (where engineers are
successfully completing approximately $1 million worth of CIP projects per year and the
costs for municipal supervision average 8 percent of total capital project costs) is that the
processes employed by other cities have been standardized and streamlined. In addition
the City involves boards and commissions 0~lanning Commission, Public Art
Commission, Historic Resources Board, and Architectural Review Board) to-a much
greater extent than other cities.
Action recommendations:
Include members of the Public Works Engineering Division, Planning Staff, City
Attorney’s Office, Administrative Services, and other City staff who work with
the Public Works Engineering Division in a review of the capital project planning
process, with the goal of standardizing and streamlining procedures where
feasible.
¯The Director of Public Works, in conjunction with the Assistant Director, should
lead the effort to establish a streamlined approval process.
17
City of Palo Alto Capital and Infrastructure Management Staffing Review
Establish a senior level project manager position, which will .oversee conceptual
plans of various projects and guide them through the project definition phase.
This person will also help define the project scope, which will facilitate the design
and construction work managed by Engineering staff. We have recommended
this position be placed in the Public Works Department.
Planning staff should be given more authority in the design approval process,
including approval of all small, non-controversial capital projects. The
involvement of City advisory boards and commissions in the capital design
review process should be limited to the maximum extent possible. Examples of
projects where Planning staff should have the authority to approve design include
public work projects such as replacement of in-kind items and maintenance items.
Develop a clear set-of design guidelines for standard features. If a City project meets
those guidelines, the design should be.approved by Planning staff. A recent example of
this was the preapproval of traffic circle designs. Other .possibilities include: lighting,
fencing, railing for small bridges (such as in parks), bollards (pedestrian/automobile
separators), traffic signal boxes, bike bridge decking material, and park or median strip
landscaping.
2. Definition of Roles and Priorities
This issue has already been discussed but it is a key to developing an effective and
successful IMP program. During our review, City engineers indicated that conflicts exist
between different departments within the City over capital projects. Some capital
projects have been assigned to the Engineering Division without the development of
adequate conceptual designs. In essence, other departments rely on Public Works’
engineers to provide the conceptual, preliminary, and final designs, all within time
frames, which are normally acceptable for just the preliminary design phase of a project.
Action recommendations:
Create a senior level project manager position within Public Works Division
to coordinate project development during the conceptual phase.
.Provide a firm set of guidelines and clear procedures regarding the stage at
which the projects can be transferred from the Project Manager to the
Engineers.
The Public Works Department Director, in conjunction with~the Manager for
Engineering, Operations, and Facilities Divisions, should also set reasonable
priorities for projects for the engineers within the Department. Reasonable
timelines and workloads need to be constantly assessed and evaluated.
Setting priorities and timelines will allow the engineers to focus on that
portion of the work for which they are best suited, while relying on the Project
18
City of Palo Alto Capital and Infrastructure Management Staffing Review
Manager to provide the project management support as required, especially
during the conceptual and preliminary design phases.
By using a priority system to concentrate resources in the right roles and on the right
projects, the City will be able to provide better support to its client base and to improve
the image of the Engineering Division within the City and the entire community.
3. Contracting and Procurement
Palo Alto’s capital project contracting and procurement processes can be greatly
improved.
Currently similar types of procurements are often bid over and over again rather than
using either a Task Order (TO) contract process or a Master Service Agreement (MSA).
The use of TO or MSA will reduce the redundant steps, time and costs to have contracts
reviewed and approved. Legal reviews alone take a considerable amount of time and
effort in Palo Alto.
TO and MSA would allow the City to pre-qualify a set of vendors for contract and
construction services. These vendors could then be selected with a minimum of
paperwork and time to do the actual project work. This streamlined system reduces
vendor proposal costs and thus saves the City money; reduces the significant time and
effort of City employees in contracting processes and paperwork; and reduces the need
for time consuming and costly legal reviews.
We recommend that the City establish a streamlined contracting and procurement
process.
