MEETING DATE: June 02, 2015
AGENDA ITEM #10
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AGENDA ITEM: Resolution Authorizing the Interim City Manager to Finalize Negotiations and Execute an Agreement with 4Leaf, Inc. for Building Department Support Services.
MEETING DATE: June 2, 2015
PREPARED BY: Randy Hatch, Contract City Planner
REVIEWED BY: Odi Ortiz, Interim City Manager
1. Provide Direction Regarding Desired Staffing Levels for Building Department Support Services; and
2. Adopt Resolution 2015-_ Authorizing the Interim City Manager to Finalize Negotiations and Execute an Agreement with 4Leaf, Inc. for Building Department Support Services.
The City has been providing Building Department Services (plan checking, building inspection, code enforcement) via a contract provider since at least 2003.
The most recent Building Department Contract Support Services Agreement was entered into August 2011 with West Coast Code Consultants, Inc., (WC3). The term of that Agreement was for three years and the City and WC3 have been operating on a month-to-month basis since the expiration of that term.
The initial work schedule for WC3 provided a building inspector/code enforcement officer four days per week (32 hrs) and a building permit technician five days per week (40 hrs).
Subsequently, hours for the building inspector/code enforcement officer were increased to five days per week (40 hrs). Initial WC3 contract guaranteed hourly rates through June 30, 2012.
In preparation for this item, City staff reviewed current contract materials and billings from WC3. Staff noticed that the hourly rate schedule for the WC3 Contract only provided rates up to June 30, 2012. There was no indication of what happened after June 30, 2012.
Although there was no guidance in the agreement, WC3 increased their hourly rates in October 2012 in both positions as follows: Inspector/Code Enforcement Officer from $65.09 to $66.51 and Permit Technician from $31.53 to $35.79; most likely through a cost of living increase.
In December 2014, WC3 submitted a request for an increase in the hourly rate for Building Services provided. As part of the mid-year budget review in February 2015, staff analyzed the projected costs of providing Building Services by newly hired City staff (in-house) compared to continuing to use contract staff (outsourcing).
The City Council directed staff to continue to provide Building Services through contract staff and to proceed with a Request for Proposals (RFP). Staff felt it was prudent to review the whole arrangement and determine what contract staff options currently exist for the City.
Accordingly, staff issued a Request for Proposals (RFP) for building permit plan review and field inspection services. The RFP had a release date of March 13, 2015 with a submittal deadline of April 14, 2015, by 5:00 p.m. The City sent the RFP to 14 firms that provide contract building services, posted the RFP on the City website, and otherwise sought and tried to make it known to interested firms that the City was seeking proposals. The City received five proposals by the deadline and one proposal after the deadline (WC3).
Although WC3 submitted their proposal past the deadline, City staff decided to still review the proposal to give the City Council the option to consider it.
The Interim City Manager and Contract City Planner performed an initial screening and selected four firms for further consideration based on the above criteria of cost, flexibility, and quality of service. These four firms are: 4Leaf, Inc., CSG Consultants, Inc., Interwest Consulting Group, and WC3.
These firms were invited to appear before an interview panel consisting of the Interim City Manager, the Contract City Planner, and the Contract City Engineer. During the interview, each firm was given an opportunity to present and elaborate on their written proposal. The panel then took turns asking each firm the same 16 questions.
In the evaluation of the four firms interviewed, staff was guided by the criteria of cost, flexibility, and quality of service.
After the interviews, staff prepared a cost review (see Attached table Exhibit A). Costs fall into three general groupings: 1) hourly costs for the provided Building Inspector/Code Enforcement Officer and for the Building Permit Technician; 2) building permit plan check fees; and 3) costs associated with building permit and plan checking software.
The costs listed within the attached table are based on the hourly rates, plan check fee percentages, and the software charges provided within the written proposals or communications staff had for clarification purposes after the interview with the firm’s authorized representative.
Staff felt that no one firm seems to have a clear cost advantage when all aspects of cost are considered.
The most important contributor to overall costs to the City is the hours worked for the Building Inspector/Code Enforcement Officer and Building Permit Technician. The costs associated with performing these primary functions are estimated to be around 80-85% of the annual contract costs.
These costs are directly paid to the contractor by the City and come from a combination of the building permit fee revenue collected by the City when building permits are filed for new construction or remodeling, and/or a portion of annual cost is subsidized by the City’s General Fund (see associated revenues vs. department costs from 2007-2016 Exhibit C).
Building permit plan check fees are paid to the contractor as a percentage of plan check fees collected by the City from the applicant when they file a set of plans. Plan check fees represent roughly 15% of overall Building Department costs. These fees are fully covered by plan check fees collected.
