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HomeMy WebLinkAbout2000-04-17 City CouncilCity of Palo Alto C ty Manager’s Report TO: FROM: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: PUBLIC WORKS15 DATE:APRIL 17, 2000 CMR: 182:00 SUBJECT:INFRASTRUCTURE MANAGEMENT PLAN PROGRESS, STAFFING ANALYSIS, AND STAFFING REQUIREMENTS; APPROVAL OF A BUDGET AMENDMENT ORDINANCE TO ADD ONE FULL TIME SENIOR PROJECT MANAGER POSITION IN THE PUBLIC WORKS DEPARTMENT TO THE TABLE OF ORGANIZATION AND RESOLUTION AMENDING THE COMPENSATION " PLAN FOR MANAGEMENT AND CONFIDENTIAL PERSONNEL AND COUNCIL APPOINTED OFFICERS TO BEGIN IMPLEMENTATION OF THE INFRASTRUCTURE MANAGEMENT PLAN ’ RECOMMENDATION Staff recommends that the City Council approve a Budget Amendment Ordinance (BAO) to add one (1.0) new Senior Project Manager position to the Table of Organization to begin implementation of the City’s Infrastructure Management Plan (IMP). BACKGROUND In 1998, staff presented a proposed General Fund IMP to Council. This ten-year plan included $95 million for improvements to City buildings, streets, sidewalks, medians, parks and open space areas. At that time, staff identified $74 million in funding sources for the program; the Council directed staff to return with options to fund the balance of the program. Council also directed staff to retum with an analysis of staffing needs to accomplish the IMP. Black and Veatch, an engineering consulting firm, was retained to evaluate current staffing levels and to develop recommendations for the future staff needed for IMP implementation. On February 1, 2000, staff presented the staffing analysis to the Finance Committee (CMR:406:99, Attachment E), which included detailed recommendations for IMP staffing and included a copy of Black and Veatch’s report. The Finance Committee directed staff to return to City Council with the attached BAO amending the Table of Organization to add one new Senior Project Manager position to the Public Works Department. Additional positions necessary to implement the IMP will be included in the FY 2000-01 Proposed Budget for Council consideration. CMR:182:00 Page 1 of 3 DISCUSSION The additional staffing resources needed to implement IMP projects are a total of 6.5 new positions. Approval of the attached BAO will allow staff to begin recruitment for the Senior Project Manager position immediately. The remaining 5.5 positions will be included as part of the 2000-01 Proposed Budget. The Senior Project Manager’s initial focus will be to develop and implement process improvement recommendations designed to streamline the City’s process for implementing Capital Improvement Program (CIP) projects. Staff recommends adding this position now so that ~he process improvements are in place as additional staff members are hired. The Senior Project Manager position is a new job classification for the City. A new job description has been prepared to focus on the specific skills needed for this position. Primary responsibilities for the position are to manage the project development and conceptual design phases of CIP projects. This will include effective implementation of public outreach efforts as well as presenting new CIP projects to the City’s appointed boards and commissions. A key skill for the Senior Project Manager will be the ability to incorporate community input and values into the conceptual design of CIP projects. Development of the architecture style for new or expanded public facilities is an extremely important part of managing the initial phase of CIP projects. The new manager must understand the community’s sensitivity to architectural design and the aesthetic impacts of new public facilities. The job description reflects these needs. Traditionally, the City’s project management staff has a background in engineering. The new job description requires prior experience in conceptual design of CIP projects and expands the educational requirements to include candidates with a degree in architecture or architectural engineering. The proposed job description is Attachment D. RESOURCE IMPACT The annual ongoing salary and benefits costs for the Senior Project Manager position are approximately $125,000, In addition, one-time costs (computer, furniture, training) for the position will total $6,000. One month of salary and benefits plus one time costs total $16,400 for Fiscal Year 1999-00. These costs are included in the 1999-00 Adopted Budget, since staff included a placeholder of $300,000 for anticipated IMP staffing. The attached BAO requests an appropriation of $16,400 from the placeholder for IMP staffing and will have no impact on the General Fund Budget Stabilization Reserve (BSR). There will be future year General Fund costs as a result of negotiated salary increases. Attachment B summarizes the BAOs approved to date in 1999-00 that impact the BSP(. This attachment also estimates future ongoing costs associated with BAOs approved to date to provide a projection for the future resource needs from the General Fund for those