4. Standards for CIP and IMP Design and Management
Public Works has developed a Construction Contract Administration Manual. The
manual details the steps that need to be followed by the contractors and/or consultants in
following the contracting procedures for normal work during the progress of a particular
project. The manual is fairly complete, is well detailed, and seems to be ready for
implementation on a wide scale. However, we were told during our interviews that this
manual is often not used on projects because it is not adaptable to some of the different
types of projects. Our interviews indicated that there is a general lack of use of standards
for processes and procedures. Department management allows considerabie latitude to
staff to ’do it their way’ and this has resulted in many diverse approaches to design and a
lack of general standards and consistent approaches.
The Public Works Department needs to develop uniform approaches to design,
contracting, and construction management, and, to complete the design/management
manual, which is awaiting approval.
19
City of Palo Alto Capital and Infrastructure Management Staffing Review
This manual should include an outline of the processes and procedures necessary for City
engineers to follow. There should be a check list format for tracking the progress of any
particular project. The checklist should be all-inclusive, and organized in a manner that
allows engineers to delete sections which have no application to particular projects. Each
project undertaken by the engineers at the City of Palo Alto should follow this checklist
so that the status of a project is known by not just the engineering staff, but also by other
members of the City staff. This approach will also help control project "scope creep."
The City’s design/management standards should also :be made available to outside
consultants as a guidance tool to help standardize the process on the various types of
work being undertaken.
Action recommendations:
Complete _the design/management handbook for implementation by City
engineers and other City staff.
Issue the design/management handbook to all employees of the Public Works
engineering staff, and other key capital project personnel (i.e., Public Works -
Operations, Parks and Open Space, Facilities).
¯Provide copies to outside consultants at the very beginning of each project
undertaken or designed by an outside consultant.
At project initiation, the City Engineer in charge of that project should determine
which elements on the design/management checklist are to be implemented or
followed during the progress of the design of that particular project. Copies of the
checklist should be provided to other City bodies and interested community
groups so that each consultant knows that, when he or she talks with a particular
agency, group, or department with the City, they also will understand the scope of
the project.
5. Increase "Client Service"
There is a need for departments to become client-focused organizations. Currently
several departments, specifically Public Works Engineering, are not viewed as client or
customer service oriented. Such a perception is due to many complex factors, but, there
is a need for capital support and service departments to become "client" oriented.
Action recommendations:
¯Identify clients and their needs
Work with clients and the new Project Manager to establish acceptable project
scope and budget prior to beginning work on projects
Develop and provide a clear mechanism for increasing or decreasing the scope of
a particular project depending on the needs of the client
20
City of Palo Alto Capital and Infrastructure Management Staffing Re.view
¯Foster an attitude of client satisfaction
¯Develop a public relations plan
6. Fewer Meetings
Too many meetings are often the symptom of a lack of effective processes and procedures.
Our recommendation is to ZERO BASE meetings. Start from zero meetings and then only
add them back if you can answer - why the meetings are being held, what purpose do they
serve and what value do they add, and, if we did things differently would we need the
meeting?
Engineering staff believe that too many meetings are overwhelming the current CIP
process. Valuable staff and management time is being spent on meeting versus doing.
At the time of the interview process as we were assessing time allocations of CIP staff,
we were provided with a list of approximately 53 separate "meetings" with varying
frequencies that were identified by the City engineering staff as requiring their time.
Some of these meetings are project-related, and City engineering staff must be available
for some of the meetings on a regular basis. Some of the meetings that are not within the
scope of the individuals’ specific job, need to be reassessed. By reviewing the CIP
process, it may be possible to eliminate some of these meetings or delegate meetings to
other staff members, thus freeing up CIP engineers for CIP work.
One method employed by consulting engineering firms to inform all engineers of
important topics within certain meetings is for the designated engineer to provide minutes
or a synopsis of the meeting for other engineers. In that way, the meeting load is more
evenly shared among the engineering staff, and yet the information is still available.
Action recommendations:
¯Identify meetings critical to the C~ process and eliminate those that are not.
¯Assign engineers or engineering teams to attend only specified required meetings.
¯Meetings which may be periodic but which do not directly impact the daily
workload of the City engineers must be removed from the responsibility of those
engineers.
While the nature of the engineering work within the City of Palo Alto requires attendance
at some meetings after hours, this practice should be minimized to reduce its impact on
staff.