As shown on the attached table, the percentage of fees retained by the Contractor firms varies from 75% to 50%. While important, staff s analysis shows that Plan Check costs are not a driving factor in cost concerns. The last cost shown on the attached table is building software costs. No Firm, except WC3, identified any costs to the City associated with building permit submittal and tracking software. In an email subsequent to the interview, WC3 indicated their willingness to waive these costs.
Recognizing that hourly costs for the contract Building Inspector/Code Enforcement Officer and Building Permit Technician were of importance, the interview panel asked questions of all the firms on their ability and willingness to be flexible in the hours worked (up or down) to match the work flow. The worst thing that can happen under a contract for these types of services is to lock the City into a certain level of staffing and later find out that the needs are less than what was expected.
4Leaf, CSG and Interwest all indicated a willingness and, indeed, a history of matching hours provided by contract staff to a city’s work flow needs. WC3 indicated a willingness to consider, but indicated to the panel they had not done so for past or current city clients.
Due to budgetary constraints, in the last few years, City management has personally approached WC3 principals with needs and with alternatives to minimize the financial economic challenges. City management has considered a reduced work schedule based on City needs and development activity and has assisted WC3 in reaching out to surrounding cities in efforts to accommodate/"share" WC3 staff with other municipalities and eventually share the service cost. WC3 has assisted with these cost saving efforts by participating in City’s monthly furlough schedules. These furlough days have varied from position from 1, 2, or 3 furloughs per month over the last several years.
Quality of service:
Included as part of the interview, the panel asked questions to determine each firm’s quality of service. Clues to their quality of service also were revealed during each firm’s overall presentation. While a more subjective criterion than cost or flexibility, the panel felt that 4Leaf and CSG would provide a high quality of service with Interwest close behind.
These consultants provide great staffing options and all have implemented and used software application (automation) to assist in managing and tracking plan checks and related activity, therefore, enhancing our current level of services. Management also expects higher participation from consultants with internal and external reporting.
After the interviews, the panel discussed the four firms and their performance among the three criteria discussed above. It was the unanimous ranking of the panel that 4Leaf was the top firm with CGS a close second.
Staff has been checking references on 4Leaf. The cities of Hollister, Turlock and Palo Alto have been contacted and provided very positive references. Hollister is most similar to Livingston in terms of building service needs in that 4Leaf provides the whole building department. The City Manager of Hollister noted 4Leaf s flexibility to expand up or down to respond to their work flow needs. Palo Alto’s experience with 4Leaf is also relevant to the services sought by Livingston in that not only does 4Leaf provide Plan Checking but also Building Inspection and Permit Technician services. In Turlock, 4Leaf provides Plan Checking and on-call inspection services. Staff has reached out to Roseville, where 4Leaf provides two in-house building inspectors and two plan checkers, but did not receive a response as of the writing of this Report.
Based upon the discussion above and the reference checks, staff recommends the City enter into an Agreement with 4Leaf, Inc. to provide Building Services to Livingston including Plan Checking, in-house Building Inspector/Code Enforcement Officer and Building Permit Technician.
Based on the current level and volume of building activity and activity in the foreseeable future, staff recommends that the Building Inspector/Code Enforcement Officer be provided at three days, 24 hours per week.
To provide good customer service, staff recommends that the Building Permit Technician be provided five days, 40 hours per week and be able to answer simple building related questions that would assist a homeowner, landlord, or small business owner with very minor non-structural repairs or additions.
A key component of this recommendation is the ability and practice of 4Leaf to expand or contract services in order to respond to changes over time in the amount and complexity of building and construction activity.
The last five years’ cost has ranged from $153,000 to current year at a projected cost of $185,000. See Exhibit B/Ba for possible scenarios/alternative on the Inspector/Code Enforcement Officer and Exhibit B 1 for possible scenarios/alternatives on the Permit Technician.
1. Resolution 2015-
2. 4Leaf Proposal includes scope of work
3. Exhibit A – Compensation/Hourly Rates Schedule from Proposals Received
4. Exhibits B, Ba and B 1 – Inspector/Code Enforcement Officer and Permit Technician/Customer Service Work Schedule Alternatives to Consider
5. Exhibit C -2007-2016 General Fund Building Activity Review
RESOLUTION NO. 2015-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LIVINGSTON AUTHORIZING THE INTERIM CITY MANAGER TO FINALIZE NEGOTIATIONS AND EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH 4LEAF, INC. FOR BUILDING DEPARTMENT SUPPORT SERVICES