programs approved after the adoption of the 1999-00 budget. CMR: 182:00 Page 2 of 3 POLICY IMPLICATIONS The recommendation does not represent any change to existing City policies. ENVIRONMENTAL REVIEW This report on infrastructure staffing does not require California Environmental Quality (CEQA) Act review. Individual projects however, have been and will be subject to environmental review as they are developed. ATTACHMENTS Attachment A: Attachment B: Attachment C: Attachment D: Attachment E: Budget Amendment Ordinance Budget Amendment Ordinances Impacting the General Fund Approved to Date in 1999-00 Resolution Proposed Job Description CMR:406:99 PREPARED BY:Kent Steffens, Assistant Director of Public Works GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL:’ HARRISON Assistant City Manager CMR:182:00 Page 3 of 3 Attachment A ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO TO AMEND THE BUDGET AND THE TABLE OF ORGANIZATION .FOR THE PUBLIC WORKS DEPARTMENT IN THE BUDGET FoR THE FISCAL YEAR 1999-00 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $16,400 AND ADD A FULL-TIME POSITION FOR THE INFRASTRUCTURE MANAGEMENT PLAN (IMP) WHEREAS, pursuant to the provisions, of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 28, 1999 did adopt a budget for fiscal year 1999-00; and WHEREAS, in February 2000 staff presented the Infrastructure Management Plan Staffing Analysis to the Finance Committee; and WHEREAS, on reviewing the analysis the Finance Committee directed staff to add one new Senior Project Manager position to the Public Works Department to begin implementation of the IMP; and WHEREAS, the total annual salary and benefit cost for the position is $125,300; and WHEREAS, the salary and benefits cost for the remainder of 1999-00 is $10,400. One~time non-salary costs for this position total $6,000. This sum of $16,400 will need to be appropriated to the Public Works Department. There is currently $300,000-in the General Fund Non-salary Contingent Account set aside for IMP implementation; and WHEREAS, this appropriation will have no impact on the General Fund Budget Stabilization Reserve. There will be future year General Fund costs as a result of negotiated salary increases; and WHEREAS, City Council authorization is needed to amend the 1999-00 budget and the Table of Organization as’ hereinafter set forth. NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows: SECTION i. The sum of Sixteen Thousand Four Hundred ($16,400) is hereby transferred from the General Fund Non-salary Contingent Account to the Public Works Department, .Structure and Grounds Functional Area. SECTION 2. This transaction will have no impact on the General Fund Budget Stabilization Reserve. Attachment A SECTION 3. The attached Table of Organization is hereby amended to reflect changes shown in Exhibit A. SECTION 4. As specified in Section 2.28.080(b) of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance. SECTION 5. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. SECTION 6. As provided in Section 2.04.350 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT:- ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM:City Manager Senior Asst. City Attorney Director of Services Administrative Director of Public Works Exhibit A TABLE OF ORGANIZATION - GENERAL FUND Actual Adjusted Adopted Adjusted Budget Budget Budget 1999. Changes Budget 1997-98 1998-99 00 1999-00 PUBLIC WORKS DEPARTMENT Administrator, Public Works Associate Engineer Asst Director, Public Works Building Servieeperson Building Serviceperson-Lead Cement Finisher Cement Finisher-Lead Control/Account Specialist Coordinator, Facilities Projects (t) Coordinator, Public Works Projects Deputy Director, PW Operations Director of Public Works/City Engineer Engineer Engineering Technician III Equipment Operator (u) Executive Assistant Executive Secretary Facilities Carpenter Facilities Electrician Facilities Maintenance-Lead Facilities Mechanic Facilities Painter Heavy Equipment Operator Heavy Equipment Operator-Lead Inspector, Public Works .Mgr., Facilities Maint. & Projects Managing Arborist Office Assistant Office Specialist Program Assistant Senior Engineer Senior Project Manager Staff Secretary Superintendent PW Operations Supervisor, Building Services Supervisor, Facilities Management Supervisor, Facilities Projects (t) Supervisor, Inspection & Surveying, P.W. Supervisor, Public Works Surveying Assistant Surveyor, Public Works Traffic Control Maintenance I Traffic Control Maintenance II Traffic Control Maintenanee-Lead Tree Maintenance Person (v) Tree Trimmer/Line Clearer (u) Tree Trimmer/Line Clearer Assistant Tree Trimmer/Line Clearer-Lead Track Driver 1.~1.~1.~1.~ 2.~2.~2.~2.~ 0.75 0.75 0.75 0.75 5.~5.~5.~5.~ 2.~2.~2.~2.~ 2.60 2.94 2.94 2.94 0.85 1.~1.~1.~ 1.~1.~1.~1.~ 0.~1.~0.~0.~ 2.~2.~2.~2.~ ,0.40 0.40 0.40 0.40 1.~1.~1.~1.~ 2.90 2.~2.~2.~ 6.03 6.03 6.03 6.03 3.55 3.55 2.55 2.55 0.~1.~1.~1.~ 1.~1.~1.~1.~ 1.~1.~1.~1.~ 1.~1.~1.~1.~ 2,~2.~2.~2.~ 5.~5.~5.~5.~ 2.~2.~2.~2.~ 1.70 1.~1.~1.90 0.85 1.05 1.05 1.05 1.~1.~1.~1.~ 1.