21
City of Palo Alto Capital and Infrastructure Management Staffing Review
7. Delegation of Work
The paperwork demands if not managed can, like meetings, overwhelm staff and
management. Most successful project organizations have clear procedures and
provisions for change orders and progress payments to be reviewed by junior staff
members. The staff members then certify the correctness of the numbers for those
engineers or senior management or staff who have the authority to contractually bind the
fm-n via signature. This method of spreading the authority to the lowest possible level
allows management or senior engineers some additional time to concentrate on those
issues or topics which cannot be handled by less experienced staff.
Action recommendations:
¯Establish a mechanism for change order writing, verification, or reviewing that
can be delegated to the lowest possible staff level.
¯Establish a mechanism for progress payments, writing, verification, or reviewing
the numbers that can be delegated to the lowest possible staff level.
The junior staff members, in addition to verifying details and mathematical
calculations on change orders and progress payments, can also provide a synopsis
or executive summary of the status of work to senior management.
As with change orders and progress payments, the City engineering staff should develop
ways to assure that the lowest appropriate level of staff can complete tasks. Each
member of the staff should be provided with both responsibilities for completion of the
work and authority to make decisions so that more important issues are passed up the
chain of command to management. Such empowerment will free management from
having to deal with simple or less important issues in a particular contract.
Action recommendations:
¯Delegate meetings.
¯Delegate regular periodic review of industry literature.
¯Delegate responsibility for plan check either to appropriate staff level or to an
outside firm.
¯Delegate to design consultants, responsibility for completion of plans.
8. Scope Creep
Most successful engineering organizations realize that their success (profitability) resides
in the control of the phenomenon known as project "scope creep." Scope creep is best
defined as an increase in project scope without an increase in compensation and/or the
project time required to provide adequate engineering services for the increase in scope.
22
City of Palo Alto Capital and Infrastructure Management Staffing Review
It appears that the Public Works Engineering Division regularly experiences project
scope creep by their clients or as a result of the public review process. One of the most
effective ways to control scope creep is to establish a clear project scope with a particular
Client at the Onset of a project.
Action recommendations:
Public Works Engineering and it’s clients must establish clear limits on the scope
of each project. Engineering must work with its clients to understand and agree to
limit the scope as originally defined.
In the event of an increase in scope, the client must understand the additional
requirements in either time or resources involved in providing the required level
of engineering.
¯The checklist developed under the Standards of Design and Management (item 3)
should assist the Engineering Division in limiting possibilities of scope creep.
9. Training
Several cities that have instituted major capital programs such as Palo Alto’s have
established Project Management Academies for project and capital management. They
have done this to assure that personnel from across the City that are involved in CIP
projects have the same basic training and exposure to City standards and requirements.
Ideas for improvement of capital programs and processes are solicited.
The City of San Diego has established and mn a very successful program. San Diego’s
Project Management Academy manual covers the following topics:
¯Project Management Fundamentals
¯Preliminary Planning and Engineering
¯Consultant Selection and Negotiation
¯Design
¯Construction Contract Bid & Award
¯Construction
¯Equipment & Furnishings
¯Project Closeout
¯Administrative Regulations
23
City of Palo Alto Capital and Infrastructure Management Staffing Review
We recommend that the City explore establishing a Project Management Academy.
V. CONCLUSION
Overall, the appropriate assignment of IMP capital projects among the different
departments and divis.ions should help to eliminate abnormal work overloads on any one
department or division. Further, the involvement of City departments and divisions
impacted by capital projects in the IMP program will stimulate a sense of project
ownership and create greater accountability and ultimately better public service. The
addition of six and one-half new positions among the different departments and divisions
will aid in defining roles and responsibilities, help in more efficient project management,
improve workload-equity, and pave the way for an effective and successful IMP
implementation.
The City will incur additional costs from these recommendations of approximately
$600,000 annually due to the additional recommended staffing. There may be alternative
ways to fund some or part of these positions and therefore minimize the impact on the
General Fund. For example, the use of long term vacant and lower priority positions is
an option to fund these needed IMP positions. The additional capital personnel costs are
justified expenditures that are necessary to assure the effective implementation of the
proposed new $74 million IMP program.
