BACKGROUND:
In the past seven years development within the city has continued to increase at a steady pace. In the years leading up to the COVID-19 Pandemic, Engineering Staff managed and completed all the required plan checking for developers in house.
At the same time, prior to the COVID-19 Pandemic, the City’s Capital Improvement Program (CIP) was slowly increasing in size. This was in part due to enactment of SB 1 funding for local roadway improvements, the corresponding Maintenance of Effort (MOE) obligations and success in securing grants, especially the Highway Safety Improvement Program (HSIP), SB 821 and Active Transportation Plan (ATP). Internally, Staff was making adjustments utilizing more consultants to complete plans and specifications for projects while still following allowable guidelines dependent on grant(s) issued, as many of the grant-based projects actually pay for the use of consultants to assist in completing the projects. Staff was also increasing the use of on-call services in order to complete strategic tasks.
In an effort to do more with less, development reviews, especially after the entitlement process, were sent out to two (2) of our on-call consulting firms that had the capacity to provide plan checking services. The firms are NAI Consulting, Inc. of Cathedral City and Fomotor Engineering, Inc. of Palm Springs (Consultants). These reviews started out as a paper plan checking process, but soon became all electronic, which is now the Engineering Department standard for plan check submittals.
The plan checking was paid for by deposits provided by the developer in a predetermined amount, depending on the size of the Project. If the deposits are depleted the developer is asked to deposit more funds to keep the plan checking process moving. The account is typically liquidated when the final permit is issued for the project.
There was no budget impact as a result of this deposit-based system as the Consultants were paid for their plan checking services from this deposit account. The amount paid to each of the Consultants, respectively, has been approximately $40,000 per year.
DISCUSSION:
This past September 2021, the City adopted a new fee schedule and structure coinciding with the launch of the City’s new electronic permit and fee collection system, all part of the City’s Enterprise Resource Planning (ERP) system. The new fee structure includes the cost of Engineering development plan checking, report and study reviews, which are collected up front with the submittal of the plan checking documents that the developer is requesting a review of.
The efficiency of this new fee structure is that the fees, when collected, are deposited as general revenue to the City and not segregated by a “Project Based” or “Time Tracking” system. This now requires the Engineering Department to pay the on-call development plan checking Consultants from the Engineering Professional and Technical Services budget.
This was not accounted for in the FY 2021-22 and 2022-23 budget and will require a budget amendment to fund and make payments to the Consultants.
The focus point is that the funds are being collected for the services in the new fee structure on the revenue side, and a budget amendment will allow the Consultants to be paid from these collected funds through an amended Engineering Budget. In future Engineering Budgets, the cost associated with these services will be accounted for. In order to pay for these services in the remaining portion of the current FY 2021-22 and 2022-23 Engineering Budget, Staff will be requesting a total of $120,000 as a Budget Amendment for these plan checking services.
The Consultants each have On-Call Agreements with the City, NAI as an On Call Engineering Services Provider and Fomotor as an On Call Engineering Surveying Provider.
Staff is proposing that a Task Order for continuing the Development Plan Checking Services be issued to the Consultants, respectively.
Staff is requesting that the City Council approve not to exceed Task Orders to NAI Consulting, Inc. and Fomotor Engineering, Inc. in the amount of $60,000 each, respectively, for Development Plan Checking Services, for a total amount of $120,000 for the remaining portion of FY 2021-22 and through FY 2022-23; and, authorize the Director of Engineering/Public Works to execute the Task Orders; and, Authorize a General Fund Budget Amendment in the amount of $120,000 to the Engineering Department’s Professional and Technical Services account 100-8600-860.
FISCAL IMPACT:
Engineering Department’s FY 2021-22 - FY 2022-23 Professional and Technical Services account 100-8600-860 was originally funded at $220,000.
Task Orders to:
•NAI Consulting, Inc. $60,000
•Fomotor Engineering, Inc. $60,000
Total Budget Amendment requested: $120,000
With the approval of this General Fund Budget Amendment the Engineering Department’s FY 2021-22 - FY 2022-23 Professional and Technical Services account 100-8600-860 will be $340,000.