~1.~1.~1.~ 1.~1.~1.~1.~ 2.~1.~1.~1.~ 2.~2.~2.~2.~ 0.~1.~1.~1.~ 3.55 3.55 3.55 3.55 0.~0.~0.~1.~1.~ 2.~2.~2.~2.~ 0.80 0.80 0.80 0.80 1.~1.~1.~1.~ 1.~1.~1.~1.~ 1.~0.~1.~1.~ 0,90 0.~0.~0,~ 1.50 1.50 1.50 1.50 0.80 0.80 0.80 0,80 0.80 0.80 0.80 0.80 1.70 1.70 1.70 1,70 2.~2.~2.~2.~ 1.~1.~1.~1.~ 0.~0.~1.~1.~ 8.~8.~9.~9,~ 0.~0.~0.~0.~ 1,~i.~1.~1.~ 0.8__~5 0.8___~5 0.8_..__~5 0.8.___55 TOTAL 80.53 82A2 83A2 1.00 84A2 ATTACHMENT B Budget Amendment Ordinances Impacting General Fund Reserves Approved-To-Date in 1999=00 BAO Description Placeholders Cost Revenue Already In the Impact on the 199900 Adopted General Fund BSR Budget Estlm~ed Future Year Ongoing Costs Estimated Beginning Budget Stabilization Reserve (BSR) Balance Adopted Budget Addition to BSR Downtown Urban Design Improvements, CIP 19608 Salary and Benefit Increases Retroactive to July 1, 1999 for Management and Confidential Employees City Manager Executive Recruitment Friends of the Palo Alto Library Grant Arts Council of Santa Clam County Grant Palo Alto Art Center Foundation Donation Cost of Sound Wall for Tennis Facility at 3005 Middlefield Rd. IT Strategic Plan Citizens Options for Public Safety (COPS) Local Law Enforcement (LLE) Block Grant Downtown Parking Structure Feasibility Study, CIP 19530 Golf Course Management Agreement Police Department Table of Organization Change Animal Services Fees Major Intersection Improvements, CIP 19073 Johnson Park Lighting Improvements, CIP 19903 Telecommunications Consulting Midyear Report City Manager Compensation Package Crossing Guards Acquisition of PAMF sites Infrastructure Staffing Public Library Fund Grant $20,591,000 $949,000 ($120,349)($120,349) ($432,200)($432,200) ($26,000)($26,000) ($58,OO0)$58,000 $0 ($5,407)$5,407 $0 ($10,000)$10,000 $0 ($50,0O0)($50,000) ($250,100)$60,534 $189,566 $0 ($135,901)$135,901 $0 ($26,192)$26,192 $0 ($308,000)($308,000) ($34,100)$103,900 $69,800 ($10,000)$0 ($1,200)$1,750 $550 ($30,100)$30,100 $0 ($19,693)($19,693) ($62,500)($62,500) $0 $0 ($58,700)($58,700) ($43,000)($43,000) ($6,929,155)($125,000)($7,054,155) ($16,400)$16,400 $0 ($103,108)$103,108 $0 ($432,200 ($317,917 ($7,000 $1,701 ($79,5~ ($43 ($512,00(1 ($125,30~ BSR Balance After BAO’s [ $13,435,753 ] follows: ATTACHMENT C RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE COMPENSATION PLAN FOR MANAGEMENT AND CONFIDENTIAL PERSONNEL AND COUNCIL APPOINTED OFFICERS ADOPTED BY RESOLUTION NO. 7890 AND AMENDED BY RESOLUTION NOS. 7897, 7902, 7907, 7914, 7927 and 7945 TO ADD THE CLASSIFICATION AND SALARY OF SENIOR PROJECT MANAGER The Council of the City of Palo Alto does RESOLVE as SECTION I. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Management Compensation Plan, adopted by Resolution No. 7890 and amended by Resolution Nos. 7897, 7902, 7907, 7914, 7927 and 7945 is hereby amended by adding the employee classification and salary of Senior Project Manager, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. SECTION 2. The Director of Administrative Services is authorized to implement the additiona! classification and salary as set forth in Section i. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM: Senior Asst. City Attorney City Manager Director of Administrative Services Director of Human Resources 000411 cl 0032326 ATTACHMENT D MARCH 2000 CLASS DESCRIPTION CITY OF PALO ALTO FLSA: EXEMPT SENIOR PROJECT MANAGER REPORTS TO: SUPERVISES: DEFINITION: Assistant Director of Public Works/City Engineer Professional and technical level engineering staff, contractors and consultants Performs management and overall coordination for planning and preliminary design of capital improvement projects. Develops new capital project proposals based on a need identified in the community. Manages development of the architectural style of new public facilities to ensure compatibility with the project’s surroundings and community expectations for high quality architectural design. Takes a lead role in completing the City review and approval process for capital projects. Responsibilities include supervising and coordinating feasibility studies, preparation of project budgets, developing project schedules, and managing public outreach programs. The position involves the preparation of technical reports and making presentations before City Council, citizens groups, and appointed boards and commissions. Prepares written reports and correspondence to City Council, other government agencies, consultants and contrac.tors. Administers contracts for predesign studies, design, and construction of capital improvements. ESSENTIAL AND RELATED FUNCTION STATEMENTs - Essential and other important responsibilities and duties may include, but are not limited to, the following: Essential Functions: Develops and implements architectural design standards for public facilities such as street lighting, decorative pavements, and median hardscaping. Through the public review process, has the ability to reflect community input in the design of public facilities. Supervises the preparation of feasibility studies and the