24
TABLE 3
INFRASTRUCTURE AND CAPITAL MANAGEMENT PROGRAM
Projected Expenditures and Staff’mg Requirements (ENGINEERING)
Projected Capital & Infrastructure Project Expenditures
Description Of Workload 1999-00 2000-01 2001-02 ~ 2003-04
($~,ooo)($~,ooo)($~,ooo) ($~,ooo)($~,ooo)
Infrastructure Work:
Street Resurfacing
College Terrace Library
Lucie Stem HVAC System
Cambridge Parking Structures
Children’s Library
Restroom Renovations
Total - Infrastructure Work
Total - Ongoing Capital Projects
Total - County Grant Street Resurfacing
Total - Prior Year Capital Projects
Total - New Projects Study & Design
Total Project Expenditures
1,870
758
2,628
1265
502
1145
125
5,665
1,970
181
57
2,208
1000
501
1145
125
4,979
1,870
780
229
117
2,996
1000
501
125
4,622
1 ~870
468
204
2,542
I000
501
125
4,168
1,870
818
2,688
1000
501
125
4,314
Current Staffin~
2 Senior Engineers
Engineer
2 Assistant Engineers
Technician
Subtotal of Current Staffing
Recommended Incremental Staffin~
Senior Project Manager
Engineer
Incremental Staffing Recommended
Total Capital/Infrastructure Staffing
Capital/Infrastructure Expenditures Per
CIP-FTE
1.4
0.7
1.4
0.7
4.2
0.5
0.7
1.4
0.7
1.4
0.7
4.2
0.5
0.7
1.4
0.7
1.4
0.7
4.2
0.5
0.7
1.4
0.7
1.4
0.7
4,2
0.5
0.7
1.4
0.7
1.4
0.7
4.2
0.5
0.7
1.2 1.2 1.2 1.2 1.2
5.4
$856
5.4
$922
5.4
$772
5.4
$1,049
5.4
$799
1. A productivity factor of 0.7 FTE is assumed for the new Engineer and a productivity factor of 0.5 is assumed for the
new Project Manager. Existing staff is assumed to be 70% productive.
Infrastructure and Capital Management Staffing Plan (Engineering)
TABLE 4
INFRASTRUCTURE AND CAPITAL MANAGEMENT PROGRAM
Projected Expenditures and Staffing Requirements (FACILITIES)
Projected Capital & Infrastructure Project Expenditures
Description Of Workload
Total - Infrasa’ucture Work
Total - Ongoing Capital Projects_
Total - Prior Year Capital Projects
Total Project Expenditures
,ooo)
528
375
404
1,307
,ooo)
903
300
404
1,607
($1 ,ooo)
2,868
2,868
($1 ,ooo)
991
3OO
1,291
,ooo)
2,087
300
2,387
Current Staffinv
Facilities Manager
Supervisor, Facilities Projects Manager
Engineering Technician
Subtotal of Current Staffing
Recommended Incremental Staffing (1)
Engineer
Incremental Staffing Recommended
Total Capital/Infrastructure Staff’mg
Capital/Infrastructure Expenditures Per
CIP-FTE
0.17
0.43
0.43
1.03
0.75
0.75
1.78
$734
0.17 0.17 0.17 0.17
0.43 0.43 0.43 0.43
0.43 0.43 0.431 0.43
1.03 1.03 1.03 1.03
0.75 0.75 0.75 0.75
0.75
1.78
$903
0.75
1.78
$1,611
0.75
1.78
$725
ASSUMPTIONS:
1. It is assumed that a productivity factor of 0.75 b’TE will be devoted exclusively to capital projects by the
recommended incremental staff.
0.75
1.78
$1341
Infrastructure and Capital Management Staffing Plan (Facilities)
TABLE 5
INFRASTRUCTURE AND CAPITAL MANAGEMENT PROGRAM
Projected Expenditures and Staffing Requirements (OPERATIONS)
Total -
Total Project Expenditures
Projected Capital & Infrastructure Project Expenditures
Description Of Workload 199900
($~ ,ooo)
Infrastructure Work 1,353
1,353
,ooo)
1,353
1;353
,ooo)
1,353
1,353
,ooo)
1,353
1,353
,ooo)
1,353
1,353
Current Staffin~
Subtotal of Current Staffing
2 Technicians
Recommended Staffin~ Upgrade
2 Assistant Engineers
Total Capital/Infrastructure Staffing
Capital/Infrastructure Expenditures Per
CIP-FTE
1.40
1.40
1.40
1.40
$966
1.40 1.40 1.40 1.40
1.40 1.40 1.40 1.40
1.40!
