HomeMy WebLinkAbout082007 Work Session
PREPARED BY:
DIRECTIVE:
DISCUSSION:
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ISSUES:
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4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL DIRECTIVE REPORT
STEVE ALBRECHT, DIRECTOR OF PUBLIC WORKS
CONSULTANT UTILIZATION FOR CITY PROJECTS
Introduction
The purpose of this report is to provide additional information to the City
Council regarding the use of Engineering Consultants for City Projects.
Historv
On February 20, 2007 the City Council directed staff to provide additional
information regarding the pros and cons of utilizing engineering consultants to
complete City Projects during the budget process. Councilor's Hedberg and
Millar requested additional information regarding whether additional staff
should be hired vs. utilizing Consultants to complete City Projects.
Current Circumstances
Attached to this report is Figure No. 1 which shows the estimated hours of
Consultant time contracted by the City for the period from 2004 to 2008 for
Engineering Services. Estimates based on current workloads and the Capital
Improvement Program were utilized for the remainder of 2007 and for 2008.
Please note this does not include survey, testing or advanced engineering
services that are not practical for the City to complete in-house. The number of
consultant hours utilized is the City has steadily declined from over 6,000 in
2004 to just over 2,000 in 2007 and is estimated to drop below 2,000 for the
first time in recently in 2008. This trend is partially related to the decline in
development activity. Development activity in a moderately busy year can
equate to more than 3,000 hours of consultant service time.. Funding for these
services comes from a variety of sources including the Trunk Reserve, Utility
and General Fund. Additionally all development driven services are passed
through dollar for dollar to developers at no cost to the City.
In 2007 the City secured consultant services for Development Construction
Observation and the Commerce Avenue and Industrial Park Feasibility
Studies. These services could have been completed in house had the City
had additional staff. Consultant services for the Water Treatment Facility,
150th Street Study, Non-deg Report, surveying and testing were not included
as specialty equipment and staff are required for these services.
The question posed by Councilors at February 20th meeting was regarding the
benefit of completing engineering work in house.
In order for the City to complete additional services in-house additional staff
would need to be added. A minimum of one Asst. City Engineer level
employee and one Field Technician would need to be added. The estimated
cost to add this staff is $200,000. Figure No.2 shows the costs to the City
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FINANCIAL
IMPACT:
CONCLUSION:
General Fund for these additional staff over the five year analysis period. The .
cost analysis takes into account funding from the non-general fund sources
such as the Trunk Reserve, Utility Fund and Development Fees. As Figure
NO.2 shows that these positions would have had zero additional cost to the
general fund from 2004 through 2006. However as can be seen in 2007 and
2008 an additional budget increase of $30,000 and $60,000 would be needed
to fund the positions. This is due in most part to the slow down of
development. Should the slow down continue this amount could approach
$100,000 in 2009.
The following table shows the pros and cons of adding additional staff to
minimize the use of consultant services.
Pros
Allows better control of quality and
customer service
Reduces overall costs to trunk/utility
funds and developers by reducing
hourly rates. For example the cost
of field construction inspection would
be approximately $40/hour
compared to more than $75/hour as
currentl rovided b a consultant
Would allow the City to catch up on
back log of engineering/public works
work.
Cons
Increases management
responsibility and impacts HR and
Finance Staff levels otentiall
Less flexibility as work loads need to
be managed and may result in
delays to completing projects and
studies.
Will result in additional tax levy
funding in years when development
is down estimated to be as much as
$100,000.
Consultants will still be needed
durin eak work loads.
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In years when development activity is low the City General Fund will need to
subsidize the costs of additional staff. While development fees and fund
contributions would cover a portion of the staffing costs funding shortfalls
would have occurred in 2007 and continued in 2008. This subsidy would
approach $100,000 by 2009 should current trends continue.
City Staff believes the current practice of utilizing consultants to manage
workloads and peaks is appropriate. This practice allows the City to reduce
overall costs to the residents by only adding staff when a permanent need is
established. Staff also believes that the current Consultants the City utilizes
provide high quality customer service to our residents.
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