preliminary design phase of capital improvement projects being conducted by outside consultants or City staff. Coordinates capital projects with City staff, design professionals, other government agencies, and members of the public. Represents the Department and makes presentations at public meetings of the City Council and various appointed boards and commissions of the City. Prepares and supervises the preparation of environmental documents in accordance with the California Environmental Quality Act. Provides technical direction, training and support to other division professionals and City departments. Develops and supervises the preparation of capital project budgets and schedules. Supervises professional engineering and technical staff members. Manages and negotiates contracts with architects, engineering firms and other professional consultants. Develops project altematives and evaluates options considering aesthetic, financial, environmental and community impacts. Serves as the City’s project manager during the design and construction phase of capital improvement projects. Related Functions: Acts in the capacity of the Assistant Director of Public Works/City Engineer in his/her absence. MINIMUM QUALIFICATIONS: Sufficient education, training and/or experience to demonstrate possession of the following knowledge, skills and abilities, which would typically be acquired through: Four-year degree in Architecture, Architectural Engineering, Civil Engineering or a closely related field (a masters degree is desirable but not required). and Four years experience as a design professional or project manager for capital improvement projects, with at least two years experience in completing feasibility and predesign studies for public facilities. and Registration as a professional architect or engineer in the state of California, or the ability to obtain registration through reciprocity within one year of appointment. Knowledge, Skills and Abilities: Knowledge of project management techniques for feasibility studies, design, and construction projects. Ability to effectively manage consultants including scope development and contract negotiations. Skill in developing the architectural design elements of public facilities so that projects meet the needs of stakeholders including community groups, appointed boards and commissions, and the City Council. Ability to work independently with a variety of internal and external customers. Skill in planning and facilitating meetings of community groups. Effective oral and written communication skills, including the ability to make presentations in a public meeting setting. Ability to make sound decisions in a manner consistent with essential job functions. Skill in developing realistic project schedules and cost estimates. Management skills including the ability to organize, prioritize, and evaluate work, as well as the ability to supervise and direct staff. Knowledge of city land use planning procedures including environmental reviews under CEQA. WORKING CONDITIONS: Regular field work is required to assess construction sites and to evaluate environmental conditions. Work in an office environment; sustained posture in a seated position for prolonged periods of time. ATTACHMENT E 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: SUBJECT: DECEMBER 13, 1999 CMR:406:99 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 staffing 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 staffmg resources needed to accomplish IMP projects are spread among three groups; the Community Services Department, the Public Works Facilities Management 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 staff members. CMR:406:99 Page 2 of 13 RECOMMENDATION Staff recommends that the Finance C~mmittee: 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) n~w FTE to begin implementation of the City’s Infrastructure Management Plan. 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:191:98). 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 methodo.logy, 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 ftrm, 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 devotedto a project. These include, for exarnpl¢, 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 staffing 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 staffing needs will be conducted. While it is anticipated that the initial study and planning for a new 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’ staffing 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 12alifomia 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 of Parks 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, Co .rnmunity 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 staffing 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 staff’mg are displayed. As staled above, the expected productivity ratio of $950,000 per productive FTE was used to determine necessary staffing levels. At the bottom of each table, the expected capital/infrastructure expenditures per productive FTE