1.40
$966i
1.40
1.40
$966
1.40
1.40
$966
1. It is assumed that a productivity factor of 0.70 FTE will be devoted exclusively to sidewalk projects by the two
Technicians when their positions are upgraded to Assistant Engineers.
1.40
1.40
$966
Infrastructure and Capital Management Staffing Plan (Operations)
TABLE 6
INFRASTRUCTURE AND CAPITAL MANAGEMENT PROGRAM
Projected Expenditures and Staffing Requirements (COMMUNITY SERVICES)
Projected Capital & Infrastructure Project Expenditures
Description Of Workload ~
($~ ,ooo)
Total - Infrastructure Work 1,462
($~,ooo)
1,462
($~ ,ooo)
1,462
($~ ,ooo)
1,462
($~,ooo)
] ,462
Total Project Expenditures 1,462 1,462 1,462 1,462 1,462
Recommended Incremental Staffing (1)
1 Program Manager
1 Engineer/Landscape Architect
[Incremental Staffing Recommended
Total Capital/Infrastructure Staffing
Capital/Infrastructure Expenditures Per
CIP-FTE
0.70
0.70
1.40
1.40
$1,044
0.70
0.70
1.40
$1,044
0.70
0.70
1.40
1.40
$1,044
0.70
0.70
1.40
1.40
$1,0441
0.70
0.70
1.40
1.40
$1,044
1. It is assumed that a productivity factor of 0.70 FTE will be devoted exclusively to capital/infrastructure projects by
the recommended incremental staff.
Infrastructure and Capital Management Staffing Plan (Community Services)
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APPENDIX A
City of Palo Alto Capital and Infrastructure Management Staffing Review
PROJECT PLAN
The Project Plan included the following tasks:
1. Task One (Overview)
In task one we defined with the City Project Team, under the direction of Melissa Cavallo
(Project Manager), the project’s final objectives and scope, work plan, deliverables,
schedule, and milestones.
We reviewed exis_ting material related to the City’s CIP and IMP programs. This
included reviewing historical and current budget documents, project plans, process
material on projects, human resources compensation and classification material, etc.
We obtained organization charts and documented current staffing for capital project
management and planning. We also reviewed the existing organizational structures of
each department and their working relations to one another. Annual budgets and existing
filled and authorized positions along with position descriptions were reviewed. We
reviewed and became familiar with the City’s existing personnel classification system and
used the existing classification system in order to expedite the rapid implementation of
staffing recommendations.
2. Task Two (Interviews)
We conducted numerous interviews and meetings with key IMP management and staff
(18 interviews) to obtain input regarding issues and concerns relevant to the review.
Meetings and interviews included:
¯The City Manager and Assistant Manager
¯Department of Public Works Director and staff
¯Administrative Services Department Director and Project Team
¯Department of Community Services Director and staff
¯Purchasing Manager
¯Department of Human Resources
Key managers and administrative staff in each department and division involved with the
IMP were interviewed (over 40 people participated in the interviews). The interviews
were one to two hours in duration and were designed to both ascertain the role and
function of the various departments and divisions as well as solicit ideas about current
problems, challenges for improvements. We designed and used a structured
questionnaire (see Appendix) in order to assure the consistent collection of information.
The material from these interviews became one of the key components of our analysis,
A-1
City of Palo Alto Capital and Infrastructure Management Staffing Review
which also drew on our past extensive project and staffing review experiences, our
review of City materials and our best practice survey of other communities.
3.~ Tasks Three and Four (StafFmg Analysis)
In tasks three and four, we documented existing staffing, positions, current workload data
on CIP, and estimated IMP capital project personnel.
A detailed analysis was conducted of the existing staffing levels in each department and
division responsible for IMP projects. -
The analysis focused on the following questions:
¯Number of staff devoted to CIP projects.
¯Classification and type of staff: engineer, drafter, manager, accountant, etc.
