CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: February 11, 2009
SUBJECT/TITLE: Discussion of Local Economic Emergency Fast Tracking Program for Public Sector Projects
TARGET ISSUE: Financial Viability of the Government
STATEMENT OF ISSUE
The dire state of the economy has created the need for decisive action to stimulate the construction industry and job creation within our community. In response to the direction from the Financial Viability of the Government Target Issue Committee, staff has developed a proposed Local Economic Emergency Fast Tracking Program for all public sector projects. The goal of the program is to stimulate our local economy by creating jobs while also developing a streamlined regulatory program that facilitates construction of needed public sector projects. The proposed stimulus package includes both permitting and procurement components. This agenda item identifies the recommendations related to permitting and procurement. If adopted, staff will provide a six-month report to the Commission to evaluate the effectiveness of the program and determine which portions may be applicable to the private sector.
RECOMMENDED ACTION
Option 1: Adopt staff recommendations 1 through 7.
FISCAL IMPACT
This program would help stimulate the construction industry and provide jobs in our local community. Funding for most of the projects is already programmed into our Capital Improvement Program. The Program would also enhance our ability to implement any projects that may be funded under the Federal Stimulus Program.
Jim English, Legal
Anita Favors Thompson, City Manager
For information, please contact: Jim English X8554
SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES
In response to direction received from the Financial Viability of the Government Target Issue Committee, staff has developed a proposed “Local Economic Emergency Fast Tracking Program for Public Sector Projects.” The program is designed to minimize the time between project design and “turning dirt” on a public sector project site. Because there are many steps that take place between a project’s inception and its ultimate completion, staff assembled a multi-departmental staff team to identify the existing City processes, policies, and ordinances that serve as barriers to “fast tracking” public sector projects through the system. Once the list of impediments was developed, staff identified potential solutions for overcoming these barriers. The recommended solutions have been assembled into the proposed “Local Economic Emergency Fast Tracking Program for Public Sector Projects.”
Realizing that the permitting process is only one of a number of steps in project development, staff reviewed not only the efficiencies that could be saved in permitting, but also in the procurement, design, and construction phases of a project. The team members identified a number of creative ideas that could help “jump start” projects and put people to work in our community. Many of the issues identified related to procurement (Requests for Proposals (RFP’s), contractor selection, consultant selection, and grievance processes) and permitting. Based upon the ideas generated, staff has prepared a “Local Economic Emergency Fast Tracking Program for Public Sector Projects.” The overall program includes recommendations for streamlining permitting and procurement policies.
In addition to the proposed program for public sector projects, staff has already begun contacting members of the development community in an effort to solicit feedback on how we can improve development review for private sector projects. As the proposed public sector program is further developed and implemented, we will be better able to determine which aspects of the program may be applicable to the private sector.
LOCAL ECONOMIC EMERGENCY FAST TRACKING PROGRAM FOR PUBLIC SECTOR PROJECTS
PERMITTING
For purposes of the proposed program, the term “fast track project” is defined as all projects initiated by the City of Tallahassee, Leon County, Leon County School Board, Blueprint, State of Florida, and the Federal Government. Under the proposed program, public sector projects (City of Tallahassee, Leon County, Leon County School Board, Blueprint, State of Florida, and the Federal Government, but not to include special districts or Community Development Districts) would be required to meet the requirements of the City’s Land Development Regulations, but “formal” permitting would not be required. Instead, Growth Management would assign staff to these capital projects at the earliest point in the design stage of a project. By being involved from the inception of the project, Growth Management staff can serve in an advisory capacity to the project manager (Public Works, Stormwater, Utilities, Blueprint, etc.) so that the project can be designed to comply with the requirements of the Land Development Regulations. This team approach would eliminate the back and forth comments-resubmittal cycle that is inherent in the current multi-step process.
It is important to note that while a higher level of coordination will help to reduce project delays to some degree, the vast majority of the permitting portion of time delays can be attributed to the difficulty in achieving compliance with the City’s local regulations. The City’s regulations are more restrictive than the State’s with regard to the 14 conservation and preservation features and stormwater requirements. For example, while the State may not claim jurisdiction over an unaltered wetland, the City would require a conservation easement over the entire feature. Similarly, while FEMA places constraints on how development in floodplains can occur (flood proofing, minimum finished floor elevations, etc.), the City’s regulations prohibit development in an unaltered floodplain (as defined by the City). The City’s regulations also limit development in altered floodplains. Unless the City’s local regulations are modified to be less restrictive, the reduction in permitting time will be negligible. Furthermore, it is important to note that full compliance with State and Federal regulations will always be required. Specifically, permitting through the Water Management District, the Florida Department of Environmental Protection (FDEP), and all other State and Federal Regulations will still be necessary.