are shown. The augmented staffing recommended 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 Community Services Community Services TOTAL 1.0 1.0 1.0 6.5 Program Manager Engineer/Landscape Architect Clerical 95,000 95,000 58,000 $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 staffing 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 define, plan and transmit projects to the other Engineering staff. As the 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.t.imely 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 fmancial 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 up.on 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. Ir~ 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 leade~rship 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 ntimber 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. Witl~ 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 apecific 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-def’med 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 fmalized. 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 IMP. 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 Community Services Total Proposed IMP Staff 1.0 FTE 1.0 Clerical 1.0 Project Manager 1.0 Engineer/Landscape Architect 5.5 FTE Establishment of Performance Measures to Monitor Completion of Capital Work A critical piece of the IMP is the estabfishment 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 staffwill 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 staffing 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 staffing 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 staffing 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 Staff will 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 staff’mg does not require California Environmental Quality Act (CEQA) review. Individual projects, 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 JosephSaccio, Manager Investments and Debt, Administrative Services DEPARTMENT HEAD: DEPARTMENT HEAD: CITY MANAGER APPROVAL: CARI/ggEATS Dir,~tor, Administrative Services 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 Rese~e [] Increased Taxes [] Augmented CIP Funding ATTACHMENTB 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 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 want to 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. Very/~ruly yours, Bla~)~ & Veatch and Y flake Boornhouwer ~/Regional Manager TA’BLE OF CONTENTS II. III. INTRODUCTION/S COPE A. Background B. Scope of Staffing 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 Staffing Recommendation 3. Administrative Services Staffing Recommendation 4. $95 Million IMP Program 5. Cost Impact to City C. PROCESS RECOMMENDATION Overview 1.The Project Process 2.Definition 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 BENCHMARKING ANALYSIS 1 1 1 2 5 6 7 7 7 7 9 13 15 16 16 17 17 24 17 18 19 19 20 21 22 22 23 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 and Staffing 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 ]MP/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 ManagementStaffing 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 staff’nag 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. Theprimary 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 recommendati.ons 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) II. 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 staffing; 2. 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 for 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 CIP 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 benchrnarked 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 benchrnarked cities. Table 1 shows that the City’s 1997-98 .staffing cost as a percent of C~ 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. oty Corvallis Davis Mountain View SarrtaCruz Santa Clam Palo Alto TABLE 1 COMPARATIVE 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 ANALYSIS Number d Employees Dedicated ta CIP FIE 6.31 7.32 14.28 2.78 11.90 ¯ 3.50 Percentage of CIP % 5.64% 9.87% 5.25% 7.20% 5.57% 9.60% CIPPer Employee $ 897,CC~ 1,410,00~ 838,00~ 1,293,00~ 921,00~ In estimating the Full Time Equivalent employees (F’rEs) 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. HI. CURRENT STAFFING ANALYSIS Table 2 below provides a summary of new and completed CIP projects for fisc~ 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 CIP $6,716,236 $5,820,970 $3,118,000 Completed CIP $2,248,000 $2,444,303 $3,011,616 Changein 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 CIP Related Non-Prqiect Related Vacation, Holiday, Sick Leave ANNUAL TOTAL Estimated Annual Hours 1,448 320 312 2,080 Percent of Total Staff Time 70% 15% 15% 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 replaceme.nt capital projects within the City. The Division also m .anages all landfill related capital projects. B.COMMUNITY 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 CiW’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 (Project 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-b’rI’E. 