¯Roles and skill of staff members. Are staff members experienced at design, project
management, construction management, inspection, etc.
¯Position descriptions. What was expected of each staff member in his or her current
positions?
¯Current CIP workload data, tasks and assignments, etc.
We also reviewed and analyzed all CIP projects, including any possible "backlog" that
was estimated to exist.
We developed draft department summaries of potential IMP positions and classifications.
We also identified potential issues regarding IMP management and planning.
For example:
¯Streamline contracting;
¯Backlog management;
¯Training needs, etc.
4. Task Five (Process Analysis)
We conducted a high level assessment of the Public Works Department’s capital work
and design processes, their use of project management technology, PM tools and
methodologies.
We .also reviewed the Public Works Department’s use of design and construction
standards.
5. Task Six (Benchmarking)
We benchmarked IMP practices in selected communities to determine "industry
A-2
City of Palo Alto Capital and Infrastructure Management Staffing Review
standards" for the design and construction phases of projects. In order to assess the
staffing requirements for the City, a comparative review of CIP staffing in other cities
was essential. We interviewed eight cities with similar characteristics to the City to
determine their CIP workload/staffmg standards.
6. Tasks Seven and Eight (Staffing Recommendations)
We reviewed the compiled information on IMP workloads (current and future) and
integrated this assessment into our best practice analysis and benchmark f’mdings.
From this information, with additional analysis and a second round of meetings with City
departments, we developed a set of draft strategies and staffing recommendations for
each department.
7. Task Nine (Report Preparation)
We have prepared this summary of our review and its findings, conclusions and
preliminary recommendations regarding the evaluation of IMP staffing for department,
City Manager and Council review.
A-3
City of Palo Alto Capital and Infrastructure Management Staffing Review
CITY OF PALO ALTO INFRASTRUCTURE MANAGEMENT STAFFING
PLAN
Initial Interview Questionnaire
In~r~ewee
Name: Position:_.Department:
Telephone:.Facsimile:.E-Mail:
Name:.Date:,
Introduction
The City of Palo Alto has engaged Black and Veatch and The Resources Company to
assist the City in reviewing current and future capital project management planning and
implementation activities. The objectives of the review are to:
Conduct areview of existing staffing (numbers and classifications) for current
Capital Improvement Program levels in the Departments of Public Works,
Community Services and Administrative Services.
Review the City of Palo Alto’s Infrastructure Management Plan.
Interview key City personnel (City Manager, Public Works, Community
Services, Administrative Services and Human Resources) concerning CIP,
IMP and capital planning and management, current workloads, backlogs,
estimated future workloads, etc.
Develop recommendations concerning staff to support current and future
capital workloads and effective implementation of the IMP.
Develop recommendations on alternatives to existing staffing configurations,
work-flow processes, organizational structure, including, in-house and
contract work.
We are beginning the project by conducting a series of key meetings and interviews with
City management and staff regarding policy, organizational, programmatic, procedural,
budgetary and other financial issues related to capital and IMP. We will subsequently
interview additional City staff and CIP contractors as part of our detailed evaluation of
the Cities capital work processes and systems. We will also conduct a selected best
practice review of capital project management and planning systems.
The purpose of this interview guide is to assist you in our interview. Please use it to note
points that you want to discuss during our interview with you. We look forward to
discussing this questionnaire and related matters in the very near future.
A-4
City of Palo Alto Capital and Infrastructure Management Staffing Review
PALO ALTO INFRASTRUCTURE MANAGEMENT STAFFING PLAN
.1..What i~ your role in your Department’s capital and IMP planning and management
process? What should it be?
2.Discuss your cm-rent capital and IMP project planning and management workload?
Number and size of projects? Resources? Schedules and Budgets?
3.What do you perceive are the Cities and your Departments capital project planning
and management strengths and/or weaknesses? What is working well? What is not?
City_:
Department:
4~What do you perceive are the Cities and your Departments capital project planning
and management goals and objectives?
City_:
Department:
A-5
City of Palo Alto Capital and Infrastructure Management Staffing Review
What tools and methodologies do you currently use to assist you in your capital
project planning and management efforts? What tools and methodologies could you
use to assist you in your capital project planning and management efforts?