Based upon the feedback received at the February 2nd retreat, the recommendations included in this agenda item are predicated on the Commission’s goal of reducing permitting time to the greatest extent feasible while also maintaining our existing environmental community standards (e.g. conservation and preservation features, stormwater, tree debits and credits). Staff has developed the recommendations outlined below in an effort to further the Commission’s stated goals.
The first recommendation is to adopt Ordinance No. 09-O-13 (attachment 1) to allow public sector projects to be reviewed under the proposed fast-track process that requires compliance with the Land Development Code but does not require formal applications and/or permits. Staff recommends the following review process for projects under the proposed fast tracking program:
Establish the Project Team. The department sponsoring the public sector project will contact Growth Management (and any other department from which participation is needed) to request that a liaison be assigned to the project to advise the design team on regulatory issues.
Capital Improvements Plan (CIP). The department proposing the project will coordinate with the Planning Department to ensure that the project is included in the CIP if it impacts a level of service standard in the Comprehensive Plan. If it is not included in the CIP, the sponsoring department will need to coordinate with the Planning Department to have the project added to the CIP, if applicable.
Zoning Authorization. The department proposing the project will send an e-mail to Growth Management outlining the use and intensity of the project so that zoning staff can verify that the proposed project is allowable in the zoning district. As it relates to site plan requirements, staff will continue to work with Legal to develop a proposed fast track procedure.
Natural Features Inventory/Environmental Impact Analysis. The department sponsoring the project will ensure that a Natural Features Inventory (NFI) and, where applicable, Environmental Impact Analysis (EIA) are completed for the project. The NFI and EIA will not be submitted to Growth Management as formal applications but will be made available to the Growth Management liaison to ensure compliance with all environmental regulations.
Continuing Coordination and Review. The multi-departmental team will continue to review and coordinate as needed throughout the design of the project. Once design is complete, a Growth Management inspector will be assigned to monitor that construction is occurring in accordance with the approved design documents. When changes occur in the field, the inspector will coordinate with the design engineer and the Growth Management staff liaison to ensure that the changes are acceptable and that they are properly reflected in the design documents. Upon completion of the project, as-built drawings will be submitted to the Growth Management inspector for final validation.
Fees. Growth Management will collect all appropriate fees as established in the fee resolution (even though a formal permit application will not be processed). This will help to offset the costs associated with Growth Management staff’s participation in the design and inspection of the project.
The second recommendation relates to the review thresholds for public sector linear infrastructure variances. Based upon past experience, it is not uncommon for public infrastructure projects to necessitate variances for impacts to conservation and preservation features. Currently, the Land Development Code grants the City Manager authority to consider linear infrastructure variances for projects that contain up to two acres of development activity. When more than two acres of development activity is proposed, City Commission review is required. Staff has historically interpreted “development activity” to refer only to the disturbed area within the conservation or preservation feature. In an effort to streamline the process, staff recommends the adoption of Ordinance No. 09-O-13 (attachment 1) to remove the two-acre limitation and authorize the City Manager to approve all public sector linear infrastructure variance applications. This would enhance the efficiency of the linear infrastructure variance process by eliminating the time delays associated with the current process, which requires an agenda item to be scheduled at least two to three weeks in advance of the meeting. In addition to efficiency gains, this process is beneficial from the perspective that it maintains the City’s high environmental community standards. The proposed change would streamline the process for linear infrastructure variance review while still requiring that the applicant demonstrate a “net environmental benefit” in order to obtain approval.
The third recommendation relates to giving the City Manager approval authority for environmental variances. It is important to note that the linear infrastructure variance process can only be used to provide relief from conservation and preservation feature requirements. There are numerous local environmental requirements that do not fall under the umbrella of conservation and preservation features such as stormwater, tree debits and credits, urban forest, and landscaping. While the recommendations above provide opportunities for streamlining the linear infrastructure variance process, it is important to note that this process cannot be used to vary the remaining elements of Chapter 5 (Environmental Management) of the Land Development Code (LDC). The Environmental Variance Board is the entity with the authority to consider variances to Chapter 5 of the LDC. Since the Board meets only on a monthly basis, staff recommends that the Commission adopt Ordinance No. 09-O-13 (attachment 1) to shift the approval authority for environmental variances (for public sector projects only) from the Environmental Variance Board to the City Manager. Again, this would eliminate delays due to scheduling, circulation of agenda items, and lack of board quorums.