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 in the duration and complexity of the C~/IMP projects and consequen~ 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 staffing needs. This ratio of $950,000/CIP-FFE is a key quantitative factor that was used to calculate FIE staffing required for future infrastmcture 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 first 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 FrE 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 turnover 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 KI (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-I:rI’E 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 FIE 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 Management Staffing 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-FTE 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 engineering 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 i~unctions. Examples of the KSAs required for the City’s capital project process incJude: 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 Ill (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 majoi: responsibilities for the Senior Project Manager position will be to: o Develop and manage the concept level project management activities of large scale or complex projects; Help to define 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: o 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 $1 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 CIP/IMP 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 phaseof the Civic Center project. In fiscal year 2003-04 due to the construction phase of the Cultural Center project the workload per FTE 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, beyon~l 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 !ack 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 Recommendations 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 scale can be achieved in terms of management of design and construction, existing staff should be able to execute the higher dollar volume of ]:NIP 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 IMP 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 a4a. d 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 need~ 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 ICOMMUNITY SERVICES! ~EXECUTIVE IMP Program Manager ~Professlonal Englneer/ Landscape Architect 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 FTE 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 CIP/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 staffing 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 City 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/IMP, 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 - Engineering: 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 filling the Engineer position in the Engineering Division with an Assistant or Associate Engineer. Indirect IMP Cost Impact: The recommended clerical positions provide administrative support for the IMP. The projected indirect cost is as follows-: One Clerical Position for Community Services - $55,000 .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 (Planning 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 an’d guide them through the project definition phase. This person will also help def’me 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 (pede.strian/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 fm’n 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 ale best suited, while relying on the Project 18 City of Palo Alto Capital andinfrastructure 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 considerable 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 engineer~ 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 Review 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 bei.ng 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 ffs 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 CIP 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 firm 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 run 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 & Fumishings 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 divisions 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 staff’mg. There may be alternative ways to fund some or part of these positions arid 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 $74 million IMP program. 