6.List the five most important issues or concerns regarding the effectiveness or
efficiency of your Department’s capital planning and management~
7.For the issues listed above do you have any suggestions that would enhance the
Department’s ability to accomplish its capital project planning mission and goals?
8.Do you have any particular issues or concerns regarding the Cities’s and your
Department’s use of the following systems?
a. Project Management System(s):
b. Financial Management System
c. Geo~aphic Information System (GIS):
d. Performance Monitoring System:
A-6
City of Palo Alto Capital and Infrastructure Management Staffing Review
General Comments or Suggestions Regarding this Review
9.Do you have any other comments, questions, or suggestions related to the scope or
execution of this review?
A-7
APPENDIX B
City of Palo Alto Infrastructure Management Staffing Review
CIP BENCHMARKING ANALYSIS
A three-step process was used in the CIP Staffing Analysis. The CIP labor information
either in terms of dollars charged (salaries/benefits) or in terms of FTE labor hours
charged towards CIP was fn’st obtained. Then the CIP labor do!lars or labor hours were
used to determine the FTE C]:P staffing. Finally the volume CIP work (in terms of
dollars) per CIP personnel was calculated.
The cities provided CIP labor information in different formats. Some cities such as the
City of Santa Cruz, City of Mountain View, City of Corvallis, and City of Santa Clara
provided non-utility related CIP persofmel cost in terms of either salaries or salaries and
benefits charged towards CIP work. The following steps were used in determining FTE
dedicated to CIP work.
Step 1:The CIP personnel costs were first determined. For the purposes of this
comparative study, CIP personnel costs calculated includes both salaries and
benefits. In order to be consistent, in the case of cities that provided only salary
information charged towards CIP, adjustments were made to the figures to
reflect salaries and benefits.
Step 2:From the CIP personnel costs, the total personnel hours charged towards CIP
work was then determined using an average hourly wage (salaries +benefits). In
the case of cities that provided the actual hourly wage (salaries + benefits), the
actual hourly wage figure was used.
Step 3:The total CIP hours charged was then converted to FTE dedicated to CIP work
by using an annual hours/employee.
Instead of CIP personnel salaries/benefits information, the City of Davis provided a
detailed list of utility and non-utility related CIP tasks, the corresponding personnel hours
charged for the tasks, and the annual hours per management personnel and staff
personnel. From the data provided, the hours charged for non-utility related CIP tasks
were determined and the FFE dedicated to CIP work was then calculated.
Once the FIE dedicated to CIP work was determined for all the cities, the average
volume of CIP work executed (in terms of dollars) per FI’E was calculated by dividing
the total non-utility related CIP expenditure by the F’I’E dedicated to execute the CIP
tasks. A summary of the comparative CIP staffing analysis is presented in Table 1.
B-1
ATTACHMENT D
Action Plan for Process Changes
Process Changes Action Plan Department Timing
Lead
Public Works 2000Standardize and
streamline the capital
project process; establish
well-defined roles and
priorities
Utilize Task order and/or
Master Service
Agreement to streamline
the procurement process
Establish and implement
standards for capital
project design
management
Adopt a client-focused
approach in all activities
Improve meeting
planning process
Delegate change order
and progress payment
processing and similar
tasks to lower level staff
Hire Sr. Project Manager;
conduct a cross-departmental
review of process improvement
opportunities; implement
changes
Identify target purchases; work
with project managers and the
City Attorney’s Office to
implement new agreements
Complete the Construction
Contract Administration
Manual (1999-00); incorporate
design standards into the
Manual (2000-01)
Develop a "Customer Service
Program" to include training
and feedback components
Identify training course for
CSD and PWD employees
Department heads to update
approval list to delegate
authority to lower level staff as
appropriate
Admin
Services
Public Works
Public Works
Human
Resources
Public Works/
Community
Services
mid 2000
1999-00
2OOO
1999-00
3 months
Establish measures to
control scope creep
Develop criteria toidentify
material scope increases;
establish approval process
before scope increase is
accepted
Public Works/
Admin
Services
2000-01
Establish project
management training
Develop course curriculum and
offer training; provide new
engineers with 32 hours training
and current staff with 16 hours
annually
Public Works/
Human
Resources
2000-01