The fourth recommendation relates to defining the methods of acceptable mitigation necessary to demonstrate a net environmental benefit for linear infrastructure variances. As mentioned above, linear infrastructure variance applications must demonstrate that approval of the variance would result in a net benefit to the environment. While there is no specific formula for quantifying net environmental benefit, examples of mitigation previously deemed acceptable include preservation of a feature of similar quality on an off-site location, paying into a mitigation bank, and donating funds to the City’s tree replanting fund. Defining the appropriate form and extent of mitigation necessary to achieve a net environmental benefit can be a time consuming process. To further the City’s goal of streamlining the permitting process, staff recommends that the Commission establish that allocating a defined percentage of the total project cost to an environmental fund (to be used for purchasing environmentally sensitive lands or any other defined environmental project approved by the City Commission) will constitute sufficient mitigation to demonstrate a net environmental benefit. This approach helps to streamline the process in several ways. First, it eliminates the “back and forth” that typically occurs when trying to define what constitutes a net environmental benefit for a specific project. Second, it allows the City Manager or the City Commission (depending on which the acreage of impact to conservation and preservation features) to specify the percentage of required mitigation as part of the linear infrastructure variance review based upon factors such as the type and extent of environmental impact. Finally, it ensures that project specific impacts can still be taken into account when determining the extent of mitigation required.
The fifth recommendation is to reduce the cost associated with traffic concurrency. Specifically, staff recommends reducing the fee associated with achieving compliance with traffic concurrency by 50% on all new projects and by 75% on all new projects that meet the commercial redevelopment criteria.
The final recommendation is to direct staff to conduct a preliminary environmental review of each project site included in the “City Funded Capital Projects Identified for Fast Tracking” in order to identify the conservation and preservation features that exist on each site. This will allow staff the opportunity to be proactive in identifying project “stoppers” and, if warranted, begin the preparation of any necessary variance requests.
PROCUREMENT
As indicated during the City Commission Retreat, staff has identified a number of processes related to procurement, contracting, RFP’s, and firm selection that can be streamlined to reduce the average purchasing administration time line. Staff anticipates that the recommendations outlined below will save a tremendous amount of time in the overall construction process.
Continuing Service Agreements. Staff recommends suspending all Continuing Service Agreement (CSA) fee thresholds as provided for in Purchasing Policy 242CP (Appendix B) for fast track projects under the proposed program and authorize the City Manager or designee to extend all existing CSA contracts currently in effect for two additional years. Current CSA fee thresholds range from $25,000 for non-architecture and engineering services to $300,000 for stormwater, roadway, water & sewer and electrical engineering. Suspending CSA fee thresholds will allow staff to utilize CSA contracts to select a pre-qualified firm and quickly start the proposed project. This change could save approximately three months time, as staff would not be required to issue a formal request for proposal (RFP) for projects where the professional services fees exceed the current thresholds.
Protest Procedures. During economically tough times, vendor protests become more prevalent as work is often limited. The current vendor protest procedures calls for the establishment of a vendor protest committee and implements a stay of procurement from the receipt of a timely protest until the protest is resolved, which averages approximately 30-60 days provided that only one protest is received and no legal investigative work in required. In an effort to avoid unnecessary delays, staff recommends suspending current protest procedures for fast track projects and authorizing the City Manager or designee to review any protests and make a final disposition. Suspending the current protest process for fast tract projects reduces potential project delays, as the City Manager or single designee would be able to resolve an issue quicker than it would take to establish a committee, conduct a protest hearing and render a committee decision.
Develop Standardized Contracts. Contract development can be a lengthy process of back and forth between the City and the selected vendor to establish a document with terms and conditions that are agreeable to both parties. Contracts for construction and professional services are currently developed subsequent to the negotiation phase, which may add an additional 30 days or more to the procurement process. Staff is recommending that Procurement Services work with the Legal Department to develop standardized contract documents for construction and professional services, which includes standard clauses based on the type of services being procured along with general terms and conditions stated in the bid/RFP documents. It is anticipated that the development of standardized contract documents will reduce preparation time, as these documents will jump-start the contract phase leaving only price and specific performance clauses to be developed.
RFP Selection Team Composition. The evaluation process of RFP’s is on average the most lengthy evaluation process in procurement. This timely process is exacerbated by the fact that a committee of cross-functional, cross-departmental team members must conduct the evaluation in a public meeting setting. This requires working with multiple schedules, recording and documenting meeting agendas, minutes and summaries and ensuring that evaluation team members, vendors and any members of the public are accommodated and briefed on their roles and conduct during the open meeting sessions. In an effort to speed up this process staff is recommending that the procurement procedures be modify to allow for RFP's to be evaluated by a single person in lieu of an evaluation team. The evaluator can rely on others to provide factual type input to consider for the evaluation, but he/she would be the only person scoring the RFP submittals. This should speed up the evaluation process that is routinely delayed, due to the open meeting law issues surrounding RFP evaluation committees. It should be noted that per current procurement policies this option is already available for departments to utilize.
