San Luis Obispo County Grand Jury
• 2016-2017
• Agency Response
Response to:
Juvenile_Hall_Final_Report
County of San Luis Obispo Board of Supervisors Agenda Item Transmittal (1) Department (2) Meeting Date (3)
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 6 findings
F1
“The first public announcement of the cost and schedule of an approved project is an initial estimate, which is usually lower than the eventually approved budget for the project based on the building contract costs and similar factors.” The County Department of Public Works agrees with this finding. Project initial estimates can increase over time due to scope refinement and construction cost escalation.
Related Recommendations (1)
R1
“Recognizing that many County residents and taxpayers are concerned about capital project development costs and delays, the County should keep the public abreast of the extent of its efforts to ensure financial rigor in the management/delivery of capital projects.” The recommendation has been partially implemented under current quarterly budget reporting to the Board of Supervisors through the County Administrative Office. To enhance this recommendation, elements of a capital projects’ change in scope, schedule or budget can be better highlighted in the quarterly reports. In addition, Public Works is currently upgrading its website which can include reporting on project scope, schedule or budget changes on the capital projects web page. The web page will be in place at the beginning of 2018.
F2
“Major factors contributing to the increase in final cost/completion over original estimates include the passage of time between initial estimates and the execution of project contracts, changes in the cost of funds, late discovered need for changes of design, unavailability of necessary materials, unexpected construction/labor problems, and changes in relevant regulations.” The County Department of Public Works partially disagrees with this finding. While the County has dealt with issues on contract changes and material availability/delays, the County has not seen work stoppage or delays due to construction labor problems.
Related Recommendations (1)
R2
“Rather than simply stating at the time of completion that a project came in “on time and within budget,” the County should provide more detailed information in a reader-friendly way, with a goal of diffusing the erroneous perception that project cost-overruns are being “slipped past the voters.” The recommendation has not yet been implemented but would be incorporated into the aforementioned Public Works Capital Projects web page, as well as enhancing the reporting under the “Completed Projects” Appendix within the annual Five-Year Capital Improvement Plan submitted to the Board of Supervisors each February. Public Works, for over a decade, has stated Capital Projects Performance Measures in each fiscal year’s adopted budget for “percent project milestone delivered on time” and “percent projects delivered within budget” with an 85% and 90% annual goal, respectively. While the performance measure does not list all active projects, it can note which projects exceeded time or budget and convey those projects clearly to the public in the adopted budget. Enhanced reporting of capital project status on the upgraded web page, Five-Year Capital Improvement Plan report, and refined fiscal year adopted budget reporting should be implemented by March 2018.
F3
“The reporting of final project completion sometimes includes statements that give rise to speculation that projects are not well managed.” The Board of Supervisors partially disagrees with this finding. Statements such as constructed “on time and within budget” are relative to a specific construction contract value and time. Projects involving state agencies frequently involve further time and approvals beyond just the construction contract which could lead to unclear project completion.
Related Recommendations (1)
R3
“The County should give itself the option to use Design-Build for any project valued above one million dollars (as opposed to the current five million dollar threshold.)” The recommendation will not be implemented at this time, as the County pursues its initial Design-Build process. Public Works recommended to the Board of Supervisors in April 2016 to use Design-Build on the Animal Shelter replacement and the new Co-Located Dispatch Center as “pilot” projects. Public Works is still in the early processing of Design-Build for those projects. In consultation with other counties, Public Works has received cautionary advice on Design-Build from their staffs. We would seek to attain experience through these two projects before requesting that the Board of Supervisors adopt a more formal long-term policy on the use of Design-Build. Furthermore, while we could see its application to the lower amount of one million dollars, as allowed by the Public Contract Code, we need to evaluate at what point it is both cost-effective and proper to use this method. By Fiscal Year 2019-20, staff should have sufficient experience to pursue other projects through Design-Build and potentially adopt policy or guidance through the Department of Central Services, for action by the Board of Supervisors, at a future update of the County’s Purchasing Policy. II. Recommended Responses from the Board of Supervisors:
F4
“California law imposes detailed process requirements on all counties awarding building contracts for capital projects, with the clear intent of eliminating the possibility that anyone could allege bias, nepotism, or preferential treatment in the awarding of any public contract.” The County Department of Public Works agrees with this finding. Additional contract regulations are created by the State Legislature annually which require on-going staff revision and review of County contract documents to ensure compliance. This is the case regardless of bidding mechanism.
No recommendations for this finding
F5
“As the State authorizes it and as the County proposes to use it, the Design-Build project delivery method has generally proven in practice to expedite project completion and enable more cost-effective contracting with less financial and other risk to owner.” The County Department of Public Works partially disagrees with this finding. While Public Works expects to see an expedited delivery system with a mechanism for cost control, we cannot assure that all risk will be removed from the County. Site development conditions, either geotechnical or environmental, are items the County will still need to develop specific criteria for use under Design-Build. Moreover, the County may be subject to owner-directed changes during the implementation of the project through the Design-Build team if requirements are not well-defined. Either case will potentially extend construction implementation or increase costs if not defined in the Design-Build project Request for Proposal (RFP) package.
No recommendations for this finding
F6
“While experts generally indicate that the Design Build method can be useful for all types and sizes of projects, under California law there is a limit: If County policy permits, the County may use Design- Build for any vertical project with a price tag that will exceed one million dollars.” The County Department of Public Works agrees with this finding. However, all projects may not fit the Design-Build process. For instance, if the County seeks specific control of final design features of the project, staff may not want to rely on a Design-Build team to determine the outcome of that design. Traditional Design-Bid-Build would still be an option available to the County.
No recommendations for this finding