24 TABLE 3 INFRASTRUCTURE AND CAPITAL MANAGEMENT PROGRAM Projected Expenditures and Staffing Requirements (ENGINEERING) Projected Capital & Infrastructure Project Expenditures Description Of Workload ~~ ~ ~ 20_03z[L4 ($~,000)($~,000) ($~,000) ($~,000) ($~,000) 1,870 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 1,970 1,870 181 780 57 229 117 2,628 1265 502 1145 125 5,665 2,208 1000 501 1145 125 2,996 1000 501 125 4,979 4,6221 468 204 2,542 1000 501 125 4,168 1,870 818i 2,688 1000 501 125 4,314 CAtrrent Staffin~ 2 Senior Engineers Engineer 2 Assistant Engineers Technician Subtotal of Current Staffing Recommended Incremental Staffing_Lid 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 1.4 1.4 1.4 0.7 0.7 0.7 0.7 1.4 1.4 1.4 1.4 0.7 0.7 0.7 0.7 4.2 4.2 4.2 4.2 0.5 0.5 0.5 0.5 0.7 0.71 0.7 0.7 1.2 1.2 1.2 1.2 1.2 5.4 $1,049 5.4 5.4 5.4 5.4 $922 $856 $772 $7991 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 - Infrastructure Work Total - Ongoing Capital Projects Total - Prior Year Capital Projects Total Project Expenditures ,ooo) 528 3?5 404 1,307 ,ooo) 903 3O0 404 1,607 ,ooo) 2,868 2,868 2002-03 ,ooo) 991 300 1,291 ,ooo) 2,087 300 2,387 Facilities Manager Supervisor,’ Facilities Projects Manager Engineering Technician Subtotal of Current Staffing Recommended Incrementa~ Engineer Incremental Staffing Recommended Total Capital/Infrastructure Staffing 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 0.43 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 1. It is assumed that a productivity factor of 0.75 FTE will be devoted exclusively to capital projects by the recommended incremental staff. 0.75 1.78 $1,341 Infrastructure and Capital Management Staffing Plan (Facilities) TABLE 5 INFRASTRUCTURE AND CAPITAL MANAGEMENT PROGRAM Projected Expenditures and Staffing Requirements (OPERATIONS) Projected Capital & Infrastructure Project Expenditures Description Of Workload Total - Infrasmacture Work Total Prqiect Expenditures ,ooo) 1,353 1,353 ,ooo) 1,353 1,353 2001-02 ($~,ooo) 1,353 1,353 ($~,ooo) !,353 1,353 ($~ ,ooo) 1,353 1.353 Current Staffin~ Subtotal of Current Staffing 2 Technicians !Recommended Staffing Upgrade (I) 2 Assistant Engineers i Total Capital/Infrastructure Staff’mg Capital/Infrastructure Expenditures Per CIP-FTE 1.4( 1.40 $966 1.40 1.40 1.4(1.4C 1.40 1.40i 1.40 1.40 1.40 1.40 $966 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 $9661 Infrastructure and Capital Management Staffing Plan (Operations) TABLE 6 INFRASTRUCTURE AND CAPITAL MANAGEMENT PROGRAM Projected Expenditures and Staffing Requirements (COMMUNITY SERVICES) Projected Capital & Infrastructure Project Expenditures Description Of Workload 1999-00 ~20_Q.l:.02 ~~ ($~,ooo)($,~,ooo)($~,ooo)($~,ooo)($~,ooo) 1,462 1,462 1,462 1,462 1,462Total - Infrastructure Work 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 1.40 $1,044 0.70 0.70 1.40 1.40 $1,0441 0.70 0.70 1.40 1.40 $1,044[ 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) O000000000000000C0000~0~0000000~ 0000000000000000 0000000000000000~0000000000000000 oo 0000000000000000 "~ 0 O00000000iO000000~ ~~~°°°°°°° ~°°RRI o LU>, ~ ÷ ~ 0 r- ~ooooo __. 2 ~× 0000 ~0000--0000 i!1r- n- O e- + ~ 88~888 ooooooooo 0 0 Oi 0 0 0 0 0 0 0 0 8 8 8 8 o° 8 8 8 8 8 8 8 8 8o,° "’8 o o 0 E ~ o 0 = ~ × o r" o "o o 0 0 o 0 " 3 g. 8 g. g ~ 0 0= ~ × 0 0 0 0~qqqq ~gggg o.9. e" o ~ ~,.- ~ a~ OoO g ° ~18 (:3 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 Cavall0 (Project Manager), the project’s final objectives and scope, work plan, deliverables, schedule, and milestones. We reviewed existing 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 (Staffing 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/staffing 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 findings. 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 Interviewee Name:, Position:Department: Telephone:Facsimile:.E-Mail: Interviewer 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 a review 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 is your role in your Department’s capital and IMP planning and management process? What should it be? 2.Discuss your current 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. Geographic 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 first obtained. Then the CIP labor dollars or labor hours were used to determine the FIE CIP staffing. Finally the volume of 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 personnel cost in terms of either salaries or salaries and benefits charged towards CIP work. The following steps were used in determining FIE dedicated to CIP work. Step 1:The CIP personnel costs were In’st 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 FIE 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 FTE 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 b-rrE was calculated by dividing the total non-utility related CIP expenditure by the FTE 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 Standardize 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 Establish measures to control scope creep Establish project management training Action Plan Hire Sr. Project Manager; Department Lead Public Works Admin Services Public Works Public Works Hunlan Resources Public Works/ Community Services Publi~ Works/ Admin Services Timing 2000 mid 2000 1999-00 3 months 2000-01 2000-01 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 Develop criteria to identify material scope increases; establish approval process before . scope increase is accepted 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 1999-00