Contractor and Design Firm Selection. As the City currently has a number of CSA contracts, it is recommended that the City extend this practice and develop a pool of pre-qualified contractors and design firms that are qualified to perform certain scopes of work that may be utilized in the proposed fast track projects. As currently conducted, firms would be selected on qualifications through a RFP process and departments could also “piggyback” on pre-qualified lists from Blueprint and Leon County. Design work could be assigned to various pre-approved consulting firms, as needed with project cost negotiated on a per project basis. Construction contracts would be bid only between the firms on the list of pre-qualified contractors. Staff also recommends that the City Manager be given the authority to approve an option to select one contractor for a negotiated price, in lieu of a competition, if compelling reasons to do so existed. This process change would save the City a significant amount of time as, most projects would require a separate bidding/RFP process that could take three months or more to complete.
Awarding of Work, Change Order Approvals. Current policy requires the City Commission approve all capital projects, as a part of its annual budget process. Policies also require that the City Commission approve all purchases over $50,000. As many projects include a number of purchases totaling over this amount, progress is often delayed several times during the project’s history awaiting the next scheduled meeting. In an effort to eliminate these delays, staff is recommending that all applicable policies by modified to allow the City Manager to move forward, with respect to contracting/purchasing actions (purchases, contract awards, change orders, etc), without obtaining additional approvals by the City Commission, if the project has been approved in the capital budget. In other words, the City Commission approval of the capital budget would serve as the authorization to move the project forward and the City Manager would be authorized to approve any and all contract actions required to get the job done. This policy change would reduce a significant amount of downtime, allow staff to better coordinate the various jobs included in each project and allow the project move forward at a quicker pace.
Purchasing Authority Thresholds. As reflected in the list of projects identified for inclusion in the fast tracking program, most projects total well beyond $50,000 with less than 15% of the projects totaling less than $100,000. In an effort to effectively complete projects in a timely manner, staff is recommending that the City Commission increase the City Manager’s purchasing authority from $50,000 to $250,000 for all purchasing expenditures. This policy change would make the most immediate and significant progress in improving the timeliness of City procurements. Consistent with this approach, staff recommends that approval thresholds be developed to allow a defined level of authority to be delegated by the City Manager. (Note: All appointed officials currently have the same authority as the City Manager for the procurement of supplies and services within their respective areas of responsibility and may designate their roles and responsibilities as deemed necessary)
Contract Signature Authority. As contract signature authority currently matches the delegated purchasing authority, staff recommends that the contract signature authority be changed to match any changes in the purchasing authority levels. The Procurement Services Manager will continue to execute contracts, contract extensions, and purchase orders that originate through the procurement cycle after the appropriate approval is obtained. This would expedite the contract execution process.
Contractor Release. Under current policies and procedures City departments cannot release a contractor to begin work until the contract documents are fully executed by both the contractor (who typically signs first) and the City. Staff recommends that after an award has been made and proper approvals obtained, departments be allowed to release the contractor to begin work subsequent to receipt of the: (i) acceptable contract documents with the contractor's signature; (ii) an acceptable insurance certificate; and (iii) an acceptable performance bond. This would allow the contractor to begin work while the City is completing its internal process of the contract execution phase and could speed up the start of the project by approximately 30 days.
Local Preference Points. As the intent of the fast tracking program is to stimulate the local construction industry and encourage job creation within our community, it is important to provide local vendors with additional support in obtaining available work. In an effort to achieve this, staff is recommending an increase in the preference provided to local vendors in City purchasing and contracting activities. Staff recommends amending Ordinance No. 99-0-0059, governing local preference in purchasing and contracting, to increase the preference given to local vendors for bids and contracting (for projects identified in the fast tracking program) from 5% for purchases under $250,000, 3% for purchases $250,000 - $500,000 and 2% for purchases over $500,000, to 10% for purchases under $250,000, 5% for purchases $250,000-$500,000 and 3% for purchases over $500,000. Under the current ordinance, the cost differential cannot exceed $25,000. It is recommended that the cost differential should not exceed $50,000 for projects in the fast tracking program. In addition, it is recommended that points allotted to local vendors for City RFP evaluation purposes increase from 10 points to 15 points or 15% of the total points allowed. Staff also recommends that points allotted to firms in the category of Volume of City Work, be reduced from 10 points to 5 points in an effort to continue to award work to local vendors who have provided the City with outstanding work performance on past projects and continue to drive home our objective of stimulating the local community.
MBE Utilization. In an effort to ensure that City certified MBE firms are considered in the award of projects included in the fast tracking program, staff recommends maximize use of existing certified MBE vendors for professional services and/or construction services for fast track projects. This shall be accomplished by allowing only those MBE firms certified at the time of the bid/RFP deadline submittal date to be considered. This should not only elevate the demand for certified MBE firms it will also reduce award time as evaluations will not be awaiting the decision of any pending certifications. In addition, consistent with staff’s recommendation to increase the points allotted for local vendors for RFP evaluation purposes, staff is also recommended that the current MBE preference points be increased from 10 to 15 or 15% of the total points allowed.
Revise or supplement elements of the Real Estate Policy. Implement financial incentives, modeled upon the FDOT and Blueprint 2000 “Incentive Offer” procedure, for selected projects to promote quick settlements; provide support for current Property Management/Real Estate staff with the selective use of consultants, as necessary, to fast track property acquisition; and, exercise the power of eminent domain within the minimum statutory time frames to achieve a “quick take” of real property needed for a public purpose.
STAFF RECOMMENDATION
1. Adopt Ordinance No. 09-O-13 to allow public sector projects to be reviewed under the proposed fast-track process that requires compliance with the Land Development Code but does not require formal applications and permits.
Pros:
Minimizes the paperwork associated with project development.
Creates a collaborative, multi-departmental team review team that facilitates early identification of environmental features so the project can be designed to minimize environmental impacts.Maintains the City’s existing environmental community standards.
Cons:
Overall time savings will be minimal because compliance with all existing local, state and federal regulations (including permitting by the Water Management District and the Department of Environmental Protection (DEP).
2. Adopt Ordinance No. 09-O-13 to remove the two-acre limitation and authorize the City Manager to approve all public sector linear infrastructure variance applications.
Pros:
Enhances the efficiency of the linear infrastructure variance review process.Continues to require a net environmental impact to be demonstrated.
Eliminates the time delays associated with scheduling linear infrastructure variances for City Commission review.
Cons:
Specifically, permitting through the Water Management District, the Department of Environmental Protection (DEP), and all other State and Federal Regulations will still be necessary.
3. Adopt Ordinance No. 09-O-13 to grant the City Manager approval authority for public sector environmental variances.
Pros:
Eliminates the time delays associated with scheduling linear infrastructure variances for Environmental Variance Board review.Cons:
Establishes a different approval authority for public sector environmental variances.
4. Establish that allocating a defined percentage of the total project cost to an environmental fund will constitute sufficient mitigation to demonstrate a net environmental benefit for public sector linear infrastructure variances.
Pros:
Reduces the time associated with determining an appropriate form of mitigation.Provides a funding source for purchasing environmentally sensitive lands.
Cons:
Depending on the number of variances and the amount of mitigation dollars required, it will take time for the fund balance to be high enough to cover the cost associated with purchasing environmentally sensitive lands or other defined environmental project approved by the City Commission.
5. Direct staff to reduce the fee associated with achieving compliance with traffic concurrency by 50% on all new projects and by 75% on all new projects that meet the commercial redevelopment criteria.
Pros:
Reduces the cost associated with development for both the public and private sectors.Provides additional incentives for redevelopment.
Cons:
Reduces the amount of money collected to make improvements.
6. Direct staff to conduct a preliminary environmental review of each project site included in the “City Funded Capital Projects Identified for Fast Tracking” and begin preparation of any necessary variance applications (environmental or linear infrastructure).
Pros:
Provides for the identification of environmental constraints prior to permitting so that projects can be designed around the features where possible.Expedites the process by allowing variances to be considered in advance of permitting for cases where it is not feasible to design around the environmental feature.
Cons:
Some project may be farther along in the design process and will not reap the full efficiency benefits associated with the preliminary environmental review.
7. Direct staff to amend all applicable City policies and procedures, and implement changes as recommended in this document. These changes shall allow staff to effectively streamline the procurement process, in an effort to implement the initiatives of the Local Economic Emergency Fast Tracking Program.
Pros:
1) Reduces public sector project implementation timelines and puts people to work.
2) Streamlines the procurement process for public sector projects.3) The economic stimulation generated by this program will be maximized for local vendors.
Cons: Out of town firms may be critical of preference for local vendors.
CHARITABLE CONTRIBUTIONS
N/A
OPTIONS
Option 1: Adopt staff recommendations 1 through 7.
Option 2: Adopt specific recommendations from this agenda item that the Commission deems appropriate at this time.
Option 3: Provide alternative direction.
ATTACHMENTS/REFERENCES